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July 21, 2021

21 July 2021

Government Narrowly Avoids Invalidation of All LCDs in the Ninth Circuit

A divided panel of the Ninth Circuit recently reversed a district court decision that held that local coverage determinations (“LCDs”) are valid only when issued through a 60-day notice-and-comment rulemaking process.  Agendia, Inc. v. Becerra, No. 19-56516 (9th Cir. July 16, 2021).  The impact of the district court’s ruling—and a spirited dissent from the Ninth Circuit majority opinion—would have been significant for healthcare enforcement actions, including under the False Claims Act.  LCDs have never gone through notice-and-comment rulemaking.  A decision that all LCDs are accordingly invalid would have undermined a number of False Claims Act cases premised on the use of LCDs to apply the “reasonable and necessary” standard for Medicare reimbursement.  The Ninth Circuit is the first court of appeals to weigh in on this issue, however, and others may yet reach a different conclusion.

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