No. 93-617 

IN THE SUPREME COURT OF THE STATE OF MONTANA 

THE STATE OF MONTANA, by and 

through its DEPARTMENT OF SOCIAL 

AND REHABILITATION SERVICES, 

Petitioner and Respondent, 

vs . 

SHODAIR HOSPITAL, 

Respondent and Appellant. 

APPEAL FROM: District Court of the First Judicial District, 

In and for the County of Lewis & Clark, 

The Honorable Jeffrey Sherlock, Judge presiding. 

COUNSEL OF RECORD: 

For Appellant: 

John F. Sullivan; Hughes, Kellner, Sullivan & 

Alke, Helena, Montana 

For Respondent: 

Gregory G. Gould, Special Attorney General, 

Department of Social and Rehabilitation Services, 

Helena. Montana 

Filed: 

Submitted on Briefs: March 9, 1995 

De~ided: August 25, 1995 
Justice Karla M. Gray delivered the Opinion of the Court. 

Shodair Hospital (Shodair) appeals from an order of the First 

Judicial District Court, Lewis and Clark County, reversing a 

decision of the Board of Social and Rehabilitation Services Appeals 

(Board) which awarded Shodair medicaid reimbursement for a 

patient's hospitalization and reinstating the hearing examiner's 

decision which denied reimbursement. We affirm. 

We restate the issues on appeal as follows: 

1. Did the District Court err in rejecting the Board's 

finding that Shodair had met the Medicaid Inpatient 

Psychiatric Services manual criteria? 

2. Does substantial evidence support the hearing 

examiner's finding that Shodair failed to meet the MIPS 

manual criteria? 

3. Does compliance with the MIPS manual criteria equate 

to a "significant danger" to the patient or others 

determination under § 46.12.590(2)(k), ARM (1991), 

thereby entitling a treatment provider to medicaid 

reimbursement for a patient's treatment? 

4. Does substantial evidence support the hearing 

examiner's finding that Shodair was not entitled to 

medicaid reimbursement for D.B.B.'s inpatient psychiatric 

care because it failed to demonstrate that D.B.B. posed 

a significant danger to herself, others, or the public 

safety as required by § 46.12.590 (2) (k) , ARM (1991) ? 

5. Was D.B.B.'s treatment at Shodair "medically 

necessary" under § 46.12.102 (2) , ARM (1991) ? 

Issues three through five are dependent on a determination of error 

on issue two. Thus, our holding below that substantial evidence 

supports the hearing examiner's finding that Shodair failed to meet 

the MIPS manual criteria is dispositive and we need not address the 

remaining issues. 
Factual and Procedural Backqround 

D.B.B., a sexually, physically, and emotionally abused eightyear-old girl, was admitted to Shodair on August 8, 1991, for 

inpatient psychiatric treatment of post-traumatic stress disorder. 

D.B.B. was discharged from Shodair to a foster home on September 

19, 1991. Shodair applied to the Department of Social and 

Rehabilitation Services Medicaid Services Division (SRS) seeking 

medicaid reimbursement for D.B.B.'s treatment. SRS reimbursed 

Shodair for inpatient treatment provided to D.B.B. from August 8, 

1991, through August 23, 1991. It denied reimbursement for the 

later portion of D.B.B.'s treatment, based on its determination 

that inpatient services were not medically necessary during that 

time. This case involves Shodair's effort to obtain reimbursement 

from SRS under the state medicaid inpatient psychiatric services 

program for the later portion of D.B.B.'s inpatient treatment. 

Pursuant to 42 U.S.C.A. § 1396a(30) (A) (West Supp. 199S), 

states are required to implement procedures regarding the 

utilization of, and reimbursement for, services rendered under a 

state medical assistance plan; the purpose of the procedures is to 

protect against unnecessary use of services and "assure that 

payments are consistent with efficiency, economy, and quality of 

care." One aspect of such a state plan is the creation of "a 

statewide surveillance and utilization control programu that, among 

other things, must safeguard against excess medicaid payments. 42 

C.F.R. § 456.3(a) (1994). SRS is the state agency responsible for 

creating and managing the utilization program to "ensur [el that 
services provided through the medicaid program are . . . consistent 

with both state and federal laws, rules, and regulations 

establishing the conditions of reimbursement." Section 

461.1012 c i, ARM. 

