Tangney v. Burwell
Filing
23
Judge William G. Young: ORDER entered. MEMORANDUM AND ORDER"The Court vacates the decision of the Council, and thus DENIES the Secretary's motion for an order affirming the decision of the Secretary, ECF No. 20 , and GRANTS Tangney's motion to reverse the Secretary's decision, ECF No. 17 .SO ORDERED."(Sonnenberg, Elizabeth)
UNITED STATES DISTRICT COURT
DISTRICT OF MASSACHUSETTS
ELIZABETH TANGNEY,
Plaintiff,
v.
SYLVIA MATHEWS BURWELL,
SECRETARY OF THE U.S. DEPARTMENT
OF HEALTH AND HUMAN SERVICES,
Defendant.
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CIVIL ACTION
NO. 14-14149-WGY
YOUNG, D.J.
May 10, 2016
MEMORANDUM & ORDER
I.
INTRODUCTION
Elizabeth Tangney is very sick, suffering from severe
nausea, vomiting, and abdominal pain.
For several years, a team
of physicians struggled to find something that would alleviate
her symptoms.
They finally succeeded in 2011 when they
administered Dronabinol.
Her insurance at the time covered it.
When Tangney switched to Medicare in May 2014, however, its Part
D program denied coverage on the ground that the off-label use
prescribed to Tangney was not “supported by one or more
citations in [approved] . . . compendia[.]”
42 U.S.C. § 1396r-
8(k)(6).
An Administrative Law Judge (“hearing officer”) 1
disagreed with this initial determination and granted coverage,
but the Medicare Appeals Council (the “Council”) then reversed.
As a result, Tangney is again without coverage for her
Dronabinol prescription.
The parties agree 2 that Tangney’s use of Dronabinol has been
successful in treating her symptoms.
Compare Mem. Law. Supp.
Def.’s Mot. Order Affirming Dec. Sec. (“Def.’s Mem.”) 12, ECF
No. 21, with Pl.’s Mem. Supp. Mot. Reverse or Remand Dec. Sec.
(“Pl.’s Mem.”) 1, ECF No. 18.
requirements for coverage.
Mem. 10.
They also agree on the regulatory
Compare Def.’s Mem. 8, with Pl.’s
Based on the plain language of the statute and the
undisputed facts in this case, Tangey’s prescription must be
covered by Part D; accordingly, the Court grants her motion to
reverse the Council’s decision.
A.
Undisputed Facts
The parties agree on the underlying facts.
Mem. 2-3 with Pl.’s Mem. 4.
Compare Def.’s
This section briefly summarizes the
pertinent ones, drawing from the findings of the hearing officer
as adopted by the Council.
1
See Vega v. Colvin, No. CV 14-13900-WGY, 2016 WL 865221,
at *1 (D. Mass. Mar. 2, 2016) (explaining the Court’s use of the
term “hearing officer”).
2
The parties’ briefing here reflects conscientious
lawyering. Tangney and the Secretary agree on many things,
focusing this Court’s review on what is truly in dispute.
[2]
In 2004, Tangney underwent surgery “to correct a partial
intestinal obstruction and an abdominal wall hernia.”
Administrative R. (“Admin. R.”) 0008, ECF No. 14-1. 3
After this
surgery, she developed increasingly severe “abdominal pain,
nausea, and vomiting.”
Id. at 0009.
Her surgeon and
gastroenterologist prescribed her various anti-nausea treatments
and medications, but “none of them worked.”
Id.
In August
2011, her doctors prescribed her Dronabinol, which significantly
relieved her nausea and vomiting.
Id.
Her insurer at the time
covered the treatment, and for three years thereafter she
continued to take Dronabinol and her symptoms were lessened.
See id.
Then, in May 2014, Tangney enrolled in Medicare Part D,
which declined coverage for Dronabinol.
See id.
After Tangney
ran out of Dronabinol, she became dehydrated, lost weight, and
was hospitalized for three weeks.
B.
See id.
Procedural History
Tangney requested reconsideration of the initial
determination declining coverage, which request was denied.
Admin. R. 0009-0010.
hearing officer.
She appealed this determination to a
Id. at 0125.
On June 26, 2014, the hearing
3
The record of the administrative proceedings covers docket
entries 14-1 through 14-5. Since this record is consecutively
numbered throughought the different docket entries, the Court
cites to the page number, omitting the ECF number from all
future citations.
[3]
officer found that Tangney’s Dronabinol “was prescribed for a
‘medically accepted indication’ . . . based on support in the
compendia[,]” and ruled that her “Medicare Part D Plan must
cover Dronabinol[.]”
Id. at 0132-0133.
The next month, Maximus
Federal Services, a contractor tasked with reviewing Medicare
determinations, petitioned the Council for review of the June
decision.
Id. at 0007.
On review, the Council noted that
“[Tangney’s] physician and attorney, and the [hearing officer],
have presented compelling arguments that the enrollee’s use of
Dronabinol is medically supported by testimony and the record.”
See id. at 0023.
In its September 2014 decision, the Council
nonetheless reversed, concluding that Tangney’s use of
Dronabinol was not covered.
See id.
Tangney filed a complaint in this Court in November 2014.
