STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

REBECCA CRANE, )

)

Petitioner, )

)

vs. )

)

AGENCY FOR HEALTH CARE )

ADMINISTRATION, )

)

Respondent, )

)

and )

) KMART AND CAMBRIDGE INTEGRATED ) SERVICES GROUP, INC., )

)

Intervenor. )

Case No. 00-0775

)

RECOMMENDED ORDER

A formal hearing was held in this case on September 1, 2000, in Orlando, Florida, before Daniel M. Kilbride, Administrative Law Judge, Division of Administrative Hearings.

APPEARANCES

For Petitioner: Jeffery J. Bordulis, Esquire

570 Crown Oak Centre Drive Longwood, Florida 32750

For Respondent: Michelle L. Oxman, Esquire

Agency for Health Care Administration 2727 Mahan Drive

Fort Knox Building 3, Suite 3431

Tallahassee, Florida 32308-5403

For Intervenor: Lisa Hurley, Esquire

Pyle, Jones, Hurley & Hand, P.A. 1069 West Morse Boulevard

Winter Park, Florida 32789 STATEMENT OF THE ISSUE

Whether Petitioner's request for authorization for the autologous chondrocyte implantation procedure should be approved pursuant to worker's compensation laws and rules.

PRELIMINARY STATEMENT

By letter dated January 4, 2000, the Agency for Health Care Administration (Respondent) notified Rebecca Crane (Petitioner) that the proposed procedure, autologous chondrocyte implantation (ACI), for her injury was deemed investigational in nature and not approved for coverage under Worker's Compensation in light of her diagnosis and condition. By letter dated January 25, 2000, Petitioner disputed Respondent's determination. On February 17, 2000, this matter was referred to the Division of Administrative Hearings for a formal hearing. Subsequently, the K-Mart Corporation (Intervenor) was permitted to intervene in these proceedings.

At hearing, Petitioner testified in her own behalf; presented the testimony of one expert witness, Dr. Jeffery Friedman, M.D.; and entered eight exhibits (Petitioner's Exhibits numbered 1-8, which include the deposition testimony of Dr. Joseph Billings, M.D.) into evidence. Respondent did not

call any witnesses to testify, but entered 3 exhibits into evidence. Respondent's Exhibit 1 is the deposition testimony of its expert, Dr. B. Hudson Berry, Jr. Intervenor did not call any witnesses to testify or offer any exhibits to be entered into evidence.

A transcript of the hearing was ordered. At the request of the parties, the time for filing post-hearing submissions was set for ten days following the filing of the transcript.

The Transcript, consisting of two-volumes, was filed on October 26, 2000. The parties timely filed their post-hearing submissions. The parties' post-hearing submissions were carefully considered in the preparation of this Recommended

Order.

FINDINGS OF FACT

Petitioner's Injury

1. At all times, the Petitioner has been employed as a Ladies Wear Department Manager for K-Mart Corporation.

2. On July 21, 1998, Petitioner, while in the course and scope of her employment, was injured when she fell on a metal ladder as she attempted to hang clothes on a rail. Her left knee struck a metal bar on the second step of the ladder, causing immediate pain.

3. On August 26, 1998, Petitioner consulted Dr. Jeffery Friedman, M.D., an orthopedic surgeon, who specializes in knee

   and shoulder surgery. Dr. Friedman was recognized as an expert in the field of orthopedic surgery.

4. On or about September 4, 1998, Petitioner underwent arthroscopic surgery performed by Dr. Friedman to remove a loose body from the knee. Dr. Friedman found grade III chondromalacia and debrided the area using an arthroscopic shaver. He also found loose articular cartilage at the patella.

5. Dr. Friedman's records describe the area of grade III chondromalacia as "fairly large" and involving " the apex of the patella." However, neither the size nor the shape of the injury is disclosed.

6. Dr. Friedman also debrided flake of articular cartilage from the tibial plateau and removed a calcific loose body from the posteromedial compartment. His post-operative diagnosis was left knee loose body, chrondromalacia, and intracruciate ligament strain.

