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Case v. Azar

United States District Court, M.D. North Carolina

January 3, 2019

JANEL CASE, Plaintiff,
v.
ALEX M. AZAR, II, Secretary of the United States Department of Health and Human Services, in his official capacity only, [1] Defendant.

          RECOMMENDATION OF UNITED STATES MAGISTRATE JUDGE

          JOE L. WEBSTER UNITED STATES MAGISTRATE JUDGE.

         Plaintiff Janel Case brought this action to obtain review of a final decision of the Medicare Appeals Council (“MAC”) rejecting Plaintiff's contention that her use of the drug Myfortic should be covered under Medicare Part D (“the Plan”), the Medicare prescription drug benefit of the Medicare program, 42 U.S.C. § 1395w-101 et seq. The Court has before it the certified administrative record and cross-motions for judgment.

         I. FACTUAL AND PROCEDURAL BACKGROUND

         Plaintiff received a lung transplant in 2005, which was covered by a commercial health insurance plan. (AR 004, 0160.) The transplant was necessary as a result of pulmonary fibrosis related to treatment of Hodgkin's lymphoma. (Id.) Post-transplant, Plaintiff experienced “late acute cellular rejection requiring high levels of immunosuppression drugs to maintain allograft function.” (Id. at 004.) Since 2013, she has taken the immunosuppressant drug Myfortic. (Id. at 0153, 0221.) After enrolling in the Plan, effective January 2017 (see id. at 0143, 0219), Plaintiff sought Medicare Part D payment for the Myfortic. Although initially approving coverage of Myfortic (id. at 0222), after conducting an audit, the Plan denied coverage because “the drug was not being prescribed for a medically accepted indication as defined by Medicare law.” (Id. at. 0004, 0225.) Plaintiff then initiated an administrative appeal through the appropriate appellate recourse available to dissatisfied Medicare Part D enrollees. (Id. at 0004, 0168-0169.) “On further appeal, the Independent Review entity (IRE) denied coverage on the same grounds: that there are no citations in the Medicare approved compendia that support the use of Myfortic for the diagnosed condition.” (Id. at 0004 citing 0169.) “The IRE also noted that it could not consider making an exception based on medical necessity because Myfortic, as prescribed, does not meet the definition of a Medicare Part D drug.” (Id. at 0004 citing 0169.)

         As an element of the appellate process, Plaintiff received a hearing by an Administrative Law Judge (“ALJ”). (Id. at 0715-0734.) On May 19, 2017, the ALJ issued a decision, which was unfavorable to Plaintiff. (Id. at 0023-0029.) The ALJ determined that Myfortic does not meet the definition of a covered Part D drug because it is not prescribed for a medically accepted indication and is not supported by the Medicare approved compendia. (Id. at 0028.) The ALJ noted that the medically accepted indication for Myfortic is for prophylaxis of organ rejection in adult patients receiving kidney transplants, which is not applicable to Plaintiff. (Id. at 0027, 0032.) In closing, the ALJ recognized the gravity of Plaintiff's circumstances but concluded that she had no authority to find that the drug is a Medicare Part D drug for purposes of the Plan's coverage. (Id. at 0029.)

         Plaintiff then appealed to the MAC. (Id. at ¶ 0010.) On June 13, 2017, the MAC issued a decision, which was unfavorable to Plaintiff. (Id. at 0001-0008.) The MAC “concur[red] with the ALJ that the Plan is not required to cover Myfortic for [Plaintiff] because it is not being prescribed for a medically accepted indication.” (Id. at 0006.) This decision represented the final agency decision of the Secretary of the Department of Health and Human Services. Having exhausted her administrative remedies, Plaintiff filed the instant civil suit for judicial review of the final agency decision.

         II. STANDARD FOR REVIEW

         Plaintiff brought the instant action pursuant to 42 U.S.C. § 1395w-104(h)(1), which incorporates the rights of appeal and judicial review provision of 42 U.S.C. § 1395w-22(g)(5). Also, this action was brought pursuant to 42 U.S.C. § 405(g), the basic judicial review provision of the Social Security Act.[2] Under 42 U.S.C. § 405(g), a court's “review of the Secretary's final decision . . . is to be based solely on the administrative record, and the Secretary's findings of fact, if supported by substantial evidence, shall be conclusive.” See MacKenzie Med. Supply, Inc. v. Leavitt, 506 F.3d 341, 346 (4th Cir. 2007). Substantial evidence has been defined by the Court of Appeals for the Fourth Circuit as

evidence which a reasoning mind would accept as sufficient to support a particular conclusion. It consists of more than a mere scintilla of evidence but may be somewhat less than a preponderance. If there is evidence to justify a refusal to direct a verdict were the case before a jury, then there is “substantial evidence.”

Laws v. Celebrezze, 368 F.2d 640, 642 (4th Cir. 1966) (citation omitted). Judicial review does not permit this Court to weigh the evidence or to make credibility assessments, because it is the Secretary's ultimate responsibility to make findings of fact and resolve conflicts in the evidence. Rudman v. Leavitt, 578 F.Supp.2d 812, 814-15 (D. Md. 2008) (citing Hays v. Sullivan, 907 F.2d 1453, 1456 (4th Cir. 1990)). In addition to reviewing for substantial evidence, the Court also looks to ascertain whether the Secretary applied the correct legal standards. Bryan v. Sec'y of HHS, 758 F.Supp. 1092, 1096 (E.D. N.C. 1990) (citations omitted).

         III. DISCUSSION

         The parties' dispute in this action arises out of whether Myfortic is covered under the Plan such that Plaintiff's Medicare insurance would be responsible for the costs. As previously noted, the MAC “concur[red] with the ALJ that the Plan is not required to cover Myfortic for [Plaintiff] because it is not being prescribed for a medically accepted indication.” (AR 0006.) The central issue here surrounds the meaning and scope of the statutory definition of a covered Part D drug. A covered Part D drug is defined by statute at 42 U.S.C. § 1395w-102(e)(1):

         Except as provided in this subsection, for purposes of this part, the term “covered part D drug” means--

(A) a drug that may be dispensed only upon a prescription and that is described in subparagraph (A)(i), (A)(ii), or (A)(iii) of section 1396r-8(k)(2) of this title; or
(B) a biological product described in clauses (i) through (iii) of subparagraph (B) of such section or insulin described in subparagraph (C) of such section and medical supplies associated with the injection of insulin ...

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