In a victory for beneficiaries, the U.S. Court of Appeals for the Ninth Circuit has allowed a lawsuit to proceed against Medicare’s policy of discontinuing coverage for vital medications with no advance notice, and making patients financially responsible for what can be the exorbitant costs of those drugs.
The Center for Medicare Advocacy and Community Legal Services at the McGeorge School of Law brought the case, Beitzel v. Kennedy, on behalf of Medicare beneficiaries blindsided by the loss of coverage for drugs they rely on. The lead plaintiff, George Beitzel, has Crohn’s disease and Parkinson’s disease. For years, he received Medicare Part B coverage of an injectable drug, administered by health care professionals in a clinical setting. But without any advance notice to beneficiaries, Medicare reclassified the drug as one that is “usually self-administered,” meaning it would no longer be covered by Part B as an item provided incident to the services of a physician. After receiving several more scheduled injections — unaware of the change — Mr. Beitzel was told by Medicare that he was responsible for over $40,000 per injection.
Medicare provides no advance notice to beneficiaries when a drug is added to its Self-Administered Drug (“SAD”) List, and it does not require medical providers to inform patients either. Patients can thus be left in the dark and on the hook, as Mr. Beitzel was.
Beitzel v. Kennedy challenges this policy on constitutional due process and statutory grounds, asserting that Medicare beneficiaries have a right to 1) advance notice when a drug they have been using will no longer be covered, and 2) protection from financial liability when they do not receive adequate, timely notice.
Although a federal district court dismissed the case in April 2024, the Ninth Circuit reinstated the case in full on June 23, 2025, ruling that:
- The court has subject matter jurisdiction over all of the plaintiffs’ claims, even if they did not complete Medicare’s lengthy administrative appeals process. Requiring exhaustion of administrative remedies would be futile and unjust.
- The plaintiffs have Article III standing to seek prospective, injunctive relief.
- The plaintiffs sufficiently pleaded legal claims that should be heard in court.
Notably, the Ninth Circuit definitively stated that the plaintiffs have a protected “property interest in Medicare benefits.” Decision at 8, 7 (citing 42 U.S.C. § 426(a)). Because protected property interests are crucial for triggering due process rights, it was helpful for the court to leave no doubt that the government must provide fair procedures, such as meaningful notice, before Medicare benefits can be taken away.
The court also held that the Legislative Act doctrine, under which due process concerns are not implicated by decisions of general applicability, does not apply in this situation. The determination that a drug is “usually self-administered” applies generally. However, since most beneficiaries qualify for coverage of drugs that are added to the SAD List under the Medicare Part D prescription drug benefit, “and thereby could retain existing benefits,” an individual eligibility determination is required. This brought the situation “outside the scope” of the Legislative Act doctrine. Decision at 7 n.2.
The decision is a crucial step forward in protecting Medicare beneficiaries from surprise coverage denials and crushing medical bills. It affirms that people who rely on Medicare deserve notice, transparency, and fairness, especially when their health and financial security are on the line. CMA and Community Legal Services look forward to continuing to litigate this case on behalf of the class.
Key Documents:
June 25, 2025 – A. Bers