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Athol Memorial Hospital v. Commissioner of the Division of Medical Assistance8/6/2002
so promulgate regulations which establish procedures for providers to appeal erroneous denials by the division of a provider's claim for payment under this chapter." The statute also contemplates that judicial review shall be pursuant to G.áL. c.á30A, §á14. See G.áL. c.á118E, §§á38,á48. Where the contract itself incorporates by reference this statutory and regulatory scheme for review of denials of payment, the hospitals may not sidestep that scheme merely by characterizing the payment denial as a "breach of contract."
Allowing the hospitals to circumvent administrative review would be contrary to the intent of Congress and the intent of the Legislature. Administrative review of claims for inpatient hospital services is consistent with the requirement under Federal law that the division "provide such methods and procedures relating to the utilization of, and payment for, care and services available under the planá.á.á. as may be necessary to safeguard against unnecessary utilization of such care and services and to assure that payments are consistent with efficiency, economy, and quality of care." 42áU.S.C. §á1396a(a)(30)(A) (1994 &áSupp.áV 1999). See Massachusetts Eyeá& Ear Infirmary v. Commissioner of the Div. of Med. Assistance, 428 Mass. 805, 812-813 (1999). Cf. Massachusetts Respiratory Hosp. v. Department of Pub. Welfare, 414 Mass. 330, 334 (1993). It also advances the Legislature's goal of utilizing "proceduresá.á.á. as may be necessary for the proper and efficient operation of [the Medicaid program] in a manner consistent with simplicity of administration and the best interests of recipients." G.áL. c.á118E, §á12. See Massachusetts Respiratory Hosp. v. Department of Pub. Welfare, supra at 334-335.
There is no indication that the Congress, the Legislature, or even the parties intended the hospitals to have a common law remedy for payment of claims under Medicaid. The requirement that the division determine the question of medical necessity in the first instance ensures a speedy and efficient means of resolving a high volume of claims involving relatively straightforward but technical questions for which the division has "special expertise," and it promotes "uniformity and consistency in the regulation of business entrusted to [the division]." Kartell v. Blue Shield of Mass., Inc., 384 Mass. 409, 413, 414 (1981). Allowing these cases to be decided by a jury is incompatible with the Federal and State legislative purposes of providing prompt medical treatment that is both appropriate and economical, and providing prompt payment for such treatment.
Even if, as the hospitals contend, some regulations promulgated by the division constitute a breach of the provider contract because they conflict with Federal law, it does not follow that the remedy for such a breach is a jury trial to determine whether it was appropriate to provide the service on the more costly inpatient basis and whether the services would be compensated on that basis. In Massachusetts Eye & Ear Infirmary v. Commissioner of the Div. of Med. Assistance, supra, we said that the division could not, under existing regulations, deny all reimbursement for appropriate medical services. We also said that the division nevertheless could address claims for reimbursing hospitals at the applicable rate by developing definitions of "inpatient" and "outpatient" services, and have the cases resolved on a case-by-case basis through the adjudicatory process. Id. at 817. See Twomey v. Commissioner of Food & Agric., 435 Mass. 497, 502 n.10 (2001), quoting Arthurs v. Board of Registration in Medicine, 383 Mass. 299, 312-313 (1981) ("It is a recognized principle of administrative law that an agency may adopt policies throug
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