Maupin v. Azar
| Decision Date | 09 December 2019 |
| Docket Number | Case No. CV 19-5673-MWF (JPRx) |
| Citation | 424 F.Supp.3d 830 |
| Parties | Frederic MAUPIN v. Alex AZAR |
| Court | U.S. District Court — Central District of California |
Farah Tabibkhoei, Reed Smith LLP, Los Angeles, CA, James Charles Pistorino, Parrish Law Office, Menlo Park, CA, for Frederic Maupin.
Paul Bartholomew Green, AUSA - Office of US Attorney, Los Angeles, CA, for Alex Azar.
Proceedings (In Chambers): ORDER RE: PLAINTIFF'S MOTION FOR SUMMARY JUDGMENT [22]; DEFENDANT'S MOTION FOR SUMMARY JUDGMENT [29]
Before the Court are two motions:
First is Plaintiff Frederic Maupin's Motion for Summary Judgment ("Plaintiff's MSJ"), filed on October 18, 2019. (Docket No. 22). Defendant Alex Azar (the "Secretary") filed an Opposition on November 4, 2019. (Docket No. 29). Plaintiff filed a Reply on November 19, 2019. (Docket No. 33).
Second is the Secretary's Motion for Summary Judgment ("Secretary's MSJ"), filed on November 4, 2019. (Docket No. 29). Plaintiff filed an Opposition on November 8, 2019. (Docket No. 31). The Secretary filed a Reply on November 18, 2019. (Docket No. 32).
The Court has read and considered the papers filed on the Motions, and held a hearing on December 2, 2019.
For the reasons discussed below, Plaintiff's MSJ is GRANTED and the Secretary's MSJ is DENIED . The Court determines that as a matter of law, the ALJ had the discretion to depart from LCD L34828 in the Part C appeal because the Secretary's interpretation of the relevant statutes and regulations is not reasonable. Because the Council's sole basis for reversing the ALJ was based on an incorrect application of law, the Council's decision was arbitrary and capricious. Moreover, because Defendant only appealed the issue of whether the ALJ had discretion to deviate from the LCD as a matter of law, and this question has been resolved as a matter of law, there is nothing to remand to the Secretary other than a determination of the amount of money Dr. Maupin is owed.
Dr. Frederic Maupin filed this case on June 28, 2019 against the Secretary in his official capacity as Secretary of the United States Department of Health and Human Services. (Docket No. 1 ("Complaint") ¶ 1). Unless otherwise indicated, all of the facts discussed below are undisputed.
The Medicare program is divided into four "Parts." (Id. ¶ 12). Relevant here are Parts "B" and "C." (Id. ). Medicare Part B is often referred to as "Original Medicare," which covers medications, treatments, medical supplies, and durable medical equipment. (Id. ¶ 13). The items/services paid for, or not paid for, under Original Medicare are described in the statutes and in various regulations and policies developed by the Secretary. (Id. ). Most relevant here are policies called Local Coverage Determinations ("LCDs"). (Id. ). Medicare has divided the country into various regions administered by contractors working for Medicare, and each LCD is a policy developed by a contractor in a region and applicable to that region, which indicates whether an item or service will be covered or not. (Id. ).
In general, the Original Medicare claim process is a five-step process that may result in district court review, starting when a Medicare beneficiary using Original Medicare submits a claim for coverage. (Id. ¶ 14). That claim is reviewed by a Medicare contractor for an initial determination, and the contractor is bound to follow Medicare policies, including any LCD applicable to the region. (Id. ). If the beneficiary is dissatisfied with the initial determination, they may "appeal" by requesting a "redetermination," which is again heard by the Medicare contractor which is again bound by LCD policies. (Id. ¶ 15). If a Medicare beneficiary is dissatisfied with this redetermination decision, they may "appeal" by seeking "reconsideration." (Id. ¶ 16). This process is carried out by a Qualified Independent Contractor ("QIC"), an ostensibly independent third party. (Id. ). The QIC is not bound by any LCD applicable to the region. (Id. ) (citing 42 U.S.C. § 1395ff(c)(3)(B)(ii)(III) ).
If a Medicare beneficiary is dissatisfied with the "reconsideration" decision, they may appeal by seeking a hearing before an Administrative Law Judge ("ALJ"), who is not bound by LCDs. (Id. ¶ 17) (citing 42 C.F.R. § 405.1062(a) and (b) ). Instead, an ALJ must give substantial deference to the applicable LCDs but has discretion to disregard them based on the facts of a particular case, and may depart for many reasons, including if an LCD has not kept up with developments in technology. (Id. ). In making this determination, the ALJ is not determining that an LCD is invalid, but is instead merely declining to apply the LCD in a particular case. (Id. ).
Decisions of ALJs may be appealed to the Medicare Appeals Council ("Council"), which is also not bound by an LCD. (Id. ¶ 18). If a Medicare beneficiary is dissatisfied with the decision of the Council, subject to certain requirements, the beneficiary may file suit in district court to seek judicial review. (Id. ¶ 20).
