David J. Bogolia and Nikki Schafer v. John Danielson, M.D.

• Court: Indiana Court of Appeals
• Decided: November 1, 2012
• Docket: 64A04-1201-CC-42
• Status: Unpublished

Opinion

Pursuant to Ind.Appellate Rule 65(D), this Memorandum Decision shall not be regarded as precedent or cited before any court except for the purpose of establishing the defense of res judicata, collateral estoppel, or the law of the case.

ATTORNEY FOR APPELLANT: ATTORNEY FOR APPELLEE:

SHAUN T. OLSEN JOHN L. KELLY, JR. Law Office of Weiss & Schmidgall, P.C. Merrillville, Indiana Merrillville, Indiana FILED Nov 01 2012, 9:17 am

IN THE CLERK COURT OF APPEALS OF INDIANA of the supreme court, court of appeals and tax court

DAVID J. BOGOLIA and NIKKI SCHAFER, ) ) Appellants-Defendants, ) ) vs. ) No. 64A04-1201-CC-42 ) JOHN DANIELSON, M.D., ) ) Appellee-Plaintiff. ) )

INTERLOCUTORY APPEAL FROM THE PORTER SUPERIOR COURT The Honorable Roger V. Bradford, Judge Cause No. 64D01-1103-CC-1649

November 1, 2012

MEMORANDUM DECISION - NOT FOR PUBLICATION

VAIDIK, Judge Case Summary

David J. Bogolia and Nikki Schafer appeal the trial court’s denial of their motion

for partial summary judgment and their motion to strike Dr. John Danielson, MD’s

response to that motion. They contend that Dr. Danielson’s response was untimely

because it was not filed within thirty days from the time they served their motion. They

also contend that there is no genuine issue of material fact that both Dr. Danielson’s

claim is barred because he is required to seek compensation solely through Medicare and

that Dr. Danielson’s claim against Schafer fails as a matter of law because she was a

disclosed agent of Bogolia. Finding that Dr. Danielson’s response to the motion for

partial summary judgment was not timely filed but nonetheless that there are genuine

issues of material fact as to both issues, we affirm.

Facts and Procedural History

On May 19, 2007, Bogolia suffered a serious hand injury that required medical

attention. Appellant’s App. p. 55. Bogolia went to Porter Memorial Hospital in

Valparaiso and was treated by Dr. Danielson. Before being seen by Dr. Danielson,

Bogolia was required to fill out registration paperwork and sign a Financial Policy.

Bogolia was unable to sign due to his hand injury, so his daughter, Nikki Schafer, signed

the Financial Agreement and indicated next to her signature that she was Bogolia’s

daughter. However, Schafer dated the Financial Policy May 22, 2007. Id. at 53. At the

time, Schafer also had power-of-attorney and was a healthcare surrogate for Bogolia.

Dr. Danielson was a participating physician in the Medicare program, and the

Financial Policy stated that Dr. Danielson would file with Medicare if the patient had met

2 his deductible for the year. Id. at 84. When Dr. Danielson treated Bogolia, Bogolia had

Medicare insurance and had met his deductible for the year. Dr. Danielson performed

surgery on Bogolia’s hand, which included an initial consultation and required two

follow-up office visits. The total cost of Bogolia’s medical bills was $9690.00. Id. at 12.

Neither Bogolia nor Schafer received a bill from Dr. Danielson after he treated

Bogolia’s injuries. However, on January 18, 2008, Dr. Danielson’s office sent a bill in

the amount of $9690.00 to Paul Rossi, Bogolia’s attorney, which was forwarded to

Bogolia. Id. at 56. Bogolia and Schafer called the Social Security Administration after

receiving the bill, and they were informed that Dr. Danielson was under contract to

accept assignment on all services provided to Medicare patients, but that he had not

submitted the bill at issue yet. Rossi then sent the bill to the Social Security

Administration on behalf of Bogolia, and the Social Security Administration made a

check payable to Dr. Danielson for the physician services rendered. However, Dr.

Danielson refused to accept the check, as Medicare reimbursements are less than the full

amount of services.

Dr. Danielson filed a complaint against Bogolia and Schafer, arguing that they

were jointly and severally liable for the payments owed to him for the medical services

he rendered to Bogolia. Bogolia and Schafer answered the complaint and filed a counter-

claim and a motion to dismiss and/or for judgment on the pleadings, which was denied.

