Filed: Oct. 25, 2011
Latest Update: Feb. 22, 2020
Summary: Case: 10-60594 Document: 00511644865 Page: 1 Date Filed: 10/25/2011 IN THE UNITED STATES COURT OF APPEALS FOR THE FIFTH CIRCUIT United States Court of Appeals Fifth Circuit FILED October 25, 2011 No. 10-60594 Lyle W. Cayce Clerk MISSISSIPPI CARE CENTER OF MORTON, L.L.C. Plaintiff-Appellant v. KATHLEEN SEBELIUS in her official capacity as Secretary of United States Department of Health and Human Services Defendant-Appellee Appeal from the United States District Court for the Southern District of
Summary: Case: 10-60594 Document: 00511644865 Page: 1 Date Filed: 10/25/2011 IN THE UNITED STATES COURT OF APPEALS FOR THE FIFTH CIRCUIT United States Court of Appeals Fifth Circuit FILED October 25, 2011 No. 10-60594 Lyle W. Cayce Clerk MISSISSIPPI CARE CENTER OF MORTON, L.L.C. Plaintiff-Appellant v. KATHLEEN SEBELIUS in her official capacity as Secretary of United States Department of Health and Human Services Defendant-Appellee Appeal from the United States District Court for the Southern District of M..
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Case: 10-60594 Document: 00511644865 Page: 1 Date Filed: 10/25/2011
IN THE UNITED STATES COURT OF APPEALS
FOR THE FIFTH CIRCUIT United States Court of Appeals
Fifth Circuit
FILED
October 25, 2011
No. 10-60594 Lyle W. Cayce
Clerk
MISSISSIPPI CARE CENTER OF MORTON, L.L.C.
Plaintiff-Appellant
v.
KATHLEEN SEBELIUS in her official capacity as Secretary of United States
Department of Health and Human Services
Defendant-Appellee
Appeal from the United States District Court
for the Southern District of Mississippi
USDC No. 3:07-CV-498
Before WIENER, CLEMENT, and ELROD, Circuit Judges.
WIENER, Circuit Judge:*
Plaintiff-Appellant Mississippi Care Center of Morton (“Morton”) owns and
operates a facility that provides nursing home and custodial care services. From
August through October 2002, Morton provided such services to Medicare
beneficiary Mary Nichols (“the Beneficiary”). As these services were custodial,
Medicare did not cover them. The Medicare contractor that processed the
Beneficiary’s claims determined that, because neither she nor her representative
*
Pursuant to 5TH CIR. R. 47.5, the court has determined that this opinion should not
be published and is not precedent except under the limited circumstances set forth in 5TH CIR.
R. 47.5.4.
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were given proper written notice of noncoverage by Morton at the time of
admission, she was not liable for payment to Morton for the services in question.
Eventually, after two redeterminations, an administrative law judge (“ALJ”)
concluded that Morton had failed to establish that the Beneficiary received
proper notice. The district court upheld the ALJ’s determination that the
Beneficiary was not liable for the services. We affirm.
I. FACTS & PROCEEDINGS
In early August 2002, the Beneficiary was admitted to Morton’s facility as
a custodial care/private pay resident. According to Morton, a “Consent to
Placement in Facility Medicare Certified Bed” form (the “Notice Form”) was
given to the Beneficiary’s representative (the “Representative”) when the
Beneficiary was admitted. The Representative, however, did not sign that form.
Five months later, in January 2003, Morton sent the Representative a notice of
proposed discharge of the Beneficiary for failure to pay. In response, the
Representative requested that Morton submit its claim for the services provided
between August and October 2002 to Medicare.
TriSpan Health Services (“TriSpan”), Medicare’s fiscal intermediary,
denied payment for these services because the information it requested, a
written notice that the services were not covered by Medicare, had not been
provided to the Beneficiary on admission. Morton requested and received a
reconsideration of the initial TriSpan determination. On reconsideration,
however, TriSpan upheld its initial determination based on its assertion that,
on admission, a beneficiary must be informed in writing that the services are not
covered by Medicare, and that such writing must be signed and dated by either
the beneficiary or his representative, which had not been done.
2
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No. 10-60594
Morton next sought clarification from the Centers for Medicare & Medicaid
Services (“CMS”). The CMS responded by mail, citing CMS Ruling 95-1, Section
IV.A, which specifies the criteria for determining beneficiary knowledge under
the limitation of liability. Morton then requested that TriSpan’s reconsideration
be reopened in light of the CMS letter. TriSpan reopened the determination and
concluded that, indeed, the Beneficiary was liable for the noncovered charges.
