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Kort v. Burwell

United States District Court, District of Columbia

July 19, 2016

Cheryl Kort, et al., Plaintiffs,
Sylvia M. Burwell, Secretary of the U.S. Department of Health and Human Services, et al., Defendants.


          Amit P. Mehta United States District Judge


         Plaintiffs Cheryl Kort, Lorraine Kovnat, and George Hepburn all have exhibited symptoms of cognitive impairment. None, however, have a firm diagnosis for their respective illnesses. Diseases associated with cognitive impairment-such as Alzheimer’s Disease, frontotemporal dementia, and Parkinson’s Disease-are notoriously difficult to diagnose because they share common symptoms. Doctors attempt to diagnose such diseases by eliminating potential causes, a process known as “differential diagnosis.” Plaintiffs believe that a recently developed imaging procedure-a beta-amyloid positron emission tomography scan (“BA Scan”)-can assist their physicians in eliminating a potential cause of their symptoms and thereby identifying the precise condition from which each suffers.

         The Food and Drug Administration has approved the use of BA Scans for adults with cognitive impairment who are being evaluated for Alzheimer’s Disease. A negative BA Scan is inconsistent with a diagnosis of Alzheimer’s and thus potentially could be used to exclude Alzheimer’s as the cause of a patient’s cognitive impairment. Stated differently, while a BA Scan cannot be used to definitively diagnose a patient with Alzheimer’s, a negative scan potentially could rule it out as a cause.

         The Medicare program, however, does not cover the costs of BA Scans, except for limited use in certain clinical studies. That is because, in September 2012, the Centers for Medicare and Medicaid Services, or CMS, which administers the Medicare program, determined that the then-existing medical and scientific evidence did not support a finding that BA Scans are reasonable and necessary for the diagnosis of an illness. Key to CMS’ decision was its finding that the evidence did not show that BA Scans improved health outcomes of patients exhibiting cognitive impairment or informed the management of such patients’ diseases.

         Plaintiffs filed this suit against CMS, the Department of Health and Human Services, and the Department’s Secretary Sylvia M. Burwell, arguing that the factors Defendants considered in evaluating BA Scans and their ultimate denial of Medicare coverage for such scans violated the Administrative Procedure Act. Specifically, Plaintiffs claim that Defendants’ consideration of health outcomes and disease management in determining whether to cover BA Scans is contrary to the plain language of the Medicare Act and inconsistent with similarly-situated coverage determinations. Further, Plaintiffs argue that even if the “coverage standard” Defendants applied was proper, the denial of coverage for BA Scans cannot be reconciled with Defendants’ statements indicating that the procedure has diagnostic value. Defendants counter that the coverage standard they employed fell well within the broad authority granted to them by Congress and that their coverage decision was supported by then-existing scientific evidence (or the lack thereof). They also assert that their coverage decision is congruent with their past actions.

         Plaintiffs and Defendants have cross-moved for summary judgment. Their Motions are now before this court. Upon consideration of the parties’ filings and the Administrative Record, the court finds that Defendants’ denial of Medicare coverage to BA Scans did not violate the Administrative Procedure Act, except in one respect: the failure to adequately explain why Medicare covers a different test that relies on similar technology-known as FDG PET scans- but not BA Scans, for patients who have exhibited symptoms of cognitive decline but whose diagnosis remains uncertain. The court therefore grants in part and denies in part both Plaintiffs’ and Defendants’ Cross-Motions for Summary Judgment. Further, it remands the Decision Memo for further proceedings consistent with this Memorandum Opinion.


         A. Regulatory Framework

         Medicare is a federally funded health insurance program for the elderly and disabled. Title XVIII of the Social Security Act, 42 U.S.C. § 1395 et seq.-commonly known as the Medicare Act-tasks the Secretary of the Department of Health and Human Services (the “Secretary”) with administering Medicare. The Secretary does so through the Centers for Medicare and Medicaid Services (“CMS”). See 46 Fed. Reg. 56, 911, 56, 911-34 (Nov. 19, 1981) (establishing the Health Care Financing Administration, which was later renamed CMS). CMS, in turn, contracts with private entities to which healthcare providers and suppliers submit their claims for reimbursement. See 42 U.S.C. § 1395kk-1; id. § 1395u; 42 C.F.R. § 421.200.

