Jamestown Management Corp. v. State of Illinois

OPINION

STEFFEN, J. THIS CAUSE COMING TO BE HEARD on Respondent’s Motion for Summary Judgment pursuant to an evidentiary hearing before Commissioner Ysursa and oral arguments before this Court, this Court being fully advised, finds as follows:

[*241] STATEMENT OF FACTS

Claimants, several long-term care facilities, filed this complaint on May 20, 1999 against Illinois Department of Public Aid (IDPA) for non-payments of medical bills for services they rendered to nursing home patients in need. The dates of services range from 1992 to 1996. (Tr. P. 74) and the payment review request relating to these service dates was filed on September 18, 1998. (Tr. P. 54-5). The bill payment procedures are stated in the Departmental Report and the evidentiary hearing before Commissioner Ysursa has resolved the factual issues that were in dispute. The Commissioner’s findings are part of the record in this case and although the issue of Respondent’s affirmative defense remains at large, this Court finds that the claim is appropriate for a ruling on the Motion for Summary Judgment based on the statute of limitations issue.

ISSUES

The issue in the Motion for Summary Judgment is whether this Court lacks jurisdiction because Claimants did not file suit within one year of the accrual date pursuant to 305 ILCS 5/11-13 (11-13). Claimants argue that the accrual date as defined in Section 11-13 is September, 1998 and triggered by their filing a Payment Review Board Request (Review Request) in response to the Prepayment Report; hence the May, 1999 complaint is timely. Respondent argues that Section 11-13(2) should govern and if the vendor cannot prove that he submitted a bill for the service rendered within 12 months of the date of service the date of accrual is twelve months following the date of service. This entire claim filed in May, 1999 for services rendered at the latest in 1996 is time barred.

ANALYSIS

The question of whether the claim is time barred begins with the issue of what is a bill under the current paperless billing system and if the Claimants can prove that a bill was submitted. The accrual period would then be determined by the parameters of section 11-13(1). If the answer to the first question is there is no bill, then the secondary question is whether 11-13(2) applies to this claim and the claim accrued 12 months following date of service.

In the Court of Claims, statutes of limitations are not procedural but jurisdictional. Klopfer v. Court of Claims, 289 Ill.App.3d 499, 676 N.E.2d 679 (1997). The failure to file suit within the applicable statute of limitations deprives the Court of Claims jurisdiction. The Claimants bear the burden to plead and prove that action was brought within the time prescribed. Id. At Ill.App.3d 506, 676 N.E.2d at 684. The issue of jurisdiction may be raised at any time and cannot be waived by Respondent. Forcade-Osborn v. Madison [*242] County Electoral Board, 334 Ill.App.3d 756, 758, 778 N.E.2d 768, 770 (5th Dist. 2002).

The relevant language of the Act states, “(a)ll claims cognizable against the State by vendors of goods or services under ‘the Illinois Public Aid Code’, …must file within one year after the accrual of the cause of action, as provided in Section 11-13 of that Code”. 705 ILCS 505/22(b). Section 11-13 of the Code further provides that parties shall commence their actions in the Court of Claims within one year next after the cause of action accrued. 305 ILCS 5/11-13.

The cause of action accrued per the directives of Section 5/11-13 “(1) If the vendor can prove that he submitted a bill for the service rendered to the Illinois Department or governmental unit within 12 months of the date the service was rendered, than (a) upon the date the Illinois department or governmental unit mails to the vendor information that it is paying a bill in part or is refusing to pay a bill in whole or in part, or (b) upon the date one year following the date that vendor submitted such bill if the Illinois Department or a governmental unit fails to mail to the vendor such payment information within one year following the date the vendor submitted the bill: or (2) If the vendor cannot prove that he submitted a bill for the service rendered within 12 months of the date the service was rendered, then upon the date 12 months following the date the vendor rendered the service to the recipient.” 305 ILCS 5/11-13.

The inquiry of whether there was a bill submitted by the Claimants in this case is simple; both sides agree there was no formal bill submitted.

Claimants’ argument as to why 5/11-13(1) should still apply seems to be based on the reasoning that the bill payment and review procedure in place at the time trigger application of 5/11-13(1) instead of 5/11-13(2). The argument why subsection (1) should apply appears to be one of equity and fairness grounded on the principal that it would be unfair to punish Claimants with a shorter statute of limitations under subsection (2) for not filing a bill when in fact they were directed by IDPA to not do so. Claimants argue for a longer limitation period based on Section 11-13(1) although there is no definite bill because they deem the accrual period to commence once IDPA gives a written denial in the form of a Remittance Advise. This Remittance Advise is in response to a Payments Review Request filed by Claimants and signals the end of the review process.

Claimants argued that although they bear the burden of proving that they submitted a bill and it is clear that they never submitted a formal bill, Section 5/11-13(1) applies by implication from the payment process and therefore, the statute of limitations accrues 12 months after the State rejected the claims in writing on September 4, 1998.

