Porzecanski v. Burwell

Cross MOTION for Summary Judgment and Opposition to Plaintiff's Motion for Summary Judgment

D.D.C.June 27, 2017

UNITED STATES DISTRICT COURT FOR THE DISTRICT OF COLUMBIA __________________________________________ ) ARTURO C. PORZECANSKI, ) ) Plaintiff, ) ) v. ) ) Case No. 1:16-CV-02064 (RDM) ) THOMAS E. PRICE, M.D., ) Secretary, United States Department ) of Health and Human Services, ) ) Defendant. ) _________________________________________ ) DEFENDANT’S CROSS-MOTION FOR SUMMARY JUDGMENT AND OPPOSITION TO PLAINTIFF’S MOTION FOR SUMMARY JUDGMENT Pursuant to Federal Rule of Civil Procedure 56(a), Defendant Thomas E. Price, M.D., Secretary of Health and Human Services, by and through his undersigned counsel, respectfully moves this Court for summary judgment on the grounds that there are no material facts in dispute and that Defendant is entitled to judgment as a matter of law. In support of this Motion, the Court is respectfully referred to the accompanying Memorandum of Law in Support of Defendant’s Cross-Motion for Summary Judgment and Opposition to Plaintiff’s Motion for Summary Judgment. A proposed order is also attached. DATE: June 27, 2017 Respectfully submitted, CHANNING D. PHILLIPS DC Bar No. 415793 United States Attorney DANIEL F. VAN HORN DC Bar No. 924092 Chief, Civil Division Case 1:16-cv-02064-RDM Document 17 Filed 06/27/17 Page 1 of 26 ii /s/ JOSHUA M. KOLSKY DC Bar No. 993430 Assistant United States Attorney 555 Fourth St., N.W. Washington, D.C. 20530 Phone: (202) 252-2541 Email: joshua.kolsky@usdoj.gov LINDA L. KEYSER United States Department of Health and Human Services Office of the General Counsel Centers for Medicare & Medicaid Services Division 330 Independence Ave, S.W. Washington, D.C. 20201 (202) 205-8779 linda.keyser@hhs.gov OF COUNSEL: JEFFREY S. DAVIS Acting General Counsel JANICE L. HOFFMAN Associate General Counsel SUSAN MAXSON LYONS Deputy Associate General Counsel for Litigation United States Department of Health and Human Services Case 1:16-cv-02064-RDM Document 17 Filed 06/27/17 Page 2 of 26 UNITED STATES DISTRICT COURT FOR THE DISTRICT OF COLUMBIA __________________________________________ ) ARTURO C. PORZECANSKI, ) ) Plaintiff, ) ) v. ) ) Case No. 1:16-CV-02064 (RDM) ) THOMAS E. PRICE, M.D., ) Secretary, United States Department ) of Health and Human Services, ) ) Defendant. ) _________________________________________ ) DEFENDANT’S MEMORANDUM OF LAW IN SUPPORT OF DEFENDANT’S CROSS-MOTION FOR SUMMARY JUDGMENT AND IN OPPOSITION TO PLAINTIFF’S MOTION FOR SUMMARY JUDGMENT This dispute turns on whether Defendant, the Secretary of Health and Human Services (“the Secretary”), properly denied coverage for a treatment called Intravenous Immune Globulin (“IVIG”) administered on December 16, 2014, to Plaintiff, who suffers from Systemic Capillary Leak Syndrome (“SCLS”). Because the Centers for Medicare & Medicaid Services (“CMS”) has reasonably determined that treating SCLS with IVIG remains experimental, and therefore cannot be covered, and the underlying final agency decision is consistent with that determination, that decision is to be afforded substantial deference. The Court should therefore grant summary judgment to the Secretary and deny Plaintiff’s Motion for Summary Judgment (“Plaintiff’s Motion” or “Pl.’s MSJ”). For items and services to be covered by Medicare, they must be eligible for coverage under a defined benefit category and be reasonable and necessary for treatment of an illness or injury. For non-cancer drugs such as the one at issue here, a drug is considered to be within a benefit Case 1:16-cv-02064-RDM Document 17 Filed 06/27/17 Page 3 of 26 2 category where it is supported by one or more statutorily-recognized drug compendia or approved by the provider’s pharmacy and drug therapeutics committee (or equivalent). See 42 U.S.C. § 1395x(t)(1). The administration of IVIG for use in the treatment of SCLS is not supported by any drug compendia or a provider committee as described. And Plaintiff has not presented authoritative medical literature to support treating SCLS with IVIG. Thus, the final agency decision on appeal appropriately concluded that IVIG for SCLS is not a covered benefit. In any event, even if the Court were to conclude that the underlying ALJ decision was wrongly decided, the Medicare statute precludes the Court from providing the relief Plaintiff requests, namely a declaration that this treatment is reasonable and necessary and an injunction to prevent future claim denials as to Plaintiff and other similarly situated beneficiaries. This appeal is governed by 42 U.S.C. § 405(g) and (h), which require that Plaintiff exhaust claims for Medicare benefits on a claim-by-claim basis. At most, Plaintiff would be entitled to a remand for a reconsideration of the evidence. For these reasons, the Court should deny Plaintiff’s motion for summary judgment and find in favor of the Secretary. BACKGROUND I. Medicare’s “Reasonable And Necessary” Standard Title XVIII of the Social Security Act, commonly known as the Medicare statute, 42 U.S.C. § 1395 et seq., establishes a program of health insurance for the elderly and disabled. The Medicare program is administered by CMS through private contractors known as Medicare Administrative Contractors (“contractors”). 42 U.S.C. §§ 1395u(a), 1395kk-1(a)(4).1 Each 1 Previously, contractors responsible for Part A claims were called “intermediaries,” and those responsible for Part B claims were called “carriers.” That distinction is no longer made. Rather, the term “contractor” refers to all contractors who process Medicare claims, regardless of whether they process Part A or Part B claims. See Pub. L. No. 108-173, § 911(e), 117 Stat. 2386 (2003) Case 1:16-cv-02064-RDM Document 17 Filed 06/27/17 Page 4 of 26 3 contractor is responsible for administering the Medicare program within its unique geographic jurisdiction. Congress has given the Secretary broad authority to determine whether a beneficiary is entitled to receive benefits for particular services. See 42 U.S.C. § 1395ff(a)(1)(A)-(B) (“The Secretary shall . . . make initial determinations with respect to benefits under part A . . . or part B” regarding “whether an individual is entitled to benefits” for particular services and “the amount of benefits available.”). Medicare Part A generally covers inpatient hospital services and other institutional care (e.g., skilled nursing facility services), while Part B, implicated here, covers other medical items and services, including physicians’ services, hospital outpatient services, and diagnostic testing performed by clinical laboratories. See 42 U.S.C. § 1395c; 42 U.S.C. § 1395j; 42 U.S.C. § 1395k(a)(1). “Notwithstanding any other provision of [the Medicare statute], no payment may be made under part A or 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.” 