Intermountain Healthcare v. OptumHealth

2015 UT App 284
THE UTAH COURT OF APPEALS
I NTERMOUNTAIN HEALTHCARE,
Petitioner,
v.
O PTUM HEALTH AND S ALT LAKE C OUNTY DIVISION OF BEHAVIORAL
HEALTH S ERVICES,
Respondents.
Opinion
No. 20140462-CA
Filed November 27, 2015
Original Proceeding in this Court
Catherine M. Larson, Attorney for Petitioner
Kimberly Neville and Kyle E. Witherspoon,
Attorneys for Respondent OptumHealth
S ENIOR JUDGE R USSELL W. BENCH authored this Opinion, in which
JUDGES GREGORY K. O RME and S TEPHEN L. R OTH concurred.1
BENCH, Senior Judge:
¶1 	Intermountain 	Healthcare 	(IHC) 	seeks 	review 	of 	the
Department 	of 	Health, 	Division 	of 	Medicaid 	and 	Health
Financing’s (DMHF) decision that IHC is entitled to payment for
only three of a patient’s eighteen days of inpatient psychiatric
care at an IHC facility. We set aside DMHF’s decision and
remand for further proceedings consistent with this opinion.
1. The Honorable Russell W. Bench, Senior Judge, sat by special
assignment as authorized by law. See generally Utah R. Jud.
Admin. 11-201(6).

Intermountain Healthcare v. OptumHealth
20140462-CA 	2 	2015 UT App 284
BACKGROUND
¶2 	The patient is a Medicaid recipient who was involuntarily
committed to an IHC facility from March 31, 2013, to April 17,
2013, for inpatient psychiatric care following a suicide attempt.
Her 	presenting 	symptoms 	included 	an 	unstable 	mood,
depression, 	irritability, 	and 	untreated 	bipolar 	disorder. 	The
patient’s care during her inpatient stay included continuous
fifteen-minute 	safety 	checks, 	several 	medication 	changes,
participation in group therapy, and electroconvulsive therapy.
She expressed suicidal thoughts to medical staff throughout her
stay and, at times, indicated that she felt she would not be safe if
she were not in a hospital setting.
¶3 	OptumHealth is a private entity that pays care providers
for 	mental 	health 	services 	rendered 	to 	Salt 	Lake 	County
Medicaid patients. Payment for a Medicaid client’s inpatient
mental healthcare is based on a guideline that OptumHealth has
established 	in 	accordance 	with 	Utah 	Medicaid 	policies 	(the
Guideline). Based on the Guideline and applicable provisions of
the Utah Administrative Code, OptumHealth determined that
the patient’s treatment after April 1 was not medically necessary
and that, as a result, IHC was entitled to payment only for the
treatment it provided the patient on April 1.2
¶4 	IHC 	initiated 	a 	Medicaid 	appeal 	with 	DMHF. 	An
administrative law judge (ALJ) conducted a formal hearing,
during 	which 	the 	patient’s 	treating 	physician 	and 	an
independent medical reviewer, also a physician, testified. The
medical 	reviewer’s 	testimony 	was 	based 	exclusively 	on 	his
consideration of the treating physician’s notes and the patient’s
relevant medical records. The ALJ recommended that IHC be
2. Because the patient’s Medicaid eligibility began on April 1,
2013, IHC is not entitled to Medicaid payment for any of the
patient’s treatment rendered on March 31, 2013.

