The opinion of the court was delivered by: SPATT
This action was commenced on September 13, 1991 by Jay Landa, as representative of the Estate of Frank Landa, pursuant to 42 U.S.C. § 405(g), to appeal from the denial of Medicare benefits by the Secretary of the Department of Health and Human Services, Donna Shalala (the "Secretary"). The Secretary moved the Court for an order pursuant to Fed. R. Civ. P. 12(c) granting judgment on the pleadings in her favor.
Frank Landa ("Landa" or the "patient") was admitted to Memorial Hospital, Hollywood, Florida on or about December 30, 1986 and he was discharged on or about January 5, 1987. He was eighty-six at the time. The parties do not inform the Court as to the reason for Landa's hospitalization, although the records from Memorial Hospital indicate that he suffered from abdominal pain. Mr. Landa returned to his home following his hospitalization. The medical record entry on his date of discharge indicates that there were "arrangements being made for 24 hour care at home." Record on Appeal at 464 (hereinafter "R.").
On January 29, 1987, Landa was admitted to the King Street Nursing Home, which is located at 787 King Street, Port Chester, New York. An "Admitting Evaluation" form completed by Dr. Leo Morganstern, Landa's physician, notes that the patient was legally blind, partially deaf, weak and unable to walk, confused, and afflicted with organic brain syndrome. R. at 433-34. Landa's eyesight is described in the record as 'legal blindness,' 'functional blindness' and 'partial blindness.' He is also described as being 'hard of hearing,' 'wearing a hearing aide on left ear,' having 'partial deafness' and 'functional deafness.' It is apparent from these descriptions that Landa's eyesight and hearing were impaired but not totally impaired.
The nursing home admitting evaluation form also outlines a treatment plan that includes (a) cessation of the drug Haldol, using hypnotics only when needed, (b) trial use of the drug Halcion, (c) sensory stimulation twice a day with regard to Landa's partial deafness and functional blindness, (d) physical therapy for rehabilitation, (e) ambulation, (f) activities of daily living and (g) bladder rehabilitation. Dr. Morganstern also ordered that Landa receive vitamins, milk of magnesia, a Fleet Enema when necessary and Tylenol in the event of pain or elevated temperature. R. 219, 246. With regard to prescription medication, Dr. Morganstern ordered administration of the drug Halcion for January 29 through February 2, 1987 as well as Mellaril in early February and again on February 23, 1987. Apparently a psychiatric evaluation was conducted some time during Landa's stay at King Street Nursing Home. The record reveals that Benadryl was prescribed for the period from February 12, 1987 to February 23, 1987 and Valium was prescribed for the period from February 17, 1987 to February 23, 1987.
With regard to behavior, the record reflect's notations by Landa's nurses that he was "alert" and "aware" with occasional confusion and lethargy observed prior to February 6, 1987. R. 227-28. It was first noted on February 6, 1987, that Landa was disturbing the other patients during the night and moving about his bed.
There are discrepancies in the record regarding the date of Landa's discharge from the hospital in Florida. The parties have apparently agreed that January 5, 1987 shall be considered the date of discharge. This date is of critical importance because Medicare coverage for post-hospital extended care is dependent on the type of care that was needed or received in the thirty day period following discharge from the hospital. The record is clear regarding the date of Landa's admission to the King Street Nursing Home, which is January 29, 1987. R. 83, 184, 218-19, 227.
On that date, January 29, 1987, King Street Nursing Home advised Landa in writing that
the medical information available at the time of, or prior to, admission shows that the specific services to be furnished do not meet the requirements for coverage under Medicare. However, should you request the facility to file a claim with Medicare, you will receive a formal determination from the Medicare intermediary as to the noncoverage of the stay.
R. 184-85. Despite this written advisement of noncoverage, Landa was admitted to the nursing home on January 29, 1987. Apparently a review of the nursing home's position was requested, in response to which the fiscal intermediary, Travelers Insurance Company ("Travelers") confirmed that the nursing home services were not covered by Medicare. The response from Travelers, dated February 11, 1987, states in part:
Extended care benefits are paid under Medicare for individuals who need on a daily basis, skilled nursing care or skilled rehabilitation services which as a practical matter can only be provided in a skilled nursing facility on an inpatient basis. Patients must require such extended care services for the medically necessary inpatient hospital care or for a condition which arose while they were in a skilled nursing facility receiving care for the same condition for which they received inpatient hospital services. Skilled care is the type of care which must be furnished by or under the supervision of skilled personnel to assure the safety of the patient and to achieve the medically desired result.
