# Skincure Oncology, LLC v. Kennedy Jr.

> District Court, District of Columbia · April 10, 2026

URL: https://www.frixlaw.com/law-library/cases/11308263

## Case

- **Court:** District Court, District of Columbia
- **Decided:** April 10, 2026
- **Precedential status:** Published
- **Opinion:** Opinion
- **Judges:** Judge Rudolph Contreras
- **Cited by:** 0 later opinions in the Frix Law Library

## Citator (automated)

- No negative treatment found by the automated citator. That is not the same as a confirmation that the case is good law; read the citing cases.
- Full citator and citing cases: https://www.frixlaw.com/law-library/cases/11308263

## How later opinions describe it (automated extraction)

- explaining that “monetary harms” are some of the “most obvious” that constitute concrete injuries under Article III
- explaining that the court “need not proceed to review the other three preliminary injunction factors” where plaintiffs had not shown a likelihood of success on the merits

## Opinion text

UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF COLUMBIA

SKINCURE ONCOLOGY, LLC, et al., :
Plaintiffs, :
: Civil Action No.: 26-737 (RC)
v. :
: Re Document Nos.: 10, 11, 14
ROBERT F. KENNEDY, JR., :
Secretary of Health and Human :
Services, et al., :
Defendants, :

MEMORANDUM OPINION

DENYING PLAINTIFFS’ MOTION FOR STAY AND PRELIMINARY AND PERMANENT INJUNCTION

I. INTRODUCTION

In March 2026, Plaintiffs brought this suit challenging recent changes to Medicare

reimbursements for Image-Guided Superficial Radiation Treatment (“IGSRT” or “the

Treatment”). Since 2015, IGSRT has been commercially available to patients in the United

States to treat certain cases of non-melanoma skin cancer. Plaintiffs include SkinCure Oncology,

LLC (“SkinCure”), a company that leases Treatment equipment and provides administrative

services to dermatology practices that deliver the Treatment, and PatientsAct.org Inc.

(“PatientsAct”), a nonprofit patient advocacy organization (collectively, “Entity Plaintiffs”).

Plaintiffs also include six individuals who have received or are currently receiving the Treatment

(“Patient Plaintiffs”). Plaintiffs are concerned that the recent changes to Medicare

reimbursements for the Treatment will result in either claim denials or reduced reimbursements.

Those changes were implemented through the (1) Calendar Year 2026 Physician Fee Schedule

(the “Final Rule”) and (2) Local Coverage Determinations made by Medicare contractors that the

Treatment was not reasonable and necessary, and would not be covered by Medicare, as well as

guidance to implement those determinations called “Billing Articles.” Plaintiffs claim that these
actions were ultra vires and in violation of the Administrative Procedure Act (“APA”).

Plaintiffs’ Complaint names as Defendants Robert F. Kennedy, Jr., in his capacity as Secretary of

the U.S. Department of Health and Human Services (“HHS”), HHS, Dr. Mehmet Oz, in his

capacity as Administrator of the Center for Medicare & Medicaid Services (“CMS”), and CMS

(collectively, the “Agency”). Shortly after filing their Complaint, Plaintiffs moved for a stay,

preliminary injunction, and permanent injunction. Plaintiffs argue that the Agency’s actions

reduce the availability and amount of reimbursement payments for the Treatment, and may

jeopardize availability of the Treatment altogether. For the reasons below, the Court concludes

that Plaintiffs have not made a clear showing that they are entitled to the preliminary relief they

seek, and accordingly denies the motion.

II. BACKGROUND

A. Statutory and Regulatory Background

Congress passed the Medicare Act as part of the Social Security Amendments of 1965.

Pub. L. No. 89-97, 79 Stat. 291 (July 30, 1965) (codified at 42 U.S.C. §§ 1395 et seq.). The

Medicare Act “establishes a program of health insurance for the elderly and disabled.” Hall v.

Sebelius, 770 F. Supp. 2d 61, 64 (D.D.C. 2011), aff’d, 667 F.3d 1293 (D.C. Cir. 2012).