Compl., ECF No. 1.
Before the Court now are the parties’ cross-
motions: Tangney’s asking for either reversal or a remand to the
Secretary, Pl.’s Mot. Reverse or Remand Decision Sec’y, ECF No.
17; and the Secretary’s requesting an affirmance, Def.’s Mot.
Order Affirming Decision Sec’y, ECF No. 20.
been thoroughly briefed.
The issues have
See Pl.’s Mem.; Def.’s Mem.; Pl.’s
Reply Mem. Opp. Def.’s Mot. Order Affirming Dec. Sec. (“Pl.’s
Reply”), ECF No. 22.
II.
BACKGROUND
[4]
The Court first briefly sketches the statutory framework
surrounding Tangney’s claim before discussing the underlying
compendium entry at issue.
A.
Medicare Part D Prescription Drug Coverage
Medicare Part D supplements Medicare 4 by partially covering
certain prescription drugs.
First Med. Health Plan, Inc. v.
Vega-Ramos, 479 F.3d 46, 48 (1st Cir. 2007) (citing Pub. L. No.
173, Tit. I (2003) (Part D); 42 U.S.C. § 1395u–102(b)).
“[A]ny use of a [prescription] drug for a medically accepted
indication” is covered.
supplied).
42 U.S.C. §§ 1395w-102(e)(1) (emphasis
“‘[M]edically accepted indication’ means any use . .
. approved [by the FDA] or the use of which is supported by one
or more citations included or approved for inclusion in any of
the [listed] compendia[.]”
42 U.S.C. § 1396r-8(k)(6).
As mentioned at the outset, the parties, by their briefing,
have narrowed the Court’s inquiry.
use is not one approved by the FDA.
Pl.’s Mem. 10.
They agree that Tangney’s
Compare Def.’s Mem. 3, with
They both assert that the Drugdex Information
System (“Drugdex”) is among the listed compendia, 5 42 U.S.C. §
4
For a discussion of Medicare generally, see, for example,
First Med. Health Plan, Inc. v. Vega-Ramos, 479 F.3d 46, 48 (1st
Cir. 2007).
5
The Seventh Circuit has described the compendia as “large
reference books that contain a variety of information about the
prescription pharmaceuticals currently available on the American
market -- everything from their chemical makeup to potential
[5]
1396r-8(g)(B)(i)(III), and is the relevant one for the Court’s
analysis.
Compare Def.’s Mem. 8, with Pl.’s Mem. 10.
Neither
party suggests that there is a relevant citation “approved for
inclusion” in Drugdex.
In other words, whether this use of
Dronabinol is “supported by one or more citations” in Drugdex,
the parties agree, is the crucial inquiry.
See Def.’s Mem. 8
(citing 42 U.S.C. § 1296r-8(g)(1)(B)(i)); Pl.’s Reply 2.
B.
The Compendium and Citation at Issue
Before beginning its analysis, the Court summarizes both
the relevant Drugdex entry and the study it cites.
Both of
these are relevant to the issue of whether Tangney’s use is
“supported by” a citation in Drugdex. 6
side-effects to the age ranges of patients the drugs have been
tested on.” United States v. King-Vassel, 728 F.3d 707, 715-16
(7th Cir. 2013) (citing Edmonds v. Levine, 417 F.Supp.2d 1323,
1332–33 (S.D. Fla. 2006)). It noted that the compendia “seem to
be intended primarily for an audience of health care
professionals, but again, were specifically incorporated by
Congress into the statutory standard for a “‘medically accepted
indication.’” Id. at 716 (internal citations omitted).
6
Tangney argued, in her first memorandum submitted to this
Court, that the “citation” in the statutory phrase refers not to
the underlying study to which the Drugdex entry provides a
direct citation, but to the Drugdex entry itself. Pl.’s Mem. 18
(“The plain meaning of the statutory language ‘supported by a
citation’ is [not] limited to the medical literature underlying
an entry in Drugdex[.]”). She then, however, appeared to
concede that the underlying study is relevant to the Court’s
analysis. See Pl.’s Reply 4 (“[Tangney] agrees that for a use
to be supported by citation it must be ‘consistent’ with the
compendium citation, but [Tangney] does not agree that this
requires an identical diagnosis to the one or ones in the
underlying study when the purpose of the drug is to treat an
[6]
1.
Drugdex Entry
Drugdex is a “listing of drugs that includes evidence
regarding the drug's effectiveness, clinical indications, and
proper dosing.”
Lindsey Gabrielsen, Bias at the Gate?: The
Pharmaceutical Industry's Influence on the Federally Approved
Drug Compendia, 40 Am. J.L. & Med. 141, 141 (2014) (internal
citation omitted).
Dronabinol.
The Drugdex entry at issue is for
See Admin. R. 0168.
Unfortunately, as has been
noted by another court, Drugdex does not have “a section
entitled ‘Uses Supported by Citation’ (i.e., tracking the
language of the statute),” Edmonds v. Levine, 417 F.Supp.2d
1323, 1332-33 (S.D. Fla. 2006).
The parties thus focus on the
section of the Dronabinol entry entitled “Clinical
Applications[.]”
Admin. R. 0179.