Section 46.12.590(3), ARM (1991), authorizes medicaid 

reimbursement for hospital inpatient psychiatric care if a person's 

psychiatric condition Npose[sl a significant danger to self, 

others, or the public safety. " Section 46.12.590 (2) (k) , ARM 

(1991). The treatment must be provided under the direction of a 

physician and must be designed to discharge the patient to a less 

restrictive setting as soon as possible. Section 46.12.590 (2) (k) , 

ARM (1991). 

SRS contracted with Mental Health Management of America (MHMA) 

to develop and implement a utilization management program to review 

inpatient psychiatric treatment services provided to medicaid 

recipients under the age of 21 pursuant to the Montana Medicaid 

Inpatient Psychiatric Services Under 21 program (MIPS). Pursuant 

to the contract, MHMA developed a MIPS manual for use by reviewers 

of medicaid reimbursement claims under the program. The manual, 

which was distributed to inpatient psychiatric treatment providers, 

including Shodair, contained criteria relating to reimbursement for 

hospital inpatient psychiatric treatment. The listed criteria 

require treatment providers to demonstrate, with regard to a 

patient's inpatient psychiatric treatment, that they have: (1) 

diagnosed the patient as having an Axis I mental disorder 

delineated in the Diagnostic and Statistical Manual Third Edition- 
Revised (DSM-111-R); (2) obtained a DSM-111-R Axis V rating of 50 

or less regarding the patient's functional level; (3) developed a 

description of the treatment and discharge plan; and (4) identified 

and documented one of four specific problem areas. 

In this case, SRS initially denied reimbursement for the later 

portion of D.B.B.'s inpatient treatment at Shodair. Shodair 

requested, and received, a "fair hearing" pursuant to 

5 46.12.1210 (21, ARM (1991), after which the hearing examiner 

issued extensive findings of fact, conclusions of law and an order 

denying reimbursement. The hearing examiner determined that 

Shodair did not meet the MIPS manual criteria relating to 

reimbursement for hospital inpatient psychiatric treatment. 

Shodair appealed to the Board, which summarily reversed the 

hearing examiner's decision. The Board found that, based on the 

"undisputed factsu of record, Shodair had met the MIPS manual 

criteria as a matter of law and that satisfying those criteria also 

satisfied the "significant dangern requirement contained in 5 

46.12.590 (2) (k) , ARM (1991). As a result, the Board determined 

that Shodair was entitled to medicaid reimbursement for the later 

portion of D.B.B.'s inpatient psychiatric treatment. 

SRS petitioned for judicial review of the Board's decision. 

The District Court concluded that the hearing examiner had 

impliedly, and correctly, determined that Shodair failed to satisfy 

one of the MIPS manual criteria relating to reimbursement for 

hospital inpatient psychiatric treatment. The court also concluded 

that the Board erred in summarily rejecting the hearing examiner's 
findings and in determining that meeting the MIPS criteria was 

sufficient to establish that a patient poses a "significant dangeru 

under 5 46.12.590 (2) (k) , ARM (1991) . The District Court reinstated 

the hearing examiner's decision denying medicaid reimbursement for 

D.B .B. 's treatment at Shodair from August 23 to September 19, 1991. 

Shodair appeals. 

1. Did the District Court err in rejecting the Board's 

finding that Shodair had met the Medicaid Inpatient 

Psychiatric Services manual criteria? 