Medicare Part B “is the supplementary medical insurance program that covers certain

physicians’ services, outpatient hospital care, and other medical items and services not covered

under Part A.” Cal. Clinical Lab’y Ass’n v. Sec’y of Health & Hum. Servs., 104 F. Supp. 3d 66,

70 (D.D.C. 2015); see 42 U.S.C. § 1395j. Importantly, the Medicare Act prohibits payments

“under part A or part B for any expenses incurred for items or services which . . . are not

reasonable and necessary for the diagnosis or treatment of illness or injury or to improve the

functioning of a malformed body member.” 42 U.S.C. § 1395y(a)(1)(A) (emphasis added).

2
“The HHS Secretary implements this rule through CMS—the agency that administers Medicare

more generally.” Greenwald v. Becerra, No. 17-cv-797, 2022 WL 2046108, at *2 (D.D.C.

June 7, 2022). The Secretary of HHS is responsible for overseeing the Medicare Program and

has authority to “prescribe such regulations as may be necessary to carry out the administration

of the insurance programs.” 42 U.S.C. § 1395hh(a)(1).

By statute, “[t]he administration of [Part B] shall be conducted through contracts with

medicare administrative contractors,” also known as “MACs” or “carriers.” Id. § 1395u(a);

id. § 1395kk-1. A MAC is “a private entity that processes claims in a geographic region

assigned by HHS.” Agendia, Inc. v. Becerra, 4 F.4th 896, 897 (9th Cir. 2021). MACs perform

many functions in administering the program and processing billions of claims annually,

including processing and paying claims for eligible services provided to Medicare beneficiaries.

See 42 U.S.C. § 1395kk-1(a)(4). As relevant here, claims may be filed by a beneficiary or by a

“provider of services who files a claim for items or services furnished to a beneficiary.” 42

C.F.R. § 405.906(a). If the beneficiary or provider is dissatisfied with the initial determination,

then they may appeal that determination through the Medicare administrative appeals process.

42 U.S.C. § 1395ff(a)(3); 42 C.F.R. §§ 405.904, 405.906(b).

“The administrative appeals process consists of up to four steps: (1) a redetermination by

the MAC that originally denied the claim; (2) a review by a different contractor (known as a

“qualified independent contractor”); (3) a hearing before an Administrative Law Judge (“ALJ”);

and finally, (4) review by the Medicare Appeals Council (“the Council”), an adjudicatory body

within HHS.” Agendia, 4 F.4th at 897 (citing 42 C.F.R. § 405.904(a)(2), (b)); see 42 U.S.C.

§ 1395ff(a)(3), (c)–(d); 42 C.F.R. § 405.900–.1140. If an aggrieved party is still unsatisfied after

3
exhausting the administrative appeals process, they can pursue judicial review in federal district

court. 42 U.S.C. §§ 405(g), 1395ff(b)(1)(A); 42 C.F.R. § 405.1130.

But how are these MACs supposed to determine whether a service in an individual claim

is “reasonable and necessary” and thus covered by Medicare? See 42 U.S.C. § 1395y(a)(1)(A).

Congress has provided a few mechanisms to promote uniformity. First, the Secretary can make a

“national coverage determination” or “NCD” regarding “whether or not a particular item or

service is covered nationally.” Id. § 1395y(l)(6)(A). “An NCD is binding on fiscal

intermediaries, carriers [or MACs], QIOs [Quality Improvement Organizations], QICs [Qualified

Independent Contractors], ALJs [Administrative Law Judges] and attorney adjudicators, and the

[Medicare Appeals] Council.” 42 C.F.R. § 405.1060(a)(4).

In the absence of a binding NCD with national applicability, a MAC can make a “local

coverage determination” or “LCD” regarding “whether or not a particular item or service is

covered on an intermediary- or carrier-wide basis,” meaning within that MAC’s jurisdiction. 42

U.S.C. § 1395ff(f)(2)(B). Unlike NCDs, which are binding throughout the claim appeal process,

LCDs are not binding on ALJs or the Council. 42 C.F.R. § 405.1062(a). LCDs are, however,

entitled to “substantial deference,” and if an ALJ or the Council “declines to follow a policy,”

they must “explain the reasons why the policy was not followed.” Id. § 405.1062(a)–(b).

