Finigan v. Burwell

Filing 30

Judge William G. Young: ORDER entered. MEMORANDUM AND ORDER"For the foregoing reasons, the Court DENIES the Secretary's motion to affirm the decision of the Council, ECF No. 27 , and GRANTS IN PART Finigans motion to reverse or remand the Council's decision, ECF No. 23 , remanding the matter to the Secretary for further proceedings consistent with this memorandum.SO ORDERED."(Sonnenberg, Elizabeth)

UNITED STATES DISTRICT COURT
DISTRICT OF MASSACHUSETTS

PATRICIA FINIGAN,
Plaintiff,
v.
SYLVIA M. BURWELL,
Secretary of Health and
Human Services,

Defendant.

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CIVIL ACTION
NO. 15-12246-WGY

YOUNG, D.J.

May 19, 2016
MEMORANDUM & ORDER

I.

INTRODUCTION
Patricia Finigan, a diabetic, brings this action under 42

U.S.C. § 405(g) to challenge her Medicare Part C plan’s denial
of coverage for disposable sensors, which are used as part of a
Continuous Glucose Monitoring System (“CGMS”).
A.

Factual Background

The underlying facts in this case are not in dispute, as
Finigan’s claims on appeal relate solely to legal issues.

See

Pl.’s Mem. Supp. Mot. Reverse Remand Decision Secretary Leave
File Granted Jan. 21, 2016 (“Pl.’s Mem.”) 8-13, ECF No. 24.

The

Court thus sketches only a brief history of the facts, as found
by the hearing officer.

Finigan has type 1 diabetes.

Admin. R. 0058.

She “has

been insulin dependent for the past thirty-five years” and has
also suffered from a variety of other medical ailments during
that time span.

Id.

To treat her diabetes, Finigan’s physician

“established a blood glucose testing regimen requiring the use
of a [CGMS.]”

Id. at 0062.

The hearing officer summarized the

effects of the CGMS on her health:
[Finigan has] had severe medical issues before [she
began using the CGMS, including an] episode of a
seizure during sleep, episodes of passing out in
public and an episode of awaking during the night and
injuring her hand in a fan due to low blood sugar and
confusion. Before use of the [CGMS, Finigan] suffered
harm from low blood sugars and has required multiple
emergency room visits and hospitalizations. Since
ceasing use of [the CGMS, Finigan] has had episodes of
testing at home before a short walk and then
experiencing significant decreases in blood glucose
levels requiring assistance only minutes later. The
use of the [CGMS] allowed [Finigan] to control her
blood sugars and to avoid anxiety, symptoms[,] and
injury. . . . [Finigan’s] physician determined
[Finigan] required [the CGMS] with sensors due to
[her] fluctuating blood sugar and that the supplies
[for the CGMS] were critical[.]
Id. at 0059 (internal citation omitted).

Although the language

of her initial request for coverage does not appear to be in the
record, the parties agree that she requested coverage for
supplies for her CGMS from her insurer (under a Medicare
Advantage Plan, explained infra Part II-A).

Compare Pl.’s Mem.

2, with Mem. Law Supp. Def.’s Mot. Affirm Decision Medicare

[2]

Appeals Council (“Def.’s Mem.”) 10, ECF No. 28.
insurer denied her request.
B.

Finigan’s

See Admin. R. 0145.

Procedural History

After this initial denial, Finigan embarked on a journey
into the Medicare appeals process, making six stops on her way
to this Court.

Finigan appealed her insurer’s initial

determination internally on December 31, 2013, and, on January
2, 2014, her insurer affirmed its initial denial of coverage for
her CGMS.

Admin. R. 0141.

Next, she began the external appeals

process, which, for her, started with Maximus Federal Services,
a contractor hired by Medicare to conduct preliminary appeals.
Id. at 127.

Maximus affirmed her insurer’s denial, relying

solely on Local Coverage Determination L11530, which, it
claimed, “incorporates [Policy] Article A33614,” the latter of
which states that CGMS’s are not covered.

Id. at 0139.

Onwards she went, to a hearing officer, 1 who, in contrast to
the three previous decision-makers, granted Finigan coverage on
July 17, 2014.

