Lewis v. Becerra

• Decision Date: 13 January 2022
• Docket Number: Civil Action 18-2929 (RBW)
• Court: United States District Courts. United States District Court (Columbia)
• Parties: CAROL A. LEWIS, et al., Plaintiffs, v. XAVIER BECERRA, [1] in his official capacity as Secretary of the Department of Health and Human Services, Defendant.

CAROL A. LEWIS, et al., Plaintiffs, v. XAVIER BECERRA, ^[1] in his official capacity as Secretary of the Department of Health and Human Services, Defendant.

Civil Action No. 18-2929 (RBW)

United States District Court, District of Columbia

January 13, 2022

MEMORANDUM OPINION

REGGIE B. WALTON UNITED STATES DISTRICT JUDGE

The plaintiffs, Carol Lewis and Douglas Sargent, on behalf of themselves and all others similarly situated, bring this civil action against the defendant, Xavier Becerra, in his official capacity as the Secretary (the “Secretary”) of the United States Department of Health & Human Services (the “Department”) pursuant to Title XVIII of the Social Security Act, 42 U.S.C § 1395ff(b), see Class Action Complaint (“Compl.”) ¶ 8, ECF No. 1; the Administrative Procedure Act (“APA”), 5 U.S.C § 706, as modified by 42 U.S.C. § 405(g), see id. ¶¶ 146-63; and the Declaratory Judgment Act, 28 U.S.C. §§ 2201, see id. ¶¶ 164-66.^[2] Currently pending before the Court is the plaintiffs' motion for a preliminary injunction to enjoin “the Secretary from continuing to reject [ ] claims based on CMS 1682-R and/or the claim that a [continuous glucose monitor (“CGM”)] is not ‘primarily and customarily used to serve a medical purpose.'” See Plaintiffs' Motion for Preliminary Injunction (“Pls.' Mot.” or the “plaintiffs' preliminary injunction motion”) at 2, ECF No. 97. Upon careful consideration of the parties' submissions, ^[3]the Court concludes for the following reasons that it must deny the plaintiffs' motion.

I. BACKGROUND

The Court previously discussed much of the relevant background of this case in detail, see Memorandum Opinion at 2-11 (Jan. 29, 2021), ECF No. 77, and therefore will not reiterate that information again here. The Court will, however, briefly discuss the background of this case as it relates to the issues the Court must consider in deciding the plaintiffs' preliminary injunction motion.

A. Statutory and Regulatory Background Relating to CGMs

Medicare “Part B is an optional supplemental insurance program that pays for medical items and services . . ., including . . . durable medical equipment.” Ne. Hosp. Corp. v. Sebelius, 657 F.3d 1, 2 (D.C. Cir. 2011) (citing 42 U.S.C. §§ 1395j-1395w-4). However, 42 U.S.C. § 1395y excludes from coverage items and services “not reasonable and necessary for the diagnosis or treatment of illness or injury[.]” 42 U.S.C. § 1395y(a)(1)(A). The Secretary has issued regulations clarifying the definition of “[d]urable medical equipment.” See 42 C.F.R. § 414.202.

Durable medical equipment means equipment, furnished by a supplier or a home health agency that meets the following conditions:

(1) Can withstand repeated use.

(2) Effective with respect to items classified as [durable medical equipment] after January 1, 2012, has an expected life of at least 3 years.

(3) Is primarily and customarily used to serve a medical purpose.

(4) Generally is not useful to an individual in the absence of an illness or injury.

(5) Is appropriate for use in the home.

Id. The Medicare statute expressly designates “blood-testing strips and blood glucose monitors for individuals with diabetes” as “durable medical equipment” and, therefore, covered. 42 U.S.C. § 1395x(n).

CGMs consist of a “disposable sensor” which “is placed below the skin in the space between tissues (interstitial space) that is filled with fluids going to and from cells.” Compl. ¶ 33. These fluids contain glucose that “is correlated with the glucose in blood itself.” Id. “Current CGM sensors last for a week and measure glucose levels every five to seven minutes (i.e., more than 200 times a day) without requiring patient interaction, including when the patient is sleeping.” Id. The information from the CGM sensors is then “transmitted, via a transmitter, to a CGM receiver/monitor or even a smart phone/tablet. A CGM transmitter typically lasts for several months.” Id. ¶ 34. CGMs monitor users' blood glucose levels more frequently than traditional blood glucose monitors, see id. ¶ 36; can “trigger an alert[], ” id. ¶ 34; “may be connected to an insulin pump such that the amount of insulin delivered can be automatically controlled based on the sensed glucose levels[, ]” id.; and “can plot glucose trends and perform further analyses[, ]” id. “Typically, the CGM is calibrated by finger prick/test strip testing twice a day[, ]” though “some newer CGMs do not require calibration. Id. ¶ 35.

With respect to the Secretary's designation and regulatory treatment of CGMs, the plaintiffs contend that

[i]n the period before January 2017, the Secretary frequently denied claims for CGM coverage on the grounds that CGMs were not “durable medical equipment” because they were not “primarily and customarily used to serve a medical purpose.”

