The Doc's Clinic, APMC VS The State of Louisiana, through the Department of Health & Hospitals, Paul Davenport, Ben Bearden, Charles Castile, Joseph E. Kopsa and Jerry Phillips

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NOT DESIGNATED FOR PUBLICATION STATE OF LOUISIANA COURT OF APPEAL FIRST CIRCUIT NO. 2014 CA 1178 THE DOC'S CLINIC, APMC VERSUS THE STATE OF LOUISIANA, THROUGH THE DEPARTMENT OF HEALTH AND HOSPITALS, ET AL. Judgment rendered April 24, 2015. ****** Appealed from the 19th Judicial District Court in and for the Parish of East Baton Rouge, Louisiana Trial Court No. C575390 · Honorable Michael Caldwell, Judge ****** ALAN SCHWARTZBERG BATON ROUGE, LA AND ROY A. RASPANTI METAIRIE, LA ATIORNEYS FOR PLAINTIFF-APPELLANT THE DOC'S CLINIC, APMC SCOTI M. LEVY V. THOMAS CLARK, JR. BATON ROUGE, LA ATIORNEYS FOR DEFENDANT-APPELLEE UNISYS CORPORATION SHERLYN D. SHUMPERT BATON ROUGE, LA ATTORNEY FOR DEFENDANTS-APPELLEES STATE OF LOUISIANA, DEPARTMENT OF HEALTH & HOSPITALS, PAUL DAVENPORT, CHARLES CASTILLE, JOSEPH KOPSA & JERRY PHILLIPS STANLEY J. BORDELON KIMBERLY L. SULLIVAN BATON ROUGE, LA ATIORNEYS FOR DEFENDANT-APPELLEE LOUISIANA DEPARTMENT OF HEALTH & HOSPITALS ****** BEFORE: PETTIGREW, WELCH, AND CHUTZ, JJ. PETTIGREW, J. This matter has a protracted history that need not be fully repeated herein. For the detailed factual and procedural background, see this court's prior appeal decision, Doc's Clinic, APMC v. State, Department of Health and Hospitals, 2007-0480 (La. App. 1 Cir. 11/2/07), 984 So.2d 711, writ denied, 2007-2302 (La. 2/15/08), 974 So.2d 665. This opinion will address only those facts relevant and necessary to resolving the salient issue before us in this appeal -- whether the district court manifestly erred in sustaining a peremptory exception raising the objection of prescription filed by defendant UNISYS Corporation (UNISYS) against the pl?!intiff, T.he Doc's Clinic, APMC (Doc's Clinic), and dismissing Doc's Clinic's claims against UNISYS with prejudice. Doc's Clinic, a professional medical corporation and. a DHH licensed Medicaid provider since 1996, filed a Petition for Damages on February 17, 2009, naming as defendants, DHH, and the following persons, individually, and in their official capacities in the Medicaid department of DHH: Paul Davenport, Ben Bearden, Charles Castille, Joseph E. Kopsa, and Jerry Phillips. Doc's Clinic alleged t~at as a result of a self-audit performed by it, in response to a DHH request made to numerous Medicaid providers, DHH sought the voluntary reimbursement from Doc's Clinic for alleged billing discrepancies, with which Doc's Clinic disagreed, Doc's Clinic alleged that DHH performed subsequent investigations and notified the clinic in July and August 2000, of additional billing irregularities and of its intention to impose sanctions of recoupment and excluding Doc's Clinic and Dr. Kent Hickey, its. office manager and physician/owner, from participating in the Medicaid program for a period. ·of five years. However, following remand by this court, in 2003, the sanction of exclusion was reversed by DHH; but ultimately, in 2004, DHH imposed sanctions on Doc's Clinic for recoupment. As a result of those sanctionsf Doc's Clinic alleged that it was compelled to terminate its business; and in the petition, it sought to recover lost profits that Doc's Clinic claims it could have realized but for DHH's wrongful and tortuous actions in wrongfully excluding it from the Medicaid program. 