Id. at 0047.

Her insurer then successfully

petitioned for review before the Medicare Appeals Council (the
“Council”).

Id. at 0008.

On January 20, 2015, the Council

issued a decision reversing the hearing officer’s determination

1

For an explanation of the Court’s use of this term, see
Vega v. Colvin, No. CV 14-13900-WGY, 2016 WL 865221, at *1 n.1
(D. Mass. Mar. 2, 2016).
[3]

and declining coverage for Finigan’s CGMS.

Id. at 0012.

Four-

and-a-half months later, Finigan filed a complaint in this
Court, challenging the Council’s decision. 2

See Compl., ECF No.

1.
II.

LEGAL FRAMEWORK
Finigan’s claim for coverage implicates an intricate

statutory and regulatory scheme.

It also involves the

interpretation of two particular documents.

The Court will

first sketch out the basic framework, then will describe the two
documents at issue here.
A.

Statutory and Regulatory Scheme

The First Circuit has provided an overview of Medicare and
Parts A, B, and C:
Enacted in 1965, Medicare is a federally run health
insurance program benefitting primarily those who are
65 years of age and older. Before the recent
extension of Medicare to cover a portion of
By the Court’s count, it will be at least the sixth
decision-maker to weigh in on this coverage issue. And, because
of the relief ordered, see infra Part V, it unfortunately will
not be the last. Is this too much process? Would those like
Finigan be better off with fewer levels of review, but with more
resources dedicated to each level? These are important
questions obviously outside the scope of this decision and the
Court’s power, but that are raised every time the Court details
a Social Security petitioner’s bureaucratic appeals-on-appeals
path to the Court. The Court has previously lamented the myriad
delays faced by claimants. See, e.g., Vega, 2016 WL 865221, at
n.1 *10 (D. Mass. Mar. 2, 2016) (citing Kelli Kennedy, Some
Struggle to Live While Waiting More Than 2 Years for Social
Security Disability Hearings, U.S. News, (Nov. 28, 2015, 11:00
AM), http://www.usnews.com/news/us/articles/2015/11/28/longwait-times-plague-social-security-disability-process).
2

[4]

prescription drug costs, Medicare covered only
inpatient care through Part A and outpatient care
through Part B. Parts A and B are fee-for-service
insurance programs operated by the federal government.
42 U.S.C. § 1395c et seq. (Part A); 42 U.S.C. § 1395j
et seq. (Part B). In 1997, Congress enacted Medicare
Part C to allow Medicare beneficiaries to opt out of
traditional fee-for-service coverage under Parts A and
B. 42 U.S.C. § 1395w–21 et seq. (Part C). Under Part
C, beneficiaries can, inter alia, enroll in “Medicare
Advantage” plans, privately-run managed care plans
that provide coverage for both inpatient and
outpatient services. Id. § 1395w–22(a)(1).
First Med. Health Plan, Inc. v. Vega-Ramos, 479 F.3d 46, 48 (1st
Cir. 2007) (internal footnote omitted).

Finigan is enrolled in

one such Medicare Advantage Plan, namely AARP Medicare Complete
(the “Plan”).

Admin. R. 0137.

is heavily regulated.

Although privately run, the Plan

It must cover all services under Medicare

Parts A and B (or those covered solely by Part B).
C.F.R. § 422.101(a).

See 42

At issue here is what Finigan claims is

“durable medical equipment,” Pl.’s Reply 4, which, if it is also
“reasonable and necessary for the diagnosis or treatment of
illness or injury,” is covered under Part B, 42 U.S.C. §
1395y(a)(1)(A)-(B).

The sole issue with regard to Finigan’s

appeal is whether her CGMS supplies qualify as “durable medical
equipment.”
“Durable medical equipment” is a listed term in the
“Definitions” section of the Medicare statute, but there is no
definition provided.

See 42 U.S.C. § 1395x(n).

Instead, the

statute (mistakenly?) provides examples of “durable medical
[5]

equipment,” most of which are irrelevant to the current case,
except for “blood-testing strips and blood glucose monitors for
individuals with diabetes.”

Id.