This was so, the Secretary contends, because they were “precautionary” - a non-statutory/regulatory term.

Without prior notice and comment, on January 12, 2017, the Secretary issued CMS Ruling 1682-R. There, the Secretary maintained that any CGM which did not completely replace finger sticks was “precautionary” and not covered. The Secretary asserted that if the reading from a CGM sensor had to be confirmed with a fingerstick prior to making a treatment decision, the CGM was not “primarily and customarily used to serve a medical purpose.”

Conversely, CGMs which do replace finger sticks the Secretary labeled “therapeutic” and considered covered. By its own terms, CMS 1682-R was effective as of the very date it issued - i.e., January 12, 2017. Pursuant to 42 C.F.R. § 405.1063, [Administrative Law Judges (“ALJs”)] and the Medicare Appeals Council are bound by CMS Rulings and must apply them. Thus, any claim with a date of service after January 12, 2017, which does not match CMS 1682-R's definition of “therapeutic” must be rejected.

Pls.' Mot. at 3 (internal citations omitted). Therefore, unlike blood glucose monitors, CGMs are not covered under Medicare because, as CMS has ruled, they are not “primarily and customarily used to serve a medical purpose” and thus do not constitute “durable medical equipment.” Centers for Medicare & Medicaid Services Ruling 1682-R (Jan. 12, 2017).

B. Factual Background

The two named plaintiffs in this case, Carol Lewis and Douglas Sargent, are individuals who are eligible for Medicare, have Type I brittle diabetes, ^[4] and have been denied coverage for CGMs. Compl. ¶¶ 97, 101-04, 109, 113-25. The plaintiffs state that they and others with diabetes “are in danger of suffering from severe hypoglycemic events.” Pls.' Mot. at 2; see Compl. ¶ 39. Furthermore, the plaintiffs assert that

[t]hese events, in both the short and long term, cause irreparable injury in the form of injury to various systems of the body. If not treated, in the short term, these events can lead to death. In the long term, cumulatively, these events can lead to blindness, nerve damage leading to loss of limbs, kidney damage, and reduced cognitive function.

Id. Regarding the utility of CGMs, the plaintiffs state that “[o]ne purpose of a CGM is to avoid these events by alerting users to out[-]of[-]range glucose values and, when combined with an insulin pump, controlling dispensed insulin.” Pls.' Mot. at 2-3. Furthermore, the plaintiffs state that

[a]pproximately half of those on Medicare have annual incomes of less than $30, 000 and one quarter of Medicare enrollees have annual incomes of less than $17, 000. As shown in the initial denial of CGM claims for both Mrs. Lewis (AR309) and Mr. Sargent (AR1935 and AR2187) a 90-day supply of CGM sensors costs ~$1, 500 for a yearly of cost of ~$6, 000.

Id. at 4-5.

Both Lewis and Sargent were denied coverage for CGMs, see Compl. ¶¶ 101-04, 113-25, and the plaintiffs allege that “[b]ased on information produced by the Secretary, it is believed that ~13, 000 claims are denied on the bad faith/illegal grounds each month[, ]” Pls.' Mot. At 2, based on what they argue is the illegal issuance of CMS 1682-R, id. at 8-9, and the conclusion by one district court that the Secretary acted in “bad faith” by issuing the regulation, id. at 7-8.^[5]

C. Procedural Background

On September 22, 2021, the plaintiffs filed their motion for a preliminary injunction. See Pls.' Mot. at 1.^[6] Thereafter, the defendant filed an opposition on September 29, 2021, see Def.'s Opp'n at 16; the plaintiffs filed a reply on October 6, 2021, see Pls.' Reply at 10; and the defendant was permitted to file a surreply on October 20, 2021, see Def.'s Surreply at 5. A hearing was held on the motion for preliminary injunction on November 22, 2021. See Min. Entry (Nov. 22, 2021).

II. STANDARD OF REVIEW

A party moving for a preliminary injunction must show “(1) a substantial likelihood of success on the merits, (2) that [he or she] would suffer irreparable injury if the injunction were not granted, (3) that an injunction would not substantially injure other interested parties, and (4) that the public interest would be furthered by the injunction.” Chaplaincy of Full Gospel Churches v. England, 454 F.3d 290, 297 (D.C. Cir. 2006). In “seeking a preliminary injunction, the movant has the burden to show that all four factors, taken together, weigh in favor of the injunction.” Abdullah v. Obama, 753 F.3d 193, 197 (D.C. Cir. 2014) (internal quotation marks omitted).^[7]

III. ANALYSIS

The plaintiffs argue that they are entitled to “a preliminary injunction barring the Secretary from continuing to reject CGM claims based on CMS 1682-R and/or the claim that a CGM is not ‘primarily and customarily used to serve a medical purpose.'” Pls.' Mot. at 2.

According to the plaintiffs, “[t]he Secretary's underlying position on which the claim denials in this case are based is in bad faith, ” id., based in part on the...