CCLA Loses Challenge of Pharmacogenomic LCD

The California Clinical Laboratory Association (CCLA) has lost a recent challenge to a local coverage determination (LCD) involving genetic testing. CCLA claimed that Medicare Administrative Contractors (MACs) “are issuing LCDs that amount to blanket and inappropriate denials of Medicare coverage for certain clinical testing services.” It had also challenged LCD development processes in general and argued it’s unconstitutional for MACs to issue LCDs. The U.S. Department of Health and Human Services successfully sought to have the complaint dismissed. That complaint arose out of the denial of Medicare coverage for pharmacogenomic testing that had been ordered for an 82-year-old registered nurse in Virginia who had multiple chronic conditions. She had suffered allergic reactions to medications prescribed for those conditions so her physician had ordered the pharmacogenomic testing to determine appropriate treatment. The coverage determination giving rise to the dispute was Palmetto LCD L34499 which was the basis for denial of coverage for the pharmacogenomic testing. CCLA claimed that LCD and others threatened access to medically necessary lab services. Generally, challenges to LCDs must be brought through the administrative process rather than directly to court but there are exceptions allowing individual Medicare recipients like the nurse to bring a challenge in court, including if the constitutionality of a provision is the only legal issue, and no facts are disputed. The court determined that the nurse on whose case the claims were based didn’t have an injury the court could address. That’s because she wasn’t obligated to pay for the services after Medicare coverage was denied—instead, the laboratory providing the service bore the cost because it didn’t provide her with an Advance Beneficiary Notice alerting her to potential Medicare denial. Also, she and her doctor were able to review the test results so she wasn’t denied access to services. The court also dismissed the parties’ argument there was potential for future injury, noting that it was speculative that the pharmacogenomic testing would be ordered again and that the laboratory would issue an ABN in that future instance, rendering the patient responsible for the cost of the testing. CCLA, representing laboratories who would be similarly denied payment under the coverage decision, couldn’t bring the claim either the court said, because they first had to appeal the coverage denial through the administrative Medicare claims review process and had no statutory right to circumvent that appeal process. The court rejected claims a statutory right was violated because it said the nurse’s ability under the statutory exception to challenge Medicare denials in court, rather than waiting until administrative options were exhausted, was merely an expedited appeal route rather than a substantive statutory right. California Clinical Laboratory Association v. Secretary of Health and Human Services, Civ. Action No. 14-cv-0673 (KBJ), (DDC May 20, 2015). Takeaway: Coverage for personalized medicine suffers a blow with CCLA’s failed challenge to LCD denying Medicare coverage for pharmacogenomic testing.