Intermountain Healthcare v. OptumHealth
20140462-CA 	3 	2015 UT App 284
paid for two additional days of the patient’s treatment but
concluded that the remainder of the patient’s inpatient care was
not medically necessary. Specifically, the ALJ found that the
patient was admitted into acute inpatient care on March 31, 2013,
based on her “recent and serious suicide attempt” but that she
no longer posed an “imminent risk of harm to self or others after
April 1, 2013.” The ALJ found that forty-eight hours of inpatient
observation was medically necessary to ensure that the patient’s
“pattern of improvement continued . . . given her mood swings
and 	impulsivity.” 	Accordingly, 	the 	ALJ 	recommended 	that
OptumHealth pay IHC for the patient’s treatment on April 1
plus two additional days of the patient’s inpatient stay—April 2
and April 3, 2013. DMHF issued a Final Agency Order adopting
the 	ALJ’s 	recommendation. 	IHC 	seeks 	review 	of 	DMHF’s
decision.
ISSUES AND STANDARDS OF REVIEW
¶5 	IHC argues that the ALJ misapplied the Guideline in
reaching her recommendation and, in turn, that DMHF erred
when it awarded only partial payment to IHC for the patient’s
care. IHC also challenges the propriety of the ALJ’s reliance on
the medical reviewer’s testimony over the treating physician’s
testimony.
¶6 	The Utah Administrative Procedures Act provides that an
“appellate court shall grant relief only if, on the basis of the
agency’s record, it determines that a person seeking judicial
review has been substantially prejudiced by[, inter alia,] . . . [an]
agency action [that] is . . . an abuse of the discretion delegated to
the agency by statute.” Utah Code Ann. § 63G-4-403(4)(h)(i)
(LexisNexis 2014); see also Murray v. Labor Comm’n, 2013 UT 38,
¶ 19, 308 P.3d 461. Because “the legislature has, by virtue of
[Utah 	Code] 	section 	26-18-2.3(1), 	explicitly 	granted 	[DMHF]
discretion 	to 	establish 	criteria 	concerning 	Medicaid
reimbursement,” 	“we 	review 	[DMHF’s] 	decision 	denying

Intermountain Healthcare v. OptumHealth
20140462-CA 	4 	2015 UT App 284
Medicaid reimbursement for medical care that [IHC] provided
[the patient] . . . for reasonableness and rationality.” See South
Davis Community Hosp., Inc./Romero v. Department of Health, 869
P.2d 	979, 	981–82 	(Utah 	Ct. 	App. 	1994); 	accord 	Conley 	v.
Department of Health, 2012 UT App 274, ¶ 8, 287 P.3d 452; see also
Utah Code Ann. § 26-18-2.3(1) (LexisNexis 2013). However, “the
Agency’s interpretation of the federal and state statutes and
regulations that govern Utah’s Medicaid Program are questions
of law that we review for correctness, according no particular
deference to the agency decision.” Conley, 2012 UT App 274, ¶ 7
(citation and internal quotation marks omitted).
ANALYSIS
¶7 	IHC argues that the ALJ “erred in her application of the
[Guideline] in that she only considered subsection[s] (1)(a)(i),
(1)(a)(ii), 	and 	(1)(b) 	and 	inaccurately 	concluded 	that 	such
subsections warrant inpatient psychiatric care only if the patient
exhibits ‘overt’ and ‘active suicidal ideation for the[ir] entire
stay.’” (Second alteration in original.) IHC argues that it was
“incorrect for [the ALJ] to apply an ‘overt’ and ‘active’ suicide
standard to this case” and that “it was also incorrect for her to
limit her analysis to just whether [the patient] exhibited suicidal
ideation during the entire hospital stay.” Last, IHC contends that
the ALJ failed to provide “a reasoned basis for declining to” give
deference 	to 	the 	patient’s 	treating 	physician. 	See 	A.M.L. 	v.
Department of Health, 863 P.2d 44, 48 (Utah Ct. App. 1993). We
agree with IHC.
¶8 	Under the Utah Medicaid Program, “‘medically necessary
service’” means
(a) it is reasonably calculated to prevent, diagnose,
or cure conditions in the recipient that endanger
life, 	cause 	suffering 	or 	pain, 	cause 	physical
deformity or malfunction, or threaten to cause a
handicap; and