The regulations do provide a

definition for “durable medical equipment” in the form of a
five-part test:
Durable medical equipment means equipment, furnished
by a supplier or a home health agency that meets the
following conditions:
(1) Can withstand repeated use.
(2) Effective with respect to items classified as DME
after January 1, 2012, has an expected life of at
least 3 years.
(3) Is primarily and customarily used to serve a
medical purpose.
(4) Generally is not useful to an individual in the
absence of an illness or injury.
(5) Is appropriate for use in the home.
42 C.F.R. § 414.202.

In addition to the statutory examples and

regulatory definition of “durable medical equipment,” the
regulations provide instructions to hearing officers and the
Council with regard to certain other documents:
(a) [Hearing officers and the Council] are not
bound by [Local Coverage Determinations], [Local
Medical Review Policies], or [Centers for Medicare &
Medicaid Services] program guidance, such as program
memoranda and manual instructions, but will give
substantial deference to these policies if they are
applicable to a particular case.
(b) If [a hearing officer or the Council]
declines to follow a policy in a particular case, the
[hearing officer or the Council’s] decision must
explain the reasons why the policy was not followed.
[A hearing officer or the Council’s] decision to
disregard such policy applies only to the specific

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claim being considered and does not have precedential
effect.
(c) [A hearing officer or the Council] may not
set aside or review the validity of an LMRP or LCD for
purposes of a claim appeal. [A hearing officer] . . .
may review or set aside an [Local Coverage
Determination] (or any part of a [Local Medical Review
Policy] that constitutes a [Local Coverage
Determination]) in accordance with part 426 of this
title.
42 C.F.R. § 405.1062 (emphasis supplied).

Out of the documents

to which “substantial deference” is owed, pursuant to the
regulation above, only a Local Coverage Determination is present
here. 3

The Court now turns to it, along with a Policy Article,

unmentioned in the relevant regulation, but, at least in the
Secretary’s view, also deserving of “substantial deference,” see
Def.’s Mem. 18-20.
B.

The Local Coverage Determination and Local Policy
Article at Issue

The Local Coverage Determination relevant here is titled
“Local Coverage Determination (LCD) for Glucose Monitors
(L11530).”

Admin. R. 0018.

Its “Coverage Guidance” section

provides that “home blood glucose monitors and related

The parties have pointed to no relevant Local Medical
Review Policies, instead agreeing that these have been phased
out, compare Pl.’s Mem. 6, with D.’s Mem. 5 n.7, and although
the Secretary attempts to rely on guidance from the Center for
Medicare and Medicaid Services to obtain an affirmance of the
Council’s decision, see Def.’s Mem. 15-16, such argument is
improperly made for the first time on appeal to this Court, see
infra Part IV-B.
3

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accessories and supplies” are covered for claimants who “ha[ve]
diabetes” and whose physicians have prescribed the supplies and
trained them in their use.

Id. at 0019.

Although the section

excludes certain related accessories (e.g., a “laser skin
piercing device”) as “not reasonable and necessary[,]” it does
not mention CGMS’s.

Id.

The Local Coverage Determination

includes an “Attachments” section, but it is empty.

See id. at

0034 (“There are no attachments for this [Local Coverage
Determination.]”).

On that same page, under “Related Local

Coverage Documents,” “A33614 -- Glucose Monitors -- Policy
Article -- Effective January 2014” is listed.

Id.

The document to which the Local Coverage Determination
refers has a confusing, seemingly two-part name: “Local Coverage
Article for Glucose Monitors - Policy Article - Effective
January 2014 (A33614).”

Id. at 0035.

Referring to this

document as a “Local Coverage Article,” right on the heels of
describing a “Local Coverage Determination,” invites trouble, so
the Court follows the parties in calling it the “Policy
Article.”

See, e.g., Pl.’s Mem. 8; Def.’s Mem. 6, 7.

The Policy Article, in its first subsection of the main
body of text, entitled “Non-Medical Necessity Coverage and
Payment Rules,” recounts the statutory requirements for
coverage, then references the Local Coverage Determination’s
statement for “[h]ome blood glucose monitors.”
[8]

Id. at 0035.