Shodair contends that the District Court erred in reinstating 

the hearing examiner's decision denying Shodair medicaid 

reimbursement. It argues that the Board correctly rejected the 

hearing examiner's findings and conclusions and awarded Shodair 

reimbursement for D.B.B. ' s stay. SRS argues that the Board did not 

comply with § 2-4-621(3), MCA. The District Court determined that 

the Board violated 5 2-4-621(3), MCA, and we agree. 

Section 2-4-621 (3) , MCA, prohibits the Board from rejecting or 

modifying the hearing examiner's findings of fact unless it states 

with particularity that the findings were not based on competent 

substantial evidence. Nowhere in the Board's brief order does it 

reject or modify any of the hearing examiner's extensive findings, 

much less state with particularity that the finding or findings 

were not based on competent substantial evidence. Instead, the 

Board summarily reversed the hearing examiner's decision, stating 

that it "finds that based on undisputed facts in the record," 

Shodair met the MIPS manual criteria as a matter of law. 

The purpose of § 2-4-621(3), MCA, as is the case with many of 
this Court's standards of review, is to prevent a reviewing body 

from substituting its judgment for that of the factfinder. Here, 

the Board's order merely substitutes its judgment for that of the 

hearing examiner with regard to findings of fact; in doing so, the 

Board violated § 2-4-621(3), MCA. 

Section 2-4-704 (2) (a) (vi), MCA, authorizes a reviewing court 

to reverse the Board's decision if it was "arbitrary or capricious 

or characterized by abuse of discretion or clearly unwarranted 

exercise of discretion [ .I I' A rejection of a hearing examiner's 

findings in violation of § 2-4-621 (3) , MCA, constitutes an abuse of 

discretion under § 2-4-704(2) (a) (vi), MCA. Brander v. Mont. Dep't 

of Institutions (1991), 247 Mont. 302, 308, 806 P.2d 530, 533. 

Thus, we conclude that, in violating 8 2-4-621 (3), MCA, the 

Board abused its discretion. We further conclude, on that basis, 

that the District Court did not err in reinstating the hearing 

examiner's extensive finding of fact for purposes of judicial 

review. 

2. Does substantial evidence support the hearing 

examiner's finding that Shodair failed to meet the MIPS 

manual criteria for hospital inpatient psychiatric 

treatment? 

Shodair and SRS disagree regarding whether satisfying the MIPS 

manual criteria also suffices to meet the "significant dangeru 

requirement of § 46.12.590 (2) (k) , ARM (1991), and the "medical 

necessity" requirement of § 46.12.102(2), ARM (1991), for medicaid 

reimbursement as a matter of law. It is undisputed, however, that 

a provider of inpatient psychiatric services must satisfy the four 

criteria contained in the MIPS manual to establish entitlement to 

7 
medicaid reimbursement for an individual's inpatient psychiatric 

treatment. 

The parties do not dispute that Shodair established, and the 

hearing examiner correctly found, that D.B.B.'s condition met three 

of the four MIPS manual criteria. They disagree on whether Shodair 

met the fourth criterion of identifying and documenting a listed 

problem area; specifically, whether Shodair established the problem 

area entitled "Impaired Safety: Threat to Self or Others." Under 

the MIPS manual, the Impaired Safety problem area consists of three 

components: (1) verbalization or gestures of intent to harm self or 

others, caused by a mental disorder; (2) threats accompanied by 

depressed mood, recent loss, recent suicide attempt or gesture, or 

concomitant substance abuse; and (3) verbalization escalating in 

intensity, or verbalization of intent accompanied by gesture or 

plan. Each of the components must be established in order to 

satisfy the fourth MIPS manual criterion. 

A. Implied Finding 

This Court has adopted the doctrine of implied findings for 

purposes of reviewing findings of fact. Interstate Brands Corp. v. 

Cannon (1985), 218 Mont. 380, 384, 708 P.2d 573, 576. That 

doctrine provides that where the "findings are general in terms, 

any findings not specifically made, but necessary to the 

[determination], are deemed to have been implied, if supported by 

the evidence." Interstate Brands, 708 P.2d at 576 (citations 

omitted). We apply the doctrine only if the implied findings are 

consistent with express findings. Interstate Brands, 708 P.2d at 
576. 