[*243] The evidentiary hearing before Commissioner Ysursa also disclosed that although there was no formal bill, there was a lengthy period of negotiations between the parties that culminated in this lawsuit. (Tr. p. 11-24). The hearing revealed that under the automated billing system, providers are not only not required to but were instructed by IDPA not to submit bills. Rather, IDPA submitted a pre-payment report to the facility and the facility, if they desired, could submit a Payment Review Request if they disagreed with the Remittance Advice from IDPA instructing them what charges were being paid or denied. (Tr. p. 11-16, 52-53). IDPA states that the facilities were required to submit this Payment Review Request within 12 months and raises this argument by way of an affirmative defense.1 The undisputed evidence demonstrated that all of the services at issue were provided between August, 1992 and November, 1996. (Tr. p. 74). No formal bill was submitted by Claimants and a payment review request relating to the disputed amount was filed in September 18, 1998. (Tr. p. 54-5). The hearing also revealed that these issues arose due to the 1992 change to the billing payment system when the old turnaround billing system was replaced by the one-cycle automated billing system. It appears that the change in the billing system was not coupled with a change in Section 11-13 of the Code to harmonize the two. Therefore, Section 5/11-13(1) which was triggered by the submission and later partial payment or denial of a bill was suddenly left to apply to a system where there simply was not a formal bill.

The evidentiary hearing established that there is no formal bill and the Claimants urge this Court to consider the ‘Pre-payment Report’ as a bill because it most serves the purpose of a bill. It is also proposed that this would prevent filing of claims before they are ripe and prevent inherent unfairness.2 This Court respectfully and reluctantly declines to follow this argument.

First, there is a long line of precedents that Claimants bear the burden of proving that they submitted a bill to IDPA to trigger Section 11-13(1).

Bautista v. State, 47 Ill.Ct.Cl. 161 (1994); Simon v. State, 40 Ill.Ct.Cl. 246 (1987); Krakora v. State, 40 Ill. Ct. Cl. 233 (1987). Although the line of cases were decided prior to the current billing system, their logic and spirit are applicable and in line with the limited powers of this Court. Unlike the United States and the Illinois Supreme Courts, the Court of Claims is devoid of equitable jurisdiction; its limitations provisions are jurisdictional and cannot be Commissioner Ysursa found that IDPA failed to present adequate proof of this affirmative defense. Although IDPA witness, Judy McCreight, does reference the IDPA rules that require the submission of a Payment Review Request within 12 months of receipt of a Remittance Advice indicating that a claim is being denied, they failed to city such a rule. (Tr. P. 48).

Note, this finding would be contrary to Court of Claims unpublished opinion in Emerald Park Nursing Center v. State, 03CC2405, which held that the Pre-payment Report is not a bill and therefore Section 11-13(2) applies and the accrual date is the date of service.

[*244] disregarded under any circumstances. Hickey v. State, 48 Ill.Ct.Cl.376, 383 (1995). Claimants’ argument why the plain language of Section 11-13(2) should not apply is precisely based on such an equitable argument.

Second, the Court of Claims does not have equitable jurisdiction to allow Claimants to utilize defenses such as waiver, estoppel or laches to overcome the Court’s strict limitations provisions. Klopfer, 286 Ill.App.3d at 505, 676 N.E.2d at 683. A State officer is without power to waive or arrest the running of the statute. Illinois Bell v. State, 35 Ct. Cl. 345, 347(1981).

Therefore, Claimants’ reliance on the Respondent’s inactions or lateness in reviewing or paying a bill or even their assurances cannot negate the statute of limitations. Claimants urge that Section 11-13(1) applies because the claim was commenced within one year after IDPA issued a Remittance Advice pursuant to their lengthy negotiations. Claimants reason that the Remittance Advice was the denial that triggers Section 11-13(1). The argument is that an action and inaction of IDPA employees tolled the statute until Claimants finally filed a Payment Review Request. Unfortunately, Claimants reliance was misplaced and neither the passage of time nor the late payment by IDPA can toll the statute.

Lastly, it is clear that Claimants must file in the Court of Claims to prevent the tolling of the statute, even if it is pursuing other remedies. National Railroad Passenger Corporation v. State, 36 Ill.Ct.Cl. 265, 267 (1982). The Administrative Code rules specifically provide procedures for a matter to be continued generally pending possible resolution through other means. Rules 6 (74 Ill.Adm.Code 60) and 7 (74 Ill.Adm.Code 70). Regardless of other remedies or procedures available, Claimants must file in the Court of Claims within this period of limitations.

The Court is mindful that its ruling concerns matters where both sides were perhaps dealing with the application of a new system and were in uncharted areas of law. However, the practical effect of adopting Claimants’ position is that accrual would depend on the filing of a Payment Review Request by Claimants. Thus, the statutory period would be determined on a case by case basis and could, arguably, be extended indefinitely by a party by merely withholding such filing. It is crucial to note that it is under such logic that a 1992 service date claim is being grouped and argued as within the same the statutory limitations as a 1996 service date claim in a lawsuit filed almost seven years after the first claim. All this occurs by the fact that Claimants chose to file a Payment Review Request on all matters at same time. The logic of how claims spread over four years of service can all accrue together escapes this Court.

Such a result would also fly in the face of the rationale behind time limitations enacted as part of a statutory scheme creating a right. This Court has spoken to the public policy behind 22(b) of the Court of Claims Act which incorporated Section 11-13:

[*245] Finally, this Court would be remiss if it did not note the sound public policy reason for the statute, 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.

Illinois Bell Telephone v. State, 35 Ill.Ct.Cl. 345, 349 (1981).

Therefore, this Court hold that the claims filed in May, 1999 for services rendered at the latest in 1996 are time barred. The Respondent’s Motion for Summary Judgment based on the statute of limitations is granted and all matters are hereby dismissed with prejudice.