[00:00:01] Speaker ?:
Case number 18-3192.

[00:01:25] Speaker 05:
Good morning.

[00:01:26] Speaker 05:
My name is Stephanie Webster.

[00:01:28] Speaker 05:
I represent the plaintiffs and their challenge to the coding decision for relies order.

[00:01:34] Speaker 05:
Even according to the government, the coding process under the Health Insurance Portability and Accountability Act, or HIPAA, is supposed to entail the grouping of like items to facilitate the efficient processing of medical claims.

[00:01:49] Speaker 05:
But the quoting determination at issue grouped the new enzyme-packed medical device

[00:01:55] Speaker 05:
with unlike items such as tubing and tape and the standard enteral feeding supply kit with the code B4035.

[00:02:04] Speaker 01:
You say the coding decision at issue, which is the 2017 decision for 2018, right?

[00:02:14] Speaker 04:
Yes.

[00:02:14] Speaker 01:
But the case has now changed pretty significantly in my view because we have a decision

[00:02:23] Speaker 01:
We just got a decision a day or two ago ruling in your favor on the coding issue.

[00:02:31] Speaker 01:
There is now a separate code and you essentially have what you asked for.

[00:02:38] Speaker 05:
Well, respectfully, our belief is that that decision was not in our favor at all because the same categorization of our unique medical device with the standard supply kit continues.

[00:02:55] Speaker 05:
Your Honor is correct that the original determination challenge was one made in late 2017, and since that time, the

[00:03:05] Speaker 05:
agency has made a series of changes to the coding, but none of those changes to the coding changed the connection that the agency has made between our code, excuse me, our product and the standard enteral supply kit.

[00:03:24] Speaker 01:
But, I mean, assuming that this recent decision will now govern and, you know, there's a loose end, they haven't technically applied this

[00:03:34] Speaker 01:
to the 2018 year yet, but assuming that all shakes out, what's left?

[00:03:47] Speaker 01:
It seems like what you're now complaining about is not the HIPAA code, but the indicator that's attached to it.

[00:03:58] Speaker 05:
The alphanumeric code, the B4035, not the B4105, is part of the coding determination.

[00:04:07] Speaker 05:
That's the alphanumeric indicator, but the series of indicators are all part of the determination as to how to treat the product.

[00:04:17] Speaker 01:
There was a 4035.

[00:04:20] Speaker 01:
code for HIPAA purposes and it lumped supplies together and it treated your client's product as a supply and you said that makes no sense, this device or whatever it is that mimics pancreatic function, it's just crazy to treat that like tape and syringes and stuff and that has a lot of force to it.

[00:04:49] Speaker 01:
But the agency ultimately agreed with you on the HIPAA codes because they've now said it's not 4035, there's a separate 4105 for this device and it's now no longer treated as a part of the supply bundle.

[00:05:08] Speaker 05:
Well, Your Honor, the problem is that

[00:05:12] Speaker 05:
even though the agency has issued a different alphanumeric code, it continues to connect that code to the supply kit and it's doing it through another indicator.

[00:05:25] Speaker 05:
Well, there's actually a brand new indicator, which is effectively a cross-reference to the manual provision that governs the supply kit.

[00:05:37] Speaker 05:
So even though the agency has issued this new number and letters, but is still making that connection of our product

[00:05:50] Speaker 05:
to the basic supply kit.

[00:05:53] Speaker 03:
But doesn't that just underscore that problem in the sense that it seems like the parties are talking past one another.

[00:06:00] Speaker 03:
Let's say they got rid of the D and the double zero.

[00:06:05] Speaker 03:
But as a substantive matter, the agency

[00:06:08] Speaker 03:
it still understands LIZORB to be part of an interior feeding kit and therefore take those codes away.

[00:06:16] Speaker 03:
The action that they're gonna take as a substantive matter would still put it under the umbrella of interior supply kit.

[00:06:24] Speaker 03:
And if that's true, so it seems like, I mean, I don't think you dispute this.

[00:06:28] Speaker 03:
What you're really trying to get at is the substantive pricing determination.

[00:06:34] Speaker 03:
And the question is, have you shot at a false target

[00:06:38] Speaker 03:
by zeroing in on the code rather than the underlying pricing determination?

[00:06:48] Speaker 05:
Well, the coding reflects a pricing determination.

[00:06:52] Speaker 05:
The entirety of the coding.

[00:06:54] Speaker 05:
Again, it's not just the alphanumeric indicator.

[00:06:56] Speaker 05:
I think one thing that highlights the problem we have here is that the code that was issued just Monday evening actually

[00:07:08] Speaker 05:
designates our product as a nutrient rather than a supply, but at the same time still tries to connect us to the previously priced competitively bid

[00:07:21] Speaker 03:
supply kit.

[00:07:23] Speaker 03:
How can you tell it's a nutrient?

[00:07:24] Speaker 03:
Is that because it's in the 4100 series?

[00:07:27] Speaker 05:
The V41 series is the series for nutrients, yes.

[00:07:31] Speaker 05:
And so it's deceiving because it makes it seem like we've gotten what we sought, which is characterization of our product as something other than

[00:07:40] Speaker 05:
a supply that's part of the standard kit that goes to all patients.

[00:07:45] Speaker 00:
You might have gotten what you sought because what you sought was the unique billing code and you did get a unique billing code and then now it seems like what you want and I understand why you want it is a billing code that isn't encumbered by indicators that you dislike and that I totally understand why you'd want that.

[00:08:05] Speaker 00:
I'm not sure it's what you asked for but it may be what you want.

[00:08:08] Speaker 00:
The question I have is

[00:08:11] Speaker 00:
If this new billing code works in the way that the government says, which is to say that it enables appeals through the normal administrative process that would allow you to attack the underlying substantive determination that relies or should be part of the bundle, then there is that opportunity to make the argument that ultimately really matters both to you and I think to the government through that channel.

[00:08:41] Speaker 05:
Well with respect to the administrative review process, the government has not ever said that

[00:08:49] Speaker 05:
Plaintiffs have an ability to challenge the coding determination through that process.

[00:08:53] Speaker 05:
They've said if the plaintiffs, sorry, go ahead.

[00:08:57] Speaker 00:
We can ask them that, to confirm that.

[00:08:59] Speaker 00:
And just to be sure I'm understanding, so you're saying the coding determination, but really what matters is whether, as I understand it, really what matters to you is whether Relisor is treated as part of the same bundle for which there's the daily cap.

[00:09:14] Speaker 00:
If it's not treated as part of the same bundle for which there's a daily cap, then it creates the possibility that there's going to be a greater reimbursement.

[00:09:21] Speaker 00:
It doesn't create the certainty, but it creates the possibility that there's going to be a greater reimbursement.

[00:09:25] Speaker 00:
So what really matters to you is the opportunity to decouple Relizor from the bundle.

[00:09:31] Speaker 00:
And if that opportunity exists through the administrative appeal process, and we can confirm that with the government, but if that opportunity does exist through the administrative appeal, then you at least have the chance to make the argument that ultimately you really care about.

[00:09:47] Speaker 00:
Am I understanding you correctly?

[00:09:48] Speaker 05:
Your Honor, there is no ability to achieve the decoupling, as you called it, through the administrative process.

[00:09:55] Speaker 05:
And the Medicare Appeals Council, which is the highest level adjudicative body in the Medicare appeals process, has said that that council and the ALJs are bound by CMS' assignment of the codes.

[00:10:13] Speaker 05:
And that's in the in Ray RMM case set and on page 14 of our reply brief.

[00:10:19] Speaker 01:
There is no ability to- Of the indicator codes?

[00:10:23] Speaker 05:
Excuse me?

[00:10:23] Speaker 01:
Of the indicators of that I or D that's appended to the HIPAA billing code?

[00:10:30] Speaker 05:
Right.

[00:10:31] Speaker 05:
The indicators are part and parcel of the coding determination, correct.

[00:10:36] Speaker 01:
So, I mean, that's one thing I'm puzzling over.

[00:10:42] Speaker 01:
When I look at the...

[00:10:46] Speaker 01:
4035 versus 4105.

[00:10:49] Speaker 01:
That's pure HIPAA billing codes.

[00:10:52] Speaker 01:
We know what the standard is.

[00:10:54] Speaker 01:
We understand how the government's changed.

[00:10:58] Speaker 01:
What do you think they are doing when they attach the indicator as opposed to the HIPAA code?

[00:11:09] Speaker 01:
Are they making a legally binding judgment

[00:11:15] Speaker 01:
under Medicare or is this just the HIPAA team giving some ultra virus advice about what might happen on the Medicare side of things?

[00:11:28] Speaker 05:
They're making a coding determination that is infected with

[00:11:34] Speaker 05:
agency views about coverage and payment.

[00:11:37] Speaker 05:
And there's a sentence in the government's brief that I think confirms that.

[00:11:39] Speaker 05:
On page 15 of the government's brief, the government says, HICPCS codes are simply an administrative mechanism for CMS to implement existing Medicare coverage and payment rules.

[00:11:52] Speaker 05:
They are making coding determinations that reflect their views on coverage and payment.

[00:11:58] Speaker 05:
and then claiming that we cannot dispute that coding determination because what we are really disputing is payment and coverage when they're all intertwined.

[00:12:05] Speaker 01:
What you just read makes it sound like they're saying that the indicator is simply a repeating and confirmation of a Medicare payment decision that's been independently and previously made.

[00:12:23] Speaker 05:
Well, Your Honor, the decision hasn't been previously made.

[00:12:28] Speaker 05:
The only determination that has been made and released by the agency is a determination as to how the product is going to be treated for, how it's going to be coded.

[00:12:47] Speaker 05:
And again, that includes all the different indicators that are attached.

[00:12:51] Speaker 05:
And if it's helpful, in the joint appendix, excuse me.

[00:13:00] Speaker 00:
There's a back and forth between the parties about the duplication.

[00:13:05] Speaker 00:
There's some part of the manual that deals with duplicative codes.

[00:13:09] Speaker 00:
And maybe you can point me to the language, because I'm not able to find it right now.

[00:13:12] Speaker 00:
But as I read that language,

[00:13:15] Speaker 00:
it indicated that there was an opportunity to challenge the fact of duplication, which would seem like the kind of challenge that you want to make, which is to say, it's not duplicative for Relizorb to be submitted for reimbursement, because it should be treated as something different.

[00:13:31] Speaker 00:
And it shouldn't be treated as part of the bundle.

[00:13:34] Speaker 00:
And if that's what I've called decoupling, I don't know if that's real.

[00:13:39] Speaker 05:
Your Honor, there's a manual provision cited in plaintiff's brief at 30 and 43 that provides that if a claim is denied as a duplicate, then there cannot be an appeal right.