7. Petitioner returned to work with K-Mart after the arthroscopic surgery, and was placed on light duty.

8. While performing her duties, Petitioner is required to stand most of the time, and is unable to sit. Prior to her injury, Petitioner worked 40 hours per week. After her injury, due to her physical limitations resulting from the accident, Petitioner is only able to work 24 hours per week. Petitioner's pain limits her ability to work 40 hours per week.

9. Petitioner cannot put her full weight down on the left knee while going up steps or a ladder or it causes sharp shooting pains. In addition, continuous walking results in continuous aching pain.

10. The reduction in Petitioner's work hours was due to her injury. Petitioner is now unable to perform all of the duties that were required of her before the injury.

11. Dr. Friedman found Petitioner to have reached maximum medical improvement in December 1998.

12. In early 1999, Petitioner sought treatment for continued pain. An MRI was performed on or about March 5, 1999, which suggested a small defect in the articular cartilage, thinning of the patellar cartilage, and narrowing of the medical femoral tibial joint consistent with the early stages of osteoarthritis.

13. In June, 1999, Petitioner underwent steroid injections for continued pain.

14. In September, 1999, Petitioner returned to Dr, Friedman because of continued pain. Dr. Friedman reviewed a video tape that he had made of the arthroscopic surgery and fount that the Petitioner had a fairly large chondral defect of the patella.

15. Dr. Friedman determined that Petitioner was a candidate for ACI, also known as the Genzyme Carticel Procedure

    (Genzyme Procedure). Dr. Friedman believed that the ACI procedure would benefit Petitioner by providing long-term symptomatic relief with joint pain and mechanical disturbances and improved joint motion function, eliminating the complaints of grinding and catching, and furthering the goal of returning the patient to regular and even strenuous activity.

16. Petitioner then requested authorization for the ACI procedure. The Employer/Carrier denied the request and referred it to the Agency for Health Care Administration for review in accordance with Florida law.

17. The Agency consulted with the University of Florida Faculty Practice Group, and Dr. B. Hudson Berrey, Chair of the Department of Orthopaedics and Rehabilitation, rendered an opinion that the procedure is investigative within the meaning of Rule 59B-11.002(5), Florida Administrative Code.

18. Dr. Berrey further opined that there was not reliable evidence that ACI would provide significant benefit to the recovery and well-being of the injured employee within the meaning of Rule 59B-11.004(3), Florida Administrative Code.

19. The documents and information forwarded to Dr. Berrey by Respondent included Petitioner's medical records provided by Intervenor, K-Mart carrier. Dr. Berrey did not review any actual MRI films, did not review any films taken at the time of the arthroscopic procedure, and in fact only reviewed certain

    documentation that was supplied to him by the agency. Petitioner was denied her right to present information to Dr. Berrey prior to his forming his opinion for the agency.

    This was a violation of Rule 59B-11.003, Florida Administrative Code.

20. The agency rendered a decision based upon Dr. Berrey's opinion, declining to order the Employer/Carrier to provide ACI to Petitioner.

    Autologous Chondrocyte Implantation

    
    

21. The ACI procedure was initially developed in Sweden by Dr. Lars Peterson.

22. ACI is a surgical procedure whereby a sample of cartilage is harvested from another area of the joint. The harvesting of the cartilage is performed during an arthroscopic surgical operation.

23. The sample is sent to Boston to the laboratory of Genzyme Tissue Repair, Inc. ("Genzyme"), the owner of the process. Genzyme uses its proprietary process to culture the cells into an estimated 12 million chondrocytes over a period of approximately two months.

24. Genzyme then returns the cultured chondrocytes to the surgeon. The surgeon then performs an open surgical operation. The surgeon creates a periosteal flap. In addition, the injury

    is debrided and the chondrocytes are implanted on the wounded cartilage and covered with the periosteal flap.

