Mass. Gen. Hosp. v. Comm’r of the Div. of Med. Assistance

REIMBURSEMENT

Mass. Gen. Hosp. v. Comm’r of the
Div. of Med. Assistance, No. 05-P-642 (Mass. App. Ct. June 8, 2006)

A hospital
sought review after the state’s Division of Medical Assistance denied reimbursement
for inpatient services provided to three Medicaid patients. The Division deemed
the services "medically unnecessary," because the
hospital could have addressed the patients’ needs through outpatient observation
services. The hospital challenged the Division’s ruling, claiming that the
regulations were vague and inconsistent with federal legislative mandate, and
the Division’s finding was not supported by the evidence. The appellate court
upheld the Division’s ruling against the first two challenges and remanded
the case to lower court to address the hospital’s third challenge. The court
held that the regulations provided sufficient guidance as to when inpatient
hospital admission would not be necessary. Also, the court determined that
the Division did not impermissibly rely on hindsight in evaluating the appropriateness
of the hospital’s decision to admit.