42 U.S.C. § 1395y(a)(1)(A); see also 42 C.F.R. § 411.15(k)(1). Thus, there is no presumption that payment will be made for any service in any particular case. “The Secretary’s decision as to whether a particular medical service is ‘reasonable and necessary’ and the means by which [he] implements [his] decision, whether by promulgating a generally applicable rule or by allowing individual adjudication, are clearly discretionary functions.” Heckler v. Ringer, 466 U.S. 602, 617 (1984). With one exception not relevant here, CMS has historically interpreted “reasonable and necessary” to mean that an item or service must (deeming any reference to a fiscal intermediary or carrier under the Medicare statute to be a reference to a contractor). Case 1:16-cv-02064-RDM Document 17 Filed 06/27/17 Page 5 of 26 4 be safe and effective, medically necessary and appropriate, and not experimental in order to qualify for reimbursement. See Medicare Program Integrity Manual (“MPIM”) § 13.5.1 (“Contractors shall consider a service to be reasonable and necessary if the contractor determines that the service is . . . Not experimental or investigational”). For Medicare coverage purposes, the term “experimental” has been used synonymously with the term “investigational.” To accomplish the daunting task of administering the “reasonable and necessary” standard, the Secretary employs a range of tools, from formal regulations to informal manuals. In choosing among these options, the Secretary is not required to promulgate regulations or policies that, “either by default rule or by specification, address every conceivable question” that may arise. Shalala v. Guernsey Mem’l Hosp., 514 U.S. 87, 96 (1995). At the highest level of generality, the Secretary may articulate “reasonable and necessary” standards through formal regulations, 42 U.S.C. § 1395hh, that have the force and effect of law throughout the administrative process, 42 U.S.C. § 1395ff(a)(1). He may also issue National Coverage Determinations (“NCDs”) “with respect to whether or not a particular item or service is covered nationally.” 42 U.S.C. § 1395ff(f)(1)(B); see also 42 C.F.R. § 400.202, 405.1060. Like regulations, NCDs are legally binding on contractors and adjudicators throughout the Medicare administrative appeals process. 42 C.F.R. § 405.1060(a)(4). Notwithstanding the existence of federal policy such as NCDs, contractors may also develop and implement Local Coverage Determinations (“LCDs”) addressing coverage for an item or service in a particular contractor’s jurisdiction. 42 C.F.R. § 400.202. LCDs are “administrative and educational tools” that are published by contractors “to provide guidance to the public and the medical community within their jurisdictions” as to the “clinical circumstances” under which a Case 1:16-cv-02064-RDM Document 17 Filed 06/27/17 Page 6 of 26 5 “service is considered to be reasonable and necessary.” MPIM Ch. 13, § 13.1.3; 2 see 42 U.S.C. § 1395ff(f)(2)(B) (LCDs are determinations “respecting whether or not a particular item or service is covered on an intermediary- or carrier-wide basis”). Contractors must ensure that LCDs are consistent with all federal law and guidance. Id. § 13.1.3. Contractors implement these LCDs as a way to identify items and services that are covered (or are not covered) under certain circumstances. Thus, a contractor may either review claims individually or, if it has implemented an LCD, automatically deny the claim based on the LCD. 42 U.S.C. § 1395ff; id. § 13.3. An LCD is binding only on the contractor that issued it, and only at the initial stages of the Medicare claim review process. 42 U.S.C. § 1395ff(c)(3)(B)(ii)(II). Finally, Medicare can and does make individual determinations as to whether, in a particular case, the services provided were reasonable and necessary where no regulation, NCD, LCD, or other existing interpretive guidance precludes coverage. II. Coverage of Physician Administered Drugs Under the Medicare Program For items and services to be covered by Medicare, they must (1) be eligible for coverage under a defined benefit category, (2) not be statutorily excluded from coverage, and (3) be reasonable and necessary. 42 U.S.C. §§ 1395k, 1395x, 1395y(a)(1)(A),(B). Medicare Part B covers medical and other health services, 42 U.S.C. § 1395k(a)(2)(B), including “drugs and biologicals which are not usually self-administered by a patient,” that are furnished as an incident to a physician’s professional service. 42 U.S.C. § 1395x(s)(2)(A). 2 The MPIM is available at http://www.cms.gov/Regulations-and-Guidance/Guidance/ Manuals/Downloads/pim83c13.pdf. The manual “is a compilation of guidelines which CMS issues to instruct Medicare contractors on how to conduct medical review of Medicare claims submitted by Medicare providers and suppliers for payment.” Erringer v. Thompson, 371 F.3d 625, 628 (9th Cir. 2004). Case 1:16-cv-02064-RDM Document 17 Filed 06/27/17 Page 7 of 26 6 The Medicare statute, in turn, defines covered drugs and biologicals,3 with the exception of anti-cancer drugs and a designated drug for osteoporosis, to include only such drugs . . . 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. 