Court Opinion

ID: 2644799
Source: CourtListenerOpinion
Date Created: 2013-12-04 15:41:06.671248+00
Date Added: 2024-06-11T12:54:08.290393
License: Public Domain

STATE OF WEST VIRGINIA

                           SUPREME COURT OF APPEALS

 Michael Kostenko, D.O.,                                                            FILED
 Petitioner Below, Petitioner                                                    December 4, 2013
                                                                              RORY L. PERRY II, CLERK

                                                                            SUPREME COURT OF APPEALS

                                                                                OF WEST VIRGINIA

 vs) No. 12-1493 (Raleigh County 10-AA-14)

 West Virginia Offices of the Insurance Commissioner,
 Respondent Below, Respondent

                              MEMORANDUM DECISION

       Petitioner Michael Kostenko, D.O., appearing pro se, appeals the order of the Circuit
Court of Raleigh County, entered November 26, 2012, that upheld the final order of the Insurance
Commissioner that permanently terminated petitioner’s right to receive workers’ compensation
payments for services rendered to injured employees. Respondent West Virginia Offices of the
Insurance Commissioner (“WVOIC”), by counsel Charles R. Bailey, Kelly C. Morgan, and
William H. Rardin, filed a response. Petitioner filed a reply.

        The Court has considered the parties’ briefs and the record on appeal. The facts and legal
arguments are adequately presented, and the decisional process would not be significantly aided
by oral argument. Upon consideration of the standard of review, the briefs, and the record
presented, the Court finds no substantial question of law and no prejudicial error. For these
reasons, a memorandum decision affirming the circuit court’s order is appropriate under Rule 21
of the Rules of Appellate Procedure.

        Petitioner is a doctor of osteopathy licensed in West Virginia, who practiced medicine
in Beckley under the name of Coal Country Clinic. On February 18, 2005, the then-existent
West Virginia Workers’ Compensation Commission (“WCC”) issued a notice of termination
permanently terminating petitioner’s right to receive workers’ compensation payments for
services rendered to injured employees because he allegedly provided care that was excessive,
medically unreasonable, and unethical. See W.Va. Code § 23-4-3c(1). Following a show cause
hearing before a hearing examiner, the notice terminating petitioner’s right to receive payments for
services was confirmed by a final order by the Commission dated August 1, 2005. Petitioner
appealed the final order to the Circuit Court of Raleigh County. The circuit court reversed the final
order finding that petitioner had been subjected to an unfair administrative proceeding. The circuit
court remanded the case for further proceedings consistent with its order.

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       Following remand, the WVOIC 1 issued a new notice of termination to petitioner on
February 15, 2008. That notice charged petitioner with three violations:

               (1)	   Administering tendon sheath injections in excess of the
                      treatment guidelines where the documentation did not
                      support the medical necessity for tendon sheath injection or
                      billing for tendon sheath injections which were not
                      administered, or both;

               (2)	   Allowing massage therapists and other employees to
                      compound and administer I.V.’s and tendon sheath and
                      trigger point injections in violation of the massage
                      therapists’ licensing and the laws of the State of West
                      Virginia, and improperly billing workers’ compensation for
                      those procedures; and

               (3)	   Engaging in “upcoding” in that petitioner billed for services
                      that implied a higher level of complexity than was
                      documented in the medical records and failing to report and
                      correct fraudulent billing by petitioner’s office when it came
                      to his attention, condoning the practice, or directly causing
                      his office to fraudulently bill for services not rendered.

        A second show cause hearing was scheduled for March 25, 2010. However, two days
prior to the hearing, petitioner’s counsel informed the hearing examiner and the WVOIC’s
counsel by letter that he and petitioner would not appear for the show cause hearing because
they had filed a petition in the Circuit Court of Kanawha County that sought to dismiss the
February 15, 2008, notice of termination. Petitioner’s counsel further advised that it was not
appropriate to subject petitioner to a hearing on the notice of termination that was issued merely
for the purposes of harassing him. However, in his letter, petitioner’s counsel did not ask for a
continuance or the postponement of the show cause hearing. In the petition filed in the Circuit
Court of Kanawha County, petitioner’s counsel likewise did not seek a stay of the show cause
hearing,2 nor did petitioner’s counsel file an extraordinary petition in either prohibition or
mandamus to enjoin the hearing. In response to petitioner’s counsel’s letter, the WVOIC’s
counsel informed petitioner’s counsel that the show cause hearing would proceed as
scheduled.

