Gaye Glaser v. Kathleen Sibelius, et al
Filing
FILED OPINION (DIARMUID F. O'SCANNLAIN, RICHARD C. TALLMAN and MILAN D. SMITH, JR.) AFFIRMED. Judge: MDS Authoring. FILED AND ENTERED JUDGMENT. [7949124]
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FOR PUBLICATION
UNITED STATES COURT OF APPEALS
FOR THE NINTH CIRCUIT
HEATHER K. L. CONAHAN, as
Personal Representative of the
Estate of Gaye S. Glaser,
Plaintiff-Appellant,
v.
KATHLEEN SEBELIUS, in her official
capacity as U.S. Dep’t of Health
and Human Services Secretary,
Defendant-Appellee,
KAISER FOUNDATION HEALTH PLAN,
INC.,
Defendant-Intervenor-Appellee.
No. 09-17510
D.C. No.
1:08-cv-00443DAE-BMK
OPINION
Appeal from the United States District Court
for the District of Hawaii
David A. Ezra, District Judge, Presiding
Argued and Submitted
October 11, 2011—Honolulu, Hawaii
Filed November 1, 2011
Before: Diarmuid F. O’Scannlain, Richard C. Tallman, and
Milan D. Smith, Jr., Circuit Judges.
Opinion by Judge Milan D. Smith, Jr.
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COUNSEL
Robert G. Klein (argued), Dayna H. Kamimura-Ching,
McCorriston Miller Mukai MacKinnon LLP, Honolulu,
Hawaii, for plaintiff-appellant Heather K.L. Conahan, personal representative of the Estate of Gaye S. Glaser.
Harry Yee, Assistant United States Attorney (argued); Florence T. Nakakuni, United States Attorney, Honolulu, Hawaii,
for defendant-appellee Kathleen Sebelius.
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CONAHAN v. SEBELIUS
Dianne Winter Brookins (argued), Allison Kirk Griffiths, Alston Hunt Floyd & Ing, Honolulu, Hawaii, for defendantintervenor-appellee Kaiser Foundation Health Plan, Inc.
OPINION
M. SMITH, Circuit Judge:
Plaintiff-Appellant Heather K.L. Conahan, personal representative of the Estate of Gaye S. Glaser, appeals the district
court’s affirmance of the Medicare Appeals Council’s (MAC)
ruling that Defendant-Intervenor-Appellee Kaiser Foundation
Health Plan, Inc. (Kaiser) is not required to pay for Glaser’s
liver surgery. Conahan contends that by refusing to cover the
procedure, Kaiser failed to comply with 42 C.F.R.
§ 422.112(a)(3), which requires Medicare Advantage plans to
make their services available, accessible, and adequate, and
42 C.F.R. §§ 422.112(a)(9) and 422.113(b)(iii), which require
the plans to cover “urgently needed services.” We agree with
the district court that substantial evidence supports the MAC’s
decision, and we affirm.
FACTUAL AND PROCEDURAL BACKGROUND
Health maintenance organizations provide Medicarecovered services through Medicare Advantage plans. See 42
U.S.C. § 1395w-27. Medicare Advantage beneficiaries usually receive medical services within the network of providers
established by their HMOs. However, federal regulations
require Medicare Advantage plans to cover certain out-ofplan medical care, including emergency and “urgently needed
services.” 42 C.F.R. §§ 422.112; 422.113.
Glaser was enrolled in Kaiser Permanente Senior Advantage, a Medicare Advantage plan. After Glaser experienced a
chronic cough throughout 2006, Kaiser performed numerous
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tests, and diagnosed Glaser with adenocarcinoma (cancer of
the liver) favoring cholangiocarcinoma (cancer of the bile
ducts).
Kaiser’s Tumor Board, a group of approximately thirty
physicians, from both within and outside of Kaiser, determined that complete removal of the tumor could leave too little liver for Glaser to survive, and that surgery would not
eliminate the possibility of cancer recurrence. The Tumor
Board recommended that Glaser instead undergo a form of
chemotherapy, known as chemoembolization, to shrink the
tumor, and Kaiser’s General Surgery Department agreed. Dr.