42 U.S.C. § 1395x(t)(1). Section 50.4.2 of the Medicare Benefits Policy Manual (“MBPM”),4 entitled “Unlabeled Use of Drug,” also provides that the drug must be reasonable and necessary for the treatment of a particular condition or disease: 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 A/B MAC (B) 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. The contractor for Plaintiff’s jurisdiction has an LCD in place pertaining to coverage for IVIG, which at the time of the claim at issue was labeled LCD L32712.5 The LCD delineates a number of specific indications for which the use of IVIG is a covered benefit. SCLS is not referenced in 3 IVIG is a so-called “biological.” “Biological products include a wide range of products such as vaccines, blood and blood components . . . . Biologics are isolated from a variety of natural sources - human, animal, or microorganism. . . .” https://www.fda.gov/aboutfda/centersoffices/ officeofmedicalproductsandtobacco/cber/ucm133077.htm. 4 The MBPM contains interpretive instructions to contractors based on statutes, regulations, and other guidance. It is located at https://www.cms.gov/Regulations-and-Guidance/Guidance/ Manuals/downloads/bp102c15.pdf. 5 That LCD, since retired, is located at http://localcoverage.cms.gov/mcd_archive/ viewlcd.asp?lcd_id=32712&lcd_version=43&show=all. In 2015, the contractor issued a substantively identical determination, LCD L35093, in order to include updated diagnosis codes. See https://www.cms.gov/medicare-coverage-database/details/lcd-details.aspx?LCDId=35093& ver=48&Date=&DocID=L35093&bc=iAAAABAAAAAAAA%3d%3d&. Case 1:16-cv-02064-RDM Document 17 Filed 06/27/17 Page 8 of 26 7 the LCD. III. The Administrative Review Process The Medicare statute provides beneficiaries with two separate appeals processes for challenging coverage determinations by the Secretary. First, the statute provides that a beneficiary may appeal the denial of a claim for Medicare benefits (the “claims appeal process”), as in this case. See 42 U.S.C. § 1395ff(b). Second, the statute provides a separate process for challenging LCDs (the “LCD review process”). See 42 U.S.C. § 1395ff(f); see also 42 C.F.R. § 426.310(a) (“LCD and NCD reviews are distinct from the claims appeal processes”). An aggrieved party may elect to pursue his or her individual claim denial through the claims appeal process, request review of the LCD generally, or both. See 68 Fed. Reg. 63,694 (Nov. 7, 2003). The regulations permit a beneficiary to pursue both appeal processes simultaneously. See 68 Fed. Reg. 63,692, 63,694. In accordance with the Medicare statute, the Secretary has created an administrative review process that allows enrollees to appeal Part B individual coverage determinations with which they disagree, such as the one at issue here. The requirements for appeals of initial determinations of whether an individual is entitled to benefits under Part A or Part B are governed by 42 C.F.R. Subpart I. The first level of appeal available to a beneficiary after a secondary review by the contractor is an on-the-record review by a qualified independent contractor (“QIC”). 42 C.F.R. § 405.960. If the appealing beneficiary is dissatisfied with the QIC’s decision, the beneficiary has the right to request a hearing before an ALJ. 42 C.F.R. § 405.1000(a). The ALJ’s decision will become binding on the parties unless the beneficiary appeals the decision to the Medicare Appeals Council (“the Council”), or the Council chooses to review the case on its own motion. 42 C.F.R. § 405.1048. Accordingly, if a beneficiary is dissatisfied with an ALJ’s determination, the beneficiary can request review of the ALJ’s decision by the Council. 42 C.F.R. § 405.1102. The Case 1:16-cv-02064-RDM Document 17 Filed 06/27/17 Page 9 of 26 8 Council limits its review of the ALJ’s decision to “exceptions raised by the party in the request for review,” except where the beneficiary is unrepresented. 42 C.F.R. § 405.1112(c). In rendering their decisions, the ALJ and the Council “are not bound by LCDs, . . . but will give substantial deference to these policies if they are applicable to a particular case. 42 C.F.R. § 405.1062(a) (emphasis added). The Council’s decision is considered the final decision of the Secretary, and is subject to judicial review if the beneficiary files an action in federal district court within 60 days of receiving notice of the Council’s decision. 42 C.F.R. § 405.1130. A beneficiary may request that an appeal be escalated to federal district court if the Council does not issue a decision, dismissal, or remand within 90 days of receipt of his or her request for review. 42 C.F.R. §§ 405.1132, 405.1100(c). ALJ and Council decisions have no precedential effect: they bind only the parties to the appeal. 42 C.F.R. §§ 405.1048, 405.1130.6 On the other hand, a facial challenge to an LCD may be reviewed under its own discrete review process. See 42 C.F.R. Part 426. “Review of an LCD or an NCD requires examination of an entire policy, or specific provisions contained therein, and not just one claim denial. Therefore, such reviews may lead to changes that impact other beneficiaries if the policies are found to be unreasonable.” 68 Fed. Reg. at 63,697. An aggrieved party can initiate an LCD challenge by filing a written complaint with the Civil Remedies Division of the Department Appeals Board (“the Board”). See https://www.hhs.gov/about/agencies/dab/different-appeals-at-dab/appeals-to- alj/index.html; 42 C.F.R. § 426.400. ALJs hear LCD challenges, 42 U.S.C. § 1395ff(f)(2)(A)(i); 42 C.F.R. § 426.405, but an aggrieved party may appeal to the Board a determination by the ALJ that an LCD is valid, 42 C.F.R. §§ 426.110, 426.465(a)(1). A determination by the Board that an 6 After the events in this case, the Secretary promulgated 42 C.F.R. § 401.109, which authorizes the Chair of the HHS Departmental Appeals Board to designate Council decisions as precedential. See 82 Fed. Reg. 4974, 5105 (Jan. 17, 2017). Case 1:16-cv-02064-RDM Document 17 Filed 06/27/17 Page 10 of 26 9 LCD is valid is subject to judicial review. See 42 U.S.C. § 1395ff(f)(2)(A)(iv); 45 C.F.R. § 426. An aggrieved party may also request that the agency issue an NCD on a coverage matter where none exists. 