[00:13:51] Speaker 00:
No, but then it goes on to say unless what's being challenged is the fact of duplication.

[00:13:58] Speaker 00:
That's how I read it.

[00:13:59] Speaker 00:
And we can ask the government that bit.

[00:14:01] Speaker 00:
If that's what that says, then it sounds like that's exactly the kind of challenge that you want to bring, which is to say it shouldn't have been treated as duplicative because it shouldn't be treated as part of the same bundle.

[00:14:13] Speaker 00:
It should be treated as something different for reimbursement purposes.

[00:14:17] Speaker 05:
Your Honor, the only reason there is... There are other provisions of the regulations that the government has not engaged on that provide that

[00:14:28] Speaker 05:
to the extent that there is a challenge to a payment determination or a categorical payment determination over which CMS has sole responsibility, that there is no right to appeal that.

[00:14:39] Speaker 05:
That's found in 42 CFR Section 405926.

[00:14:44] Speaker 05:
which is the section that excludes certain items from the definition of initial determinations that can be appealed.

[00:14:50] Speaker 00:
Well, let's suppose, so it seems like there's a fight about whether it can be appealed.

[00:14:54] Speaker 00:
Let me just make sure I'm understanding it correctly.

[00:14:56] Speaker 00:
Let's suppose that the government says there is the ability to raise the kind of challenge that you want to raise, which is through the administrative process, which is that we don't think relies or should be treated as part of the same bundle.

[00:15:08] Speaker 00:
It should be given its own code and also all the accoutrements that come along with giving its own code, which is to say it gets separate reimbursement.

[00:15:17] Speaker 00:
Let's suppose that that's true.

[00:15:18] Speaker 00:
I know you dispute that, but let's suppose that's true.

[00:15:21] Speaker 00:
If that's true,

[00:15:22] Speaker 00:
does that satisfy you?

[00:15:25] Speaker 00:
Or do you think that there's something different about this other way that you could get a different treatment, which you've introduced, which is this kind of gap-filling notion, which is that seems different from the normal administrative appeal process because it goes to, I think it goes through a different process.

[00:15:41] Speaker 00:
And that may be another way to get the same thing, which is a determination of whether it relies or it should be part of the same bundle.

[00:15:50] Speaker 05:
Your Honor, the only reason that

[00:15:52] Speaker 05:
the claim that a supplier or beneficiary like Plaintiff Flap even has any ability to pursue the administrative claims process is because this court issued an emergency injunction.

[00:16:09] Speaker 05:
In advance of the issuance of the injunction, there was no right to appeal because all claims were rejected.

[00:16:15] Speaker 00:
But I thought the point of the new code that we got on Monday is that it equates it with the code that because of our, it's definitely true that it came about as a result of what we said, but it equates it with that code in the sense that it gives rise to an appeal possibility through the administrative process.

[00:16:34] Speaker 05:
Well, that's what the government's 28-J letter

[00:16:38] Speaker 05:
suggests, but the only means through which appeal rights were accomplished was through a special instruction that the agency issued just after this court issued its emergency injunction.

[00:16:50] Speaker 00:
But now they've issued a permanent code that they say operates the same way.

[00:16:53] Speaker 05:
Right, but whether there's a temporary code, Your Honor, or a permanent code, there's still the problem of all the regular Medicare rules governing

[00:17:02] Speaker 05:
administrative appeals.

[00:17:04] Speaker 03:
Excuse me.

[00:17:05] Speaker 03:
Just to clarify, I just want to make sure I understand what you're saying.

[00:17:09] Speaker 03:
So our panel said that based on HHS's representation that 42 CFR 405.926C would not bar an appeal that the special panel understood that it would not

[00:17:31] Speaker 03:
Is it your position that but for that order, the ordinary operation of HHS would bar the appeal?

[00:17:41] Speaker 05:
Yes, that's my position.

[00:17:42] Speaker 05:
But for that order, there would be no right to appeal whatsoever for suppliers and beneficiaries.

[00:17:50] Speaker 05:
And with respect to Appresta, a manufacturer, there is absolutely no right to pursue that administrative claims process whatsoever.

[00:17:58] Speaker 05:
They're not defined as a party.

[00:18:01] Speaker 05:
That system is designed to review claims submitted by suppliers on behalf of beneficiaries or beneficiaries.

[00:18:08] Speaker 05:
And there are significant hurdles.

[00:18:10] Speaker 05:
Excuse me.

[00:18:11] Speaker 01:
I assume that provision, that 42 CFR

[00:18:14] Speaker 01:
405926C is not something akin to a subject matter jurisdiction limit, right?

[00:18:25] Speaker 01:
Now that the government has made this representation, right, judicial estoppel or something like it will kick in as to that potential bar.

[00:18:38] Speaker 05:
I don't believe that whatever explanation

[00:18:43] Speaker 05:
the government gave in the context of the briefing on our emergency motion would bind them later.

[00:18:48] Speaker 01:
Why wouldn't it be judicial estoppel unless that requirement were jurisdictional?

[00:18:54] Speaker 05:
Well, that regulation is jurisdictional as to the agency adjudicators.

[00:19:01] Speaker 05:
I mean, the 40524 of the 42 CFR defines...

[00:19:07] Speaker 01:
It looks like something more like a preclusion of review than a subject matter jurisdiction.

[00:19:12] Speaker 01:
I don't know.

[00:19:12] Speaker 01:
We're slicing the case finally.

[00:19:13] Speaker 05:
Well, I guess the preclusion of review would be a jurisdictional problem as well.

[00:19:19] Speaker 05:
The statute, going back to the statute, defines initial determinations or requires that the secretary provide a process for the review of initial determinations and sets forth certain parameters and the regulations implement that.

[00:19:37] Speaker 05:
and review provision per se, but that definitely constrains the ability of those adjudicators to review that kind of determination.

[00:19:46] Speaker 00:
Can I just get back to this question just so I make sure I understand your position before we go to the government?

[00:19:53] Speaker 00:
If – I know you dispute whether the beneficiary can take the kind of appeal that seems to me that matters, which is the kind of appeal that allows the argument to be made that relies or should not be treated as part of the bundle for reimbursement purposes.

[00:20:07] Speaker 00:
I know you dispute that.

[00:20:08] Speaker 00:
But let's just assume that the government says, no, in the administrative appeal process, the beneficiary can make that argument.

[00:20:17] Speaker 00:
And then someone's going to have to make a determination.

[00:20:19] Speaker 00:
The agency's going to have to decide whether relies or is part of the bundle.

[00:20:23] Speaker 00:
does that satisfy you or do you think that there's still a problem?

[00:20:28] Speaker 05:
There is still a problem from our perspective because it is very challenging for a beneficiary to even get to the point of being able to appeal.

[00:20:38] Speaker 05:
We have a coding determination that

[00:20:44] Speaker 05:
indicates to the whole industry that Medicare is not going to pay for this product.

[00:20:51] Speaker 05:
Therefore, suppliers don't want to furnish the product.

[00:20:54] Speaker 05:
But patients, physicians don't want to prescribe the product because they don't expect that it will be covered and they don't want to lead these vulnerable patients down the path of trying to get a product that they're never going to be able to afford.

[00:21:09] Speaker 00:
So the point is that you may never have a beneficiary who's in a position to make use of the administrative process.

[00:21:15] Speaker 05:
Right, we have one beneficiary and it was very difficult to get the supplier to furnish that product to the beneficiary based on the supplier's understanding that it would need to be filing a claim for an item that was not going to be reimbursed.

[00:21:33] Speaker 05:
And I want to emphasize as well that El Presta as a manufacturer doesn't have any independent ability to pursue that administrative claims process even if it would have the motivation to do so.

[00:21:43] Speaker 03:
If this were not a product that was coded as part of the kit, the pre-existing, what is the process?

[00:21:52] Speaker 03:
Does a manufacturer ordinarily have an ability to participate in a pricing determination and appeal if it disagrees with the pricing determination?

[00:22:01] Speaker 03:
What is that process?

[00:22:03] Speaker 05:
A manufacturer doesn't ever have a right to pursue that administrative claims appeal process.

[00:22:08] Speaker 03:
Right.

[00:22:08] Speaker 03:
The one that they're referring to is the one for flat.

[00:22:11] Speaker 03:
to say I'm not getting the coverage I should get.

[00:22:15] Speaker 03:
But I'm saying is there, if they hadn't sort of funneled everything into this coding determination, you have a new product and it's not even susceptible of being grouped under something that's a pre-existing code, you get a code that's unique, and what is the ordinary course of establishing and or disputing the pricing?

[00:22:41] Speaker 03:
the ordinary, if it's not all sort of.

[00:22:44] Speaker 05:
Well, this is the ordinary course for disputing such a determination.

[00:22:48] Speaker 05:
Just being what?

[00:22:50] Speaker 05:
A court action, challenging the decision.

[00:22:52] Speaker 05:
The agency says that the.

[00:22:54] Speaker 03:
We haven't even seen a pricing decision.

[00:22:56] Speaker 03:
We've seen a pricing decision, a coding, in your view, as I understand it, we've seen a pricing decision masquerading as a coding decision, and that creates a whole level of complication.

[00:23:08] Speaker 03:
So I'm trying to give you a hypothetical in which

[00:23:10] Speaker 03:
The pricing decision is not masquerading as a coding decision.

[00:23:14] Speaker 03:
It is a pricing decision.

[00:23:16] Speaker 03:
Where does that happen and where does that get appealed?

[00:23:18] Speaker 05:
Well, there are no pricing, separate pricing decisions that are made by the agency that are independent of coding determinations.

[00:23:28] Speaker 00:
I thought the whole, your argument about gap filling was this other route.

[00:23:32] Speaker 00:
I thought that was the route.

[00:23:33] Speaker 00:
I thought that was your argument is that

[00:23:36] Speaker 00:
there's this gap-filling mechanism under which even a manufacturer can raise this claim, and that's a different route from the administrative appeal process that the government's referring to.

[00:23:45] Speaker 05:
That is correct.

[00:23:46] Speaker 05:
The gap-filling, to clarify, in that situation, the Medicare contractor would be making a determination of price using the gap-filling process because there had been no price previously set through the fee schedule and the competitive bidding process.

[00:24:05] Speaker 05:
as a new product relies orb, if treated properly, would be priced by the Medicare contractor using appropriate data regarding charges until such time that it could be brought into the competitive bidding process and priced through the agency's regular course.

[00:24:23] Speaker 05:
But a new product should not, our view would be it should not be priced this way.

[00:24:29] Speaker 05:
It should go through that contractor process.

