Townsend v. Cochran
| Citation | 528 F.Supp.3d 209 |
| Decision Date | 25 March 2021 |
| Docket Number | 20-cv-01210 (ALC) |
| Parties | Robert TOWNSEND, Plaintiff, v. Norris COCHRAN, in his official capacity as Secretary of the United States Department of Health and Human Services, Defendant. |
| Court | U.S. District Court — Southern District of New York |
Geoffrey Garrett Young, Reed Smith LLP, New York, NY, for Plaintiff.
Rachael Lightfoot Doud, Jennifer C. Simon, Susan D. Baird, U.S. Attorney's Office, Sdny, New York, NY, for Defendant.
Plaintiff Robert Townsend (hereinafter, "Plaintiff" or "Mr. Townsend") brings this action against Norris Cochran,1 in his official capacity as Secretary of the United States Department of Health and Human Services (hereinafter, "Defendant" or the "Secretary"), challenging the Secretary's decision denying coverage of Plaintiff's Medicare claims pursuant to 42 U.S.C. § 405(g), and the Administrative Procedures Act (APA), , 5 U.S.C. §§ 706(1) and (2). Before the Court are the Plaintiff's and Secretary's cross-motions for summary judgment. For the reasons discussed below, both parties’ motions for summary judgment are DENIED and the Medicare Appeals’ Council's unfavorable administrative decision is REVERSED and REMANDED for further proceedings consistent with this opinion.
Plaintiff commenced this action on February 11, 2020. ECF No. 1 ("Compl."). Defendant filed an answer on April 20, 2020. ECF No. 11. On April 28, 2020 and May 1, 2020, the parties filed pre-motion conference letters in connection with motions for summary judgment. ECF Nos. 14-15. On June 4, 2020, the Court denied the parties’ requests for pre-motion conferences, but granted leave for the parties to file cross-motions for summary judgment. ECF No. 16. The parties filed their opening briefs on June 26, 2020, ECF Nos. 18, 21 (hereinafter, "Pl. Mot." and "Def. Mot.," respectively), their opposition briefs on July 17 and July 20, 2020, ECF Nos. 25, 27 (hereinafter, "Pl. Opp." and "Def. Opp.," respectively), and their reply briefs on August 3, 2020, ECF Nos. 30, 32 (hereinafter, "Pl. Reply" and "Def. Reply," respectively). On December 2, 2020, Plaintiff filed a brief with supplemental authority and on December 9, 2020, Defendant responded. ECF Nos. 40-41. On March 5, 2021 Defendant filed a notice of supplemental authority. ECF No. 42. On March 9, 2021, Plaintiff filed a letter motion for leave to file supplemental authority (including the supplemental authority as an exhibit to the letter motion), which this Court granted. ECF Nos. 43-44. On March 15, 2021, Defendant responded to Plaintiff's supplemental authority. ECF No. 45. The parties’ motions are deemed fully briefed.
Plaintiff suffers from glioblastoma multiforme
("GBM"), a type of brain cancer, and is seeking Medicare coverage for treatment, specifically, tumor treatment field therapy ("TTFT").3 Compl. ¶¶ 4, 20. For Medicare to cover a particular medical service, including TTFT, it must fit within a benefit category established by the Medicare statute. See 42 U.S.C. § 1395 et seq. This case concerns Medicare Part B, which covers certain types of durable medical equipment ("DME") for qualified recipients. 42 U.S.C. §§ 1395k(a), 1395x(s)(6). Excluded from coverage are "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 ...." 42 U.S.C. § 1395y(a)(1)(A).