For the most part, the hearing examiner addressed the 

components of the Impaired Safety problem area in a systematic 

manner. With regard to the first component, the hearing examiner 

expressly found that D.B.B. had verbalized an intent to harm both 

others and herself and that these threats were probably caused by 

her mental disorder. Under the second component, relating to the 

patient's recent loss, the hearing examiner found that D.B.B.'s 

threats were accompanied by "the recent loss of her family . . . 

loss of self and loss of self-esteem." 

The third component is comprised of two alternatives: the 

patient's verbalization of intent to harm self or others must be 

accompanied by gestures or plans or escalating in intensity. The 

hearing examiner expressly found that the record did not support a 

finding that D.B.B.'s verbalizations of intent to harm herself or 

others were accompanied by gestures or plans or a finding that 

verbalizations of intent to harm herself escalated in intensity. 

Shodair does not dispute the finding related to verbalizations 

accompanied by gesture or plan and, for purposes of appeal, has 

conceded that the record does not support a finding that D.B.B.'s 

verbalizations of intent to harm herself had escalated in 

intensity. Thus, the only portion of the third component of the 

Impaired Safety problem area at issue is whether D.B.B.'s 

verbalizations of intent to harm others escalated in intensity. 

The hearing examiner did not make an express finding regarding 

the "escalating in intensity" factor. She continued her discussion 
regarding the third component by finding that D.B.B. had harmed 

peers, including one incident which could have posed a danger, but 

that Shodair's treatment after the incident rendered the event 

insignificant. She also found that D.B.B. did not have a serious 

intent to harm and that she was not frequently violent. Shodair 

does not challenge these express findings. The hearing examiner 

concluded by finding that " [criterion] (4 ) of the Department ' s 

criteria for hospital inpatient psychiatric treatment has not been 

met." 

The hearing examiner made systematic, express, and undisputed 

findings that the first two Impaired Safety problem area components 

had been established and that portions of the third component had 

not been established. Those express findings, together with her 

finding that Shodair failed to establish the fourth MIPS manual 

criterion, permitted the District Court to determine that the 

hearing examiner had necessarily found that the escalating in 

intensity portion of the third component had not been established, 

if such a finding is supported by the evidence. See Interstate 

Brands, 708 P.2d at 576. This is so because the finding that 

D.B.B.'s verbalizations were not escalating in intensity was 

necessary for the examiner's ultimate finding that the MIPS manual 

criteria were not met. Moreover, the implied finding is entirely 

consistent with the express findings made by the hearing examiner 

and with the general finding that Shodair failed to meet the fourth 

MIPS manual criterion. See Interstate Brands, 708 P.2d at 576. 

Thus, all that remains is to determine whether the implied finding 
is supported by substantial credible evidence. 

B. Substantial Evidence 

An implied finding must be not only necessary to the judgment, 

but also supported by the evidence. Interstate Brands, 708 P.2d at 

576. When reviewing an administrative agency's findings of fact, 

courts defer to the agency's findings unless they are clearly 

erroneous. Section 2-4-704 (2) (a) (v) , MCA; Westmoreland Resources 

v. Dep't of Revenue (1994), 263 Mont. 303, 310, 868 P.2d 592, 596. 

Generally, findings of fact are not clearly erroneous if they are 

supported by substantial credible evidence. Westmoreland 

Resources, 868 P.2d at 596. Substantial evidence must be more than 

a scintilla, but may be less than a preponderance, of evidence. 

Miller v. Frasure (1991), 248 Mont. 132, 137, 809 P.2d 1257, 1261. 

Both Shodair's records of D.B.B.'s hospitalization and expert 

testimony at the hearing provide substantial evidence supporting 

the implied finding that D.B.B.'s intent to harm others was not 

escalating in intensity. D.B.B.'s hospitalization records 

documented that in forty-three days of hospitalization, she was 

involved in five or six disputes with staff members or peers. 

