Key Medical Supply, Inc. v. Sebelius et al

Filing 84

ORDER AND MEMORANDUM. 1. Defendants' Motion to Dismiss for Lack of Subject Matter Jurisdiction (Doc. No. 29 ) is GRANTED. 2. Defendants' Motion for Summary Judgment Based on the Administrative Record (Doc. No. 29 ) is DENIED AS MOOT. 3. Plaintiff's Second Motion for Temporary Restraining Order (Doc. No. 70 ) is DENIED AS MOOT. (Written Opinion). Signed by Judge Donovan W. Frank on 2/26/2013. (BJS)

UNITED STATES DISTRICT COURT
DISTRICT OF MINNESOTA

Key Medical Supply, Inc.,
a Minnesota Corporation,

Civil No. 12-752 (DWF/JJG)

Plaintiff,
v.

ORDER AND MEMORANDUM

Kathleen Sebelius, Secretary of the
United States Department of Health and
Human Services, in her official capacity;
and Marilyn Tavenner, Acting Administrator
of the Centers for Medicare and Medicaid
Services, in her official capacity,
Defendants.

This matter is before the Court on Defendants’ Motion to Dismiss for Lack of
Subject Matter Jurisdiction, or in the Alternative, Motion for Summary Judgment Based
on the Administrative Record (Doc. No. 29) and Plaintiff’s Second Motion for
Temporary Restraining Order (Doc. No. 70). At the February 15, 2013, hearing on the
motions, the Court offered to issue a short order, with a full memorandum and opinion to
follow.
Based upon the presentations and submissions of the parties, the Court having
carefully reviewed the file and the entire record in this matter, and the Court being
otherwise duly advised in the premises, the Court hereby enters the following:

ORDER
1.

Defendants’ Motion to Dismiss for Lack of Subject Matter Jurisdiction

(Doc. No. [29]) is GRANTED.
2.

Defendants’ Motion for Summary Judgment Based on the Administrative

Record (Doc. No. [29]) is DENIED AS MOOT.
3.

Plaintiff’s Second Motion for Temporary Restraining Order (Doc. No. [70])

is DENIED AS MOOT.

Dated: February 26, 2013

s/Donovan W. Frank
DONOVAN W. FRANK
United States District Judge
MEMORANDUM

While the decision on the motions is supported by law, the Court is deeply
concerned about the unjust consequences of its order. As such, the Court feels compelled
to issue a short memorandum herewith, prior to issuing its full memorandum and opinion.
It is true, as zealously observed by counsel for Defendants, that, at Congress’s
direction, Defendants have, for almost a decade, implemented a competitive bidding
program, the primary purpose and design of which was to reduce waste, fraud, and abuse
relating to Medicare payments for Durable Medical Equipment, Prosthetics, Orthotics,
and Supplies (“DMEPOS”). 42 U.S.C. § 1395w-3(a)(1)(A). Admittedly, in furtherance
of this objective, Congress barred judicial review of the key aspects of establishing and
implementing the program. The Medicare Prescription Drug, Improvement, and

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Modernization Act of 2003 (“MMA”), Pub. L. No. 108-173, 117 Stat. 2066 (2003), states
in pertinent part:
There shall be no administrative or judicial review under section 1395ff of
this title, section 1395oo of this title, or otherwise, of—
(A) the establishment of payment amounts under paragraph (5);
(B) the awarding of contracts under this section;
(C) the designation of competitive acquisition areas under subsection
(a)(1)(A) of this section;
(D) the phased-in implementation under subsection (a)(1)(B) of this
section;
(E) the selection of items and services for competitive acquisition
under subsection (a)(2) of this section; [or]
(F) the bidding structure and number of contractors selected under
this section . . . .
Id. at § 1395w-3(b)(11).
While the Court will discuss its analysis in more detail in a memorandum and
opinion to follow, the Court observes that, not only did Congress apparently intend to
preclude any administrative or judicial review of the items articulated above, but once
such “no review” provisions are triggered, the Court may not inquire as to whether a
challenged agency decision is arbitrary, capricious, or procedurally defective. Rather, the
Court must determine whether the challenged agency action falls into any of the
categories shielded from review. Tex. Alliance for Home Care Srvcs. v. Sebilius, 681
F.3d 402, 409 (D.C. Cir. 2012); Amgen v. Smith, 357 F.3d 103, 360 (2004).

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Notably, if the Court did have jurisdiction over this case, it would likely conclude
that Defendants’ decision here was arbitrary and capricious. While the 1,300 page
administrative record makes references to low profile enteral feeding tubes with respect
to children and individuals with dementia, Defendants appear indifferent to, if not ignore
entirely, the large number of individuals in the United States of America that are
developmentally disabled and have other disabilities, who have been prescribed and
provided low profile enteral feeding tubes for a number of years. In fact, more than
80 percent of Plaintiff’s approximately 5,000 clients are individuals with developmental
and other disabilities. (Doc. No. 17 at 2 n.2; see also Compl. ¶ 15.)
At the first TRO hearing in this matter, counsel for Defendants represented that a
“searching inquiry” would be made by his clients into the situation in Minnesota and
other regions of the United States regarding the effect of the Medicare competitive
bidding program on the coordination of benefits for persons with developmental or other
disabilities who are dually eligible for Medicaid. In the Court’s view, no such searching
inquiry was made, despite counsel’s contention that its perusal of Internet pricing
amounted to a sufficient search.
The affidavits of Colleen Wieck, Executive Director of the Minnesota Governor’s
Council on Developmental Disabilities (a position which she has held for over 31 years),
and Steve Larson, Senior Policy Director and Interim Executive Director of the Arc
Minnesota, more than substantiate that Defendants are entirely unaware of the adverse
effect of the competitive bidding process on a significant number of individuals with
disabilities. It is difficult for the Court to believe defense counsel’s assertion that
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Congress intended such a result. The record before the Court indicates a seeming
indifference on the part of Defendants to the fact that individuals with developmental and
intellectual disabilities, as well as other disabilities, have a clear need for low profile
products because conventional feeding tubes with their long, protruding, external tubing
carry a greater risk of accidental removal or dislodgement. Such occurrences may be
caused by behavioral issues, mobility issues, or coordination difficulties.
Each and every citizen is entitled to equal justice under law, which is not
measured by incidence of death or hospital admissions, but rather by the right to receive
medically necessary treatment and to live each day with dignity and respect. In this case,
such medically necessary treatment includes low profile and enteral feeding tubes—
prescribed by physicians—for individuals with developmental and other disabilities for
the reasons stated above.
This is a sad day for those who believe that when a judge adheres, even-handedly,
to his or her oath of office, justice will prevail and the public interest will be served. To
the extent that a civilized and democratic society is measured by the manner in which it
treats and protects its most vulnerable members, it has failed today.
D.W.F.

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