Louisiana Department of Health and Human Resources, DAB No. 631 (1985)

GAB Decision 631

March 28, 1985

Louisiana Department of Health and Human Resources;
Ballard, Judith A.; Garrett, Donald F. Teitz, Alexander
Docket No. 84-152


The Louisiana Department of Health and Human Resources (State)
appealed the decision by the Health Care Financing Administration
(Agency or HCFA) to disallow $537,037 in federal financial participation
(FFP) claimed for emergency hospital services provided during the period
January 1, 1981 through October 5, 1982. The issue in dispute is
whether the State complied with the regulatory requirement that the
services be provided at the "most accessible" hospital available to the
patient. In addition to briefing, at the request of the State the Board
held a hearing in Baton Rouge on January 15 and 16, 1985. This decision
is based on the entire record, including the transcript of the hearing.
We conclude that the State failed to establish that the services were
provided at the most accessible hospital. Accordingly, the Board
upholds the disallowance. BACKGROUND Federal regulations provide for
FFP for certain emergency services in hospitals which do not meet all
the requirements to participate in the Medicaid program. These
emergency hospital services are defined in 42 CFR 440.170(e) (1980) as
services that:

(1) Are necessary to prevent the death or serious impairment of the
health of a recipient; and

(2) Because of the threat to the life or health of the recipient
necessitate the use of the most accessible hospital available that is
equipped to furnish the services. . . .(emphasis added)$%The State
claimed FFP for the period in question for emergency hospital services
at 11 hospitals which did not otherwise participate in the Medicaid
program, and were called "Emergency Access Hospitals." The State plan
provided for payment to the hospital upon submission of a state Form
110-HE approved by a member of a Medical Review Committee.(2)$%In
November 1982 HCFA conducted a review of the State's claims for
emergency services provided at the Emergency Access Hospitals to
determine if the State was reimbursing the hospitals to accordance with
the regulation. The review team found that the State was paying claims
for services which were not emergency hospital services within the
definition of 42 CFR 440.170(e). The team found the primary problem to
be that the State had no evidence that the most accessible hospital had
been used in any given case. The team also found that many of the
claims did not appear to be for services necessary to prevent death or
serious impairment to health. In a report dated February 18, 1983, the
team notified the State of its findings. The State subsequently
requested technical assistance in developing a method for checking
accessibility. Thereafter, the State discontinued reimbursement for
Emergency Access Hospitals on September 1, 1983. DISCUSSION The State
did not dispute that the requirements of 42 CFR 440.170(e) had to be met
for the State to receive Medicaid funds for emergency services at
hospitals which did not participate in Medicaid. The State did not
dispute that one of the requirements of 42 CFR 440.170(e) that had to be
met was that the services be provided at the most accessible Emergency
Access Hospital available to the patient in the emergency situation.
The State, however, did dispute the Agency's conclusion that the State
had not met the accessibility requirement. The State also argued that
the regulation was unreasonable and that, although the nature of the
condition treated was not an issue properly before the Board, if the
Board considered it then all claims accompanied by a Form 110-HE should
be allowed. I. Did the State satisfy the accessibility requirement of 42
CFR 440.170(e)?

A. Should accessibility be inferred from the fact of an emergency?
The State argued that in an emergency situation a person would naturally
go to the nearest hospital, and that, since all the claimed costs were
for emergencies, the State in fact satisfied the accessibility
requirement. This argument is not persuasive. First, 42 CFR 440.170(e)
has two parts. The first part requires that the condition be an
emergency and the second requires that the hospital used be the most(3)
accessible one available. To accept the State's argument (that the fact
of an emergency is sufficient to establish that the most accessible
hospital was used) would be to find the second part of the regulation to
have no meaning. It is more reasonable to assume that the Agency
drafted the regulation in two distinct parts so that it would be clear
that two distinct requirements had to be met in order to receive federal
funds. This reading of the regulation is consistent with one of the
basic rules of legal construction which states that a law should be
construed in such a way as to give meaning to all its parts.
Sutherland, Stautory Construction, 4th Ed., Vol. 2A, Sec. 46.06.
Second, it is not improbable that people in certain emergency situations
might consider some hospital other than the most accessible one.
Another hospital might have a better reputation, a particular doctor on
staff, or other attributes which could create a strong preference for
the patient. Moreover, it is clear from the record that certain of the
problems for which the State sought reimbursement (lumbar pain, sprained
ankle) were not so serious as to warrant a presumption that the patient
would go only to the most accessible hospital. (See Agency Exhibit A,
pp. 3, 4) We conclude that accessibility cannot be inferred from the
existence of an emergency alone, without other evidence from the State
to prove accessibility.

