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Surgicore, inc. v. Office of Personnel Management

March 21, 2006

SURGICORE, INC., AN ILLINOIS CORPORATION, PLAINTIFF,
v.
OFFICE OF PERSONNEL MANAGEMENT, JUDGE REBECCA R. PALLMEYER DEFENDANT.



The opinion of the court was delivered by: Rebecca R. Pallmeyer United States District Judge

MEMORANDUM OPINION AND ORDER

Christy Prewitt, a federal employee, enrolled in the American Postal Workers Union Health Plan (the "Plan" or "APWU Plan"), which has a contract with the Office of Personnel Management ("OPM") to provide health insurance coverage to enrollees. The Plan reimburses enrollees for medical services, but excludes, among other things, procedures that are not medically necessary. On five separate occasions between April and June 2000, Plaintiff Surgicore, Inc. performed surgery on Ms. Prewitt's left and right feet. Surgicore, as Ms. Prewitt's assignee, submitted charges to the Plan for these surgeries totaling $31,440.31. The Plan denied Surgicore's request for benefits on the ground that the surgeries were not medically necessary, prompting Surgicore to appeal the Plan's decision to OPM under the Federal Employees Health Benefits Act ("FEHBA"). After OPM upheld the Plan's decision to deny benefits, Surgicore sued OPM in this court to recover the amount charged for Ms. Prewitt's surgeries. The parties' cross-motions for summary judgment are now before this court.*fn1

PROCEDURAL HISTORY

On April 11, 2003, after exhausting its administrative remedies, Surgicore filed a complaint against OPM with this court alleging that Ms. Prewitt's surgeries were medically necessary and should be covered by the plan. See Surgicore LR 56.1 Stmt. ¶ 48. Together with its answer, OPM submitted the Administrative Record ("AR") it considered in reviewing Plaintiff's administrative appeal. While the parties briefed their cross-motions for summary judgment, OPM enlisted an orthopedic surgeon (Dr. Robert W. Molinari) to review Surgicore's appeal pursuant to a medical review policy that OPM had instituted after Surgicore filed its complaint. See id. at ¶ 49. In a two-page report dated June 14, 2004, Dr. Molinari made "clinical findings" with respect to each of Ms. Prewitt's five surgeries and concluded that those surgeries were not medically necessary. Third Medical Review Analysis ("MRA"), AAR at 175--76. On OPM's own motion, the court remanded the case on June 30, 2004 to give Surgicore the opportunity to comment upon Dr. Molinari's conclusions. See Fed. Def.'s Motion for Voluntary Remand ¶ 8. As discussed more fully below, after reviewing some (but not all) of the materials Surgicore submitted on administrative remand, Dr. Molinari again concluded that Ms. Prewitt's surgeries were not medically necessary and OPM again denied Surgicore's appeal. The court then granted Surgicore's motion to reinstate this case on February 23, 2005, and OPM filed an Amended Administrative Record ("AAR") consisting primarily of materials related to OPM's post-remand review. The AAR does not incorporate materials included in the original AR and, consequently, this court cites to both the original and amended administrative records, as applicable.

FACTUAL BACKGROUND

The relevant facts, based on the parties' Local Rule 56.1 statements and the administrative record, are as follows.

1. Ms. Prewitt's Surgeries

This case turns on whether certain foot surgeries performed by Surgicore were "medically necessary" as defined by the Plan.*fn2 On April 6, 2000, Ms. Prewitt met with Dr. Robert I. Steinberg, her doctor of 20 years, to schedule outpatient surgery to remove a "hypertrophic bone" from her left foot. Surgicore LR 56.1 Stmt. ¶ 5.*fn3 Surgicore would later explain that in 1982 Ms. Prewitt had suffered severe damage to her left foot when an "50 foot construction I-Beam [fell] directly onto her left foot." See Surgicore Response to Medical Evaluation Prepared by Robert W. Molinari, M.D. (hereinafter "Surgicore Rebuttal Memo"), Ex. 1 to Supp. Amended Admin. Rec., at 1. According to Dr. Steinberg, this injury resulted in numerous foot surgeries and subsequent surgical complications, including the "hypertrophic bone." Id. On April 11, 2000, Surgicore partially removed the bone from Ms. Prewitt's foot; the specific "[p]ost-operative findings were partial excision of 1st metatarsal left foot and sheath lengthening of EHL tendon left foot." Id. at ¶ 6. The

Plan did not dispute the medical necessity of this initial surgery and paid Surgicore for its services to Ms. Prewitt. See Surgicore Rebuttal Memo at 1.