Ryan Takamori, Glaser’s surgical oncologist, informed Glaser
that Kaiser would not cover surgery, and Glaser was offered
a second opinion from another Kaiser doctor.
Dr. Kevin Lin-Hurtubise, a physician who is unaffiliated
with Kaiser, agreed to perform liver resection surgery on Glaser. Dr. Eric Matayoshi, Kaiser’s Chief of General Surgery,
told Glaser that Kaiser would not cover surgery performed by
Dr. Lin-Hurtubise, and scheduled another appointment for
Glaser to discuss her treatment options with Dr. Takamori.
Glaser did not attend either Kaiser appointment. Instead, Dr.
Lin-Hurtubise performed the surgery on October 12, 2006,
during which he removed approximately 70% of Glaser’s
liver. Glaser suffered post-operative impairment of her brain
and liver function, and remained in the hospital for approximately three weeks.
Glaser asked Kaiser to reimburse her nearly $150,000 for
the surgery, and Kaiser denied the request. Glaser appealed
Kaiser’s denial to Maximus Federal Services (Maximus), a
private contractor that reviews Medicare disputes. Maximus
affirmed Kaiser’s decision in January 2007. Glaser appealed
Maximus’s decision to an Office of Medicare Hearing and
Appeals administrative law judge (ALJ), who took testimony
from Glaser and Dr. Matayoshi in a June 27, 2007 telephone
hearing. The ALJ reversed Maximus’s decision on October
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11, 2007, concluding that Kaiser failed to make its medical
services available, accessible, and adequate, as required by 42
C.F.R. § 422.112(a)(3), and that Kaiser was obligated to pay
for the out-of-plan liver resection surgery because it was an
“urgently needed service” under 42 C.F.R. §§ 422.112(a)(9)
and 422.113(b)(iii).
Kaiser appealed the ALJ’s ruling to the MAC, which
reversed the ALJ’s decision on August 15, 2008. Glaser
appealed the decision by filing a complaint against the Secretary of Health and Human Services (Secretary) in district
court, and Kaiser intervened as a party. The district court
affirmed the MAC on September 9, 2009, finding that substantial evidence supports the conclusion that the Medicare
regulations do not require Kaiser to cover Glaser’s surgery.
Glaser timely appealed the district court’s affirmance of the
MAC’s ruling. Glaser died on March 6, 2011. Conahan, the
personal representative of Glaser’s estate, was substituted as
the Plaintiff-Appellant in this case.
JURISDICTION AND STANDARDS OF REVIEW
We have jurisdiction under 28 U.S.C. § 1291. We review
a district court’s order upholding the MAC’s decision de
novo. Miller v. Heckler, 770 F.2d 845, 847 (9th Cir. 1985).
The MAC’s ruling is the final decision of the Secretary, Heckler v. Ringer, 466 U.S. 602, 607 (1984); thus we must uphold
the MAC’s factual findings if they are supported by substantial evidence. 42 U.S.C. § 405(g); Mayes v. Massanari, 276
F.3d 453, 458-59 (9th Cir. 2001).1 Substantial evidence
1
Conahan argues that the ALJ’s factual findings — not the MAC’s —
must be upheld if they are supported by substantial evidence. She cites
Edlund v. Massanari, 253 F.3d 1152 (9th Cir. 2001); Tackett v. Apfel, 180
F.3d 1094 (9th Cir. 1999); Morgan v. Apfel, 169 F.3d 595 (9th Cir. 1999);
and Moncada v. Chater, 60 F.3d 521 (9th Cir. 1995). However, in each
of those cases, the ALJ’s decision was the agency’s final decision on
review. Here, in contrast, the MAC’s ruling was the agency’s final decision. Thus, the district court correctly held that the MAC’s ruling receives
deference, and that we are not required to defer to the ALJ’s factual findings.
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“means such relevant evidence as a reasonable mind might
accept as adequate to support a conclusion.” Richardson v.
Perales, 402 U.S. 389, 401 (1971) (citation and internal quotation marks omitted). The agency’s interpretation of its own
regulations receives “substantial deference” and “must be
given controlling weight unless it is plainly erroneous or
inconsistent with the regulation.” Thomas Jefferson Univ. v.