42 U.S.C. § 1395ff(f)(4)(A). STATEMENT OF FACTS AND PROCEDURAL HISTORY I. Underlying Administrative Proceedings Arturo Porzecanski (“Plaintiff”) is a Medicare beneficiary who suffers from SCLS and, since 2005, he has experienced multiple acute episodes of the disease that required hospitalization. Admin. R. (“AR”) 21. After the episodes began occurring more frequently, his treating physician instituted a regimen of IVIG treatments, which he receives over two days each month. Id. On December 16, 2014, Plaintiff received the IVIG treatment at issue in this lawsuit at Georgetown University Medical Center (“Georgetown”). Id. The claim was covered and paid by Plaintiff’s primary insurance, Blue Cross Blue Shield. Id. 292, 328. The claim was also submitted to Medicare as the secondary payer; the contractor denied coverage for the treatment. Id. 333. Plaintiff requested a redetermination by the contractor and reconsideration by a Medicare Qualified Independent Contractor, or QIC, both of which were denied. Id. 333, 339, 353-62. Plaintiff then appealed the denial to an HHS ALJ. Id. 53-54. II. The Evidence of Record a. Journal articles In support of his claim, Plaintiff submitted evidence in the form of clinical case reports purporting to provide evidence in support of the use of IVIG in the treatment of SCLS. Id. 59- 190, 340-43, 363-70. As far back as 1998, a case report in the journal Intensive Care Medicine chronicled one acute episode of SCLS and concluded “it seems likely that [IVIG] was effective in preventing attacks in our patient” and that “[f]urther studies are needed to evaluate the efficacy of Case 1:16-cv-02064-RDM Document 17 Filed 06/27/17 Page 11 of 26 10 i.v. globulins.” Id. 80. A 2008 article in the journal Critical Care Medicine described three individuals with SCLS treated with IVIG and observed that “IV[IG] were effective against acute- phase SCLS based on the outcomes of our three patients” and, noting that “[t]o date, only one other patient has reportedly responded to IV[IG] . . . . Unfortunately, we cannot precisely explain why IV[IG] were effective in patients with SCLS.” Id. 76-77, 161-62. Plaintiff also submitted later materials, as discussed below. 2010 A letter to the editor of the American Journal of Medicine (“AJM”), not provided by Plaintiff in its entirety, observed that in one patient with refractory SCLS, administration of IVIG every six weeks “yielded dramatic improvement.” Id. 58. In another letter to the editor of AJM, clinicians described a case study of one SCLS patient whose symptoms resolved with IVIG prophylaxis. They recommended further investigations of the treatment based on their observations. Id. 144-45. 2011 An article in the journal Revista Clinica Espanola described a case study of one SCLS patient who was symptom free after IVIG prophylaxis. Id. 59-60, 146-47. One letter to the editors of Annals of Internal Medicine opined that IVIG had been used with some efficacy in one patient, but added that “[i]t is tempting but naïve to draw conclusions from such anecdotal experience, and an international patient registry would be of great use . . . .” Id. 71, 156. A journal called BMJ Case Reports published a case study of one SCLS patient, describing IVIG as “a promising alternative treatment strategy for SCLS” and concluding that “[f]urther studies are needed . . . .” Id. 121, 189. A letter to the editor of the Annals of Internal Medicine responded to an earlier article on the subject and advocated “strongly . . . that IVIG is the optimal prophylaxis and should be the Case 1:16-cv-02064-RDM Document 17 Filed 06/27/17 Page 12 of 26 11 initial choice to prevent attacks in patients with SCLS.” Id. 87, 170. In response, however, the article’s authors pointed out that“[i]n the past, many treatments have been claimed to be effective in treating SCLS. However, because SCLS is rare and has an unpredictable course, drawing clear conclusions is often difficult, and many of these treatments are not used anymore.” Id. 87, 170. They opined that “it is still difficult to decide whether IVIG should be the initial choice to prevent episodes of SCLS.” Id. 88. A final case study that year of one SCLS patient, published in the journal Internal and Emergency Medicine, observed that the administration of IVIG was “useful in the acute phase, and in reducing the severity of clinical manifestations.” Id. 155. 2012/2013 A 2012 case study of one individual observed that IVIG was “useful in the acute phase, and in reducing the severity of clinical manifestations” for him, but also cautioned that “[f]or the time being, the optimal management of the acute phase is still unclear . . . .” Id. 67-68. A study of 20 SCLS patients in the journal Blood in 2012 described IVIG treatment for the disease as “promising,” but stopped short of any blanket recommendation of the treatment. Id. 108, 181. In a case study of one patient published in 2013 in Internal Medicine Journal, the authors observed that IVIG “has shown clinical efficacy in the acute and prophylactic treatment of SCLS.” Id. 91, 174. But they added that there is still “ongoing discussion about whether IVI[G] is superior to terbutaline and aminophylline or theophylline . . .” (other medications sometimes used to treat IVIG). Id. Case 1:16-cv-02064-RDM Document 17 Filed 06/27/17 Page 13 of 26 12 2014 The journal Expert Review of Clinical Pharmacology presented a case report of one SCLS patient who benefited from IVIG treatment, but concluded that “future studies are needed to confirm this finding.” Id. 86, 168. Another case study of record from the Journal of Hematology, focused primarily on the differential diagnosis of SCLS and with respect to IVIG, indicated only that “[c]linicians should be aware of this syndrome and the role of IVIG in its treatment.” Id. 100. 2015 One case study reported IVIG treatment for an individual with SCLS “as being effective in both reducing the severity of an acute . . . episode as well as preventing further episodes . . . .” Id. 63. That year, the Journal of Cancer Research and Therapeutics published a case study of a child treated with IVIG for SCLS concluding that “[t]he most suggested hypothesis also [in] need [of] further investigations is that IVIGs are effected via their immunomodulatory role.” Id. 73, 158. But the study observed that “we cannot answer the question why some cases benefit from steroids and some from IVIGs.” Id. A letter to the editor in the journal Anaesthesia Critical Care & Pain Medicine described two cases of patients with SCLS treated with IVIG and noted that SCLS “warrants more publishing and research” and that “IVIG seems to be promising for the prevention of future attacks.” Id. 83, 165. The letter also noted that “[w]hether they have a role in the acute setting remains unclear.” Id. An article in International Medical Press presented another individual case study, which reflected only that the patient was “doing well 6 months after discharge with no new episodes of SCLS” after preventive treatment with IVIG was instituted. Id. 94. A case study in the journal Clinical