[00:24:32] Speaker 03:
Always, that's the, I mean, it's called gap-filling, and it seems like it's kind of backing into and provisional, but if your product came online at a time when it wasn't mid-year, it's, I mean, as I understood, the work group does the coding and CMS does the pricing, so there actually are two separate, am I wrong, two separate determinations?

[00:24:56] Speaker 05:
Well, I think there's a little ambiguity about the exact process, but there are,

[00:25:02] Speaker 05:
The coding process, the coding is done by the work group that is comprised of people outside the agency and people within the agency.

[00:25:14] Speaker 05:
And of those people within the agency, there are pricing experts who are on the work group.

[00:25:20] Speaker 05:
And so I think that there's interplay between the pricing folks at the agency and the work group, if that answers your question.

[00:25:28] Speaker 05:
That's the information that I have as to how it works.

[00:25:32] Speaker 03:
If there were no gap fill provision, if that just wasn't a method and your product was not a product that was grouped under the umbrella of daily and tarot-feeding supply kit, who would make the pricing decision and what would we look to in terms of

[00:25:59] Speaker 03:
if there were no gap filling provision?

[00:26:02] Speaker 05:
Yes.

[00:26:03] Speaker 05:
Well, I think if there were no, well, there is one, but if there weren't one, the contractor would have to make that determination because the product wouldn't be, wouldn't have a price already set.

[00:26:20] Speaker 03:
But this competitive, there's a reference to this competitive method, and that's the contractor.

[00:26:25] Speaker 05:
No, the competitive bidding is done nationwide for products such as enteral nutrition products.

[00:26:31] Speaker 05:
So what happens is that codes are set and then for each code, for each product or set of products or bundle of products, the competitive bidding is done.

[00:26:40] Speaker 05:
Not by the work group.

[00:26:41] Speaker 05:
Not by the work group.

[00:26:42] Speaker 05:
That's done by the agency.

[00:26:43] Speaker 05:
The competitive bidding is done

[00:26:45] Speaker 05:
And then the results of that competitive bidding are reflected in notice and comment rulemaking.

[00:26:52] Speaker 05:
And so payment rates are set for each of the bundled items.

[00:26:56] Speaker 01:
Right.

[00:26:56] Speaker 01:
And there's a statutory provision, 1395W3, I think, which says with regard to this kind of

[00:27:11] Speaker 01:
and enteral nutrients, equipment, and supplies, there's supposed to be competitive bidding, and then based on that bidding, the secretary determines payment amounts.

[00:27:22] Speaker 05:
Yes.

[00:27:22] Speaker 01:
Right?

[00:27:23] Speaker 01:
That's how it's done.

[00:27:25] Speaker 01:
Yes, on the payment side.

[00:27:28] Speaker 05:
And the problem that we have here is that competitive bidding was done for the supply cap under B4035.

[00:27:34] Speaker 05:
And then Relisorb came along.

[00:27:37] Speaker 05:
Relisorb was not among a part of the set of products that were competitively bid.

[00:27:42] Speaker 05:
But the position of the government, nonetheless, is that even though it wasn't part of that competitive bidding, it should be grouped with that bundle and paid according as though it were part of that bundle.

[00:27:54] Speaker 05:
when actually the existing payment rules would require it to be treated as a new product and there is language in the rule makings that says that you don't add a product to the bundle later and then the gap filling occurs.

[00:28:08] Speaker 03:
So why, so putting aside the gap filling, if you now have a code, is there, and it doesn't have a price associated with it, right?

[00:28:18] Speaker 03:
So if

[00:28:21] Speaker 03:
Is there another cycle when competitive bidding is going to happen?

[00:28:25] Speaker 03:
And how do we know that this will not be competitively bid at that time?

[00:28:28] Speaker 03:
We know because of the D and the 00 codes, right?

[00:28:33] Speaker 05:
Well, there is supposed to be another cycle.

[00:28:36] Speaker 05:
The government may have more information than I do about when that next cycle will be.

[00:28:42] Speaker 05:
But in the interim, this gap filling provides the mechanism.

[00:28:46] Speaker 03:
I'm trying to put the interim aside because I understand that the

[00:28:51] Speaker 03:
gap filling might be particularly advantageous to a firm in your position and it might be because it's kind of like they take the pricing that you're asking.

[00:29:04] Speaker 03:
So I'm trying to understand the ordinary regulatory process as opposed to the provisional gap filling process and whether there is, if you were teed up to be priced in that regular process that's competitive,

[00:29:18] Speaker 03:
what would be the appeal rights resulting from that?

[00:29:24] Speaker 03:
Would you be able to, it would be a final rule and you'd be able to appeal whether it's arbitrary and capricious the way they priced you or?

[00:29:32] Speaker 05:
Oh, if we were competitively, if we were part of the competitive bidding.

[00:29:38] Speaker 05:
If we were part of the competitive bidding then we would pursue a challenge to the rule establishing the rates based on that competitive bidding.

[00:29:48] Speaker 05:
But the last competitive bidding was done in 2016.

[00:29:52] Speaker 01:
So what do you do with, again, under that statute, there seems to be an obligation to do competitive bidding for nutrients, equipment, supplies.

[00:30:05] Speaker 01:
So once you get this separate code to follow down Judge Pillard's decision tree, there should now, in theory, be an obligation

[00:30:16] Speaker 01:
on the secretary to do competitive bidding with respect to this new product that has its new code.

[00:30:27] Speaker 01:
And as far as I can tell, under B5, that gets done and a price gets established.

[00:30:35] Speaker 01:
The secretary establishes a reimbursement amount based on that bidding.

[00:30:40] Speaker 01:
And then on the question of review, there's this B-12 provision which says no administrative or judicial review of the establishment of payments under B-5, which is the competitive bidding provision.

[00:30:55] Speaker 01:
So I would think your answer is you'll be precluded.

[00:30:59] Speaker 01:
Once the competitive bidding pricing is in place, you're precluded from challenging that under this 1395W3B-12.

[00:31:10] Speaker 05:
Well, I'm confident that the government would assert arguments that we would be precluded from review.

[00:31:18] Speaker 05:
I think we would have arguments to get around that preclusion of review.

[00:31:22] Speaker 01:
But your question is about... And what do we do?

[00:31:25] Speaker 01:
So how does that impact...

[00:31:28] Speaker 01:
You know, I can think of an argument that that just underscores the precise and reticulated nature of all of the Medicare review scheme and the fact that you should be proceeding under it.

[00:31:46] Speaker 01:
I can think of an argument that, well, if you can't get, you're going to be precluded from review anyway, you should be able to do this 1331 and run right now.

[00:31:55] Speaker 05:
Well, the problem is that

[00:31:58] Speaker 05:
Even assuming that the agency is at some point in the future going to do competitive bidding, the code that they just issued on Monday connects us to the competitive bidding amount for B4035.

[00:32:15] Speaker 05:
Because it is still cross-referencing the provision governing payment for supply kits.

[00:32:22] Speaker 05:
We don't have any expectation that

[00:32:26] Speaker 05:
that our new B4105 code would be separately competitively bid or priced.

[00:32:32] Speaker 05:
And that is the crux of the problem.

[00:32:34] Speaker 01:
Which takes us back to the question I asked you earlier.

[00:32:37] Speaker 01:
What is the legal status of an indicator determination that's associated with the code?

[00:32:46] Speaker 01:
And I frankly don't know the answer to that.

[00:32:51] Speaker 01:
But let me ask you one more question, which is,

[00:32:55] Speaker 01:
We don't have the competitive bidding yet, so presumably the preclusion of review provision won't yet have kicked in.

[00:33:05] Speaker 01:
So what happens in the interim?

[00:33:09] Speaker 05:
What happens with respect to payment in the interim?

[00:33:11] Speaker 01:
Yeah.

[00:33:12] Speaker 01:
Well, as... Suppose there were no indicator code.

[00:33:17] Speaker 01:
We just, we got this new, we have this new 4105,

[00:33:22] Speaker 01:
and the people, the Medicare assistance contractor or administrative contractor.

[00:33:29] Speaker 01:
So, okay, what do we do with this?

[00:33:30] Speaker 01:
Someone makes a claim for payment.

[00:33:33] Speaker 01:
How do they analyze it?

[00:33:35] Speaker 01:
There's no competitive bid in place yet, but there's a HIPAA code.

[00:33:38] Speaker 05:
How do they analyze it under the current state of affairs?

[00:33:43] Speaker 01:
Current state of affairs except assume hypothetically there's no indicator.

[00:33:49] Speaker 01:
in the HIPAA code.

[00:33:50] Speaker 05:
Hypothetically, there is no indicator.

[00:33:53] Speaker 01:
There's no I or D or anything.

[00:33:54] Speaker 05:
If there were, if we just got the B4105 and no indicators tying us to the supply kit, then they would

[00:34:02] Speaker 05:
follow the regular process for new products and do this gap filling and make a determination on medical necessity because of course none of this is going to be covered unless the patient needs the product and there is going to be an assessment done of that.

[00:34:14] Speaker 05:
We're not looking for categorical reimbursement.

[00:34:17] Speaker 05:
We're looking for access to a process of determining whether reimbursement is appropriate for a particular patient.

[00:34:22] Speaker 05:
So there would be the gap filling, looking at charges and their percentages taken off of charges depending on the locality.

[00:34:30] Speaker 05:
There is a formula for determining that in the interim until we get to competitive bidding.

[00:34:36] Speaker 00:
That's something that Alcestra, Alcresta itself would do.

[00:34:41] Speaker 00:
That's not something that's dependent on a beneficiary or a provider.

[00:34:44] Speaker 05:
Well, that would take place with respect to a beneficiary.

[00:34:50] Speaker 05:
A beneficiary would have to get a prescription for the product, and the supplier would furnish the product, and then make a claim for the product.

[00:34:57] Speaker 05:
Of course, this still can't do any of that, but that would be the process.

[00:34:59] Speaker 01:
Oh, right.

[00:35:00] Speaker 01:
You make a tender claim for payment.

[00:35:02] Speaker 05:
And if I might indulge, in the joint appendix at page J8300,

[00:35:18] Speaker 05:
I'm happy to share mine.

[00:35:20] Speaker 01:
Just tell me what it is I probably have.

[00:35:22] Speaker 05:
This is the spreadsheet through which the agency announced the temporary code in April.

[00:35:32] Speaker 05:
And I refer you to it because I think it demonstrates that the coding determination is more than just the alphanumeric indicator.

[00:35:44] Speaker 05:
It's got a whole bunch of letters and numbers and lots of different columns.

