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Athol Memorial Hospital v. Commissioner of the Division of Medical Assistance8/6/2002
ented, are inconsistent with Federal law, all claims for medically appropriate services must be compensated at the higher, inpatient rate as a matter of law, even under a standard consistent with Federal law.
The trial judge correctly ruled that factual considerations underlying claims for reimbursement for inpatient care require the division's assessment of whether the particular treatment rendered in each case was medically appropriate, and could have been provided in a more conservative or less costly setting. He also found that, if the legal theory now being pressed had been made to the division, the board of hearings would have noted that fact in the record to preserve the question for judicial review under G. L. c. 30A. The purposes of exhaustion thus would have been served and issues would have been properly preserved for judicial review had the hospitals pursued reimbursement through the administrative process, as occurred in the Massachusetts Eyeá& Ear Infirmary case. See Massachusetts Respiratory Hosp. v. Department of Pub. Welfare, supra.
(c) Futility. The hospitals' final contention is that they should not be required to exhaust administrative remedies because to do so would have been futile: the board of hearings refused to consider the legality of the division's regulations, the central issue of this litigation.
They rely on Stock v. Massachusetts Hosp. Sch., 392 Mass. 205, 213 (1984), S.C., 394 Mass. 437, 439 (1985), and Ciszewski v. Industrial Acc. Bd., 367 Mass. 135, 141 (1975). Those cases are distinguishable. In Stock v. Massachusetts Hosp. Sch., supra at 209, the plaintiff's request for an administrative appeal was denied on jurisdictional grounds. We held that, in the unusual circumstances of that case, exhaustion was futile. Id. at 213. Here, the hospitals were not denied an administrative appeal, they elected not to pursue one. In Ciszewski v. Industrial Acc. Bd., supra at 141, we said that the futility exception to the requirement for exhaustion applies "where the power and authority of the agency themselves are in question, and not where the exercise of that agency's discretion is challenged." The hospitals do not challenge the power or authority of the division to determine whether the services provided were medically appropriate. Rather, they challenge the standards used to make the determination as to the second prong: that there is no more conservative or less costly course of treatment. Thus, their challenge goes to the division's exercise of discretion.
The hospitals next focus on the regulations that direct the board of hearings not to consider challenges to the validity of the regulations. See 130áCode Mass. Regs. §§á450.244, 610.082(C)(2). They maintain that these regulations provided "absolutely no opportunity" for them to have their claims raised within the context of the available administrative procedures. They contend that exhaustion of administrative remedies is not required where "it is clear beyond doubt that the relevant administrative agency will not grant the relief in question." Massachusetts Bay Transp. Auth. v. Labor Relations Comm'n, 425 Mass. 253, 258 (1997), quoting American Fed'n of Gov't Employees v. Acree, 475 F.2d 1289, 1292 (D.C. Cir. 1973). The argument is unpersuasive.
The doctrine of exhaustion of administrative remedies is one of deference to the Legislature where it has expressed its intent that a particular question be determined in the first instance by an administrative agency. Exceptions are rare. See Wilczewski v. Commissioner of the Dep't of Envtl. Quality Eng'g, 404 Mass. 787, 792 (1989). Although futility is such an exception, it does not apply in the circumstances of this case. All fa
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