This section lists eight
“Therapeutic Uses,” 7 the relevant one being: “Nausea and
identical symptom.”). Tangney’s initial position is implausible
because, if “supported by citation” is read to mean merely the
mention of a drug’s use in Drugdex, it would include the
listings that are not supported by evidence. See infra Part IIB-1 (describing three uses of Dronabinol listed in Drugdex, that
are also, per Drugdex, not supported by the evidence).
7
The other listed therapeutic uses for Dronabinol are “AIDS
- Loss of appetite,” “Chemotherapy-induced nausea and vomiting;
Prophylaxis,” “Gilles de la Tourette’s syndrome,” “Loss of
appetite, Cancer-related,” “Multiple sclerosis - Spasticity,”
“Nausea and vomiting, Disease-related, treatment refractory,”
“Postoperative nausea and vomiting; Treatment and Prophylaxis,”
and “Pruritus, Cholestasis-associated, treatment refractory[.]”
Admin. R. 0181-0186.
[7]
vomiting, Disease-related, treatment refractory” (the
“Therapeutic Use”).
Id. at 0181-0186.
Drugdex states its
recommendation for the Therapeutic Use as “Evidence favors
efficacy[,]” in contrast to its recommendation for two other
uses, which have a rated “Efficacy” of “inconclusive.”
at 0181-0186.
See id.
Drugdex classifies the “Strength of Evidence” for
the Therapeutic Use as Category C, which includes “[e]xpert
opinion or consensus, case reports, or case series,” id. at
0018; this type of evidence contrasts with “randomized control
trials,” which would constitute a stronger category of
evidentiary support, id.
The summary of the “Therapeutic Use” states: “Intractable
nausea and vomiting related to metastatic cancer of the
gastrointestinal mucosa resolved only after addition of
[Dronabinol.]”
Id. at 0185.
Drugdex’s recommendation for using
Dronabinol for the Therapeutic Use is “Class IIB,” meaning that
the treatment “may be useful and is indicated in some, but not
most, cases.”
Id. at 0009.
The Therapeutic Use entry, and
Drugdex’s accompanying recommendation, are based on a single
case study, to which the entry provides a citation.
See id. at
0185 n.25.
2.
Case Study
The underlying study (“Case Study”) to which the Drugdex
entry provides a citation was published in the Journal of Pain
[8]
and Symptom Management, 8 see id. at 0017, under a heading called
“Palliative Care Rounds.” 9
See Francisco Gonzalez-Rosales &
Declan Walsh, Intractable Nausea and Vomiting Due to
Gastrointestinal Mucosal Metastases Relieved by
Tetrahydrocannabinol (Dronabinol) (“Case Study”), 14 J. of Pain
& Symptom Manag. 311 (1997).
The Case Study focuses on the
treatment of a single patient (the “Patient”).
It begins by
summarizing existing research 10 and identifying its purpose,
which is investigating “the use of Dronabinol as an antiemetic
in patients with vomiting that is not chemotherapy related but
is associated with advanced cancer.”
Id. at 311.
The authors
characterize the Patient’s “main problem” as “intractable nausea
and vomiting unresponsive to conventional antiemetics[.]”
Id.
8
The Journal focuses on “research and best practices
related to the relief of illness burden among patients afflicted
with serious or life-threatening illness.” Journal of Pain and
Symptom Management, http://www.jpsmjournal.com/content/aims.
Its tagline is “[a]dvancing palliative care, hospice, and
symptom research.” Id.
9
The aim of this section is “to provide case-based
information relevant to the clinical practice of palliative
care.” Journal of Pain and Symptom Management, Guide for
Authors, https://www.elsevier.com/journals/journal-of-pain-andsymptom-management/0885-3924/guide-for-authors.
10
The Case Study notes that Dronabinol is currently
“recommended . . . for chemotherapy induced nausea and vomiting
when other antiemetic medication are not effective. . . . [and]
for anorexia cachexia in [AIDS.]” Case Study 311. It also
notes that there “is some information in the literature” about
other uses, such as alleviating “nausea and vomiting related
with anesthesia[.]” Id.
[9]
They posit that “the main cause of the nausea and vomiting was
diffuse gastrointestinal mucosal tract metastases.”
12.
Id. at 311-
Administering Dronabinol worked like a charm for the
Patient, eliminating his “pain, nausea, vomiting, [and]
constipation[.]”
Id. at 313.
But the authors are not sure why, or, more precisely, how,
Dronabinol worked to relieve the Patient’s symptoms.
See id.
(“The mechanism of the antiemetic effect of [Dronabinol] is
unknown[.]”).
Their best guess is that Dronabinol binds to the
“opiate receptors in the forebrain[,]” which “inhibit . . . the
vomiting center in the medulla[.]”
Id.
This would not have
anything to do with the underlying cause of the nausea, which,
they suspected, was cancer-related. 11
The authors conclude that
“low doses of Dronabinol may be safe and effective when used in
combination with other antiemetics for intractable cancerrelated nausea and vomiting with no mechanical obstruction.
Dronabinol should be considered a potentially useful agent in
this setting.”
C.
Id. at 314.
