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From Health Law Daily, July 20, 2016

CMS ordered to diagnose coverage determination on certain PET scans

By Anthony H. Nguyen, J.D.

CMS’ denial of Medicare coverage for the beta-myloid positron emission tomography (PET) scan (BA Scan), which can be used with patients who have exhibited symptoms of cognitive decline but whose diagnosis remains uncertain, based on reasonableness and necessity, did not violate the Administrative Procedure Act (APA) according to a federal court in the District of Columbia. The court found, however, that CMS failed to adequately explain why Medicare covered a different test that relies on similar technology, the fluorodeoxyglucose (FDG) PET scans, but not BA Scans, for these same patients. The court remanded CMS’ decision memo to the agency to evaluate whether this discrepancy could be reconciled (Kort, et al. v. Burwell, July 19, 2016, Jackson, L.).

Background. Diseases associated with cognitive impairment—such as Alzheimer’s Disease, frontotemporal dementia, and Parkinson’s Disease—are difficult to diagnose because the ailments share common symptoms. Doctors attempt to diagnose such diseases by eliminating potential causes, by a process known as differential diagnosis. In bringing their suit, Medicare beneficiaries suffering cognitive impairment believe that the newly available BA Scan can assist physicians in eliminating a potential cause of cognitive impairment symptoms and help to identify the precise condition from which each patient suffers.

In July 2013, after a lengthy review, CMS determined that the existing medical and scientific evidence did not support a finding that BA Scans are reasonable and necessary for the diagnosis of an illness. Key to CMS’ decision was its finding that the evidence did not show that BA Scans improved health outcomes of patients exhibiting cognitive impairment or informed the management of such patients’ diseases.

The beneficiaries claimed that the government’s use of health outcomes and disease management in determining whether to cover BA Scans was contrary to the plain language of the Medicare Act and inconsistent with similarly-situated coverage determinations.

Reasonable and necessary. The Medicare beneficiaries argued that the use of the disjunctive "or" in the "reasonable and necessary diagnosis or treatment" provision under 42 U.S.C. § 1395y(a)(1)(A) evidenced Congress’ intent to require CMS cover diagnostic services based on their diagnostic value alone. CMS argued that focusing on "or" ignored the "reasonable and necessary" focus of the provision. The court was unwilling to accept the beneficiaries’ argument that diagnosis and treatment occupied mutually exclusive areas in which nothing related to one may be contemplated when assessing the other. The court agreed with CMS, finding the "reasonable and necessary" phrase limited the effect of the scope of Medicare coverage and declining to read the statue in such a manner it would substantially restrict CMS’ discretion.

Arbitrary and capricious. The beneficiaries had also argued that coverage standard CMS imposed on BA scans conflicted with other CMS determinations applied to similar medical services, such as FDG PET scans. CMS’ Decision Memo, which directly addressed why CMS considered health outcomes and disease management in evaluating BA Scans, offered some court insight into CMS’s determination. However, the court highlighted that critically, for the issue at hand, CMS approved FDG PET even though there were no published studies evaluated as to whether FDG PET can alter clinical decision-making and improve patient outcomes.

The similarities between FDG PET and BA Scans were evident. Both are diagnostic tests that involve the use of a PET scan and a radiopharmaceutical tracer and are indicated for use on overlapping patient populations exhibiting symptoms of cognitive impairment. Although neither test could affirmatively diagnose a disease, both have diagnostic value as a tool for differentially diagnosing patients who exhibit symptoms associated with several different diseases.

As such, the court could not reconcile CMS’ different determinations based on the present record and found that CMS’ failure to provide a cogent explanation for the different determinations was arbitrary and capricious, in violation of the APA. Remand, without vacating CMS’ determination, was therefore appropriate.

The case is No. 1:14-cv-01519-APM.

Attorneys: William Anthony Sarraille (Sidley Austin LLP) for Cheryl Kort. James C. Luh, U.S. Department of Justice, for Sylvia Mathews Burwell.

Companies: Lilly USA, LLC

MainStory: TopStory CaseDecisions CMSNews CoverageNews DrugBiologicNews ExclusionsNews

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