On September 9, 2011, Bogolia and Schafer mailed their motion for partial summary

judgment, rendering it served. It was deemed filed with the clerk’s office on September

13, 2011. Dr. Danielson filed his response on October 13, 2011, and Bogolia and Schafer

3 filed a motion to strike his response as untimely. A hearing was held, during which both

parties referred to this action as a personal injury case. See, e.g., Tr. p. 11, 18. The trial

court denied both the motion to strike and the motion for partial summary judgment.

Bogolia and Schafer asked the trial court to certify its orders on the motion to

strike and the motion for partial summary judgment for interlocutory appeal, which the

trial court granted. This Court accepted jurisdiction over the interlocutory appeal on

March 2, 2012.

Discussion and Decision

Bogolia and Schafer make three arguments on appeal: (1) whether the trial court

erred by denying the motion to strike Dr. Danielson’s response to the motion for partial

summary judgment; (2) whether the trial court erred by denying their partial motion for

summary judgment because Dr. Danielson’s claim is barred since he is required to look

solely to Medicare for payment for the treatment he provided to Bogolia; and (3) whether

the trial court erred by denying their partial motion for summary judgment because Dr.

Danielson’s claim against Schafer fails as a matter of law because she was a disclosed

agent of Bogolia.

I. Denial of Motion to Strike

Bogolia and Schafer mailed their motion for partial summary judgment on

September 9, 2011, and it was received by the clerk of the court on September 13, 2011.

Dr. Danielson served his response to the motion on October 13, 2011. Bogolia and

Schafer contend that Dr. Danielson did not timely file his response to their motion for

4 partial summary judgment, so the trial court erred by denying their motion to strike his

response. We agree.

Bogolia and Schafer’s motion was served pursuant to Trial Rule 5(B)(2) when it

was mailed, which was September 9, 2011, and it was filed pursuant to Trial Rule 5(F)(1)

when it was delivered to the clerk of the court, which was September 13, 2011. Trial

Rule 5(B)(2) states that service is complete upon mailing, so the time period within

which Dr. Danielson had to respond to the motion for partial summary judgment began to

run on September 9, 2011. Pursuant to Indiana Trial Rule 56(C), Dr. Danielson had

thirty days after service of the motion for partial summary judgment to serve his

response. Trial Rule 6(E) extends that deadline by three days since Bogolia and Schafer

served their motion by mail. Any response was therefore due by October 12, 2011,

thirty-three days after September 9, 2011, making Dr. Danielson’s answer that was filed

on October 13, 2011, untimely.

As the rules make clear, the thirty-day window begins to run as soon as service is

complete, not when filing is complete. “No doubt the most important thought in relation

to Rule 5 is that emphasis is clearly given to service of papers, and not to filing of papers.

. . . It is the date of service rather than that of filing that is significant insofar as

measuring time is concerned.” William F. Harvey, 1 Indiana Practice: Rules of

Procedure Annotated 426 (3d ed. 1999). The case law on this issue also indicates that the

courts interpret the trial rule as written and allow parties thirty days from the time of

service within which to respond to a motion for summary judgment. See, e.g., HomEq

Servicing Corp. v. Baker, 883 N.E.2d 95, 98 (Ind. 2008) (“At no time within thirty days

5 after service of the plaintiff’s motion for summary judgment did the defendants request

any alteration of the time limits imposed by Indiana Trial Rule 56.”) (emphasis added);

Farm Credit Servs. of Mid-America, FLCA v. Tucker, 792 N.E.2d 565, 568 (Ind. Ct. App.

2003) (“Indiana Trial Rule 56(C) provides that after one party files a motion for summary

judgment, ‘an adverse party shall have thirty (30) days after service of the motion to

serve a response and any opposing affidavits.’”) (emphasis added); Seufert v. RWB Med.

Income Props. I Ltd. P’ship, 649 N.E.2d 1070, 1072 (Ind. Ct. App. 1995) (“Trial Rule 56

requires that an adverse party designate evidence and material issues of fact in its

‘response,’ which must be filed within 30 days after the motion is served.”) (emphasis

added).