Ms. Prewitt's left foot showed symptoms of infection after surgery, prompting Dr. Steinberg to perform the first disputed surgery on April 21, 2000 "to have the wound on her left foot debrided." Surgicore LR 56.1 Stmt. ¶¶ 8--9. Specifically, the operation performed was "incision and drainage of infection left foot and debridement, and application of xenograft left food [sic]." Id. at 9.*fn4 The preand post-operative diagnoses were "deep post op infection left foot [and] wound dehiscence left food [sic]." Id. Tissue collected from Ms. Prewitt's foot and tested by the Illinois Masonic Medical Center Department of Pathology indicated "marked acute inflammation and bacterial colonization." Id. at ¶ 11. This surgery was not entirely successful as Ms. Prewitt still displayed signs of infection four days later, perhaps attributable to her failure to take the prescribed antibiotics. Id. at 13--15. This led to the second disputed surgery on April 26, 2000 to close the wound "in a primary fashion with sutures of 5-0 nylon." Id. ¶ 15. Cultures collected during this surgery revealed that the "staphylococcus species was still present." Id. at ¶ 17. Dr. Steinberg saw Ms. Prewitt on April 28, 2000 and advised her to continue taking her antibiotics, and by May 9, 2000 her wound had nearly closed. Id. at ¶¶ 18--19. Dr. Steinberg saw Prewitt again on May 13, 2000, noting that the wound "looked better and clean." Id. at ¶ 20.

Then, on May 19, 2000, Surgicore performed the third disputed surgery, this time on Ms. Prewitt's right foot for a separate condition: "synovitis and contracted digits (hammer toe)." Id. at

¶ 21.*fn5 Surgicore asserts that Ms. Prewitt was complaining of pain in her right foot, id., a claim OPM disputes. Dr. Steinberg's notes from a May 13, 2000 consultation make no specific reference to pain, instead indicating only that Ms. Prewitt "now wants digits 3 & 4 (R) straight." See Clinical Notes, AR Tab 13. In a letter addressed to APWU after Surgicore's claim was denied, Dr. Steinberg stated that Ms. Prewitt was complaining of pain in her right foot, and that another medical provider had previously attempted to correct Ms. Prewitt's condition without success. See Oct. 2000 Steinberg/APWU, AR Tab 3. When Dr. Steinberg examined Ms. Prewitt on May 20, 2000, the day after surgery, she showed no signs of infection in her right foot. Id. at ¶ 23.

Less than a week later, on May 25, 2000, Ms. Prewitt reported to Dr. Steinberg that her daughter had stepped on her right foot, and he noted that "fixative devices" used to correct two toes on her right foot were "impacted." Id. at ¶¶ 24--25. This mishap prompted the fourth disputed surgery on May 27, 2000 "to remove the dislodged fixative devices." Id. at ¶ 25. When Dr. Steinberg examined Ms. Prewitt on June 1, 2000, the condition in her right foot appeared corrected, but the wound on the left foot still had not completely closed. Id. at ¶ 27. On June 3, 2000, Dr. Steinberg examined Prewitt again, noting that the wound still had not closed and recommending "vinegar soaks." Id. at ¶ 28.

On June 7, 2000, Surgicore performed the fifth and final disputed surgery to repair the open wound on Ms. Prewitt's left foot. Id. at ΒΆ 29. The surgical report characterizes the procedure as "deep debridement of wound defect left foot with advancement flap to the area," and further indicates that the procedure was performed on the "dorsal aspect of the lft [sic] foot," utilizing "[m]ultiple sutures of 3-0 and 4-0 nylon." Id. A pathology report dated ...


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