## Facts

- W. D. was a Medicare beneficiary with serious medical conditions, including hypertension, type II diabetes, and congestive heart failure, and a history of myocardial infarction followed by coronary-bypass surgery with stent placement.
- W. D. needed extraction of two molars.
- Due to W. D.’s cardiac risk, his physicians chose to perform the extractions at a regional medical center (hospital) rather than in an office so his heart could be monitored during the procedure.
- On April 25, 2007, W. D. presented to the hospital’s same-day surgery area for the procedure.
- The teeth were extracted under general anesthesia in the operating room; W. D. recovered in the recovery area, returned to same-day surgery, and was discharged later that day.
- The hospital’s records showed W. D. was treated as an outpatient throughout and was never admitted as an inpatient.
- The Medicare contractor, Cahaba GBA, denied payment for the hospital services associated with the outpatient dental surgery.
- On reconsideration, a qualified independent contractor also denied coverage, stating Medicare did not cover hospital services incurred in connection with an outpatient dental procedure.
- An administrative law judge (ALJ) reversed and found the hospital services covered, reasoning they were inpatient hospital services related to the dental surgery.
- The Centers for Medicare & Medicaid Services (CMS) referred the ALJ decision to the Medicare Appeals Council for own-motion review, asserting an error of law material to the outcome.
- During the appeal, W. D. died, and his estate succeeded to his rights and obligations and continued the appeal.

## Issues

1. Whether Medicare Part B covers hospital facility services incurred in connection with an outpatient, same-day dental extraction procedure.
2. Whether the medical necessity of performing the dental extractions in a hospital setting (because of serious comorbidities and the need for monitoring under general anesthesia) creates Medicare coverage despite the dental-services exclusion.
3. Whether the ALJ committed a material legal error by treating outpatient same-day surgery services as covered inpatient hospital services.

## Decision

- The Medicare Appeals Council took own-motion review and reversed the ALJ’s decision.
- The Council found the record established W. D. was an outpatient during the entire hospital encounter and was never admitted as an inpatient.
- Because the services at issue were outpatient hospital services furnished in connection with a dental extraction—an item or service generally excluded from Medicare coverage—the Council determined Medicare payment was not available on these facts.
- The Council rejected the ALJ’s characterization of the claim as involving covered inpatient hospital services and treated that misclassification as a legal error affecting the outcome.
- The Council reinstated the denial of payment for the hospital charges associated with the outpatient dental surgery.

## Legal Principles

- Medicare generally excludes payment for dental services, including services connected with the care, treatment, filling, removal, or replacement of teeth, subject to narrow exceptions.
- Medicare Part B payment for outpatient hospital services depends on whether the underlying items or services are covered and not barred by a statutory exclusion; excluded dental services do not become payable merely because they are performed in a hospital.
- The medical appropriateness of performing a dental procedure in a hospital (including for monitoring or anesthesia-related risk) does not, standing alone, create Medicare coverage when the dental-services exclusion applies.
- Coverage analysis may turn on whether the patient was actually admitted as an inpatient; outpatient same-day surgery does not qualify as inpatient hospital care absent an inpatient admission reflected in the medical record.
- The Medicare Appeals Council may conduct own-motion review of an ALJ decision when there is an error of law material to the outcome. See 42 C.F.R. § 405.1110.

## Conclusion

In the Case of the Estate of W. D., the Medicare Appeals Council reversed an ALJ decision that had treated outpatient same-day hospital services for dental extractions as covered inpatient care, holding that Medicare Part B did not cover the hospital facility charges because the beneficiary was never admitted as an inpatient and the services were furnished in connection with a noncovered dental procedure, even though the hospital setting was medically appropriate given the beneficiary’s health conditions.


In the Case of the Estate of W. D., Decision of Medicare Appeals Council (2009)