Shalala, 512 U.S. 504, 512 (1994) (citation and internal quotation marks omitted).
DISCUSSION
I.
“Available, accessible, and adequate” services
[1] A Medicare Advantage organization must make its
covered services “available and accessible.” 42 C.F.R.
§ 422.112(a). If the organization’s in-network specialty care
is “unavailable or inadequate to meet the enrollee’s medical
needs,” it must arrange out-of-network care. 42 C.F.R.
§ 422.112(a)(3). The Department of Health and Human Services (HHS) stated during its rulemaking procedures that this
duty is triggered when, “for example, the plan includes no
specialist qualified to treat an enrollee’s rare condition.” 65
Fed. Reg. 40,170, 40,199 (June 29, 2000).
Conahan contends that Kaiser’s refusal to perform liver
surgery rendered its services unavailable, inaccessible, and
inadequate, and therefore Kaiser must cover the out-of-plan
surgery. The MAC disagreed, concluding that Kaiser “denied
the enrollee a referral to an out-of-network provider; it did not
deny her medical care that was reasonably believed to be
within the standard of appropriate medical care, as determined
by multiple physicians[.]” We agree with the district court
that substantial evidence supports the MAC’s conclusion.
[2] The record contains abundant evidence that Kaiser
thoroughly considered performing surgery, but determined
that it would be too dangerous and ineffective. Dr. Matayoshi
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testified to the ALJ that Kaiser’s multidisciplinary Tumor
Board concluded that the surgery would require removal of up
to 80% of Glaser’s liver, which would likely result in Glaser
not having enough liver remaining to survive. The only physician to reach a different conclusion than the Tumor Board was
Dr. Lin-Hurtubise, who performed the surgery. This disagreement does not significantly undermine the conclusion of
approximately thirty physicians on the Tumor Board. See Am.
Textile Mfrs. Inst., Inc. v. Donovan, 452 U.S. 490, 523 (1981)
(“[T]he possibility of drawing two inconsistent conclusions
from the evidence does not prevent an administrative agency’s finding from being supported by substantial evidence.”)
(internal quotation marks and citation omitted).
[3] Moreover, the record contains substantial evidence that
Kaiser developed a comprehensive plan to shrink the tumor
with chemoembolization. Dr. Matayoshi testified that if the
tumor shrank, Kaiser would reconsider whether to perform
surgery. Dr. Matayoshi described Glaser’s surgical oncologist, Dr. Takamori, as “our resource for all of our liver tumors”
and “very well qualified” to treat Glaser. Conahan claims that
the MAC should not have considered this evidence because
Kaiser had not informed Glaser of the chemoembolization
plan. However, the administrative record contradicts this
claim. Dr. Matayoshi testified that he mentioned chemoembolization to Glaser in a telephone call before she underwent
surgery. Moreover, Dr. Takamori planned to discuss further
the treatment plan with Glaser, but Glaser failed to appear for
her two scheduled appointments. The district court correctly
rejected the “implicit contention that [Glaser] can refuse
appointments with in-network providers and, at the same
time, argue that alternative options were not made available
to her.”
Conahan contends that the MAC erred by relying on Dr.
Matayoshi’s testimony, which she claims the ALJ discredited.
As support for her position, Conahan cites Pogue v. United
States Dep’t of Labor, 940 F.2d 1287 (9th Cir. 1991), in
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which we held that “[s]pecial deference is to be given the
ALJ’s credibility judgments.” Id. at 1289 (citation and internal quotation marks omitted). In Pogue, we reviewed the Secretary of Labor’s dismissal of an employment complaint
against the Navy. The ALJ in that case stated that testimony
from the plaintiff ’s supervisor was not credible, but the Secretary of Labor nonetheless relied on that testimony. Id. at
1290-91. In contrast, the ALJ here did not find that Dr.
Matayoshi’s testimony lacked credibility. In fact, the ALJ’s
opinion does not explicitly mention Dr. Matayoshi’s hearing
testimony, and Conahan has not cited any authority that
would require us to interpret the ALJ’s silence on that testimony as a finding that the testimony lacks credibility. Furthermore, the ALJ wrote that he “accepts the medical opinions
of all physicians’ [sic] involved as opinions based upon their
best medical assessment of the Appellant’s condition at the
time.” Because the ALJ did not find that Dr. Matayoshi’s testimony lacked credibility, the MAC was free to consider the
evidence.