Case Reports described one SCLS patient treated with IVIG and observed that monthly IVIG injections were administered and “reported as being effective in both reducing the severity of an acute [SCLS] episode as well as preventing further Case 1:16-cv-02064-RDM Document 17 Filed 06/27/17 Page 14 of 26 13 episodes . . . .” Id. 150. Finally, a study of 22 SCLS patients published in AJM concluded that IVIG prophylaxis is associated with a dramatic reduction in the occurrence of [SCLS] attacks in most patients . . . . A prospective, randomized trial may be necessary to fully assess the benefits . . . .” Id. 114, 142. In sum, all but three of the articles submitted report anecdotal results of IVIG treatment for just one individual with SCLS. Of the remaining three, a 2008 article described IVIG treatment for three patients with SCLS, observing that only one other patient had reportedly responded to IVIG. Id. 76-77, 161-62. An additional study described IVIG treatment for 20 SCLS patients, but called the treatment simply “promising” without providing any recommendations. Id. 108, 181. And, as with most of the articles in the record, a 2015 study of IVIG therapy in 22 individuals with SCLS concluded by recommending more investigation is warranted. Id. 114, 142; see also id. 71, 73, 80, 83, 86, 88, 91, 121, 144-45, 156, 158, 165, 168, 174, 189. b. Letters from Physicians Plaintiff also submitted letters from several physicians in support of his claim. Dr. Kirk Druey of National Institutes of Health (“NIH”) submitted three letters on Plaintiff’s behalf, dated May 31, 2015, December 3, 2015, and March 18, 2016. Id. 135-37, 340-41, 369-70. In March 2016, he wrote ALJ Han that Plaintiff is a study patient at NIH and that [i]n a longitudinal follow-up study completed last year, we found that an overwhelming majority of our study patients who experienced one or more severe SCLS attacks prior to starting IVIG . . . have become essentially episode-free after starting monthly IVIG, some for as long as 8 years. Anecdotally, we are also aware of patients who have responded to IVIG and then either missed doses or discontinued it for one reason or another, only to experience relapse of their disease. Until the specific etiology of SCLS can be identified and more targeted therapy developed, patients should receive monthly IVIG prophylaxis indefinitely. Case 1:16-cv-02064-RDM Document 17 Filed 06/27/17 Page 15 of 26 14 Id. 135-37. In May and December of 2015, he wrote the contractor and then the QIC, similarly opining in both that “IVIG is the best available treatment” for SCLS and “strongly recommend[ing] that [Plaintiff] continue monthly IVIG infusions . . . indefinitely.” Id. 341. During the same months, Dr. Michael Adams, who treated Plaintiff at Georgetown, also wrote the contractor and the QIC, concluding that since he began administering IVIG to Plaintiff prophylactically each month in 2009, Plaintiff “stopped having any and all episodes of SCLS.” Id. 343, 364. He added [t]o be sure, only a prospective, randomized trial would fully assess the benefits of IVIG for SCLS, and determine the optimal dosage and duration of such therapy. However, knowing what we already do, I doubt that such a study will ever be carried out: it would be unethical for someone like me to put [Plaintiff] into such a trial knowing that he may well die from receiving a placebo instead of his absolutely successful IVIG therapy. Id. Finally, in a letter dated March 17, 2016, Dr. Varun Sharma, an Assistant Professor of Internal Medicine at Georgetown who indicated that he had assumed Plaintiff’s care from Dr. Adams, offered that “if there is a disruption of [Plaintiff’s] IVIG infusions, there are strong odds that he will have a reoccurrence of” SCLS. Id. 128. In sum, he observed that “[a]lthough it is impossible to establish causation without a randomized controlled trial, there is compelling evidence in these notes that the onset of IVIG administration and the remission of [Plaintiff’s] SCLS are closely related.” Id. III. The Final Agency Decision ALJ James Han held a hearing on April 6, 2016, at which Plaintiff testified. Id. 478-91. On April 28, 2016, ALJ Han issued a decision denying coverage for the claim “on the ground that it is not a covered benefit.” Id. 25. In one instance, the ALJ erroneously referenced 42 U.S.C. Case 1:16-cv-02064-RDM Document 17 Filed 06/27/17 Page 16 of 26 15 § 1396r-8(k), a provision of the Medicaid statute, that the Medicare statute incorporates into the definition of “covered Part D drug” for Medicare Part D, not Part B. See 42 U.S.C. § 1395w- 102(e)(1). This provision states that a medically-accepted indication for the use of a drug, i.e., an indication covered by Medicare, is “a use that is approved by the FDA or . . . supported by one or more of the statutorily approved drug compendia.” Id. 22; see 42 U.S.C. § 1396r-8(k)(3), (6). However, the ALJ also appropriately cited 42 U.S.C. § 1395x(t)(1), applicable to non-cancer drugs like the one here. He concluded that for drugs that are not used in an anti-cancer regimen, clinical evidence cannot form the basis for a conclusion that the drug’s use is a medically-accepted indication. Id. 22-23. The ALJ went on to observe that “[t]he evidence of medical necessity for the use of IVIG for the Beneficiary’s condition was compelling . . . .” Id. 25. Nevertheless, he concluded that he had no authority to disregard the coverage limitations here, invoking the LCD on point in this jurisdiction, LCD L32712, which provides coverage for IVIG in limited instances and does not reference SCLS. Id. (In fact, the LCD leaves coverage decisions to individual adjudication.) In sum, he found that Plaintiff did not meet the requirements under Medicare Part B for payment for the claim in question. Id. On June 7, 2016, Plaintiff timely appealed the ALJ’s decision to the Council. Id. 8-9. After the Council failed to issue a decision on the appeal within the 90-day adjudication period set forth by regulation, Plaintiff requested escalation of the appeal to federal district court. Id. 4; see 42 C.F.R. § 405.1100(c). This suit followed. See id. 2-3. ARGUMENT I. Standard of Review Summary judgment is appropriate if the record, viewed in the light most favorable to the nonmoving party, reveals that there is no genuine issue of material fact and that the moving party is entitled to judgment as a matter of law. Fed. R. Civ. P. 56(c); see Tao v. Freeh, 27 F.3d 635, Case 1:16-cv-02064-RDM Document 17 Filed 06/27/17 Page 17 of 26 16 638 (D.C. Cir. 1994). Plaintiff faces a heavy burden in his challenge to the Secretary’s final determination and has failed to meet it. This Court reviews the Secretary’s final decision regarding Medicare reimbursement under the APA. See Thomas Jefferson Univ. v. Shalala, 512 U.S. 504, 512 (1994). Pursuant to the APA, this Court may only set-aside HHS’s determination if it is “arbitrary, capricious, an abuse of discretion, otherwise not in accordance with the law,” or “unsupported by substantial evidence … reviewed on the record of an agency hearing provided by statute.” 