Porzecanski v. Azar, Civil Action No. 16–2064 (DLF)

• Decision Date: 30 May 2018
• Docket Number: Civil Action No. 16–2064 (DLF)
• Citation: 316 F.Supp.3d 11
• Parties: Arturo C. PORZECANSKI, Plaintiff, v. Alex M. AZAR, Secretary, U.S. Department of Health and Human Services, Defendant.
• Court: U.S. District Court — District of Columbia

316 F.Supp.3d 11

Arturo C. PORZECANSKI, Plaintiff,

v.Alex M. AZAR, Secretary, U.S. Department of Health and Human Services,¹ Defendant.

Civil Action No. 16–2064 (DLF)

United States District Court, District of Columbia.

Signed May 30, 2018

Christopher L. Keough, Akin Gump Strauss Hauer & Feld LLP, Washington, DC, for Plaintiff.

Joshua M. Kolsky, U.S. Attorney's Office for the District of Columbia, Washington, DC, for Defendant.

MEMORANDUM OPINION

DABNEY L. FRIEDRICH, United States District Judge

Before the Court are Arturo Porzecanski's Motion for Summary Judgment, Dkt. 15, and the U.S. Department of Health and Human Services' Cross–Motion for Summary Judgment, Dkt. 17. For the reasons that follow, the Court will grant in part and deny in part Porzecanski's motion, and the Court will grant in part and deny in part HHS's motion.

I. BACKGROUND

In 2005, Porzecanski was diagnosed with systemic capillary leak syndrome (SCLS), also known as Clarkson's disease. Administrative Record (AR) 29, 124, Dkt. 22. SCLS is an "exceedingly rare" and life-threatening disorder, characterized by debilitating episodes in which blood and proteins shift from blood vessels into nearby body cavities and muscles. See AR 59, 73, 124, 342–45. SCLS can be treated with intravenous immune globulin (IVIG). AR 33, 137. Porzecanski received IVIG treatment on December 16, 2014, but when he submitted a Medicare claim for the treatment, an administrative law judge denied the claim. AR 28–33. Porzecanski now challenges that denial, and he seeks declaratory and injunctive relief to prevent HHS from continuing to deny similar claims.

A. Medicare Part B and the Claims Process

Medicare is a federal health insurance program that serves elderly or disabled Americans. See 42 U.S.C. § 1395 et seq. Medicare Part B covers "medical and other health services," id. § 1395k(a)(2)(B), including "services and supplies (including drugs and biologicals which are not usually self-administered by the patient) furnished as an incident to a physician's professional service," id. § 1395x(s)(2)(A) (emphasis added). The Medicare statute, with a few exceptions not relevant here, defines covered drugs and biologicals based on whether they are approved by certain hospital committees or listed in authoritative sources known as compendia:

The term "drugs" and the term "biologicals" ... include only such drugs (including contrast agents) and biologicals, respectively, as are included (or approved for inclusion) in the United States Pharmacopoeia, the National Formulary, or the United States Homeopathic Pharmacopoeia, or in New Drugs or Accepted Dental Remedies (except for any drugs and biologicals unfavorably evaluated therein), or as are approved by the pharmacy and drug therapeutics committee (or equivalent committee) of the medical staff of the hospital furnishing such drugs and biologicals for use in such hospital.

Id. § 1395x(t)(1).

In addition, covered services must be reasonable and necessary. "Notwithstanding any other provision of [the Medicare statute], no payment may be made under ... part B ... for any expenses incurred or items or services—which ... are not reasonable and necessary for the diagnosis or treatment of illness or injury or to improve the functioning of a malformed body member." Id. § 1395y(a)(1)(A); see also Medicare Benefits Policy Manual, Chapter 15, § 50 (drugs and biologicals must be "reasonable and necessary for the diagnosis or treatment of the illness or injury for which they are administered according to accepted standards of medical practice"). Drugs approved by the Food and Drug Administration (FDA) are considered reasonable and necessary when used for indications specified on their FDA-approved labeling. Medicare Benefits Policy Manual, Chapter 15, § 50.4.1. And even when used for indications not specified on the labeling, i.e . "off-label" uses, a drug is considered reasonable and necessary if the use is "medically accepted":

An unlabeled use of a drug is a use that is not included as an indication on the drug's label as approved by the FDA. FDA approved drugs used for indications other than what is indicated on the official label may be covered under Medicare if the [Medicare administrative contractor] determines the use to be medically accepted, taking into consideration the major drug compendia, authoritative medical literature and/or accepted standards of medical practice.... These decisions are made by the [contractor] on a case-by-case basis.

Id. § 50.4.2.

