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Judith v. the Hon. Michael O. Leavitt

March 7, 2011

JUDITH M. LAYZER AND RAY J. FISCHER, PLAINTIFFS,
v.
THE HON. MICHAEL O. LEAVITT, SECRETARY OF THE UNITED STATES DEPARTMENT OF HEALTH & HUMAN SERVICES, DEFENDANT.



The opinion of the court was delivered by: Hon. Harold Baer, Jr., District Judge:

OPINION & ORDER

Judith M. Layzer*fn1 and Ray J. Fischer ("Plaintiffs") bring this action pursuant to § 205(g) of the Social Security Act (the "Act"), 42 U.S.C. § 405(g), for review of a final decision of the Secretary of Health and Human Services ("Secretary" or "Defendant") that denied them reimbursement for certain prescription drugs. The dispute centers on the question of whether the prescription drugs at issue are covered by Medicare Part D, a voluntary prescription drug benefits program. The Defendant moves for judgment on the pleadings affirming the denial of coverage and dismissing the complaint. Plaintiffs bring a cross-motion for judgment on the pleadings. For the reasons that follow, Secretary's motion is denied and the Plaintiffs' motion is granted.

BACKGROUND

1.The statutory framework

Title XVIII of the Social Security Act (the "Act"), 42 U.S.C. § 1395 et seq., establishes the Medicare program, which provides health insurance to Americans aged 65 and over, as well as Americans with certain qualifying disabilities. The Secretary administers the Medicare program, one component of which is Part D. See 42 U.S.C. § 1395w-101 et seq. In 2003 Congress passed the Medicare Prescription Drug, Improvement, and Modernization Act ("MMA"), under which a plan sponsor is required to provide coverage of qualified prescription drugs. 42 U.S.C. §§ 1395w-102-§ 1395w-104. Section 1395w-102(e) of the MMA defines what may be considered a "covered Part D drug" (the "Definition).

The Definition refers to the term "medically accepted indication" as defined at 42 U.S.C. § 1396r-8(k)(6): "any use for a covered outpatient drug which is approved under the Federal Food, Drug, and Cosmetic Act [21 U.S.C.A § 301 et seq. (the "FDCA")] or the use of which is supported by one or more citations included or approved for inclusion in any of [three compendia]."*fn2 The Secretary promulgated a regulation implementing the Definition, and it requires that to be a "covered Part D drug", a drug must be prescribed for a "medically accepted indication." See 42 C.F.R. § 423.100.*fn3 In this case, coverage of the Plaintiffs' drugs was denied because the uses for which the drugs were prescribed were not approved or listed in any of these compendia. Because FDCA approval is not an issue in this case, the "medically accepted indication" requirement set forth in 42 C.F.R § 423.100 will simply be referred to as the "Compendia Requirement."

2.Factual and procedural history

Mrs. Layzer is a Medicare beneficiary with granulose cell tumor, a rare form of ovarian cancer. AR 244. Several oncologists urged her to take the drug Cetrotide to control her cancer, including Robert Bast, M.D., her oncologist at the University of Texas M.D. Anderson Cancer Center, who prescribed the drug for Mrs. Layzer for several years. See Compl. ¶ 21, 23; AR 313. According to Dr. Bast, Cetrotide retards the growth of Mrs. Layzer's cancer and prevents her tumors from hemorrhaging. AR 309, 313. He has warned that the medicine "is essential for my patient. There is no substitute at this time. Furthermore, if the medicine is stopped, even tempor[ari]ly, it is likely that the remaining tumors will grow quickly and she will suffer grave consequences." AR 309. Other physicians have echoed the conclusion that Cetrotide is critical to Mrs. Layzer's treatment. See AR 159, 264, 270-71. Peer-reviewed medical literature has also recognized the unique and effective capacity of Cetrotide to treat ovarian cancer. See AR 317, 325, 340, 363. Mrs. Layzer's plan sponsor denied full coverage, stating that Cetrotide "is a fertility agent," AR 491, and "not covered under Medicare Part D." AR 304; Compl. ¶ 30.

Mr. Fisher is a Medicare beneficiary diagnosed with myotonic muscular dystrophy type 2 ("DM2"), a rare and degenerative form of muscular dystrophy that results in muscle weakness and cardiac abnormalities, among other things. AR 700. The drug Increlex proved significantly helpful in slowing or stopping the deterioration of Mr. Fisher's muscle; it also helped him regain strength and range of motion, and allowed him to function without a hand-arm tremor. AR 693, 756. Mr. Fisher's physician, Richard Moxley, M.D., Director of Research at the Rochester Medical Center's Neuromuscular Disease Center, noted that Increlex has "helped to optimize [Mr. Fisher's] quality of life and maintain his present level of independence." AR 650. Mr. Fisher's plan sponsor denied coverage, explaining that Increlex "is not FDA approved for the diagnosis provided." AR 622.

On appeal, the respective denials of coverage were affirmed by a Medicare Part D Independent Review Entity, which concluded that the plan sponsors were not required to provide coverage because the drugs were not being used for a medically accepted indication. AR 308, 666. It explained that "a medically accepted indication means a use that is approved by the FDA [sic] or a use that is supported by one or more citations in . . . drug compendia." AR 308.

The Plaintiffs' respective denials were again affirmed by Administrate Law Judges. Judge Smith found that "the medical necessity of Cetrotide to treat [Mrs. Layzer's] ovarian cancer . . . has been firmly established . . . No other drug on the Plan's formulary is as effective as Cetrotide for treating [her]." AR 244. He also noted that "[u]nfortunately, the lack of the 'required' compendium listing is likely due to the rarity of [Mrs. Layzer's] cancer." AR 249. Judge Sterner denied Mr. Fisher's appeal, noting that while Mr. Fisher's situation "is a compelling one," Administrative Law Judges do not possess the power to promulgate the law, and he was bound by 42 C.F.R. § 423.100. AR 786. 42 C.F.R. § 423.100.

Plaintiffs appealed to the Medicare Appeals Council, which affirmed the denials of coverage, noting that it too was bound to follow 42 C.F.R. § 423.100 and lacked authority to consider whether that regulation was inconsistent with the statute. AR 8, 625. Plaintiffs seek review in this Court and argue that the Compendia Requirement should be set aside as inconsistent with the Act.

DISCUSSION

1.Standard of Review

Plaintiffs do not argue that the decisions below were in error; rather, the crux of their argument is that the regulation imposing the Compendia Requirement, 42 C.F.R. ยง 423.100, is inconsistent with the language of the Definition. The parties agree that the Chevron test governs whether or ...


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