25. The ACI procedure thus requires two surgical operations, one arthroscopic procedure and one open procedure.

26. The claimed benefit of ACI is that the cartilage that is generated and implanted onto the knee will be hyaline cartilage or hyaline-like cartilage rather than fibrocartilage.

27. Hyaline cartilage is composed both of the cartilage cells of an extra-cellular matrix. It has greater ability than fibrocartilage to withstand compression and shearing forces.

28. ACI has been shown to produce "hyaline-like" cartilage in some patients. However, it does not reproduce the extra- cellular matrix in which the chondrocytes are found in naturally occurring hyaline cartilage.

    Alternative Treatments

    
    

29. Other available treatments for a defect in articular cartilage of the knees include abrasion chondroplasty, arthroscopic microfracture, and arthroscopic drilling.

30. Many patients get relief with one or more of these alternative procedures and do not need another operation.

31. In addition, a surgical procedure to elevate the tibial tubercle and remove some of the weight from the patella might also alleviate the Petitioner's pain and improve her functioning.

32. Dr. Friedman performed an abrasion chondroplasty during the arthroscopic surgery of September 4, 1998.

33. Dr. Friedman did not offer Petitioner either the microfracture or the drilling procedures.

34. Dr. Friedman had considered performing a tibial tubercle elevation but has not recommended that the Petitioner undergo that procedure either before the ACI is approved or independently of the ACI. Dr. Friedman views the primary purpose of this procedure as assuring the best possible results from the ACI.

35. Dr. Friedman indicated there were no appropriate alternative medical procedures, other then the ACI procedure, available for Petitioner's injury. Dr. Friedman opined that the only viable option of putting back normal articular cartilage underneath the kneecap would be with the ACI procedure. In this opinion, the alternative procedures are not appropriate for and would not benefit Petitioner, as they were merely temporary procedures. Moreover, he emphatically stated that the ACI procedure is the procedure which is appropriate for an would benefit Petitioner.

    The Evidence That ACI Remains Investigative

    
    

36. The Agency for Health Care Administration has not promulgated, endorsed, or approved any particular treatment for injuries to the articular cartilage of the knee in accordance

    with Sections 440.13(15) or 408.02, Florida Statutes; therefore, there was no Agency-approved protocol for Dr. Berrey to consider in rendering his opinion.

37. Dr. Berrey testified that he could find no articles or publications describing controlled studies in which the effectiveness of ACI compared to any other procedure.

38. Dr. Berrey further testified that he could find no articles about the ACI procedure in peer-reviewed journals in which the authors used objective measures of outcome which compared the patients' condition before and after treatment.

39. The use of blinded or controlled studies is important so that possible confounding factors or variables can be controlled or accounted for and the results measured objectively.

40. Dr. Berrey found that the publications cited by the proponents of the procedure discussed research which was funded by Genzyme, the owner of the process by which the chondrocytes were cultured. The funding of the research by the owner of the process was an additional factor in his determination that the evidence supporting the efficacy of the procedure was not reliable.

41. The Cartilage Repair Registry and the results reported therein do not constitute reliable evidence of the benefits of ACI when compared to other available procedures for two reasons.

    First, the potentially confounding variables are neither controlled nor accounted for. Second, each surgeon evaluates his or her own work, so that there is no objective, independent measurement or assessment of the condition of each patient before and after surgery.

42. Although the premise on which ACI is based is that the patient's implant will consist of hyaline cartilage rather than fibrocartilage, the available data does not indicate that the results are comprised only, or even primarily, of genuine hyaline cartilage. Rather, the evidence is that some patients develop "hyaline-like" cartilage, or cartilage composed partly of hyaline tissue.

43. It cannot be determined whether hyaline or hyaline- like cartilage has filled a patient's defect without performing a biopsy and a histological evaluation of the tissue.

44. The published reports described in the testimony contain discussions of post-surgical histological performed on very small numbers of patients.

45. The published reports concerning the use of ACI to treat defects of the patella show that the results are not as favorable as those claimed for treatment of the femoral condyle.

