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Roeder v. Burwell

United States District Court, E.D. Virginia, Alexandria Division

June 21, 2016

LISA ROEDER, Plaintiff,
v.
SYLVIA MATHEWS BURWELL, Defendant.

          MEMORANDUM OPINION

          CLAUDE M. HILTON UNITED STATES DISTRICT JUDGE.

         THIS MATTER comes before the Court on Plaintiff's and Defendant's cross Motions for Summary Judgment.

         Plaintiff Lisa Roeder, Executor of the Estate of William F. Roeder, Jr., seeks Medicare Part D coverage for mycophenolate mofetil, brand name CellCept. Mr. Roeder took CellCept prior to his death to treat systemic sclerosis with interstitial lung disease and pulmonary fibrosis. By decision of the Medicare Appeals Council ("MAC"), the Secretary determined that Plaintiff s Medicare Part D plan was neither required nor permitted to cover his use of CellCept. Coverage was denied because the Medicare statute, regulations, and manual instructions do not recognize CellCept as a covered Part D drug as used by Mr. Roeder. Mr. Roeder's "off-label" use was not for a "medically accepted indication." CellCept as prescribed to Mr. Roeder is not a covered Part D drug.

         Plaintiff acknowledges that Mr. Roeder's CellCept prescription was neither written nor used for a "medically accepted indication." Plaintiff argues that Medicare must nonetheless cover the prescription because the drug is approved for sale by the Food and Drug Administration ("FDA"), and because his prescribing physician found it effective treatment for his condition.

         Mr. Roeder was a Medicare beneficiary enrolled in Medicare Part D as a member of AARP MedicareRx Preferred, a prescription drug plan offered by United Healthcare Insurance Company ("United Healthcare"). His treating physician diagnosed him with systemic sclerosis with interstitial lung disease, and prescribed mycophenolate mofetil (the generic of CellCept).

         Mr. Roeder sought authorization from United Healthcare for the CellCept prescription. On June 27, 2013, upon expedited redetermination, the plan sponsor confirmed its initial denial because the drug was "not supported by the FDA or one of the Medicare approved references for treating [plaintiff's] medical conditions."

         Plaintiff sought reconsideration of this determination from Maximus, a Medicare Part D IRE. Maximus affirmed United Healthcare's coverage denial based on Mr. Roeder's prescribed use of CellCept not qualifying as a "medically accepted indication, " finding it thus "d[id] not meet the definition of a Medicare Part D drug." For the same reason, Maximus also found that Mr. Roeder was not entitled to an "exceptions request based on medical necessity."

         Mr. Roeder appealed the Maximus decision to an ALJ. After a hearing in which Plaintiff's counsel and a United Healthcare representative participated, the ALJ issued a "Fully Favorable" decision to Plaintiff. The ALJ noted that the Medicare statute and regulations require a drug to be used for its FDA-approved use or a use supported by citation in the compendia to be a covered Part D drug. Nevertheless, because CellCept became the "standard of care for the treatment of scleroderma lung disease, " and based on the "evidence of 9 separate studies showing that the drug has been used successfully for the Beneficiary's condition, " he concluded that "the treatment is covered due to the circumstances presented in this case."

         The MAC decided on its own motion to review the ALJ's decision "because there [wa]s an error of law material to the outcome of the claim." The MAC reversed the ALJ's decision and held that Medicare did not cover plaintiff's CellCept prescription because the plain language of the statute, implementing regulations, and manual provision limit the definition of "medically accepted indication" to a use approved by the FDA or supported by one or more citations in the compendia, and the prescription here was not for a "medically accepted indication."[1] In so ruling, the MAC noted that "the appropriate inquiry in this case was not whether [CellCept] was medically reasonable and necessary for the treatment of the enrollee's condition, but whether [CellCept] met the definition of a Part D drug, i.e., whether it is prescribed for a 'medically accepted indication.'" The MAC also ruled that Mr. Roeder did not qualify for a formulary exception because that process "may not be invoked to cover a drug that is not otherwise within the definition of a Part D drug.[2]

         Because the crux of Plaintiff's argument is that the Secretary improperly interpreted the relevant statutory language to deny his request for Part D coverage, this Court must apply the framework set forth in Chevron U.S.A., Inc. v. Natural Res. Def. Council, Inc.[3] Under Chevron, the Court must employ a two-step analysis:

First, applying the ordinary tools of statutory construction, the court must determine whether Congress has directly spoken to the precise question at issue.
If the intent of Congress is clear, that is the end of the matter; for the court, as well as the agency, must give effect to the unambiguously expressed intent of Congress. But if the statute is silent of ambiguous with respect to the specific issue, the question for the court is whether the agency's answer is based on a permissible construction of the statute.[4]

         The issue is whether the definition of "covered part D drug, " as set forth in Section 102(e), is limited to a "medically accepted indication"-either by the plain terms of the statute, or, to the extent the Court deems the statute ambiguous, by a permissible interpretation the Secretary expressed through adjudication of this case and regulation duly published through notice-and-comment rulemaking. Plaintiff acknowledges that Mr. Roeder's CellCept prescription was not made for a "medically accepted indication" within the meaning of that provision, as the prescription was neither for an "on label" use approved by the FDA, nor for a non-cancer "off-label" use that is supported by citation in a qualifying drug compendia. Thus, the issues raised by this case are purely legal and of statutory construction.

         Summary judgment must be entered in favor of the Secretary for three reasons. First, the plain language of Section 102(e)(1) unambiguously limits Part D coverage to drugs prescribed for a "medically accepted indication, " which Plaintiff admits is a condition that Mr. Roeder's CellCept prescription did not satisfy. Second, even if the Court were to find the statute ambiguous on this question, the Secretary's interpretation of the statute is entitled to substantial deference and definitively resolves the question. Third, Plaintiff's claim to a drug formulary exception ...


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