These incidents involved yelling obscenities at a staff member, 

"invading another peer's space," discussion of how she feared she 

would kill someone if she returned home, and shoving a peer during 

an activity. The medical records establish that D.B.B.'s physical 

conflicts were infrequent and that she had not seriously injured an 

individual. 

In addition, Dr. Larry Osborn (Osborn) testified that, based 
on his review of the medical records, Shodair failed to document 

that D.B.B. had verbally threatened or promised to hurt someone and 

did not demonstrate how any of D.B.B.'s verbalizations escalated in 

intensity. He opined that, although D.B.B.'s recreation often 

contained some violent aspect, nothing in the record confirmed that 

she took the initiative or had the means to hurt her peers. He 

also suggested that the record supported a conclusion that D.B.B. 

learned not to express her anger in an inappropriate manner, such 

as hitting an individual, but to redirect her anger in a positive 

manner by punching pillows or taking "time out." In Osborn's 

opinion, nothing in D.B.B.'s medical record established that D.B.B. 

was impulsive, violent, or dangerous to others. 

The record contains substantial credible evidence supporting 

a finding that Shodair failed to establish that D.B.B.'s 

verbalizations of intent to harm others escalated in intensity and, 

therefore, failed to establish the third Impaired Safety component. 

Such a finding is consistent with the hearing examiner's findings-- 

not disputed here--that D.B.B. lacked serious intent to harm and 

was not frequently violent and with her general express finding 

that Shodair failed to meet the fourth MIPS manual criterion. 

Shodair relies on other evidence of record to support its 

position that D.B.B.'s verbalization of intent to harm others 

increased in intensity. "We will not substitute our judgment for 

that of the [fact finder] even where there is evidence in the 

record to support contrary findings." Estate of Alcorn (1994), 263 

Mont. 353, 360, 868 P.2d 629, 633. Thus, we decline to review 
Shodair's citations to the record and to determine whether that 

evidence supports the finding Shodair advocates. 

We conclude that the District Court did not err in determining 

that the hearing examiner had impliedly found that Shodair did not 

establish the "escalating in intensityn component and that the 

implied finding was supported by substantial credible evidence and 

was not clearly erroneous. We further conclude that the hearing 

examiner did not err in determining, on that basis, that Shodair 

failed to meet the MIPS manual criteria. We hold, therefore, that 

the District Court did not err in reinstating the hearing 

examiner's decision which denied Shodair medicaid reimbursement for 

the later portion of D.B.B.'s inpatient psychiatric treatment. 

Af f irmed. 

We concur. 

Chief Justice 

/@y& 

The ~onorable'yea~. Mizner, 

District Court ($idgel sitting 

for Justice W. illiam Leaphart 
Justice Terry N. Trieweiler dissenting 

I dissent from the majority opinion. 

What is notably absent from the hearing examiner's decision, 

the District Court's decision, or the majority opinion, is any 

mention of the enabling statute pursuant to which medical services 

are reimbursed by the Medicaid program. While I do not disagree 

with the majority's analysis of the evidence in this case as 

applied to the nearly indecipherable MIPS criteria, I do conclude 

that the Administrative Rule pursuant to which those criteria were 

developed was neither consistent with nor reasonably necessary to 

effectuate the purpose of its enabling statute, and therefore, was 

ineffective. For these reasons, I would reverse the decision of 

the District Court and remand to the hearing examiner for 

consideration of the evidence as applied to the only true 

requirement for Medicaid reimbursement which is established by 

statute. 

The enabling statute for the Administrative Rules relied on by 

the department, the hearing examiner, the District Court and the 

majority is set forth at § 53-6-101, MCA, which provides as 

follows : 

(1) There is a Montana medicaid program established 

for the purpose of providing necessary medical services 

to eligible persons who have need for medical assistance. 

