Arkansas Department of Human Services, Division of Medical Services v. Northwest Arkansas Hospital, Springdale

Cite as 2022 Ark. App. 312 ARKANSAS COURT OF APPEALS DIVISION III No. CV-21-344 ARKANSAS DEPARTMENT OF Opinion Delivered September 7, 2022 HUMAN SERVICES, DIVISION OF MEDICAL SERVICES APPEAL FROM THE PULASKI APPELLANT COUNTY CIRCUIT COURT, SIXTH DIVISION [NO. 60CV-20-6752] V. HONORABLE TIMOTHY DAVIS FOX, NORTHWEST ARKANSAS HOSPITAL, JUDGE SPRINGDALE APPELLEE AFFIRMED N. MARK KLAPPENBACH, Judge The dispute in this case concerns whether a one-week inpatient hospitalization was medically necessary for a mentally ill patient. The Arkansas Department of Health, Office of Medicaid Provider Appeals (OMPA) found that it was. Appellant Arkansas Department of Human Services, Division of Medical Services (DHS) appealed OMPA’s decision to circuit court, which affirmed OMPA’s decision. DHS appeals to this court. We affirm. Medicaid rules require hospitals, like appellee Northwest Arkansas Hospital (Northwest) to gain approval for inpatient hospitalizations exceeding four days to be reimbursed for those services. Any days of inpatient hospitalization after the fourth day are covered by Medicaid if they are deemed medically necessary, which requires the hospital to submit all available medical information justifying or supporting the necessity of continued hospitalization. DHS contracts with the Arkansas Foundation for Medical Care (AFMC) to evaluate such claims. In this case, Medicaid approved the first four days of LB’s inpatient hospitalization, March 2 through March 5, 2019. LB had been admitted to acute psychiatric hospitalization due to his depression and expression of suicidal and homicidal ideation. DHS denied the claim for the remaining days of hospitalization, March 6 through 12, 2019, after reviewing the medical records and failing to find evidence of actual acute-care treatment being provided on those days. Northwest appealed the denial to OMPA. During an OMPA hearing, there is a rebuttable presumption in favor of the medical judgment of the performing or prescribing physician in determining the medical necessity of treatment. Ark. Code Ann. § 20-77-1708(a) (Repl. 2018). This presumption may be overcome by the resisting party, here DHS, with evidence contradicting the medical necessity of treatment. Pursuant to the Arkansas Medicaid Manual, to be reimbursable, treatment must be “medically necessary,” which means “reasonably calculated to prevent, diagnose, correct, cure alleviate or prevent the worsening of conditions that endanger life, cause suffering or pain, result in illness or injury, threaten to cause or aggravate a handicap or cause physical deformity or malfunction and if there is no other equally effective (although more conservative or less costly) course of treatment available or suitable for the beneficiary requesting the service.” 016.06.35-400.000 Ark. Admin. Code (WL current through April 15, 2022). If an administrative law judge finds that DHS has overcome the presumption in 2 favor of the medical judgment of the treating physician, the judge must state how the presumption was overcome. Ark. Code Ann. § 20-77-1708(b). At the OMPA hearing conducted in 2020, DHS presented the testimony of Dr. Tom Tinsman, the medical director for AFMC, which provides initial evaluations for DHS on claims for Medicaid reimbursement regarding inpatient hospital stays. Northwest presented the testimony of Dr. Brian Hyatt, LB’s treating psychiatrist. …

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