       At the beginning of the March 25, 2010 show cause hearing, the hearing examiner
addressed petitioner’s and his counsel’s non-appearance by first asking the WVOIC’s counsel

       1
        The WVOIC is the statutory successor of the now-defunct WCC. See W.Va. Code §
23-1-1(e).
       2
          The Kanawha County proceeding has now been stayed pending the outcome of the
instant case.
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whether he had informed petitioner’s counsel that the hearing would proceed. The WVOIC’s
counsel indicated that he had so informed petitioner’s counsel. Next, the hearing examiner
confirmed that he was aware of “an action pending in the Circuit Court of Kanawha County”
that raised overlapping issues. The hearing examiner then ruled: “But, we’re going to go
ahead and proceed with the hearing.” Following the presentation of the WVOIC’s witnesses
and evidence at the show cause hearing, the hearing examiner issued a recommended decision
on May 12, 2010, that petitioner’s right to receive payments for services rendered should remain
terminated permanently. On June 1, 2010, the Insurance Commissioner issued a final order
adopting the hearing examiner’s recommended decision.

        Petitioner appealed this June 1, 2010 order to the Circuit Court of Raleigh County which
held a final hearing on his appeal on August 21, 2012. After hearing the arguments of counsel, the
circuit entered an order on November 26, 2012, that upheld the Insurance Commissioner’s final
order. The circuit court first determined that West Virginia Code § 23-4-3c(b) required petitioner
to appear at the March 25, 2010 show cause hearing.3 Second, the circuit court ruled that legal
authority strongly suggested that petitioner waived his right to complain about the administrative
proceedings or any procedural issues when he failed to appear for the show cause hearing, but that
the court would address the issues raised by petitioner “out of an abundance of precaution.” The
issues that the circuit court refuted were as follows: (1) that the show cause hearing was not
scheduled at a “mutually agreeable time”; (2) that the WVOIC had a duty to present evidence
favorable to petitioner at the show cause hearing; (3) that the hearing examiner at the show cause
hearing should have considered petitioner’s submissions from the original show cause hearing; (4)
that petitioner should have been afforded the right to submit proposed findings of fact and
conclusions of law following the show cause hearing; (5) that the hearing examiner should have
noted the reason for petitioner’s non-appearance at the show cause hearing in his recommended
decision; and (6) that instead of pursuing a termination of petitioner’s right to receive payments
pursuant to West Virginia Code § 23-4-3c, the WVOIC should have attempted to collect any
overpayments made to petitioner under the procedures set forth in W.Va. Code R. § 85-28-3
(2005).

        The circuit court also reviewed the February 15, 2008, notice of termination and the
resultant proceedings to ensure that they complied with its remand order. The circuit court first
determined that the February 15, 2008, notice of termination satisfied due process because it
contained more specific charges and details than did the February 18, 2005 notice of termination.
Second, the circuit court found that while petitioner was not provided with an opportunity to
fully present his case pursuant to the February 18, 2005 notice, this issue was rendered moot
by petitioner’s non-appearance at the March 25, 2010 show cause hearing. The circuit court noted
at the March 25, 2010 hearing, the WVOIC presented the testimony of a former WCC employee as
well as the testimony of Dr. James Baker who “testified extensively from specific case records,
and was highly critical of the petitioner’s billing practices for established office visits.” The circuit
court further noted that because petitioner and his counsel failed to appear for the March 25, 2010

        3
          West Virginia Code § 23-4-3c(b) provides, in pertinent part, that “[t]he health care
provider shall appear to show cause why the health care provider’s right to receive payment under
this chapter should not be suspended or terminated.” (Emphasis added.)
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hearing, the WVOIC’s evidence was undisputed. Accordingly, the circuit court concluded that the
hearing examiner’s findings, as adopted by the Insurance Commissioner’s June 1, 2010 final
order, were not clearly wrong, nor arbitrary or capricious, and not characterized by an abuse of
discretion.