46. After the proponents of the procedure began to perform other procedures with the ACI to assure that any defects in the

    alignment of the patella are repaired, improved results were reported.

47. Dr, Friedman testified about the published results of histological evaluations of 37 patients. Of those, seven underwent ACI to treat defects of the patella. Only one of the seven showed the development of hyaline-like tissue. Further, only two of the seven patella patients reported surgical results classified as good or better.

48. Dr. Friedman opined that the histological data resulting from treatment of defects of the patella had improved since the study described in the preceding paragraph. However, he could not give any reference to the basis for his opinion.

49. Dr. Friedman further testified that the more recent articles discussed the results of patients who had been followed from nine to 15 years. However, the articles and presentations from 1997 to 2000 report on follow-up of the first hundred patients between two and nine years after their surgery.

50. Dr. Billings testified that Dr. Peterson's presentation discussed follow-ups of ACI patients occurring as long as 15 years after surgery. Yet, the March 2000 presentation to the American Academy of Orthopedic Surgeons focused on 40 patients who had been evaluated three or more years after their surgery.

51. The FDA granted an accelerated approval of the Carticel product in 1997. The original accelerated FDA approval was granted for defects of the femoral condyle, the trochlear groove, and the patella. The terms of the approval require that controlled studies be conducted which compare the procedure to other procedures available for the treatment of focal chondral defects, specifically, microfracture and the creation of a periosteal flap without the injection of the cultured chondrocytes.

52. None of the expert witnesses had found in their literature search any published reports of the progress of the controlled studies required under the terms of the accelerated FDA approval.

53. In February, 2000, the FDA approval was modified.

    
    

    Genzyme is no longer permitted to market the ACI procedure or its Carticel product for treatment of defects to the patella.

54. The requirements of Rule 59B-11.004, Florida Administrative Code, differ significantly from those of the accelerated FDA approval process, so that the granting of accelerated approval does not determine the answer to the question whether a treatment is investigative under that rule. The FDA's inquiry addresses the issues of safety and efficacy. However, the accelerated FDA approval process does not address

    the issues of whether a particular product is more effective than currently existing treatments or is equally cost-effective.

55. Based upon all the evidence, the performance of the ACI procedure on the defects located in the patella is investigative within the meaning of Rule 59B-11.002(5), Florida Administrative Code.

    The Probability That ACI Would be of Significant Benefit in Returning Petitioner to Work

56. Both of Petitioner's expert witnesses testified that if she does not undergo ACI, it is likely that she will need a total knee replacement. However, neither witness testified that Petitioner currently requires a total knee replacement. No testimony was presented as to when Petitioner might require a total knee replacement.

57. Despite the testimony that ACI has been studied for 20 years, the published reports follow patients only for nine years after surgery. From the current state of the research, it is not possible to conclude that patients who undergo ACI avoid the need for subsequent surgery in ten or more years.

58. The published studies of the results of ACI going out nine years from the date of surgery do not state the number of procedures performed on the patella.

59. No witnesses testified regarding any published studies of the effectiveness of ACI that addressed the extent to which

    patients had been able to return to work as a result of the procedure.

60. There is insufficient evidence from which to conclude that the ACI is more likely to enable the Petitioner to return to her duties that other available procedures.

    The Likelihood That the Benefits of ACI Would Outweigh the Risks and the Costs

61. The testimony compared the cost and benefit of ACI with chondroplasty, microfracture or drilling, and, to some extent, a Macquet procedure or tibial tubercle elevation.

62. Each of the other procedures requires only one surgical operation.

63. ACI requires an arthroscopic surgical procedure to harvest cartilage, culturing of the chondrocytes at the Genzyme laboratory in Boston, and followed by an open surgical procedure to create a periosteal flap and to implant the chondrocytes.

64. Petitioner's expert testified that the cost of culturing the chondrocytes alone was between $8,000 and $10,000, in addition to the two surgical procedures.

