Goldman v. Azar

Randall Goldman, Plaintiff, v. Alex M. Azar II, in his capacity as Secretary of the United States Department of Health and Human Services, Defendant.

Civil Action No. 4:20-cv-463

United States District Court, S.D. Texas, Houston Division

June 25, 2021

MEMORANDUM AND RECOMMENDATION

Christina A. Bryan United States Magistrate Judge

This matter is before the Court on the Secretary's Motion to Dismiss for Lack of Subject Matter Jurisdiction. ECF No. 31. Having considered the parties' arguments and the law, the Court RECOMMENDS the Secretary's Motion be GRANTED.^[1] Due to the Court's lack of subject matter jurisdiction to hear this case, the Court further RECOMMENDS Goldman's Motion for Summary Judgment (ECF No. 35) and the Secretary's Motion for Summary Judgment (ECF No. 44) be DENIED as MOOT. The Court DENIES the Secretary's Motion to Strike (ECF No. 38) as MOOT.

I. BACKGROUND

Goldman a Medicare beneficiary, suffers from a rare and particularly deadly form of brain cancer called glioblastoma multiforme (“GBM”). ECF No. 27 ⁋ 13, 20. Tumor treatment field therapy (“TTFT”) has been shown to be effective in treating GBM. Id. ⁋⁋ 14-16 Novocure, Inc. (“Novocure”) supplies the equipment that delivers TTFT to GBM patients. Novocure rents the equipment to patients on a monthly basis. Id. ⁋ 17. Medicare beneficiaries like Goldman must submit claims to Medicare to obtain approval for payment of TTFT as a Medicare benefit. Id.

Medicare coverage for Novocure's TTFT device is provided for under Medicare Part B, which precludes payment for items and services that are not “reasonable and necessary.” See 42 U.S.C. §§ 1395k(a), 1395x(s)(6), 1395y(a)(1). The Secretary of Health and Human Services has delegated to the Centers for Medicare and Medicaid Services (“CMS”) the authority to determine whether a particular service or treatment is covered by Medicare. CMS uses administrative contractors to make coverage determinations and to develop and issue Local Coverage Determinations (“LCD”) for their geographic areas. 42 U.S.C. § 1395kk-1. Thus, LCDs are written policy decisions regarding whether particular items and services are covered by Medicare and are entitled to substantial deference. 42 C.F.R. § 405.1062(a); Thumann v. Cochran, Case No. 1:20-cv-125, 2021 WL 1222142, at *1 (S.D. Ohio Mar. 31, 2021).

Goldman was diagnosed with GBM and began using Novocure's TTFT equipment to treat his cancer. ECF No. 31 at 1. At the time Goldman began TTFT, the LCD in effect (the “2014 LCD”) stated that TTFT “will be denied as not reasonable and necessary.” ECF No. 31 at 7. Goldman submitted a claim for Medicare coverage for TTFT service dates between July and September 2017 that was initially denied. Goldman appealed the denial^[2] and ALJ Tews issued a final decision approving Goldman's TTFT claims despite the 2014 LCD, stating he “declined to follow the applicable LCD in light of FDA approval, acceptance by major insurance carriers, peer-reviewed-medical literature, general acceptance by the medical community and the specific evidence of medical necessity in this case.” ECF No. 9-1 at 20. Goldman then submitted multiple additional claims for service dates between October 2017 and February 2019 and these claims were initially denied.^[3] Goldman appealed these denials but ALJs McCormick and Patterson issued final decisions denying the claims for benefits as not reasonable and necessary. The 2014 LCD remained in effect at the time of ALJ McCormick's and ALJ Patterson's final decisions. However, in 2019, the LCD was revised (the “2019 LCD”) to allow some TTFT to be covered as a reasonable and necessary expense. Although ALJs considering any future appeals by Goldman will not be bound by the 2019 LCD, they must give it “substantial deference.” 42 C.F.R. § 405.1062(a).

Although ALJ McCormick and ALJ Patterson issued final decisions denying Goldman's claims for service dates between October 2017 and February 2019, both ALJs found Novocure, not Goldman, would be financially responsible for payment of the TTFT.^[4] ECF No. 31 at 7-8. As a result, Goldman has not paid, and cannot be asked to pay, for any of the TTFT previously denied as a covered benefit. Id.

After exhausting his administrative remedies, Goldman brought this action under 42 U.S.C. § 405(g), and now appeals the ALJ decisions denying payment of his TTFT claims. ECF No. 27 ⁋⁋ 5, 25-26.