         Medicare Part B is one of the program’s four segments. It provides insurance coverage for outpatient services, including “diagnostic services which are-(i) furnished to an individual as an outpatient by a hospital or by others under arrangements with them made by a hospital, and (ii) ordinarily furnished by such hospital (or by others under such arrangements) to its outpatients for the purpose of diagnostic study.” 42 U.S.C. § 1395x(s)(2)(C); see also 42 C.F.R. § 410.28 (“Medicare Part B pays for hospital or [other] diagnostic services furnished to outpatients, including drugs and biologicals required in the performance of the services[.]”). Part B does not guarantee coverage for all diagnostic services, however. Section 1395y(a)(1)(A) of the Medicare Act establishes that “no payment may be made under . . . part B . . . for any expenses incurred for items or services” that “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) (emphasis added). That provision lies at the center of this dispute.

         Among the ways that the Secretary, through CMS, informs Medicare contractors and providers of the items and services that she has deemed “reasonable and necessary for the diagnosis or treatment of illness and injury, ” id., are National Coverage Determinations (“NCDs”). An NCD is a decision “with respect to whether or not a particular item or service is covered nationally.” See 42 U.S.C. § 1395ff(f)(1)(B); see also 68 Fed. Reg. 55, 634, 55, 635 (Sept. 26, 2003) (“In general, an NCD is a national policy statement granting, limiting, or excluding Medicare coverage for a specific medical item or service.”); 42 C.F.R. § 405.1060(a)(1) (“An NCD is a determination by the Secretary of whether a particular item or service is covered nationally under Medicare.”). If an NCD concludes that a particular use of an item or service shall not be covered under Medicare, such decision is binding on all entities and persons that implement the Medicare program. See 42 C.F.R. § 405.1060(a)(4) (“An NCD is binding on fiscal intermediaries, carriers, . . . [administrative law judges], and the [Medicare Appeals Council], ” among others); see also 42 U.S.C. § 1395ff(c)(3)(B)(ii)(I) (“If the Secretary has made a[n NCD] . . . such determination shall be binding on the qualified independent contractor in making a decision with respect to a reconsideration [of an initial coverage determination].”). Plaintiffs here ask the court to overturn an NCD that barred Medicare reimbursement for all BA Scans, except for those provided to patients participating in certain clinical studies.

         B. Factual Background

         1. PET Scans

         BA Scans are within a family of imaging procedures known as Positron Emission Tomography (“PET”) scans. In scientific terms, a PET scan “is a minimally invasive diagnostic imaging procedure used to evaluate normal tissues as well as diseased tissues in conditions such as cancer, ischemic heart disease, and some neurologic disorders, ” in which a “radiopharmaceutical (or ‘tracer’) [that] emits positrons when it decays” is “injected” into a patient and “a positron camera (tomograph) [is used] to measure the decay of [the radiopharmaceutical] within human tissue.” See J.A. of Administrative Record, ECF Nos. 36 & 36-1 [hereinafter AR], at 4719. In terms understandable to the rest of us, a patient receiving the procedure has a substance-the “radiopharmaceutical” or “tracer”-injected into his or her body, which the PET scan allows a physician to view. What that substance does in the patient’s body-principally, the rate at which it decays-may assist a physician in identifying the medical condition from which the patient is suffering.

         PET scans first were developed in the 1970s, but Medicare did not cover any form of the procedure until 1995. See Defs.’ Cross-Mot. for Summ. J., ECF No. 13 [hereinafter Defs.’ Mot.], at 13.[1] In the two decades since, CMS has expanded Medicare coverage of PET scans to include a range of scans that employ several different radiopharmaceuticals, which are used to diagnose many different conditions. See Id. at 13-14.[2] But Medicare does not provide blanket-coverage for all PET scans. Rather, the NCD Manual, which “lists all Medicare-covered uses of PET scans, ” makes clear that “a particular use of PET scans is not covered unless th[e] manual specifically provides that such use is covered.” NCD Manual § 220.6 (emphasis added).

