Monday, April 22, 2024

Court Case: Agendia Loses Coverage Battle; Long Summary of its Legal Filings

 In late March 2024, Agendia got an unfavorable ruling regarding Medicare coverage, from the District of Columbia federal court.   The decision was covered by Bloomberg Law (subscription, here.)    

While that's firewalled, the judge's 30pp decision is not, it's  open access here.  

The government's winning 36pp brief is also open access, here.


Here's a Chat GPT4 summary of the judge's decision.

Dalle3 via GPT4

The court case, Agendia, Inc. v. Becerra, deals with disputes over Medicare coverage for two molecular diagnostic tests, BluePrint and TargetPrint, developed by Agendia, Inc. These tests are used for the diagnosis and treatment of breast cancer. Agendia sought coverage from Medicare for these tests but faced repeated denials by Medicare contractors based on coverage determinations made under the Molecular Diagnostic Services (MolDX) Program.

Here's a summary of the key points and implications for CMS policy decision-makers:

Substantial Deference Scheme: The heart of the dispute is the "substantial deference" scheme, where HHS adjudicators must defer to the coverage determinations made by private Medicare contractors. Agendia challenged this scheme as unconstitutional and contrary to the Medicare statute. However, the courts have consistently upheld the scheme, emphasizing that it does not unconstitutionally delegate governmental power to private entities, as the final decision-making authority remains with the public administrators.

Coverage Denials Upheld: The court in this instance ruled against Agendia, stating that the decisions denying coverage were supported by substantial evidence and were in accordance with the law. This included evidence that the tests were considered investigational and not medically necessary under existing Medicare standards.

Legal Precedents and Claim Preclusion: The decision also discusses the application of legal doctrines such as claim preclusion, which prevents Agendia from re-litigating issues that were or could have been raised in prior litigation. This highlights the importance of the legal strategy in ongoing and repetitive litigation against government bodies.

Impact on Policy: For CMS policy decision-makers, this case underlines the strength of the current framework governing the adjudication of Medicare coverage, especially the role of MolDX in assessing clinical and analytical validity of tests. It also highlights the robustness of the deference given to contractor determinations, suggesting that significant evidence or legal changes would be required to challenge such determinations successfully.

Future Considerations: The continued validation of the "substantial deference" rule may encourage more precise and evidence-based submissions from providers seeking Medicare coverage for new or controversial tests. It also suggests a stable regulatory environment but raises questions about the balance of power between private contractors and public oversight.

This case serves as a significant precedent in understanding and navigating the complex landscape of Medicare coverage for innovative medical tests, and it reinforces the structured, evidence-based approach required to alter or influence existing coverage determinations under Medicare policies.

Here's an AI Summary of the government's winning position.

The Government Brief in the case Agendia, Inc. v. Xavier Becerra, Secretary of Health and Human Services, presents a detailed legal argument defending the role of Medicare Administrative Contractors (MACs) in issuing local coverage determinations (LCDs) for specific medical services under Medicare Part B. Here are the key points summarized for those engaged in CMS policy:

Statutory Authority and Medicare Part B Coverage: The brief emphasizes that under Medicare Part B, coverage is generally limited to items or services that are "reasonable and necessary for the diagnosis or treatment of illness or injury" (42 U.S.C. 1395y(a)(1)(A)). MACs are authorized to determine coverage for services by applying regulations and national coverage determinations set by CMS.

Role of Medicare Administrative Contractors: The Government argues that MACs play a crucial role in the initial determination of coverage through the issuance of LCDs, which are localized and not nationally binding. LCDs help in applying the statutory "reasonable and necessary" standard on a regional basis.

Constitutional and Procedural Legitimacy: The brief counters claims that the delegation of authority to MACs to issue LCDs is unconstitutional. It argues that MACs function under the supervision of the Secretary of Health and Human Services and do not have independent regulatory power. Thus, their actions are constitutionally valid.

Challenge to LCDs and Judicial Review: The brief addresses the process through which a party can challenge LCDs and seek judicial review, emphasizing that there are robust mechanisms for appeal and review within the administrative process.

Implications of the Case: For CMS policy makers, the case highlights the balance between maintaining flexibility in Medicare coverage determinations at a regional level while ensuring that these determinations are consistent with overarching federal standards and statutory requirements.

The decision in this case reinforces the established framework where MACs are key operational components in administering Medicare coverage determinations, maintaining that their role and the existing procedures for issuing LCDs are both legally valid and practically essential for the efficient functioning of the Medicare program. This framework supports nuanced local application of Medicare policies without overstepping legal or constitutional boundaries, which is crucial for adapting to regional medical practice variations and needs.


The case particularly stands out to me because the LCD at issue is MolDx's foundational LCD, which stipulates that tests are not covered until they have been reviewed. This LCD is concise and predates the development of the tests in question. Given that judges are statutorily required to defer only to "reasonable" findings in LCDs, it is surprising to see this LCD granted deference. It seems quirky to determine that an LCD written before a test's creation could contain reasonable findings about the test's necessity and appropriateness. Additionally, the judge's decision skims past this point.

Nerd note

Note also this is a sentence about LCDs and lab tests in PAMA (SSA 1834A) at (g).

1834A(g) Coverage.—(1) Issuance of coverage policies.—(A) In general.—A medicare administrative contractor shall only issue a coverage policy with respect to a clinical diagnostic laboratory test in accordance with the process for making a local coverage determination (as defined in section 1869(f)(2)(B)), including the appeals and review process for local coverage determinations under part 426 of title 42, Code of Federal Regulations (or successor regulations).