## Facts

- Rajumati Shah was a 77-year-old Medicare beneficiary enrolled in a Medicare Advantage plan.
- Shah’s Medicare Advantage plan was administered by Health Net of Arizona (Health Net) and generally required use of in-network providers selected by the plan.
- Under the plan’s provider agreement, out-of-network services were covered only if they were for: (1) a medical emergency, (2) urgently needed care, (3) renal dialysis, or (4) care preapproved by Health Net.
- In 2007, while visiting India, Shah’s knee locked up and caused severe pain.
- Shah consulted Dr. Bharat Mody in India, who recommended a total knee replacement.
- Because of Shah’s ongoing health issues, Dr. Mody would not perform surgery until he received Shah’s U.S. medical records.
- The medical records arrived about ten days later, after which Dr. Mody performed the knee-replacement surgery.
- Shah stayed in an Indian hospital for approximately two months for physiotherapy following the surgery.
- Shah paid $6,801 for the surgery and related hospitalization and submitted a claim to Health Net seeking reimbursement.
- Health Net denied the claim, concluding that the out-of-network treatment did not qualify as covered emergency or urgently needed care under the plan.
- In the administrative appeal, Shah submitted a letter from Dr. Mody stating it was not feasible for her to return to the United States for treatment due to severe pain, poor general health, and the air travel required.
- Health Net presented testimony from two witnesses stating that the ten-day delay while awaiting records weighed against any claim of emergency or urgency, and that other treatment options are usually tried before a total knee replacement.
- An Administrative Law Judge (ALJ) upheld Health Net’s denial of coverage.
- The Medicare Appeals Council (MAC) affirmed the ALJ’s decision.
- Shah filed suit in federal district court against the Secretary of Health and Human Services seeking review of the final agency decision.

## Issues

1. Whether the final Medicare administrative decision (affirming Health Net’s denial) erred in concluding that Shah’s knee-replacement surgery and related hospitalization in India did not qualify as covered out-of-network “emergency” or “urgently needed” care under her Medicare Advantage plan and applicable Medicare standards.
2. Whether the MAC’s decision was supported by substantial evidence and consistent with governing law on judicial review of final Medicare benefit determinations.

## Decision

- The district court affirmed the MAC’s decision.
- The court upheld the determination that Health Net was not required to reimburse Shah for the out-of-network treatment obtained in India.
- The court left in place the agency’s finding that the circumstances—including the ten-day wait for medical records and the evidence about typical treatment sequencing—supported the conclusion that the care was not an emergency and was not “urgently needed” within the meaning of the plan and Medicare rules.
- The court entered judgment for the Secretary and directed that the case be terminated.

## Legal Principles

- Medicare Advantage plans may condition coverage on use of network providers and may limit payment for out-of-network services to specified categories such as emergency services and urgently needed care, as defined by the plan and applicable Medicare requirements.
- A beneficiary seeking payment for out-of-network services under a Medicare Advantage plan must show that the services fall within a covered exception (e.g., emergency or urgently needed care) or were otherwise authorized.
- On judicial review of a final Medicare administrative decision, a district court does not retry the case; it reviews the administrative record and upholds the agency’s determination when it is supported by substantial evidence and is not contrary to law.
- When the administrative record contains conflicting evidence about medical urgency, it is for the agency decisionmaker (ALJ/MAC) to weigh that evidence; a reviewing court generally defers to those findings when supported by substantial evidence.
- Evidence such as a delayed course of treatment and testimony about standard medical practice may support an agency conclusion that treatment, though necessary and related to significant pain, did not meet the plan’s standards for emergency or urgently needed out-of-network care.

## Conclusion

The district court affirmed the Secretary’s final decision upholding Health Net’s denial of reimbursement for Shah’s knee-replacement surgery and related hospitalization in India, concluding that substantial evidence supported the agency’s determination that the services did not qualify as covered out-of-network emergency or urgently needed care under the Medicare Advantage plan and applicable review standards.


Shah v. Secretary of Health & Human Services, 2010 WL 1489984 (2010)