CASE | DECISION | JUDGES | FOOTNOTES

Department of Health and Human Services
DEPARTMENTAL APPEALS BOARD
Medicare Appeals Council
IN THE CASE OF Claim For

(Appellant)


 


(Beneficiary)


(HICN)


(Carrier/Intermediary/PRO/HMO)


(Docket Number)

DECISION
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The Medicare Appeals Council has decided, on its own motion, to review the Administrative Law Judge's decision dated September 28, 2000 due to an error of law (20 CFR 404.969 and 404.970, by reference of 42 CFR 405.856).

The beneficiary claimed Medicare payment for surgery to his mouth and related hospital services rendered on June 24, 1998, as well as pre-operative tests performed on June 18, 1998, at Passavant Hospital in Pittsburgh, Pennsylvania. The Medicare contractor ("carrier") denied coverage for all services in its initial determination, and upon reconsideration affirmed its initial denial. A fair hearing was requested, and the fair hearing officer decided that only the blood test performed on June 18, 1998 was covered by Medicare. The beneficiary then requested a hearing before an Administrative Law Judge, who decided that all of the billed services were covered. The Health Care Financing Administration (HCFA) protested this decision in a memo to the Council dated October 12, 2000.

The Council has considered the record which was before the Administrative Law Judge, as well as the memorandum, with attachments, from HCFA. The HCFA memorandum and the Council's notice of review are hereby entered into the record in this case.

Section 1862(a)(12) of the Social Security Act ("Act") excludes dental procedures from Medicare coverage. That section reads:

(a) Notwithstanding any other provision of this title, no payment may be made under part A or part B for any expenses incurred for items or services -

(12) where such expenses are for services in connection with the care, treatment, filling, removal or replacement of teeth or structures directly supporting teeth, except that payment may be made under part A in the case of inpatient hospital services in connection with the provision of such dental services if the individual, because of his underlying medical condition and clinical status or because of the severity of the dental procedure, requires hospitalization in connection with the provision of such services . . . .

Medicare regulations at 42 CFR 411.15(i) reiterate the statutory provision. In further explaining the policy, section 2136 of the Medicare Carrier's Manual specifically states that "[t]he reconstruction of a ridge performed primarily to prepare the mouth for dentures is a noncovered procedure." An example is given: "the removal of a torus palatinus (a bony protuberance of the hard palate) may be a covered service. However, with rare exception, this surgery is performed in connection with an excluded service, i.e., the preparation of the mouth for dentures. Under such circumstances, do not pay for this procedure" (emphasis added).

In this case, the services included extraction of the teeth and excision of bony protrusions ("tori") in the mouth in preparation for dentures. The fact that the excision was in preparation for dentures is not disputed (Ex. 6, p. 27; Ex.11). The carrier and the fair hearing officer determined that both the extraction and the excision were not covered services, as they were both related to the preparation of the mouth for dentures. According to the statements of the beneficiary's wife, who represented the beneficiary at the hearing before the Administrative Law Judge, the beneficiary concedes that the extraction of the teeth is not covered, and claims reimbursement only for the excision of the tori and the related hospital charges. The Council finds that the excision is also not covered, given that it was also performed for the purpose of preparing the beneficiary's mouth for dentures.

Further, the Council finds that the related hospital services of June 24, 1998, and the pre-operative services rendered on Jun 18, 1998, are not covered. Section 1862(a)(12) of the Act allows payment in the case of "inpatient" hospital services related to noncovered dental procedures. In this case, there is no claim that the beneficiary was admitted as an inpatient and the record indicates that he was admitted as an outpatient (Ex. 2, p. 2; Ex. 6, various pages). (1)

The beneficiary has based his claim for payment on his reliance on erroneous information that he and the oral surgeon allegedly received from one or more employees of the carrier. This information, the beneficiary claims, led him to believe that the excision of the tori would be covered, and therefore led him to schedule the surgery. The benficiary's argument is essentially that the Health Care Financing Administration (HCFA) and the adjudicators in the appeals process should be "estopped," or barred, from applying the law in this case. The Council cannot confirm what information the provider and the beneficiary received verbally from employees of the carrier, nor can it confirm what the provider or the beneficiary told the employees in explaining the situation, which prompted the employees' response. As the fair hearing officer noted in her decision, explanatory information is given verbally by the carriers, but final determinations about the coverage of services can only be correctly and fairly made when all the facts are available for review.

