Almy v. Sebelius
2010 U.S. Dist. LEXIS 116974
D. Maryland2010Background
- Plaintiff is the Chapter 7 trustee for the bankruptcy estate of BioniCare Medical Technologies, Inc. (the Supplier).
- The BIO-1000 is a knee osteoarthritis treatment device developed by BioniCare and licensed from Murray Electronics.
- FDA clearance of BIO-1000 occurred via 510(k) substantial equivalence to a TENS device, not PMA approval.
- CMS issued a HCPCS code and a DME fee schedule for BIO-1000, but these do not guarantee coverage.
- MAC issued eight final decisions denying or limiting coverage and payment for BIO-1000 claims; one decision addressed payment for nine claims (the 191 Decision).
- The court denied the plaintiff’s summary judgment motion and granted the Secretary’s cross-motion, affirming the MAC decisions.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether MAC decisions were inconsistent with prior agency actions | Almy argues MAC departed from prior agency interpretations | Sebelius argues MAC decisions were not contrary to prior agency positions | No reversible inconsistency; deference maintained |
| Whether the MAC decisions are substantively valid | BIO-1000 is FDA-cleared and medically accepted; denial lacks substantial evidence | MAC properly evaluated medical necessity and evidence under MPIM | MAC decisions supported by substantial evidence |
| Whether FDA clearance status dictates Medicare coverage | 510(k) clearance should favor coverage | FDA clearance is necessary but not sufficient for coverage | FDA clearance is not auto-determinative of coverage |
| Whether the 191 Payment Decision was proper | Payment should be 80% of charges, not local fee schedule | Local gap-filling method valid in absence of national schedule | Payment determination supported by 80% of lesser of charges or local/ national schedule rules |
| Whether ABN rejections were proper | Some ABNs were non-generic and adequate to shift liability | ABNs deemed generic; liability properly placed on supplier | MAC findings on ABNs reasonable and supported by MPIM |
Key Cases Cited
- Heckler v. Ringer, 466 U.S. 602 (1984) (Secretary's discretion in Medicare coverage decisions; deference to agency)
- Chevron U.S.A. Inc. v. Natural Resources Defense Council, 467 U.S. 837 (1984) (agency interpretations upheld if reasonable when statute silent or ambiguous)
- United States v. Mead Corp., 533 U.S. 218 (2001) (Chevron framework; deference depends on formality of proceedings)
- Marymount Hosp., Inc. v. Shalala, 19 F.3d 658 (D.C. Cir. 1994) (deference to agency expertise in Medicare matters)
- International Rehabilitative Sciences, Inc. v. Sebelius, 737 F.Supp.2d 1281 (W.D. Wash. 2010) (MAC decisions inconsistent with lower-level rulings; court scrutinized deference)
- St. Luke's Hospital v. Sebelius, 611 F.3d 900 (D.C. Cir. 2010) (lower-level decisions do not bind CMS or Secretary; final decision authority remains with Secretary)