HARTGROVE HOSPITAL v. STATE OF ILLINOIS (2013)

ORDER

THESE CAUSES come before the Court for consideration of Claimant's Petitions for Rehearing after having heard oral argument from both parties, this Court being fully advised in the premises. The above-captioned cases were consolidated for purposes of the oral argument as the party litigants, the fundamental issues, and the statutory provisions applicable to all the matters are identical.

It is hereby ordered that the Claimant's Petitions for Rehearing are denied and the Court's Order of November 3, 2011 granting Respondent's Motions to Dismiss will stand.

FACTS AND ARGUMENTS

The Claimant is a hospital medical care provider seeking payment from the State of Illinois for services under the HFS medical programs. The dates of service for the instant claims are between late 2005 and early 2008. The Claimant alleges that they properly billed the State and that the State never mailed them any information that it was paying or rejecting the claims in whole or in part. Claimant denies that the remittance advises are rejections/refusals. Claimant further argues that subsequently, the parties engaged in lengthy discussions regarding the bills which were akin to cleaning up messy submittals or providing additional information. It is the Claimant's theory that this process of review tolls the statute of limitation under 89 Ill. Adm. Code 148, 240(h)(3), which addresses the denial of payments as a result of utilization review when there is a request by a medical provider for an expedited reconsideration and the State is required to give its re-determination within one business day). The Claimant therefore believes that the statute of limitation was not violated because the statute was tolled during review and did not start until the Claimant had received a full review and satisfactory final rejection. According to Claimant, this occurred on September 25, 2008 and therefore the claims are timely. Claimant lastly argues that these cases are distinguishable from Terracom Nursing Associates, LTD. v. State, 59 Ill.Ct.Cl. 224 (2006), and Jamestown Management Corp. et al. v. State, 59 Ill.Ct.Cl. 240 (2006), because those cases were based on the paperless billing systems for nursing homes and were requests for equitable relief.

The State disagrees and has argued that while the cases are distinguishable, the reasoning behind upholding the strict and easily determined statute of limitation should be applied to the cases at bar and that a contrary result would create a situation where the accrual would depend on when a Claimant believes negotiations are completed and would have to be judged on a case by case basis. The Respondent farther denies liability because it asserts the claims are time barred by the statute of limitation as set forth in Section 22(b) of the Court of Claims Act (705 ILCS 505/22(b)) and Section 11-13 of the Public Aid Code (305 ILCS 5/11-13). The State asserts that the claims began to accrue at the latest on January 2, 2008 (most recent date of denial) or in the alternative, if there was no denial/refusal, then one year from the date when the Claimant first billed the State. Under either theory, the Respondent argues these claims filed on September 9, 2009, more than one year after the date of accrual under either theory, are time barred.

OPINION

The issue before this Court is a question of law to determine when hospital vendor claims accrue when there is an actual bill submitted and when there is either an uncertain rejection or denial of the bill and/or parties continue to negotiate to try to reach agreement. The secondary question is whether 89 Ill. Adm. Code 148.240(h)(3) (“Code”) either supplements or overrides the applicable statute of limitation as set by the Court of Claims to allow the tolling of the statute when parties are negotiating or correcting a disputed bill.

Clearly, the fact that timely bills were submitted is not at issue. The issue remains: when does the bill accrue for purposes of the one year statute of limitation? Pursuant to statute, if the vendor fails to respond, then the accrual period starts a year from the date the bill was submitted. While both sides contest the fact of bill rejection, if there is no rejection, the Claimant's accrual date starts one year from the date of the mailing of the bill. If the bills were rejected or responded to, in whole or in part, the accrual date essentially begins from any response by the State other than full payment. Anything less, even if that decision is later changed or is being contested administratively, starts the clock ticking. The heart of Claimant's argument is that unlike the nursing home paperless billing cases, hospital cases such as theirs have a special provision that tolls the statute during negotiations. Specifically, Claimant argued to the Court during oral argument that the Code tolls the limitation period when parties are in a period of review.

The Claimant's reliance on this Code provision is simply misplaced and the plain language of the Code is neither applicable to the statute of limitation, nor can it legally or otherwise override the express, clearly laid out provisions of the Court of Claims Act. The pertinent portion of the Code that Claimant relies on addresses the situation when there is a denial of payment as a result of the utilization review process. The Code provides that a medical provider may request an expedited reconsideration and provide the Department with needed information for this task. The Department is then required to give its re-determination within one business day. The Code also provides that if the provider does not submit all necessary information then this “shall toll the time in which the reconsideration shall be completed”. Id.

Claimant urges that this “tolling” language should be interpreted to toll the statute of limitation and that the long term review and negotiations between the parties are essentially the same as the expedited reconsideration process within the Code. Therefore, the Code provisions negate or supplement the statutory guidelines of Section 22(b) of the Court of Claims Act (705 ILCS 505/22(b)) and Section 11-13 of the Public Aid Code (305 ILCS 5/11-13).

This argument fails for several reasons. Initially, the language of the Court of Claims Act governing the statute of limitation is clear. There is no authority that allows this said language of the Act to be interpreted or supplemented by the provisions of the Administrative Code. Lastly, even a plain reading of the Code itself does not dictate that the limitation period be tolled during the expedited reconsideration. The parameters of said reconsideration are limited and clear. The Code states, “failure of the hospital or physician to submit all needed information shall toll the time in which the reconsideration shall be completed”. 89 Ill. Adm. Code 148.240(h)(3). The benefit that the Code grants the Department cannot be extended or stretched to allow the Claimant to be given a respite from the time requirements under the statute of limitation. An expedited process that guarantees a one business day decision cannot toll or extend a statute of limitation for years after the date of the bill or arguable rejection in this case.

Finally, it is worth noting the historically accepted precedent that a statute of limitation should be easily ascertainable and not determined on a case by case basis. This sentiment was echoed in Illinois Bell Telephone v. State, 35 Ill.Ct.Cl. 345, 349 (1981):

(T)his Court would be remiss if it did not note the sound public policy reason for the statute (of limitation), which is that to all things there must be an end, and there is no hardship in requiring claimants to act within a reasonable time. Failure by a claimant to act, whether by lapse of time or omission, forfeits his title to the claim under the law, allowing the government to avail itself thereof in suits against it.

THEREFORE, IT IS HEREBY ORDERED the Claimant's Motions for Reconsideration are denied and this Court's prior orders granting Respondent's Motions to Dismiss shall stand.

STEFFEN, J.