The Coverage Article notes that “[i]n addition” to the Local
Coverage Determination’s reasonable-and-necessary requirements,
“there are specific statutory payment policy requirements,
discussed below, that also must be met.”

Id.

The Article then

lists seven devices, and explains why each is “non-covered.”
See id. at 0036.

Relevant here, the Article asserts that CGMS

is “considered precautionary and therefore non-covered under the
[durable medical equipment] benefit.”

Id.

III. PRIOR DECISIONS
With the relevant legal framework established, this section
moves from the general to the specifics of Finigan’s case,
recounting first the hearing officer’s, then the Council’s,
coverage determinations.
A.

Hearing Officer

The hearing officer ordered the Plan to cover Finigan’s
CGMS supplies.

See Admin. R. 0042.

He observed that the Policy

Article labeled Finigan’s CGMS “precautionary” and thus
ineligible for reimbursement as “durable medical equipment,” and
stated that he must “give substantial deference” to this
determination.

Id. at 0045-46.

The hearing officer nonetheless

found that based on the facts in Finigan’s particular case, 4 her
CGMS was “medically reasonable and necessary to maintain stable

4

These facts are outlined supra Part I-A.
[9]

blood sugar levels and to prevent future complications and a
worsening condition.”

Id. at 0045-46.

For Finigan, the hearing

officer found, the CGM “is not precautionary . . . but rather is
reasonable and necessary for treatment and monitoring of her
Id. at 0046. 5

diabetes.”
B.

Medicare Appeals Council

The Council reviewed the hearing officer’s decision after
the Plan appealed.

Admin. R. 0008.

officer’s decision.

Id. at 0012.

It reversed the hearing
The Council stated that

Policy Article A33614 did not bind it under 42 C.F.R. §
405.1062(a), but that under subsection (b) the Coverage Article
was entitled to “substantial deference.”

Id. at 0010.

Its

analysis regarding whether Finigan’s particular situation was
sufficient to overcome this “substantial deference” was
conclusory: in asserting that the hearing officer’s
justification for “depart[ing] from [the Policy Article]” was
“insufficient[,]” id. at 0011, the Council did not explain what

5

The hearing officer also found persuasive that a different
policy offered by the Medicare Advantage Plan provider used by
Finigan does cover CGM’s when a patient had “demonstrated
adherence to a physician-ordered treatment plan” yet still had
“experienced hypoglycemia unawareness and/or frequent episodes
of hypoglycemia.” Admin. R. 0046. The Council took issue with
this analysis, see id. at 0011, but failed to appreciate that
the hearing officer was using the private policy merely as
circumstantial evidence that CGMS could be helpful to a patient
with diabetes, not as logically requiring that the Plan make the
same coverage determination with respect to its Medicare Plus
plans.
[10]

more would have rendered the record sufficient, or if, for
example, a different type of evidence ought have been proffered
by Finigan.

The only evidence to which the Council pointed, as

an apparent contradiction to the particularized facts found by
the hearing officer, was the safety label on Finigan’s CGMS,
which stated “the CGM is not a replacement for standard selfmonitoring of blood glucose[.]”

Id. at 0010.

Instead of

replacing the blood-testing method, CGM supplements it by
“alert[ing] the patient” when her levels are low, so that a test
should be performed.

Id.

These facts supported the Local

Article’s notation that the CGMS was precautionary only, the
Council reasoned, as the CGMS “readings are not used directly in
adjusting the patient’s treatment regimen.”
IV.

Id.

ANALYSIS
Finigan challenges the Council’s decision, ostensibly

advancing four arguments.

She claims that the Council

erroneously deferred to a Policy Article, Pl.’s Mem. 8-9; that
the medical evidence in the record constitutes “substantial
evidence” that “[s]upports a finding that [Finigan’s CGMS] is
reasonable and [n]ecessary,” id. at 10-11; that the hearing
officer adequately explained his rejection of the Policy
Article, id. at 11-12; and that the Council made legal error and
used evidence outside the record in its decision, id. at 12-13.
Her four arguments, however, in fact converge on one main
[11]

point of contention: the Secretary, through the Council, treated
the Policy Article as though it were a Local Coverage
Determination, and that was legal error.

