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Fifth Division
August 30, 2002

This appeal arises out of the Illinois Department of Public Aid's decision to terminate theeligibility of the plaintiff, Dr. Jia Hwang, to participate as a provider in the Illinois MedicalAssistance Program. 305 ILCS 5/5-1 et seq. (West 2000). The Medical Assistance Program iscommonly referred to as Medicaid. State law requires that providers of medical services underMedicaid keep detailed records and make the records available to the Department of Public Aid(Department) for routine inspection. Plaintiff was ultimately terminated as a provider because heignored repeated requests from the Department to inspect his medical records.

On September 20, 2000, the Department notified plaintiff regarding his possibletermination and his right to a hearing. Specifically, the notification sent to plaintiff stated that hehad 10 days to request a hearing; however, plaintiff never made such a request. On October 16,2000, the date on which the hearing would have been held had one been requested, theDepartment proved up service of the notice sent to plaintiff. The administrative law judge thenissued a recommended decision finding plaintiff in default and recommending that theDepartment's proposed action be final and binding. On January 22, 2001, the Director of theDepartment of Public Aid adopted the recommended decision as her final decision.

On February 26, 2001, plaintiff filed a complaint for administrative review in the circuitcourt of Cook County, Illinois. Plaintiff also sought a stay of the Department's decision. Onadministrative review, plaintiff argued that he received improper notice of the Department'sproposed action against him. The trial court denied the stay and affirmed the Department'sdecision. Plaintiff appeals from the trial court's decision to uphold the ruling of the Department.

The issues presently before us are (1) whether plaintiff was provided proper notice; (2)whether, due to plaintiff's default, he is precluded from raising any issues other than subjectmatter or personal jurisdiction; (3) assuming plaintiff is not barred from raising other issues,whether the Department of Public Aid was entitled to adopt a default procedure and terminateplaintiff as a provider in the absence of additional evidence; (4) whether the Department ofPublic Aid gave plaintiff proper notice of its default motion; (5) whether the Department ofPublic Aid properly notified plaintiff of its final decision; and (6) whether the trial court properlydenied plaintiff's request for a remand.

We affirm the trial court's decision to uphold the administrative ruling. Morespecifically, we hold that plaintiff was provided proper notice and that, due to plaintiff's default,he is precluded from raising any issues other than subject matter or personal jurisdiction. Consequently, there is no need for us to discuss any issues beyond whether plaintiff was providedproper notice.

The Medical Assistance Program, contained in Article V of the Public Aid Code (theCode) (305 ILCS 5/5-1 et seq. (West 2000)) and in the regulations of the Department of PublicAid, sets out the plan for administering Medicaid in Illinois. Section 5-5 of the Code states thatthe Department of Public Aid must require health care providers enrolled in the program to"maintain records that document the medical care and services provided to recipients of MedicalAssistance under this Article." 305 ILCS 5/5-5 (West 2000).

On eight separate dates, between late February and early June 2000, the Department ofPublic Aid made 14 requests that plaintiff furnish his medical records to the Department or makethem available for inspection. These requests were made by telephone, facsimile, regular mail,certified mail, and personal delivery. Despite these requests, the Department contends thatplaintiff failed to submit his records or make them available.

On September 20, 2000, the Department issued to plaintiff a "Notice of Right to Hearingand Department Action to Terminate." The notice specifically stated that the Department haddetermined that plaintiff had failed to furnish or make available his medical records and,therefore, the Department was seeking to terminate his eligibility to participate in the program. Pursuant to the notice, plaintiff was advised that he had the right to request a hearing, and that ifa hearing was requested, it would be held on October 16, 2000. Accompanying the notice was a"Statement of Grounds," listing each unsuccessful request for records, the dates of the requests,and the methods by which the requests had been made.

The September 20, 2000, notice and the accompanying statement of grounds were sent toplaintiff via certified mail, return receipt requested, at three addresses. Specifically, notice wassent to (1) Highland Medical Center, 8201 South Ashland Avenue, Chicago, Illinois 60620; (2)South Shore Hospital, 8015 South Luella, Suite 211, Chicago, Illinois 60617; and (3) SouthShore Hospital, 8012 South Crandon, Chicago, Illinois 60617. Each envelope was addressed toplaintiff. Despite this request and all earlier requests, plaintiff failed to request a hearing on theDepartment's intended action to terminate his participation in the program.

On October 16, 2000, the date the hearing would have been held had it been requested,counsel for the Department appeared before the administrative law judge and asked that plaintiffbe found in default. Counsel for the Department tendered to the administrative law judge acertified mail return receipt showing delivery of the notice and the accompanying statement ofgrounds to South Shore Hospital. The signature on the return receipt is illegible.

