Department of Community Health v. Freels

• Decision Date: 19 November 2002
• Docket Number: No. A02A1160.,A02A1160.
• Citation: 258 Ga. App. 446,576 S.E.2d 2
• Court: Georgia Court of Appeals
• Parties: DEPARTMENT OF COMMUNITY HEALTH v. FREELS.

576 S.E.2d 2

258 Ga. App. 446

DEPARTMENT OF COMMUNITY HEALTH v. FREELS.

No. A02A1160.

Court of Appeals of Georgia.

November 19, 2002.

Thurbert E. Baker, Atty. Gen., Dennis R. Dunn, Deputy Atty. Gen., William C. Joy, Senior Asst. Atty. Gen., Charles E. Hoffecker, Asst. Atty. Gen., for appellant.

Swift, Currie, McGhee & Hiers, Michael Rosetti, Marietta, for appellee.

RUFFIN, Presiding Judge.

James Freels suffers from a severe form of cerebral palsy. On September 3, 1999, the then five-year-old Freels, through his parents and a treating physician, petitioned the Georgia Department of Community Health (the "Department") seeking reimbursement under Medicaid for his hyperbaric oxygen therapy ("HBOT"). After the Department denied his petition, Freels requested a hearing before an administrative law judge ("ALJ"). The ALJ upheld the Department's refusal to reimburse Freels, and the Department then issued a final decision denying Medicaid coverage for Freels' HBOT. Freels appealed to the superior court, which reversed the Department's final decision. We granted the Department's application for a discretionary appeal, and for the reasons set forth below, we affirm in part, reverse in part, and remand the case to the superior court.

"[O]n appeal our duty is not to review whether the record supports the superior court's decision but whether the record supports the initial decision of the local governing body or administrative agency...."¹ Our function "is to determine whether the ... superior court has in [its] own final ruling committed an error of law."² The "any evidence" standard applies to the superior court's review of the findings of fact of the ALJ.³

The record shows that Freels' parents aggressively sought treatment for his cerebral palsy. Freels underwent two years of occupational therapy, speech therapy, and physical therapy and then began a series of assisted movement exercises referred to as "patterning." In February 1999, shortly after Freels turned five, his parents learned of HBOT from a volunteer who had assisted with Freels' patterning exercises. Freels' family arranged for a series of 42 treatments using HBOT.

Norman Harbough, Freels' physician, submitted a request to the Department for reimbursement for the costs of Freels' HBOT from Medicaid. In a November 30, 1999 letter to Harbough, the Department denied the request, explaining that "[o]ur physician panel has determined that HBOT in Cerebral Palsy is experimental/investigational and is not a generally accepted practice at this time." Harbough asked for reconsideration, but the Department upheld the denial because there was "no scientific data to support the medical necessity for HBOT in this case."

After the Department's medical review decision, Freels asked for an administrative hearing. At the hearing, Freels presented the testimony of Dr. Paul Harch and his father David Freels. Dr. Harch is a board-certified physician in the field of hyperbaric medicine. Dr. Harch also has extensive experience in using a brain blood flow imaging technique known as a SPECT scan. SPECT is an acronym for single photon emission computed tomography, which is a functional image of the blood flow in the brain. Dr. Harch admitted, however, that the use of SPECT scans as a reliable source of objective data is in dispute.

According to Dr. Harch, HBOT involves enclosing the patient's body in a pressurized vessel containing pure oxygen, which causes an increase in the amount of oxygen dissolved in the patient's blood. Dr. Harch explained his theory behind the effective use of HBOT in treating cerebral palsy. After the brain is damaged in patients with cerebral palsy, Dr. Harch testified, some brain cells may become idle. The delivery of more oxygen to the damaged area may encourage growth of blood vessels and thus restore function to the cells. This theory, Dr. Harch concluded, is consistent with his review of SPECT scans generally showing more normal or increased brain blood flow in patients who have undergone a series of HBOT treatments.

