Samaritan Health Services v. Arizona Health Care Cost Containment System Admin.

• Decision Date: 11 January 1994
• Docket Number: Nos. 1,CA-CV,s. 1
• Citation: 178 Ariz. 534,875 P.2d 193
• Parties: SAMARITAN HEALTH SERVICES, dba Air Evac, Plaintiff-Appellee, v. ARIZONA HEALTH CARE COST CONTAINMENT SYSTEM ADMINISTRATION, an Agency of the State of Arizona; Dr. Leonard Kirschner, in his capacity as Director of AHCCCS; Arizona Physicians IPA, Inc., an Arizona corporation, Defendants-Appellants. SAMARITAN HEALTH SERVICES, an Arizona corporation, dba Air Evac, Plaintiff-Appellee, v. ARIZONA PHYSICIANS IPA, INC., an Arizona corporation, Defendant-Appellant. 91-0495, 1 91-0568.
• Court: Arizona Court of Appeals

Page 193

875 P.2d 193

178 Ariz. 534

SAMARITAN HEALTH SERVICES, dba Air Evac, Plaintiff-Appellee, v. ARIZONA HEALTH CARE COST CONTAINMENT SYSTEM ADMINISTRATION, an Agency of the State of Arizona; Dr. Leonard Kirschner, in his capacity as Director of AHCCCS; Arizona Physicians IPA, Inc., an Arizona corporation, Defendants-Appellants.

SAMARITAN HEALTH SERVICES, an Arizona corporation, dba Air Evac, Plaintiff-Appellee, v. ARIZONA PHYSICIANS IPA, INC., an Arizona corporation, Defendant-Appellant.

Nos. 1 CA-CV 91-0495, 1 CA-CV 91-0568.

Court of Appeals of Arizona Division 1, Department C.

Jan. 11, 1994.

Review Denied June 21, 1994.

Meyer, Hendricks, Victor, Osborn & Maledon, P.A. by Ron Kilgard, G. Murray Snow, Phoenix, for appellant Arizona Physicians IPA, Inc.

Johnston Maynard Grant & Parker by Logan T. Johnston, Jeffrey C. Brodin, Phoenix, for appellants AHCCCS and Kirschner.

Gammage & Burnham by Richard B. Burnham, Curtis Ullman, Lisa A. Neuville, Phoenix, for appellee Samaritan Health Services.

OPINION

EHRLICH, Acting Presiding Judge.

The issue presented by this appeal is whether the superior court correctly ruled that the Arizona Health Care Cost Containment System Administration ("AHCCCS") and Arizona Physicians IPA, Inc. ("APIPA") must pay Samaritan Health Services' claim for emergency air transportation services provided to a patient who was a member of Arizona's indigent health-care program. We affirm the court's judgment for the reasons which follow.

FACTS AND PROCEDURAL HISTORY

Electing not to participate in the federal Medicaid program, the Arizona Legislature developed a cooperative alternative administered by AHCCCS to provide medical services to indigent persons. See Ariz.Rev.Stat.Ann. section ("A.R.S. s") 36-2901 et seq. Under this program, individual health plans bid for and contract with the State of Arizona through AHCCCS to provide covered medical services to eligible persons. Funding for the services furnished by the health plans is supplied by the state and is based on the number of members assigned to each plan. The patient involved in this case was a member of APIPA, a health plan under contract with AHCCCS.

The patient was a 72-year-old woman with diabetes whose right leg had been amputated below the knee at University Medical Center ("UMC") in Tucson. She was admitted to the Casa Grande Regional Medical Center ("CGRMC") after having arrived at its emergency room with complaints of nausea, epigastric pain, abdominal distention and jaundice. The emergency room physician believed that the woman had an obstruction of the common bile duct, and admitted her to control her diabetes and determine whether surgery was required.

On the morning of May 3, 1989, a physician performed an invasive diagnostic procedure on the patient ¹ and confirmed that she had an acute obstruction at the top of the pancreas. The physician recommended that surgery be performed that day, to which the patient and her daughter agreed. The patient's son, however, insisted that his mother be transferred to UMC for further treatment. The physician complied and arranged for the patient's transfer from CGRMC's intensive-care unit to a comparable unit at UMC. She informed the patient's family that ground transportation was not appropriate because it was possible that the patient was experiencing life-threatening complications from the earlier procedure. The physician also told the family that AHCCCS would not pay for air transportation because the transfer was due to the request of the patient and her family.