Prior Decisions
11
The authors reiterate that there are many causes of
nausea in cancer patients, see Case Study 313 (“Nausea and
vomiting are among the 20 most frequent symptoms in advanced
cancer. The etiology is multifactorial.”), and suggest one in
their case, see id. (“In this case, we believe that the main
cause was diffuse metastatic disease in the gastrointestinal
tract mucosa.”).
[10]
With this statutory framework and factual background in
mind, the Court next summarizes the reasoning of each of the
decisions below.
1.
Hearing Officer’s Decision
The hearing officer issued a ruling finding that Medicare
Part D covered Tangney’s use of Dronabinol because the use was
supported by a citation in Drugdex.
See Admin. R. 0125-0133.
He rejected the Secretary’s narrow interpretation of the Drugdex
listing, which is limited to cancer patients with treatmentresistant nausea, for two main reasons.
First, and most importantly, the expansive title of the
Drugdex therapeutic use at issue here -- “nausea and vomiting,
disease-related, treatment refractory” -- contrasted with the
titles of other therapeutic uses, which were limited to specific
diseases, such as “nausea and vominting, cancer-related,
treatment refractory” and “chemotherapty-induced nausea and
vomiting[.]”
See id. at 0131-0132 (internal citations omitted).
Thus, the plain meaning of the Drugdex entry supported the
palliative use to treat Tangney’s symptoms in this case: she too
had “nausea and vomiting, disease-related, treatment refractory”
and there was no reason, in the entry, to suspect that the
treatment would not work to alleviate her symptoms, as well.
See id. at 0132.
[11]
Second, the hearing officer considered Tangney’s real-world
history.
See id.
Specifically, he observed that Dronabinol had
worked in treating her symptoms in the past, and that “without
coverage of this drug, [Tangney] will either have to remain in
the hospital indefinitely or possibly die.”
2.
Id.
Appeals Council’s Decision
The Council reached the opposite conclusion of the hearing
officer: Tangney’s use of Dronabinol was not supported by a
citation in Drugdex.
See id. at 0007-0023.
It emphasized that
Drugdex “is not written by a legislative body and [is] thus not
structured with the expectations and assumptions that underlie
statutory drafting.”
Id. at 0016.
The Council proceeded to
criticize the hearing officer’s reliance on the title of the
Therapeutic Use -- “Nausea and vomiting, Disease-related,
treatment refractory,” id. at 0181 -- because such titles in a
compendia are merely “analogous to labels on file folders.”
at 0016.
Id.
Such labeling has very little probative value, the
Council reasoned, because a broad-sounding title could reflect
that “indications will be recommended based on citations as the
[scientific] literature develops.”
Id. at 0019.
(The Council’s
reasoning does not explain the variation among the titles
identified by the hearing officer; the Council did not suggest
why the other, more specific titles, lacked an expectation that
the scientific literature would develop.)
[12]
Although it is without medical expertise, the Council also
purported medically to evaluate the Case Study.
The Council
interpreted the Case Study very narrowly: because its authors
did not know how Dronabinol worked, 12 there was no basis for
concluding that the Case Study supported the use of Dronabinol
to treat to other, non-identically-diagnosed patients.
See id.
The Council put the most weight on the wording of the Case
Study’s conclusion, which, again, was that “low doses of
Dronabinol may be safe and effective when used in combination
with other antiemetics for intractable cancer-related nausea and
vomiting with no mechanical obstruction.”
Case Study 314).
Id. at 0018 (quoting
Due to this “cancer-related nausea” limitation
in its conclusion, the Council reasoned that using Dronabinol on
patients with nausea that was not cancer related was not
supported by the Drugdex entry’s citation to this study.
See
id.
III. ANALYSIS
Having described the administrative agency’s decisions and
the underlying facts and compendium entry on which they were
based, the Court now turns to its analysis of the parties’
opposing motions.
Although the Court holds that the Council’s
12
The Council did not discuss that, while admitting that
“the mechanism . . . is unknown” the authors of the study did
hypothesize that that Dronabinol binds to the “opiate receptors
in the forebrain[,]” which “inhibit . . . the vomiting center in
the medulla[.]” Case Study 313.
[13]
decision, and its implied definition of “supported by,” is not
entitled to deference under Chevron, U.S.A., Inc. v. Nat. Res.
Def. Council, Inc., 467 U.S. 837 (1984) (“Chevron deference”),
it does command respect pursuant to Skidmore v. Swift & Co., 323
U.S. 134 (1944) (“Skidmore deference”).
Applying Skidmore
deference to the substantive issue of whether Tangney’s use of
Dronabinol is “supported by” a citation in Drugdex, the Court
concludes that the Council’s reasoning is unpersuasive, and
holds that Tangney’s use of Dronabinol, because palliative, is
supported by the citation in Drugdex to a case study of a
patient with the same symptoms.
A.
Standards of Review
The first issue is the appropriate standard of review.
Here, this issue actually requires the analysis of two issues -the appropriate deference to a factfinder, and to an expert
agency -- which will be discussed in turn.
1.
Questions of Fact, Questions of Law
The governing statute and caselaw are, at first glance,
clear in defining how the Court ought review final decisions of
the Secretary: such decisions will stand if supported by
substantial evidence, so long as the proper legal standard was
employed.
