SSR 73-8c: Sections 1861(k) and 1862(a)(9).—Hospital Insurance Benefits—Extended Care Services—Custodial Care Exclusion—Effect of Deficiency in Operations of Utilization Review Committee

20 CFR 405.127

SSR 73-8c

Elsie Eichbaum v. Finch, U.S.D.C., District of Nebraska, March 19, 1971; (CCH UIR Fed. Par. 26,349)

Held, substantial basis existed for a finding that the services furnished a 77-year-old hospital insurance beneficiary by an "extended care facility" after the 50th day of extended care services constituted "custodial care," payment for which was precluded by section 1862(a)(9) of the Social Security Act, when the evidence showed that she was ambulatory, received only oral medications and neither required nor received skilled nursing services.

Held further, a possible deficiency in the operations of the facility's Utilization Review Committee would not justify payment under title XVIII for services which the Secretary had found, after de novo examination of the facts, specifically excluded from coverage by section 18862(a)(9) of the Act. Such deficiencies on the part of the Utilization Review Committee cannot deprive the Secretary of his statutory responsibility for determining whether services provided at the ECF are covered under Part A of title XVIII.

URBOM, D.J.: The plaintiff, by way of this action, seeks judicial review of an adverse decision of the Secretary of Health, Education and Welfare denying the plaintiff's claim for supplementary medical insurance benefits [sic] for the aged under Tit. XVIII of the Social Security Act. Such judicial review is authorized in 42 U.S.C.A. §1395ff, utilizing the judicial review procedure found in 42 U.S.C.A. §405(g). The court has previously found, in denying the defendant's motion to dismiss, that it has jurisdiction over this matter. The defendant's motion for summary judgment now stands ready for determination. The court in ruling upon the defendant's motion to dismiss found the relevant facts to be as follows:

The plaintiff was admitted to the Homestead Nursing Home, an extended care facility within the meaning of 42 U.S.C.A. §1395x(h), following a period of illness at Bryan Memorial Hospital. At this time plaintiff began receiving post-hospital extended care benefits under 42 U.S.C.A. §1395d(a)(2). Under this provision the plaintiff was eligible for up to 100 days of paid benefits. The intermediary insurance company paid for 50 days of the plaintiff's stay at the extended care facility through March 31, 1968, after which the Utilization Review Committee[1] determined that the plaintiff no longer required skilled nursing care services and recommended that her benefits be terminated. A hearing examiner for the Department of Health, Education and Welfare found in favor of the plaintiff; however, the Appeals Council of the Department upon its own motion reviewed the case and reversed the hearing examiner's decision. It is that adverse decision of the Appeals council that the plaintiff seeks to have this court review.

The procedure for judicial review of a final decision of the Secretary is quite closely prescribed by §405(g) of 42 U.S.C. The court has the power to affirm, modify or reverse the decision, with or without remanding the cause for further hearing. It is specifically provided that "the findings of the Secretary as to any fact, if supported by substantial evidence, shall be conclusive." 42 U.S.C. §405(g). As required by the foregoing section, the Secretary has filed as part of his answer a certified copy of the transcript of the record which includes findings of fact and the evidence upon which the decision was based. The court shall restrict itself to the evidence that was before the Appeals Council when it rendered its decision. If there was the required substantial basis for the decision, then that decision must stand. Social Security Board v. Warren, 142 F.2d 974 (C.A. 8th Cir. 1944).

On April 24, 1969, a hearing examiner of the Bureau of Hearings and Appeals, Social Security Administration, Department of Health, Education and Welfare, conducted a hearing regarding Mrs. Eichbaum's claim. As set forth by the hearing examiner, the general issue to be determined was "whether claimant's care at the Homestead Nursing Home after March 31, 1968 (was) covered under the Health Insurance Program." Specifically, the issue to be determined was "whether skilled nursing services were required or furnished plaintiff after March 31, 1968, as specified in section 1814(a)(C) of the Social Security Act or whether services rendered claimant were custodial care and specifically excluded from coverage under the Act in section 1862(a)(9)."

The hearing examiner devoted the major portion of his decision to a consideration of whether or not the Utilization Review Committee properly carried out its administrative function in that it failed to consult with the attending physician before making its decision to terminate payment for the plaintiff's stay in the extended care facility. The hearing examiner found that:

Since the evidence indicates that the attending physician was not duly consulted, as noted above, the examiner finds that the determination of the utilization review committee of March 27, 1968, in claimant's case is without effect.

Further the examiner finds that claimant still requires skilled nursing care services. There is no evidence of record that the level of care given claimant has decreased since her admittance to the Homestead Nursing Home. There is evidence that her condition has deteriorated subsequent to her admittance.

