Almy v. Sebelius
2012 U.S. App. LEXIS 8468
4th Cir.2012Background
- Almy, as Chapter 7 trustee for BioniCare, challenges MAC determinations denying Part B coverage for the BIO-1000.
- BIO-1000 is a knee osteoarthritis device; FDA approved it under 510(k) based on substantial equivalence to a predicate device.
- MAC decisions repeatedly held BIO-1000 not reasonable and necessary; some cases involved differing local determinations.
- District court granted summary judgment for the Secretary; Almy appeals to the Fourth Circuit.
- Medicare Part B coverage decisions may proceed by NCD, LCD, or individual adjudication; the Secretary's discretion is broad.
- Statutory framework requires substantial evidence and APA review of agency action, with deference to agency expertise.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether MAC may adjudicate case-by-case rather than issuing an NCD or LCD | BioniCare seeks statewide policy via NCD/LCD. | Secretary may choose adjudication or rulemaking; discretion rests with agency. | Adjudication permissible; no requirement to issue NCD/LCD. |
| Whether MAC's denial is supported by substantial evidence | BIO-1000 is safe and effective; studies show should be covered. | MAC found evidence insufficient and flawed; substantial evidence supports denial. | Yes; MAC's conclusions supported by substantial evidence. |
| Whether procedural errors taint MAC decisions | Errors at QIC process and other steps undermine final determinations. | No reversible procedural flaws; presumption of regularity applies. | Procedural claims fail; decisions upheld. |
| Whether FDA 510(k) clearance compels coverage | FDA clearance supports safety/efficacy and thus coverage. | FDA approval does not automatically entitle device to Medicare coverage; further evidence required. | 510(k) clearance does not require automatic favorable coverage; additional proof needed. |
Key Cases Cited
- Chenery Corp. v. SEC, 332 U.S. 194 (Supreme Court 1947) (agency discretion in choosing rule vs. ad hoc adjudication)
- Heckler v. Ringer, 466 U.S. 602 (Supreme Court 1984) (Secretary's discretion in determining 'reasonable and necessary')
- Consolidated Edison Co. v. NLRB, 305 U.S. 197 (Supreme Court 1938) (definition of substantial evidence)
- Bowles v. Seminole Rock & Sand Co., 325 U.S. 410 (Supreme Court 1945) (deference to agency interpretation of its regulations)
- Thalmer Jefferson Univ. v. Shalala, 512 U.S. 504 (Supreme Court 1994) (expert agency in technical regulatory program; deference to agency)
- Medtronic, Inc. v. Lohr, 518 U.S. 470 (Supreme Court 1996) (510(k) clearance does not equal PMA; safety/efficacy data differ)
- Talk America, Inc. v. Michigan Bell Tel. Co., 131 S. Ct. 2254 (Supreme Court 2011) (administrative deference; rational agency decision-making)
- In re NLRB v. Transpersonnel, Inc., 349 F.3d 175 (4th Cir. 2003) (credibility and deference in agency credibility determinations)
- Off. of Workers' Comp. Programs v. Greenwich Collieries, 512 U.S. 267 (Supreme Court 1994) (prima facie evidence standards and administrative proceedings)
- Baltimore Gas & Elec. Co. v. NRDC, 462 U.S. 87 (Supreme Court 1983) (reasonableness and rational connection in agency action)