Townsend v. Azar

Background

Robert Townsend sought Medicare Part B coverage for tumor treatment field therapy, a treatment for glioblastoma multiforme. Medicare contractors denied claims for treatment provided in August, September, and October 2018. A qualified independent contractor upheld the denials but found the supplier, rather than Townsend, liable for the cost. Administrative Law Judge Brian Butler later denied coverage, reasoning in part that a local coverage policy denying coverage for the treatment deserved substantial deference and that Townsend had not used the device at the recommended rate.

Townsend appealed to the Medicare Appeals Council, but the Council did not issue a decision within 90 days. He then sought judicial review under 42 U.S.C. § 405(g) and the Medicare statute. Before and after Judge Butler’s decision, three other administrative law judges had found that the treatment was medically reasonable and necessary for Townsend and was a Medicare-covered benefit for him. Those decisions concerned earlier or later treatment periods.

The parties filed cross-motions for summary judgment. The opinion states that no material facts were disputed, so the questions were legal ones. The court reviewed factual findings for substantial evidence and reviewed legal conclusions independently. It also held that the Administrative Procedure Act’s review standard did not apply to this Medicare appeal.

Standing

The Secretary argued that Townsend lacked standing because Judge Butler had not made him responsible for paying the denied claims. The court rejected that argument. It held that the denial of a Medicare benefit created a sufficient injury because the Medicare statute gave Townsend a substantive legal right, even though he did not suffer monetary harm.

Reason for Remand

The court concluded that Judge Butler’s failure to address an earlier decision by Administrative Law Judge David Krane undermined Judge Butler’s ruling. The earlier decision involved claims for reimbursement for the same services, to the same beneficiary, and for the same diagnosis. The court held that this failure supported a finding that Judge Butler’s decision was not supported by substantial evidence. The court also directed further consideration of the other favorable administrative decisions involving Townsend.

The court did not decide whether collateral estoppel—the rule that can prevent relitigation of an issue already decided—applied in the Medicare context. It found remand appropriate without reaching that issue.

Disposition

The court denied both parties’ motions for summary judgment. It reversed the Medicare Appeals Council’s unfavorable administrative decision and remanded the matter for further proceedings consistent with the opinion. The clerk was directed to close the case.