See 42 U.S.C. § 405(g); Seavey v. Barnhart, 276 F.3d
1, 9 (1st Cir. 2001) (stating that the standard of review is
“whether the final decision is supported by substantial evidence
[14]
and whether the correct legal standard was used”) (internal
citations omitted).
Tangney agrees that this is the standard.
See Pl.’s Reply 3.
This simple-sounding standard, however, encapsulates two
different standards of review, for two different types of
issues.
The agency’s findings of fact, “if supported by
substantial evidence, shall be conclusive.”
10 (quoting 42 U.S.C. § 405(g)).
Seavey, 276 F.3d at
This deference is justified,
because the agency is the one on the ground, so to speak: “the
responsibility for weighing conflicting evidence, where
reasonable minds could differ as to the outcome, falls on the
Commissioner and his designee[,] . . . [and] [i]t does not fall
on the reviewing court.”
Id.
There is no cause for deference
if the issue is a legal one, however, because the Court is in as
good of a position to interpret the law as anyone, thus de novo
review of these issues, see id. at 9, also makes sense. 13
So far, so good.
But when the issue being raised is
neither obviously a finding of fact, such as whether to believe
one witness’s testimony over another’s, nor one of law, such as
whether it is the applicant’s burden to prove her eligibility or
the Secretary’s to prove her ineligibility, the rule statement
above is of less help.
These situtations involve so-called
13
As will be discussed in the next section, an exception to
this overarching principle applies where the agency possesses
and brings to bear expertise regarding a particular issue.
[15]
mixed questions of law and fact, and they require the reviewing
court to defer to the agency’s determination to the extent that
that determination involved fact-finding.
As the First Circuit
has explained:
Many cases involve what courts term ‘mixed’ questions
-- questions which, if they are to be properly
resolved, necessitate combining factfinding with an
elucidation of the applicable law. The standard of
review applicable to mixed questions usually depends
upon where they fall along the degree-of-deference
continuum: the more fact-dominated the question, the
more likely it is that the trier's resolution of it
will be accepted unless shown to be clearly erroneous.
In re Extradition of Howard, 996 F.2d 1320, 1328 (1st Cir. 1993)
(internal citations omitted).
The Court was unable to locate any published caselaw
analyzing a challenge to the Secretary’s determination analogous
to the one here, where the facts are not in dispute, and the
only question is whether the prescribed use is “supported by” a
citation in a compendium entry. 14
The Council’s analysis
involved applying a statutory phrase (“supported by a citation”)
14
There are various district court cases interpreting the
statutory phrase “supported by.” See Diamond v. Sec'y of Health
& Human Servs., No. 1:13 CV 2481, 2015 WL 367010, at *1 (N.D.
Ohio Jan. 27, 2015); Broome v. Burwell, No. 6:14-CV-01248-MC,
2015 WL 1526532, at *1 (D. Or. Apr. 1, 2015); Nievod v.
Sebellius, No. C 11-4134 SBA, 2013 WL 503089, at *1 (N.D. Cal.
Feb. 8, 2013). In those cases, however, the claimaints did not
argue that their prescribed uses were supported by a citation in
the one of the compendia, but rather that such support was not a
statutory requirement. Tangey does not advance this statutory
interpretation. Instead, she argues that her use of Dronabinol
is supported by a citation in Drugdex.
[16]
to undisputed facts (Tangney’s medical records, and the relevant
Drugdex entry).
The issue is confusing. 15
Most telling is that
the Council, like the Court, necessarily based its decision on a
“cold administrative record,” Seavey, 276 F.3d at 9.
The
Council, in its review, had to determine whether “the [hearing
officer] disregarded Medicare law and rules relative to Part D
Admin. R. 0014. 16
coverage[.]”
In the securities enforcement
context, the First Circuit has held that a lesser level of
deference applies to agency decisions resulting from an appealscouncil-type body’s reversal of a hearing officer’s
determination:
15
Indeed, the Secretary appears confused, as well. Compare
Def.’s Mem. 12 (framing its determination that Tangney’s use of
Dronabinol is not supported by a citation in Drugdex as one of
fact) with id. at 13-14 (arguing that its determination was a
legal one involving its interpretation of the phrase “supported
by citation[.]”).
16
This point is further supported by the Council’s
summation of its decision, which, while containing language
nodding towards facts, reveals that it thought the reversible
error was one of law. See Admin. R. 0015 (“[T]he Council finds
reversible legal error in the [hearing officer’s] decision, and
finds that the decision is inconsistent with the preponderance
of the evidence of record.”) (emphasis supplied); id. at 0016
(stating that the hearing officer “misapprehended the nature and
structure of the Drugdex compendium listings, sections, and the
citations therein.”). Again, in the Council’s view, the true
error in the hearing officer’s decision was a legal
interpretative one. See id. at 0016 (“As a result of the
[hearing officer’s] errors in interpreting the compendium, he
erroneously gave weight to evidence not related to the issue of
whether the drug Dronabinol is used for a medically accepted
indication in this case.”).
