Intermountain Healthcare v. OptumHealth

2015 UT App 284

THE UTAH COURT OF APPEALS

INTERMOUNTAIN HEALTHCARE,
Petitioner,
v.
OPTUMHEALTH AND SALT LAKE COUNTY DIVISION OF BEHAVIORAL
HEALTH SERVICES,
Respondents.

Opinion
No. 20140462-CA
Filed November 27, 2015

Original Proceeding in this Court

Catherine M. Larson, Attorney for Petitioner
Kimberly Neville and Kyle E. Witherspoon,
Attorneys for Respondent OptumHealth

SENIOR JUDGE RUSSELL W. BENCH authored this Opinion, in which
JUDGES GREGORY K. ORME and STEPHEN L. ROTH concurred. 1

BENCH, Senior Judge:

¶1 Intermountain Healthcare (IHC) seeks review of the
Department of Health, Division of Medicaid and Health
Financing’s (DMHF) decision that IHC is entitled to payment for
only three of a patient’s eighteen days of inpatient psychiatric
care at an IHC facility. We set aside DMHF’s decision and
remand for further proceedings consistent with this opinion.

1. The Honorable Russell W. Bench, Senior Judge, sat by special
assignment as authorized by law. See generally Utah R. Jud.
Admin. 11-201(6).
 Intermountain Healthcare v. OptumHealth

BACKGROUND

¶2 The patient is a Medicaid recipient who was involuntarily
committed to an IHC facility from March 31, 2013, to April 17,
2013, for inpatient psychiatric care following a suicide attempt.
Her presenting symptoms included an unstable mood,
depression, irritability, and untreated bipolar disorder. The
patient’s care during her inpatient stay included continuous
fifteen-minute safety checks, several medication changes,
participation in group therapy, and electroconvulsive therapy.
She expressed suicidal thoughts to medical staff throughout her
stay and, at times, indicated that she felt she would not be safe if
she were not in a hospital setting.

¶3 OptumHealth is a private entity that pays care providers
for mental health services rendered to Salt Lake County
Medicaid patients. Payment for a Medicaid client’s inpatient
mental healthcare is based on a guideline that OptumHealth has
established in accordance with Utah Medicaid policies (the
Guideline). Based on the Guideline and applicable provisions of
the Utah Administrative Code, OptumHealth determined that
the patient’s treatment after April 1 was not medically necessary
and that, as a result, IHC was entitled to payment only for the
treatment it provided the patient on April 1. 2

¶4 IHC initiated a Medicaid appeal with DMHF. An
administrative law judge (ALJ) conducted a formal hearing,
during which the patient’s treating physician and an
independent medical reviewer, also a physician, testified. The
medical reviewer’s testimony was based exclusively on his
consideration of the treating physician’s notes and the patient’s
relevant medical records. The ALJ recommended that IHC be

2. Because the patient’s Medicaid eligibility began on April 1,
2013, IHC is not entitled to Medicaid payment for any of the
patient’s treatment rendered on March 31, 2013.

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paid for two additional days of the patient’s treatment but
concluded that the remainder of the patient’s inpatient care was
not medically necessary. Specifically, the ALJ found that the
patient was admitted into acute inpatient care on March 31, 2013,
based on her “recent and serious suicide attempt” but that she
no longer posed an “imminent risk of harm to self or others after
April 1, 2013.” The ALJ found that forty-eight hours of inpatient
observation was medically necessary to ensure that the patient’s
“pattern of improvement continued . . . given her mood swings
and impulsivity.” Accordingly, the ALJ recommended that
OptumHealth pay IHC for the patient’s treatment on April 1
plus two additional days of the patient’s inpatient stay—April 2
and April 3, 2013. DMHF issued a Final Agency Order adopting
the ALJ’s recommendation. IHC seeks review of DMHF’s
decision.

ISSUES AND STANDARDS OF REVIEW

¶5 IHC argues that the ALJ misapplied the Guideline in
reaching her recommendation and, in turn, that DMHF erred
when it awarded only partial payment to IHC for the patient’s
care. IHC also challenges the propriety of the ALJ’s reliance on
the medical reviewer’s testimony over the treating physician’s
testimony.