On August 5, 1969, the Appeals Council notified the plaintiff's representative that, on its own motion, it had decided to review the hearing examiner's decision. The Appeals Council conducted a de novo hearing and adduced evidence in addition to that contained in the record compiled by the hearing examiner. The additional evidence considered by the Appeals Council included monthly medication charts, personal care and nursing notes, and certain minutes of the Utilization Review Committee, all pertinent to the case of Mrs. Eichbaum. The Appeals Council reversed the decision of the hearing examiner and found that:

Considering all of the evidence, the Appeals Council is of the opinion that the primary purpose of the care provided the claimant after March 31, 1968, was to assist her in meeting the activities of daily living. Therefore, the Appeals Council finds that the care received by the claimant after March 31, 1968, was custodial in nature and excluded from coverage by section 1862(a)(9) of the Social Security Act.

The Appeals Council fully considered the hearing examiner's concern with the administrative process employed by the Utilization Review Committee and found that even assuming for the purposes of argument "that the Utilization Review Committee had not been properly constituted and assuming further arguendo, that the committee did not consult with the attending physician before issuing its determinations, the Appeals Council's decision in this case would not be affected."

This court is of the opinion that the decision of the Appeals Council was based upon substantial evidence and therefore must be affirmed. The "physician's orders and progress notes" for the period February 12, 1968, through July 16, 1968, indicate that for the period April 1 through May 20, 1968, the period of time for which Mrs. Eichbaum seeks payment, the attending physician issued only one order regrading the medication and treatment to be received by Mrs. Eichbaum. The physician's order given on May 15, 1968, was to "continue same orders." Therefore, the plaintiff's condition during the period of time in question apparently did not require the close supervision and care of a physician. Further, the nursing notes for the months of April and May, 1968, indicated no unusual developments in Mrs. Eichbaum's medical condition that required the attention of a doctor. Against these facts stood the affidavit of Dr. J the attending physician. Dr. J was of the opinion that "(Mrs. Eichbaum's) condition subsequent to her admittance has gradually but definitely deteriorated and that she has needed and will continue to need extended care provided by a facility of this type."

The Appeals Council after considering the evidence of record was "unable to find any evidence that the claimant either needed or received continuous skilled nursing care after March 31, 1968.

Indeed, the Council believes that payment of benefits for services provided during the 50-day period from February 11 through march 31 constitutes the most liberal allowance possible under the circumstances in this case." The court agrees with this finding. Upon a reading of the record, no evidence is apparent to support the contention that Mrs. Eichbaum was in need of skilled nursing care during the 50-day period in question. Although the attending physician concluded that Mrs. Eichbaum needed to be in an extended care facility, no facts were presented to support such a position.

Upon transfer to the Homestead Nursing Home from Bryan Memorial Hospital, Mrs. Eichbaum was suffering from many chronic medical problems, including probable metastatic disease of the spine, osteoarthritis of the spine, diabetes mellitus, arteriosclerotic heart disease with cardiac enlargement, atrial fibrillation, and chronic congestive heart failure. In addition to those serious problems, Mrs. Eichbaum was incontinent of bladder and had a speech impairment. However, except for the first three days she was in the nursing home and for the period March 1 through March 8, Mrs. Eichbaum has a moderate activity tolerance and was able to ambulate alone using a walker. During Mrs. Eichbaum's entire stay her treatment was by medication administered orally in tablet or capsule form. The Appeals Council properly found that because the services required by Mrs. Eichbaum could be administered "by the average rational, nonmedical person, without the direct supervision of trained medical or paramedical personnel," they were, therefore custodial in nature only and excluded from coverage.

The plaintiff's remaining contentions that the Utilization Review Committee was improperly constituted, that the committee did not consult with the attending physician before issuing its determination, and that certain brochures and information regrading Medicare benefits supplied by the Secretary were misleading are all without merit in this appeal and were adequately answered by the Appeals Council.[2] The possibility that the local Utilization Review Committee used improper procedures in making its determination would, at the most, affect the local facility's eligibility to provide services under the Medicare program. See 20 C.F.R. §405.1137. The Appeals Council conducted its own de novo examination of the evidence and did not rely on the evidence as found by the Utilization Review Committee.

Because there is a substantial basis for the decision of the Appeals Council, an order will be entered this day granting the defendant's motion for summary judgment.

Provided for in section 1861(k) of the Social Security Act. (42 U.S.C. 1395xc(k)) [Ed.]

[2]The Appeals Council pointed out that:

"Such deficiencies, however, cannot deprive the Secretary of his statutory responsibility for determining whether services provided at an extended care facility are covered or not covered under Part A of Title XVIII. More specifically, defects in the organization or procedures of a utilization review committee cannot justify payment under title XVIII for services which the Secretary or those to whom he has delegated authority have determined to be custodial services specifically excluded from coverage by section 1862(a)(9) of the SOcial Security Act." (Ed.)