5 U.S.C. § 706; Citizens to Preserve Overton Park, Inc. v. Volpe, 401 U.S. 402, 413-14 (1971); Marymount Hosp., Inc. v. Shalala, 19 F.3d 658, 661 (D.C. Cir. 1994). The arbitrary and capricious standard is “highly deferential” to agency decisionmaking and “presumes the validity of agency action.” Nat’l Mining Ass’n v. Mine Safety and Health Admin., 116 F.3d 520, 536 (D.C. Cir. 1997) (internal citation omitted). As part of this task, a court must determine whether “the agency . . . articulate[d] a satisfactory explanation for its action including a ‘rational connection between the facts found and the choice made.’” Motor Vehicles Mfrs. Ass’n, 463 U.S. at 43 (quoting Burlington Truck Lines, Inc. v. U.S., 371 U.S. 156, 168 (1962)). Moreover, the Secretary’s decision must be treated with substantial deference, particularly given the complex and technical nature of the Medicare program. Thomas Jefferson Univ., 512 U.S. at 512; see also Albert Einstein Med. Cntr. v. Sebelius, 566 F.3d 368, 373 (3d Cir. 2009). II. The Secretary’s Decision Was Lawful In the underlying final agency decision at issue here, the ALJ properly found that Plaintiff’s claim for Medicare coverage for IVIG treatment he received on December 16, 2014, for SCLS was not a covered Medicare benefit. In the D.C. Circuit, the arbitrary and capricious standard and the substantial evidence standard “require equivalent levels of scrutiny.” St. Luke's Hosp. v. Case 1:16-cv-02064-RDM Document 17 Filed 06/27/17 Page 18 of 26 17 Thompson, 224 F. Supp. 2d 1, 5 (D.D.C. 2002) (citing Mem’l Hosp./Adair County Health Ctr. v. Bowen, 829 F.2d 111, 117 (D.C. Cir. 1987). The Court will not “disturb the decision of an agency that has ‘examine[d] the relevant data and articulate[d] a satisfactory explanation for its action including a rational connection between the facts found and the choice made.’” MD Pharm., Inc. v. DEA, 133 F.3d 8, 16 (D.C. Cir. 1998) (alterations in original) (quoting Motor Vehicles Mfrs. Ass’n, 463 U.S. at 43). In this case, the Secretary made a reasonable determination that IVIG for SCLS does not fit within a benefit category. Substantial evidence of record supports his findings. The ALJ noted that he reviewed the articles and anecdotal reports of record. AR 21. He correctly observed that neither the FDA nor approved drug formularies list SCLS as an indication for IVIG therapy. Id. For non-cancer drugs like the one at issue here, 42 U.S.C. § 1395x(t)(1) includes only those drugs that are either included in one of the listed drug compendia or “as are approved by the pharmacy and drug therapeutics committee (or equivalent committee) of the medical staff of the hospital furnishing such drugs . . . .” While the ALJ appropriately referenced 42 U.S.C. § 1395x(t)(1), the ALJ erred in referencing 42 U.S.C. § 1396r-8(k)(3). That provision merely reflects that the term “covered outpatient drug” does not include a drug “used for a medical indication which is not a medically accepted indication.” 42 U.S.C. § 1396r-8(k)(3). The ALJ opined that “[f]or drugs not used in an anti-cancer regimen, no statute, regulation, or CMS policy allows a medically accepted indication to be established by reference to clinical evidence in medical literature.” AR 22; see 42 U.S.C. § 1395x(t)(2). This is true enough. But he then found that “for Medicare coverage, the non-anticancer drug must be prescribed for an FDA-approved use or the use must be supported [by] a listing in one of the specified drug compendia.” Id. 22-23. This error was harmless, however, as the ALJ went on to reach the correct result. See 5 Case 1:16-cv-02064-RDM Document 17 Filed 06/27/17 Page 19 of 26 18 U.S.C. § 706 (“due account shall be taken of the rule of prejudicial error”); cf. 42 C.F.R. § 426.476(b)(4) (“Harmless error is not a basis for [the Departmental Appeals Board to] revers[e] an ALJ decision.”); see Nat’l Ass’n of Home Builders v. Defenders of Wildlife, 551 U.S. 644, 659 (2007) (“in reviewing agency action, ‘due account shall be taken of the rule of prejudicial error’”) (quoting 5 U.S.C. § 706); Citizens to Preserve Overton Park, Inc. v. Volpe, 401 U.S. 402, 417 (1971) (“the absence of formal findings does not necessarily require that the case be remanded to the Secretary”). Under the principle called alternatively the “harmless error” rule and the “prejudicial error” rule, agencies must correct their mistakes only if their decision has caused injury. As ALJ Han concluded, Plaintiff “did not establish that the IVIG was used for a medically accepted indication . . . .” AR 24. It is undisputed that IVIG for SCLS is not FDA-approved. But IVIG for treatment of SCLS is also not referenced in any approved drug compendia. And Plaintiff failed to submit any evidence to show that IVIG has been approved by the pharmacy and drug therapeutics committee or its equivalent at Georgetown, where his December 16, 2014, treatment was administered. In addition, as the ALJ observed, the letters and articles submitted on behalf of Plaintiff do not provide support for coverage here. Id. Neither the letters of record submitted by two treating physicians at Georgetown, nor the letters from an NIH physician show that a Georgetown drug therapeutics committee or anything similar approved the December 16, 2014, IVIG treatment; these are merely the recommendations of single clinicians. Similarly, the journal articles of record show largely anecdotal evidence of IVIG’s effectiveness in treating SCLS and virtually all of them emphasized that additional studies are necessary. The other ALJ decisions Plaintiff furnished also