Therefore, any argument by Dr. Danielson that the thirty days within which he

was able to file his response did not start running until the date the papers were filed with

the court is without merit. Because Dr. Danielson failed to file his response within the

proscribed time period, the trial court erred by denying Bogolia and Schafer’s motion to

strike his response.1

II. Motion for Summary Judgment

When reviewing the entry or denial of summary judgment, our standard of review

is the same as that of the trial court: summary judgment is appropriate only where there

is no genuine issue of material fact and the moving party is entitled to a judgment as a

1 We note that Dr. Danielson also argues that Bogolia and Schafer have not shown that their motion was served with the appropriate certificate of service. Appellee’s Br. p. 10. However, Dr. Danielson admits that he was served. Id. at 8. He also raises this argument for the first time on appeal, so we find the argument to be waived. Mid-States Gen. & Mech. Contracting Corp. v. Town of Goodland, 811 N.E.2d 425, 438 n.2 (Ind. Ct. App. 2004) (“An appellant who presents an issue for the first time on appeal waives the issue for purposes of appellate review.”). 6 matter of law. Ind. Trial Rule 56(C); Dreaded, Inc. v. St. Paul Guardian Ins. Co., 904

N.E.2d 1267, 1269 (Ind. 2009). All facts established by the designated evidence, and all

reasonable inferences from them, are to be construed in favor of the nonmoving party.

Naugle v. Beech Grove City Sch., 864 N.E.2d 1058, 1062 (Ind. 2007). Since Dr.

Danielson’s response to Bogolia and Schafer’s motion for partial summary judgment has

been stricken, we have also stricken his designated evidence. We will therefore not use

his designated evidence in our decision, but will look only at the designated evidence that

remains.

A. Payment for Treatment

Bogolia and Schafer next contend that the trial court erred by denying their partial

motion for summary judgment because Dr. Danielson’s claim is barred since he is

required to look solely to Medicare for payment for the treatment he provided to Bogolia.

Finding a genuine issue of material fact, we conclude that the trial court did not err by

denying the motion for partial summary judgment on this ground.

It is undisputed that at the time he treated Bogolia, Dr. Danielson was a

participating physician in the Medicare system, Appellant’s App. p. 8; Appellant’s Br. p.

8; Appellee’s Br. p. 3, and his financial policy said that he would bill Medicare if the

patient had met his deductible for the year.2 As a participating physician, Dr. Danielson

had voluntarily chosen to enter into an agreement with the Secretary of the United States

2 Bogolia and Schafer argue that because Dr. Danielson’s Financial Policy states that he accepted Medicare, he should have been required to file with Medicare since the terms of the contract were clear and unambiguous. They also argue that Dr. Danielson should be estopped from seeking a fee from anyone other than Medicare because they reasonably relied on the language of the Financial Policy and its representation that Dr. Danielson would bill Medicare. However, by accepting Medicare, Dr. Danielson also must follow the rules of Medicare, including the rules of when Medicare is a primary or secondary payer. We therefore find both of these arguments to be without merit. 7 Department of Health and Human Services to accept payment from Medicare for services

provided to Medicare beneficiaries. 42 U.S.C.A. § 1395u(h)(1). Medicare would pay

80% of the cost of services, while the patient would pay no more than the remaining 20%

as a copayment. 42 U.S.C.A. § 1395l(a)(1). Additionally, he must accept the Medicare

payment as full payment for his services and could not bill the patient for any additional

amounts other than the copayment. 42 U.S.C.A. § 1395u(18)(B). Therefore, since

Medicare was Bogolia’s insurer, and he had met his deductible for the year, Dr.

Danielson was required to file a claim with Medicare for payment of the services he

rendered to Bogolia, assuming Medicare was the primary payer.

However, in this case, Medicare would be a secondary payer if the medical bills

arose as a result of an accident for which a liability insurance company would make a

payment.3 Under the Medicare regulations, payment “may not be made . . . with respect

to any item or service to the extent that-- . . . (ii) payment has been made or can

reasonably be expected to be made under a . . . liability policy or plan . . . .” 42 U.S.C.A.

