In the Case of the Estate of W. D.

W. D. (beneficiary) suffered from several serious medical ailments, including hypertension, diabetes, and congestive heart failure. The beneficiary had previously undergone cardiac-bypass surgery following a myocardial infarction. The beneficiary needed to have two teeth extracted. Because of the beneficiary’s underlying medical conditions, his doctors opted to perform the surgery at a regional medical center (hospital) rather than in the office so that his heart could be appropriately monitored during the procedure. The beneficiary reported to the hospital’s same-day surgery area on the day of the surgery. The beneficiary’s teeth were successfully extracted under general anesthesia, and the beneficiary was then transferred to recovery and was discharged from the hospital the same day. Hospital records confirmed that the beneficiary was never admitted as an inpatient. Cahaba GBA found that the hospital services associated with the beneficiary’s dental surgery were not covered under Medicare. The qualified independent contractor also denied coverage, ruling that Medicare did not cover hospital services incurred in connection with a patient’s outpatient dental surgery. An administrative-law judge (ALJ) found that the hospital services were covered by Medicare because the services were inpatient hospital services. The Centers for Medicare and Medicaid Services (CMS) (defendant) referred the matter to the Medicare Appeals Council. There, CMS argued that hospital charges associated with dental surgery were not covered under Medicare if the surgery was performed on an outpatient basis. CMS argued that the beneficiary’s hospital charges were not covered because his dental surgery was performed on an outpatient basis. CMS did not contest that it was appropriate to perform the surgery at the hospital because of the beneficiary’s underlying health conditions. At some point in the proceedings, the beneficiary died, and his estate (plaintiff) acceded to his rights and obligations. The estate argued that the beneficiary’s hospitalization was medically necessary and that the ALJ’s decision was thus proper.