[00:35:47] Speaker 05:
And actually, I even tried to print out the one that was issued on Monday, and it's a really, really, really long spreadsheet.

[00:35:52] Speaker 05:
It's not even possible, or we would have copied that for you as well.

[00:35:54] Speaker 01:
It has these columns for COV and pricing, which are these... Right, right.

[00:35:59] Speaker 05:
It's all part of that determination.

[00:36:00] Speaker 05:
This is the HICPCS quarterly update reflecting the determinations of that work group made in April.

[00:36:10] Speaker 01:
If you're right that

[00:36:13] Speaker 01:
You just have the code, right, the first column.

[00:36:18] Speaker 01:
Without the indicator, everything works.

[00:36:20] Speaker 01:
On your theory, everything works fine, right?

[00:36:23] Speaker 01:
Someone can go through the Medicare scheme.

[00:36:26] Speaker 01:
and make it an argument that you think will be successful based on gap-filling, at least until competitive bidding.

[00:36:33] Speaker 05:
Right, and medical necessity.

[00:36:35] Speaker 01:
Okay, so that's premise number one.

[00:36:37] Speaker 01:
Premise number two is you've told us now in the actual world where we have not only the 9994 and 4105, but we also have these Ds and Is and double zeros, everything grinds to a halt.

[00:36:56] Speaker 01:
Right.

[00:36:58] Speaker 01:
If both of those are true, it seems like what's going on is that the agency is sort of smuggling a Medicare determination into the HICFA coding decision.

[00:37:17] Speaker 05:
That's exactly right.

[00:37:17] Speaker 01:
Is that a fair characterization?

[00:37:20] Speaker 05:
That is the crux of the problem that we have here.

[00:37:23] Speaker 01:
That's your perspective.

[00:37:24] Speaker 01:
But isn't the upshot of that that we have to treat?

[00:37:30] Speaker 01:
The HICFA piece of the case is this 4105 code.

[00:37:37] Speaker 01:
And then there's a separate part of the case that's really a Medicare claim, which is just to

[00:37:45] Speaker 01:
the I and the D and the double zero, but that's a claim arising under the Medicare Act, isn't it?

[00:37:51] Speaker 05:
Well, again, Alcresta can't make such a claim, and the beneficiaries and suppliers can only make such claims as a result of this Court's injunction.

[00:38:00] Speaker 01:
Okay, so that's an argument that that piece of the case arises under the Medicare Act, but you can circumvent the Medicare scheme because

[00:38:12] Speaker 01:
you can't, you can't, I'm sorry, Alcestra can't exhaust and their practical difficulties with individual patients exhaust.

[00:38:21] Speaker 05:
Right, under counsel for urological interest is correct.

[00:38:24] Speaker 05:
The manufacturers do not have access to that appeals process.

[00:38:29] Speaker 00:
But in terms of the beneficiaries, so I don't understand the point that it's only because of the injunction because now that we have the permanent code, the beneficiary can still pursue the administrative route.

[00:38:40] Speaker 05:
But the permanent code with the indicator, the current situation is no different from the situation that we had over the summer with the temporary code.

[00:38:53] Speaker 05:
It's just a permanent code.

[00:38:54] Speaker 05:
It used to be a temporary code.

[00:38:56] Speaker 05:
Now the problem is permanent rather than temporary.

[00:38:59] Speaker 00:
But it's the same problem.

[00:39:00] Speaker 00:
Well, there's a question of whether there's that problem because the government may think that the beneficiary can make the kind of challenge that you're talking about.

[00:39:06] Speaker 05:
Well, again, in our view,

[00:39:08] Speaker 05:
After this court issued its emergency injunction, the agency was required to issue a special and separate instruction to its contractors to explicitly direct them to issue initial determinations.

[00:39:23] Speaker 05:
And the reason for that is because under the normally operating rules, there would be no initial determination because this is treated as a duplicate claim.

[00:39:35] Speaker 00:
Right.

[00:39:35] Speaker 00:
And then there's a question of whether that fact of duplication can be challenged.

[00:39:38] Speaker 00:
I have one very technical question, which is with the indicators, the letters, the D's and the I's and those things.

[00:39:44] Speaker 00:
So one of the letters is a C. Yes.

[00:39:47] Speaker 00:
If the indicator were a C, that would be okay.

[00:39:52] Speaker 05:
that would solve the problem we have here, yes.

[00:39:55] Speaker 00:
Right, so it's not that you need a code that doesn't have any indicator at all, it's that you need a code that doesn't have the wrong indicator from your perspective.

[00:40:02] Speaker 05:
Well, I think that under the HIPAA statute, coding should be separate from payment and reimbursement.

[00:40:09] Speaker 05:
In our situation, if we were to get a C, which would indicate that the contractors are supposed to determine pricing, then that would solve our problem, yes.

[00:40:21] Speaker 00:
Okay, we'll hear from the government.

[00:40:23] Speaker 00:
Thank you.

[00:40:31] Speaker 02:
Good morning, may it please the court, Courtney Dixon for the government.

[00:40:34] Speaker 02:
The government absolutely thinks that this case arises under the Medicare Act and the claim should be presented to the agency in the first instance as is the usual course as is required by the Medicare statute.

[00:40:46] Speaker 02:
We have given a unique billing code

[00:40:48] Speaker 02:
the coverage indicator.

[00:40:50] Speaker 00:
So under your understanding of that administrative appeal process that you want, only the beneficiary can do that.

[00:40:56] Speaker 02:
Yes, you're right.

[00:40:57] Speaker 00:
Or a supplier.

[00:40:58] Speaker 00:
But not a drug company.

[00:41:00] Speaker 02:
And that is, to go back to one of Judge Pillard's earlier questions, that is the usual course of business.

[00:41:06] Speaker 00:
So let's just hypothesize.

[00:41:08] Speaker 00:
Let's put to one side the potential problem that

[00:41:11] Speaker 00:
You may never have the practical situation of a beneficiary in a position to bring a claim.

[00:41:15] Speaker 00:
We can come back to that.

[00:41:16] Speaker 00:
But let's just assume that there is a beneficiary who seeks reimbursement, has it rejected, and then wants to appeal that.

[00:41:24] Speaker 00:
In that process, with the code that has now been given,

[00:41:28] Speaker 00:
can the beneficiary make the claim that it's wrong to treat Relisorb as part of the same bundle?

[00:41:34] Speaker 02:
That is my understanding, Your Honor, and I would point the court to the technical direction letter that the agency issued when it changed the coverage indicator to D with the Q9994 code.

[00:41:42] Speaker 02:
The agency said with the coverage indicator D, it assures an initial determination that can... No, but I know it said it issues an initial determination, but it seems to me the problem is...

[00:41:54] Speaker 00:
And it just seems like every time we think there's an answer, there's a new code that gives rise to a potential problem.

[00:42:01] Speaker 00:
The question is the content of the review.

[00:42:04] Speaker 02:
Yes, Your Honor.

[00:42:04] Speaker 02:
And there I would point the court to 42 CFR 405.924.

[00:42:07] Speaker 02:
What is that, 405.924?

[00:42:24] Speaker 00:
And you said which part of it?

[00:42:26] Speaker 02:
B-11, Your Honor.

[00:42:27] Speaker 02:
Initial determination includes any other issues having a present or potential effect on the market.

[00:42:31] Speaker 03:
I'm sorry, is that an appendix?

[00:42:32] Speaker 02:
I don't know if it's an appendix, Your Honor, and I apologize.

[00:42:34] Speaker 02:
We cite it in our brief.

[00:42:39] Speaker 02:
It's also in the Wilson Declaration, which is in the record and explains this.

[00:42:44] Speaker 02:
Your initial determination includes any other issues having a present or potential effect on the amount of benefits to be paid under Part B of Medicare, including a determination as to whether there was an underpayment of benefits.

[00:42:55] Speaker 01:
Putting aside the concession that you made in the

[00:43:00] Speaker 01:
interlocutory litigation on appeal.

[00:43:04] Speaker 01:
Why wouldn't review be barred by

[00:43:07] Speaker 01:
926C, which says you can't get administrative review of the fee schedule established.

[00:43:16] Speaker 02:
Your Honor, my understanding of what that regulation is talking about is the publication of the fee schedule.

[00:43:21] Speaker 02:
You can't appeal directly from that.

[00:43:22] Speaker 02:
You have to present a claim to the agency.

[00:43:24] Speaker 02:
If you believe that you were underpaid in the context of a claim that you've been presented to the agency, you can proceed to the appeals process.

[00:43:31] Speaker 01:
But in the context of

[00:43:34] Speaker 01:
presenting the claim, which is what you usually have to do, you can attack not just the application of the regulation, but the correctness.

[00:43:44] Speaker 01:
You can attack the underlying regulation, which says this device will be classified in this way and produce this amount of... Yeah, I don't think there's a regulation directly, obviously, speaking to relies or in this instance.

[00:43:56] Speaker 02:
I think what plaintiffs are complaining about is

[00:43:59] Speaker 02:
Well, regulation, the rule, whether it's... Certainly, if they're contesting that they're not supposed to be bundled in this supply payment because the agency has misclassified them, for some reason, I believe that that would be an issue having an effect on payment, and if someone believes that they're being underpaid, and I want to be clear that... I mean, there are a lot of Medicare contexts in which claimants are permitted to attack

[00:44:22] Speaker 01:
narrow, adjudicatory, computational sort of issues, but not the design of the reimbursement scheme.

[00:44:30] Speaker 01:
I'm just wondering.

[00:44:32] Speaker 02:
Well, it's my understanding, Your Honor, that it's my understanding that the claim was presented.

[00:44:37] Speaker 02:
You think it's not?

[00:44:37] Speaker 02:
I think that this could be raised as to whether the agency would itself decide it.

[00:44:43] Speaker 00:
It could be raised.

[00:44:44] Speaker 00:
I mean, I guess it just seems like there's not a clear answer, because here's the concern that I have, at least.

[00:44:50] Speaker 00:
is that if the claim is raised, and then the answer that the agency gives is, there was no underpayment.

[00:44:57] Speaker 00:
And the question is, well, why wasn't there an underpayment?

[00:44:59] Speaker 00:
Well, because it's part of the bundle.

[00:45:01] Speaker 00:
Then it's sort of like, well, you haven't even messed the ball at all.

[00:45:04] Speaker 00:
And if that's the answer, that there's no underpayment, the claim is rejected because it's part of the bundle, then there is no meaningful opportunity to raise the argument that they want to be able to raise.

[00:45:12] Speaker 00:
And it seems like it ought to be able to be aired in some fashion, which is that it's just wrong to think of it as part of the bundle.

[00:45:20] Speaker 02:
Two responses to that, Your Honor.

