Weber v. Shewry

Filed 3/3/06 Weber v. Shewry CA3

NOT TO BE PUBLISHED

California Rules of Court, rule 977(a), prohibits courts and parties from citing or relying on opinions not certified for publication or ordered published, except as specified by rule 977(b). This opinion has not been certified for publication or ordered published for purposes of rule 977.

IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

THIRD APPELLATE DISTRICT

(Sacramento)

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The California Department of Health Services (DHS) determined after an audit and administrative appeal hearing Dr. Robert Weber (Weber) had been overpaid $1,415,911 in claims under the California Medical Assistance (Medi-Cal) program. (Welf. & Inst. Code, §§ 14000 et seq.) DHS disallowed the claims based almost entirely on the prior authorization requirement of section 51311, subdivision (b), of title 22 of the California Code of Regulations (section 51311(b)). Weber petitioned the superior court for a writ of administrative mandamus ordering DHS to reverse the overpayment assessment. (Code Civ. Proc., § 1094.5.) The superior court denied the petition.

Weber appeals the denial of his writ petition claiming the trial court erred in denying his petition because (1) the overpayment assessment was based on an erroneous interpretation of section 51311(b), (2) he was denied due process, and (3) DHS is estopped from recovering any overpayment based on its 1994 audit. We disagree and shall affirm the judgment denying Weber's petition for administrative mandamus.

FACTUAL AND PROCEDURAL BACKGROUND

In June 1999 DHS conducted an onsite inspection of Weber's listed office location in Los Angeles, California.^[1] The auditor found the site was actually the office of Cal-Med Diagnostics, Inc. (Cal-Med), owned by Eugenia and Igor Litinsky. The auditor determined the equipment used to provide the diagnostic tests listed in Weber's Medi-Cal claims was housed on portable units transported by four vans, each with a technician who operated the testing unit. The vans were owned by the technicians. The vans were dispatched to several doctor's offices on a weekly schedule to do testing procedures. Weber was paid a salary by Cal-Med as Cal-Med's medical director. He was not an owner of Cal-Med. Weber read the non-invasive cardiology scans performed by Cal-Med technicians while another doctor, radiologist Dr. Lawrence Chespak (Dr. Chespak), read the non-cardiology scans. Cal-Med billed Medi-Cal for the testing services using Weber's physician provider number.

Pursuant to an interagency agreement with DHS, the California State Controller's Office (SCO) performed an audit of Weber's Medi-Cal claims for the period January 5, 1998 through August 5, 1999. The audit objective was to determine the legality and propriety of Medi-Cal payments to Weber, including whether Weber's billings were consistent with the services performed. The SCO auditors obtained all the claims records from Cal-Med. The SCO auditors were told Weber had a financial agreement with the owners of Cal-Med under which Weber turns his Medi-Cal payment check over to Cal-Med and then is paid a monthly salary by Cal-Med as its medical director to read, interpret, and write reports for the non-invasive cardiology scans, which he does from his home.

According to DHS and SCO, Weber's arrangement with Cal-Med circumvented the prior authorization process for mobile diagnostic services under section 51311(b). The SCO audit determined Weber did not have the appropriate documentation, specifically the required prior authorizations, needed to support his bills to Medi-Cal. The audit disallowed 100 percent of Weber's claims for the audit period in a total amount of $1,415,911. Based on the SCO audit, DHS demanded from Weber $1,415,911 as an overpayment of Medi-Cal claims, $1,392,549 of which was based on the lack of prior authorizations.

The summary of findings attached to the DHS demand letter explained the â€