do not support reversal. Medicare Appeals Council decisions are not precedential; much less ALJ decisions. See 42 C.F.R. Case 1:16-cv-02064-RDM Document 17 Filed 06/27/17 Page 20 of 26 19 §§ 405.1130 & 405.1048; compare 42 C.F.R. 401.109 (2017). And the D.C. Circuit has recognized that where the Secretary previously let stand the decisions of a lower-level decision maker, it is not arbitrary to reverse one of those decisions because otherwise, the lower component of the agency would bind the decision making of the highest level. See Community Care Found. v. Thompson, 318 F.3d 219, 226-27 (D.C. Cir. 2003). The Court must only reverse an agency decision when the record is “so compelling that no reasonable factfinder could fail to find” to the contrary. I.N.S. v. Elias-Zacarias, 502 U.S. 478, 484 (1992). Where, as here, the ALJ’s citation to the incorrect statutory standard “did not affect the outcome” and “did not prejudice the [plaintiff], it would be senseless to vacate and remand for reconsideration.” See PDK Laboratories Inc. v. DEA, 362 F.3d 786, 799 (D.C. Cir. 2004); First American Discount v. CFTC, 222 F.3d 1008, 1015 (D.C. Cir. 2000). Given the fact that Plaintiff has not provided evidence sufficient to show that the use of IVIG for SCLS is “medically accepted,” any error by the ALJ is harmless. The Court should decline to overturn the Secretary’s final decision in this case. III. The Prospective Relief Plaintiff Seeks is Unavailable in this Section 405(g) Case The broad, speculative relief Plaintiff requests for future claims for services not yet rendered, nor before the Court, is not available to him. At most, if the Court were to find in Plaintiff’s favor, it could award Medicare coverage only for the December 16, 2014, IVIG claim at issue in this lawsuit, nothing more. And since that claim was covered and paid by Plaintiff’s primary insurer, Blue Cross Blue Shield, no monetary payment on the claim is warranted in any event. See AR 292, 485-86. Nonetheless, Plaintiff seeks declaratory and prospective injunctive relief, including an agency declaration that off-label use of IVIG for SCLS is reasonable and necessary and an Case 1:16-cv-02064-RDM Document 17 Filed 06/27/17 Page 21 of 26 20 injunction preventing the Secretary from denying Plaintiff and other beneficiaries with SCLS coverage for IVIG. Id. ¶ 51. The Medicare statute precludes this relief. This is an action for judicial review by a Medicare beneficiary under 42 U.S.C. § 405(g), incorporated by reference in the Medicare statute at 42 U.S.C. § 1395ff(b)(1)(A). Compl. ¶ ¶ 1,10; see 42 U.S.C. § 405(g) (“Any individual, after any final decision of the Commissioner of Social Security made after a hearing to which he was a party, irrespective of the amount in controversy, may obtain a review of such decision by a civil action . . . .”). Under section 405(h), section “405, to the exclusion of 28 U.S.C. § 1331, is the sole avenue for judicial review for all ‘[claims] arising under’ the Medicare Act.” Heckler v. Ringer, 466 U.S. 602, 615 (1984). In Ringer, also a Medicare coverage case under section 405(g), the Supreme Court held that the plaintiff was not entitled to an advance determination as to whether Medicare would provide coverage for a specific medical procedure. Id. at 621-22. The Court concluded that courts are not permitted to provide advisory opinions concerning the Medicare statute before the Secretary has the opportunity to issue an opinion, underscoring that “we would be inviting [plaintiffs] to bypass the exhaustion requirements of the Medicare Act by simply bringing declaratory judgment actions in federal court.” Id. at 621. In Illinois Council, the Supreme Court held that 42 U.S.C. § 405(h) precludes the kind of prospective relief Plaintiff requests here because it demands the “channeling” of virtually all legal attacks through the agency, [thereby] assur[ing] the agency greater opportunity to apply, interpret, or revise policies, regulations, or statutes without possibly premature interference by different individual courts applying “ripeness” and “exhaustion” exceptions case by case. But this assurance comes at a price, namely, occasional individual, delay- related hardship. In the context of a massive, complex health and safety program such as Medicare, embodied in hundreds of pages of statutes and thousands of pages of often interrelated regulations, any of which may become the subject of a legal challenge in any of several different courts, paying this price may seem justified. Case 1:16-cv-02064-RDM Document 17 Filed 06/27/17 Page 22 of 26 21 Illinois Council, 529 U.S. at 13; see also Ringer, 466 U.S. at 621-22. Nothing about this case is distinguishable. Yet this is precisely what Plaintiff demands here. In support of his prayer for relief, Plaintiff cites a non-Medicare decision that is inapplicable here. See Pl.’s MSJ at 20; FiberLight, L.L.C. v. Nat’l R.R. Passenger Corp., 81 F. Supp. 3d 93, 106 (D.D.C. 2015). Plaintiff urges that “[d]eclaratory and injunctive relief are appropriate where, as here the Secretary has taken action that will inevitably result in further litigation.” Pl.’s MSJ at 10; see also FiberLight, 81 F. Supp. 3d at 106. But FiberLight was not a Medicare case – it was an unsuccessful attempt to obtain a declaratory judgment to dispute the terms of a contract to which the plaintiff was not a party. FiberLight, 81 F. Supp. 3d at 97. By contrast, as Plaintiff observes, this case arises under the Medicare statute, 42 U.S.C. § 1395 et seq., Compl. ¶¶ 9, 10, which, except for the LCD and NCD provisions, see supra at 8-9, does not allow claimants to use declaratory judgments to short-cut administrative review of future claims. Here, administrative exhaustion is a prerequisite to judicial action. Plaintiff also argues that Lujan v. Defenders of Wildlife, 504 U.S. 555 (1991), authorizes the injunctive relief he seeks. Pl.’s MSJ 20, 21. But Lujan discusses the threshold requirements for Article III standing – it says nothing at all about the Medicare statute’s channeling requirements for judicial review. Lujan, 504 U.S. 561-62.; see also Illinois Council, 529 U.S at 13, 24 (“At a minimum, . . . the matter must be presented to the agency prior to review in a federal court.”).7 7 Similarly, none of the other cases Plaintiff cites support his claim for declaratory