B. Should accessibility be inferred from the locations of the
hospitals? The State argued that certain hospitals were clearly the
most accessible hospitals available in particular areas, and, therefore,
any services provided at those hospitals should be deemed to have
satisfied the accessibility requirement. The State cited such factors
as traffic flow, the physical location of drawbridges, and the fact that
certain hospitals were the only ones located in particular geographical
regions to establish that those hospitals were, in fact, the most
accessible. This argument begs the real question of where the hospitals
were located in relation to where the emergency arose. An example
illustrates how little the argument proves. The State argued that all
claims at DeSoto General Hospital in the town of Mansfield in rural
DeSoto Parish should have been allowed because DeSota General was
located in the center of the Parish and there were no full service
hospitals in the Parish. A map presented by the State at the hearing
shows the locations of all the Emergency Access Hospitals involved in
the dispute (marked in green) and the nearest full service Medicaid
hospitals (marked in red).(4) (Appellant's Exhibit 11; Transcript of
hearing (Tr.), pp. 37, 38, 40) The map shows full service hospitals in
the city of Shreveport in neighboring Caddo Parish, and in Coushatta in
neighboring Red River Parish. (Tr., pp. 39, 40, 41) An emergency
arising in DeSoto Parish along the southern border of Caddo Parish or
the western border of Red River Parish might, in fact, be closer to the
full service hospitals in Shreveport or Coushatta, respectively, than to
DeSoto General in Mansfield. While it is true that DeSoto General would
be the most accessible hospital for emergencies arising in Mansfield or
locations nearer to Mansfield than Shreveport or Coushatta, the location
of the hospital alone does not prove that the hospital was the most
accessible one in a given case. The State's records gave no indication
of where the particular emergency arose, and the State provided no other
evidence about this key factor. /1/

We conclude that accessibility cannot be inferred from the location of
the hospital. II.Was the regulation unreasonable because it required the
State to track routes of travel? The State argued that the regulation
was unreasonable since it required the State to "search out routes of
accessibility." (Appellant's Brief, September 21, 1984, p. 4) The State
alleged that this was not "administratively cost-effective." (Tr., p.
96) The regulation merely required that the State use the most
accessible facility. It did not specify how the State should determine
accessibility or what type of documentation the State should keep. The
record reveals that the State and Agency differed on how to determine
accessibility and what documentation was sufficient (Tr., pp. 21, 96).
It appears from the record that the Agency wanted the State to consider
such factors as where the emergency arose. (Tr., p. 220)(5)$%The State
has presented nothing more than the vague and unsubstantiated allegation
that the requirement was not "administratively cost-effective" as
support for its argument that the regulation was unreasonable. The
State never clearly established how the Agency wanted the State to
determine or document accessibility or in what specific ways the
Agency's requirement was unreasonable. The Board concludes that the
State has failed to establish that the accessibility requirement of the
regulation was unreasonable. In any event, the Board is bound by all
applicable regulations. 45 CFR 16.14. The Board notes that this is not
a case in which the State requested technical assistance and the federal
government was somehow culpable for not providing it. The emergency
access program in Louisiana began in 1981 and the period in question was
January 1, 1981 through October 5, 1982. The State did not request
technical assistance until April 7, 1983. (Tr., p. 96, Agency Exhibit
F) Furthermore, the regulation is not complicated. It clearly required
that the services be provided at the most accessible hospital. Yet, the
State did nothing concrete to document accessibility. By choosing to
ignore the accessibility requirement rather than seeking guidance prior
to a federal review, the State assumed the risk and now must pay the
price. III. Were the services "necessary to prevent death or serious
impairment to health," as required by section one of 45 CFR 440.170(e)?
As has two parts: section one, the "medical emergency" requirement; and
section two, the "accessibility" requirement. The State did not dispute
that to receive FFP it had to satisfy both parts. Rather, the State
argued that the "accessibility" question was the only issue properly
before the Board since the disallowance letter did not specifically
allege that the State's claims were not for medical emergencies. The
State further argued that if the Board determined that the "medical
emergency" question was also an issue, then all claims accompanied by a
"signed and approved Form 110-HE" should be deemed to have satisfied the
medical emergency requirement. (Appellant's Post-Hearing Brief, February
13, 1985, p. 6) Since we found above that the State did not meet the
accessibility requirement of the regulation, we do not need to decide
whether (6) the services met the medical emergency requirement of the
regulation. /2/ We address the State's arguments below only because the
parties devoted a significant amount of time to the question at the
hearing.

Although the State argued that the Agency had not relied on the medical
emergency requirement in disallowing the claims, the disallowance letter
set out both sections of the regulation in full. In addition, the State
was given an opportunity to address the medical emergency issue in
briefing and at the hearing, so no prejudice resulted to the State from
considering it. As for the evidence itself, a signed and approved Form
110-HE alone is not sufficient to establish that a service was
"necessary to prevent death or serious impairment of the health of a
recipient," as required by the medical emergency requirement of the
regulation. It is clear that certain of the claims which were
accompanied by a signed and approved Form 110-HE, such as lumbar pain,
could under no circumstances be considered as threatening death or
serious impairment to health. (See Agency Exhibit A, p. 3; Respondent's
Brief, p. 6) CONCLUSION Based on the foregoing, we conclude that the
State failed to establish that it had satisfied the accessibility
requirement of 45 CFR 440.170(e) or that the requirement was
unreasonable. Accordingly, we uphold the disallowance of $537,037 in
FFP. /1/ The State's form used for emergency admissions (110-HE, Exh.
9) gives no address at all for the patient and did not indicate where
the emergency occurred. The State argued that it had the home addresses
of recipients available in other records. However, this would not prove
the patient was taken to the most accessible hospital when an emergency
arose. An emergency can occur at work, at school, or in an automobile
accident on the highway, as well as at home. The Board inquired as to
transportation forms mentioned by the State, but the State did not
attempt to offer any such information. (Tr., p. 97) /2/ At the hearing
the State objected to allowing any evidence by the Agency's
medical witness because of the State's position that medical emergency
was not an issue. The Presiding Board Member admitted the evidence
conditionally, subject to being stricken after post-hearing briefing.
(Tr., p. 217) It is unnecessary to rule on the admissibility of this
evidence since our decision is based only on accessibility.

JUNE 06, 1985