Thumann v. Cochran

Judge Timothy S. Black

ORDER RESOLVING THE PARTIES' PENDING MOTIONS (Docs. 9, 11)

This case is before the Court on: (1) Plaintiff's Motion for Summary Judgment (Doc. 9); and (2) Defendant's Combined Motion to Dismiss and Cross-Motion for Summary Judgment (Doc. 11). Also before the Court are the parties' responsive memoranda. (See generally Docs. 14, 15, 16, 17, 18, 19, 20, 21).

Plaintiff John Thumann ("Plaintiff" or "Mr. Thumann"), a natural person residing in the State of Ohio, has brought this action against Defendant Norris Cochran ("Defendant" or the "Secretary"), the Secretary of Health and Human Services, to challenge the denial of certain claims for Medicare coverage, pursuant to 42 U.S.C. § 405(g) and 5 U.S.C. §§ 706(1). (Doc. 1 at ¶¶ 7-8, 26-37).

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Plaintiff suffers from glioblastoma multiforme ("GBM"), a particularly lethal form of brain cancer. (Doc. 6-2 at 11, 53). Since 2018, Plaintiff has used tumor treatment field therapy ("TTFT") to manage his condition. (Id.) TTFT is an FDA-approved treatment for GBM, which uses alternating electric fields to interfere with the replication of tumor cells. (Id. at 17; see also Doc. 1 at ¶ 14). While TTFT does not cure GBM, it greatly increases patients' survival rates. (Doc. 1 at ¶¶ 15-17; Doc. 5 at ¶¶ 15-17).

The durable medical equipment ("DME") that provides TTFT is called the "Optune system." (Doc. 1 at ¶ 17; Doc. 5 at ¶ 17). The sole supplier of the Optune system is a company called Novocure, Inc. ("Novocure"). (Doc. 1 at ¶ 17; Doc. 5 at ¶ 17). Novocure rents the Optune system to GBM patients on a monthly basis. (Doc. 1 at ¶ 17; Doc. 5 at ¶ 17). As such, any Medicare beneficiary who uses the Optune system must submit monthly claims for its coverage. (Doc. 1 at ¶ 17; Doc. 5 at ¶ 17).

A. The Medicare claims process

Medicare is a federally funded health insurance program that serves elderly and disabled persons. See 42 U.S.C. §§ 1395, et seq. Part B of the Medicare statute allows qualified beneficiaries to submit claims for the use of DME—such as the Optune system. Id. §§ 1395k(a), 1395x(s)(6). DME is covered by Part B of the Medicare statute if it is "reasonable and necessary for the diagnosis or treatment of illness or injury . . . ." Id. § 1395y(a)(1)(A). DME is reasonable and necessary if it is safe, effective, and not experimental. Medicare Program Integrity Manual § 13.5.4 (Feb. 12, 2019).²

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To obtain Medicare coverage, a beneficiary must first submit a claim to a "MAC"—a contractor hired to administer Medicare's day-to-day functions. 42 U.S.C. § 1395kk-1; 42 C.F.R. § 405.920. The MAC reviews the beneficiary's claim and determines whether the DME sought is reasonable and necessary. 42 U.S.C. § 1395kk-1; 42 C.F.R. § 405.920. In making its decision, the MAC is bound by any local coverage determinations ("LCDs") applicable to the DME. 42 U.S.C. § 1395ff(c)(3)(B). LCDs are written policy decisions issued by MACs regarding whether particular items/services are covered by Medicare. Id. § 1395ff(f)(2)(B).

If the MAC determines that coverage is appropriate, the beneficiary is generally entitled to payment through Medicare. See 42 C.F.R. § 405.928. If, however, the MAC determines that coverage is not appropriate, the beneficiary may seek review of the MAC's decision. See generally 42 U.S.C. § 1395ff. A five-part appeals process governs the review of Medicare denials. See generally id.; see also Porzecanski v. Azar, 943 F.3d 472, 476 (D.C. Cir. 2019) (summarizing the five-part Medicare appeals process); Maxmed Healthcare, Inc. v. Price, 860 F.3d 335, 338 (5th Cir. 2017) (summarizing the same).

