Haverhill Mun. Hosp. v. Commissioner of Div. of Medical Assistance

• Citation: 45 Mass.App.Ct. 386,699 N.E.2d 1
• Decision Date: 27 August 1998
• Docket Number: No. 97-P-0351,97-P-0351
• Parties: HAVERHILL MUNICIPAL HOSPITAL v. COMMISSIONER OF the DIVISION OF MEDICAL ASSISTANCE.
• Court: Appeals Court of Massachusetts

Page 1

699 N.E.2d 1

45 Mass.App.Ct. 386

HAVERHILL MUNICIPAL HOSPITAL v. COMMISSIONER OF the DIVISION OF MEDICAL ASSISTANCE.

No. 97-P-0351.

Appeals Court of Massachusetts Suffolk.

Argued May 4, 1998.

Decided Aug. 27, 1998.

Peter V. Kent, Peabody, for plaintiff.

Stephen Dick, Assistant Attorney General, for defendant.

Before KASS, GILLERMAN and LENK, JJ.

GILLERMAN, Justice.

On the basis of the administrative record, see G.L. c. 30A, § 14(5), a judge of the Superior Court upheld the decision of the Claims Review Board (the board), affirming the decision of the Division of Medical Assistance (the division), which denied the claim of the Haverhill Municipal Hospital (the hospital) for payment regarding child delivery and elective sterilization services performed for a patient at the hospital early in November, 1993. The hospital has appealed, claiming that the division wrongly withheld payment.

The undisputed facts are these. On November 4, 1993, the hospital admitted the patient for delivery of a child. The patient presented documentation that she was insured by the John Hancock Insurance Company, with family coverage, effective November 30, 1992, and expiring December 4, 1993. The same documentation stated, "TO VERIFY COVERAGE CALL 1-800-367-7781 [.] IMPORTANT * * THIS CALL PROTECTS YOUR PAYMENT[.]" The hospital did not call to verify coverage.

In fact, John Hancock had canceled the patient's policy on October 31, 1993, but the hospital did not learn this until March 1, 1994, following the submission of its claim to John Hancock on November 22, 1993.

The patient was not an eligible Medicaid recipient when the delivery and sterilization services were provided by the hospital. Thus, the hospital did not fulfill the detailed requirements of State and Federal law, described below, in order to obtain Medicaid reimbursement for sterilization services it had provided to the patient. However, after the patient was discharged from the hospital, she acquired Medicaid eligibility retroactive to November 1, 1993, that being three or four days before the patient delivered her baby and before sterilization services were provided by the hospital.

On these facts, the division denied the hospital's claim for providing sterilization and child delivery services to its patient. The board, which announced its decision as an administrative summary judgment, see 130 Code Mass. Regs. § 450.323 (1994), ruled that because the patient had not executed the required Medicaid-specific consent form, CS-21, see 130 Code Mass. Regs. § 485.007(A)(1)(b) (1993), ¹ the hospital's claim for sterilization services as well as labor and delivery services was correctly denied. See 130 Code Mass. Regs. § 485.009(C) (1993), discussed below.

When the matter came before the Superior Court judge, she found no exception in the regulations that would permit payment and affirmed the decision of the board.

1. Regulatory background. The division makes payments to hospitals and other providers under the State program for medically necessary services provided to patients eligible for Medicaid benefits. ² See G.L. c. 118E, § 1. The hospital, by reason of its agreement to comply with all applicable Federal and State laws, rules and regulations, see G.L. c. 118E, § 36(4), is an eligible provider of medical services to Medicaid-eligible persons. See Haley v. Commissioner of Pub. Welfare, 394 Mass. 466, 467, 476 N.E.2d 572 (1985). Authorized and funded family planning services provided by the United States Department of Health, Education and Welfare (the Department) include sterilization, see 43 Fed.Reg. 52,146 (1978), but only under the specific conditions described in the Federal and State regulations. See 42 C.F.R. § 441.253 (1979) and 130 Code Mass. Regs. § 485.003 (1993), discussed below.

The history of the development of Federal policy regarding the provision of Federal financial assistance for sterilization procedures for Medicaid beneficiaries is traced in 43 Fed.Reg. 52,146-52,165 (1978). We summarize that history, which is material to the outcome of this controversy.

Before 1973, authority for sterilization services merely required that the receipt of such services be "voluntary." In mid-1973, several tragic examples of sterilization abuse under Federal programs came to light--the sterilization of the adolescent Relf sisters in Alabama, and a case of a coerced sterilization in South Carolina. In July, 1973, the Department imposed a moratorium on the Federal funding of sterilization of persons under twenty-one or legally incapable of consent.