and injunctive relief for future claims. In both Los Angeles Haven Hospice, Inc. v. Sebelius, 638 F.3d 644, (9th Cir. 2001) and Metro Hospital, Inc. v. H.H.S., 702 F.Supp.2d 808 (W.D. Mich. 2010), a provider Case 1:16-cv-02064-RDM Document 17 Filed 06/27/17 Page 23 of 26 22 Plaintiff could instead avail himself of two separate processes to change agency policy in this regard going forward, but as yet has chosen not to. The applicable contractor in Plaintiff’s jurisdiction had an LCD on point in place at the time of the claim at issue. http://localcoverage.cms.gov/mcd_archive/viewlcd.asp?lcd_id=32712&lcd_version=43&show =all. LCD L32712 (and now LCD L35093) provided that Medicare would cover IVIG for certain enumerated illnesses. SCLS was not one of the listed conditions, leaving coverage determinations in this context to case-by-case adjudication. Id. Plaintiff was free to challenge the exclusion of SCLS in LCD L32712, and may challenge the same aspect of LCD L35093 now. See 42 C.F.R. § 426.400. In addition, Plaintiff is also at liberty to request that the agency issue an NCD providing for coverage for IVIG for the treatment of SCLS nationwide. See 42 U.S.C. § 1395ff(f)(4)(A); see also 78 Fed. Reg. 48,164, 48,167. Inexplicably, Plaintiff has failed to avail himself of either avenue to address his concerns, both of which could provide the prospective coverage declaration from the agency he seeks. But there is no authority for the sweeping, hypothetical relief Plaintiff seeks here and his arguments to the contrary are meritless. IV. In the Event That the Court Finds in Plaintiff’s Favor, the Court Should Remand the Matter for the Agency to Conduct Additional Evidence Development Despite all this, should the Court conclude that agency’s underlying final decision must be reversed, the Court should remand the matter to the agency for additional evidence development. See 42 U.S.C. § 405(g); see also NTEU v. Fed. Labor Relations Auth., 30 F.3d who had received a final agency decision brought a facial challenge to the validity of a regulation Id. at 654; Metro Hosp., 702 F.Supp.2d at 825. In each case, the court ordered injunctive relief, id. at 654-55; Metro Hosp., 702 F.Supp.2d at 826, concluding that the Secretary had refused to comply with his statutory mandate. Grey Panthers Project v. Thompson, 273 F.Supp.2d 32, 34- 37 (D.D.C. 2002), was not an individual claim for benefits as in this case, but an action to require the agency to comply with procedural rules required by statute. Here, Plaintiff does not allege that any agency rule violates Congressional intent and therefore must be enjoined on an ongoing basis. Case 1:16-cv-02064-RDM Document 17 Filed 06/27/17 Page 24 of 26 23 1510, 1514 (D.C. Cir. 1994) (“[a]n administrative interpretation may be unsustainable on the basis of what the agency has said, yet perfectly valid once it reveals its reasoning”). “Where the ALJ fails in his duty to fully inquire into the issues necessary for adequate development of the record, and such failure is prejudicial to the claimant, the case should be remanded.” Kearney v. Astrue, 730 F.Supp.2d 482, 484 (E.D. N.C. 2010) (quoting Marsh v. Harris, 632 F.2d 296, 300 (4th Cir. 1980)); Cutler v. Weinberger, 516 F.2d 1282, 1286 (2d Cir. 1975); Hess v. Sec’y of Health, Educ. and Welfare, 497 F.2d 837, 840-41 (3d Cir. 1974). “[E]ven though the record as it is presented to the court may contain substantial evidence to support the Secretary’s decision, the court may still exercise its power to remand for the taking of additional evidence” and courts “have found good cause to remand where the administrative law judge fails diligently to explore all relevant facts . . . .” Walker v. Harris, 642 F.2d 712, 714 (4th Cir. 1981). Thus, should the Court conclude that it was not harmless error for the ALJ to represent that, in order to be covered by Medicare, the evidence must show that the use of IVIG for SCLS is either FDA- or compendium-approved, see AR 22-23, an appropriate remedy is a remand for the agency to reconsider the evidence. That reconsideration should include any relevant new evidence, including the fact that LCD L32712 is no longer extant. CONCLUSION For the foregoing reasons, the Secretary respectfully requests that the Court grant the Secretary’s Cross-Motion for Summary Judgment, deny Plaintiff’s Motion for Summary Judgment, and affirm the final agency decision. In the alternative, Defendant respectfully requests that the Court remand the matter to the agency for the reconsideration of the evidence on the efficacy of Intravenous Immune Globulin in the treatment of Systemic Capillary Leak Syndrome. Case 1:16-cv-02064-RDM Document 17 Filed 06/27/17 Page 25 of 26 24 DATE: June 27, 2017 Respectfully submitted, CHANNING D. PHILLIPS DC Bar No. 415793 United States Attorney DANIEL F. VAN HORN DC Bar No. 924092 Chief, Civil Division /s/ JOSHUA M. KOLSKY DC Bar No. 993430 Assistant United States Attorney 555 Fourth St., N.W. Washington, D.C. 20530 Phone: (202) 252-2541 Email: joshua.kolsky@usdoj.gov LINDA L. KEYSER United States Department of Health and Human Services Office of the General Counsel Centers for Medicare & Medicaid Services Division 330 Independence Ave., S.W. Washington, D.C. 20201 (202) 205-8779 linda.keyser@hhs.gov OF COUNSEL: JEFFREY S. DAVIS Acting General Counsel JANICE L. HOFFMAN Associate General Counsel SUSAN MAXSON LYONS Deputy Associate General Counsel for Litigation United States Department of Health and Human Services Case 1:16-cv-02064-RDM Document 17 Filed 06/27/17 Page 26 of 26 UNITED STATES DISTRICT COURT FOR THE DISTRICT OF COLUMBIA __________________________________________ ) ARTURO C. PORZECANSKI, ) ) Plaintiff, ) ) v. ) ) Case No. 1:16-CV-02064 (RDM) ) THOMAS E. PRICE, M.D., ) Secretary, United States Department ) of Health and Human Services, ) ) Defendant. ) _________________________________________ ) ORDER Upon consideration of Defendant’s Motion for Summary Judgment, any opposition thereto, and the entire record herein, the Court hereby ORDERS that: 1. Defendant’s Motion for Summary Judgment is GRANTED; 2. Plaintiff’s Complaint is DISMISSED WITH PREJUDICE; 3. Judgment is ENTERED for the Defendant. SO ORDERED. Date: ____________ __________________________ United States District Judge Case 1:16-cv-02064-RDM Document 17-1 Filed 06/27/17 Page 1 of 1