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WESTERN PENNSYLVANIA HOSPITAL v. COMMONWEALTH PENNSYLVANIA (12/11/87)

decided: December 11, 1987.

THE WESTERN PENNSYLVANIA HOSPITAL, PETITIONER
v.
COMMONWEALTH OF PENNSYLVANIA, DEPARTMENT OF PUBLIC WELFARE, RESPONDENT



Appeal from the Order of the Department of Public Welfare in the case of Appeal of: The Western Pennsylvania Hospital, 4800 Friendship Avenue, Pittsburgh, PA 15224, Re: Case No. 02K0070.

COUNSEL

Edward V. Weisgerber, with him, Carolyn M. Branthoover, Kirkpatrick & Lockhart, for petitioner.

Jason Manne, Assistant Counsel, with him, Bruce G. Baron, Assistant Counsel, for respondent.

Judges MacPhail and Colins, and Senior Judge Kalish, sitting as a panel of three. Opinion by Judge Colins.

Author: Colins

[ 111 Pa. Commw. Page 598]

The Western Pennsylvania Hospital (Hospital), an acute care facility, appeals an order of the Department of Public Welfare (DPW), Office of Hearings and Appeals, adopting in its entirety the recommendation of a Hearing Officer which held that DPW properly denied the reimbursement of certain claims for payment for health care services rendered by the Hospital because certain associated requisite forms were untimely submitted. DPW has filed a Motion to Quash the Hospital's appeal on the grounds that the Petition for Review presents an issue not preserved for appeal.

We distill the following facts from the minimal record in the instant matter. During the period July, 1984 to October 1984, the Hospital provided obstetrical services to sixteen patients eligible under the Pennsylvania Medical Assistance (MA) Program. These patient admissions followed closely upon DPW's implementation of a radically revised prospective system for MA

[ 111 Pa. Commw. Page 599]

    reimbursement based on Diagnosis Related Groups (DRGs), such program purporting to control inpatient hospital costs by assuring that hospital admissions are necessary and that appropriate medical care is rendered to MA patients.*fn1

In accordance with the DRG reimbursement process, the Hospital was required to submit to DPW a "Hospital Admission DRG CHR Certification Form" (MA-87 form) for any MA patient admitted to the facility, such form to be received by DPW within ten calendar days of the admission or payment for inpatient services would be denied. See 55 Pa. Code ยง 1163.75(6). The Hospital submitted MA-87 forms for the sixteen obstetrical patients here at issue but each was received by DPW after the ten day time limitation for submission and each was denied as untimely. At all times throughout the proceedings, the Hospital conceded that the forms were untimely submitted. However, it requested reimbursement in whole or in part because these services were undeniably rendered, medically appropriate and not reimbursed solely as a result of the untimely submission of the MA-87 forms, a delay the Hospital attributed to operational problems with a recently purchased computer software system.

The Hospital appealed the denials of reimbursement to the Office of Hearings and Appeals and a telephone hearing was conducted by a designated Hearing Officer.

[ 111 Pa. Commw. Page 600]

The Hospital was represented at this hearing by Dr. James Hanrahan, Chairman of the Hospital's Utilization Review Committee, who again reiterated that the delay in submission of the MA-87 forms was occasioned by a computer software problem which prevented the categorization of patients into the appropriate DRG. The Hearing Officer denied the appeal, stating that while she understood that the computer problem may have made the Hospital's task more difficult, there were no regulations providing for ...


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