[00:45:21] Speaker 02:
First, the Medicare statute does provide a process for expedited judicial review.

[00:45:25] Speaker 02:
If the parties think this is something that the agency doesn't have the authority, the review process doesn't have the authority to decide, and there's no material fact in dispute, the agency can certify it for direct judicial review.

[00:45:35] Speaker 02:
That's a way to get into court.

[00:45:37] Speaker 02:
I would also say, Your Honor.

[00:45:37] Speaker 00:
Direct judicial review of what?

[00:45:39] Speaker 03:
Of the authority of the agency to decide.

[00:45:41] Speaker 03:
I don't think we're at the point of questioning the authority of the agency.

[00:45:45] Speaker 03:
I think it has the agency in a reviewable way

[00:45:49] Speaker 03:
exercised its authority to decide, yes, this is part of the bundle, or no, it's not.

[00:45:55] Speaker 03:
And the grounds on which it decided, yes, this is part of the bundle, even though a whole list of other things relating to enteral feeding aren't.

[00:46:05] Speaker 03:
Why this?

[00:46:07] Speaker 03:
And is that decision something that can be accessed?

[00:46:09] Speaker 03:
Not the general authority of the agency, not the general question of whether this is something covered by Medicare, but that question, where is that appealable?

[00:46:18] Speaker 02:
You know, if a beneficiary believes that they've been underpaid and acclaimed for benefits, the Medicare Act requires that to be presented to the agency in the first instance in the context of a context claim.

[00:46:27] Speaker 03:
And then someone says, duplicative, what you're seeking under this code is covered under the kit, done.

[00:46:36] Speaker 03:
I'm sorry, when you say duplicate, I want to be clear that... That would be the ground on which they fear that that plaque with the appeal would be denied.

[00:46:45] Speaker 02:
Your Honor, it may be the case that in the administrative review process, the agency says that the agency has correctly classified the item.

[00:46:51] Speaker 02:
But then either the appeals process will be exhausted, or if plaintiffs think that this is something that can't be resolved in the appeal, there's a way to get to court.

[00:46:57] Speaker 03:
And again, I would... And that is so you exhaust and then you come to court and challenge

[00:47:01] Speaker 03:
not the contents of the decision, but that the decision didn't include other things.

[00:47:06] Speaker 03:
It feels that the agency has sort of subliminally made or sort of behind the scenes made a determination and is playing a bit of a shell game, I think this is their claim, with how to get at that decision.

[00:47:22] Speaker 03:
And I'm just trying to get your answer.

[00:47:24] Speaker 03:
No, no, no, that's not what's going on.

[00:47:26] Speaker 03:
Here's the easy way to get at that decision.

[00:47:29] Speaker 03:
And I just wonder what your, you know,

[00:47:32] Speaker 02:
Again, Your Honor, the Medicare Act requires claims to be presented to the agency in the first instance.

[00:47:37] Speaker 02:
So we're addressing these issues in the context of a context claim for payment, and we're not hypothesizing in district court and a preliminary injunction motion what claims might be raised.

[00:47:45] Speaker 02:
Because again, we're here under the guise of a billing code challenge that is not a challenge to the billing code.

[00:47:50] Speaker 02:
It's a challenge to Medicare coverage and payment rules as they're being applied to Alcresta.

[00:47:54] Speaker 02:
And to the extent that Your Honor suggested that there's not a lot in the record here on how a determination was made as to whether Alcresta was a supply, but I would point the court

[00:48:02] Speaker 02:
uh... jay one fifty one of the appendix they mentioned an initial benefit category determination agency made that kind of initial benefit category determination is something made by the relevant division at cms in charge of those items here it was division of durable medical equipment and so this isn't something that's happening behind the scenes in a shell game your honor and again the medicare act requires challenges to be presented to the agency in the context of a concrete claim for payment where's the language about duplication

[00:48:31] Speaker 02:
I guess I'd like to clarify what your order means by duplication.

[00:48:35] Speaker 00:
There is somewhere, and I just can't place where in the materials it is, where it talks about denials of claims based on duplicativeness or duplication.

[00:48:43] Speaker 00:
And then it has a carve out that says,

[00:48:45] Speaker 00:
But if it's the fact of duplication that's being raised, that can be presented.

[00:48:50] Speaker 00:
Where is that?

[00:48:51] Speaker 03:
By a supplier.

[00:48:51] Speaker 03:
I think it's the Medicare claims processing manual.

[00:48:54] Speaker 02:
Where?

[00:48:54] Speaker 02:
Which section, Your Honor?

[00:48:55] Speaker 02:
I'm sorry.

[00:48:57] Speaker 02:
I know that under the duplicative claims, Your Honor, if we're referring to the B4035 code specifically, if there were two claims submitted for B4035 for the same day for the same patient,

[00:49:09] Speaker 02:
Medicare is only going to pay one of those, so the second one would be rejected.

[00:49:13] Speaker 00:
And then there's a question of what happens if someone wants to challenge that administratively.

[00:49:18] Speaker 02:
I mean, here, Your Honor, we've provided them a code in which they have a way to go through the agency on that code.

[00:49:24] Speaker 03:
So let's say, hypothetically, that Flath now has a code and he is denied

[00:49:30] Speaker 03:
reimbursement on the ground that an effort to recover under the current code is duplicative of a recovery under B4035.

[00:49:44] Speaker 03:
As I understand it, the Medicare claims processing manual in Chapter 20, Section 30.7.2 and 110.5 says that

[00:49:55] Speaker 03:
When a claim is rejected as duplicative, that kind of decision is not appealable, except that a supplier, not a beneficiary, but a supplier who claims that claim is not in fact duplicative can get a determination from the durable medical equipment Medicare administrative contractor.

[00:50:18] Speaker 03:
Is that the course that you anticipate that a supplier needs to go through, and that's how this question is going to be teed up?

[00:50:25] Speaker 02:
I don't know in the context of a supplier, Your Honor, and I apologize for not having that language in front of me.

[00:50:28] Speaker 03:
So in the context of a recipient like FLAC, no review, because when it's rejected, it's duplicative, it's not appealable.

[00:50:35] Speaker 02:
No, Your Honor.

[00:50:36] Speaker 02:
Again, under Alcresta's code that was the Q9994 code, or the B code that will be effective in January 2019,

[00:50:44] Speaker 02:
The agency has said it will result in an initial determination that either Mr. Flapp or a supplier can appeal for the administrative review scheme.

[00:50:50] Speaker 03:
It's going to be an initial determination.

[00:50:53] Speaker 03:
Well, if the determination is duplicative, then unless you're making some special exception for this case, it wouldn't be appealable.

[00:51:01] Speaker 02:
Your Honor, I think that Alcresta's argument, or Mr. Flatt's argument at bottom, is that they shouldn't be included in the bundled payment for supplies.

[00:51:10] Speaker 02:
Bingo.

[00:51:11] Speaker 02:
And where do they get to appeal that?

[00:51:12] Speaker 02:
And Your Honor, I'm saying that that needs to be appealed in the context of a concrete claim for payment presented now under Relisord's new code, which

[00:51:20] Speaker 02:
We've said, Your Honor, that would result in initial determination.

[00:51:24] Speaker 02:
And then he can go to the agency and say, in the context of that, I've been underpaid because I think that this needs to be paid separately.

[00:51:30] Speaker 00:
But is the agency going to say, we keep coming back to the same thing, is the agency then just going to say, what are you talking about?

[00:51:35] Speaker 00:
It's duplicative.

[00:51:37] Speaker 03:
Or, what are you talking about?

[00:51:38] Speaker 03:
You haven't been underpaid.

[00:51:38] Speaker 02:
You got your $12 for that day.

[00:51:43] Speaker 02:
a couple of things.

[00:51:44] Speaker 02:
One, again, the Medicare requires claims to be presented to the agency in the first instance.

[00:51:48] Speaker 00:
Right, but then what's the answer going to be once they present it?

[00:51:50] Speaker 00:
Let's take it as a given that it's present.

[00:51:51] Speaker 00:
Then once it's presented, what's the answer going to be?

[00:51:54] Speaker 00:
Is it going to be

[00:51:55] Speaker 00:
Sorry, it's duplicative.

[00:51:57] Speaker 00:
You reach the daily cap.

[00:51:59] Speaker 00:
What are you complaining about?

[00:52:00] Speaker 00:
Or is it going to be, actually, this should be part of the same bundle.

[00:52:04] Speaker 00:
You know why it should be part of the same bundle?

[00:52:05] Speaker 00:
Because it's just like the other things that are part of the same bundle, even though you say you, the beneficiary or the supplier or whoever it is, says that it performs a unique function.

[00:52:15] Speaker 00:
We actually don't think it performs a unique function, thereby teeing up the question that I think both you and the other side agree is at root here.

[00:52:22] Speaker 02:
Again, Your Honor, I can't answer that question precisely because that claim hasn't been presented, hasn't been attempted to present it.

[00:52:28] Speaker 02:
I don't know the precise nature of the argument that will be raised or what the agency's answer will be.

[00:52:32] Speaker 03:
I guess what we're saying is it seems unlikely to us that the latter kind of question is something that would typically be reviewed in an administrative review from a payment determination and that that record is not going to be made there unless there's a whole category of these kind of claims that we're unfamiliar with.

[00:52:50] Speaker 02:
Well, Your Honor, again, to the extent that the agency wouldn't address it, it needs to be presented to the agency.

[00:52:56] Speaker 02:
And then there's the expedited access judicial review process that... What would happen then?

[00:53:00] Speaker 00:
So let's play that out.

[00:53:01] Speaker 00:
Let's suppose what happens is there's an alleged underpayment.

[00:53:07] Speaker 00:
Then the type of claim that you want to see brought is brought before the agency.

[00:53:11] Speaker 00:
And then the agency responds by just saying, I don't know what you're complaining about.

[00:53:16] Speaker 00:
Under our rules, under our understanding, it's duplicative.

[00:53:19] Speaker 00:
And then you're alluding to some expedited judicial review process.

[00:53:23] Speaker 00:
I'm not sure why expedition, expedition is just about time.

[00:53:26] Speaker 00:
So at some, is your ultimate response that at some point it goes to court and then this gets raised and litigated before a court, whether it should be part of the same bundle?

[00:53:36] Speaker 02:
It could be, Your Honor, if the administrator review process, if there's no facts in dispute, it's not something that's going to be resolved in the administrator review process, there's a process for getting it to court.

[00:53:45] Speaker 02:
But the central, important point is that claims have to be presented to the agency in the first instance.

[00:53:51] Speaker 02:
Okay, the other, so let's say that the

[00:53:56] Speaker 03:
Claim is presented.

