Ashley Brown v. Indiana Family and Social Services Administration (mem. dec.) , 71 N.E.3d 50 ( 2017 )

MEMORANDUM DECISION
Pursuant to Ind. Appellate Rule 65(D),
this Memorandum Decision shall not be
regarded as precedent or cited before any
FILED
court except for the purpose of establishing Feb 16 2017, 6:03 am
the defense of res judicata, collateral CLERK
Indiana Supreme Court
estoppel, or the law of the case. Court of Appeals
and Tax Court
ATTORNEYS FOR APPELLANT ATTORNEYS FOR APPELLEE
Amanda M. Hall Curtis T. Hill, Jr.
Katherine J. Rybak Attorney General of Indiana
Indiana Legal Services, Inc.
Evansville, Indiana Andrea E. Rahman
Deputy Attorney General
Indianapolis, Indiana
IN THE
COURT OF APPEALS OF INDIANA
Ashley Brown, February 16, 2017
Appellant-Petitioner, Court of Appeals Case No.
82A05-1603-PL-688
v. Appeal from the Vanderburgh
Superior Court
Indiana Family and Social The Honorable Richard G.
Services Administration, D’Amour, Judge
Appellee-Respondent Trial Court Cause No.
82D07-1504-PL-1921
Crone, Judge.
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Case Summary
[1] Ashley Brown appeals the trial court’s denial of her petition for judicial review,
in which the trial court sustained the determination of the administrative law
judge (“ALJ”) that Brown’s request for prior authorization of Medicaid
coverage for genetic testing was properly denied. The Indiana Family and
Social Services Administration (“FSSA”) concedes that the ALJ erred in its
application of Indiana Medicaid law, and therefore requests that we vacate the
trial court’s decision and remand with instructions for the trial court to remand
the case to FSSA for a rehearing. We agree with FSSA, and therefore we
vacate and remand.
Facts and Procedural History
[2] In April 2014, Brown was twenty-nine years old and had three children. Brown
received Medicaid coverage from the State of Indiana through the Hoosier
Healthwise Program. Brown’s insurance coverage was administered by
MDWise, a managed care entity administering Medicaid insurance coverage as
a state contractor. Brown had surgery to remove a tumor in her abdomen.
The tumor was identified as a benign paraganglioma, a type of rare
neuroendocrine tumor. Appellant’s App. at 50, 52. One-third to one-half of
paragangliomas are associated with inherited syndromes, including Hereditary
Paraganglioma-Pheochromocytoma (“PGL/PCC”) Syndrome. Id. at 53.
PGL/PCC Syndrome “is a familial cancer syndrome which results in
neuroendocrine tumors.” Id. Genetic testing can identify individuals with
PGL/PCC Syndrome, and such identification “may improve patient prognosis
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through regular screening and treatment of early-onset malignancies.” Id. at 54.
“Early detection [of tumors] through surveillance and removal of tumors may
prevent or minimize complications.” Id. Brown’s doctors recommended that
Brown have genetic testing to determine whether she had PGL/PCC
Syndrome. If the genetic testing showed that she had PGL/PCC Syndrome,
then she would receive monitoring and screenings, and her children would also
be tested to determine if they had PGL/PCC Syndrome.
[3] In July 2014, Brown’s doctors sought from MDWise prior authorization for
approval of the PGL/PCC Syndrome genetic test. MDWise denied
authorization, stating that the “genetic lab tests [were] not covered under
Indiana Medicaid.” Id. at 29. Brown pursued MDWise’s appeal procedures,
which included an external review of the denial by an independent review
organization for the Indiana Department of Insurance. The reviewer concluded
that the genetic testing was “medically indicated” but that “the genetic testing
was correctly denied as it is not a covered benefit under the member’s health
plan.” Id. at 45-46.
