Appeal from the order of the Board of Claims, in the case of Stanford Zukin, Inc. and Thatcher's Rexall Pharmacy, Inc. v. Commonwealth of Pennsylvania, Department of Public Welfare, No. 903-P.
Richard D. Malmed, Hepburn, Willcox, Hamilton & Putnam, for petitioners.
Bruce G. Baron, Assistant Counsel, for respondent.
Judges Craig, Barry, and Senior Judge Narick, sitting as a panel of three. Opinion by Senior Judge Narick.
[ 113 Pa. Commw. Page 425]
Stanford Zukin, Inc. and Thatcher's Rexall Pharmacy, Inc. (hereinafter Petitioners) appeal from a decision of the Board of Claims (Board) which denied their request for relief. For the reasons set forth herein, we will affirm.
The relevant chronology of events is as follows. From March 1968 to February 7, 1983 Petitioners were a provider in the Pennsylvania Medical Assistance Program (Program) enrolled as a pharmacy, pursuant to a provider agreement entered into between Petitioners and the Department of Public Welfare (DPW). On January 6, 1983, Petitioners received written notice from DPW that their provider status would be terminated on February 7, 1983. On January 9, 1983, a timely appeal was filed by Petitioners with the Office of Hearings and Appeals (OHA). At that time Petitioners also made a request to OHA to issue a supersedeas order with respect to the termination of their provider status.
Three supersedeas orders were subsequently issued by OHA with respect to this matter. The first supersedeas order was issued by OHA on January 26, 1983. This order provided that Petitioners could continue billing the Program for covered services and be reimbursed for such services if they posted a bond. The amount of the bond was to be no less than the amount of Petitioners' average monthly payments from the Program
[ 113 Pa. Commw. Page 426]
for a four month period, with the average payment to be calculated on the basis of Petitioners' payments during the period July 1982 through December 31, 1982. The bond was also required to guarantee payment to DPW of all monies reimbursed to Petitioners during the period February 8, 1983 to June 7, 1983 in the event an adverse decision was issued by OHA against Petitioners. Lastly, the order stated that if a final administrative decision was not issued by OHA on or before June 7, 1983 that DPW could seek to have the amount of the bond increased. On February 23, 1983, OHA issued a second supersedeas order. This order contained the same terms as the first supersedeas order with the exception that the amount of the bond was to be $10,000 and enabled Petitioners to continue billing for Program services during the period February 14, 1983 through June 7, 1983. On March 16, 1983 OHA issued a third supersedeas order which was essentially the same as the two previous supersedeas orders. However, the third supersedeas order did provide in paragraphs two and three as follows:
2. If the Department shall have paid to the Appellant [Petitioners] for services rendered after February 14, 1983 an amount in excess of $10,000, the Appellants shall, within ten (10) days of the date of written notice of such fact from the Department, post an additional $10,000 as a bond with respect to any further participation failing which payments will cease pending the outcome of this matter; and so each time payments exceed the total amount of the bond.
3. In the event that the Appellant's [Petitioners] appeal is denied, the bond shall be used to reimburse the Department for any and all sums paid to the Appellant for services rendered ...