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Roth v. Department of Public Aid





Appeal from the Circuit Court of Cook County; the Hon. James C. Murray, Judge, presiding.


Defendant, Illinois Department of Public Aid (the Department), appeals from an order entered by the trial court upon administrative review, which reversed its determination that it was entitled to recoup $56,688.53 in payments made to plaintiff, Dr. Robert Roth, for medical services provided to Medicaid recipients.

The issues on appeal are: (1) whether retroactive application of the statutory power of recoupment would contravene due process; (2) whether the Department had a common law power to recoup such payments; (3) whether the Department's record keeping standards at the time of the audit were unconstitutionally vague; (4) whether the Department's finding that Dr. Roth failed to maintain adequate records was against the manifest weight of the evidence; and (5) whether the Department erred in granting recoupment where amounts claimed and evidence submitted are in dispute.

The pertinent facts follow.

On June 15, 1976, the Department notified Roth of its intention to recoup $96,703.41 in payments made to him for medical services rendered to Medicaid recipients. Roth voluntarily withdrew from the program and requested formal review of the proposed recoupment.

The Department initially listed three charges against him, (1) that he billed the Department for services he did not perform; (2) that he billed the Department more than once for the same service; and (3) that he failed to maintain proper records. At the beginning of formal hearings, however, the Department stipulated to the dismissal of the first and second charges, thereby basing its claim for recoupment solely on the ground that Roth failed to keep adequate records.

The Department justified its recoupment from Dr. Roth on the statutory powers conferred by the Public Aid Code (Ill. Rev. Stat., 1978 Supp., ch. 23, pars. 12-4.25, 12-4.26). The pertinent portions of 12-4.25 are as follows: "(A) The [Department] may deny, suspend, or terminate the eligibility of any person * * * to participate as a vendor of goods or services to recipients under the medical assistance program * * * [where] (c) Such vendor has failed to keep * * * such records regarding payments claimed for providing services. * * * (D) The [Department] may recover money improperly or erroneously paid, or overpayments, either by setoff, crediting against future billings or by requiring direct repayment to the [Department]."

Section 12-4.26 concerns the retroactive extent of section 12-4.25 and provides that: "The [Department] may terminate or suspend a vendor pursuant to the authority and powers conferred in Section 12-4.25, only subsequent to the effective date of [the Act]. However the authority and powers are expressly declared to be retroactive to the extent that conduct and activities of vendors engaged in prior to the effective date of [the Act] may be relied upon as the basis for terminating or suspending eligibility to participate in the Medical Assistance Program, where the vendor had actual or constructive knowledge of the requirements which applied to his conduct or activities."

Sections 12-4.25 and 12-4.26 became effective on December 1, 1977.

At the hearing, Paul Rogers testified for the Department that he was one of the two auditors who reviewed Roth's records. The audit began in July 1975 and consisted of a review of approximately 25% of his records for the period from July 1973 through December 1974.

Rogers testified that the auditors compared the records maintained by Roth in the 25% sample to a computer printout of cases, called the vendor-patient profile or "VPP," for which Roth had requested payments. From this review, the auditors compiled a list of cases in the sample which they believed justified recoupment.

Of these sample cases, Rogers requested that Roth produce the records for each patient on the sample list. Roth responded that prior to May 1974 he had kept his record of services rendered on a duplicate copy of the Department billing form, or DPA-132.

The information contained on the DPA-132 form included a patient's name, address, case number, the diagnosis, a report of the services rendered, and the capacity in which the services were rendered, e.g., attending physician or surgical assistant.

Rogers testified that the auditors were, however, informed that the DPA-132 was not a sufficient record and were instructed not to review Roth's copies of those records. He further stated that the Department guidelines were "pretty liberal at that time and if there was anything written relevant to the patient it was accepted"; and that if the same information contained on a ...

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