Moreover, even where misinformation is given and relied on - either by a provider or by a beneficiary - there is no legal basis for Medicare reimbursement of a service explicitly excluded from coverage by statute. In 1984, the United States Supreme Court decided in Heckler v. Community Health Services of Crawford Co. that estoppel could not be invoked to prevent recoupment of an overpayment to a medical provider under Part A of Medicare. 467 U.S. 51. In Crawford Co., the provider had accepted payment of costs for certain operating expenses in reliance on erroneous oral advice from the carrier that such payments were appropriate. Id. at 56-57. In considering whether HCFA should be estopped from recovering the overpayment, the Court noted that "it is well settled that the Government may not be estopped on the same terms as any other litigant." Id. at 60. "[T]he general rule," the Court said, is "that those who deal with the Government are expected to know the law and may not rely on the conduct of Government agents contrary to law." Id. at 64. "[A]nyone entering into an arrangement with the Government takes the risk of having accurately ascertained that he who purports to act for the Government stays within the bounds of his authority." Id. (quoting from Federal Crop Insurance Corp. v. Merrill, 332 U.S. 380, 384 [1947]).

Moreover, in 1990, the Supreme Court issued a decision in another case that made it clear that estoppel could not be applied in money claims against the government by individuals. Office of Personnel Management (OPM) v. Richmond, 496 U.S. 414. That case involved an individual beneficiary and was also, the Court observed, "in practical effect one for misrepresentation." (2) Id. at 430. While stopping short of finding that estoppel could never apply against the government, the Court in Richmond settled the matter with regard to money claims against the government. Id. at 426, 434 (As for monetary claims, . . . there can be no estoppel . . . .")

The Court's reasoning in Richmond stressed the exclusive power of Congress to appropriate federal funds under the Constitution. "[W]e cannot accept . . . that the terms of a statute should be ignored based on the facts of individual cases." (3) 496 U.S. at 424-26, 432. Even assuming that there was "much equity" in Mr. Richmond's claim for benefits, the Court concluded that it did not "have authority to order the payment he seeks." Id. at 416. Similarly, the Council find itself without authority to do so in this case.

CONCLUSION

After careful consideration of the record, the Medicare Appeals Council finds that the beneficiary's oral surgery and related services rendered on June 18, 1998 and June 24, 1998, are not covered by Medicare.


Date: December 21, 2000
JUDGES
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M. Susan Wiley
Adminstrative Appeals Judge

FOOTNOTES
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1. Even if there was a dispute as to the status of the admission, the Council finds that the beneficiary was not admitted as an inpatient. An inpatient, for purposes of Medicare, is defined in section 210 of the Medicare Hospital Manual "...as a person admitted to a hospital for bed occupancy for purposes of receiving inpatient hospital services. Generally a person is considered an inpatient if formally admitted as an inpatient with the expectation that he will remain at least overnight and occupy a bed even though it later develops that he can be discharged or transferred to another hospital and does not actually use a hospital bed overnight." Section 3112.1 of the Medicare Intermediary Manual and Section 230.1 of the Medicare Hospital Manual define a hospital outpatient as a person who has not been admitted by the hospital as an inpatient but is registered on the hospital records as an outpatient and receives services (rather than supplies alone) from the hospital. In this case, there was no expectation of admission as an inpatient or overnight stay, and the beneficiary was discharged the same day.

2. At issue in Richmond was erroneous information as to the amount a recipient of government disability benefits could earn without losing benefits. Mr. Richmond had relied on misinformation given by his former agency's personnel department concerning the amount of wages he could earn annually and still retain his disability benefits. When OPM subsequently discovered that he had exceeded the statutory earnings limit, it discontinued his disability annuity. The U.S. Supreme Court held that OPM could not be estopped from applying the statutory limit because of the recipient's reliance on misinformation from an official source. 496 U.S. at 416-18.

3. In emphasizing the exclusive role of Congress in authorizing statutory benefits, the Richmond Court also noted that Congress may provide remedies to those denied such benefits. Besides amending the statute itself to include the additional benefits, Congress may enact legislation specifically providing for payment of benefits where there has been detrimental reliance on misinformation, Id. at 428-29. In the present case, no such special statute permits payment of the beneficiary's expenses.

CASE | DECISION | JUDGES | FOOTNOTES