Are you covered by Medicare Part D, the prescription-drug insurance program? Does any of your relatives have Part D coverage?
Are you a doctor, or a health-care professional, frustrated at rules that limit which prescriptions Part D will pay for?
Are you a victim of an orphan disease, wondering whether Part D will pay for your medicine when you retire?
If so, then a decision this past week by a federal judge in New York may be of interest.
The judge ruled that a regulation that has governed Medicare Part D, since the program's inception, is unlawful and a misreading of the statute.
The regulation, written by the Bush Administration, says that to be paid for by Part D, a prescription has to be for a use of the drug that is recognized in "compendia"--that is, privately published guides to pharmacological research.
Two Medicare beneficiaries, however, argued that the Bush Administration's compendia requirement is inconsistent with the law. And a federal judge has just agreed, and has held that "Congress did not intend to impose the compendia requirement."
On March 7, Judge Harold Baer of the United States District Court for the Southern District of New York decided Layzer v. Leavitt, a case in which two Medicare beneficiaries challenged a rule that limits the drugs that Part D will pay for. Holding that Congress did not intend the rule, which was in “discord” with the Medicare statute, the court ordered Medicare to provide the plaintiffs coverage, without regard to the unlawful rule.
The rule at issue imposes a purported “compendia requirement.” The rule says that Part D cannot reimburse a prescription for an off-label use of a drug, if that use is not listed on privately published drug guides known as compendia. This rule has governed Part D since the program’s inception in 2006.
Enter two Medicare beneficiaries: Ray Fischer, who was diagnosed with muscular dystrophy, and Judith Layzer, who suffered from ovarian cancer. Their doctors had prescribed drugs—increlex for the muscular dystrophy, and cetrotide for the ovarian cancer. Yet the Part D plans refused to pay for these drugs, under the rule, because the use of these drugs for these conditions was not listed on the compendia.
Layzer and Fischer sued the Secretary of Health and Human Services in the Southern District of New York. Layzer and Fischer argued that the compendia requirement was not authorized by the Part D statute.
In its decision, the court rejected HHS's compendia requirement, and held that it was inconsistent with the Social Security Act's definition of covered Part D drug. “The statutory language that Congress used to define what is meant by 'covered part D drug,' along with the canons of statutory construction, make clear that the Act does not impose a compendia requirement," the court said.
The court therefore ordered the current Secretary of Health and Human Services to ensure that appropriate coverage is provided to the two plaintiffs, unlimited by the unlawful compendia requirement.
The court's decision is here, on the website of the Medicare Rights Center, which helped bring the plaintiffs' lawsuit back in 2007.
For those with Westlaw access, a hyperlinked version of the decision is available as Layzer v. Leavitt, 2011 WL 813822 (S.D.N.Y. March 7, 2011).
According to the docket, the Secretary has not appealed. But the Secretary has 60 days in which to do so.
. . .
Apologies in advance for being away from the computer for much of Sunday. But I'll be interested in what you all think of this ruling, and how it may affect Medicare, going forward.
Tue May 31, 2011 at 6:59 PM PT: The Secretary appealed. The case is now Layzer v. Leavitt, No. 11-1922 (2d Cir.).