The Secretary of the Department of Health and Human Services has delegated to the Center for Medicare & Medicaid Services ("CMS") broad authority to determine whether Medicare covers particular medical services. CMS has interpreted "reasonable and necessary" to mean that an item or service must be "safe and effective," "not experimental or investigational," and "appropriate" in order to qualify for reimbursement. See CMS, CHAPTER 13 – LOCAL COVERAGE DETERMINATIONS , MEDICARE PROGRAM INTEGRITY MANUAL § 13.5.4 (Feb. 12, 2019) ("MPIM").4
CMS contracts with Medicare Administrative Contractors ("MACs") to administer certain day-to-day functions of the Medicare program. 42 U.S.C. § 1395kk-1. MACs make coverage determinations, issue payments, and develop Local Coverage Determinations ("LCDs") for the geographic area it serves, consistent with controlling regulations and applicable National Coverage Determinations ("NCDs") issued by the Secretary. Id. ; OFFICE OF THE INSPECTOR GENERAL , HHS, LOCAL COVERAGE DETERMINATIONS CREATE INCONSISTENCY IN MEDICARE COVERAGE 1 (Jan. 2014). NCDs and LCDs are determinations by the Secretary and MACs, respectively, as to whether a particular item or service is covered by Medicare. MPIM § 13.1.1; 42 U.S.C. §§ 1395ff(f)(1)(B), 1395ff(f)(2)(B). These actions are taken in accordance with the reasonable and necessary provisions in 42 U.S.C. § 1395y(a)(1)(A). See 42 U.S.C. §§ 1395kk-1(a)(4), 1395ff(f)(2)(B).
An LCD is binding only on the contractor that issued it and is not binding at later stages of the Medicare claim review process, including on Administrative Law Judges ("ALJs") who review appeals of MAC determinations. 42 U.S.C. § 1395ff(c)(3)(B)(ii)(II) ; 42 C.F.R. § 405.1062(a). However, ALJs must give LCDs "substantial deference" if they are applicable, 42 C.F.R. § 405.1062(a), and if it declines to follow an LCD in a particular case, it "must explain the reasons why the policy was not followed." 42 C.F.R. § 405.1062(b). An ALJ's decision not to follow an LCD "applies only to the specific claim being considered and does not have precedential effect." Id.
After the United States Food and Drug Administration ("FDA") approved the commercial distribution of a TTFT device manufactured by Novocure, Inc., (later rebranded Optune) for treatment of newly diagnosed GBM, DME MACs issued an LCD for TTFT indicating that TTFT was not covered for beneficiaries with GBM. Certified Admin. Record ("CAR") at 149.5 This meant that a beneficiary would have to go through the claims and administrative appeals process to get a claim for TTFT approved.
A beneficiary can challenge the denial of a claim under the Medicare statute by submitting a claim for payment to the Medicare contractor. 42 C.F.R. § 405.904(a)(2). If the claim is denied, the beneficiary must generally exhaust the following four levels of administrative review before filing suit in federal court:
Mr. Townsend sought coverage of TTFT for dates of service on August 7, 2018, September 7, 2018, and October 7, 2018. CAR at 67. On August 13, 2018, September 13, 2018 and October 13, 2018, MAC Noridian Healthcare Solutions denied payment of the claims. Id. On January 3, 2019, Noridian issued a redetermination affirming the initial denial of the claims. Id. Plaintiff then requested reconsideration, and on March 19, 2019, the QIC determined the device was not covered under Medicare. Id. However, the QIC found the supplier liable, rather than Plaintiff. Id.
On April 1, 2019, Plaintiff filed a request for an ALJ hearing. CAR at 67. ALJ Brian Butler conducted a hearing on May 29, 2019. Id. On June 25, 2019, ALJ Butler issued a decision denying Plaintiff's claims for Medicare coverage of the Optune system for the period at issue. Compl. ¶ 22; CAR at 67-73. ALJ Butler held that even though he was not bound by the LCD "categorically den[ying] coverage for TTFT," he was required to give it "substantial deference ... unless there [was] a reason particular to the specific case that justifie[d] deviation from [it]." CAR at 71-72. ALJ Butler concluded that deviating from the LCD was not warranted, including because Plaintiff had not been using the TTFT device at the recommended usage rate. CAR at 72-73. Additionally, ALJ Butler found it significant that the new LCD (which had then been proposed and which later went into effect) would provide coverage for newly diagnosed GBM, and thus would not provide coverage for Plaintiff who had been initially diagnosed in 2011. CAR at 68, 73. ALJ Butler found that there was no evidence to suggest that Plaintiff "knew, or should have been expected to know, [that] the device would not be covered," and thus would not be held responsible for payment. CAR at 73.6
Following ALJ Butler's decision, Plaintiff appealed that decision to the Medicare Appeals Council. CAR at...
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