The Montana medicaid program is a joint federal-state 

program administered under this chapter and in accordance 

with Title XIX of the federal Social Security Act (42 

U. S. C. 1396, et seq. ) , as may be amended. The department 

of social and rehabilitation services shall administer 

the Montana medicaid program. 
(2) Medical assistance provided by the Montana 

medicaid program includes the following services: 

(a) inpatient hospital services; .... 

(3) Medical assistance provided by the Montana 

medicaid program may, as provided by department rule, 

also include the following services: . . . . (k) inpatient psychiatric hospital services for 

persons under 21 years of age; .... 

(6) The services provided under this wart may be 

onlv those that are medicallv necessarv and that are the 

most efficient and cost-effective. 

(Emphasis added. ) 

In other words, the Department may, by departmental rule, 

decide whether or not services for inpatient psychiatric care are 

reimbursed. However, the criteria for reimbursement are 

established by subparagraph (6) and provide only two requirements: 

(1) that the services be medically necessary, and 

(2) that they be the most efficient and costeffective means of treatment. 

Rule 46.12.590, ARM (1990), upon which the hearing examiner's 

decision is based and pursuant to which that decision was affirmed 

by this Court was enacted pursuant to 5 53-6-101 (3) (k) , MCA. 

However, it adds to the statutory criteria an additional 

requirement for reimbursement of inpatient psychiatric services. 

It provides in subparagraph (k) : 

lrHospitalinpatientpsychiatric care" means hospital 

based active psychiatric treatment provided under the 

direction of a physician. The individual's psychiatric 

condition must be of such a nature as to Dose a 

siqnificant danqer to self, others, or the public safetv, 

or one which has resulted in marked wsvchosocial 

dvsfunction or qrave disabilitv of the individual. The 

theraweutic intervention or evaluation must be desisned - 

to achieve the patientls discharge from inpatient 
hospital status to a less restrictive environment at the 

earliest possible time. 

(Emphasis added. ) 

The underlined portion of subparagraph (k) adds an additional 

requirement to the statutory requirements for reimbursement of 

in-patient psychiatric care. It is, therefore, inconsistent with 

its enabling statute and is unenforceable. 

In Michels v. Department of Social and Rehabilitation Services ( 19 8 0 ) , 18 7 Mont . 

173, 177-78, 609 P.2d 271, 273, we stated that: 

Whatever force and effect the regulation has must derive 

from the statute under which it is enacted, and a 

regulation in conflict with that statute is without 

effect. See, 2 Am. Jur. 2d Administrative Law § 289, and Bell 

v. Departmentoflicensing (1979), 182 Mont. 21, 594 P.2d 331, 36 

St. Rep. 880. "It is axiomatic that a statute cannot be 

changed by administrative regulation. " State ex rel. Swart v. 

Casne (1977) 172 Mont. 302, 308, 564 P.2d 983, 986. 

Likewise, in Bick v. State, Department of Justice (1986) 224 Mont . 455, 

458-59, 730 P.2d 418, 421, we held that: 

A valid rule must meet both prongs of a two-prong test to 

determine whether or not it harmonizes with its enabling 

legislation. It must not engraft additional and 

contradictory requirements on the statute, and it must 

not engraft additional non-contradictory requirements on 

the statute which were not contemplated by the 

legislature. Bell v. Department of Licensing, supra, 182 Mont . at 

23, 594 P. 2d at 333. The rule also must be reasonably 

necessary to effectuate the purpose of the statute. Board 

of Barbers of the Department of Professional and Occupational Licensing v. Big Sky 

College (Mont. l98l), 626 P.2d 1269, 1270, 38 St. Rep. 621, 

623. 

The requirement by Administrative Rule that an individual's 

psychiatric condition pose a significant danger to herself or 

others before she is entitled to reimbursement for inpatient 
psychiatric care engrafts an additional requirement on its enabling 

statute. That additional requirement is, therefore, without 

effect. 