[00:53:57] Speaker 03:
This is not duplicative.

[00:54:00] Speaker 03:
Please don't reject me as duplicative because it's an error that it's categorized as part of the enteral feeding supply kit.

[00:54:09] Speaker 03:
And the administrative persons as well.

[00:54:14] Speaker 03:
Above my pay grade, I have to treat it that way because that's the decision that the agency has made about pricing is that it is part of the enteral supply kit.

[00:54:22] Speaker 03:
So then the individual tries to do

[00:54:25] Speaker 03:
to seek review, and under the regulation, which our special panel suspended, the payment amount of program reimbursement, I'm quoting the regulation, the payment amount of program reimbursement for which CMS or a carrier has sole responsibility under Part B is not an appealable determination.

[00:54:45] Speaker 03:
So there's no administrative appeal of that.

[00:54:48] Speaker 02:
Your Honor, again, I think that the regulation that you're citing and referring to, Your Honor, is talking about

[00:54:54] Speaker 02:
the amount that's been competitively bid for something, or the publication of a fee schedule.

[00:54:58] Speaker 03:
Again, if a beneficiary... Right, so there's a fee schedule here, though.

[00:55:02] Speaker 03:
Your position, your agency's position, is there is a fee schedule applicable to this, and it's the daily internal supply kit.

[00:55:11] Speaker 02:
Because we consider a supplier.

[00:55:14] Speaker 03:
Exactly.

[00:55:14] Speaker 02:
So any dispute over that?

[00:55:17] Speaker 02:
I don't necessarily read the regulation that way, Your Honor.

[00:55:19] Speaker 02:
I mean, I don't think that someone could say, hey, the fee schedule amount, or I apologize if I'm being imprecise.

[00:55:25] Speaker 02:
It's not my understanding that someone would be precluded by that regulation from saying I shouldn't be considered a supply and in this bundle in the first place, Your Honor.

[00:55:34] Speaker 00:
So is the upshot of where we are the following?

[00:55:36] Speaker 00:
That everybody agrees that the relevant issue at root is whether it relies or it should be considered part of the bundle.

[00:55:43] Speaker 00:
I think everybody agrees that.

[00:55:44] Speaker 00:
And then the upshot from the government's perspective now is there's a requirement that you have to seek relief for underpayment before the agency.

[00:55:53] Speaker 00:
Whether you're going to be able to raise that thing that everybody agrees is at root there, I don't know, maybe, maybe not.

[00:56:00] Speaker 00:
I'm not sure.

[00:56:01] Speaker 00:
But what you have to do is at least try to see whether we're going to give you an answer to that through the government process, through the administrative process.

[00:56:08] Speaker 00:
Is that where we are?

[00:56:09] Speaker 00:
And that may be where we are, and it may be that you're right that we have to be there.

[00:56:13] Speaker 00:
I have to say it's not terribly satisfying that the government can't tell us whether the issue that the government thinks is at root is in fact something that's going to be able to be aired in the administrative process.

[00:56:25] Speaker 02:
Your Honor, we're here at our preliminary injunction, directly in district court, purportedly about a billing code.

[00:56:30] Speaker 02:
Again, I think we all agree that the billing code is just not an issue here.

[00:56:34] Speaker 02:
To the extent that there are issues about coverage and payment, that's just not what this suit was about.

[00:56:39] Speaker 02:
And Plaintiff suggested earlier that this is the ordinary course.

[00:56:41] Speaker 02:
That is not true, Your Honor.

[00:56:42] Speaker 02:
It would be quite extraordinary if someone could just file directly in district court and ask for a preliminary injunction for the agency to change how they're reimbursing that product.

[00:56:50] Speaker 02:
That is not how this works.

[00:56:51] Speaker 02:
That's not what Congress specified.

[00:56:52] Speaker 03:
How is it that all these other things that are coded, you know, B4150, B4151, got coded even though they also have to do with internal supply, feeding supplies, they didn't get coded in a way that put them under the umbrella of B4035?

[00:57:14] Speaker 03:
in the first instance.

[00:57:16] Speaker 02:
Well, I can't obviously speak code by code.

[00:57:17] Speaker 02:
Some codes refer to formulas.

[00:57:19] Speaker 02:
Formulas are not supplies.

[00:57:21] Speaker 02:
There's different payment rules that apply to formulas.

[00:57:23] Speaker 03:
Well, I understand the pump feeding kit includes a tube, but then, for example, there's B4084 gastrostomy jejunostomy tubing, which is a different kind of tubing.

[00:57:36] Speaker 03:
So that's not under the umbrella.

[00:57:38] Speaker 02:
And maybe this will help clarify some other things as well.

[00:57:42] Speaker 02:
these codes are used by other insurers other than Medicare.

[00:57:47] Speaker 02:
So perhaps another insurer needs a separate code that Medicare does not need.

[00:57:52] Speaker 02:
Again, these are simply an administrative mechanisms to help the efficient processing of Medicare billing.

[00:57:58] Speaker 02:
And the fact that we're here purportedly about billing codes, when in reality we're talking about coverage and payment, just shows that the district court was correct, that their suit is fundamentally disconnected from what they want in this case.

[00:58:08] Speaker 03:
So you're the expert.

[00:58:09] Speaker 03:
Are some of these things that have a different numeric code from B4035 nonetheless also, like as Alcresta was, treated as part of

[00:58:21] Speaker 03:
the daily B4035 allowance?

[00:58:24] Speaker 02:
I know that some other codes are not separately priced.

[00:58:28] Speaker 02:
They have the same 00 pricing indicator or the same D indicator.

[00:58:32] Speaker 02:
I obviously can't go code by code and I will be getting out way too far in front of my skis if I were to attempt to do so, Your Honor.

[00:58:38] Speaker 02:
But again, these are just for the efficient processing of claims.

[00:58:42] Speaker 02:
And for Medicare purposes, they help process the billions of Medicare claims that are received every year.

[00:58:46] Speaker 02:
There's a Medicare administrative review process or coverage and payment dispute charter.

[00:58:50] Speaker 03:
And if you were counseling on CRUST, if you were a new or a similar product and you came up with a product that you really thought was great and was distinct from anything previously priced, bring it on the market.

[00:59:02] Speaker 03:
You want to make sure that patients have access to it.

[00:59:06] Speaker 03:
What would be your step one in making a case to someone in the agency about the price that should be reimbursed for that?

[00:59:17] Speaker 02:
Your Honor, I guess in terms of how people might come to the agency, it's quite common in my understanding that as companies are developing products, they come to the agency to see, hey, are we going to be covered on our Medicare?

[00:59:31] Speaker 02:
How we might be paid?

[00:59:32] Speaker 02:
Again, there's not a lot on the record here, but there is a reference to the fact that Alcresta, in fact,

[00:59:37] Speaker 02:
did that with the agency and it was the division of durable medical equipment policy that said, hey, we think you're a supply.

[00:59:43] Speaker 03:
But is there a formal way to make a record and submit an application for a price or anything like that that you're aware of?

[00:59:53] Speaker 02:
I personally can't speak to any.

[00:59:55] Speaker 02:
I don't know.

[00:59:56] Speaker 02:
And I think, again, Your Honor, the way that these things usually go, the ordinary course of business, is that in the context of a concrete claim for payment when you think you've been underpaid by the agency.

[01:00:05] Speaker 03:
No, it can't be that I've developed a product

[01:00:08] Speaker 03:
And I'm not even going to know whether Medicaid is going to cover it until somebody buys it at some market price I've set and tries to get coverage for it.

[01:00:17] Speaker 03:
That can't be that the whole pricing starts that way.

[01:00:20] Speaker 03:
I understand that's your position on judicial review, but I'm stepping outside that and trying to understand how the agency operates with respect to pricing.

[01:00:27] Speaker 02:
Right, and as I mentioned, Your Honor, companies often come to the agency in the first instance.

[01:00:31] Speaker 02:
Now, Cresta had quite a lot of back and forth.

[01:00:34] Speaker 03:
You're talking informally.

[01:00:35] Speaker 03:
I'm not talking about formally.

[01:00:35] Speaker 03:
Is there an application for a price?

[01:00:37] Speaker 03:
How do you get into the competitive bidding mechanism?

[01:00:42] Speaker 02:
Well, Your Honor, competitive bidding is not in place everywhere in the country.

[01:00:46] Speaker 02:
There's only about 130 jurisdictions, I think, that have competitive bidding.

[01:00:50] Speaker 03:
And then, otherwise, it's the gap filling?

[01:00:52] Speaker 02:
No, Your Honor, the gap filling is quite different.

[01:00:55] Speaker 02:
In the case of a newly covered

[01:00:57] Speaker 02:
product in which there isn't a fee schedule price or maybe there's not an equivalent price in the market, the CMS can interrupt the contractors to gap fill and kind of fill in a price that's different from competitive bidding earner.

[01:01:11] Speaker 02:
And again, that's just not applicable here because under the agency's view, we have a price that we pay for items that are supplies for internal nutritional therapy.

[01:01:19] Speaker 02:
And so simply having a new code is not going to entitle you

[01:01:22] Speaker 02:
by itself to additional reimbursement.

[01:01:25] Speaker 02:
And that is the crux, essentially, of plaintiff's argument here.

[01:01:27] Speaker 02:
And that goes against every discipline.

[01:01:29] Speaker 00:
Why hasn't this kind of thing ever come up before?

[01:01:32] Speaker 00:
It seems like almost what's happened is that in every other situation,

[01:01:37] Speaker 00:
If something is in fact a separate product, it just gets a separate code and then nothing ever arises.

[01:01:43] Speaker 00:
This seems like this kind of crazy situation in which something that seems in a lot of respects like it might, you know, perhaps substantively shouldn't automatically be considered part of the bundle, nonetheless was considered part of the bundle.

[01:01:56] Speaker 02:
I don't think it's the case that, I mean, every product doesn't get its own billing code.

[01:02:00] Speaker 02:
There are groups of code that describes, like, items.

[01:02:03] Speaker 02:
And the extent that you have to... And then what happens in those situations?

[01:02:05] Speaker 00:
Because this must come up.

[01:02:06] Speaker 00:
So what happens in those situations when someone wants to say, boy, I don't like the fact that I'm in group with a bunch of other things because it's compromising the extent to which I'm getting an economic return?

[01:02:20] Speaker 00:
Has that, are you aware of any history of that kind of thing being raised, either through the administrative process or through gap filling or any other mechanism for this type of dispute to be aired?

[01:02:32] Speaker 02:
Again, Your Honor, the difficulty here is that plaintiffs are tying together the, or I,

[01:02:38] Speaker 02:
I guess conflating the fact that, oh, I have a billing code and this is what the dispute is.