When individuals do not require such skilled services on a daily basis or when as a practical matter the provision of such services does not require that the individuals be admitted as inpatients to a skilled nursing facility, their care in a skilled nursing facility is not covered under the Medicare law. Since we have determined that the care you received was not of the type described, no Medicare hospital insurance benefits can be allowed for your skilled nursing facility stay.
R. 188. Landa's attorney requested reconsideration of the denial of benefits by Travelers and upon review, Travelers advised in a letter dated September 10, 1987, that it adhered to its prior determination that the services provided to Landa at King Street Nursing Home were not covered by Medicare. R. 193.
On September 14, 1987, Landa appealed from Travelers' denial of benefits. A hearing was held in the case, which the Court will refer to as Landa I, before an Administrative Law Judge (the "ALJ"), who also consulted an impartial medical advisor, Dr. Arthur Bauman, regarding the medical issues in the case. The ALJ affirmed the denial of benefits by Travelers in a decision dated December 9, 1988. The ALJ found that the care provided by the King Street Nursing Home was "custodial" in nature in that it did not involve skilled nursing or rehabilitation services within the meaning of the Medicare law.
On appeal, the Secretary's Appeals Council vacated and remanded Landa I for the ALJ to determine whether (1) Landa's physician certified his need for skilled nursing facility care; (2) upon consideration of Landa's total condition, there was a need for or receipt of skilled care; and (3) if and when Landa received proper notice of noncoverage. The Appeals Council also directed the ALJ to obtain a legible copy of the psychiatric consultation report. R. 293-5.
The remand hearing was held by the ALJ on December 4, 1989. On April 6, 1990, the ALJ issued a decision affirming the denial of Medicare benefits, concluding that Landa's total condition established a need for custodial rather than skilled care. R. 24-26.
On April 17, 1990, Landa appealed the Landa II decision. The Appeals Council reversed Landa II and remanded the case to the ALJ to consider evidence from a medical expert and the treating physician's opinion letter, written on June 29, 1989 stating the opinion of Dr. Morganstern concerning Landa's condition and care at King Street during the period commencing on January 29, 1987. R. 426. In its opinion, the Appeals Council stated that the ALJ did consider Landa's overall condition in Landa II. R. 15. However, the Appeals Council directed that on remand, the ALJ was to address (1) whether the overall management and evaluation of Landa's care constituted skilled care and (2) whether Landa had any special medical complications that would require that "otherwise nonskilled services would be considered skilled." R. 15. The decision of the Appeals Council notes that extended care is covered under Medicare only if skilled care was required within thirty days after a beneficiary's hospital discharge, so that "if daily skilled services were not needed/received by February 6, 1987, and the 42 CFR 409.30(b)(2) exception [due to special medical complications] is not met, the beneficiary's subsequent skilled nursing facility stay need not be addressed."
On remand, the ALJ held a hearing and called the independent medical advisor Dr. Arthur Bauman to testify. R. 114-149. Dr. Bauman reviewed the opinion letter of Dr. Morganstern, the physician orders and nurse's notes as well as information relating to the medication Landa was given. He stated opinions with regard to Landa's overall condition and the level of care necessary to meet his needs. It was Dr. Bauman's conclusion, which is discussed further below, that Landa did not require or receive the type of caretaking services that can only be provided by skilled personnel. Other hospital personnel also testified at the December 17, 1990 hearing. The ALJ questioned the parties to determine whether all relevant medical information pertaining to Landa's case had been submitted for review. Upon request of the plaintiff's counsel, the ALJ directed the nursing home to submit medication records that apparently had been missing from the record.
The ALJ issued a lengthy decision dated May 7, 1991. In this decision the ALJ reviewed Landa's physical condition, his disabilities and behavior and the history of his treatment and the relevant law. R. 9-12. The ALJ concluded in this, the Landa III decision, that Landa did not qualify for Medicare coverage for the services provided by the King Street Nursing Home during the period beginning on January 29, 1987 through the 100th day of his stay at the facility.
On June 4, 1991, Landa appealed from the ALJ's Landa III decision, arguing that the ALJ applied an incorrect legal standard in weight assigned to the medical evidence in the case. The Secretary's Appeals Council denied review of Landa III on July 11, 1991, citing two recent Second Circuit cases in which that court "declined to specify the weight to be assigned any particular opinion evidence on Medicare cases," namely Stein v. Secretary of HHS, 924 F.2d 431 (2d Cir. 1991) and Holland v. Sullivan, 927 F.2d 57 (2d Cir. 1991). R. at 2. When the Appeal's Council denied review, Landa III became the final determination of the Secretary.