First, the beneficiary must ask the MAC for a "redetermination" of its initial decision. 42 U.S.C. § 1395ff(a)(3); 42 C.F.R. § 405.940. In making the redetermination, the MAC is, again, bound by any LCDs applicable to the DME. 42 U.S.C. § 1395ff(c)(3)(B)(ii)(II); 42 C.F.R. § 405.968(b). Second, if the MAC denies coverage on redetermination, the beneficiary may ask a qualified independent contractor (a "QIC") for a "reconsideration" of the MAC's denial of coverage. 42 U.S.C. § 1395ff(c)(1)-(2);

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42 C.F.R. § 405.960. Unlike the MAC, the QIC is not bound by any applicable LCDs during reconsideration. 42 U.S.C. § 1395ff(c)(3)(B)(ii)(II); 42 C.F.R. § 405.1062(a).

Third, if the QIC denies coverage on reconsideration, the beneficiary may appeal the QIC's reconsideration to an Administrative Law Judge ("ALJ"). 42 U.S.C. § 1395ff(b)(1)(A); 42 C.F.R. § 405.1000. When reviewing the QIC's reconsideration, the ALJ is not bound by any applicable LCDs. 42 U.S.C. § 1395ff(c)(3)(B)(ii)(II); 42 C.F.R. § 405.1062(a). But, that said, the ALJ must pay substantial deference to such LCDs. 42 C.F.R. § 405.968(b)(2); see also id. § 405.1062(a). If the ALJ departs from an applicable LCD, it must "explain the reasons why the policy was not followed." Id. § 405.1062(b); see also id. § 405.968(b)(3).

Fourth, if the ALJ denies coverage, the beneficiary may appeal the ALJ's decision to the Medicare Appellate Panel (the "Council"). 42 U.S.C. § 1395ff(b)(1)(A); 42 C.F.R. § 405.1100. And fifth, if the Council does not issue a decision in 90 days, the beneficiary may seek review in federal court. 42 C.F.R. § 405.1132. Again, during these last two steps of the review process, any applicable LCDs are entitled to substantial deference—but are not binding. See 42 U.S.C. § 1395ff(c)(3)(B)(ii)(II); 42 C.F.R. § 405.1062(a); see also U.S. ex rel. Lynch v. Univ. of Cincinnati Med. Ctr., LLC, No. 1:18-CV-587, 2020 WL 1322790, at *18 (S.D. Ohio Mar. 20, 2020).

B. Facts specific to Plaintiff

Between August 2018 and August 2019, Plaintiff submitted monthly claims for the Optune system's use. (Doc. 6-2 at 10, 25, 52; Doc. 9-1 at 6). However, each of Plaintiff's claims was initially denied by the assigned MAC. (Doc. 6-2 at 10, 25, 52;

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Doc. 9-1 at 6). This is because, at the time of the claims' submission, there was an unfavorable LCD in place. (See, e.g., Doc. 6-2 at 15-16). That LCD (the "Original LCD") did not provide any circumstances under which TTFT would be covered. (Id. at 17). Instead, it simply stated as follows: "Tumor treatment field therapy (E0766) will be denied as not reasonable and necessary." (Id. at 16).

Plaintiff challenged the initial denials through the redetermination and reconsideration processes, but neither the MAC nor the QIC awarded coverage—so, Plaintiff filed four ALJ appeals. (Doc. 6-2 at 10, 25, 52; Doc. 9-1 at 6). ALJ MacDougall considered whether Plaintiff's claims were covered from August-October 2019; ALJ Gates considered whether Plaintiff's claims were covered from November 2018-January 2019; ALJ Bartlett considered whether Plaintiff's claims were covered from February-May 2019; and ALJ Bruch considered whether Plaintiff's claims were covered from June-August 2019.³ (Doc. 6-2 at 10, 25, 52; Doc. 9-1 at 6).

Although the facts underlying the four appeals were the same, Plaintiff received two different results. ALJs Gates, Bartlett, and Bruch each decided to depart from the Original LCD and award coverage. (Doc. 6-2 at 10, 25; Doc. 9-1 at 6). ALJ MacDougall, however, reached the opposite conclusion. (Doc. 6-2 at 52). ALJ MacDougall concluded that, while Plaintiff's arguments in support of coverage were "outstanding," ALJ MacDougall could not depart from the Original LCD on the record

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presented. (Id. at 57-58). As such, ALJ MacDougall denied Plaintiff Medicare coverage from August-October 2018.⁴ (Id. at 58).

Importantly however, even though ALJ MacDougall technically denied Plaintiff Medicare coverage, ALJ MacDougall did not impose any treatment-related costs on Plaintiff. (Id.) Instead, ALJ MacDougall determined that Novocure was required to pay for Plaintiff's treatment during the period of noncoverage. (Id.) Thus, to be...