Intermountain Healthcare v. OptumHealth
20140462-CA 	5 	2015 UT App 284
(b) there is no other equally effective course of
treatment available or suitable for the recipient
requesting the service that is more conservative or
substantially less costly.
Utah Admin. Code R414-1-2(18). According to the Guideline,
“Acute Inpatient” care “is for the active treatment of a mental
health condition” and “Active Treatment is a clinical process
involving 	24-hour 	care 	that 	includes 	assessment, 	diagnosis,
intervention, evaluation of care, treatment and planning for
discharge and aftercare.” The Guideline provides,
The following criteria must be met[:]
1 	The symptoms of a mental health condition
require 	immediate 	care 	and 	treatment 	to 	avoid
jeopardy 	to 	life 	or 	health. 	Examples 	include 	the
following[:]
a 	The member is at imminent risk of harm to self
or others as evidenced by, for example[,]
i 	The member has made a recent and
serious suicide attempt,
ii 	The 	member 	is 	exhibiting 	current
suicidal ideation with intent, realistic plan and/or
available means, or other serious life threatening, self-
injurious behavior(s),
iii 	The member has recently exhibited self-
mutilation 	that 	is 	medically 	significant 	and/or
potentially dangerous,
iv 	The 	member 	has 	made 	recent 	and
seriously physically destructive acts that indicate a
high risk for recurrence and serious injury to self [or]
others[.]

Intermountain Healthcare v. OptumHealth
20140462-CA 	6 	2015 UT App 284
b 	There has been a deterioration in the member’s
psychological, 	social, 	occupational/educational, 	or
other important area of functioning, and the member
is unable to safely and adequately care for him/her
self[.]
c 	There is an imminent risk that severe, multiple
and/or complex psychological stressors will produce
enough 	distress 	or 	impairment 	in 	psychological,
social, occupational/educational, or another important
area of functioning to undermine treatment at a lower
level of care[.]
Furthermore, the Guideline indicates that it should be “used in
conjunction 	with 	the 	Continued 	Service 	[G]uideline 	when
assessing the need for a continuing stay.” The Continued Service
Guideline states, “It is anticipated that as the severity of a
member’s 	condition 	changes, 	the 	member’s 	condition 	will
eventually no longer meet the criteria for the current level of care
and the member will be safely transitioned to another level of
care.”
¶9 	Here, the patient was admitted into acute inpatient care
based on her “recent and serious suicide attempt.” The ALJ’s
decision quotes Guideline subsections (1)(a)(i), (1)(a)(ii), and
(1)(b), as well as the Continued Service Guideline. The ALJ
found that the patient did not pose an “imminent risk of harm to
self or others after April 1, 2013.” This conclusion hinges on the
ALJ’s interpretation of the Guideline as requiring the patient to
maintain “active suicidal ideations for the entire stay,” minus
forty-eight hours of observation time.
¶10 	However, 	the 	Guideline 	and 	the 	Continued 	Service
Guideline do not mandate that the patient maintain the same
symptoms 	for 	which 	she 	was 	initially 	admitted 	into 	acute
inpatient care—i.e., active suicidal ideation with a plan. While
active suicidal ideation with a plan is an example given in the

Intermountain Healthcare v. OptumHealth
20140462-CA 	7 	2015 UT App 284
Guideline 	of 	a 	mental 	health 	condition 	warranting 	acute
inpatient care, it is not, in and of itself, the criteria by which the
necessity for acute inpatient care is to be measured under the
Guideline or the Continued Service Guideline.
¶11 	Moreover, the examples in the Guideline pertaining to
suicide are not specifically limited to active suicidal ideation
with a plan, as the ALJ’s interpretation suggests. Rather, the
Guideline 	provides 	that 	acute 	inpatient 	care 	is 	medically
necessary if, “for example[,] . . . 	[t]he member is exhibiting
current 	suicidal 	ideation 	with 	intent, 	realistic 	plan 	and/or
available 	means, 	or 	other 	serious 	life threatening, 	self-injurious
behavior(s).” 	(Emphasis 	added.) 	Here, 	the 	treating 	physician
testified 	that 	the 	patient’s 	passive 	suicidal 	ideation 	still
presented a sufficient risk to her own safety. He testified that his
notes 	describing 	the 	patient 	as 	having 	“background” 	or
“passive” suicidal ideation indicated that her “suicide risk” was
“outside of a contained, protective setting,” meaning that she
was not looking “for ways to harm herself in the hospital, but
later on.” He explained that someone with “passive suicide
ideation or active without a plan[] can . . . still be at imminent
risk of harm to themselves,” “[p]articularly in the context of [this
patient’s] 	. 	. 	. 	mood 	swings 	that 	[were] 	occurring 	fairly
frequently with regularity and consistently through much of her
stay.” The treating physician also testified that the patient’s
suicidal ideation was only one of several reasons for which he
considered the entire length of the patient’s acute inpatient care
to be medically necessary. He testified that his “decision to
discharge 	[the 	patient]” 	was 	based 	only 	partly 	“on 	her
representation 	of 	what 	her 	suicidal 	ideation 	was.” 	And 	he
opined that prior to her release date, the patient “would have
had difficulty functioning outside of the hospital setting.”3
3. We note that the treating physician’s testimony appears to
comport with the examples provided in Guideline subsections
(1)(a), (1)(b), and (1)(c). OptumHealth asserts, and we agree, that
(continued…)