See Pl.’s Reply Mem.

Opp’n Def.’s Mot. Affirm Decision Medicare Appeals Council
(“Pl.’s Reply”) 1, ECF No. 29.

This error prejudiced her, she

asserts, because it was the basis for the Secretary’s decision
that her CGMS was not covered (reimbursable) “durable medical
equipment.”

Id.

In response, the Secretary claims that the

Council’s determination was supported by substantial evidence,
Def.’s Mem. 16-20, but also, separately, that the CGMS is not
“durable medical equipment” because the component performing the
medically necessary function is non-durable, so affirmance of
the coverage denial is warranted on that ground, as well, id. at
15-16.

As to the Secretary’s second argument, Finigan claims,

in reply, that the Court cannot rely on it because it was not
advanced by the agency in the proceedings below, Pl.’s Reply 12.
The Court first deals with the issue of the Policy Article,
then explains why it is remanding for a determination of whether
the CGMS qualifies as “durable medical equipment” under the
regulations.
A.

Unwarranted Deference

The Council, in denying Finigan coverage, relied on its
assertion that Policy Article A33614 “represents the
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contractor’s determination that [CGMS] is not medically
reasonable and necessary as required by the Medicare statute.”
Admin. R. 0009.

The Council treated the Policy Article like it

was a Local Coverage Determination, which would be entitled to
“substantial deference,” 42 C.F.R. § 405.1062(a), and the
Secretary continues to do so before this Court, see Def.’s Mem.
19 (arguing that the Council’s reliance on the Policy Article
“was appropriate”).

This is legal error.

The Policy Article is not a Local Coverage Determination
because it does not make reasonable-and-necessary
determinations, and the Secretary effectively admits as much.
See Def.’s Mem. 5 n.7 (stating that Local Coverage
Determinations contain reasonable-and-necessary determinations,
while “contractor-issued ‘Policy Articles’” contain information
“not related to [the reasonable and necessary determination],”
such as “benefit category and coding guidelines[.]”).

While

vacating the Secretary’s decision because of the difference
between a “Policy Article” and a “Local Coverage Determination”
might sound like the height of legalistic formalism, this
difference is a meaningful one.

As Finigan points out, see

Pl.’s Mem. 9, Magistrate Judge Duffin, of the Eastern District
of Wisconsin, has explained why the two documents are apples and
oranges:

[13]

Looking to [Policy] Articles for coverage
determinations would undermine [a Medicare statutory
amendment,] whereby Congress created the right for
certain beneficiaries to challenge coverage language
contained in [Local Coverage Determinations]. Given
their limited purpose, a [Policy] Article is not
subject to challenge. Reading a [Policy] Article as
if its language determined whether a service or item
is covered would render such determination exempt from
review. Moreover, [Policy] Articles may be created
without the notice and comment period required for a
[Local Coverage Determinations]. Accepting the
Secretary's position that a [Policy] Article can
determine coverage would seemingly open the door to a
system whereby beneficiaries would not have the
opportunity to provide input on coverage
determinations before the policy went into effect or
to challenge those policies once they were adopted.
Whitcomb v. Burwell, No. 13-CV-990, 2015 WL 3397697, at *4 (E.D.
Wis. May 26, 2015) (internal citation omitted).

The Council’s

decision that “the record is insufficient to depart from the
coverage standards articulated in [Policy] Article A33614[,]”
Admin. R. 0011, thus incorporates a false premise: that this
Policy Article, like a Local Coverage Determination, was
entitled to “substantial deference” and thus that the hearing
officer needed sufficient evidence before he could “depart” from
it. 6

Even apart from the erroneous deference, the Secretary’s
construction of the term “precautionary” to include CGMS because
Finigan’s CGMS is “not intended to replace [Finigan’s]
traditional blood glucose monitoring[,]” but only to supplement
it, Def.’s Mem. 15, is head-scratching, or at least underexplained. The Secretary’s argument here seems to go: since
Finigan uses CGMS to monitor her diabetes symptoms in
conjunction with another piece of equipment, her CGMS cannot be
“durable medical equipment.” It is far from clear, though, why
6

[14]

Perhaps realizing this error, the Secretary advances a
somewhat different argument: even if Policy Articles are
generally different from Local Coverage Determinations, this
Policy Article was entitled to substantial deference because it
was incorporated into the Local Coverage Determination.
Mem. 19.