In September, 1973, the Department began rulemaking proceedings. Interim rules were adopted which permitted Federal funding for sterilization of a person who was either under twenty-one or who was mentally incompetent if certain procedures were followed. Those rules were permanently enjoined, see Relf v. Weinberger, 372 F.Supp. 1196 (D.D.C.1974), vacated, 565 F.2d 722 (D.C.Cir.1977). ³

Beginning in February, 1979, the Department's final rules ⁴ provided that Federal financial participation in the Medicaid program was not available for the sterilization of persons under twenty-one years old, ⁵ mentally incompetent persons, or institutionalized persons. In addition, detailed provisions regarding informed consent were imposed. Further, except in the case of certain therapeutic sterilizations, the required informed consent had to be obtained at least thirty days (but not more than 180 days) prior to sterilization.

Most important, 42 C.F.R. § 441.252 (1979), provided that Federal financial participation for sterilization procedures was available "only if all the requirements of this subpart [regarding sterilization] were met." (Emphasis added.)

The Federal requirements regarding informed consent included the following: (a) the patient must be informed verbally of the elements of informed consent; (b) an interpreter must be provided if necessary; (c) the person obtaining the consent and the physician performing the procedure must obtain from the patient the material facts regarding the patient's consent and must certify that those facts were obtained; (d) use of a specific consent form is mandated; and (e) documentation of the consent form and certifications is required as a condition of payment. See 42 C.F.R. §§ 441.253, 441.257, and 441.258 (1979). The mandated consent form and the form of certification to be signed by the attending physician appear in the appendix to the Federal regulations.

In sum, Federal policy regarding sterilization procedures was designed to insure that no person who is incompetent, underage, unwilling or uninformed will be sterilized. "Implementation of this policy requires a strong enforcement program including monitoring of the recipients of Federal financial assistance to see that the procedural safeguards contained in the regulations are followed." 43 Fed.Reg. 52,147 (1978).

Massachusetts regulations, conforming substantially to Federal requirements, have been adopted. See 130 Code Mass. Regs. §§ 485.001 et seq. (1993). Thus, 130 Code Mass. Regs. § 485.003(A) provides that a sterilization service is reimbursable "only if" there has been compliance with the informed consent requirements of 130 Code Mass. Regs. §§ 485.005 and 485.006, and that consent is documented in the manner described in 130 Code Mass. Regs. § 485.007.

However, 130 Code Mass. Regs. § 485.009 (1993) provides that when a "sterilization [is] performed in conjunction with another procedure (e.g., a delivery) [the hospital's services are] reimbursable only if all of the requirements for sterilization outlined in 130 CMR § 485.000 are met." Sub-paragraph (C) of that section adds the proviso that is critical to this appeal: if "all of the requirements for sterilization outlined in 130 CMR § 485.000 [are not met], the claim for the entire inpatient stay will be disallowed." (Emphasis added.)

2. Discussion. We start with the familiar rules that the commissioner of the division "has the authority to promulgate regulations which give effect to legislative mandates ... [and] 'we must apply all rational presumptions in favor of the validity of the administrative action and not declare it void unless its provisions cannot by any reasonable construction be interpreted in harmony with the legislative mandate.' " Thomas v. Commissioner of the Div. of Med. Assistance, 425 Mass. 738, 746, 682 N.E.2d 874 (1997). On appeal, the hospital has the burden of demonstrating the invalidity of the board's determination. Faith Assembly of God v. State Bldg.Code Commn., 11 Mass.App.Ct. 333, 334, 416 N.E.2d 228 (1981). While we may set aside the decision of the board only as permitted by G.L. c. 30A, § 14(7), "to the extent that an agency determination involves a question of law, it is subject to de novo judicial review." Haley v. Commissioner of Pub. Welfare, 394 Mass. at 476, 476 N.E.2d 572, quoting from Raytheon Co. v. Director of the Div. of Employment Security, 364 Mass. 593, 595, 307 N.E.2d 330 (1974).

We see no basis for setting aside the board's decision insofar as it denied payment for the sterilization services provided by the hospital. Payment for sterilization services, without compliance with the regulations governing those services, is prohibited by the plain words of 130 Code Mass. Regs. § 485.003(A) (1993), described above. The hospital responds with the argument that, in this case, when eligibility was sought and obtained only after the sterilization services were performed, it was necessarily "impossible" for the hospital to have complied with the State regulations at the time the services were provided and therefore it would be unfair in the extreme to deny payment for those services.

The argument fails to recognize the importance of the careful and thoroughly considered Federal policy regarding sterilizations. That lengthy deliberative process, outlined above, was based on the perceived need to...