Court Opinion

ID: 4126697
Source: CourtListenerOpinion
Date Created: 2017-02-16 16:07:40.144841+00
Date Added: 2024-06-11T07:46:26.001074
License: Public Domain

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.

Court of Appeals of Indiana | Memorandum Decision 82A05-1603-PL-688 | February 16, 2017       Page 1 of 9
                                             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

      Court of Appeals of Indiana | Memorandum Decision 82A05-1603-PL-688 | February 16, 2017   Page 2 of 9
      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

      Court of Appeals of Indiana | Memorandum Decision 82A05-1603-PL-688 | February 16, 2017   Page 3 of 9
      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;

      Court of Appeals of Indiana | Memorandum Decision 82A05-1603-PL-688 | February 16, 2017   Page 4 of 9
                         (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.

      Court of Appeals of Indiana | Memorandum Decision 82A05-1603-PL-688 | February 16, 2017   Page 5 of 9
               (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.”

      Court of Appeals of Indiana | Memorandum Decision 82A05-1603-PL-688 | February 16, 2017            Page 6 of 9
                       (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

      Court of Appeals of Indiana | Memorandum Decision 82A05-1603-PL-688 | February 16, 2017   Page 7 of 9
               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)).

      Court of Appeals of Indiana | Memorandum Decision 82A05-1603-PL-688 | February 16, 2017              Page 8 of 9
       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.

       Court of Appeals of Indiana | Memorandum Decision 82A05-1603-PL-688 | February 16, 2017   Page 9 of 9