         2. Alzheimer’s Disease and Beta-Amyloid Plaques

         “Dementia is a syndrome involving cognitive and behavioral impairment in an otherwise alert patient.” AR at 4715. Alzheimer’s Disease, one of several conditions that cause the syndrome, “is an irreversible dementia characterized by progressive, relentless cognitive and functional decline.” Id. at 4716. Although Alzheimer’s “is the number one cause of dementia in older Americans (age 65 and over), contributing to 60-80% of cases, ” id., frontotemporal dementia, cerebrovascular dementia, dementia with Lewey bodies, Parkinson’s Disease, and Creutzfeldt-Jakob disease, among others, also cause dementia and share many of Alzheimer’s symptoms. Id. at 4718. It is precisely “because several other neurological diseases can mimic the dementia seen in” Alzheimer’s that the accuracy of “clinical diagnosis” of the disease is “poor.” Id.; see also Id. at 4717 (“[D]espite being the ‘cornerstone’ of diagnosis, clinical assessment of [Alzheimer’s] remains poor.”). And it is in large part because clinical diagnosis is poor that Plaintiffs believe they will benefit from BA Scans. See, e.g., Pls.’ Mot. for Summ. J., ECF No. 10-1 [hereinafter Pls.’ Mot.], at 18 (“Plaintiffs suffer from symptoms of cognitive impairment that preclude a reliable diagnosis based solely on a clinical assessment. Therefore, each Plaintiff would benefit from a [BA Scan].” (citations omitted)).

         The build-up of beta-amyloid plaques in the brain is a physiological “hallmark[]” of Alzheimer’s. AR at 4718. Such build-up, however, is “seen in other diseases” as well, including several of the dementia-causing conditions with symptoms similar to Alzheimer’s. Id. It also can “be detected in cognitively normal older adults.” Id. Indeed, “[a]utopsy studies demonstrate that approximately 33% of older individuals . . . who are cognitively normal have amyloid accumulation at levels consistent with” Alzheimer’s. Id. Thus, as noted by CMS’ “Decision Memo for [BA Scans] in Dementia and Neurogenerative Disease” (the “Decision Memo”)- which accompanies and explains the NCD at issue in this case-while it “is widely accepted that the presence of amyloid plaques in the human brain is virtually necessary for the diagnosis of” Alzheimer’s, “there are competing views” as to what exactly that means. Id. The National Institute on Aging’s Alzheimer’s Association has “conclude[d] that at this point, it remains unclear whether it is meaningful or feasible to make the distinction between [beta-amyloid plaques] as a risk factor for developing the clinical syndrome of [Alzheimer’s] versus [beta-amyloid plaque] accumulation as an early detectable stage of [Alzheimer’s] because current evidence suggests that both concepts are plausible.” Id. at 4719 (citation and quotation marks omitted).

         3. BA Scans

         a. FDA Approval of Amyvid

         Historically, beta-amyloid plaques “could only be identified upon autopsy.” Pls.’ Mot. at 3. That has changed in recent years with the development of BA Scans, PET scans that allow physician’s to view beta-amyloid plaques in the body. See AR at 20-21. BA Scans “became clinically available for the first time in April 2012, ” when the Food and Drug Administration (“FDA”) approved a radiopharmaceutical to be used in connection with such scans. Pls.’ Mot. at 12. That radiopharmaceutical-Amyvid-is manufactured by Lilly USA, LLC (“Lilly”) and was approved specifically for use with a PET Scan “of the brain to estimate [beta]-amyloid . . . plaque density in adult patients with cognitive impairment who are being evaluated for Alzheimer’s . . . and other causes of cognitive decline.” AR at 29. In approving Amyvid, the FDA noted that while a “negative Amyvid scan indicates sparse to no amyloid plaques and is inconsistent with a . . . diagnosis of [Alzheimer’s]” and a “positive Amyvid scan indicates moderate to frequent amyloid . . . plaques” which “is present in patients with [Alzheimer’s], ” “Amyvid is an adjunct to other diagnostic evaluations” and “does not establish a diagnosis of [Alzheimer’s] or other cognitive disorder.” AR at 13.

         b. Request for Medicare Coverage of BA Scans

         FDA approval of a drug does not automatically entitle it to coverage under Medicare. Although “[b]oth CMS and the FDA review scientific evidence, and may review the same evidence, ” the agencies operate “under different statutory standards and different delegated authority.” 68 Fed. Reg. at 55, 636. “Whereas the FDA must determine that a product is safe and effective as a condition of approval, CMS must determine that the product is reasonable and necessary as a condition of [Medicare] coverage.” Id. Thus, on June 29, 2012, after receiving FDA approval, Lilly submitted a letter to CMS seeking Medicare coverage for BA Scans that would use Amyvid. AR at 10-28.