[17]
When the [Securities and Exchange Commission] and the
[hearing officer] reach different conclusions, the
[hearing officer]’s findings and written decision are
simply part of the record that the reviewing court
must consider in determining whether the [Securities
and Exchange Commission]'s decision is supported by
substantial evidence. Because evidence supporting a
conclusion may be less substantial when an impartial,
experienced examiner who has observed the witnesses
and lived with the case has drawn conclusions
different from the [appeals council]'s than when the
[hearing officer] has reached the same conclusion,
where the [Securities and Exchange Commission] has
reached a conclusion opposite of that of the [hearing
officer], our review is slightly less deferential than
it would be otherwise[.]
Flannery v. S.E.C., 810 F.3d 1, 9 (1st Cir. 2015) (internal
quotation marks and citations omitted).
Accordingly, the Court holds that the Council’s ruling was,
in the main, a ruling on matter of law, 17 and is entitled to
little deference as such.
2.
The Appropriate Level of Deference
17
This legal ruling arguably sits in some tension with the
Seventh Circuit’s discussion of this same issue -- whether a
patient’s use of a given drug is “supported by” a citation in a
compendia and thus covered by Part D -- albeit in the False
Claims Act context. See United States v. King-Vassel, 728 F.3d
707, 717 (7th Cir. 2013) (treating the issue as one of fact).
In King-Vassel, the Seventh Circuit emphasized the fact-specific
nature of the inquiry, stating that “any given prescription
could turn out to be unsupported [by a citation in Drugdex] for
any number of reasons -- from the relatively simple to the
dizzyingly complex.” Id. There, however, the district court
was serving its trial function, not reviewing an agency’s
action, and thus the discussion seems of limited relevance here.
See id. (reversing district court’s ruling that an expert was
per se necessary to interpreting the compendia’s listings and
determining whether they supported a given prescription).
[18]
When reviewing an agency adjudication that involves matter
of law, the Court’s usual reviewing posture is de novo, as
discussed above.
The Secretary argues that, insofar as the
Council’s decision here interpreted a statutory phrase, 18 that
interpretation is entitled to Chevron deference, Def.’s Mem. 1112.
Tangney disagrees.
See Pl.’s Mem. 11-13; Pl.’s Reply 4-6.
The Court mostly agrees with Tangney, but finds that Skidmore
deference applies.
Whether the Council’s interpretation of Part D’s
requirements deserves Chevron deference appears to be an open
question in the First Circuit. 19
Chevron deference applies 20
18
The Secretary appears to argue that a press release
stating that “supported by” is different than merely “listed
in” constitutes an interpretation that is entitled to Chevron
deference. See Def.’s Mem. 13-14 (citing Ctr. for Medicaid and
State Operations, Medicaid Drug Rebate Program Release No. 141,
For State Medicaid Directors: Compendia Clarification). As
discussed above, the relevant inquiry is whether the
interpretation had the force of law. This press release did
not, and thus does not receive Chevron deference. It adds no
value to the Secretary’s argument and is omitted from the rest
of the discussion.
19
In Doe v. Leavitt, 552 F.3d 75 (1st Cir. 2009), the First
Circuit confronted a situation somewhat analogous to the one
before the Court. The court there explained that:
the Secretary [of Health and Human Services] has not
exercised this rulemaking authority to set forth his
interpretation of the word ‘investigation.’ Instead,
the Secretary's interpretation must be gleaned from
(i) an agency manual, the NPDB Guidebook (the
Guidebook), issued in September of 2001, and (ii) the
Secretary's decision in this case. The appellant
contends that these ‘informal’ interpretations do not
[19]
where the interpretation is “the type of legislative ruling that
would naturally bind more than the parties to the ruling.”
United States v. Mead Corp., 533 U.S. 218, 232 (2001); see also
id. at 233 (noting that the agency classification there did not
qualify because it was “conclusive only as between itself and
the importer to whom it was issued”); Patel v. Johnson, 2
F.Supp.3d 108, 120 (D. Mass. 2014) (“[T]he primary consideration
governing the type of deference that ought apply is whether the
interpretation was intended ‘to carry the force of law,’ and a
major indicator of that intention is whether the decision was
precedential and published.”) (quoting River St. Donuts, LLC v.
Napolitano, 558 F.3d 111, 115-16 (1st Cir. 2009)).
warrant deference under the familiar rubric of
Chevron.
Id. at 79 (1st Cir. 2009). After noting that “the level of
deference owing to informal agency interpretations is freighted
with uncertainty[,]” the court there declined to decide the
issue. Id. at 80 (citing Lisa Schultz Bressman, How Mead Has
Muddled Judicial Review of Agency Action, 58 Vand. L. Rev. 1443,
1457–69 (2005)).
20
Whether Chevron deference applies is an important issue.
If it does, the Court would adopt the agency’s interpretation of
the law unless it was “procedurally defective, arbitrary or
capricious in substance, or manifestly contrary to the statute.”
United States v. Mead Corp., 533 U.S. 218, 219 (2001) (internal
footnote and citations omitted). This level of deference to
agency decision-making strikes some scholars as undermining the
judiciary’s function as a check on executive power. See, e.g.,
Ronald A. Cass, Vive La Deference?: Rethinking the Balance
Between Administrative and Judicial Discretion, 83 Geo. Wash. L.
Rev. 1294 (2015).