II. LEGAL STANDARDS

The Secretary has moved to dismiss Goldman's claims for lack of subject matter jurisdiction under Federal Rule of Civil Procedure 12(h)(3).^[5] Goldman bears the burden of establishing subject matter jurisdiction. See Exelon Wind 1, LLC v. Nelson, 766 F.3d 380, 388 (5th Cir. 2014). In evaluating subject matter jurisdiction, the Court may consider: “(1) the complaint alone; (2) the complaint supplemented by the undisputed facts evidenced in the record; or (3) the complaint supplemented by undisputed facts plus the court's resolution of disputed facts.” Lane v. Halliburton, 529 F.3d 548, 556 (5th Cir. 2008); see also Schaeffler v. U.S., 889 F.3d 238, 242 (5th Cir. 2018). Here, the Court bases its decision on Goldman's First Amended Complaint supplemented by the undisputed facts in the record. If Goldman fails to meet his burden to establish subject matter jurisdiction, the case must be dismissed. See Nelson, 766 F.3d at 388.

III. ANALYSIS

“Federal courts have jurisdiction only over ‘cases' or ‘controversies.'” Christopher v. Lawson, 358 F.Supp.3d 600, 606 (S.D. Tex. 2019) (quoting Williams v. Parker, 843 F.3d 617, 620 (5th Cir. 2016)); Spokeo, Inc. v. Robbins, 136 S.Ct. 1540, 1547 (2016) (Article III, § 2, of the United States Constitution limits federal court jurisdiction to live “cases” or “controversies.”). “Standing to sue is rooted in the traditional understanding of a case or controversy[] . . . [and] limits the category of litigants empowered to maintain a lawsuit in federal court to seek redress for a legal wrong.” Id. (citations omitted). The law of Article III standing “prevent[s] the judicial process from being used to usurp the powers of the political branches” and limits the exercise of federal court jurisdiction “to a properly judicial role.” Spokeo, 136 S.Ct. at 1547. To establish Article III standing required to invoke federal court jurisdiction, a plaintiff must establish that she (1) suffered an injury in fact, (2) that the injury is fairly traceable to the alleged conduct of the defendant, and (3) that the injury is likely to be redressed by a favorable decision. Lujan v. Defenders of Wildlife, 504 U.S. 555, 560-61 (1992). The plaintiff bears the burden of establishing all three elements of standing. Spokeo, 136 S.Ct. at 1547.

In this case, the Secretary argues Goldman has not suffered an injury in fact. ECF No. 31 at 10-12. To establish injury in fact, Goldman must show that he suffered “an invasion of a legally protected interest” that is “concrete and particularized” and “actual or imminent, not conjectural or hypothetical.” Spokeo, 136 S.Ct. at 1548 (quotations omitted). For an injury to be “particularized” the plaintiff must have suffered an actual or threatened injury which affects him in a personal and individual way. Id. For an injury to be “concrete” it must actually exist and cannot be speculative or hypothetical. Id.

To begin with, at least eight district courts around the country^[6] have considered whether Medicare beneficiaries have standing to challenge TTFT coverage denials in analogous circumstances-i.e., cases involving the denial of payment for TTFT to treat GBM (based on the 2014 LCD which stated that TTFT is not a reasonable and necessary expense), and placement of the financial burden for the cost of the denied claim on someone other than the Medicare beneficiary. All but one of the eight district courts to have considered the issue concluded that under those circumstances, the Medicare beneficiary lacked Article III standing to sue for denial of the payment for TTFT.^[7] The beneficiaries in those cases raised arguments substantially similar to those raised here by Goldman. Although these cases from other jurisdictions are not binding on this Court, the Court agrees with the reasoning of seven of the eight courts to have considered the issue and finds that Goldman-a Medicare beneficiary who is not liable for payment of the cost of any TTFT for which payment by Medicare was denied-lacks Article III standing. Therefore, this case must be dismissed for lack of subject matter jurisdiction.

A. Goldman has not suffered a concrete injury.

Goldman argues he has standing to sue for the denial of the claim because he was denied Medicare benefits which are a statutory right, and the denial of a statutory right is a concrete injury. The Supreme Court made clear in Spokeo, 136 S.Ct. at 1549, and more recently in Thole v. U.S. Bank N.A., 140 S.Ct. 1615, 1619 (2020), that a violation of a statutory right, without any accompanying actual or imminent injury, does not constitute an injury in fact sufficient to confer Article III standing. The Supreme Court in Thole “rejected the argument that ‘a plaintiff automatically satisfies the injury-in-fact requirement whenever a statute grants a person a statutory right and purports to authorize that person to sue to vindicate that right.'” Thole, 140 S.Ct at 1620 (quoting Spokeo, 136 S.Ct. at 1549). As noted in Spokeo, “Congress cannot erase Article III's standing requirements by statutorily granting the right to sue to a plaintiff who would not otherwise have standing.” Spokeo, 136 S.Ct. at 1547-48. “Article III standing requires a concrete injury even in the context of a statutory violation.” Id. “Put differently, the deprivation of a right created by statute must be accompanied by ‘some concrete interest that is...