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IHC Health Services, Inc. v. Office of Personnel Management

United States District Court, D. Utah, Central Division

February 6, 2017

IHC HEALTH SERVICES, INC., dba MCKAY-DEE HOSPITAL, Plaintiff,
v.
OFFICE OF PERSONNEL MANAGEMENT, Defendant.

          MEMORANDUM DECISION AND ORDER AFFIRMING THE DECISION OF THE AGENCY

          Paul M. Warner Chief United States Magistrate Judge

         Pursuant to 28 U.S.C. § 636(c), the parties consented to have Chief United States Magistrate Judge Paul M. Warner conduct all proceedings in this case, including trial, entry of final judgment, and all post-judgment proceedings.[1] Before the court is Plaintiff IHC Health Services, Inc. dba McKay-Dee Hospital's (“Plaintiff”) Motion for Review of Agency Action.[2]Having reviewed the parties' briefs and the relevant law, the court renders the following Memorandum Decision and Order.[3]

         BACKGROUND

         F.R.G. (the “Patient”) is covered by a Federal Employee Health Benefits Act (“FEHBA”) health plan through Blue Cross Blue Shield (“Blue Cross”).[4] On December 31, 2015, Plaintiff initiated this action, after Blue Cross and the Office of Personnel Management (“OPM” or the “agency”) refused to reimburse it for the expenses Plaintiff incurred treating the Patient's frostbite injuries.[5] Plaintiff seeks reimbursement for treating the Patient's acute arterial insufficiency due to frostbite with hyperbaric oxygen treatments (“HBOTs” or “HBOT”).

         A. Blue Cross's Policy Definitions and Coverage

         During the injury and subsequent treatment, the Patient was covered by a FEHBA health plan through Blue Cross.[6] Blue Cross's Statement of Benefits provides the following regarding the definition of “medical necessity”:

All benefits are subject to the definitions, limitations, and exclusions in this brochure and are payable only when we determine that the criteria for medical necessity are met. Medical necessity shall mean health care services that a physician, hospital, or other covered professional or facility provider, exercising prudent clinical judgment, would provide to a patient for the purpose of preventing, evaluating, diagnosing, or treating an illness, injury, disease, or its symptoms, and that are:
a. In accordance with generally accepted standards of medical practice in the United States; and
b. Clinically appropriate, in terms of type, frequency, extent, site, and duration; and considered effective for the patient's illness, injury, disease, or its symptoms; and
c. Not primarily for the convenience of the patient, physician, or other health care provider, and not more costly than an alternative service or sequence of services at least as likely to produce equivalent therapeutic or diagnostic results for the diagnosis or treatment of that patient's illness, injury, or disease, or its symptoms; and
d. Not part of or associated with scholastic education or vocational training of the patient; and
e. In the case of inpatient care, only provided safely in the acute inpatient hospital setting.
For these purposes, “generally accepted standards of medical practice” means standards that are based on credible scientific evidence published in peer-reviewed medical literature generally recognized by the relevant medical community and physician specialty society recommendations.
The fact that one of our covered physicians, hospitals, or other professional or facility providers has prescribed, recommended, or approved a service or supply does not, in itself, make it medically necessary or covered under this Plan.[7]

         Additionally, on September 13, 2012, Blue Cross issued a policy statement regarding the use of HBOT.[8] Blue Cross's policy statement concluded that HBOT is not medically necessary for the treatment of “acute arterial peripheral insufficiency.”[9]

         B. Injury and Medical Care

         On December 22, 2012, the Patient suffered frostbite while hunting.[10] On December 23, 2012, the Patient was treated at Uintah Basin Medical Center where he was diagnosed with “[m]oderate frostbite to the right index finger, right middle finger, right ring finger, right little finger, left index finger, left middle finger, left ring finger, and left little finger.”[11]

         After treatment at the Uintah Basin Medical Center, the Patient was treated at McKay-Dee Hospital.[12] When the Patient was discharged, the Patient was informed that he had frostbite and that the “cold can injure deeper tissues such as blood vessels.”[13] Subsequently, the Patient received treatment from the McKay-Dee Hospital Wound Clinic.[14] The Wound Clinic determined that the Patient was being seen for wounds due to “frostbite.”[15] The Wound Clinic determined that the patient should undergo HBOTs to treat “acute arterial insufficiency due to cold exposure.”[16] From January 7, 2013, until February 28, 2013, the Patient received eighteen HBOTs costing a total of $39, 423.84.[17]

         C. Denial of Coverage and Subsequent Agency Review

         Plaintiff submitted a claim to Blue Cross for the full amount of the Patient's HBOTs.[18]Blue Cross denied coverage, determining that HBOT is not medically necessary for the treatment of frostbite.[19] On January 8, 2014, after the Patient assigned his rights under his FEHBA plan, Plaintiff asked Blue Cross to reconsider its decision.[20]

         Upon reconsideration, Blue Cross submitted Plaintiff's claim to an independent board-certified physician to review whether the Patient's HBOTs were medically necessary.[21] The independent physician determined that the Patient's HBOTs did not meet Blue Cross's policy definition of medical necessity.[22] The physician concluded that while there is some scientific literature supporting the use of HBOT to treat frostbite, “many consider this treatment to be unproven.”[23] Additionally, the physician noted:

[s]everal potential but unproven treatments for frostbite have been reported. [HBOT] has been proposed as adjunctive therapy to improve revascularization and healing of injured tissue. Older studies showed no benefit, but subsequent case reports suggest a possible role and describe improvement of symptoms and the microcirculation of affected tissues. Further study of [HBOT] is needed before it can be recommended. There is insufficient evidence in the published literature to establish the use of [HBOT] for frostbite; therefore, this treatment is not [in] accordance with generally accepted standards of medical practice.[24]

         Based on the physician's opinion, Blue Cross denied Plaintiff's request for reconsideration.[25]

         Subsequently, Plaintiff filed an appeal with the OPM.[26] In response, the OPM asked Dr. Michael J. Wheatley, MD, an independent board-certified physician in hand surgery, to review Plaintiff's claim and determine if HBOT met Blue Cross's definition of medical necessity.[27] Dr. Wheatley reviewed the Plaintiff's diagnosis of arterial insufficiency due to frostbite and concluded that the use of HBOT did not meet Blue Cross's definition of medical necessity.[28] On June 16, 2014, relying on Dr. Wheatley's assessment, the OPM affirmed Blue Cross's denial of benefits.[29]

         STANDARDS ...


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