¶6 The Utah Administrative Procedures Act provides that an
“appellate court shall grant relief only if, on the basis of the
agency’s record, it determines that a person seeking judicial
review has been substantially prejudiced by[, inter alia,] . . . [an]
agency action [that] is . . . an abuse of the discretion delegated to
the agency by statute.” Utah Code Ann. § 63G-4-403(4)(h)(i)
(LexisNexis 2014); see also Murray v. Labor Comm’n, 2013 UT 38,
¶ 19, 308 P.3d 461. Because “the legislature has, by virtue of
[Utah Code] section 26-18-2.3(1), explicitly granted [DMHF]
discretion to establish criteria concerning Medicaid
reimbursement,” “we review [DMHF’s] decision denying

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Medicaid reimbursement for medical care that [IHC] provided
[the patient] . . . for reasonableness and rationality.” See South
Davis Community Hosp., Inc./Romero v. Department of Health, 869
P.2d 979, 981–82 (Utah Ct. App. 1994); accord Conley v.
Department of Health, 2012 UT App 274, ¶ 8, 287 P.3d 452; see also
Utah Code Ann. § 26-18-2.3(1) (LexisNexis 2013). However, “the
Agency’s interpretation of the federal and state statutes and
regulations that govern Utah’s Medicaid Program are questions
of law that we review for correctness, according no particular
deference to the agency decision.” Conley, 2012 UT App 274, ¶ 7
(citation and internal quotation marks omitted).

ANALYSIS

¶7 IHC argues that the ALJ “erred in her application of the
[Guideline] in that she only considered subsection[s] (1)(a)(i),
(1)(a)(ii), and (1)(b) and inaccurately concluded that such
subsections warrant inpatient psychiatric care only if the patient
exhibits ‘overt’ and ‘active suicidal ideation for the[ir] entire
stay.’” (Second alteration in original.) IHC argues that it was
“incorrect for [the ALJ] to apply an ‘overt’ and ‘active’ suicide
standard to this case” and that “it was also incorrect for her to
limit her analysis to just whether [the patient] exhibited suicidal
ideation during the entire hospital stay.” Last, IHC contends that
the ALJ failed to provide “a reasoned basis for declining to” give
deference to the patient’s treating physician. See A.M.L. v.
Department of Health, 863 P.2d 44, 48 (Utah Ct. App. 1993). We
agree with IHC.

¶8 Under the Utah Medicaid Program, “‘medically necessary
service’” means

(a) it is reasonably calculated to prevent, diagnose,
or cure conditions in the recipient that endanger
life, cause suffering or pain, cause physical
deformity or malfunction, or threaten to cause a
handicap; and

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(b) there is no other equally effective course of
treatment available or suitable for the recipient
requesting the service that is more conservative or
substantially less costly.

Utah Admin. Code R414-1-2(18). According to the Guideline,
“Acute Inpatient” care “is for the active treatment of a mental
health condition” and “Active Treatment is a clinical process
involving 24-hour care that includes assessment, diagnosis,
intervention, evaluation of care, treatment and planning for
discharge and aftercare.” The Guideline provides,

The following criteria must be met[:]

1 The symptoms of a mental health condition
require immediate care and treatment to avoid
jeopardy to life or health. Examples include the
following[:]

a The member is at imminent risk of harm to self
or others as evidenced by, for example[,]

i The member has made a recent and
serious suicide attempt,

ii The member is exhibiting current
suicidal ideation with intent, realistic plan and/or
available means, or other serious life threatening, self-
injurious behavior(s),

iii The member has recently exhibited self-
mutilation that is medically significant and/or
potentially dangerous,

iv The member has made recent and
seriously physically destructive acts that indicate a
high risk for recurrence and serious injury to self [or]
others[.]

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b There has been a deterioration in the member’s
psychological, social, occupational/educational, or
other important area of functioning, and the member
is unable to safely and adequately care for him/her
self[.]

c There is an imminent risk that severe, multiple
and/or complex psychological stressors will produce
enough distress or impairment in psychological,
social, occupational/educational, or another important
area of functioning to undermine treatment at a lower
level of care[.]

Furthermore, the Guideline indicates that it should be “used in
conjunction with the Continued Service [G]uideline when
assessing the need for a continuing stay.” The Continued Service
Guideline states, “It is anticipated that as the severity of a
member’s condition changes, the member’s condition will
eventually no longer meet the criteria for the current level of care
and the member will be safely transitioned to another level of
care.”

¶9 Here, the patient was admitted into acute inpatient care
based on her “recent and serious suicide attempt.” The ALJ’s
decision quotes Guideline subsections (1)(a)(i), (1)(a)(ii), and
(1)(b), as well as the Continued Service Guideline. The ALJ
found that the patient did not pose an “imminent risk of harm to
self or others after April 1, 2013.” This conclusion hinges on the
ALJ’s interpretation of the Guideline as requiring the patient to
maintain “active suicidal ideations for the entire stay,” minus
forty-eight hours of observation time.

¶10 However, the Guideline and the Continued Service
Guideline do not mandate that the patient maintain the same
symptoms for which she was initially admitted into acute
inpatient care—i.e., active suicidal ideation with a plan. While
active suicidal ideation with a plan is an example given in the

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Guideline of a mental health condition warranting acute
inpatient care, it is not, in and of itself, the criteria by which the
necessity for acute inpatient care is to be measured under the
Guideline or the Continued Service Guideline.

