Opinion ID: 458924
Heading Depth: 1
Heading Rank: 1

Heading: facts

Text: 2 On August 22, 1981, decedent, then sixty-nine, suffered a stroke. She had several other physical disorders, for which she had been receiving treatment. The stroke required her hospitalization. Initially, decedent was unable to care for herself. Physical therapy began on September 2. On September 16, the hospital's social worker began to seek space for decedent in an area skilled nursing facility. For some time, plaintiff insisted that decedent enter a skilled nursing facility within the immediate vicinity of decedent's home, effectively limiting the options to two facilities, both of which had no openings. According to the social workers, the skilled nursing facility that decedent eventually entered first solicited a placement application for decedent on October 7, 1981. 3 Decedent's condition improved significantly. By September 21, her doctor set a provisional discharge date of approximately thirty days, later changed to October 31, and finally, on September 28, the doctor changed the discharge date to October 10, noting decedent's major improvement and potential to walk on her own. Although, the following day, decedent became upset with the prospect of discharge and the doctor noted that he may have to change the date, the doctor never did alter the date. When the hospital's utilization review committee met on October 7, it determined that decedent no longer required inpatient acute care. The committee notified decedent and her family of its conclusions, revealed that the conclusions would result in the termination of Medicare benefits after October 10, and informed them that decedent could remain in the hospital only at private expense. On October 16, Blue Cross, the Secretary's fiscal intermediary, agreed with the committee's assessment, and stated that the care required for plaintiff was not of a type that necessitated inpatient hospital services. Agreeing to bear the expense, the family indicated that it wished to keep decedent in the hospital. After October 7, decedent continued to receive medication, tests, treatment, therapy, and the care of the hospital's doctors and nurses. By early November, decedent could stand, move her joints, and walk short distances with a four-pronged cane. On November 3, decedent left the hospital and entered a skilled nursing facility. In the spring of 1982, decedent left the hospital and returned home. Shortly thereafter, she died. 4 Medicare covered the costs incurred by decedent from August 22 through October 10 and also covered the cost of care at the skilled nursing facility after November 3. At issue is the cost of the services received from October 11 to November 3, which amounted to $2,952.19. Plaintiff sought administrative review of the fiscal intermediary's conclusions, whereupon the supervisor of the reconsideration section determined that a skilled nursing facility could have provided the care that decedent received from the hospital and determined that skilled nursing facility beds had been available in the area. Subsequent appeals to an administrative law judge and the Appeals Council failed to grant plaintiff the requested relief. 5 Plaintiff then sued defendant in federal district court. The magistrate to whom the court initially referred the matter recommended reversal of the Secretary's determination. The magistrate reasoned that because neither party disputed that the care decedent received was reasonable and necessary for treatment of her condition, that a hospital and not a skilled nursing facility provided the care was immaterial. The level of care, not the facility providing that care, was determinative. The magistrate emphasized the remedial nature of the Medicare legislation in reaching a concededly liberal construction of the section. 6 The Secretary objected to the magistrate's disposition. The district court sustained the objection. The court noted that the very purpose behind the establishment of utilization review committees was to evaluate whether a medical necessity existed for treatment in a hospital. Because hospitalization was not necessary to provide the services required by the decedent, the district court concluded that it was not reasonable and necessary to continue the hospital stay. Thus, Medicare did not cover the disputed expenses. 7 The Medicare program consists of a great number of statutory and administrative regulations. Nonetheless, only a few of these pronouncements are relevant to the instant case. The first such provision states that Medicare will pay for expenses which are reasonable and necessary for the diagnosis and treatment of illness. 42 U.S.C. Sec. 1395y(a)(1)(A). There is no further definition of what is reasonable and necessary for treatment. To receive Government payment for hospital services, a physician must certify that the services received [were] required to be given on an inpatient basis for such individual's medical treatment. 42 U.S.C. Sec. 1395f(a)(3). A further prerequisite is that, with respect to inpatient hospital services ..., a finding [was] not ... made ... pursuant to the system of utilization review that further hospital services ... [were] not medically necessary. 42 U.S.C. Sec. 1395f(a)(7). A separate statutory provision governs the establishment and procedural requirements of a hospital's utilization review committee. 42 U.S.C. Sec. 1395x(k). See Kraemer v. Heckler, 737 F.2d 214 (2d Cir.1984), for an extended analysis of the operation of utilization review committees. Finally, one of the requirements for acting as a fiscal intermediary for Medicare is that the intermediary be willing and able to assist the providers to which payments are made through it under this part in the application of safeguards against unnecessary utilization of services furnished by them to individuals entitled to hospital insurance benefits. 42 U.S.C. Sec. 1395h(b)(1)(B).