Though an ALJ or the Council cannot invalidate an LCD through the claim appeal process, id.

§ 405.1062(c), there is a separate process for challenging and invalidating LCDs before ALJs

and the Council, see generally id. § 426.400–.490.

In the absence of an applicable NCD or LCD, MACs must make their own determination

whether a service is “reasonable and necessary.” See 42 U.S.C. § 1395kk-1(a)(4)(A); 42 C.F.R.

4
§ 405.920(a). And again, if a beneficiary or provider is dissatisfied with that determination, then

they may pursue the appeals process described above. See 42 U.S.C. § 1395ff(a)(3).

B. The Agency Actions at Issue

1. The Final Rule

Each year, the Secretary must “establish, by regulation, fee schedules that establish

payment amounts for all physicians’ services furnished in all fee schedule areas . . . for the year.”

42 U.S.C. § 1395w-4(b)(1). Each payment amount is the product of the “relative value for the

service,” the “conversion factor,” and the “geographic adjustment factor.” Id. § 1395w-4(b)(1).

The “relative value” for each service is determined by “combining the work, practice expense,

and malpractice relative value units.” Id. § 1395w-4(c)(2)(A)(i). In determining these relative

values, “the Secretary may collect or obtain information on the resources directly or indirectly

related to furnishing services” from “any eligible professional or any other source.” Id.

§ 1395w-4(c)(2)(M)(i). The statute gives the Secretary broad discretion in determining both the

types of information to be collected and the mechanisms for collecting that information. See id.

§ 1395w-4(c)(2)(M)(iii)–(iv), (N). Consistent with that discretion, the statute precludes

“administrative or judicial review” of “the determination of relative values and relative value

units under subsection (c),” as well as “the collection and use of information in the determination

of relative values under subsection (c)(2)(M).” Id. § 1395w-4(i)(1)(B), (F).

“Since 1966, the American Medical Association (“AMA”) has published and updated the

Physicians’ Current Procedural Terminology (“CPT ”).” Am. Soc. of Dermatology v. Shalala,

962 F. Supp. 141, 144 (D.D.C. 1996), aff’d, 116 F.3d 941 (D.C. Cir. 1997). The CPT codes

“provide a uniform language that accurately describes medical, surgical, and diagnostic services

to facilitate nationwide communications among health care workers, patients, and others.” Id.

5
The Calendar Year 2026 Physician Fee Schedule (the “PFS” or “Final Rule”) was

published on October 31, 2025, and appeared in the Federal Register the following week. See

Medicare and Medicaid Programs; CY 2026 Payment Policies Under the Physician Fee

Schedule, 90 Fed. Reg. 49266 (Nov. 5, 2025). The Final Rule became effective January 1, 2026.

Id. Plaintiffs challenge one portion of the Final Rule, titled “Use of the Relationship Between

OPPS [Outpatient Prospective Payment System] APC [Ambulatory Payment Classification]

Relative Weights To Establish PE [Practice Expense] RVUs [Relative Value Units] for Radiation

Oncology Treatment Delivery, Superficial Radiation Treatment, and Proton Beam Treatment

Delivery.” 90 Fed. Reg. at 49379–90 (citation modified). As the Final Rule explained, “the CPT

Editorial Panel” revised the CPT codes for CY 2026 for radiation treatment delivery services,

presenting “an opportunity both to consider adopting CPT codes under the PFS and to re-

examine how to best assign relative value units to radiation treatment delivery and superficial

radiation treatment delivery services under the PFS.” Id. at 49380. Though the Agency typically

determines Practice Expense RVUs for non-facility settings, such as a physician’s office,

separately from those for services provided in a hospital facility, the Agency noted concerns with

obtaining accurate data and using “incomplete, small sample, potentially biased or inaccurate

resource input costs [that] may distort [the Agency’s] valuation of the non-facility PE RVUs

used in calculating PFS payment rates for individual services.” Id. at 49379.

