A federal court has ruled against Medicare beneficiaries in a case concerning the reimbursement rates for Relizorb, a medical device designed to help patients with cystic fibrosis and other serious pancreatic conditions. The ruling, issued by Judge Colleen Kollar-Kotelly of the District Court for the District of Columbia, affirms the decisions made by the Medicare Appeals Council to deny higher reimbursement payments for the device. This decision affects patients who rely on Relizorb for their nutritional needs, highlighting ongoing issues in Medicare's reimbursement processes.
The case, known as Goetter v. Kennedy (Civil Action No. 2025-3100), involved plaintiffs Athena Goetter, Nya Muhammad-Solomon, and Shandale Mayo, all of whom are Medicare beneficiaries. They, along with the manufacturer Alcresta Therapeutics, challenged the Medicare Appeals Council's decisions regarding the reimbursement rates for Relizorb. The court's ruling is significant as it underscores the complexities of Medicare's reimbursement policies and the challenges faced by patients in obtaining necessary medical supplies.
Background
The plaintiffs in this case are individuals who have received Relizorb, a therapeutic device that helps patients digest and absorb essential fats. The device is particularly beneficial for those with cystic fibrosis and other pancreatic conditions. Alcresta Therapeutics, the manufacturer of Relizorb, also joined the lawsuit, seeking to challenge the reimbursement decisions made by the Medicare Appeals Council.
Relizorb was approved by the FDA in November 2015, and since then, it has been at the center of a reimbursement dispute with the Centers for Medicare and Medicaid Services (CMS). The plaintiffs argued that the Medicare Appeals Council improperly denied their requests for higher reimbursement rates, which they claimed were necessary for their medical needs. The case reached the District Court after the plaintiffs exhausted their administrative appeals.
The Ruling
In her opinion, Judge Kollar-Kotelly ruled in favor of the defendant, Robert F. Kennedy, Jr., in his official capacity as Secretary of Health and Human Services. The court found that the Medicare Appeals Council's decisions were consistent with relevant legal standards and supported by substantial evidence. Judge Kollar-Kotelly stated, "the record indicates that the MAC used an amount—either an MSRP or the wholesale cost—that was not the appropriate price information for purposes of calculating the gap-filled payment amount for the [Relizorb] cartridges at issue in accordance with the regulations."
The court granted the Secretary's motion for summary judgment and denied the plaintiffs' motion for summary judgment. This ruling effectively upholds the lower reimbursement rates determined by the Medicare contractors, which were based on a $49-per-cartridge figure provided by Alcresta in its HCPCS application.
Impact
This ruling has significant implications for Medicare beneficiaries who rely on Relizorb for their medical needs. The decision reinforces the authority of the Medicare Appeals Council and the discretion of CMS in determining reimbursement rates for medical devices. Patients who require Relizorb may continue to face challenges in obtaining adequate reimbursement for the device, which could impact their access to necessary treatment.
The court's decision also sets a precedent for similar cases involving Medicare reimbursement disputes. By affirming the Council's decisions, the court has established that beneficiaries must provide sufficient evidence to support their claims for higher reimbursement rates. This may make it more difficult for patients to challenge reimbursement decisions in the future.
What's Next
The plaintiffs may consider appealing the court's decision to a higher court, although details on any potential appeal were not available in the court filing. Additionally, a related case involving similar reimbursement issues remains pending in the District Court, which could further impact the ongoing discussions surrounding Medicare's reimbursement policies for medical devices like Relizorb.