Opinion ID: 3199124
Heading Depth: 2
Heading Rank: 1

Heading: Administration of Lucentis

Text: During the years 2007 and 2008, VRC served patients covered by Medicare Part B who suffered from age-related macular degeneration (“AMD”) and other retinal diseases. Among other treatment methods for AMD, VRC administered the intravitreal injection of Lucentis. Lucentis is FDA approved for the treatment of AMD. It is manufactured and sold by Genentech, Inc., in 2.0-mg vials. The FDA-approved labeling on the drug instructs that a single 0.5-mg dose of Lucentis be injected into the patient’s eye once each month. The proper method for extracting the drug and administering the injection described on the label requires the healthcare professional to extract the full contents of the 2.0-mg vial 2 Case: 14-15342 Date Filed: 04/29/2016 Page: 3 of 27 into a syringe. The contents of the syringe are then to be expelled until the plunger tip is aligned with the line that marks 0.05 mL (0.5 mg). Then the dose is to be injected into the patient’s eye. The label further instructs that “[e]ach vial should only be used for the treatment of a single eye.” First Coast Service Options, Inc., administers Medicare payment processing in Florida. SafeGuard Services LLC audits Medicare claims. In February 2008, First Coast issued its first Local Coverage Determination for Lucentis, acknowledging that the drug was “medically reasonable and necessary” for the treatment of AMD. The Local Coverage Determination incorporated the label’s instruction that “[e]ach vial should only be used for treatment of a single eye.” VRC did not follow the Lucentis label’s instructions limiting dosage to one per vial. Instead, VRC treated up to three patients from a single vial. It did so by extracting up to three doses of 0.5 mg each from one vial into three separate syringes. This process is referred to by the parties as “multi-dosing.” VRC billed Medicare for every 0.5-mg dose of Lucentis it administered. The reimbursement rate for Medicare Part B drugs is capped at the lower of the physician’s billed charge or 106% of the drug’s average sales price. 42 U.S.C. § 1395w-3a. The drug’s average sales price, in turn, is calculated quarterly based on nationwide sales, divided by the total number of units of drug sold. Id. (c)(1), (5)(B). Physicians receive reimbursement based on the number of dosage units 3 Case: 14-15342 Date Filed: 04/29/2016 Page: 4 of 27 used to treat a patient. Id. (b)(1). Where a drug’s administration results in wasted contents, Medicare reimburses the physician for the waste if it was a necessary part of administration. Medicare Claims Processing Manual, Pub. No. 100-04, Ch. 17, § 40. The calculated reimbursement rate of Lucentis during the period at issue was approximately $405 per 0.1 mg administered or $2,025 for a standard 0.5-mg dose.1 This price was reached by determining the cost of an entire single-use vial of Lucentis. The average sales price for a vial was $2,025. This price was then assigned as the cost of one dose of 0.5 mg. The 0.5-mg dose was then broken down into individual units of 0.1 mg, with a reimbursement rate of $405 ($2,025 ÷ 5). Hence, if administered according to the label, a provider would inject 0.5 mg into a patient’s eye, dispose of 1.5 mg, and receive reimbursement in the amount of approximately $2,025 for the single vial—or the total average cost of the 20-mg vial. VRC billed Medicare at the allowed rate for every 0.5-mg dose it administered,2 resulting in a bill for approximately $2,025 for every dose. Because VRC was extracting up to three doses from a single vial, it was “reimbursed” for approximately $6,075 per single Lucentis vial, three times the average cost of the 1 During 2007-2009 the average sales price of Lucentis fluctuated between approximately $405 and $407. The exact amount is immaterial for the purpose of this opinion. 2 VRC’s billed charge was higher than the 106% statutory rate, so the lower rate based on the average sales price was applied in accordance with the Medicare statute. 42 U.S.C. § 1395w3a. 4 Case: 14-15342 Date Filed: 04/29/2016 Page: 5 of 27 vial and three times the amount it would have received had it administered the drug according to the label.