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Mazzitti and Sullivan Counseling Services, Inc. v. Dep't of Public Welfare

October 7, 2010

MAZZITTI AND SULLIVAN COUNSELING SERVICES, INC., PETITIONER
v.
DEPARTMENT OF PUBLIC WELFARE, RESPONDENT



The opinion of the court was delivered by: Senior Judge Kelley

Submitted: April 23, 2010

BEFORE: HONORABLE RENÉE COHN JUBELIRER, Judge, HONORABLE PATRICIA A. McCULLOUGH, Judge, HONORABLE JAMES R. KELLEY, Senior Judge.

Mazzitti and Sullivan Counseling Services, Inc. (Mazzitti) petitions for review of a Final Order issued by the Secretary of the Department of Public Welfare (DPW). The Secretary's order upheld an order of the DPW's Bureau of Hearings and Appeals (BHA), which had adopted the Recommendation of a DPW Administrative Law Judge (ALJ) dismissing Mazzitti's claim for payment under the Pennsylvania Medical Assistance (MA) Program for outpatient mental health services that it had provided to children under 21 years of age. We affirm.

Mazzitti was established in 1983 offering outpatient drug and alcohol addiction treatment programs. Mazzitti has maintained its drug and alcohol treatment license with the Commonwealth since 1983.

In 1994, DPW added outpatient mental health services to children under 21 years of age such as Mobile Therapy (MT), Behavior Special Consultant (BSC), and Therapeutic Staff Support (TSS), also known as "wraparound services", to its fee schedule.*fn1 All enrolled providers in the MA program are given a provider type number. Only a qualified and enrolled Provider Type 50, and certain enrolled psychiatrists, licensed psychologists, and the like, could submit claims for payment to DPW for the provision of wraparound services.*fn2 However, a qualified and enrolled Provider Type 50 could subcontract for the provision of wraparound services.*fn3

In 1996, Mazzitti began working as a subcontractor with Meadows Psychiatric Clinic (Meadows), a qualified and enrolled Provider Type 50, for the provision of wraparound services. The agreement between Mazzitti and Meadows provided that Meadows would train Mazzitti's staff and supervisor and monitor their work, and pay Mazzitti 75% of what DPW paid to Meadows for its provision of wraparound services. However, a number of billing issues arose between Mazzitti and Meadows.

In 1997, Mazzitti's employee in charge of record-keeping resigned. As a result, Mazzitti hired Mona Olvera as a case manager. In addition, Olvera was the principal for Healthy Options, Inc. (Healthy Options). Olvera approached Mazzitti about working with her and Healthy Options for the provision and billing for wraparound services. Although Olvera represented to Mazzitti that Healthy Options had a Provider Type 50 "license" with DPW, Healthy Options was not an enrolled Provider Type 50 approved for the provision of wraparound services; rather, it was only enrolled and approved by DPW for the provision of case management services. Mazzitti did not contact DPW to determine whether Healthy Options could seek reimbursement from DPW as an enrolled Type 50 provider for wraparound services.

Ultimately, on January 2, 1998, Mazzitti and Olvera entered into a subcontract agreement under which Mazzitti would provide wraparound services and Healthy Options would submit the billing to DPW for the services. Under the agreement, Mazzitti agreed to abide by DPW's rules and regulations, and Healthy Options agreed to pay Mazzitti 90% of what DPW paid to Healthy Options. Because Healthy Options had no billing department or staff, Mazzitti did the data entry and billing to DPW, and kept the billing records for Healthy Options, using software supplied by Olvera. Olvera instructed Mazzitti to use Healthy Options' Type 50 provider MA identification number (MAID) and group enrollment number when submitting the billing to DPW. Healthy Option and Mazzitti agreed that all checks and remittance advices received from DPW would be sent to Mazzitti.

In February of 1998, service descriptions were submitted to DPW under Healthy Options' name for MT and TSS services provided by Mazzitti. DPW's Office of Mental Health and Substance Abuse Services (OMHSAS) denied the service descriptions because Healthy Options was not a licensed mental health provider and did not qualify to provide wraparound services.

In April of 1998, service descriptions were submitted to DPW for MT and TSS services under the name of Ivonne Acrich, M.D., a psychiatrist employed by Mazzitti. OMHSAS approved these service descriptions.

In 1998 and 1999, additional service descriptions were submitted to DPW for MT, TSS and BSC services under the names of five psychologists who worked for Mazzitti, including John Ramos. These service descriptions were approved by OMHSAS.

On June 2, 1998, Olvera called DPW's Bureau of Quality Management and Program Integrity (BPI) to inquire into why claims for payment were being denied. During the course of the telephone call, BPI became aware that Healthy Options was submitting claims under its MAID for unauthorized wraparound services. On June 5, 1998, BPI sent a letter to Healthy Options advising that it was improper for Healthy Options to submit billing for wraparound services, that Healthy Options must cease such billing, and that BPI was going to initiate a review of Healthy Options' billing to DPW.

After the June 5, 1998 letter, claims for wraparound services were no longer submitted to DPW under Healthy Options' MAID number. Rather, Olvera instructed Mazzitti to use Dr. Acrich's MAID number as Dr. Acrich was an authorized provider of wraparound services. In addition, Olvera instructed Mazzitti to resubmit certain denied TSS service claims using Dr. Acrich's MAID number, and to resubmit certain denied BSC service claims using Mr. Ramos's MAID number.

However, Dr. Acrich did not provide wraparound services, did not supervise the wraparound program, and did not provide clinical oversight of the wraparound program. Moreover, Mazzitti resubmitted these claims to DPW using Dr. Acrich's MAID number knowing ...


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