In response to that determination on reopening, the Beneficiary filed an
appeal with the ALJ. On appeal, the ALJ determined that (1) the services were
custodial in nature and, therefore, not covered by Medicare, but (2) the
Beneficiary was not liable for the services because she had not been given a
proper notice that Medicare did not cover the services. Morton then requested
that the Medicare Appeals Council review the ALJ’s decision, but that request
was denied. Consequently, the ALJ’s decision is considered the final decision of
Defendant-Appellee the Secretary of the United States Department of Health
and Human Services (the “Secretary”).
Morton filed the instant action against the Secretary in district court,
pursuant to 42 U.S.C. § 1395ff(b). After the parties filed cross-motions for
summary judgment, the district court granted the Secretary’s motion and
entered a final judgment in favor of the Secretary, the effect of which was to
relieve the Beneficiary of any responsibility for the payments sought by Morton.
Morton timely filed a notice of appeal.
II. STANDARD OF REVIEW
We review a district court’s grant of summary judgment de novo.1 When
we review a final agency decision, however, our standard is highly deferential:
1
Tex. Clinical Labs, Inc. v. Sebelius, 612 F.3d 771, 774 (5th Cir. 2010) (citation
omitted).
3
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We only look to see if the final agency decision (1) comports with the applicable
legal standards and (2) is supported by substantial evidence.2 We “may not
overturn the Secretary’s decision if it is supported by substantial evidence —
‘more than a mere scintilla’ . . . .”3
III. ANALYSIS
Medicare is a federally funded health insurance program for the eligible
elderly and disabled. It is codified in Title XVIII of the Social Security Act.4 The
program comprises four parts. “Part A” of Medicare5 provides coverage for
hospital services and post-hospital extended care services, including care at
skilled nursing facilities.6 Part A, however, generally excludes coverage for
“custodial care.”7 Part A limits the liability of a beneficiary when the beneficiary
does not know, and could not have reasonably known, that the provider’s service
was not covered.8 Part A does not provide for reimbursement when “both the
individual to whom the items or services were furnished and the provider of
service or other person, as the case may be, who furnished the items or services
2
Anthony v. Sullivan, 954 F.2d 289, 292 (5th Cir. 1992) (citing Wingo v. Bowen,
852
F.2d 827, 829 (5th Cir. 1988)).
3
Estate of Morris v. Shalala, 207 F.3d 744, 745 (5th Cir. 2000) (citing Richardson v.
Perales,
402 U.S. 389, 401 (1971) (defining the standard as requiring such relevant evidence
as a reasonable mind might accept as adequate to support a conclusion.)).
4
42 U.S.C. § 1395 et seq.
5
Id. §§ 1395c–1395i-5.
6
Id. § 1395a(2)(A).
7
Id. § 1395y(a)(9).
8
Id. § 1395pp(b).
4
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knew, or could reasonably have been expected to know, that payment could not
be made for items or services . . . by reason of a coverage denial . . . .”9
42 C.F.R. § 411.404 further describes the criteria for determining whether
a beneficiary knew that services such as custodial care were excluded from
coverage. It defines the basic rule as requiring that (1) “[w]ritten notice is given
to the beneficiary, or to someone acting on his or her behalf, that the services
were not covered because they did not meet Medicare coverage guidelines”10 and
(2) the notice is given by “[t]he QIO, intermediary, [] carrier . . . [t]he group []
committee responsible for utilization review for the provider that furnished the
services . . . [ t]he provider, practitioner, or supplier that furnished the service.”11
Section 411.404 does not, however, establish the exclusive method for
determining whether the beneficiary had knowledge that the services were not
covered. CMS has clarified its policy regarding this regulation in one of its
rulings, noting that, “[w]hile § 411.404 provides criteria for beneficiary
knowledge based on written notice, section 1879(a)(2) of the Act12 specifies only
that knowledge must not exist in order to apply the limitation on liability
protection.”13 In the Skilled Nursing Facility Manual (the “Manual”),14 CMS
9
Id. § 1395pp(c).
10
Public Health, 42 C.F.R. § 411.404(b)(1).
11
Id. § 411.404(c).
12
42 U.S.C. § 1395pp(a)(2).
13
HEALTH CARE FINANCING ADMINISTRATION RULING 95-1 at 17 (Dec. 31, 1995)
(“HCFAR 95-1”).
14
Many courts, including this one, have recognized the importance of Medicare
manuals in the administration of the Medicare program, as well as how the Secretary will
apply and interpret Medicare statues and regulations. See Shalala v. Guernsey Mem’l Hosp.,
514 U.S. 87, 101 (1995) (“The Secretary has promulgated regulations setting forth the basic
principles and methods of reimbursement, and has issued interpretive rules such as [Medicare
Provider Reimbursement Manual] § 233 that advise providers how she will apply the Medicare
statute and regulations in adjudicating particular reimbursement claims.”); Cmty. Care, LLC
5
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further instructs providers that “[i]f you are aware that the services to be
furnished to a patient are not covered, advise the patient (or representative) in
writing prior to, or at, admission (or when the type of care changes during a
stay) that the care is noncovered and why . . .” and urges providers to “[e]stablish
a procedure for notifying beneficiaries and physicians promptly when a decision
of noncoverage is made . . . [i]t must provide for the written notice of
noncoverage to the beneficiary . . . .”15 Thus, a deviation from the procedure
outlined in § 404.411 does not automatically exonerate the beneficiary from
responsibility for the noncovered services.
