## Facts

- Michael J. Friedrich, a Medicare Part B beneficiary, received chelation therapy (intravenous disodium edetate (EDTA)) for coronary artery disease.
- Medicare Part B pays for drugs and services deemed “reasonable and necessary,” administered through private insurance carriers acting as the Secretary’s agents.
- In 1980, the Secretary issued criteria under which carriers could reimburse FDA-approved drugs if “reasonable and necessary,” except where a use was specifically disapproved by the FDA or excluded by a national instruction.
- In 1982, after notice and evaluation of medical information and input from professional groups, the agency adopted a national coverage determination (NCD) directing carriers not to reimburse chelation therapy for arteriosclerotic or occlusive vascular disease.
- In 1983, Friedrich sought Part B reimbursement for his chelation therapy; the carrier denied the claim and reaffirmed the denial on review.
- At a carrier hearing, Friedrich’s physician testified in support of the therapy, but the hearing officer denied reimbursement based on the binding NCD.
- Friedrich sued in federal district court, asserting that (1) the NCD was a legislative rule requiring APA notice-and-comment rulemaking, and (2) due process required an individual, de novo determination not constrained by the NCD.
- The district court ruled for Friedrich, invalidated the NCD, and effectively required consideration of the claim without binding effect from the NCD.
- The Secretary appealed.

## Issues

1. Whether the Secretary’s Medicare Part B national coverage determination excluding chelation therapy was invalid because it was promulgated without APA notice-and-comment procedures.
2. Whether due process is violated when a carrier hearing officer is bound by a national coverage determination in deciding an individual Part B claim.

## Decision

- The Sixth Circuit reversed the district court.
- The court held the NCD was an interpretive rule applying the statutory “reasonable and necessary” standard to a particular treatment and therefore was not subject to APA notice-and-comment requirements.
- The court held that due process was not violated by a carrier hearing in which the hearing officer was bound by the NCD and could not revisit the national policy judgment on coverage.
- The denial of Friedrich’s reimbursement claim was upheld.

## Legal Principles

- A Medicare Part B national coverage determination that applies the statutory “reasonable and necessary” standard to a specific item or service is an interpretive rule and may be issued without APA notice-and-comment rulemaking.
- In the Medicare Part B scheme, due process does not require a de novo forum for beneficiaries to challenge the validity of national coverage determinations; a hearing officer may be required to follow binding national coverage instructions when adjudicating individual claims.
- Uniform national coverage instructions may be used to ensure consistent administration of Part B without requiring individualized relitigation of nationwide medical-necessity policy determinations.

## Conclusion

The Sixth Circuit upheld HHS’s national noncoverage instruction for chelation therapy as an interpretive application of the Medicare “reasonable and necessary” standard exempt from APA notice-and-comment procedures and held that binding carrier hearing officers to such determinations does not deny due process.


Friedrich v. Sec'y of Health & Hum. Servs., 894 F.2d 829 (6th Cir. 1990)