[01:02:41] Speaker 02:
To the extent that there is a need for a unique billing code, you can apply for that.

[01:02:46] Speaker 02:
We can have a fight about that over here.

[01:02:48] Speaker 02:
To the extent that that is a payment and coverage about the item, that's just under Medicare coverage and payment rules, and that is what

[01:02:54] Speaker 02:
goes through the agency.

[01:02:55] Speaker 02:
And to your point about you haven't seen anything like this, again, this is not the ordinary course that these disputes happen.

[01:03:00] Speaker 02:
We don't come into court.

[01:03:01] Speaker 00:
But then you would have thought that you're not able to give a definitive answer on whether even the administrative claims process allows for the airing of this, because apparently there's no history of it being done through that process either.

[01:03:11] Speaker 02:
I can't give specifics again because we're here on a floating and drug promotion about, purportedly, a billing code.

[01:03:16] Speaker 02:
And that's not how these claims are usually presented to the agency, and this is not how these fights usually play out.

[01:03:21] Speaker 00:
But do you know, have this kind of thing come before the agency from an underpayment review?

[01:03:28] Speaker 02:
Not that I'm aware of, Your Honor, speaking for myself.

[01:03:34] Speaker 02:
If there are no further questions, Your Honor,

[01:03:36] Speaker 02:
We think the district was correct.

[01:03:38] Speaker 02:
There's a fundamental disconnect here between what plaintiffs have asked for in this preliminary injunction motion.

[01:03:43] Speaker 03:
I do have one question, which is, I think there's a little bit of confusion about the regulation that says, the regulation I was citing before, 42 CFR 405.926C, that is about whether it is reviewable when CMS makes a payment amount

[01:04:06] Speaker 03:
determination and a panel of our court said as a matter of provisional relief based on a representation, perhaps it was by you, that that would not bar an administrative appeal.

[01:04:26] Speaker 03:
Is that, does that still apply to the new code or was that just a kind of provisional for purposes of that temporary code?

[01:04:34] Speaker 03:
Is it your understanding that were Alcresta to try to appeal, they would not be, or were Flack to try to appeal, he would not be barred by that provision?

[01:04:44] Speaker 02:
Plaintiffs made the same kind of disputes about the regulations and what they would appeal in the context of that, the context of their emergency motion that they're making here.

[01:04:54] Speaker 02:
Exactly.

[01:04:54] Speaker 02:
And we made the same representation that under the regulation that I cited, Your Honor, 405.924B11, an initial determination would include an issue having a potential effect on the amount of benefits, and the .926 regulation that you cited, Your Honor, would not preclude that.

[01:05:12] Speaker 02:
I think that regulation is referring, Your Honor, to things like appealing from the direct publication of a fee schedule or things of that nature, Your Honor, not in the context of appealing a concrete claim for benefits and saying that you are underpaid.

[01:05:24] Speaker 01:
So do you have authority to represent to us that if we accept your position and then the inevitable challenge is brought

[01:05:41] Speaker 01:
through the Medicare scheme that the government will not assert that 920, sorry, I don't have the provision, that preclusion provision?

[01:05:53] Speaker 02:
I don't know if I need to make an assertion about my authority here, Your Honor.

[01:05:56] Speaker 02:
I know that that's what we cited in our briefs, that's what we cited in our motions to the court, that's what we said about this litigation.

[01:06:02] Speaker 00:
But what you can't say is the content of that.

[01:06:05] Speaker 00:
So it might be that the review is not precluded, but what you're not in a position to say is that the content of that review will include the question of whether it relies or should be considered part of the bundle.

[01:06:17] Speaker 02:
Because I would be speaking about hypotheticals for claims that haven't been even attempted to be presented here.

[01:06:21] Speaker 01:
Well, I mean, it's not all that hypothetical.

[01:06:26] Speaker 01:
when the last part of your brief tells us not to worry about any of this because all of this can be aired through the Medicare system, which applies only if there's channeling as opposed to preclusion.

[01:06:42] Speaker 02:
And you're on the Medicare Act requires presentment and exhaustion.

[01:06:45] Speaker 02:
We've said to the extent that they're disputing coverage and payment.

[01:06:49] Speaker 01:
Unless exhaustion operates for one reason or another to eliminate review rather than delay it.

[01:06:55] Speaker 02:
I don't think we're there at this point, Your Honor, because there hasn't been even an attempt to present to the agency.

[01:07:00] Speaker 02:
preliminary injunction related to a billing code, and that's just not the right way to come about this.

[01:07:03] Speaker 00:
Can I just play it out?

[01:07:04] Speaker 00:
So let's suppose that there's no preclusion because a review is available, and that the beneficiary has access to that, and that practically it's available for the beneficiary to do it, and then the beneficiary seeks review of an alleged underpayment, and then the agency says there's no underpayment because it's duplicative, and then the beneficiary tries to say, well,

[01:07:25] Speaker 00:
It shouldn't be duplicative because it should be segregated out.

[01:07:29] Speaker 00:
There should be separate reimbursement.

[01:07:31] Speaker 00:
And the agency says, that's not what this process is all about.

[01:07:34] Speaker 00:
We've said it's duplicative.

[01:07:35] Speaker 00:
That's it.

[01:07:36] Speaker 00:
And then it goes up.

[01:07:38] Speaker 00:
Then what happens?

[01:07:39] Speaker 00:
If that's the way things unfold, because we don't know that that's not the way things are going to unfold.

[01:07:44] Speaker 00:
So if that's the way things do unfold, where at some point is there an actual

[01:07:51] Speaker 00:
conjoining of the issues such that the agency is making a reviewable assessment of whether relies or should be considered part of the bundle.

[01:08:03] Speaker 02:
point precisely in the process that would happen, I would again say to the extent that there's no material facts in dispute, and this is something that the agency doesn't have the authority to resolve, there's an expedited process for judicial review, but again the Medicare Act requires these things to be presented in the context of a concrete claim for payment, so the agency hasn't a chance to apply its statutes and regulations in the first instance, and consider these questions in the context of a concrete claim, which we're not here about a billing code.

[01:08:29] Speaker 03:
Who made the determination that

[01:08:32] Speaker 03:
this product fit under B4035.

[01:08:38] Speaker 03:
Who and where was that determination made?

[01:08:40] Speaker 02:
That's not on the record.

[01:08:41] Speaker 02:
Again I would point to the reference in it to

[01:08:43] Speaker 02:
an informal benefit category determination that Alpreste says was made by the agency.

[01:08:48] Speaker 02:
Those informal benefit category determinations are made by the deficients at the agency that are responsible for the product at issue.

[01:08:54] Speaker 02:
So here would be the durable medical equipment group, Your Honor.

[01:08:57] Speaker 03:
And there's no documentation of the grounds for that.

[01:08:59] Speaker 03:
Again, because we're here purportedly about a billing code.

[01:09:01] Speaker 03:
I know.

[01:09:01] Speaker 03:
I can't imagine that the documentation about the grounds for that would be raised in an individual administrative review of an individual benefits denial, but maybe it would be.

[01:09:15] Speaker 03:
I think that's my only remaining question.

[01:09:17] Speaker 03:
You had not addressed the other preliminary injunction factors.

[01:09:21] Speaker 02:
No, Your Honor, because the basis for a preliminary injunction is irreparable harm, and they haven't alleged irreparable harms that will be remedied by an injunction, as indicated by the fact that we've given them the billing code that they set out to establish.

[01:09:31] Speaker 03:
So if we were to disagree with you, then the other factors you don't dispute, or

[01:09:38] Speaker 02:
Again, Your Honor, we think that the only thing the court needs to determine is that what plaintiffs are seeking here is just not connected to these kind of irreparable harms that they've connected to their billing code.

[01:09:47] Speaker 02:
That's just, and I think, again, as was indicated earlier, we're all in agreement that that's not the fight that we're having here.

[01:09:52] Speaker 00:
So the one way that we use back in to some extent is likelihood of success on the merits is one criterion for PI, for preliminary injunction, right?

[01:10:00] Speaker 00:
And you're not contesting likelihood of success on the merits.

[01:10:04] Speaker 02:
You know, it's not that we're not contesting that.

[01:10:06] Speaker 02:
We're saying the merits are before the district court.

[01:10:07] Speaker 02:
There's discovery ongoing in the district court with a summary judgment briefing.

[01:10:10] Speaker 02:
Well, not on the HDI.

[01:10:11] Speaker 01:
Just on FACA, right?

[01:10:13] Speaker 00:
on the pocket, Your Honor, and in the context of the P.I., there's no need to address any of that, because it can... Right, so you've... I know that you think that there's no need to address it, because you think you went on another ground.

[01:10:21] Speaker 00:
I'm just saying that for our purposes, we take it as a given that likelihood of success on the merits is actually established.

[01:10:28] Speaker 00:
And your argument is, even though that may have been established, the government still wins.

[01:10:32] Speaker 00:
And I guess if that's... I don't... You don't disagree with that.

[01:10:35] Speaker 02:
Your Honor, the basis for a plenary injunction is always our formal harmonium.

[01:10:38] Speaker 02:
hear what plaintiffs are seeking is just not going to remedy their alleged irreparable harm.

[01:10:41] Speaker 00:
So irreparable harm is a separate ground from like, so I just want to make sure that you agree with me.

[01:10:44] Speaker 00:
So the way we look at it is likelihood of success on the merits is something that we just assume to be taken.

[01:10:50] Speaker 00:
Because the government says that doesn't matter because of irreparable harm.

[01:10:52] Speaker 02:
We haven't briefed that here, Your Honor.

[01:10:53] Speaker 02:
And again, we obviously contest the merits that's going on in district court.

[01:10:56] Speaker 02:
But for purposes of this motion, we haven't briefed that.

[01:11:00] Speaker 02:
They're not entitled to their induction because they haven't established irreparable harm.

[01:11:03] Speaker 00:
And for the merits, the underlying merits that we treat as

[01:11:08] Speaker 00:
For these purposes, just for these purposes, I understand the interest in cordoning it off, because you should.

[01:11:14] Speaker 00:
For these purposes, does the underlying merits include the underlying substantive determination of whether relies or should be considered part of the bundle?

[01:11:22] Speaker 02:
No, Your Honor, that's absolutely not before the court in the context of this motion or this litigation.

[01:11:25] Speaker 02:
Again, that plaintiffs are suited by the billing code to the extent we're going to have a dispute about coverage and payment.

[01:11:30] Speaker 02:
The proper way to proceed, as the Medicare Act requires, is to the agency in the first instance.