[4] In October 2014, Brown sought an administrative appeal of MDWise’s denial
of prior authorization. In February 2015, following a hearing, the ALJ found
that PGL/PCC Syndrome genetic testing was not excluded from Medicaid
coverage by the Indiana Administrative Code, but the Current Procedural
Terminology (“CPT”) codes for PGL/PCC Syndrome genetic testing were
identified as not covered in the Indiana Health Coverage Programs (“IHCP”)
manual. The ALJ concluded that Indiana’s Medicaid program did not cover
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genetic testing for PGL/PCC Syndrome and sustained the denial for prior
authorization of the genetic test. Id. at 25-26. Brown requested agency review
of the ALJ’s decision, and in March 2015, the FSSA issued a final
determination affirming the ALJ’s decision. In April 2015, Brown filed a
petition for judicial review of FSSA’s determination. In February 2016, the trial
court issued an order denying Brown’s petition. Id. at 6-10. This appeal
ensued.
Discussion and Decision
[5] Brown seeks review of an agency action pursuant to the Administrative Orders
and Procedures Act (“AOPA”). Under AOPA,
we are bound by the same standard of review as the trial court.
When a court reviews a decision from an administrative agency,
the reviewing court may neither try the case de novo nor
substitute its judgment for that of the agency. Ind. Code § 4-21.5-
5-11. Judicial review of disputed issues of fact must be confined
to the agency record for the agency action. Id. Further, we will
not reweigh the evidence. We give deference to the expertise of
the administrative body, and will reverse the agency’s decision
only if it is
(1) arbitrary, capricious, an abuse of discretion, or
otherwise not in accordance with law;
(2) contrary to a constitutional right, power, privilege, or
immunity;
(3) in excess of statutory jurisdiction, authority, or
limitations, or short of statutory right;
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(4) without observance of procedure required by law; or
(5) unsupported by substantial evidence.
Ind. Code § 4-21.5-5-14(d). A decision is arbitrary and capricious
when it is made without any consideration of the facts and lacks
any basis that may lead a reasonable person to make the same
decision made by the administrative agency. The burden of
demonstrating the invalidity of an agency action is on the party
asserting its invalidity. Ind. Code § 4-21.5-5-14(a).
Dev. Servs. Alternatives, Inc. v. Indiana Family & Soc. Servs. Admin., 915 N.E.2d
169, 176 (Ind. Ct. App. 2009) (citations and quotation marks omitted), trans.
denied (2010).
[6] Specifically, Brown argues that the ALJ erred in sustaining the denial of her
request for prior authorization of Medicaid coverage for PGL/PCC Syndrome
genetic testing. The Indiana Medicaid program is governed, in part, by Title
405 of the Indiana Administrative Code.1 405 IAC 5-29-1 identifies services
that are not covered under Medicaid:
(1) Services that are not medically necessary.
(2) Services provided outside the scope of a provider’s license,
registration, certification, or other authority to practice under
state or federal law.
1
State Medicaid programs must also comply with 42 U.S.C. § 1396, et seq.
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(3) Experimental drugs, treatments, or procedures, and all related
services.
(4) Any new product, service, or technology not specifically
covered in this article. The product, service, or technology will
remain a noncovered product, service, or technology until such
time as the office authorizes the coverage of the product, service,
or technology. This subdivision does not apply to legend drugs.
This section goes on to list more than thirty specific procedures, services, and
drugs that are not covered, such as acupuncture, hair transplants, artificial
insemination, and amphetamines when prescribed for weight control. Genetic
testing is not specifically listed.2
[7] In sustaining the denial of Brown’s request for prior authorization for
PGL/PCC Syndrome genetic testing, the ALJ based its decision on the IAC’s
exclusion of “[s]ervices that are not medically necessary.” 405 IAC 5-29-1(1).
Medically necessary services are defined in 405 IAC 5-2-17:
“Medically necessary service” as used in this title means a
covered service (as defined in section 6 of this rule[3]) that is
required for the care or well-being of the patient and is provided
in accordance with generally accepted standards of medical or
professional practice. For a service to be reimbursable by the
office, it must:
2
We observe that the IAC also provides a list of services for which Medicaid reimbursement may be
available with prior authorization. 405 IAC 5-3-13. This list includes “[g]enetic testing for detection of
cancer of the breast or breasts or ovaries,” but does not specifically include genetic testing for PGL/PCC
Syndrome. Id.