Intermountain Healthcare v. OptumHealth
20140462-CA 	8 	2015 UT App 284
¶12 	In making her recommendation to deny IHC’s request for
reimbursement for the patient’s stay beyond April 3, 2013, the
ALJ relied on the medical reviewer’s testimony that the patient’s
passive suicidal ideation and mood swings were insufficient to
justify the patient’s ongoing acute inpatient care as medically
necessary. The ALJ provided no “reasoned basis” “consistent
with the purposes of the Medicaid Act” for her decision to not
give deference to the treating physician’s testimony on these
issues. See A.M.L. v. Department of Health, 863 P.2d 44, 48 (Utah
Ct. App. 1993) (citation and internal quotation marks omitted).
Several courts have required “Medicaid agencies to recognize a
presumption in favor of the medical judgment of the attending
physician in determining the medical necessity of treatment.” Id.
(citation and internal quotation marks omitted). This court has
previously held that, if the agency “elects not to give deference
to the testimony given by the treating physician, the agency
should provide a reasoned basis for declining to do so which is
consistent with the purposes of the Medicaid Act.” Id. (citation
and internal quotation marks omitted); cf. Frey v. Bowen, 816 F.2d
508, 513 (10th Cir. 1987) (“[T]he reports of physicians who have
treated a patient over a period of time or who are consulted for
purposes of treatment are given greater weight than are reports
of physicians employed and paid by the government for the
purpose of defending against a disability claim.” (citation and
internal quotation marks omitted)). The ALJ erred in rejecting
the treating physician’s testimony and his treatment notes absent
an explanation for this deviation from our established rule. Cf.
Frey, 816 F.2d at 515 (“[F]indings of a nontreating physician
(…continued)
the Guideline does not require “administrative law judges to
consider all possible scenarios under which inpatient treatment
might be appropriate.” However, consideration of “all possible
scenarios” under the Guideline is distinct from consideration of
the relevant examples explicitly provided in the Guideline.

Intermountain Healthcare v. OptumHealth
20140462-CA 	9 	2015 UT App 284
based upon limited contact and examination are of suspect
reliability.”).
¶13 	The 	ALJ 	abused 	her 	discretion 	by 	interpreting 	the
Guideline in a way that limited the plain language of the acute
inpatient criteria and by failing to explain why the treating
physician’s opinion did not deserve deference. As a result, the
ALJ’s recommendation was not reasonable and rational. See
South Davis Community Hosp., Inc./Romero v. Department of Health,
869 P.2d 979, 981–82 (Utah Ct. App. 1994). Accordingly, DMHF’s
decision 	to 	adopt 	the 	ALJ’s 	recommendation 	was 	also 	not
reasonable and rational. See id.
CONCLUSION
¶14 	Because the ALJ misconstrued the Guideline and did not
provide a reasoned basis for declining to give deference to the
treating 	physician’s 	opinion, 	her 	recommendation 	was 	not
reasonable 	or 	rational. 	Accordingly, 	we 	set 	aside 	DMHF’s
decision to adopt the ALJ’s recommendation and remand for
further proceedings consistent with this opinion.4
4. We decline IHC’s invitation to issue an order demanding that
OptumHealth pay IHC for all of the inpatient psychiatric care it
rendered 	to 	the 	patient 	from 	April 	1 	to 	April 	17, 	2013.
Additionally, “[w]e do not intend our remand to be merely an
exercise in bolstering and supporting the conclusion already
reached.” See Allred v. Allred, 797 P.2d 1108, 1112 (Utah Ct. App.
1990).