On October 16, 2000, the administrative law judge issued a recommended decisionfinding that plaintiff's eligibility should be terminated. The administrative law judge determinedthat plaintiff had been served with the notice, that the notice adequately informed plaintiff of hisright to request a hearing, and that plaintiff had not made such a request and had not appeared onOctober 16, 2000. The administrative law judge also noted that under the Department'sregulations, its action becomes final and binding when a respondent fails to request a hearing orfails to appear at a hearing without good cause. Thus, the administrative law judge concludedthat the Department's action was final and binding.

A copy of the recommended decision, along with a letter notifying plaintiff of his right tofile written exceptions with the Director within 10 days, was mailed to plaintiff at South ShoreHospital. The record does not reflect that plaintiff filed exceptions to the recommended decision.

On January 22, 2001, the Director of the Department of Public Aid adopted therecommended decision as the decision of the Department and terminated plaintiff's eligibility. The Director notified plaintiff of her decision in a letter dated January 22, 2001. The Director'sletter informed plaintiff of his right to seek administrative review of the decision by filing acomplaint within the circuit court within 35 days.

On February 26, 2001, plaintiff filed a timely complaint for administrative review in thecircuit court. The complaint alleged that the Department's decision was contrary to law andviolated due process because the Department improperly gave notice of its proposed action andhearing.

In May 2001, after the Department filed the administrative record, plaintiff moved for astay of the Department's decision on three grounds. First, plaintiff asserted that his due processrights had been violated because the record did not establish that he had been given notice. Plaintiff specifically argued that notice was not proper because the signature on the return receiptis illegible. Second, plaintiff argued that his due process rights had been violated because theDepartment had not held a "prove-up." Plaintiff submitted his own affidavit and the affidavit ofa Highland Medical Clinic employee stating that on an unspecified date a representative of theDepartment had come to his office to review his medical records and said that she would returnto complete the review, but never did. Third, plaintiff complained that the administrative lawjudge's recommended decision was sent to the 8012 South Crandon address and the evidence inthe record did not show that he received it.

The Department responded to the motion for stay and plaintiff replied. On June 7, 2001,the trial court denied the motion for stay without prejudice, permitting plaintiff to file a renewedmotion for stay before July 6, 2001.

Next, the parties were allowed to brief the matter on the merits. Plaintiff made the samearguments that he had made in support of his motion for stay. In addition, plaintiff argued thatbecause a default cannot be entered without a "prove-up," the record lacked evidence to supportfindings that he failed to provide medical records. Plaintiff also asserted that the record did notshow he received the recommended decision. Lastly, plaintiff asked for a remand on the groundthat it would be just to do so.

On July 6, 2001, the trial court heard argument and, subsequently, entered an orderaffirming the administrative decision.

First, we will examine whether plaintiff received proper notice pursuant to therequirements set forth in the Illinois Administrative Code. Second, we will review whetherplaintiff received proper notice under the due process requirements of the fourteenth amendmentof the United States Constitution. The issue of whether plaintiff was provided proper notice is aquestion of law. As a result, the standard of review is de novo. Hormel Foods Corp. v. Zehnder,316 Ill. App. 3d 1200, 1204 (2000).

Section 12-4.25(A)(b) of the Public Aid Code provides in pertinent part:

"(A) The Illinois Department may deny, suspend or terminate the eligibility of any person, firm, corporation, association, agency, institution or other legal entity to participate as a vendor of goods or services torecipients under the medical assistance program under Article V, if after reasonable notice and opportunity for a hearing the Illinois Department finds:

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(b) Such vendor has failed to keep or make available for inspection, audit or copying, after receiving a written request from the Illinois Department, such records regarding payments claimed for providing services." 305 ILCS 5/12-4.25(A)(b) (West 2000).

Sections 104.230(a), (b), (e), and (f) of the Administrative Code provide:

"104.230 Notice, Service and Proof of Service 

(a) The chief hearing officer and all parties to the proceedings shall be served all papers, notices and otherdocuments filed by any party. Proof of such service upon all parties shall be filed with the chief hearing officer.

(b) Final administrative decisions issued pursuant to these Rules as well as any notice which initiates administrative proceedings pursuant to these Rules and which states that the Department intends to recover money from a vendor, terminate or suspend a vendor's eligibility to participate in the Medical Assistance Program or terminate, suspend, or not renew a vendor's provider agreement, or deny a vendor's application for participation, must be served personally or by certified or registered mail upon the vendor or the vendor's agent appointed to receive service of process.

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(e) Proof of service of any paper shall be by certificate of attorney, affidavit or acknowledgement [sic], or certified or registered mail return receipt. 

(f) Wherever notice or notification is indicated or required, it shall be effective upon the date of mailing to a vendor's or other party's business address, residence or last address on file with the Department." 89 Ill. Adm. Code