65. Petitioner's expert compared the cost of ACI to that of a total knee replacement. However, that comparison is not appropriate under the rule because there is no evidence that Petitioner currently needs a knee replacement or that a knee

    replacement is the treatment generally used to treat her current condition.

66. The cost of the abrasion chondroplasty, the microfracture or drilling procedure would approximate the cost of the first stage of ACI, approximately $2,300.

67. Dr. Billings testified that the cost of the second stage of ACI was greater than that of the first stage. The second stage is an open surgical operation rather than an arthroscopic one. The total cost of the ACI procedure, including therapy, is probably close to the $30,000 required for a total knee replacement, including the therapy required for the total knee replacement. Dr. Berrey testified that published reports of the cost of ACI are as high as $37,000.

68. The ACI requires extensive physical therapy; Petitioner presented no evidence as to the extent to which the cost of this aspect of treatment was included in the total cost of ACI.

69. ACI has been established to be safe, so that the benefits of the procedure outweigh the risks. However, there is insufficient evidence from which to conclude that the benefits of ACI outweigh the additional costs.

    CONCLUSIONS OF LAW

    
    

70. The Division of Administrative Hearings has jurisdiction over the subject matter of this proceeding and the

    parties thereto pursuant to Section 120.569 and Subsection 120.57(1), Florida Statutes.

71. Section 440.13(1)(m), Florida Statutes, provides in pertinent part:

    1. DEFINITIONS. As used in this section, the term:

       
       

       * * *

       
       

       (m) "Medically necessary" means any medical service or medical supply which is used to identify or treat an illness or injury, is appropriate to the patient's diagnosis and status of recovery, and is consistent with the location of service, the level of care provided, and applicable practice parameters. The service should be widely accepted among practicing health care providers, based on scientific criteria, and determined to be reasonably safe. The service must not be of an experimental, investigative, or research nature, except in those instances in which prior approval of the Agency for Health Care Administration has been obtained. The Agency for Health Care Administration shall adopt rules providing for such approval on a case-by- case basis when the service or supply is shown to have significant benefits to the recovery and well-being of the patient.

       
       

72. Rule 59B-11.002, Florida Administrative Code, provides in pertinent part:

    
    

    1. "Experimental" describes a medical service, procedure, drug, equipment, or supply which, for the particular diagnosis, the efficacy has not been proven and the safety and validity are unknown or unclear.

       This can but need not include treatments and procedures being tested in phase I and phase II clinical trials.

       
       

    2. "Investigative" describes a medical service, procedure, drug, equipment, or supply which has been found safe and efficacious for the particular diagnosis but is still being investigated. The reliability, validity, efficacy and cost benefit of the service, procedure, drug, equipment or supply has not been conclusively demonstrated for use in treating or diagnosing the injury or illness being covered under workers' compensation medical benefits. This can but need not include treatments and procedures being tested in phase III clinical trials.

    
    

    * * *

    
    

    1. "Reliable evidence" means practice parameters or guidelines endorsed by AHCA pursuant to sections 440.13(15), or 408.02, Florida Statutes, or sources of information where medical researchers have expressed their conclusions in a scientifically appropriate manner including peer-reviewed literature and articles published in medical and scientific journals.

       
       

    2. "Significant benefits to the recovery and well being of the injured employee" means that evidence indicates that the proposed procedure or supply is more likely than not, when compared with other treatment modalities, to promote the injured employee's ability to return to gainful employment by maintaining or improving his or her functional condition. In cases where the injured employee cannot return to gainful employment, "significant benefits to the recovery and well being of the injured employee" means that the proposed procedure or supply is more likely than not, when compared with other treatment modalities, to

    promote the injured employee's ability to independently perform the activities of daily living.

    
    

73. Rule 59B-11.004, Florida Administrative Code, provides in pertinent part:

    (3) . . . A treatment that is classified as investigational may be approved if reliable evidence suggests that it will provide significant benefits toward the recovery and well being of the injured employee.

