District Court Upholds Medicare Beneficiary’s Challenge to Local Coverage Determination | Epstein Becker & Green

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A recent decision by the U.S. District Court for the District of Columbia clarified that a Medicare beneficiary can challenge a Medicare Local Coverage Determination (LCD) without having to first exhaust Medicare’s lengthy administrative appeals process.

The court further ruled that a Medicare LCD that is more restrictive than a corresponding National Coverage Determination (NCD) is not valid and went ahead and invalidated the LCD in question. Greenwald vs. Becerra, No. 17-797 (DDC 7 June 2022).

In this case, Mr. Greenwald, a Medicare beneficiary, was prescribed a pneumatic compression device (PCD) to treat chronic lymphedema after a four-week trial of conservative therapy was attempted and deemed unsuccessful. Under an existing Medicare NCD, a PCD is covered after a trial if “the treating physician determines that there has been no significant improvement or if significant symptoms persist after the trial.” However, the claim was denied by a Medicare Administrative Contractor (MAC) based on a narrower LCD and only allowing coverage “when no significant improvement has occurred within four last weeks,” without referring to the phrase in the NCD allowing coverage when a treating physician determines that significant symptoms remained after the trial.

Mr. Greenwald filed a civil suit challenging the validity of the LCD on several grounds, including an argument that the LCD imposed new substantive requirements for Medicare coverage of PCDs and that the Secretary of Health and Human Services (secretary) failed to follow the regulatory requirements imposed by 42 USC § 1395hh(a)(2). The action was brought under 42 USC § 1395ff(f)(3), which allows direct judicial review of an LCD and avoids the lengthy administrative appeal process if there are no questions of material facts in dispute.

The secretary moved to dismiss the complaint for lack of subject matter jurisdiction, in part because Mr. Greenwald had not exhausted the administrative appeal process. The district court disagreed with much of the report and recommendation of a magistrate judge who had agreed with the secretary. The court concluded that it had jurisdiction to hear the case; he determined that the dispute was a question of law that dealt with whether the MAC had the power to impose new legal obligations in a DCL. The court then determined that the LCD and the corresponding NCD conflicted, rendering the LCD invalid. The court noted that any other conclusion would be inconsistent with the plain language of the CRS and render the CRS irrelevant.

The district court also found that Mr. Greenwald had standing to bring the action in court even though he had not exhausted Medicare’s administrative appeal process. The court found that as a Medicare beneficiary, he had a procedural right to challenge an LCD and suffered concrete harm. He was not required to prove that his PCD would have been covered if the NCD criteria had been applied to his original claim.

Key points to remember

The Greenwald The decision helps clarify when a Medicare LCD can be challenged in court and confirms that the provision of Medicare law allowing direct judicial review of LCDs is independent of the administrative appeals process for Medicare claims.[1] Additionally, this decision helps clarify a specific limit on the discretion delegated to MACs processing health insurance claims by confirming that a Medicare LCD that is more restrictive than a corresponding NCD is invalid and further finding that the LCD in question is invalidated to be more restrictive on its face. Interested stakeholders should review current MAC policies to ensure they comply with NTMs, regulations, and Centers for Medicare & Medicaid Services rules.

END NOTE

[1] See also Hays v. Sebelius, 589 F. 3d 1279 (DC Cir. 2009).

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