Shoot v. State, Family and Social Services Admin.

• Decision Date: 26 February 1998
• Docket Number: No. 49A05-9704-CV-144,49A05-9704-CV-144
• Citation: 691 N.E.2d 1290
• Parties: James SHOOT, M.D., Appellant-Petitioner, v. STATE of Indiana, FAMILY AND SOCIAL SERVICES ADMINISTRATION, Appellee-Respondent. Jerry SHEWARD, M.D., Appellee-Petitioner, v. STATE of Indiana, FAMILY AND SOCIAL SERVICES ADMINISTRATION, Appellee-Respondent.
• Court: Indiana Appellate Court

Page 1290

691 N.E.2d 1290

James SHOOT, M.D., Appellant-Petitioner, v. STATE of Indiana, FAMILY AND SOCIAL SERVICES ADMINISTRATION,

Appellee-Respondent.

Jerry SHEWARD, M.D., Appellee-Petitioner, v. STATE of Indiana, FAMILY AND SOCIAL SERVICES ADMINISTRATION,

Appellee-Respondent.

No. 49A05-9704-CV-144.

Court of Appeals of Indiana.

Feb. 26, 1998.

Phyllis J. Garrison, Indianapolis, for Appellants-Petitioners.

Jeffrey A. Modisett, Attorney General, Rachel Zaffran, Deputy Attorney General, Indianapolis, for Appellee-Respondent.

OPINION

BARTEAU, Judge.

Dr. James Shoot and Dr. Jerry Sheward appeal the determinations made on judicial review sustaining the rulings of the State of Indiana Family and Social Services Administration (FSSA) which denied Medicaid reimbursement for days their patients spent in the hospital receiving inappropriate level of care services. The following issue is presented by the doctors for our review: Whether the trial court erred in determining that FSSA's denial of reimbursement was not arbitrary or capricious, an abuse of discretion, or otherwise contrary to law, when it applied the prevailing Indiana statutes and regulations rather than a conflicting federal statutory provision? We affirm.

FACTS

The present appeal is a consolidation of appeals brought by Doctors Shoot and Sheward against FSSA to recover Medicaid reimbursement denied by FSSA. In each case, a patient was admitted as an inpatient to the psychiatric unit of Community Hospital, and was not discharged until a space could be procured in a long-term care facility. Each patient required twenty-four hour care and supervision, although it was not "medically necessary" to keep the patients in an acute-care hospital setting for that length of time. Because the length of stay in the hospital exceeded "medical necessity," FSSA denied Medicaid reimbursement for the days on which each patient was receiving inappropriate level of care services. ¹

Each doctor requested administrative review of the denial of reimbursement, and ultimately sought judicial review of the denial. The trial courts, in similarly-worded orders found that FSSA's denial was not arbitrary, capricious, an abuse of discretion, or contrary to law in that both federal and state Medicaid regulations allow appropriate limits to be placed on a service based upon criteria such as medical necessity. 42 C.F.R. § 440.230(d); 405 I.A.C. 1-6-3(c). Indiana regulations further provide that "reimbursement will be denied for any days during which the inpatient psychiatric hospitalization is found not to have been medically necessary." 405 I.A.C. 1-7-20(l). The trial courts found that there was substantial evidence in the record supporting FSSA's determination that the days of hospitalization for which reimbursement was denied were not medically necessary, and therefore affirmed FSSA's denial.

STANDARD OF REVIEW

A court reviewing an administrative decision is limited to determining whether the agency possessed jurisdiction over the subject matter, and whether the agency's decision was made upon substantial evidence, was not arbitrary or capricious, and was not in violation of any constitutional, statutory or legal principles. Ind.Code § 4-21.5-5-14; Indiana Dep't of Natural Resources v. United Refuse Co., 615 N.E.2d 100, 103 (Ind.1993). The trial court proceeding is not intended to be a trial de novo, but rather the court simply analyzes the record as a whole to determine whether the administrative findings are supported by substantial evidence. Natural Resources Comm'n v. Sugar Creek Mobile Estates, 646 N.E.2d 61, 64 (Ind.Ct.App.1995), reh'g denied, trans. denied. Courts that review administrative determinations, at both the trial and appellate level, are prohibited from reweighing the evidence and judging the credibility of witnesses and must accept the facts as found by the administrative body. Id.

DISCUSSION

We note at the outset that, in their petitions for judicial review and supporting briefs, the doctors framed the issues for review as whether FSSA's determination that the days of hospitalization for which reimbursement was denied were not medically necessary was supported by substantial evidence and whether that determination was arbitrary, capricious, an abuse of discretion, or otherwise contrary to law because FSSA failed to state the specific criteria on which it based its determination. The doctors requested that the trial courts reverse the decisions of FSSA on these grounds and remand the cases to FSSA for approval of reimbursement for the days previously denied. Shoot R. 9-11; Sheward R. 10-12.

In this appeal, however, the doctors argue exclusively that Indiana's Medicaid plan is not in compliance with federal law because it does not provide an inappropriate level of care rate of reimbursement as required by the Boren Amendment, 42 U.S.C. § 1396a(a), which rate would be applicable to the cases at issue. Brief of Appellant, James Shoot, M.D. at 1; Brief of Appellant, Jerry Sheward, M.D. at 1. The doctors now request, based on this alleged non-compliance, that this court reverse the decisions of the trial courts, remand with instructions to enjoin future violations of the federal law, order that the legislature amend Indiana's Medicaid plan to comply with the federal law, and order FSSA to adopt an interim rate of reimbursement for inappropriate level of care services until such time as the state plan is amended. Brief of Appellant, James Shoot, M.D. at 10-11; Brief of Appellant, Jerry Sheward, M.D. at 11.

A party may obtain judicial review only of an issue that was raised before the administrative agency, with two exceptions: where the issue concerns notice of the proceedings and where the interests of justice would be served by judicial resolution of an issue which has arisen from a change in the controlling law occurring after the agency action was taken. Ind.Code § 4-21.5-5-10; Indiana Educ. Employment Relations Bd. v. Tucker, 676 N.E.2d 773, 775 (Ind.Ct.App.1997). Based upon the limited records presented to this court, ² it appears that the Boren Amendment issue was not...