Medicare Part "C" is a program in which private parties, including Kaiser, offer Medicare plans called Medicare Advantage Plans. (Id. ¶ 21). By statute, these plans must offer everything Original Medicare does but may also offer additional services, like dental care or eye glasses. (Id. ). Plaintiff asserts that when claims for coverage are submitted by Medicare Advantage Plan customers, if the Plan determines that the claim falls outside its services, the claim is processed as an Original Medicare claim using the claim and appeal procedures available to Original Medicare. (Id. ¶ 22). The Secretary disputes that the appeals process is the same for Part C and B programs.
In November 2014, a clinical trial of tumor treatment field therapy ("TTFT") was suspended because it would have been unethical to withhold TTFT treatment from the control group. (Id. ¶ 24). On October 1, 2015, LCD L34828 became final, indicating that TTFT would not be covered because it was deemed not medically reasonable and necessary. (Secretary's Statement of Undisputed Facts ("SSUF") Nos. 1-2 (Docket No. 29-3)). Four days later, on October 5, 2018, the FDA approved the Optune TTFT device to treat newly diagnosed Glioblastoma Multiforme
("GBM"), brain cancer. (Complaint ¶ 26). Thereafter, positive papers were published about TTFT, and TTFT received a Category 1 designation by the NCCN Guidelines. (Id. ¶¶ 28-31).
On September 1, 2019, LCD L34823 was updated to allow coverage for TTFT to treat newly diagnosed GBM, but not recurrent GBM. (SSUF No. 3).
Dr. Maupin is a member of a Medicare Advantage plan. (Plaintiff's MSJ at 6). He has been diagnosed with GBM. (Id. ). After brain surgery
to remove as much of the cancer as possible and associated chemotherapy and radiation, Dr. Maupin was prescribed TTFT using the Optune device to minimize the progression of the cancer. (Id. at 6-7). TTFT has been shown to increase the 2-year survival rate by more than 38% and to nearly triple the five-year survival rate. (Complaint ¶ 9). Dr. Maupin submitted a request for pre-approval of coverage of TTFT under this Medicare Advantage plan. (SSUF No. 4).
Dr. Maupin's Medicare Advantage plan provider, Kaiser, denied coverage of Dr. Maupin's request for pre-approval pursuant to LCD L34828. (Id. No. 5). During Dr. Maupin's redetermination, Kaiser affirmed the denial of coverage, using the LCD L34828 as the basis to not cover Dr. Maupin's claim. (Id. No. 6). Dr. Maupin sought reconsideration before the Independent Review Entity, which also denied coverage, again citing LCD L34828. (Id. No. 7). Dr. Maupin then sought review by an ALJ. (Id. No. 8). According to the Secretary, the sole issue before the ALJ was "[w]hether Kaiser Foundation Health Plan is required to pre-approve [Dr. Maupin]'s request for ... (TTFT) ... pursuant to the provisions of Title XVIII of the Social Security Act and implementing regulations or under the terms of the Medicare Advantage Organization's Health Plan." (Id. ).
On appeal, ALJ Troy Smith issued a decision on February 1, 2019, requiring Kaiser to approve Dr. Maupin's request for TTFT coverage. (Plaintiff's Statement of Undisputed Facts ("PSUF") No. 1) (Docket No 22-2) (citing Declaration of Farah Tabibkhoei ("Tabibkhoei Declaration") Ex. 1) (Docket No. 20)). ALJ Smith declined to apply the LCD because the LCD had not kept up with the scientific developments related to TTFT and the Optune device, and TTFT treatment was further medically reasonable and necessary for Dr. Maupin. (Id. No. 2). In ordering coverage, ALJ Smith exercised his discretion to depart from LCD L34823, citing 42 C.F.R. § 405.1062. (Id. ). The Secretary disputes that ALJ Smith had the discretion to depart from LCD L34823. (Secretary's Statement of Genuine Disputes of Material Fact No. 2 (Docket No. 29-4)).
On March 19, 2019, Dr. Maupin's Medicare Advantage plan (Kaiser) appealed Judge Smith's decision to the Council. (Id. No. 3). Kaiser contended that Judge Smith erred "based on an incorrect application to regulatory guidance." (Id. No. 4) (citing Tabibkhoei Declaration Ex. 1). Kaiser contended that because it was bound to follow the LCD at the initial and reconsideration stages of claim review, ALJ Smith should also be bound by the LCD. (Plaintiff's MSJ at 7). Kaiser did not allege any other grounds for error in Judge Smith's decision. (Id. at 7-8).
In a May 2, 2019 decision, the Council reversed ALJ Smith and held that ALJs and the Council are bound by LCDs and have no discretion to depart from them. (PSUF No. 5). The Council acknowledged that if Dr. Maupin was enrolled in Original Medicare, the ALJ and the Council would not be bound by the LCD. (Plaintiff's MSJ at 8.). Nevertheless, because Dr. Maupin was enrolled in a Medicare Advantage plan and because Kaiser purportedly was bound by the LCD at the initial claim...
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