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Palian v. Maine Department of Health & Human Services

Superior Court of Maine, Kennebec

May 17, 2019


          Plaintiff's Attorney Joshua D. Hadiaris, Esq.

          Defendant's Attorney Thomas Bradley, AAG.


          William R Stokes, Justice

          Before the court is Petitioner Charles Palian, DMD's Appeal of Final Agency Action pursuant to M.R.Civ.P. 80C against the Maine Department of Health and Human Services. After reviewing the Record, the parties' filings, and considering the parties' arguments at hearing, the court finds that Petitioner's Rule 80C appeal must be denied and the Respondent's decision should be affirmed.

         I. Background

         Petitioner Dr. Palian was an oral surgeon and MaineCare provider in Lewiston, Maine until his retirement in 2013. (R. 1074.) As a MaineCare provider, Dr. Palian was contractually obligated to adhere to MaineCare rules via a Provider Agreement, signed September 11, 2009. (R. 336.) In December, 2014, Valerie Hooper, an employee of the Maine Department of Health and Human Services Program Integrity Unit (the "Department") sent a request for information to Dr. Palian for a post-payment review or audit. (R. 458, 1149.) Ms. Hooper performed the post-payment review, or audit, selecting at random 100 of Dr. Palian's patients for which Dr. Palian submitted claims from September 1, 2010, through December 31, 2013. (R. 1149-50.)

         On October 2, 2015, the Department issued Dr. Palian a Notice of Violation reporting that for the 100 randomly-selected patients reviewed during the September 1, 2010 - December 31, 2013 time period, the Department sought $189, 770.08 as a recoupment for various violations.[1] (R. 32.) The Notice of Violation alleged that Dr. Palian had violated the MaineCare Benefits Manual through: 1) improper or incomplete documentation for interpreter services, radiographs, anesthesia recovery times, tooth numbers for tooth extractions and dates of service; 2) improper coding for non-emergency hospital procedures; 3) improper coding for Versed, Fentanyl, Ketamine, Propofol, and Valium; 4) billing for drugs above acquisition cost; 5) duplicate payments, payments for services covered through primary insurance, or payments not billed to primary insurance; 6) improper coding for comprehensive oral evaluation; and 7) improper coding for alveoplasty when less than four teeth per quadrant were extracted. (R. 32-34.)

          Dr. Palian timely requested an informal review of the Department's Notice of Violation, arguing: 1) documentation for two patients' procedures was provided; 2) the code used for non-emergency hospital procedures was correctly used because a hospital qualifies as an "institution" under the American Dental Association's Dental Procedure Codes; 3) claims for improper documentation for anesthesia recovery times misinterpreted the code requirements; 4) adequate radiograph documentation was provided; 5) claims for overpayments for alveoplasty misinterpreted the code requirements; 6) individual claims for overpayments were unfounded; and, 7) claims for overpayments on drug acquisition costs misinterpreted the code requirements. (R. 83.) Furthermore, Dr. Palian argued that the Department failed to pay him for multiple claims submitted for reimbursement. (R. 83.)

         On August 9, 2016, Herb Downs, Director of the Department's Division of Audit, issued a Final Informal Review Decision, revising the overpayment calculation amount to $147, 329.89. (R. 104.) Ms. Hooper drafted the decision and provided Mr. Downs with the audit materials, according to standard procedure. (R. 1434-35.) The Final Informal Review Decision overturned the finding of an overpayment on 33 line-items and reduced the finding of an overpayment to a 20% sanction for inadequate documentation, overpayments for drug acquisition costs, supplemental charges for services billed under codes the Department deemed incorrect, and anesthesia recovery time overcharges. (R. 104.)

          Dr. Palian timely requested an administrative hearing. (R. 151.) On July 17, 2017 and again on January 9, 2018, the Department held an administrative hearing before Hearing Officer Richard Thackeray. (R. 1122, 1325.) After the hearing, the Department reduced its demand to $116, 852.05, revising a 100% sanction for lack of documentation of anesthesia recovery times to a 20% sanction. (R. 375.) On June 5, 2018, Hearing Officer Thackeray issued an Administrative Hearing Recommended Decision, finding that the Department correctly established and maintained a recoupment claim against Dr. Palian for $116, 852.05. (R. 1076.) In response to Dr. Palian's other arguments, the Hearing Officer concluded that "the Department did not violate Dr. Palian's procedural rights by virtue of Ms. Hooper assisting Mr. Downs during the Final Informal Review." (R. 1078.) The Hearing Officer found that the Department should not be equitably estopped from maintaining a recoupment claim against Dr. Palian. (R. 1090.) Lastly, the Hearing Officer determined that Dr. Palian did not preserve for appeal the argument that the Department abused its discretion (or failed to exercise discretion at all) by imposing the maximum penalty of 20% for improperly documented claims. (R. 1090.)

         Dr. Palian filed a Responses and Exceptions to the Recommendations of the Hearing Officer on June 19, 2018. (R. 1094.) On July 3, 2018, Commissioner Ricker Hamilton issued the Final Decision adopting the Recommended Decision. (R. 1121.) Dr. Palian timely filed this Rule 80C appeal. Oral argument was held on April 23, 2019.

         II. Standard of Review

         When the decision of an administrative agency is challenged on appeal, the court may reverse or modify the decision if the administrative findings, inferences, conclusions or decisions are:

1) In violation of constitutional or statutory provisions;
2) In excess of the statutory authority of the agency;
3) Made upon unlawful procedure;
4) Affected by bias or error of law;
5) Unsupported by substantial evidence on the whole record; or
6) Arbitrary or capricious or characterized by abuse of ...

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