[01:11:35] Speaker 00:
But they've been saying that they're entitled to a billing code because it's not part of the bundle.

[01:11:40] Speaker 00:
And so in some ways, the merits, the likelihood of success on the merits is the question of whether it should be part of the bundle.

[01:11:50] Speaker 00:
And what they're saying is it shouldn't be part of the bundle, therefore you ought to give us a separate billing code that kind of manifests that underlying merits determination.

[01:12:00] Speaker 02:
I mean, the confusion there obviously is that we've

[01:12:03] Speaker 02:
given them a billing code.

[01:12:04] Speaker 02:
Our whole point is that what they're actually fighting, it's kind of hard to see what that is in the context of this billing code dispute.

[01:12:12] Speaker 02:
Again, to the extent that they have established irreparable harms, it's just not caused by the billing code as indicated by the fact that we've given them the unique code.

[01:12:19] Speaker 02:
And so everything else, you know, out of the Medicare Act requires to go to the agency in the first 10 states.

[01:12:26] Speaker 01:
What does the government understand itself to be doing when it, having established the code itself, then puts on it these indicators, the coverage and pricing indicators?

[01:12:44] Speaker 02:
Your Honor, those coverage and pricing indicators are an administrative mechanism

[01:12:48] Speaker 02:
for conveying information to the Medicare administration of contractors.

[01:12:51] Speaker 01:
It's purely payment, right?

[01:12:53] Speaker 01:
It's not a HIPAA code.

[01:12:55] Speaker 01:
It's a Medicare payment instruction.

[01:12:58] Speaker 02:
Those reflect existing Medicare coverage and payment rules, as we explained in our brief.

[01:13:02] Speaker 01:
Does the indicator have independent legal significance to bind the contractors, or is it simply

[01:13:16] Speaker 01:
an advisory restatement of pre-existing Medicare law.

[01:13:21] Speaker 02:
I don't know the answer to that, Your Honor.

[01:13:22] Speaker 01:
I can, again, just emphasize that they reflect existing Medicare... I think the likely answer is when you go to the contractor and present the claim for payment, contractor is going to deny it in a second and say, code D.

[01:13:40] Speaker 02:
If they're not separately priced under Medicare, that's a function of the Medicare coverage and payment rules, which presumably we're all looking at the same coverage.

[01:13:47] Speaker 01:
Well, I'm just saying it may be a function of this indicator determination, which I'm just having a hard time understanding.

[01:13:59] Speaker 01:
I don't see any statutory or regulatory authority for it.

[01:14:04] Speaker 01:
It seems to be a

[01:14:06] Speaker 01:
seems to be a Medicare payment decision that's somehow mysteriously appearing in the context of a HIPAA coding decision.

[01:14:15] Speaker 02:
I would emphasize, Your Honor, that the billing code is the other column, the B4035.

[01:14:19] Speaker 02:
Right, the first column.

[01:14:20] Speaker 01:
Right, I get that.

[01:14:22] Speaker 01:
That's HIPAA.

[01:14:23] Speaker 01:
That's independent of Medicare decisions.

[01:14:26] Speaker 01:
As to that column, I'm with you on redressability, right?

[01:14:30] Speaker 01:
That's not what's bothering me.

[01:14:32] Speaker 01:
What's bothering me is

[01:14:34] Speaker 01:
the right-hand columns, which seem to be the separate acts of administrative authority that seem Medicare-focused and seem to have legal significance in and of themselves.

[01:14:48] Speaker 02:
And my entry order would be that for Medicare purposes, that's for Medicare claims processing, that's reflecting existing Medicare coverage and payment rules.

[01:14:55] Speaker 02:
And to the extent there's a dispute about those rules or whether they're being applied properly, that's for the Medicare administrative review scheme.

[01:15:02] Speaker 02:
Thank you.

[01:15:03] Speaker 00:
OK.

[01:15:03] Speaker 00:
Thank you, Counsel.

[01:15:05] Speaker 00:
We'll give you two minutes for rebuttal.

[01:15:12] Speaker ?:
Thank you.

[01:15:12] Speaker 05:
To Judge Pillard's question, the determination was made in a letter sent to APRESTA in 2017, which is in the joint appendix at day 189.

[01:15:26] Speaker 05:
The existing, no existing payment rule or other rule dictates the categorization of the LIZO with the supply.

[01:15:35] Speaker 05:
made that clear.

[01:15:37] Speaker 05:
And the whole problem is that the agency did the cross-reference to the supply kit as part of its coding determination.

[01:15:48] Speaker 03:
I'm sorry, say that again, the no existing payment rule or supply rule?

[01:15:52] Speaker 05:
Well, the government's position throughout its brief is that there's some existing payment rule that somehow drives the decision to categorize Relizor with the supply kit.

[01:16:03] Speaker 05:
they haven't cited any rule that requires that treatment.

[01:16:06] Speaker 05:
They decided it's a supply and a supply.

[01:16:11] Speaker 05:
We know what the answer will be from the Medicare contractor if the claim is submitted because we have one.

[01:16:17] Speaker 05:
And the answer was that the benefit for this service is included in the payment allowance for another service procedure that has already been adjudicated.

[01:16:26] Speaker 05:
And I will translate that into this is a duplicate claim

[01:16:31] Speaker 05:
payment for this claim, payment for this bundle has already been made.

[01:16:37] Speaker 00:
And was that appealed?

[01:16:41] Speaker 05:
That is the claim determination that has been appealed.

[01:16:43] Speaker 05:
It has just recently been appealed, so we don't know exactly how that's going to play out.

[01:16:47] Speaker 01:
But I do want to hear in the most recent decision, getting some mixed signals from the government.

[01:16:58] Speaker 01:
On the one hand, we're getting

[01:17:01] Speaker 01:
the indicator code which seems to say that for reimbursement purposes, they still regard this device as part of the supply bundle.

[01:17:14] Speaker 01:
On the other hand, we're getting a coding decision that seems to suggest that someone in CMS, for some purpose or another, now thinks

[01:17:28] Speaker 01:
now thinks that this really isn't a supply, it's something different.

[01:17:35] Speaker 01:
They say to give it a nutrient code.

[01:17:38] Speaker 05:
Well, I think those next signals, Your Honor, highlight the arbitrariness of this decision.

[01:17:47] Speaker 01:
it might highlight the difficulty of our trying to jump in here at this stage and figure out what is going on with these indicator codes in an arguably abstract context where we don't have something that feels like a concrete payment dispute.

[01:18:18] Speaker 05:
respectfully this dispute is very real to Al Presta that's lost millions and millions of dollars based on this decision.

[01:18:27] Speaker 05:
Judge Srinivasan had asked a question about what happens normally and normally if there's a new product

[01:18:36] Speaker 05:
the manufacturer goes and gets a code, and a code is seen as a path to reimbursement.

[01:18:43] Speaker 05:
What has happened that is very unique here is that the manufacturer got a code that

[01:18:50] Speaker 05:
categorized it with something with items that shouldn't be categorized with and therefore stood in the way of reimbursement.

[01:18:58] Speaker 00:
Has that just not happened before?

[01:18:59] Speaker 00:
It seems like that's something that could have happened other times too and then someone would have had a dispute about whether it was appropriate to code it so that it's part of a pre-existing reimbursement cap.

[01:19:12] Speaker 05:
Well, I think that, as you might imagine, manufacturers are reluctant to sue the agency, especially when the agency is consistently taking the position that what it's doing is not reviewable.

[01:19:23] Speaker 05:
And this is, for the reason I just stated, a rather anomalous situation.

[01:19:29] Speaker 05:
But there were also some questions about how this would play out, and I refer you back to that Medicare Appeals Council case that's cited on page 14 of our brief, the in-ray RMM case.

[01:19:44] Speaker 05:
In that case, the Medicare Appeals Council decided that it couldn't decide arguments that were being made about the fact that the product belonged in one code versus another because it said that CMS is exclusively responsible for assigning uniform national definitions of codes.

[01:20:03] Speaker 01:
That's an indicator code?

[01:20:04] Speaker 05:
Right, the HCPCS codes, right.

[01:20:07] Speaker 05:
And it's in that language that sole responsibility is the language that is used in the regulation 405926 that we've been discussing.

[01:20:16] Speaker 05:
The 405926 talks about the inability to challenge a payment determination for which CMS has a sole responsibility.

[01:20:25] Speaker 05:
I offer that as an example of how this would play out if the appeal

[01:20:29] Speaker 05:
is allowed to progress.

[01:20:32] Speaker 05:
Under the regulations, a rejection of a claim, because it's a duplicate claim, would not progress, and there is no expedited judicial review in the situation where that occurs with a claim, if there are no further questions.

[01:20:47] Speaker 03:
The letter that you pointed us to, 189 to 190,

[01:20:55] Speaker 03:
that says that CMS believes the existing code describes this product, and it talks about how private insurers aren't bound.

[01:21:01] Speaker 03:
And then it says for Medicaid systems, please contact the Medicaid agency in the state in which the claim is being filed.

[01:21:08] Speaker 03:
Can you, I probably should have asked the government, do you have any idea what that's referring to, and have you done that?

[01:21:15] Speaker 05:
I believe the government's position, which doesn't square with reality, but their position is that they're making the code

[01:21:23] Speaker 05:
And other insurers can just do whatever they want with the code and pay whatever they want to pay with the code and process claims however they want.

[01:21:31] Speaker 05:
The reality is that Medicare is leading the charge.

[01:21:36] Speaker 05:
It's setting codes, and the rest of the industry is looking back.

[01:21:39] Speaker 05:
And so I think this means if you want to know how it's going to be covered under Medicaid, contact Medicaid.

[01:21:46] Speaker 05:
But in reality, most Medicaid programs are following Medicare.

[01:21:51] Speaker 05:
And so there is an answer.

[01:21:53] Speaker 05:
out there in the market.

[01:21:55] Speaker 05:
Hopefully that answers your question, Your Honor.

[01:22:01] Speaker 03:
I guess so.

[01:22:02] Speaker 03:
Yeah, I mean, I understand that they're saying the private is separate and that may or may not be, but then it says for Medicaid systems, please contact the Medicaid agency in the state.

[01:22:10] Speaker 03:
And I just wondered what, contact them for what and what way is that, is that referring to some kind of redress or avenue?

[01:22:16] Speaker 05:
No, Medicaid, Medicaid,

[01:22:19] Speaker 05:
programs across the country would use the code set by the agency and the work group under HIPAA.

[01:22:33] Speaker 00:
Thank you, Council.

[01:22:34] Speaker 00:
Thank you, Council.

[01:22:35] Speaker 00:
The case is submitted.