Dr. Harch performed a neurological exam on Freels. He looked at Freels' SPECT scan brain images taken before HBOT and those taken after a number of treatments. The images showed a "generalized improvement in the flow, but specifically ... in the general regions of his speech motor area." Dr. Harch noted that the difference in the two scans shows a change from an asymmetric to an even distribution in the brain blood flow. Dr. Harch was impressed with the difference in images given the improvement in Freels' speech. Dr. Harch testified that HBOT was safe and effective.

James Carroll, a board-certified neurologist specializing in child neurology, was called as a witness by the Department. Dr. Carroll testified that there was no biological reason why HBOT would cause cells to develop in the brain where they were not surviving. He also stated his opinion that SPECT scans only showed blood flow in the brain and could not be related to function. Dr. Carroll testified that even though there may have been evidence of improvement in Freels' condition during the HBOT, the improvement could not necessarily be attributed to the HBOT. He further testified that he had no reason to believe the HBOT would correct or ameliorate any of Freels' medical problems and that HBOT was not an acceptable standard of treatment for children with cerebral palsy.

The Department also called child neurologist Frank Berenson, who testified that it has not been established that HBOT is medically beneficial for the treatment of children with cerebral palsy. He corroborated Dr. Carroll's testimony that SPECT scans do not measure the functional activity of the brain, and he stated his opinion that it was medically implausible that HBOT could change the injury to the brain caused by cerebral palsy. Based upon this, and other evidence, the Department decided that it would not reimburse Freels for the treatment.

1. The superior court reversed the Department's final decision because it was affected by error of law.⁴ Specifically, the superior court found that the Department applied the wrong legal standard by focusing on whether HBOT was an accepted treatment that was medically necessary. According to the superior court, the proper inquiry was whether HBOT was necessary "to correct or ameliorate a physical or mental defect or condition" regardless of whether it is an accepted medical practice. The Department contends the superior court erred in finding that the legal standard used by the Department in reaching its final decision failed to comport with Medicaid requirements. We disagree.

The General Assembly has designated the Department as the agency authorized to adopt and administer the plan for medical assistance under the federal Medicaid program.⁵ Medicaid is

a cooperative venture of the state and federal governments. A state which chooses to participate in Medicaid submits a state plan for the funding of medical services for the needy which is approved by the federal government. The federal government then subsidizes a certain portion of the financial obligations which the state has agreed to bear. A state participating in Medicaid must comply with the applicable statute, Title XIX of the Social Security Act of 1965, as amended, 42 U.S.C. § 1396 et seq., and the applicable regulations.⁶

"The interpretation of a statute by an administrative agency which has the duty of enforcing or administering it is to be given great weight and deference."⁷ Nevertheless, the Department must comply with the applicable federal law,⁸ and, having chosen to participate in the Medicaid program, the State must provide the services required under the program.⁹

Federal law governing the Medicaid program provides that eligible recipients under the age of 21 are entitled to early and periodic screening, diagnostic, and treatment ("EPSDT") services.¹⁰ Specifically, 42 U.S.C. § 1396d (r)(5) provides that EPSDT services include: "Such other necessary health care, diagnostic services, treatment, and other measures ... to correct or ameliorate defects and physical and mental illnesses and conditions discovered by the screening services, whether or not such services are covered under the State plan."¹¹ The parties agree that Freels is eligible for EPSDT services.

In its final decision, the Department noted that it "reimburses only for services which are medically necessary and within accepted professional standards." The Department also recited the definition of medically necessary services found in its policies and procedures manual:

Medically necessary services are those services which are reasonable and necessary in establishing a diagnosis and providing palliative, curative or restorative treatment for physical and/or mental health conditions. Services meeting professional standards are those which, in the opinion of [a] recognized peer, under usual circumstances contributed to a satisfactory outcome in the health status of the recipient. The services provided, as well as the type of provider and setting, must be appropriate to the specific medical needs of the recipient; and there must be no other equally effective, more conservative or substantially less costly course of treatment available. The determination of medical necessity shall be made in accordance with currently accepted standards of medical practice.

The Department denied Medicaid coverage to Freels because it found that, "[b]ased upon the evidence presented, Petit...