        Petitioner, appearing pro se, now appeals the circuit court’s November 26, 2012 order that
upheld the Insurance Commissioner’s final order. “On appeal of an administrative order from a
circuit court, this Court is bound by the statutory standards contained in [West Virginia] Code §
29A-5-4(a) and reviews questions of law presented de novo; findings of fact by the administrative
officer are accorded deference unless the reviewing court believes the findings to be clearly
wrong.”4 Syl. Pt. 1, Muscatell v. Cline, 196 W.Va. 588, 474 S.E.2d 518 (1996).

        On appeal, petitioner raises the first five issues the circuit court discussed in its order
entered November 26, 2012, although petitioner attempts to recast these alleged errors as either
misconduct by the WVOIC’s counsel or ineffective assistance by his own counsel. This Court will
address those added dimensions to petitioner’s arguments. First, petitioner asserts that the
WVOIC’s counsel misled the hearing examiner concerning the nature of petitioner’s Kanawha
County petition. This Court notes that the hearing examiner indicated on the record that he was
aware of the petition and that it raised overlapping issues, but ruled that he was moving forward
with the show cause hearing. The one question the hearing examiner asked of the WVOIC’s
counsel was whether counsel had communicated to petitioner’s counsel that the March 25, 2010
show cause hearing would proceed as scheduled. The WVOIC’s counsel indicated that he had so
informed petitioner’s counsel, which fact is established by the record. Thus, this Court finds
that the WVOIC’s counsel did not misled the hearing examiner.

       Second, petitioner alleges that the WVOIC’s counsel acted inappropriately by not
searching through the records from the first show cause hearing and provide thereafter to the
hearing examiner any and all evidence favorable to petitioner. Petitioner analogizes the duty owed
by the WVOIC’s counsel to the duty owed by a prosecutor to a criminal defense attorney to
disclose exculpatory evidence. This Court finds that because this was an administrative
proceeding—and not a criminal proceeding—petitioner’s argument is devoid of merit.

        Lastly, petitioner alleges that if the WVOIC’s counsel did not commit misconduct, his own
counsel must have provided ineffective assistance by not appearing for the March 25, 2010 show
cause hearing. The WVOIC counters that petitioner has not made such an allegation against his
former attorney until now and that in over three years since the hearing, it is believed that
petitioner has never sued his counsel for malpractice. The record reflects that petitioner’s counsel
made the strategic decision for his client and himself not to appear for the March 25, 2010 hearing
once they had filed their Kanawha County petition. This Court finds that both at the time of the
March 25, 2010, hearing and at the time of the August 21, 2012 final hearing before the circuit
court, no evidence existed that petitioner disagreed with his counsel’s strategic decision. This

       4
         As noted by the circuit court, petitioner appealed the Insurance Commissioner’s June 1,
2010 final order pursuant to the West Virginia Administrative Procedures Act, West Virginia
Code §§ 29A-1-1 to -7-4.
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Court accordingly determines that this issue provides no basis for overturning the Insurance
Commissioner’s final order.

        All other arguments made by petitioner are adequately resolved by the circuit court’s order.
Having reviewed the circuit court’s “Order,” entered November 26, 2012, we hereby adopt and
incorporate the circuit court’s well-reasoned findings and conclusions as to the assignments of
error in this appeal. The Clerk is directed to attach a copy of the circuit court’s order to this
memorandum decision.

       For the foregoing reasons, we find no error in the decision of the Circuit Court of Raleigh
County and affirm its November 26, 2012 order that upheld the June 1, 2010 final order of the
Insurance Commissioner that permanently terminated petitioner’s right to receive workers’
compensation payments for services rendered to injured employees.

                                                                                         Affirmed.

ISSUED: December 4, 2013

CONCURRED IN BY:

Chief Justice Robin Jean Davis
Justice Brent D. Benjamin
Justice Margaret L. Workman
Justice Menis E. Ketchum
Justice Allen H. Loughry II

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