2 As fully detailed in this court's prior appeal decision, DHH sanctioned Doc's Clinic with the recoupment of approximately $261,06533 that was allegedly overpaid by DHH to Doc's Clinic as a result of alleged billing discrepancies. This court, in that prior appeal, reversed the recoupment and ordered re1mbursernent to Doc's Clinic. Doc's Clinic, APMC, 984 So.3d at 733. As noted above, DHHrs. wr!t was denied by the Supreme Court on February 15, 2008. Doc',s Ciinic maintains that this court's reversal of the recoupment, and the subsequent writ deriial by the Supreme Court gave rise to its claims for damages. The DHH defendants filed an exception raising the .objection of prescription. In . ,. ' ' . ; . . ' opposition to that exception, Doc's Cl,inic argu.ed that the writ denial by the Supreme Court on February 15, 2008, marked the end of the adrninistratiye procedure it was statutorily required to follow to challenge .OHH's sanctions, and also, marked the beginning of the running of the one-year prescriptive period during which it could file a suit seeking tort damages arising from the negligent, fraudulent, and wrongfully imposed sanctions by DHH upon it. 1 Thus, Doc's Clinic claimed that its petition for damages naming DHH and the other individual defendants within that prescriptive period was . ' . ' timely filed. The district court sustained the defendants' exception of prescription as to 2 Doc's Clinic's tort claims on April 30, 2013. On April 17, 2013, Doc's Clinic filed an amending petition for damages adding as a defendant, UNISYS Corporation, as DHH's fiscal intermediary, alleging that it negligently and/or intentionally implemented a fraudulent auditing system that did not comply with federal guidelines, that it failed to advise Doc's Clinic of the discrepancies in the electronic system (as compared to the manual HCFA ·1soo forms), and that its electronic submission system was incompatible with Doc's Clinic's billing system. 1 Doc's Clinic alleged that A person or entity that wishes to contest an administrative sanction imposed by the DHH secretary may seek judicial review first, by a hearing conducted by the Department in compliance with the Administrative Procedure Act, and thereafter, by a hearing in the Nineteenth Judicial District Court La. R.S. 46:437.4.C(l), (2) and (3). See also La. R.S. 49:964 and 965, detailing the procedure of judicial review and the appeal thereof. 2 That judgment was appealed by Doc's Clinic to this court, and was docketed as 2013 CA 1845; however, after issuing a rule to show cause why the appeal should not be dismissed, as it appeared it was from a partial judgment without the required designation as a final appeaiable judgment required by La. C.C. P. art. 1915(B), this court dismissed that appeal on March 13, 2014. 3 UNISYS was jointly and solidariiy Hable with the previously named defendants. ~'l. opposition filed an exception raising the objection. of prescription.. 3 UNISYS to UNISYS's exception, Doc's Clinic asserted that lt5. dam:~~ ag~1nst. UNISYS ·arose out of the same conduct, transaction, or occurrence set frntb ~n the or1!gina! petition; therefore, those claims relate back to that filing date of February 17,, 2009, ', . ' anq theamending petition is ' therefore, timely, pursuant to La. C.C.P. art 1153. UNISYS's exception was heard by the district court on July 22, 2013. Notably, only counsel for UNISYS was present at that hearing; neither counsel for, nor representative of, Doc's Clinic made an appearance. Foilowing that hearing, the district court signed a judgment August 1, 2013, sustaining the exception£ finding all claims against UNISYS had ' ' . . prescribed, and dismissing Doc's Clinic's claims against UNISYS with prejudice. 4 Doc's Clinic appealed that judgment. A trial court's findings of fact on· the .·issue of prescription are subject to the ~'· I ' , ' • ' '' manifest error-clearly wrong standard. of revi~w; :: .Guillot- v. Doughtyi 2013-1348 (La" App. 1 Cir. 3/21/14), 142 So.3d 10341 l041r wdtdeni~d, ·2014-0824 (La, 6/13/14), 140 So.3d 1192. At the trial of a pererilptorj exception, evidence may be introduced to support or controvert the defense of prescription, if its grounds do not appear from the petition. La. C.C.P. art. 931. Generally1, in the absence of evidence, the objection of prescription must be decided based upon the facts alleged in the petition, which must be accepted as true. Illes v. State ex