[4] In sum, we conclude that substantial evidence in the
administrative record supports the MAC’s determination that
Kaiser’s services were available, accessible, and adequate,
and therefore that 42 C.F.R. § 422.112(a)(3) does not require
Kaiser to pay for the surgery.
II.
“Urgently needed service”
[5] Conahan also seeks reimbursement under 42 C.F.R.
§ 422.112(a)(9), which requires Medicare Advantage organizations to cover out-of-plan “urgently needed services.” Such
services are
provided when an enrollee is temporarily absent
from the [Medicare Advantage] plan’s service (or, if
applicable, continuation) area (or, under unusual and
extraordinary circumstances, provided when the
enrollee is in the service or continuation area but the
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organization’s provider network is temporarily
unavailable or inaccessible) when the services are
medically necessary and immediately required —
(A) As a result of unforeseen illness, injury,
or condition; and
(B) It was not reasonable given the circumstances to obtain the services through the
organization offering the [Medicare Advantage] plan.
42 C.F.R. § 422.113(b)(iii) (emphasis added).
Conahan contends that Kaiser’s refusal to perform the surgery rendered its network “temporarily unavailable or inaccessible,” making Glaser’s out-of-plan liver resection an
“urgently needed service” that Kaiser was required to cover.
The MAC rejected this interpretation of the regulation, concluding that Kaiser’s “recommendation against surgical resection of the enrollee’s liver tumor did not render their provider
network unavailable or inaccessible, even if this recommendation was against the enrollee’s personal wishes.”
[6] The MAC’s conclusion is consistent with the text and
history of the Medicare Advantage regulations. When it promulgated those regulations, HHS stated that the requirement
to pay arises
only under unusual and extraordinary circumstances,
for services provided when the enrollee is in the service or continuation area, but the organization’s provider network is temporarily unavailable or
inaccessible, and such services are medically necessary and immediately required. We believe that
examples of when this could arise would include
unusual events such as an earthquake or strike, if
such events impede enrollee access to care[.]
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65 Fed. Reg. 40,170, 40,199 (June 29, 2000) (emphasis
added). A health insurer’s denial of coverage is not an
extraordinary or unusual event, similar to an earthquake or
labor strike.
[7] Conahan responds that earthquakes and strikes are
“merely examples of situations that would make a plan
unavailable.” However, HHS specifically rejected this broader
interpretation of the proposed regulation during the noticeand-comment period. A commenter asked HHS whether the
“urgently needed services” exception would allow beneficiaries to “unilaterally obtain care out-of-plan if their [Medicare
Advantage] organization did not provide the care they
requested.” Id. HHS replied that
[t]here are other mechanisms in place to handle such
situations. We may require a plan to take corrective
action, where necessary, if a plan fails to provide
services. In addition, services that the beneficiary
believes he or she was entitled to receive from the
[Medicare Advantage] organization, but that the
organization denied or otherwise did not provide,
may be appealed under the regulations in subpart M
of part 422.
Id. HHS concluded that a denial of benefits does not constitute “unusual and extraordinary circumstances.” This interpretation is neither plainly erroneous nor inconsistent with the
regulation’s plain text. Were we to accept Conahan’s construction, Medicare Advantage organizations always would be
required to pay for out-of-plan procedures they refuse to perform. Nothing in the regulation suggests that HHS intended
such a sweeping result. Because we defer to the agency’s reasonable determination that the “urgently needed services”
exception is not triggered by a denial of coverage, Kaiser is
not required to pay for the surgery.
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CONCLUSION
There is no dispute that Glaser faced a life-threatening
medical condition. After learning of her precarious medical
situation, she understandably acted swiftly to obtain what she
believed was the best possible treatment. However, our decision does not turn on whether Glaser acted reasonably. Before
us is the narrow legal question of whether the MAC correctly
concluded that Medicare regulations do not require Kaiser to
pay for the surgery. We hold that substantial evidence supports that conclusion.
AFFIRMED.
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