         Lilly’s letter to CMS formally requested that the agency “reopen and revise Section 220.6 of the” NCD Manual-which denies Medicare coverage to all PET Scans not specifically listed in that Section, see NCD Manual § 220.6-to guarantee coverage for BA Scans. Id. at 10. Lilly argued that BA Scans would “provide physicians with accurate and reliable diagnostic information with which to evaluate patients within the Medicare population suffering from cognitive impairment and being evaluated for Alzheimer’s disease and other causes of cognitive decline.” Id. Lilly urged CMS to grant nationwide coverage for the procedure through the issuance of an NCD. Id.

         c. CMS’ Scientific Review of BA Scans

         Lilly’s letter prompted CMS to initiate a substantial scientific review process, which included several public comment periods, the convening of an expert panel, the release of a proposed NCD, and ultimately, the issuance of an NCD. The process commenced with a public comment period that began on October 9, 2012, and concluded on November 8, 2012. See AR at 4736. During that period, CMS received 27 comments, 26 of which “supported Medicare coverage of [BA S]cans in the diagnostic context of suspected dementia.” Id.

         Thereafter, on January 30, 2013, the Medicare Evidence Development and Coverage Advisory Committee (“MEDCAC”)-which was “established to provide independent guidance and expert advice to CMS on specific clinical topics” and to assist CMS “in making decisions based upon the reasoned application of scientific evidence, ”[3]-assembled a panel of 16 M.D.- or Ph.D.-holding experts. See AR at 1000, 1003-04. The panel’s task was “to review available evidence and hear public testimony on the use of [BA Scans] for the management of dementia and neurogenerative disease.” Id. at 999, 1003-04. The panel received a presentation from CMS; heard testimony from five “guest speakers” and public comments from 13 others; participated in a question-and-answer session with those who presented; and engaged in a discussion of the evidence before it. See Id. at 1000-01, 1004-05; see generally Id. at 1464-1906 (MEDCAC Meeting Transcript).

         At the meeting’s conclusion, the panel was asked to vote, using a 5-point scale “with a score of 1 being low or no confidence, and 5 representing high confidence, ” on two questions relevant to the case at hand:

1. How confident are you that there is adequate evidence to determine whether or not PET imaging of brain beta[-]amyloid changes health outcomes (improved, equivalent or worsened) in patients who display early symptoms or signs of cognitive dysfunction?, ” and
2. How confident are you that these conclusions are generalizable to the Medicare beneficiary population?”

Id. at 1002. The average vote for Question 1 was 2.17, meaning the panel had “medium-low confidence” that then-existing evidence was sufficient to evaluate the effects of BA Scans on health outcomes. Id. at 4741; see also id. at 1853. The average vote for Question 2 was 4.25, meaning that the panel had “high confidence” that its finding as to Question 1 was generalizable across all Medicare beneficiaries. Id. at 1875.

         d. CMS’ Decision

         On July 3, 2013, CMS issued the Proposed Decision Memo for Lilly’s requested coverage of BA Scans. See generally Id. at 1908-74. While an NCD itself may be relatively succinct, see, e.g., id. at 1-6, such a determination is generally accompanied by a thorough memorandum that explains CMS’ conclusion, see, e.g., id. at 4709-92. In this case, a 68-page Proposed Decision Memo-the final version of which would accompany the NCD for BA Scans-provided background information on PET scans, BA Scans, Alzheimer’s, and other cognitive conditions, see Id. at 1912-18; “summarized the published literature [and scientific studies] on whether [BA Scans are] beneficial to patients with symptoms of [Alzheimer’s], ” id. at 1919; see also Id. at 1920-29, 1934-37; discussed the MEDCAC panel, id. at 1930; and presented CMS’ lengthy analysis of the information before it, id. at 1933-56.

         CMS expressly centered its analysis on two “Key Questions, ” similar ...

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