Rapport v. Leavitt

Ruth Rapport (plaintiff) was enrolled in Preferred Care, a Medicare Advantage (MA) program authorized under Part C of the Medicare Act. In January 2006, Preferred Care sent an Evidence of Coverage (EOC) to Rapport detailing all plan benefits and limitations for the 2006 calendar year, including that skilled-nursing-facility (SNF) care would only be covered if immediately preceded by a three-day inpatient hospital stay. In December 2006, at age 90, Rapport broke her ankle. Rapport’s fracture was treated in the hospital, and Rapport was discharged that same day to the Jewish Home and Infirmary, a SNF. Rapport’s treating physician certified a care plan requiring four weeks of skilled nursing care. Preferred Care denied coverage for Rapport’s SNF care because she did not have the prerequisite three-day inpatient hospital stay immediately preceding her admission to the SNF. Rapport petitioned for reconsideration, asking that the prerequisite be waived because SNF care was medically necessary. Preferred Care affirmed the denial, and Rapport petitioned for independent review. After the independent reviewer confirmed the denial of coverage, Rapport requested a hearing before an administrative-law judge (ALJ). Because the Medicare Act allowed MA programs to waive the three-day inpatient stay prerequisite for SNF coverage, the ALJ held that Preferred Care was required to waive the prerequisite and cover Rapport’s SNF care. Preferred Care appealed to the Medicare Appeals Council (MAC). MAC held that Preferred Care could deny coverage for Rapport’s SNF care because it had properly notified Rapport that a three-day inpatient stay was a prerequisite for SNF coverage. The MAC’s findings became the final decision of Michael Leavitt (defendant), the Secretary of Health and Human Services. Rapport appealed the secretary’s final decision in federal district court.