Smith v. Thompson

After Fred Smith (plaintiff) was diagnosed with prostate cancer, his doctor told him that his only treatment option was cryosurgery of the prostate, a procedure that used cold temperatures to destroy cancerous tissue. Both Smith’s doctor and the treating hospital advised Smith that cryosurgery of the prostate was considered an experimental and investigational procedure and was therefore unlikely to be covered by Medicare. Smith signed forms indicating that he understood and agreed to be personally responsible for payment if Medicare denied the doctor’s and hospital’s claims. Smith received the treatment in March 1995, and it proved successful. However, when the doctor and hospital submitted their bills to Health Care Service Corporation (HCSC), Illinois’s Medicare carrier, HCSC denied the claims, stating that cryosurgery was not a reasonable and necessary treatment for Smith’s cancer because it was experimental and investigational. Smith’s requests for review of the decision within HCSC proved unsuccessful. Smith then sought review by an administrative-law judge (ALJ). HCSC presented evidence that in 1995, the time of Smith’s treatment, it had a published policy stating that cryosurgery of the prostate was experimental and investigational and therefore not covered. Additionally, in 1995, the American Urological Association had described cryosurgery of the prostate as experimental and investigational. Further, at the 1997 National Coverage Determination, it was held that cryosurgery of the prostate could not be considered a reasonable and necessary treatment because there was insufficient proof of its effectiveness. Relying on that information, the ALJ upheld HCSC’s denial of payment. The Medicare Appeals Council denied review, making the ALJ’s judgment a final decision of the secretary of health and human services, Tommy Thompson (defendant). Smith sued Thompson in federal district court, arguing that the decision was arbitrary and capricious because cryosurgery was safe and effective, generally accepted in the medical community, Smith’s only option, and a complete success. The district judge referred the case to a magistrate judge for a report and recommendation.