[20]
Tangney correctly points out that the Council’s decisions
are, per the regulations promulgated by the agency itself, nonprecedential.
See Pl.’s Reply 5, citing 42 C.F.R. §§ 405.1048,
405.1130 (“The [Council’s] decision is final and binding on all
parties [to the action.]”).
Thus the Court will not accord the
Council’s decision, and any statutory interpretation contained
therein, Chevron deference.
Compare Garcia-Quintero v.
Gonzales, 455 F.3d 1006, 1012 (9th Cir. 2006) (“[B]ecause the
[Board of Immigration Appeals’] decision was an unpublished
disposition, issued by a single member of the [Board of
Immigration Appeals], which does not bind third parties, we
conclude that it does not carry the force of law.”), abrogated
on unrelated grounds by Medina-Nunez v. Lynch, 788 F.3d 1103,
1104 (9th Cir. 2015), with Nat'l Cable & Telecommunications
Ass'n v. Brand X Internet Servs., 545 U.S. 967, 980 (2005)
(applying Chevron deference because of “provisions [that] give
the [agency] the authority to promulgate binding legal rules”)
(emphasis supplied).
This does not end the deference question,
however.
3.
Applying Skidmore Deference
The First Circuit has laid out a roadmap for how to proceed
once a court determines that Chevron deference does not apply:
[W]hen an agency speaks with something less than the
force of law, its interpretations are entitled to
deference only to the extent that those
[21]
interpretations have the “power to persuade.” [This is
Skidmore deference.] That is the situation here. We
must, therefore, dig deeper.
To gauge persuasiveness, an inquiring court should
look to a “mix of factors” that “either contributes to
or detracts from the power of an agency's
interpretation to persuade.” Those factors include
“the thoroughness evident in the agency's
consideration, the validity of its reasoning, and the
consistency of its interpretation with earlier and
later pronouncements.” “The most salient of the
factors that inform an assessment of persuasiveness is
the validity of the agency's reasoning.”
Merrimon v. Unum Life Ins. Co. of Am., 758 F.3d 46, 55 (1st Cir.
2014), cert. denied, 135 S. Ct. 1182 (2015) (internal citations
omitted).
Those factors are “not exhaustive,” and a court can
consider, too, the formality of the agency process that produced
the decision, as well as the extent to which it is based on the
agency’s expertise.
See Doe v. Leavitt, 552 F.3d 75, 81 (1st
Cir. 2009) (citing Kristin E. Hickman & Matthew D. Krueger, In
Search of the Modern Skidmore Standard, 107 Colum. L. Rev. 1235,
1259 (2007)).
Four of the enumerated factors seem particularly relevant
in the current case: (1) the agency’s consistency, through the
Council, in its restrictive interpretation of citations in
approved compendia; (2) the formality of the process that led to
the Council’s decision; (3) the decision’s non-precedential
effect; and (4) the reasoning of the decision.
discussed in turn.
[22]
These will be
The Secretary highlights that the Council has been
consistent in its application of “supported by,” citing to
several prior Council cases with holdings consistent with its
position here.
See Def.’s Mem. 15-17.
The hearing officer
himself was aware of this consistency -- noting that the Council
“has found in similar cases that the therapeutic use headings in
[the relevant compendium] should not be read expansively, but
rather strictly,” Admin. R. 6 --
but refused to follow the
Council’s prior rulings because they were non-precedential, see
id. at 7.
Tangney does not appear to dispute that the Council
has been consistent in its restrictive definition of “supported
by.”
This consistency favors deferring to the agency’s
interpretation.
The formality of the process that produced the Council’s
decision also nudges this Court towards deferring: Tangney was
present and represented by counsel at each stage of the
decision-making process, and the procedures were spelled out in
advance.
See Doe, 552 F.3d at 81 (stating that “[g]reater
weight ordinarily is due to interpretations that result from a
structured interpretive process as opposed to a catch-as-catchcan interpretive process.”).
On the other hand, though, the
Council’s decision was not precedential and thus not analogous
to a proffered rule to be applied by all future hearing
officers.
This counsels against strong deference, see id.
[23]
(“[G]reater deference is due to an interpretation that ‘is not
merely ad hoc but is applicable to all cases.’”) (internal
citation omitted), although it certainly does not suggest the
Court ought abandon all deference, see Patel, 2 F.Supp.3d at 121
(“[W]hile this interpretation lacks the force of law, it was not
a mere casual construction, but rather was the product of a
multilayered intra-agency appellate process involving relatively
formal procedures.”) (internal citation omitted).
The final and “most salient” of the factors is the
persuasiveness of the agency’s reasoning.
55.
Merrimon, 758 F.3d at
“This inquiry does not focus on the [persuasiveness of the]
interpretation per se but, rather, on whether the agency has
consulted appropriate sources, employed sensible heuristic
tools, and adequately substantiated its ultimate conclusion.”
Doe, 552 F.3d at 82.
This means “something more” than deferring
“only when an inquiring court is itself persuaded that the
agency got it right.”
Id. at 81.
Here, the Council did consult “appropriate sources,”
id.
at 82, discussing the Drugdex entry and the underlying Case
Study, along with referencing various previous Council
decisions, see Admin. R. 0015-0022.