rel. Div, of Admin., Roman Catholic Church . . of Diocese of Baton Rouge, 2014-0689 (La. App. 1 Cir. 12/23/14); _ So.3d _ . j ~ 3 '- . . .. In our previous decision, this court described. UNlSYS's role as follows:. The UNISYS Corporation is DHH's' fiscal infrirmediary in connection with the processing of Medicaid clai.ms submitted by authorized heaith care providers. Pursuant to its contract' with the State of Loulsiariar ·UNISYS performs various services relative to the administration of the Medicaid program, including the processing, payment, and review or adJudiec1tion. of reimbursement ,claims. Doc's . Clinic, APMC, 984 So.2d at 716, fn.2; 4 The record before us contains the one-page transcript of that hearing. Presumably, since neither the plaintiff nor its counsel was in attendance, t~e district court did not hear argument, and no evidence was presented. The district court merely stated that the exception was very similar to the one it had previously sustained in favor of DHH and that the plaintiff's late-filed opposition to the exception raised the same arguments as before. The district court stated, "clearly any tort claims had prescribed," and sustained · UNISYS's exception with regard to any claims in tort. 4 On appeal, Doc's Clinic reiterates its .argument advanced in opposition to the exception: that the one-year prescriptive p~riod did not begin to run until after it had exhausted its administrative remedies regarding its challenge to DHH's sanctions, which was February 15, 2008, the date on which the Supreme Court denied writs. Doc's Clinic also argues on appeal, for the first t~me, that UNISYS is a joint tortfeasor with the defendants named in the original petition, and purs1.Jant to La. C.C. art. 2324(8) and (C), the timely filing of the original petition interrupted pre_s,cription as to UNISYS. UNISYS asserts that prescription was evident from the face of the original petition and the amending petition through which it was ·added as a defendant. It argues, therefore, that the burden of proof shifted ; to Doc's Clinic to present evidence and/or legal . ' .. ' 5 support that its tort claims:against ·UNISYS: were 'not prescribed;_ Noting Doc's Clinic's ' '' absence from the hearing on the exception. ~nd its f~ilOre to· present any evidence whatsoever, UNISYS maintains Doc's 'Clinic fetl. woefuily 1 short of meetin·g its burden of proving its claims were not prescribed. UNISYS. maintains that the district court did not commit manifest error in sustaining its exception on this basis alone. However, UNISYS . •. - additionally argues that Doc's Clinic cannot raise, for the first time on appeal, the new argument that UNISYS is a joint tortfeasor and, therefore, the original petition served to interrupt prescription against it. Finally, UNISYS asserts that even lf this late-posited argument were to be considered, it lacks merit because the district court also sustained an exception of prescription in favor of the originally named defendants; thereforec even if UNISYS's joint-tortfeasor status. were corisideredf the tort claims are still prescribed, • ' "· •• • - ' • ' ' .·· . ,. '. ' ~ •, •, : ' ' ' ; .. : :· '. • • ; • .l I '. •' l •• ' • We find it unnecessary to "address either 'of the part.ies' arguments on appeal, as we find a separate basis exists ~pon whfch :~t 'ca~' b~ ~det~r~ined th:a{'the district court did • .' ',_,,·1 5 .