Samaritan Health Services directs Air Evac, a rapid-response, emergency aeromedical transportation service that operates helicopters and fixed-wing ambulance aircraft. The physician called Air Evac on its dedicated emergency line and requested air transportation to UMC. ² Air Evac was not aware that the patient was being moved due to her family's demand. As requested, it simply "scrambled" a crew and a helicopter immediately departed. The patient arrived at UMC without incident.

Air Evac later submitted a claim for payment, which APIPA denied because its medical director concluded that the transportation, for which Air Evac had not obtained prior authorization, was medically necessary but not emergent. Among the director's reasons were that, at the time of transfer, the patient had normal vital signs and was awake and alert. Air Evac filed a grievance, which APIPA denied. APIPA found that payment had been denied properly because Air Evac had not obtained prior authorization to transport the patient and subsequent medical review revealed that her condition was not emergent.

Air Evac then appealed the APIPA grievance decision to AHCCCS. Following an evidentiary hearing, the AHCCCS hearing officer found that there was no evidence that the patient's transfer to UMC was either an emergency or medically necessary. He decided that, notwithstanding Arizona Department of Health Services ("DHS") regulations which require Air Evac to respond to all requests for emergency transportation received from responsible parties, AHCCCS regulations concerning reimbursement for services rendered to its members governed payment for ambulance services. The hearing officer further concluded that, because Air Evac acknowledged that it had not sought prior authorization for the transportation, APIPA properly had refused to reimburse Air Evac for the unnecessary emergency air transportation it had provided to the patient. He recommended that Air Evac's grievance be denied.

The hearing officer's recommendation was adopted by Dr. Leonard Kirschner, then director of AHCCCS. Air Evac petitioned the AHCCCS director for a rehearing and review. Dr. Kirschner denied the petition and entered his final decision upholding APIPA's denial of Air Evac's claim.

Air Evac sought judicial review of the AHCCCS director's decision in superior court. It subsequently moved for summary judgment, arguing that, as a matter of law, it was entitled to reimbursement when it responded, as required by DHS regulations, to a physician's request for emergency transportation. Air Evac further argued that AHCCCS regulations do not require prior authorization nor provide for retroactive review of emergency air transportation, and that the patient's condition warranted such air service. AHCCCS ³ and APIPA responded that reimbursement was not authorized under AHCCCS regulations because the patient's air transportation was not medically necessary. They also asserted that Air Evac's obligations under non-AHCCCS law were not relevant to AHCCCS's payment of claims submitted to it. AHCCCS filed a cross-motion for summary judgment.

The superior court entered summary judgment in favor of Air Evac and denied AHCCCS's cross-motion, deciding that the administrative decision was contrary to the law and the evidence. The court found that

Air Evac must answer a call to transport when it is received from the appropriate medical professional or law enforcement agency. They do not have to determine, under the circumstances of this case, whether the transport is an emergency or not. When it's received on "the hot line" they must respond. To require Air Evac to conduct their own investigation and/or inquiry as to whether an emergency exists is not warranted. People could die while this investigation and conclusions are going on. [Emphasis original.]

AHCCCS and APIPA timely appealed the judgment vacating the administrative decision and ordering that Air Evac's claim be paid. ⁴

DISCUSSION

On examination of a superior court's review of an administrative decision, we must decide whether there is evidence to support the superior court's judgment; the fact that the court made its determination by summary judgment does not change the nature of our review. Havasu Heights Ranch and Development Corp. v. Desert Valley Wood Products, Inc., 167 Ariz. 383, 386, 807 P.2d 1119, 1122 (App.1990). Thus we must determine, as did the superior court, whether the administrative action was illegal, arbitrary, capricious or involved an abuse of discretion. Id.; Sanders v. Novick, 151 Ariz. 606, 608, 729 P.2d 960, 962 (App.1986). We draw our own conclusions as to whether the administrative agency erred in its interpretation and application of the law. E.g., Havasu Heights, 167 Ariz. at 387, 807 P.2d at...