Federal Court Confirms Order to HHS to Pay Reimbursement Claims of Cancer Therapy Provider

On July 9, 2013, the United States District Court for the Western District of Oklahoma confirmed its Order to the Secretary of HHS to compute appropriate reimbursement payments to a provider of a new type of radiation treatment for cancer. See Oklahoma ProCure Management, LLC v. Kathleen Sebelius, Secretary of the United States Department of Health and Human Services.

Oklahoma ProCure Management (“ProCure”) provides proton therapy treatment to cancer patients; proton therapy is an alternative to X-ray radiation therapy that seeks to expose less healthy tissue to radiation than is exposed during standard X-ray radiation therapy. ProCure originally filed its federal court lawsuit after the Centers for Medicare and Medicaid Services (“CMS”) — although acknowledging that ProCure’s treatments were medically reasonable and necessary for patients — reimbursed ProCure at a rate significantly below what ProCure requested and at a small fraction of what commercial payers pay for the treatment. Before going to federal court, ProCure had appealed CMS’ reimbursement decisions through the agency’s administrative appeals process.

In April, 2013, the Court granted summary judgment in favor of ProCure, finding that the evidence indicated that CMS had not engaged in the detailed, rate-setting decision-making process required under its regulations. Following the Court’s grant of summary judgment for ProCure, the Secretary of HHS filed a Motion for a New Trial or, in the Alternative, Motion to Alter or Amend Judgment. The Secretary made several arguments; specifically, the Secretary argued that the Court committed legal and factual errors by, first, misapplying the standard for evaluating whether an agency’s action is supported by sufficient evidence and, second, by making incorrect assumptions regarding fluctuations over time in the level of reimbursement payments that CMS approved. The Secretary also argued that it had uncovered new evidence that supported its position that CMS had engaged in an appropriate rate-setting process.

The Court rejected all of the Secretary’s arguments. The Court held that it had appropriately understood and applied both the law and the facts; it also held that the Secretary had not uncovered new evidence and, in addition, that the Secretary had not shown that it had diligently tried to discover the evidence at an earlier time. “In sum,” according to the Court, “nothing…convinces the Court that its prior ruling was in error.”

As a practical matter, this ruling affects both the specific reimbursement claims before the Court and multiple, additional claims pending before CMS.

Parrish Law Offices represented ProCure before CMS and before the federal court, and was assisted by local counsel McAfee & Taft.

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