· .. : ; . . We agree with UNISYS's representation of the law arid the applicable burden of proof. Ordinarily, the party pleading prescription bears the burden of proving ·that the claim has prescribed. Oracle Oil, LLC v. EPI Consultants, Div. of Cudd Pressure Control, Inc.1 2,011-0151 (La. App. 1 Cir. 9/14/11), 77 So.3d 64, 67, writ denied, 2011-2248 (La. 11/23/11), 76So.3d1157. However, when prescription is evident from the face of the pleadings, the burden shifts to the plaintiff to show the action has not prescribed. Straub v. Richardson, 2011-1689 (La. App. 1 CiL 5/2/12), 92 So.3d 548, 552, writ denied, 2012-1212 (La. 9/21/12), 98 So.3d 341, cert. denied, 133 S.Ct. 1805, 185 L.Ed.2d 811 (2013). The petition and the amending petition seek damages arising out of sanctions that were imposed. in 2004. Thus, the one-year tort claims are prescribed from the face of the petition. Accordingly, the burden then shifted to Doc's Clinic to show that the claims were not prescribed. '. . : 5 . ·, ,. , not manifestly err in sustaining the exception of. prescription. In the earlier appeal by Doc's Clinic, challenging the sanctions i.rnposed upon it by DHH, this court noted: "[s]ince the exclusion order and $28,432,51 recoupment have been reversed, this appeal relates exclusively to the August 4, 2000 recouprr1ent." (Emphasis added.) Doc's Clinic, APMC, 984 So.2d at 718. This court was referring. to the first phase of Doc's Clinic's administrative process. Doc's Clinic's. original challenge .to DHH's sanctions had been heard by an Administrative Law Judge who submitt~d a recommended decision to the then DHH Secretary (David W. Hood) thc;it recommended reversal of the exclusion order, as well as the majority of the remaining recoupment amount. At that time, DHH Secretary Hood issued a final decision on April 3, 2003, that accepted the All's recommendation to reverse the exclusion ore/er, but reversed the AU's recommendation regarding the recoupment, ·instead upholqihg the recoupment. Thereafter, Doc's Clinic "· continued to proceed With the administrative process. by rChallenging the remaining recoupment in the Nineteenth Judicial District Court.. The sanction of excluding Doc's. Clinic from participating as a Medicaid provider for five years, which forms the basis in the petition .for damages for lost profits, was reversed by DHH Secretary Hood's decision dated April 3, 2003. Although Doc's Clinic filed subsequent pleadings for judicial review of DHH's actions, those subsequent pleadings concerned only the issue of the recoupment, as the exclusion of Doc's Clinic had been reversed and was not further challenged by any party. Delictual actions are subject to a liberative prescription of one year, which begins to run from the day injury or damage is ·sustained.· La. C.C. art. 3492. commences when a plaintiff obtains ·actual to a reasonable person that he or she Prescription or.constructive knowledge of facts indicating i~ the\ti~tlHf ~f a tort. ··Guillot, 142 So.3d at 1046. Constructive knowledge is whatever notice is enough to excite attention and put the injured party on guard and call for inquiry.·· Such notice is tantamount to knowledge or notice of everything to which a reasonable inquiry may lead. Id., see also Campo v. Correa, 2001-2707 (La. 6/21/02)r 828So.2d 502, 510-11. ------------- . - -. --- -- --- - -- - Based on the foregoingr we find th~t as of ,Aprii 3f 2003, Doc's Oinic had actual knowledge that the sanction of excluding it .from participation in the Medicaid program had been reversed. Thus, as of that date, Doc's Oinic had notice that the sanction of exclusion that had been imposed on it was wmngfuliy imposed, and therefore, prescription began to run from that date on all tort daims, including the claims at issue for lost profits that Doc's Clinic may have had against the defendants involved in the sanctioning process. Accordingly, those claims prescribed .one year from that date, or April 3, 2004. Therefore, the petition for damages filed on February 17, 2009, as well as the amending petition filed on April 17, 2013, adding UNISYS as a defendant, asserted claims that were prescribed, and untimely filed. For the foregoing reasons, we find the district court did not err in sustaining the exception of prescription fiied by UNISYS and dismissing Doc's Clinic's claims against it. Accordingly, that judgment is affirmed. Ali costs ·of this appeal are _assessed to the plaintiff, The Doc's Clinic, APMC. AFFIRMED. 7

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