    
    

    * * *

    
    

    1. In making the determination for an approval, there must be reliable evidence indicating:

       
       

       1. that the proposed procedure or supply is safe and efficacious in relation to existing diagnostic or therapeutic alternatives,

          
          

       2. that the proposed procedure or supply will yield positive net beneficial effects on health outcomes that outweigh any harmful effects in relation to existing diagnostic or therapeutic alternatives, and

          
          

       3. that the positive net beneficial effects of the proposed procedure or supply outweigh the cost.

    
    

74. The evidence demonstrates that the proposed surgery is "investigative" within the meaning of Rule 59B-11.002(5), Florida Administrative Code. It has been found safe and efficacious for the diagnosis of focal osteochondral defect but is still being investigated. Its reliability, validity, efficacy, and cost benefit have not yet been conclusively demonstrated, in that

    there are no controlled studies in which the procedure is compared to existing procedures or treatments for the same type of injury. There are many questions about the procedure which remain unanswered, including the long-term benefit, the effects of smoking and other co-morbidities upon recovery, and the ages for which it is appropriate to perform the procedure.

75. None of the available studies compared the proposed procedure with any of the existing forms of treatment.

    Therefore, the alleged benefits of the proposed procedure are not supported by reliable evidence within the meaning of Rule 59B- 11.002(5), Florida Administrative Code.

76. Because there have been no clinical trials comparing ACI to other procedures, the articles and studies published have been written by the surgeon performing the procedure, who has evaluated his own work, and there is little evidence of its long- term effects, positive or negative. There was no reliable evidence that the ACI will yield positive net beneficial effects or health outcomes that outweigh any harmful effects in relation to existing procedures, as required by Rule 59B-11.004(5)(b), Florida Administrative Code.

77. There was no evidence from which to conclude that the positive net beneficial effects of ACI outweigh the cost, which is much greater that that of the other accepted procedures, as required by Rule 59B-11.004(5)(c), Florida Administrative Code.

RECOMMENDATION

Based on the foregoing Findings of Fact and Conclusions of Law, it is

RECOMMENDED that the Agency for Health Care Administration enter a final order denying approval of the autologous chondrocyte implantation for Petitioner Rebecca Crane.

DONE AND ENTERED this 27th day of November, 2000, in Tallahassee, Leon County, Florida.

DANIEL M. KILBRIDE

Administrative Law Judge

Division of Administrative Hearings The DeSoto Building

1230 Apalachee Parkway

Tallahassee, Florida 32399-3060

(850) 488-9675 SUNCOM 278-9675

Fax Filing (850) 921-6847 www.doah.state.fl.us

Filed with the Clerk of the Division of Administrative Hearings this 27th day of November, 2000.

COPIES FURNISHED:

Jeffrey J. Bordulis, Esquire

570 Crown Oak Centre Drive Longwood, Florida 32750

Lisa J. Hurley, Esquire

Pyle, Jones, Hurley & Hand, P.A. 1069 West Morse Boulevard

Winter Park, Florida 32789

Michelle L. Oxman, Esquire

Agency for Health Care Administration 2727 Mahan Drive

Fort Knox Building 3, Suite 3431

Tallahassee, Florida 32308-5403

Sam Power, Agency Clerk

Agency for Health Care Administration 2727 Mahan Drive

Fort Knox Building Three, Suite 3431 Tallahassee, Florida 32308

Ruben J. King-Shaw, Jr., Director Agency for Health Care Administration 2727 Mahan Drive

Fort Knox Building, Suite 3116 Tallahassee, Florida 32308

Julie Gallagher, General Counsel Agency for Health Care Administration 2727 Mahan Drive

Fort Knox Building Three, Suite 3431 Tallahassee, Florida 32308

NOTICE OF RIGHT TO SUBMIT EXCEPTIONS

All parties have the right to submit written exceptions within

15 days from the date of this recommended order. Any exceptions to this recommended order should be filed with the agency that will issue the final order in this case

Docket for Case No: 00-000775

Orders for Case No: 00-000775