It also utilized some
“heuristic devices,” Doe, 552 F.3d at 82, while explicitly
rejecting others.
Specifically, the Council repudiated the
hearing officer’s use of a traditional statutory interpretation
[24]
device 21 because Drugdex, it said, is not legislation, and should
not be interpreted as such.
See Admin. R. 0016-0018.
Instead
of according much weight to the title of the Case Study, the
Council reasoned that, because the compendia are made to
“provide access to the [medical/scientific] research and the
scientific evidence it contains[,]” determining what uses its
citations support should be done by evaluating the underlying
studies included therein.
Id. at 0017-0018.
The Council’s analysis of the Case Study, however, did not
“adequately substantiate[] its ultimate conclusion.”
F.3d at 82.
Doe, 552
The Council observed that, as a case study, it
constituted “the lowest category for strength of evidence.”
at 18.
Id.
It also noted that the Case Study did not definitively
identify how or why Drobabinol works.
Id.
Based on these
factors, the Council determined that the listing ought be read
very narrowly. 22
Id.
21
See supra Part II-C-1 (describing hearing officer’s
comparision of the differences between titles of Drugdex
Therapeutic Uses).
22
Taking a step back, the Court observes that the
regulatory scheme here forced Tangney into a Kafka-esque
situation: trying to convince the Council that Tangney’s use of
Dronabinol was supported by a case study of a single patient,
when, in fact, Tangney’s record here itself constitutes a case
study, with her having taken Dronabinol to near miraculous
effect for three consecutive years before switching to Part D
and being denied coverage.
[25]
While this interpretation is internally consistent, it
fails completely to engage with Tangney’s argument, which is
essentially that it does not matter how Dronabinol works,
because it is merely treating symptoms, not the underlying
disease. 23
The Secretary allows that “the palliative use of
Dronabinol for nausea related to stomach cancer, a use likely
approved for that patient after consideration of the specific
dangers involved[,]” would be supported by the Drugdex citation.
Def.’s Mem. 15.
A few sentences in its memorandum later, the
Secretary appears to go further, noting that the Drugdex
citation, “read broadly,” “is . . . for otherwise untreatable
nausea in patients with a cancer diagnosis.”
Id.
The
Council’s, and the Secretary’s, application of “supported by”
fails to explain its choice of scope.
Tangney’s interpretation
-- that, since she is receiving palliative care, like the
patient in the underlying case study, the similarity of their
symptoms should control -- in contrast, is clear in why it
governs in this particular case.
Another way of stating this is that there is a level-ofgenerality problem.
While Tangney has an explanation for her
level of generality, the Secretary does not.
The Council (and,
now, the Secretary) frames Tangney’s use of Dronabinol as
23
This interpretation is supported by the journal in which
the case study was published. See supra notes 8 and 9
(describing focus on palliative care research).
[26]
treating her nausea that is caused by her particular
diseases/conditions.
See Admin. R. 0016.
Only because of this
framing is the absence in both the Drugdex entry and the
underlying case study to “nausea and vomiting secondary to
severe gastroparesis and intestinal motility disorder” evidence
that the citation does not support her use.
Id.
Conversely,
Tangney argues that her Dronabinol prescription merely treats
her symptom of treatment-resistent nausea, regardless of the
underlying cause, because she is receiving palliative care.
Pl.’s Reply 6.
See
Thus, “[w]hile a curative drug may logically be
limited to a specific diagnosis, a drug [like Dronabinol] that
is used to treat symptoms should be more logically linked to the
specific symptoms.”
Id. at 6-7.
This failure to explain, coupled with the facts of this
particular case, and, as Tangney points out, the favorable-toclaimants tradition in ambiguous Social Security cases, Pl.’s
Reply 7; see also, e.g., McCuin v. Sec'y of Health & Human
Servs., 817 F.2d 161, 174 (1st Cir. 1987) (“[T]he Social
Security Act . . . is a remedial statute, to be broadly
construed and liberally applied in favor of beneficiaries.”)
(internal citation omitted), compels the Court to adopt her
reading of the statutory scheme 24 and underlying Case Study.
24
Tangney does not advance the statutory interpretation
adopted by the Southern District of New York in 2011,
[27]
IV.
CONCLUSION
The Court vacates the decision of the Council, and thus
DENIES the Secretary’s motion for an order affirming the
decision of the Secretary, ECF No. 20, and GRANTS Tangney’s
motion to reverse the Secretary’s decision, ECF No. 17.
SO ORDERED.
/s/ William G. Young
WILLIAM G. YOUNG
DISTRICT JUDGE
recognizing that, while favorable to claimants such as herself,
it represents a minority position. See Pl.’s Mem. 9 (“Unlike
most cases which have challenged the Secretary’s denial of
coverage for an off label use under Medicare Part D, [Tangney]
does not challenge the requirement [that the prescribed use be a
medically accepted indication.]”). The Southern District, in
Layzer v. Leavitt, 770 F. Supp. 2d 579 (S.D.N.Y. 2011),
construed the statute’s inclusion of coverage for prescriptions
“for a medically accepted indication,” as inclusive, not as
exhaustive, meaning that it was not per se required for a
prescription to be covered under the statute. Id. at 583-87.
[28]
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