In the instant case, the ALJ misapplied the relevant law when he
concluded that “[a]n individual is found to have known that items or services
were excluded from coverage only if the individual or someone acting on behalf
of the individual has been given written notice from an appropriate source
stating that the items or services were excluded from coverage.” Although
written notice is sufficient to rebut the presumption that the beneficiary did not
receive proper advance notice of noncoverage, all the provider must do to rebut
that presumption is establish a “clear and obvious” record that the beneficiary
had the requisite knowledge that coverage would be denied.16
Nevertheless, the ALJ's subsequent determination that Morton did not
carry its burden of persuasion and production is correct. Morton contends that
v. Leavitt, 537 F.3d 546, 547 n.2 (5th Cir. 2008) (“The [Medicare Provider Reimbursement
Manual] contains non-binding guidelines and interpretative rules to assist providers and
intermediaries in the implementation of the Medicare regulations.” (internal quotation marks
and citation omitted)); Battle Creek Health Sys. v. Leavitt,
498 F.3d 401, 404 (6th Cir. 2007);
Shalala v. St. Paul-Ramsey Med. Ctr.,
50 F.3d 522, 527-28 (8th Cir. 1995). See also Thomas
Jefferson Univ. v. Shalala,
512 U.S. 504, 512 (1994) (“We must give substantial deference to
an agency’s interpretation of its own regulations.” (citations omitted)).
15
U.S. DEP’T OF HEALTH & HUMAN SERVS., SKILLED NURSING FACILITY MANUAL § 356.1
(2005).
16
See HCFAR 95-1 at 17-18.
6
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multiple staff members orally informed the Representative at the time that the
services would not be covered and that it provided the Notice Form to the
Representative when the Beneficiary was admitted. The task of assessing
credibility and resolving conflicts of evidence lies firmly with the ALJ.17 Here,
the ALJ discounted the value of the Notice Form, which neither the
Representative nor the Beneficiary signed, because of its late appearance in the
record. As the ALJ noted, Morton did not produce that form, purportedly dated
August 8, 2002, until June 2004, more than a year after Morton initially
requested Medicare payment and after several determinations by TriSpan. The
ALJ also discounted Morton's evidence of oral notice. Based on this record, the
ALJ could easily reach those conclusions. We therefore defer to the ALJ's
findings that notice was not sufficient under these facts.
IV. CONCLUSION
Despite the ALJ’s identification and application of an inapplicable legal
standard, substantial evidence supports his ultimate conclusion. We therefore
affirm the district court’s summary judgment that affirms the ALJ’s holding,
albeit on somewhat different grounds.
AFFIRMED.
17
Carey v. Apfel, 230 F.3d 131, 135 (5th Cir. 2000) (citing Brown v. Apfel,
192 F.3d 492,
496 (5th Cir. 1999)).
7
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EDITH BROWN CLEMENT, Circuit Judge, dissenting:
I would remand this case. Two things are clear: (1) the ALJ applied an
incorrect legal standard requiring advance written notice of non-coverage and (2)
the ALJ’s decision makes no explicit factual findings regarding whether advance
oral notices were given. In light of these two points, by affirming the ALJ’s
decision the majority necessarily relies on its own factual determination that no
sufficient oral notice was given to the beneficiary.
By treating written notice as necessary, the ALJ improperly foreclosed
Morton’s argument that it was “clear and obvious” the beneficiary had
knowledge of non-coverage based on repeated oral notice. I therefore do not
agree with the majority’s conclusion that “[t]he ALJ . . . discounted Morton’s
evidence of oral notice.” The ALJ’s decision dismissed the evidence of oral notice
as legally irrelevant rather than considering it and “discounting” it as incredible.
Notably, the ALJ did not even mention the alleged oral notices in the section of
his decision entitled “Evaluation of the Evidence.” Indeed, because he had
expressly stated his erroneous view that oral notice was legally insufficient, the
ALJ had no reason to make findings regarding whether advance oral notices
were given. Though it couches its decision in the language of deference, the
majority strains to uphold a result that it concludes, on its own implicit factual
determination, is correct. Deference to the ALJ means upholding a finding of fact
where it is reasonable, not supplying a finding of fact where doing so enables an
affirmance.
I respectfully dissent.
8
