NO. 4-00-1049

	IN THE APPELLATE COURT

	OF ILLINOIS

	FOURTH DISTRICT

ARIES HEALTHCARE OF ILLINOIS, INC.,

d/b/a RIVEREDGE HOSPITAL,

		Plaintiff-Appellant,

		v.

THE DEPARTMENT OF PUBLIC AID; and ANN

PATLA, Director of the Department of

Public Aid,

		Respondents-Appellees.	)

)

)

)

)

)

)

)	Appeal from

Circuit Court of

Sangamon County

No. 99MR423

Honorable

Thomas R. Appleton,

Judge Presiding.

_________________________________________________________________

	ORDER		JUSTICE TURNER delivered the opinion of the court:

		Plaintiff, Aries Healthcare of Illinois, Inc.,

d/b/a Riveredge Hospital (Riveredge), sought judicial review of the decision by the Department of Public Aid (Department) to deny

Riveredge’s application for disproportionate-share-hospital (DSH)

status.  The circuit court affirmed the Department’s decision.  Riveredge appeals, arguing the Department erred in refusing to

consider additional information filed after an application deadline, in its review procedure, to correct Riveredge’s ac counting error in its initial application.  We affirm.

		I. BACKGROUND

		Riveredge is a licensed psychiatric hospital partici

pating in Medicaid.  Riveredge also receives reimbursement funds

from Cook County and the Illinois Department of Children and Family Services (DCFS).  Payments from these sources, plus

inpatient charges for charity care, are used in determining DSH qualification based on low-income utilization.  See 89 Ill. Adm. Code §148.120(a)(2) (Conway Greene CD-ROM September 1999).  The Department makes adjustment payments to hospitals qualifying for DSH status.  See 89 Ill. Adm. Code §148.120(a) (Conway Greene CD-

ROM September 1999).

		In April 1999, the Department notified Riveredge of a

July 1, 1999, deadline for postmarking information required for

DSH determination.  See 89 Ill. Adm. Code §148.120(f)(1) (Conway Greene CD-ROM September 1999).  This information must reflect (1)

total hospital net revenue for all patient services, (2) total

payments received directly from State and local governments for

all patient services, (3) total gross inpatient hospital charges

for charity care, and (4) total gross inpatient hospital charges. 

See 89 Ill. Adm. Code §§148.120(d)(1) through (d)(4) (Conway Greene CD-ROM September 1999).

		In May 1999, Riveredge applied for DSH status for rate-

year 2000 by submitting a form, cash-posting summaries, monthly operating statements, a trial balance, and audited financial

statements.  The form stated Riveredge had (1) direct payments from state and local governments of $3,209,832, (2) total hospi

tal net revenue of $14,881,174, (3) total gross inpatient hospi

tal charges for charity care of $731,245, and (4) total hospital

gross charges of $31,942,729.  Riveredge derived the first amount

from the cash-posting summaries, identifying payments from Medicaid, DCFS, and Cook County.

		Based on this information, the Department calculated Riveredge’s low-income utilization rate as 23.86%, adding the

first amount as a percentage of the second amount to the third amount as a percentage of the fourth amount.  In August 1999, the

Department informed Riveredge it failed to qualify for DSH status

because its low-income utilization rate did not exceed 25%.

		Riveredge sent the Department a letter, postmarked September 18, 1999, to appeal the DSH determination.  See 89 Ill.

Adm. Code §148.310(b) (Conway Greene CD-ROM September 1999).  Riveredge attached a "revised" form, stating it received $4,110,183 in direct payments from state and local governments. 

Riveredge also attached four checks from DCFS, totaling

$900,351.33.  Riveredge’s letter indicated these payments were

incorrectly posted to an "unapplied cash" account instead of a DCFS account.  Riveredge attached a copy of the cash-posting

summaries with asterisks marking the increase in "unapplied cash" from $13,867 in June 1996 to $1,112,331 in June 1997.

		In October 1999, the Department responded to

Riveredge’s appeal letter, stating the Department is prohibited

by rule from including the corrections in its DSH determination

because Riveredge did not submit them by July 1, 1999.  In

November 1999, Riveredge filed its complaint for administrative

review in the circuit court.  In November 2000, the circuit court

awarded judgment to the Department.  This appeal followed.

	II. ANALYSIS

	A. Standard of Review

		Riveredge contends the Department should have granted

it a substantive appeal and should have considered the informa

tion Riveredge submitted after the July 1, 1999, deadline.  Riveredge argues the Department’s refusal to grant DSH status was

based on an erroneous interpretation of its regulations.

		We conduct a de novo review because the facts are undisputed and we are presented solely with issues of law.  Morse v. Illinois Department of Professional Regulation, 316 Ill. App. 3d 664, 667, 737 N.E.2d 678, 680 (2000).  An agency's interpretation of

its own regulations is subject to some deference on review. 

Dimensions Medical Center, Ltd. v. Elmhurst Outpatient Surgery Center, L.L.C., 307 Ill. App. 3d 781, 800, 718 N.E.2d 249, 263 (1999).

