Shaw v. Secretary of the Executive Office of Health & Human Services
Docket: No. 06-P-1599
Court: Massachusetts Appeals Court; February 19, 2008; Massachusetts; State Appellate Court
In May 2004, MassHealth denied authorization for a surgical procedure for Ashley Shaw, citing lack of coverage despite her physician deeming it medically necessary. Ashley's mother, Elizabeth Shaw, appealed the decision but opted to proceed with the surgery due to its perceived necessity, assuming financial responsibility should the appeal fail. MassHealth later denied the appeal on the grounds that the procedure was performed without prior authorization. Ashley sought judicial review in the Superior Court, where her motion for judgment was denied, and judgment was entered for the defendants.
The background details include that Ashley, a minor suffering from HIV-AIDS, developed a significant lipodystrophy, which caused various physical and psychological issues. Dr. Elof Eriksson submitted a request for authorization to MassHealth, supported by letters from other medical professionals asserting the necessity of the procedure. During a subsequent hearing, Dr. Gail LoPreste of MassHealth stated the initial denial was due to the procedure not meeting medical necessity criteria and later claimed it was a retroactive request after learning the surgery had already been performed.
The hearing officer, however, did not address the medical necessity of the procedure since it had already been conducted without prior authorization, which was deemed an error. The court rejected the view that the claim could be terminated solely on the basis of the lack of authorization, noting that no timely alternative was available when the initial request was denied. The Superior Court's judgment was vacated.
Shaw sought a hearing for Ashley after MassHealth denied a procedure due to lack of prior authorization, rather than addressing the medical necessity. The appeal process has extended over three and a half years. The court found that prioritizing prior authorization over medical necessity contradicts the regulation's intent. While courts generally defer to agency interpretations, they can overrule them if deemed arbitrary or unreasonable. The court rejected MassHealth's interpretation that led to the termination of the review, emphasizing that the relevant regulation, 130 Code Mass. Regs. 433.408, focuses on medical necessity as a critical condition for service payment. The court clarified that Ashley's request was not retroactive as it was submitted before services were provided and remains pending. If the appeal results favorably, it would still satisfy the regulation’s requirement for determining medical necessity. The absence of a hearing or ruling on medical necessity necessitates remanding the case to MassHealth for proper review based on established criteria and a complete record. Consequently, the Superior Court's judgment was vacated, and the case was remanded for further proceedings. MassHealth's regulations require prior authorization for certain procedures, which also necessitates a determination of medical necessity. The clinical notes from Dr. Burchett and Dr. Eriksson supported the medical necessity of the procedure. Additionally, the record lacks pertinent documentation from the physician manual, and the court found it unnecessary to address MassHealth's dispute regarding the application of a federal regulation on retroactive payments, as the court's decision effectively resolved the matter.