¶11 Moreover, the examples in the Guideline pertaining to
suicide are not specifically limited to active suicidal ideation
with a plan, as the ALJ’s interpretation suggests. Rather, the
Guideline provides that acute inpatient care is medically
necessary if, “for example[,] . . . [t]he member is exhibiting
current suicidal ideation with intent, realistic plan and/or
available means, or other serious life threatening, self-injurious
behavior(s).” (Emphasis added.) Here, the treating physician
testified that the patient’s passive suicidal ideation still
presented a sufficient risk to her own safety. He testified that his
notes describing the patient as having “background” or
“passive” suicidal ideation indicated that her “suicide risk” was
“outside of a contained, protective setting,” meaning that she
was not looking “for ways to harm herself in the hospital, but
later on.” He explained that someone with “passive suicide
ideation or active without a plan[] can . . . still be at imminent
risk of harm to themselves,” “[p]articularly in the context of [this
patient’s] . . . mood swings that [were] occurring fairly
frequently with regularity and consistently through much of her
stay.” The treating physician also testified that the patient’s
suicidal ideation was only one of several reasons for which he
considered the entire length of the patient’s acute inpatient care
to be medically necessary. He testified that his “decision to
discharge [the patient]” was based only partly “on her
representation of what her suicidal ideation was.” And he
opined that prior to her release date, the patient “would have
had difficulty functioning outside of the hospital setting.” 3

3. We note that the treating physician’s testimony appears to
comport with the examples provided in Guideline subsections
(1)(a), (1)(b), and (1)(c). OptumHealth asserts, and we agree, that
(continued…)

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¶12 In making her recommendation to deny IHC’s request for
reimbursement for the patient’s stay beyond April 3, 2013, the
ALJ relied on the medical reviewer’s testimony that the patient’s
passive suicidal ideation and mood swings were insufficient to
justify the patient’s ongoing acute inpatient care as medically
necessary. The ALJ provided no “reasoned basis” “consistent
with the purposes of the Medicaid Act” for her decision to not
give deference to the treating physician’s testimony on these
issues. See A.M.L. v. Department of Health, 863 P.2d 44, 48 (Utah
Ct. App. 1993) (citation and internal quotation marks omitted).
Several courts have required “Medicaid agencies to recognize a
presumption in favor of the medical judgment of the attending
physician in determining the medical necessity of treatment.” Id.
(citation and internal quotation marks omitted). This court has
previously held that, if the agency “elects not to give deference
to the testimony given by the treating physician, the agency
should provide a reasoned basis for declining to do so which is
consistent with the purposes of the Medicaid Act.” Id. (citation
and internal quotation marks omitted); cf. Frey v. Bowen, 816 F.2d
508, 513 (10th Cir. 1987) (“[T]he reports of physicians who have
treated a patient over a period of time or who are consulted for
purposes of treatment are given greater weight than are reports
of physicians employed and paid by the government for the
purpose of defending against a disability claim.” (citation and
internal quotation marks omitted)). The ALJ erred in rejecting
the treating physician’s testimony and his treatment notes absent
an explanation for this deviation from our established rule. Cf.
Frey, 816 F.2d at 515 (“[F]indings of a nontreating physician

(…continued)
the Guideline does not require “administrative law judges to
consider all possible scenarios under which inpatient treatment
might be appropriate.” However, consideration of “all possible
scenarios” under the Guideline is distinct from consideration of
the relevant examples explicitly provided in the Guideline.

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based upon limited contact and examination are of suspect
reliability.”).

¶13 The ALJ abused her discretion by interpreting the
Guideline in a way that limited the plain language of the acute
inpatient criteria and by failing to explain why the treating
physician’s opinion did not deserve deference. As a result, the
ALJ’s recommendation was not reasonable and rational. See
South Davis Community Hosp., Inc./Romero v. Department of Health,
869 P.2d 979, 981–82 (Utah Ct. App. 1994). Accordingly, DMHF’s
decision to adopt the ALJ’s recommendation was also not
reasonable and rational. See id.

CONCLUSION

¶14 Because the ALJ misconstrued the Guideline and did not
provide a reasoned basis for declining to give deference to the
treating physician’s opinion, her recommendation was not
reasonable or rational. Accordingly, we set aside DMHF’s
decision to adopt the ALJ’s recommendation and remand for
further proceedings consistent with this opinion. 4

4. We decline IHC’s invitation to issue an order demanding that
OptumHealth pay IHC for all of the inpatient psychiatric care it
rendered to the patient from April 1 to April 17, 2013.
Additionally, “[w]e do not intend our remand to be merely an
exercise in bolstering and supporting the conclusion already
reached.” See Allred v. Allred, 797 P.2d 1108, 1112 (Utah Ct. App.
1990).

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