There is considerable cause for concern that had the hearing 

examiner, the District Court, and the majority of this Court not 

focused completely on the administrative requirement of 

"significant danger," and instead, focused simply on the statutory 

requirement that hospitalization be "medically necessary," the 

outcome in this case may have been different. 

I note, for example, that the hearing examiner found that, 

prior to her hospitalization, D.B.B. had digressed into fantasy and 

was having nightmares; sexually acted out at school with her 

friends; was observed on the playground trying to call up the 

devil; and had been followed in out-patient therapy for the 

previous two years. As a result of sexual abuse by her uncle and 

emotional abuse by her father, she was diagnosed as suffering from 

post-traumatic stress disorder. Three mental health professionals 

recommended that she be placed in inpatient treatment. At the time 

that SRS concluded that hospitalization was no longer medically 

necessary, D.B.B. was being treated for anger, depression, and 

oppositional behavior. She had frequent mood swings, decreased 

self-esteem, felt overwhelmed by her environment, and she felt 

worthless, helpless, and hopeless. She suffered from flashbacks 

and disruptive recollections of past events of sexual abuse, she 

experienced dissociative episodes, outbursts of anger and 
aggression, marked difficulty concentrating, play themes consisting 

of violence, avoided dealing with feelings, was unable to express 

feelings openly, and she was overly anxious. 

Those health care providers from Shodair who treated D.B.B. 

testified, according to the hearings examiner: 

[Hlow critical it was that [D.B.B. I have a continuity of 

care with time for relationships of trust and confidence 

to develop. Shodair provides it would have been 

counterproductive to have allowed [D.B.B.] to stay at 

Shodair only two weeks and then transfer her to a 

residential treatment facility. 

The hearing examiner also agreed with Shodair that: 

[Ul nlike MHMA reviewers or Dr. Osborne, the Shodair staff 

dealt directly with [D.B.B. I and, therefore, knows a good 

deal more about the child than the MHMA reviewers. . . . 

Finally, the following entries from D.B.B.'s medical records 

made during the period in question suggest that, at a minimum, 

continued inpatient treatment was "medically necessary": 

08/29 During play therapy DBB played with puppets and 

a baby doll. The puppets tucked the baby in bed, but one 

puppet made too much noise and woke the baby. The puppet 

then had to be killed and was buried in the sand and left 

there. Shodair Exhibit I, entry for 8/29. Cheryl 

Ronish, DBB's primary therapist and a master's degree 

social worker, testified that: " [A] violent theme ran 

through all of [DBB'sl play. Often she would be the 

victim and then she would switch to be the victimizer, 

people were hurt, usually the puppets or her. . . ." 

Hearing Transcript, p. 309. 

08/31 During activities therapy, DBB continued to 

exhibit swings in mood. She was having difficulty with 

her feelings, but was unable to put words to those 

feelings . DBB needed redirection in all areas and 

discontinued activities after participating for only a 

few minutes. Shodair Exhibit J, entry for 8/31. On the 

same day DBB expressed anger and used foul language with 

the nursing staff. DBB stated she did not want to go 

home and stated that she feared she would kill someone if 
she returned home. DBB told the nursing staff, I1I1ve 

killed people, the police and everyone know what I've 

done." DBB was given a pillow and allowed to use the 

quiet room to discharge her anger. She hit the pillow 

against the wall and was observed kicking the wall and 

head butting the wall. Dr. Larson, DBB's child 

psychiatrist, testified at the hearing that Shodair 

considered this to be "very dangerous behavior. " Hearing 

Transcript, p. 203. DBB was then taken to the punching 

bag where she "wailed on it." The child care worker 

noted that DBB had homicidal fears and appeared to have 

delusional thinking. Shodair Exhibit G, entry for 8/31. 

09/03 During the evening of 9/3 DBB said she was on 

suicide precautions for biting herself. She hit a peer, 

then started talking about "wanting to kill somebody, 

anybody. I've done it and will do it again, my dad even 

knows." Shodair Exhibit G, entry for 9/3. 