§ 1395y(b)(2)(A) (emphases added). This is to effectuate “Congress’s intent to make

Medicare a secondary payer to liability insurance.” Parkview Hosp., Inc. v. Roese, 750

N.E.2d 384, 390 (Ind. Ct. App. 2001), trans. denied.

It is uncontested by the parties that Bogolia’s injuries resulted in a personal injury

action. See, e.g., Tr. p. 11, 18. Additionally, in Schafer’s affidavit, she states that “Dr.

Danielson’s office sent a bill for $9690.00 to Paul Rossi, my father’s attorney at the time

of the injury, and that bill was forwarded to my father.” Appellant’s App. p. 56. That

3 Since we are without any information of a liability insurance settlement, the issue of a lien on any such settlement is not ripe for our consideration. 8 there is a personal injury action and that Dr. Danielson sent the bill to an attorney after

treatment for the injuries creates a question as to whether there has been or will be any

settlement in the personal injury case. We are therefore without sufficient information to

know if a liability insurer has already made or will make a payment toward Bogolia’s

medical treatment by making a settlement payment. This creates a genuine issue of

material fact in regards to this issue, so the trial court did not err in denying Bogolia and

Schafer’s motion for partial summary judgment on this ground.

B. Schafer as Bogolia’s Agent

Finally, Bogolia and Schafer contend that Dr. Danielson’s claim against Schafer

fails as a matter of law because she was a disclosed agent of Bogolia. They argue that the

trial court erred by not granting their partial motion for summary judgment on this issue

because there is no genuine issue of material fact that Schafer was Bogolia’s agent. We

disagree.

An agency relationship is created when one person gives another the authority to

act on his behalf. Johnson v. Blankenship, 679 N.E.2d 505, 507 (Ind. Ct. App. 1997),

trans. granted and summarily aff’d, 688 N.E.2d 1250 (Ind. 1997). There are three

elements necessary to create an actual agency relationship: “(1) manifestation of consent

by the principal, (2) acceptance of authority by the agent, and (3) control exerted by the

principal over the agent.” Demming v. Underwood, 943 N.E.2d 878, 883 (Ind. Ct. App.

2011), reh’g denied, trans. denied. In order to create an apparent agency relationship, the

principal must consent to its manifestation, represent its manifestation to a third party,

and the third party must have a reasonable belief that someone else is an agent of the

9 principal. Hope Lutheran Church v. Chellew, 460 N.E.2d 1244, 1248 (Ind. Ct. App.

1984). If an individual is considered an agent and contracts on behalf of a disclosed

principal, he is not personally liable to the other contracting party. Hawkins v. Dorst Co.,

116 N.E. 577 (Ind. 1917).

In this case, Schafer argues that she had an apparent agency relationship with

Bogolia that she represented to Dr. Danielson when she signed the financial policy

documents because Bogolia’s hand was injured and he was unable to sign. However,

Schafer signed the Financial Agreement and wrote “(daughter)” next to her name.

Appellant’s App. p. 53. The meaning of “(daughter)” is not clear on its face and raises an

issue of fact as to whether there was an apparent agency relationship between Bogolia

and Schafer.

Additionally, Schafer also argues that she signed the Financial Policy while in the

emergency room and that she was informed by Dr. Danielson that it needed to be signed

before Bogolia could receive treatment. Id. at 55. However, Bogolia received treatment

in the emergency room on May 19, 2007, and the Financial Policy was dated May 22,

2007. This raises an issue of fact as to when Schafer actually signed the Financial Policy

and when the Financial Policy became effective, which, in turn, raises the question of

what charges Schafer could be responsible for if she is found to be financially liable for

Bogolia’s treatment. Based on this, the trial court did not err in denying Bogolia and

Schafer’s motion for partial summary judgment on this issue.

Affirmed.

MATHIAS, J., concurs.

10 BARNES, J., concurs with separate opinion.

11 IN THE COURT OF APPEALS OF INDIANA

DAVID J. BOGOLIA and NIKKI SCHAFER, ) ) Appellants-Defendants, ) ) vs. ) No. 64A04-1201-CC-42 ) JOHN DANIELSON, M.D., ) ) Appellee-Plaintiff. )

BARNES, Judge, concurring

I concur in full with the majority opinion. I only write to vent my frustration with

the legally mandated result.

