California Clinical Laboratory Association v. Secretary of Department of Health and Human Services

104 F. Supp. 3d 66, 2015 U.S. Dist. LEXIS 65591, 2015 WL 2393571
CourtDistrict Court, District of Columbia
DecidedMay 20, 2015
DocketCivil Action No. 2014-0673
StatusPublished
Cited by14 cases

This text of 104 F. Supp. 3d 66 (California Clinical Laboratory Association v. Secretary of Department of Health and Human Services) is published on Counsel Stack Legal Research, covering District Court, District of Columbia primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
California Clinical Laboratory Association v. Secretary of Department of Health and Human Services, 104 F. Supp. 3d 66, 2015 U.S. Dist. LEXIS 65591, 2015 WL 2393571 (D.D.C. 2015).

Opinion

MEMORANDUM OPINION

KETANJI BROWN JACKSON, United States District Judge

Plaintiffs California Clinical Laboratory Association (“CCLA”) and Jane'Doe have *69 brought the instant action to challenge certain Medicare coverage determinations that private entities — known as Medicare Administrative Contractors (“MACs”)— make. Congress has expressly authorized Defendant Secretary of the Department of Health and Human Services (the “Secretary”) to use MACs to help administer the Medicare program, and under the existing statutory and regulatory scheme, MACs routinely establish local Medicare coverage practices by issuing statements regarding whether or not, as a general rule, Medicare insurance will be available for particular items or services within a geographic region. These statements are known as “local coverage determinations” or “LCDs,” and Plaintiffs’ complaint alleges, inter alia, that MACs are issuing LCDs that amount to blanket and inappropriate denials of Medicare coverage for certain clinical testing services. Plaintiffs also launch several broad attacks. against the LCD development process and the resulting coverage (or non-coverage) practices, including the charge that Congress has acted unconstitutionally in delegating to private contractors the authority to issue LCDs;

Before this Court at present is Defendant’s motion to dismiss Plaintiffs’ complaint. The Secretary argues that Jane Doe lacks constitutional standing to bring the instant claims, and that, in any event, this Court does not have subject matter jurisdiction over Plaintiffs’ claims under any of the statutes upon which Plaintiffs rely. (See Def.’s Mot. to Dismiss (“Def.’s Mot.”) 1, ECF No. 17; see also Def.’s Mem. in Supp. of Def.’s Mot. (“Def.’s Br.”) 15, ECF No. 17-1.) 1 For the reasons explained below, this Court concludes that Jane Doe has failed to allege a sufficient injury-in-fact to give rise to Article III standing, and that this Court lacks subject matter jurisdiction over CCLA’s remaining claims. Consequently, Defendant’s motion to dismiss the complaint will be GRANTED, and Plaintiffs’ complaint will be dismissed without prejudice. A separate order consistent with this opinion will follow.

I. BACKGROUND

A. Background Facts

Jane Doe is a retired, 82 year-old registered nurse who lives in Virginia and is a Medicare enrollee. (Compl. ¶ 6, ECF No. 3.) 2 Plaintiffs allege that Doe has been diagnosed with “several chronic conditions requiring the administration of numerous [prescription] drugs,” and that, unfortunately, some of those drugs have caused her to “suffer[] allergic and other very serious adverse reactions!.]” (Id.) Hoping to learn more about Jane Doe’s reactions to medication and to customize further treatment, Doe’s “physician recently ordered pharmacogenomic testing from a clinical laboratory in Virginia.” (Id.) Phar-macogenomic testing is a type of molecular diagnostic testing that can anticipate a medication or treatment’s effect on a patient based on that patient’s genetic makeup. (See id. ¶¶6, 27; see also Decl. of Scott W. Blevins (“Blevins Deck”) ¶-1, Ex. 1 to Pis.’ Opp’n, ECF No. 18-1 (explaining that “genotyping of drug-metabolizing enzymes and bleeding risk factors ...' enables health care practitioners to provide targeted therapy to patients based on patients’ individual genetic profiles”).) The *70 parties do not dispute that such testing may allow doctors to determine in advance whether a particular medication or course of treatment will help or harm a patient.

Doctors can order pharmacogenomic and other molecular diagnostic 'testing from certain clinical laboratories across the United States, The compláiñt does not specify which Virginia laboratory received the doctor’s order for the pharma-cogenomic testing of Jane Doe; however, Plaintiffs explain that CCLA’s members include laboratories that provide such testing for Medicare enrollees and other individuals. (See Compl. ¶ 5; see also Blevins Decl. ¶ 3.) Specifically, Plaintiffs state that one of CCLA’s member laboratories is GENETWORx, “a clinical laboratory headquartered in Glen Allen, Virginia” (Blevins Decl. ¶ 1), and that, GENET-WORx “conducts [pharmacogenomic] testing of samples from patients located throughout the United States” (id. ¶ 2). When GENETWORx provides services to Medicare Part B enrollees, it must submit claims for reimbursement to Palmetto GBA (“Palmetto”), which is the MAC assigned to cover GENETWORx’s region. (See Blevins Decl. ¶3.) Palmetto has issued a local coverage determination known as “LCD L34499,” which Plaintiffs contend Palmetto relies on to “denfy] Medicare coverage for pharmacogenomic testing regularly performed by GENET-WORx” and other laboratories in Palmetto’s region. (Id.) Indeed, according to the complaint, “Jane Doe. has learned that Medicare will, not cover or pay for [her pharmacogenomic] testing” because of LCD L34499. (ComplJ 6.)

Plaintiffs maintain that LCD L34499 and other similar LCDs pertaining to clinical testing “jeopardize! ] [Jane Doe’s] and similarly situated Part B enrollees’ access to medically necessary laboratory services” (id.), and more broadly, that “[t]he current LCD development process and the resulting LCD policies of the MACs are legally invalid and ultra vires (id. ¶ 2). Thus, Plaintiffs have directly challenged an aspect of the coverage system that the Medicare Act creates; the following brief description of the Medicare system provides the necessary context for understanding Plaintiffs’' claims.

B. The Medicare Act

Congress established the Medicare program in 1965 when it passed the Medicare Act (the “Act”), 42 U.S.C. §§ 1395 et seq., as part of the Social Security Amendments of 1965. .See Pub.L. No. 89-97, 79 Stat. 291 (July 30,1965). The program provides health benefits to all persons age sixty-five and older who are eligible for Social Security benefits or eligible for retirement benefits under the railroad retirement system, see 42- U.S.C. § 1395c(l), and is divided into several parts that the Secretary administers through the Centers for Medicare and Medicaid Services (“CMS”), along with the MACs. Medicare Part A, the program’s hospital insurance component, covers inpatient care in facilities such as hospitals and skilled nursing facilities, as well as hospice care and some home healthcare. See Hall v. Sebelius, 770 F.Supp.2d 61, 64 (D.D.C.2011) (citing 42 U.S.C. §§ 1395c-1395i-5). Individuals who receive benefits under Medicare Part A' are commonly referred to .as “Medicare beneficiaries.” The instant case concerns Medicare Part B, which is the supplementary medical insurance program that covers certain physicians’ services, outpatient hospital care, and other medical items and services not covered under Part A.

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Bluebook (online)
104 F. Supp. 3d 66, 2015 U.S. Dist. LEXIS 65591, 2015 WL 2393571, Counsel Stack Legal Research, https://law.counselstack.com/opinion/california-clinical-laboratory-association-v-secretary-of-department-of-dcd-2015.