09/06 The weekly treatment plan review for 9/6, which 

is a part of Shodair Exhibit J, states that DBB was 

"still unable to express anger appropriately and has a 

potential to hurt others." It also noted that DBB talked 

"a lot about violence." 

09/07 DBB stated that she wanted to be placed on 

suicide precautions, and would do it by biting and 

hitting herself. She was talking with her peers about 

how the Indians had killed the white man in her town. 

Shodair Exhibit G, entry for 9/7. 

09/14 During activities therapy DBB continued to have 

great variations in mood, and her moods could change 

within a single activity. There appeared to be no way of 

predicting when this was going to happen. DBB continued 

to close herself down when overwhelmed by her feelings, 

and refused to speak to staff at such times. DBB had 

particular difficulty while playing miniature golf. She 

appeared to be very preoccupied and needed constant 

redirection from staff, which she did not easily accept. 

At times staff had to physically intervene in order to 

get DBB back on task, and when DBB was touched she would 

become very hostile. Shodair Exhibit K, entry for 9/14. 

[The activities therapist] testified as follows about 

this incident: 

. . . we were playing miniature golf at Mr. T's and 

DBB was having a very difficult time attending to 

the activity. There was one instance where when I 

tried to call her back to that activity there was 
absolutely no response from her, she had her back 

to me and it was as if she didn't hear anything I 

was saying. I called her name four times, she 

still didn't respond, I finally had to touch her 

and then she was very hostile toward me at that 

point. A lot of just this verbal barrage came at 

me and this extremely fearful reaction in her 

entire body posturing that looked as if she could 

strike out at any minute. She did not reveal 

anything at that point in time and did not seem 

able to talk right then but it was on that same day 

that she spoke about the dad possibly beating the 

shit out of her if she indeed talked about things 

that had happened to her. So it looked like this 

was a time when she is reflecting on a lot of 

what's happened to her. Possibly having flashbacks 

and fortunately is able to begin disclosing some of 

what's happening to her. Hearing Transcript, pp. 

355-56. 

The problem with the result in this case is that none of these 

facts have been analyzed in terms of whether they made continuing 

hospitalization "medically necessary" without the additional 

requirement of proving medical necessity by establishing 

significant danger according to the department's policy guidelines 

which were at best indecipherable and at worst a classic example of 

a bureaucratic mind run amok. 

Lost in the shuffle of bureaucratic rules and guidelines was 

the only real consideration which was relevant in this case. That 

was whether D.B.B.'s continued hospitalization was medically 

necessary. Her treating physicians said, "Yes. " Her records would 

indicate that it was. Yet that question was never answered. 

For these reasons, I would reverse and vacate the decision of 

the hearing examiner based on an incorrect application of the law 

to the facts in this case and remand for further consideration 
based on the correct criteria for medicaid reimbursement which is 

set forth at § 53-6-101(6), MCA. 

justice William E. Hunt, Sr., joins in the foregoing dissenting 

opinion. 
Justice James C. Nelson specially concurs. 

I have signed the opinion in this case because our analysis 

and decision is correct on the issues as raised in the 

administrative proceedings, as reviewed by the District Court and 

as presented and argued to this Court on appeal. 

That is not to say, however, that I disagree with the 

substance of Justice Trieweiler's dissent or with his analysis of 

ARM 46.12.590 (1990), vis-a-vis 5 53-6-101, MCA, at issue here. 

Rather, my decision in the instant case is dictated by the oftrepeated principle that we will not address or determine arguments, 

issues or theories unless first presented in the appropriate lower 

tribunals and then preserved for decision by this Court on appeal. 

Farley v. Booth Bros. Land & Livestock Co. (1995), 890 P.2d 377, 

381, 52 St.Rep. 46, 49, (citing Goodover v. Lindey's Inc. (1992),