In the Agency’s view, “[c]onsidering that the resources involved in furnishing radiation

treatment delivery and superficial radiation treatment delivery services seem to be primarily

driven by capital costs that aren’t as likely to vary greatly between facilities like hospitals and

free standing centers, and because the billing codes for the services (both old and new) are

already stratified into professional and technical services, these services have obvious

6
characteristics that make use of OPPS data particularly appropriate.” Id. at 49380. The Agency

also “determined that identifying an alternative data source that is more routinely updated and

standardized would improve the accuracy of valuation for these services.” Id. Citing to its broad

authority to determine practice expense relative values under § 1395w-4(c)(2)(N), the Agency

decided to use “OPPS cost data to develop PE RVUs,” and to adopt the CPT codes used under

the OPPS. Id. at 49380, 49386.

Specific to Superficial Radiation Therapy (“SRT”), the Final Rule adopted four new CPT

codes to replace the old ones and established RVUs according to the new methodology, relying

on OPPS data. See id. at 49386–88. Under this new scheme, “image guidance costs” are not

separately payable. See id. at 49382. The Agency reasoned that “the payment for the treatment

delivery services includes the resource costs associated with furnishing the image guidance

services.” Id. Specifically, the Agency responded to comments:

we believe that one of the advantages of bundling in the payment for ultrasound
guidance, consistent with the OPPS, would eliminate financial incentives to provide
ultrasound guidance where it may be of questionable value. As we stated earlier in
this section, services in this code family that describe technical costs and are not
separately payable under the OPPS will not be separately payable under the PFS,
because the associated costs are incorporated into the costs for separately paid
codes. We will assign the procedure status of “B” to the CPT code describing
ultrasound guidance; this will mean that the use of ultrasound guidance will not
vary the payment made under the PFS.

Id. at 49387. Thus, while SRT would still be payable, the image-guided element of IGSRT

would not be separately payable because it would be considered included in the cost of SRT.

2. The Local Coverage Determinations (“LCDs”) and Billing Articles

In May 2025, five of the seven MACs issued identical proposed LCDs titled “Superficial

Radiation Therapy (SRT) for the Treatment of Nonmelanoma Skin Cancers (NMSC)” that they

had developed jointly through a workgroup. See CGS Administrators, LLC, DL40179; National

Government Services, Inc., DL40168; Noridian Healthcare Solutions, LLC, DL40176; Palmetto

7
GBA, DL40189; WPS, DL40193. 1 On January 8, 2026, the MACs published final LCDs under

the same name. See CGS Administrators, LLC, L40179; National Government Services, Inc.,

L40168; Noridian Healthcare Solutions, LLC, L40176; Palmetto GBA, L40189; WPS, L40193.

Those LCDs were accompanied by identical responses to comments, see, e.g., Defs.’ Ex. 3

(“LCD Responses to Comments”), ECF No. 17-4, and Billing Articles that provide guidance to

implement the LCDs, see, e.g., Defs.’ Ex. 4 (“Billing Articles”), ECF No. 17-5. The LCDs were

amended on March 12, 2026, see Defs.’ Ex. 6 (“Final LCD”), ECF No. 17-6. 2

As relevant here, the LCDs concluded that “[u]se of [high-resolution ultrasound] HRUS

to guide SRT delivery and to assess lesion reduction during the superficial radiation treatment

protocol is not considered reasonable and necessary and is not supported by literature.” Final

LCD at 10. So, while “the use of SRT is considered reasonable and necessary” in certain

conditions under the LCDs, the full scope of the Treatment, is not. Id.

The LCDs also explained that “[s]ervices will be considered medically reasonable and

necessary only if performed by appropriately trained providers.” Id. at 11. Under the LCDs,

A qualified physician for this service is defined as follows: training and expertise
must have been acquired within the framework of an accredited residency and/or
fellowship program in the applicable specialty/subspecialty (i.e., Radiation
Oncology OR by a qualified dermatology program and the dermatologist has
didactic training and clinical experience in radiation treatment).

Id. The final LCDs and Billing Articles became effective on March 1, 2026.

