## Facts

- Dora Hultzman, a 73-year-old Medicare Part A beneficiary, was hospitalized at Albert Einstein Medical Center in Philadelphia from July 13 to September 3, 1970 (59 days) on her treating physician’s order.
- She had severe rheumatoid arthritis and was described as “completely helpless” at admission, with major difficulty ambulating.
- The admission was primarily for physical and occupational therapy, but she also had significant coexisting conditions, including iron-loss anemia, urinary tract infection, eye problems, and a history of gastrointestinal bleeding.
- The treating physician selected an acute-care hospital rather than a rehabilitation facility due to the need to manage multiple conditions and associated risks in one setting.
- The treating physician and the hospital utilization review committee repeatedly certified that continued inpatient hospitalization was medically necessary.
- The Medicare fiscal intermediary denied payment, asserting the services could have been provided in a “lesser care facility” and that the stay reflected overutilization of inpatient services.
- The Secretary conceded the care provided was medically necessary and agreed the care was not excluded as “custodial care,” but maintained that inpatient hospital admission and continued stay were not necessary under the Medicare coverage standard.
- A reviewing physician who did not examine Hultzman supported denial; an administrative hearing examiner affirmed, and the Secretary’s decision became final; the district court affirmed on judicial review.

## Issues

1. Whether the Secretary could deny Medicare Part A coverage under 42 U.S.C. § 1395y(a)(1) by concluding that, although the treatment was medically necessary, hospitalization was not “reasonable and necessary” because the care could have been furnished in a lesser facility.
2. Whether the Secretary’s denial was supported by substantial evidence under 42 U.S.C. § 405(g), given the treating physician’s judgment and the hospital utilization review committee’s certifications.

## Decision

- The Third Circuit reversed the district court and set aside the Secretary’s denial of coverage.
- The court held the denial was not supported by substantial evidence on the record as a whole.
- The court concluded the 59-day stay constituted “reasonable and necessary inpatient hospital services” covered by Medicare Part A.

## Legal Principles

- Judicial review of Medicare coverage denials under 42 U.S.C. § 405(g) asks whether the agency decision is supported by substantial evidence—relevant evidence that a reasonable mind could accept as adequate.
- When inpatient necessity is supported by the treating physician and the hospital utilization review committee, the Secretary must rely on substantial, record-based medical evidence to justify denial.
- A conclusory file-review opinion, without meaningful engagement with the patient’s specific risks and comorbidities, may be insufficient to support a finding that a lesser facility was appropriate.
- Where the government concedes the services are therapeutic and not custodial, the coverage inquiry centers on whether hospital-level inpatient care was reasonable and necessary in light of the patient’s clinical circumstances.

## Conclusion

The Third Circuit required a record-supported justification for denying hospital coverage based on “level of care” and held that, on this record, Medicare Part A covered Hultzman’s inpatient hospitalization because the Secretary lacked substantial evidence that a lesser facility could safely provide the needed care.


Hultzman v. Weinberger, 495 F.2d 1276 (3d Cir. 1974)