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State, Department of Health and Human Services v. Silber

Superior Court of Maine, Kennebec

November 5, 2018

STATE OF MAINE, DEPARTMENT OF HEALTH AND HUMAN SERVICES, Plaintiff
v.
WILLIAM SILBER, M.D., Defendant

          Attorney for: DEPARTMENT OF HEALTH AND HUMAN SERVICES LINDA CONTI - RETAINED OFFICE OF THE ATTORNEY GENERAL.

          Attorney for: WILLIAM SILBER MD, CHRISTOPHER TAINTOR, NORMAN HANSON & DETROY LLC

          Attorney for: WILLIAM SILBER MD, MICHAEL DEVINE - RETAINED, NORMAN HANSON & DETROY LLC.

          DECISION AND JUDGMENT

          William R. Stokes, Justice.

         INTRODUCTION AND PROCEDURAL BACKGROUND

         Before the court for decision are the respective motions for summary judgment filed by the Department of Health and Human Services ("DHHS" or "Department") and Dr. William Silber, M.D. in this dispute involving the collection of a $10, 000 fine assessed against Northern Maine Ambulatory Endoscopy Center ("NMAEC"), a dissolved corporation that was solely owned by Dr. Silber. The parties agree that there are no genuine issues of material fact. They differ, however, on the question of which party is entitled to judgment as a matter of law.

         DHHS commenced this action against Dr. Silber by the filing of a one-count complaint on November 28, 2017 alleging breach of contract as a result of Dr. Silber's failure to pay $10, 000 owed to the Department by NMAEC. Dr. Silber filed a timely answer on December 8, 2017. On May 4, 2018, DHHS filed its Motion for Summary Judgment supported by the affidavits of Sarah Taylor and Beth Ketch. Dr. Silber objected to the Department's summary judgment request and moved for summary judgment in his favor on July 27, 2018. His motion was supported by the affidavit of Attorney Christopher Taintor, Esq. Both parties have filed reply memoranda, with the last one being received by the court on August 30, 2018. The parties have waived oral argument on the motions.

         The undisputed material facts are taken from the summary judgment record and are summarized below.

         FACTS

         On December 9, 2009, Dr. Silber signed a "MaineCare/Medicaid Provider Agreement" on behalf of NMAEC as the named "Provider." Dr. Silber signed the Provider Agreement as "CEO." On December 7, 2009, he also signed a "Disclosure of Ownership and Control Interest Statement," listing himself as the sole owner of NMAEC. Beth Ketch, an official of DHHS, signed the Provider Agreement on February 5, 2010 on behalf of the Department.

         Section D (3) of the Provider Agreement is entitled: "Liability of Provider for Debts Owed to the Department." In accordance with Section D(3)(b) "[t]he Department may collect any debts, including overpayments, through offset or recoupment against amounts owed by the Department to the Provider, or any other method of collecting debts, consistent with relevant statutory and regulatory provisions, including 22 M.R.S.A. §1714-A."

         Of particular significance in this case is the language of Section D(3)(c) which states:

The liability for debts owed to the Department by the Provider is enforceable against the Provider, including any person who has an ownership or control interest in the Provider, and against any officer, director or member of the Provider who, in that capacity, is responsible for any control or any management of the funds or finances of the Provider.

         NMAEC was a "healthcare facility" within the meaning of the Rules Governing the Reporting of Sentinel Events" as promulgated by the Division of Licensing and Regulatory Services of DHHS. A 'sentinel event" includes "[a]n unanticipated death ... unrelated to the natural course of the patient's illness or underlying condition" A healthcare facility, such as NMAEC, is required to notify the "Sentinel Event Team" (SET) within DHHS of a sentinel event "by the next business day after the event occurred or by the next business day after the facility discovers that the event occurred" A healthcare facility that fails to report a sentinel event as required by the rules is subject to a financial penalty of not more than $10, 000, payable to the State of Maine.

         In a letter dated September 11, 2013, Dr. Silber was notified by the Director of the Division of Licensing and Regulatory Services that a financial penalty of $10, 000 was being assessed against NMAEC because it failed to report a sentinel event involving the death of a patient. Dr. Silber sought an administrative hearing to contest the imposition of the fine. That hearing was rescheduled several times at Dr. Silber's request. Ultimately, it was scheduled for September 15, 2014. A few days before the hearing, Attorney Taintor entered his appearance for Dr. Silber. His request to postpone the hearing was denied.

         The hearing was held as scheduled. In a "Recommended Decision" dated November 6, 2014, the hearing officer recommended that the Commissioner of DHHS find that NMAEC had failed to timely report a sentinel event that occurred on July 10, 2013. With respect to the financial penalty, the hearing officer did not make any recommendation because "[t]here was no evidence presented as to what factors were considered in determining the amount."

         In a "Final Decision" dated December 23, 2013, the Commissioner accepted the recommendation that NMAEC failed to report a sentinel event, but did not accept the recommendation regarding the $10, 000 fine. Rather, the Commissioner found that the $10, 000 civil penalty was appropriate and was not '"grossly disproportional' to the provider's undisputed complete failure to report an undisputable sentinel event."

         After receiving the "Final Decision," Attorney Taintor contacted Dr. Silber and discussed with him, via email, the next course of action. With respect to filing a Rule 8OC appeal, Attorney Taintor suggested that the only reason not to file such an appeal was if NMAEC was insolvent and "we are convinced that the Department would never try to collect the fine from Dr. Silber personally." Attorney Taintor expressed uncertainly as to whether DHHS could ...


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