1
Each proposed and final LCD is available by entering the document code at
https://www.cms.gov/medicare-coverage-database/search.aspx.
2
For clarity, when citing to the operative LCD in this opinion, the Court refers to
Defendants’ Exhibit 6 and the corresponding ECF-generated page numbers.

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C. Factual and Procedural Background

Non-melanoma skin cancer, or NMSC, “is a group of malignant, skin-based tumors

comprised primarily of basal cell carcinoma and squamous cell carcinoma, which together

represent the most common cancers in the United States.” Corrected Compl. (“Compl.”) ¶ 36,

ECF No. 13. “Dermatologists have used radiation therapy to treat NMSC for more than a

century.” Id. ¶ 39. “By the mid-1970s, more than half of dermatology offices in North America

reported having SRT (or similar radiation therapy devices) available for use in the outpatient

setting.” Id. “Use of SRT declined in subsequent decades, largely due to the emergence and

growth of Mohs micrographic surgery (“Mohs”) as a tissue-sparing surgical technique.” Id. ¶ 40.

In 2015, the FDA “cleared the SRT-100 Vision™ device, enabling the integration of

HRUS with superficial radiation delivery and marking the introduction of IGSRT.” Id. ¶ 41.

“The Treatment delivers low-energy superficial radiation that is primarily absorbed in the

dermis . . . allowing treatment at shallow depths while sparing deeper structures.” Id. ¶ 43.

Based on these features, Plaintiffs allege that the “Treatment is an appropriate and desirable

option for patients with early-stage NMSC who are poor surgical candidates (e.g., because of

advanced age, comorbidities, or lesion location), or who prefer a non-surgical approach—

particularly for tumors located on cosmetically or functionally sensitive sites such as the face,

head, and neck.” Id. ¶ 50. “[T]he Treatment is overwhelmingly delivered by dermatologists in

office-based clinical settings, with approximately 96% of SRT and Treatment claims attributable

to dermatologists and other skin specialists, and fewer than 2% attributable to radiation

oncologists.” Id. ¶ 54.

“In a typical Treatment cycle, patients receive several individual radiation sessions,

called ‘fractions,’ each lasting approximately thirty seconds to one minute,” and each course of

9
Treatment involves a median of 20 fractions. Id. ¶ 44. Plaintiffs allege that HRUS imaging is

clinically necessary before and after the course of Treatment, as well as during each fraction

because the tumor depths fluctuate. Id. ¶ 45. But Plaintiffs assert that this frequent imaging is

worthwhile, reporting that Treatment studies have found “cure rates exceeding 99% across large

cohorts and multi-year follow-up.” Id. ¶ 42.

On March 3, 2026, two days after the LCDs and Billing Articles took effect, Plaintiffs

filed suit in this case challenging the Final Rule, LCDs, and Billing Articles. ECF No. 1.

Plaintiffs are two entities, SkinCure and Patients Act (the “Entity Plaintiffs”) and six individuals

(the “Patient Plaintiffs”).

According to the Complaint, “SkinCure is the nation’s leading provider of management

and administrative services supporting dermatology practices that deliver IGSRT for Cancer.”

Compl. ¶ 16(a). Specifically, “SkinCure’s solution includes the provision and leasing of the

FDA-cleared SRT-100 Vision™ device, buildout of dedicated shielded treatment suites,

regulatory compliance, staffing of certified radiation therapists, and access to radiation

oncologists for consultation.” Id. ¶ 58. But SkinCure does not directly provide or bill for

medical services; “instead, its dermatology practice partners deliver and bill for all the Treatment

care services.” Id. Through its management-fee structure, SkinCure receives “approximately

54% of total reimbursements paid to practice partners” for the Treatment. Id. ¶ 139.

“PatientsACT is a national patient advocacy organization committed to ensuring that

every individual has access to high‑quality, medically appropriate care and the right to make

informed decisions about their healthcare.” Id. ¶ 16(b). PatientsAct alleges that the challenged

Agency actions “impair PatientsACT’s mission and frustrate its advocacy efforts on behalf of

Medicare beneficiaries.” Id.