Def.’s

This argument ignores the language of the Local

Coverage Determination, which has a blank “Attachments” section
that; were the Policy Article included in it, this case would
present a closer issue.

See Admin. R. 0034.

The Secretary’s

argument, relying as it does on the listing of the Policy
Article in the “Related Local Coverage Documents” section, id.,
conflates a document’s being “related” to another one and its
being “incorporated” into it.

See Whitcomb, 2015 WL 3397697, at

*3-*4 (holding that listing a policy article as a “related
document” is not equivalent to incorporating it).

The Court is

persuaded that the Secretary’s according the Policy Article
“substantial deference” was legal error.
B.

Finigan’s CGMS

the fact of her having other equipment is dispositive: the CGMS,
as used by Finigan, helped her manage her diabetic symptoms,
and, while it would not qualify were the category “Primary
Device Used to Treat Symptoms,” her blood-testing regime seems
irrelevant to whether her CGMS is “durable medical equipment.”
Cf. Currier v. Leavitt, 490 F. Supp. 2d 1, 9 (D. Me. 2007)
(ordering reimbursement for claimant even though the purported
“durable medical equipment" did not “cure the underlying
condition but only alleviate[d] its symptoms”).
[15]

The Secretary argues that, even were deferring to the
Policy Article error, a remand is unnecessary because, under the
guidance of the Center for Medicare & Medicaid Services -- whose
publications are due “substantial deference” -- the CGMS does
not qualify as “durable medical equipment.”
(citing 42 C.F.R. § 405.1062(a)).

Def.’s Mem. 15-16

The publication to which the

Secretary points discusses “multi-component devices” -- a
category into which Finigan’s CGMS with its disposable sensors
fits, the Secretary argues, id. at 16 -- and states that if “the
component that performs the medically necessary function of the
device is non-durable” then it is “considered non-durable[.]”
Id. (quoting a statement made regarding the current rules, in a
proposed rule statement in the Federal Register).

Finigan

claims that this argument was not advanced by the Council or the
hearing officer, and thus cannot serve as the basis of an
affirmance of the Secretary’s decision.

See Pl.’s Reply 4 n.3.

She is right.
When reviewing an agency’s determination, the Court is “not
usually permitted to affirm . . . on grounds other than those
advanced by the agency [below],” unless “it is clear what the
agency's decision must be.”

Polanco-Quinones v. Astrue, 477 F.

App'x 745, 746 (1st Cir. 2012); see also, e.g., Maine Med. Ctr.
v. Burwell, 775 F.3d 470, 478 (1st Cir. 2015) (“[W]e are limited
to the rationale advanced by the agency in the administrative
[16]

proceeding[.]”) (internal citations and quotation marks
omitted).
Although Finigan has convinced the Court that the
Secretary’s reasoning was erroneous, she has not convinced the
Court that she is clearly entitled to coverage, and thus a
remand is appropriate.

See Vega v. Colvin, No. CV 14-13900-WGY,

2016 WL 865221, at *11 (D. Mass. Mar. 2, 2016) (citing Seavey,
276 F.3d at 11) (“The Court here takes issue with the basis for
the hearing officer's decision; it does not follow from the
Court's conclusion that the hearing officer's findings were not
supported by substantial evidence that Vega is necessarily
entitled to benefits.

Accordingly, the appropriate course of

action is to remand.”).
V.

CONCLUSION
For the foregoing reasons, the Court DENIES the Secretary’s

motion to affirm the decision of the Council, ECF No. 27, and
GRANTS IN PART Finigan’s motion to reverse or remand the
Council’s decision, ECF No. 23, remanding the matter to the
Secretary for further proceedings consistent with this
memorandum.
SO ORDERED.

/s/ William G. Young
WILLIAM G. YOUNG
DISTRICT JUDGE
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