3
405 IAC 5-2-6 provides, “‘Covered service’ means a service or supply provided by a provider for a member
for which payment is available under Medicaid subject to the limitations of this article.”
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(1) be medically necessary, as determined by the office,
which shall, in making that determination, utilize
generally accepted standards of medical or professional
practice; and
(2) not be listed in this title as a noncovered service, or
otherwise excluded from coverage.
(Emphasis added.) The ALJ concluded that because the CPT codes for
PGL/PCC Syndrome genetic testing were identified as not covered in the
IHCP manual, such testing fell in the category of a service “otherwise excluded
from coverage.” Id.; Appellant’s App at 25.
[8] FSSA concedes that the “ALJ erred in her legal reasoning and application of
State Medicaid law.” Appellee’s Br at 12. FSSA states that “the type of genetic
testing sought by Brown was not covered under the State Medicaid plan
because it was a new or experimental treatment at the time of the ALJ’s
decision.” Id. (citing 405 IAC 5-29-1(3) and -(4)) (emphases added). FSSA
urges us to vacate and remand for a new factfinding hearing, explaining as
follows:
the new or experimental provisions of 405 I.A.C. 5-29-1(3) and
(4) were not the legal basis for the ALJ’s conclusion that the
genetic testing was properly considered a noncovered service.
And there was no factual finding regarding the genetic testing’s
status as a new or experimental treatment, e.g., its acceptance in
the medical community or general concerns regarding its efficacy
or safety. The status of the genetic testing at issue in this case
may have now changed from being a new or experimental
service, to a medically accepted service, but in order to determine
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the status of the genetic testing at issue in this case, there must be
a rehearing of the relevant evidence.
Id.4 (citations omitted). Indiana Code Section 4-21.5-5-12(b) provides that the
court may “remand a matter to the agency before final disposition of a petition
for review with directions that the agency conduct further factfinding or that the
agency prepare an adequate record, if [] the agency failed to prepare or preserve
an adequate record.” We agree with the State that under the circumstances of
this case remand to FSSA is appropriate.
[9] Brown contends that FSSA is attempting to raise a new issue that it did not
properly preserve and that remand is improper, citing Indiana Code Sections 4-
21.5-5-10, -11, and -12(a). However, those sections are irrelevant to the
propriety of remand to the agency because they address judicial review of issues
(Section 10) and facts (Section 11) not raised before the agency and when the
court may receive evidence in addition to that contained in the agency record
(Section 12(a)). The cases relied on by Brown are also inapposite because they
address issues pertaining to those sections. Brown also asserts that “even if the
Court granted the State’s request for a remand instructing [FSSA] to make
4
The State notes that a state Medicaid plan may properly limit a new or experimental treatment or service,
citing Miller by Miller v. Whitburn, 10 F.3d 1315 (7th Cir. 1993). In reference to new or experimental services,
the Whitburn court observed,
In making such a decision [whether to provide payment for a particular service], a basic
consideration is whether the service has come to be generally accepted by the professional
medical community as an effective and proven treatment for the condition for which it is being
used. If it is, Medicare may make payment. On the other hand, if the service is rarely used,
novel or relatively unknown, then authoritative evidence must be obtained that it is safe and
effective before Medicaid may make payment.
Id. at 1320 (quoting Rush v. Parham, 625 F.2d 1150, 1156 (5th Cir. 1980)).
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specific findings about the experimental nature of genetic testing, [FSSA] would
still need to make an actual determination of medical necessity, which is the
crux of Brown’s appeal.” Appellant’s Reply Br. at 6-7. We agree that the
FSSA will be required to make an individualized determination as to whether
the genetic testing is medically necessary, but that does not persuade us that
remand is inappropriate. In fact, Brown asks for us to remand for instructions
to the agency to issue a new decision based upon the individual evidence
presented regarding medical necessity. Accordingly, we vacate the trial court’s
denial of Brown’s petition for judicial review and remand with instructions for
the trial court to remand the case to FSSA for a rehearing.
[10] Vacated and remanded.
Riley, J., and Altice, J., concur.
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