To submit a Medicare Part B claim, a beneficiary must first file with an administrative contractor hired by HHS to make initial coverage determinations. 42 C.F.R. §§ 405.920, 405.924(b). The initial contractor may review the claim individually, or the contractor may deny the claim automatically by relying on a "local coverage determination," which is a decision promulgated by the contractor "to provide guidance to the public and the medical community within their jurisdictions" as to the clinical circumstances under which a "service is considered to be reasonable and necessary." Medicare Program Integrity Manual, Chapter 13, § 13.1.3; see 42 U.S.C. § 1395ff(f)(2)(B) ; 42 C.F.R. § 400.202. A local coverage determination binds only the contractor that issued it, and only at the initial stages of the Medicare claim review process. See 42 U.S.C. § 1395ff(c)(3)(B)(ii)(II).

If the beneficiary disagrees with the contractor's initial determination, the beneficiary may request a "redetermination" by the same contractor. 42 C.F.R. § 405.940. Assuming the contractor does not reverse itself and the beneficiary remains dissatisfied, the beneficiary may request "reconsideration" by another Medicare program contractor called a "qualified independent contractor." Id. § 405.960. After an adverse reconsideration, the beneficiary may appeal to an HHS administrative law judge. Id. § 405.1000. The administrative law judge's decision binds the parties unless the Medicare Appeals Council reviews the decision on its own motion or the beneficiary appeals to the Council. See id. §§ 405.1048, 405.1110, 405.1102. When evaluating a claim, administrative law judges and the Medicare Appeals Council are not bound by contractors' local coverage determinations or by Medicare program guidance such as manual instructions, but according to HHS regulations, HHS "will give substantial deference to these policies if they are applicable to a particular case." Id. § 405.1062. If the Medicare Appeals Council does not issue a decision, dismissal, or remand within 90 days of the beneficiary's request for review, the beneficiary may escalate the appeal to a federal district court. Id. §§ 405.1132, 405.1100(c). And if the Medicare Appeals Council does issue a decision, the beneficiary has 60 days to seek review by a federal district court. Id. § 405.1130. Decisions by administrative law judges and the Council generally lack precedential effect and bind the parties only. Id. § 405.1048, 405.1130; see also 82 Fed. Reg. 4974, 5105–06 (Jan. 17, 2017) (authorizing HHS to designate certain Council decisions as precedential).

B. Porzecanski's Claims

Beginning in 2005, Porzecanski experienced numerous life-threatening SCLS episodes that required prolonged stays at intensive care units. AR 21. Despite a preventive regimen of theophylline and terbutaline, the episodes began occurring more frequently. Id. In 2009, Porzecanski began treatment with IVIG injections for two consecutive days every four weeks. Id.

Since receiving IVIG, he has been symptom-free. Id. ; see also Dkt. 23–1 at 4.

This case involves an IVIG treatment that Porzecanski received on December 16, 2014 at Georgetown University Medical Center, for which the Medical Center billed $29,860.95. AR 21. Porzecanski submitted a Medicare claim for the IVIG treatment, but the initial contractor—Novitas Solutions—denied coverage. AR 333. Porzecanski requested a redetermination, and Novitas Solutions again denied coverage. Id. Porzecanski then sought reconsideration by a qualified independent contractor, Maximus Federal Services, which also rejected his claim. Id. Maximus's decision, although not entirely clear, appeared to rely on a local coverage determination promulgated by Novitas Solutions and the decision stated that Porzecanski's documentation did not justify coverage for his IVIG treatment. See AR 333–34; see also AR 32; Def.'s Mem. at 8–9, 24, Dkt. 17.

Porzecanski then appealed to an administrative law judge, who held a brief hearing at which Porzecanski testified. AR 53 (appeal); AR 478–91 (hearing transcript). The administrative law judge denied coverage on April 28, 2016. AR 28–33 (opinion). Porzecanski sought review by the Medicare Appeals Council, see AR 7, but the Council did not act within 90 days. Porzecanski requested escalation to federal district court, see AR 2–4, and filed his complaint on October 17, 2016, asserting that the administrative law judge's decision violated the Administrative Procedure Act. See Compl. ¶¶ 9, 44–51, Dkt. 1; see also Pl.'s Mem. at 13–14, Dkt. 15–1. The parties cross-moved for summary judgment in summer 2017, and the case was reassigned to the undersigned judge on December 5, 2017. See Dkt. 15; Dkt. 17.

Since Porzecanski received the IVIG treatment at issue in this case, initial contractors have continued to deny his claims for other monthly treatments, but he has fared better with at least one qualified independent contractor and all other administrative law judges who have heard his appeals. Relying on a local coverage determination, the initial contractor Novitas Solutions and the qualified independent contractor Maximus Federal Services rejected Porzecanski's claims for IVIG treatments received in November 2015, December 2015, and January 2016. Administrative law judges, however, reversed the contractors in early 2017. See Dkt. 15–2; Dkt. 15–3; Dkt. 15–4. In addition, Novitas Solutions denied Porzecanski's claim for IVIG treatment received in April 2016...