	B. Applicability of Information-Filing

Deadline to Review Procedure

		Riveredge asserts the Department erred in refusing to

consider revised and supplemental information filed with its

appeal because the time-limit requirement for filing information

applies only to "initial determinations."  The Department's

regulations provide:

			"The information required *** must be received no later than the first day of July

preceding the DSH determination year for

which the hospital is requesting consider

ation of such information for the determina

tion of DSH qualification.  Information re

quired *** which is not received in compli

ance with these limitations will not be con

sidered for the determination of those hospi tals qualified for DSH adjustments."  (Empha sis added.)  89 Ill. Adm. Code §148.120(f)(1)

(Conway Greene CD-ROM September 1999).

		We reject Riveredge's interpretation because the

Department's regulations provide only one determination of

eligibility for DSH status.  The language of section

148.120(f)(1) supports this conclusion.  We disagree with

Riveredge's characterization of the Department's review procedure

in section 148.310(b) as a "final determination" of DSH status. 

Instead, review is limited to "verification that the Department utilized criteria in accordance with State regulations" (emphasis

added) (89 Ill. Adm. Code §148.310(b)(2)(A) (Conway Greene CD-ROM September 1999)) and "verification that low[-]income utilization rates were calculated in accordance with federal and State regulations" (emphasis added) (89 Ill. Adm. Code §148.310(b)(2)(C) (Conway Greene CD-ROM September 1999)).  Finally, an interpretation allowing Riveredge to revise and

supplement its application for DSH status would render the

deadline meaningless.  Therefore, section 148.120(f)(1) clearly required Riveredge to submit all necessary information prior to

July 1, 1999, and the Department did not err in refusing to

consider any additional information Riveredge filed after the

deadline.

	C. Scope of Review Procedure

		Riveredge next argues, even if the deadline bars the

information in its September 1999 filing, it should have received DSH status because it submitted, prior to July 1, 1999, "raw data" establishing its eligibility.  Riveredge contends its May

1999 filing was sufficient to qualify for DSH status but for its

"error in calculation," which, Riveredge asserts, may be cor

rected on review.

		However, Riveredge does not dispute the Department's

"initial determination" to deny DSH status.  The Department did

not have sufficient information to identify $900,351.33 in DCFS payments posted to an "unapplied cash" account.  As stated, we have determined the Department makes only one determination of

DSH status eligibility.  Therefore, the issue becomes whether

Riveredge may correct its "error in calculation" through the

Department's review procedure, which provides:

			"Hospitals shall be notified of their qualification for DSH payments adjustments and

shall have an opportunity to request a review of the DSH add-on for errors in calculation.  Such a request must be received *** within 30

days after the date of the Department's no

tice to the hospital of its disproportionate share qualification and add-on calculations.  Such request shall include a clear explana

tion of the error and documentation of the

desired correction.  ***"  (Emphasis added.)  89 Ill. Adm. Code §§148.310(b)(1) (Conway Greene CD-ROM September 1999).

		We reject Riveredge's interpretation of this review procedure as providing a "substantive review" of the DSH determi

nation for "errors in calculation."  Section 148.310(b)(1)

clearly provides review only of the Department's add-on calcula

tion.  Further, the review procedure in section 148.310(b)(1) applies only after the Department determines a hospital qualifies

for DSH payment adjustments and calculates the add-on amount. 

Finally, Riveredge's interpretation is inconsistent with related

regulations, which limit review of the DSH determination to

verification the Department used criteria in accordance with

State regulations (89 Ill. Adm. Code §148.310(b)(2)(A) (Conway Greene CD-ROM September 1999)) and limit review of the low-income utilization rate to verification it is calculated in accordance

with federal and State regulations (89 Ill. Adm. Code

§148.310(b)(2)(C) (Conway Greene CD-ROM September 1999)).

		We disagree with Riveredge's contention the Depart

ment's interpretation deprives hospitals of any meaningful review

of the DSH determination.  Sections 148.310(b)(2)(A) and

(b)(2)(C) allow substantive review of the Department's DSH

determination and low-income utilization rate calculations for

compliance with regulations.  However, these review procedures

provide for verification only, not a second determination.

  		III. CONCLUSION

		For the reasons stated, we affirm the circuit court's

judgment.

		Affirmed.

		STEIGMANN, P.J., and McCULLOUGH, J., concurring.TURNER, J., with

State of Illinois

APPELLATE COURT

Fourth District

INTER-OFFICE MEMORANDUM

To:	Judge Steigmann		Date: July 5, 2001

     Judge McCullough

						From: Judge Turner

					  	Subject:  Aries Healthcare v. 

						          Department of Public Aid

						  No. 4-00-1049   July/01/Oral

						  TURNER, Steigmann, McCullough

		Enclosed for your consideration is a proposed Rule 23 order prepared by Anastacia Warren.

Enc.

cc:  Judge Myerscough

	Judge Knecht

	Judge Cook

	Clerk