Case Explained: ARDELYX, INC v. ROBERT F. KENNEDY, JR., SECRETARY OF HEALTH AND HUMAN SERVICES

Court: United States Court of Appeals for the District of Columbia Circuit Filed: 2026-06-26 The D.C. Circuit affirmed the district court’s dismissal of Ardelyx, Inc.’s complaint challenging the Centers for Medicare & Medicaid Services (CMS) definition of “renal dialysis services” to include oral-only drugs and the specific identification of the drug XPHOZAH as a covered service under the Medicare bundled payment system. The court held that 42 U.S.C. § 1395rr(b)(14)(G) bars judicial review of the Secretary’s “identification of renal dialysis services included in the bundled payment.” To determine if this jurisdiction-stripping provision applied, the court first had to decide whether the challenged actions qualified as an “identification” within the meaning of the statute and whether they fell within the statutory definition of “renal dialysis services” found in § 1395rr(b)(14)(B). Regarding the regulation defining “renal dialysis services,” the court concluded that the term “identification” encompasses categorical determinations, not just the selection of specific drugs. The court further ruled that subpart (B)(iii) of the statute explicitly includes “other drugs and biologicals… for which payment was… made separately under this subchapter,” a category that plain text covers oral-only drugs furnished for the treatment of end-stage renal disease (ESRD). The court rejected Ardelyx’s argument that the subsequent clause regarding “oral equivalent form” implied an exclusion of oral-only drugs from the first clause, finding such a reading unduly constrained and contrary to congressional intent. Additionally, the court noted that Congress’s subsequent enactments delaying the implementation of oral-only drugs while referencing them as part of the bundle confirmed its understanding that these drugs were already included under the statutory definition. Regarding the specific identification of XPHOZAH, the court determined that the drug is “furnished for the treatment of” ESRD within the meaning of the statute because it treats hyperphosphatemia, a condition commonly caused by and closely associated with ESRD in dialysis patients. The court reasoned that the phrase “treatment of ESRD” includes management of conditions resulting from the disease, citing the inclusion of erythropoiesis stimulating agents (which treat anemia) as evidence of this statutory scope. Because the CMS acted within its delegated authority to include oral-only drugs and XPHOZAH in the bundled payment, the jurisdictional bar in § 1395rr(b)(14)(G) precluded the court from reviewing whether these actions were arbitrary, capricious, or procedurally defective under the Administrative Procedure Act. The practical consequence of this decision is that the CMS’s rule defining “renal dialysis services” to include oral-only drugs and its identification of XPHOZAH as a covered service remain in effect. The bundled payment system for renal dialysis services, which includes reimbursement for XPHOZAH starting January 1, 2025, proceeds without judicial interference, and Ardelyx’s claims regarding the legality or reasonableness of these actions are dismissed. Do It For The Case Law is a news reporting service. Nothing in this episode constitutes legal advice.