Stormont-Vail Healthcare v. Kansas Dept. of Health and Environment

── Stormont-Vail Healthcare v. Kansas Dept. of Health and Environment ── Court: Court of Appeals of Kansas Date: May 08, 2026 Category: General No. 127,307 IN THE COURT OF APPEALS OF THE STATE OF KANSAS STORMONT-VAIL HEALTHCARE, INC., Appellant, v. KANSAS DEPARTMENT OF HEALTH AND ENVIRONMENT, DIVISION OF HEALTH CARE FINANCE, Appellee. SYLLABUS BY THE COURT 1. When evaluating contradictory or inconsistent medical opinions regarding the medical necessity of a healthcare intervention in the Kansas Medicaid program, the reviewing agency must consider the relative length and comprehensiveness of the medical professionals' relationships with the patient. The reviewing agency may disfavor a treating physician's medical opinion when the treating physician has a relatively brief or tangential treatment relationship with the patient or the treating physician's medical opinion is conclusory or unsupported by medical evidence. 2. The medical opinion of a treating physician with a long and comprehensive treatment relationship with the patient is important, but not irrefutable. In the Kansas Medicaid program, the reviewing agency must set forth a legitimate, reasoned basis supported by substantial evidence in the record when viewed as a whole and consistent with Medicaid's purpose for disfavoring a treating physician's medical opinion. 1 3. Under K.A.R. 30-5-58(ooo)(1)(C), when evaluating the scope criteria of medical necessity, the reviewing agency under the Kansas Medicaid program must consider the record as a whole to determine whether "[t]he health intervention provides the most appropriate supply or level of service, considering potential benefits and harms to the patient." 4. Under K.A.R. 30-5-58(ooo)(1)(E), when evaluating the value criteria of medical necessity for a health intervention, the reviewing agency under the Kansas Medicaid program must make an individualized determination of the benefits and harms relative to costs based on the patient's particular characteristics. Appeal from Shawnee District Court; THOMAS G. LUEDKE, judge. Oral argument held August 5, 2025. Opinion filed May 8, 2026. Reversed and remanded with directions. Cameron S. Bernard, Amanda M. Wilwert, and Nancy E. Musick, of Foulston Siefkin LLP, of Overland Park, for appellant. Darren K. Sharp and Megan J. Ochs, of Armstrong Teasdale LLP, of Kansas City, Missouri, and Matthew Langworthy, of Kansas Department of Health and Environment, Division of Health Care Finance, for appellee. Before HILL, P.J., MALONE and HURST, JJ. HURST, J.: Under the Kansas Medicaid program, hospitals are only permitted reimbursement for inpatient healthcare services when, among other things, the record demonstrates those services were medically necessary. In this case, Stormont-Vail Healthcare, Inc. (Stormont-Vail) and the Kansas Department of Health and Environment, Division of Health Care Finance disagree about whether the record demonstrates that 2 Diana's (a pseudonym) inpatient healthcare services were medically necessary for the last two weeks of her pregnancy. During Diana's inpatient hospitalization, Sunflower Health Plan became reticent that continued inpatient services were medically necessary and asked Stormont-Vail to determine whether a home health agency in Emporia would accept Diana as a patient. Stormont-Vail did not believe Diana was stable enough for discharge or that her condition was appropriate for home healthcare in Emporia. Sunflower Health Plan denied Stormont-Vail reimbursement for the last two weeks of inpatient care, and the State Appeals Committee (SAC) of the Kansas Department of Health and Environment, Division of Health Care Finance, upheld that decision. Stormont-Vail appeals. Whil