A recent decision by the U.S. District Court for the District of Columbia has clarified that a Medicare beneficiary may challenge a Medicare Local Coverage Determination (LCD) without first having to exhaust the lengthy Medicare administrative appeals process.
The court further ruled that a Medicare LCD that is more restrictive than a corresponding National Coverage Determination (NCD) is invalid and went ahead and invalidated the LCD at issue. Greenwald v. Becerra, No. 17-797 (D.D.C. June 7, 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 had been tried and found to be 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 remain after the trial.” However, the reimbursement claim was denied by a Medicare Administrative Contractor (MAC) based on an LCD that was narrower and that authorized coverage “[o]nly when no significant improvement has occurred in the most recent four weeks,” making no reference to the phrase in the NCD permitting coverage when a treating physician determines that significant symptoms remained after the trial.
Mr. Greenwald brought a civil action 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) had failed to follow the rulemaking requirements mandated under 42 U.S.C. § 1395hh(a)(2). The action was brought under 42 U.S.C. § 1395ff(f)(3), which allows for direct judicial review of an LCD and avoids the lengthy administrative appeals process if there are no material issues of fact 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 appeals process. The district court disagreed with the bulk of a Magistrate-Judge’s report and recommendation that had agreed with the Secretary. The court concluded that it had jurisdiction to hear the case; it determined that the dispute involved an issue of law that focused on whether the MAC had the authority to impose new legal obligations in an LCD. The court then determined that the LCD and the corresponding NCD did conflict, rendering the LCD invalid. The court noted that any other conclusion would be inconsistent with the plain language of the NCD and would make the NCD irrelevant.
The district court also concluded that Mr. Greenwald had standing to bring the action in a court even though he had not exhausted the Medicare administrative appeals process. The court found that, as a Medicare beneficiary, he had a procedural right to challenge an LCD and had suffered a concrete injury. He was not obligated to prove that his PCD would have been covered had the NCD criteria been applied to his original benefit claim.
The Greenwald decision helps clarify when a Medicare LCD can be challenged in court and confirms that the provision of the Medicare statute allowing for direct judicial review of LCDs is independent of the administrative appeals process for Medicare claims. Additionally, this decision helps clarify a specific limit on the discretion delegated to MACs who process Medicare claims by confirming that a Medicare LCD that is more restrictive than a corresponding NCD is invalid and finding further that the LCD at issue is invalidated for being more restrictive on its face. Interested stakeholders should examine current MAC policies to ensure that they conform to the Centers for Medicare & Medicaid Services’ NCDs, regulations, and rules.
Robert Wanerman of Epstein Becker Green was the lead counsel for Mr. Greenwald.
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This Insight was authored by Robert Wanerman and Lynn Shapiro Snyder. For additional information about the issues discussed in this Insight, please contact one of the authors or the Epstein Becker Green attorney who regularly handles your legal matters.
 See also Hays v. Sebelius, 589 F. 3d 1279 (D.C. Cir. 2009).