The Medicare system was and is set up to allow the payment of fixed, tangible

prices for services rendered to persons treated by physicians who accept Medicare. In the

vast majority of cases, a Medicare-approved provider cannot and should not directly bill a

Medicare beneficiary for the full cost of services provided. In fact, there is a statute

expressly stating that by agreeing to be a Medicare provider, a doctor agrees “not to

charge, except [for deductibles and co-insurance], any individual or any other person for

12 items or services for which such individual is entitled to have payment made . . . .” 42

U.S.C. § 1395cc(a)(1)(A).

An overwhelming majority of the time, Medicare reimbursements to physicians

are based upon a fee schedule that falls well below the “going rate” for charged

procedures. Regardless, physicians who agree to participate in Medicare generally must

“accept Medicare’s payment for services rendered.” U.S. v. Awad, 551 F.3d 930,

933 (9th Cir. 2009), cert. denied. Here, Mr. Bogolia went to a physician, Dr. Danielson,

who clearly held himself out as a doctor who accepted Medicare payments. Mr. Bogolia

underwent the procedure, and Dr. Danielson billed him the full market amount for the

treatment after declining to cash a check tendered by Medicare for presumably a much

lesser amount.

Mr. Bogolia was seeking compensation in a lawsuit for the injuries to his hand and

Dr. Danielson was aware of that fact. It does not appear that Dr. Danielson ever billed

Medicare for the treatment provided to Mr. Bogolia. It does seem that Dr. Danielson is

permitted to do what he did—assuming Mr. Bogolia has already received an insurance

settlement—under the current guidelines adopted by the Centers for Medicare &

Medicaid Services regarding Medicare as a secondary payer, which provide in part:

[I]f the physician or other supplier pursues liability insurance,

the physician or other supplier may charge beneficiaries

actual charges, up to the amount of the proceeds of the

liability insurance less applicable procurement costs but may

not collect payment from the beneficiary until after the

13 proceeds of the liability insurance are available to the

beneficiary.

Medicare Secondary Payer (MSP) Manual, Chapter 2, § 40.2(D) (available at

http://www.cms.gov/Regulations-and-

Guidance/Guidance/Manuals/Downloads/msp105c02.pdf); see also Joiner v. Medical

Center East, Inc., 709 So. 2d 1209, 1221 (Ala. 1998). We must defer to an agency’s

interpretation of the statutes and regulations the govern it. See Development Servs.

Alternatives, Inc. v. Indiana Family & Soc. Servs., 915 N.E.2d 169, 181 (Ind. Ct. App.

2009), trans. denied. Despite my best efforts to the contrary, I can find no legal authority

to come to a conclusion other than the one reached by the majority.

I also can find no parallel to Indiana Code Section 32-33-4-3, which allows

hospitals to have a lien for “all reasonable and necessary charges for hospital care”

against any settlement proceeds received by a patient, but which first requires the lien to

be reduced by any available medical insurance proceeds and which limits a hospital’s

total lien to eighty percent of a settlement. Dr. Danielson is not a hospital, and here Mr.

Bogolia pays the full freight for the doctor’s charges, despite the fact that Medicare was

clearly in play and contemplated as the payor by Mr. Bogolia.

It seems to me that if one holds himself out as a physician who will accept

Medicare payments, performs a function that is Medicare covered, and is tendered

payment from Medicare for that work, that is the social and legal bargain Medicare

contemplates. I also note that under the holding of Stanley v. Walker, 906 N.E.2d 852,

14 858 (Ind. 2009), evidence of the discounted Medicare reimbursement rate for Bogolia’s

procedure—not the full market rate Dr. Danielson wishes to collect—would have been

relevant and admissible in valuing Mr. Bogolia’s tort claim and almost certainly would

have been considered by a liability insurer in determining the reasonable value of medical

services that he received. As a practical matter, it does not seem Mr. Bogolia has or will

hit the proverbial “jackpot” on his negligence claim—possibly, not even enough to cover

Dr. Danielson’s bill of $9690.00.4

The majority has the law right in my view, much to my chagrin. Thus, I

grudgingly concur.

4 There is reference in the record—albeit in evidence designated by Dr. Danielson that the trial court properly struck—that Mr. Bogolia received a settlement of approximately $8,000.00 for his claim. 15