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The Patient Plaintiffs are six “individuals enrolled under Medicare Part B” who allege

that they need the Treatment. Id. ¶ 16(c). Two of the Patient Plaintiffs are currently in the

process of scheduling or receiving IGSRT. See Pls.’ Ex. D ¶ 16; Pls.’ Ex. G ¶ 12. They both

claim that without Medicare coverage for IGSRT, they will be forced to undergo invasive

surgery, which presents heightened risks based on personal health factors, or forgo treatment.

See Pls.’ Ex. D ¶ 18–19; Pls.’ Ex. G ¶ 14–15.

Plaintiffs’ Complaint brings 9 counts that they have grouped into three categories:

(1) claims that Defendants’ actions were ultra vires and exceeded statutory authority (Counts 1

and 2); (2) claims that Defendants improperly changed Agency policy without a reasoned

explanation in violation of the APA (Counts 3, 4, and 9); and (3) claims that Defendants

circumvented binding procedural requirements in violation of the APA and Medicare Act

(Counts 5, 6, 7, and 8). See Reply in Supp. Pls.’ Mot. (“Reply”) at 1–2, ECF No. 18. To

simplify further, the Entity Plaintiffs challenge the Final Rule, and the Patient Plaintiffs

challenge the LCDs and Billing Articles. See id. at 2–6. Their Complaint seeks declaratory and

injunctive relief enjoining the CPT coding and corresponding RVUs for the Treatment and

enjoining enforcement of the Final LCDs and associated Billing Articles. See Compl. at 63–64.

On March 6, 2026, Plaintiffs filed their “Motion for Stay and Preliminary and Permanent

Injunction.” See Mem. Supp. Pls.’ Mot. Stay & Prelim. & Perm. Inj., ECF No. 10-3. 3 Plaintiffs’

3
On March 16, 2026, Plaintiffs filed corrected versions of their Complaint, Motion, and
one declaration to amend the treatment history of one Patient Plaintiff. See ECF No. 13. For
consistency, the Court cites only to the corrected version of Plaintiffs’ Motion and Complaint.
See Mem. Supp. Pls.’ Corrected Mot. Stay & Prelim. & Perm. Inj. (“PI Mot.”), ECF No. 14-1.
Plaintiffs have also moved to file those Patient Plaintiffs’ declarations and an unredacted
version of their Motion under seal because they contain personal medical information and
healthcare history of those Plaintiffs. See ECF Nos. 10, 14. Upon consideration of the factors in
United States v. Hubbard, 650 F.2d 293, 317–22 (D.C. Cir. 1980), the Court will grant those
motions.

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proposed order requests that the Court stay the portions of the Final Rule establishing new CPT

codes and RVUs for the Treatment, as well as the Final LCDs and Billing Articles. 4 See ECF

No. 14-2. Defendants oppose the Motion and argue that each of Plaintiffs’ claims is either

precluded from review—by statute and requirements of administrative channeling—and that any

claims that this Court may consider lack merit. See Defs.’ Mem. in Opp’n (“Opp’n”) at 1–2,

ECF No. 17. Defendants also argue that Plaintiffs have failed to demonstrate irreparable harm

such that preliminary relief is unwarranted. See id. at 3. The Motion is fully briefed, and the

Court heard argument on April 1, 2026. The Motion is thus ready for this Court’s review.

III. LEGAL STANDARD

A preliminary injunction is “an extraordinary remedy that may only be awarded upon a

clear showing that the plaintiff is entitled to such relief.” Winter v. Nat. Res. Def. Council, Inc.,

555 U.S. 7, 22 (2008). “To get a preliminary injunction the movant must show: (1) ‘he is likely

to succeed on the merits,’ (2) ‘he is likely to suffer irreparable harm in the absence of

preliminary relief,’ (3) ‘the balance of equities tips in his favor,’ and (4) issuing ‘an injunction is

in the public interest.’” Hanson v. District of Columbia, 120 F.4th 223, 231 (D.C. Cir. 2024),

cert. denied, 145 S. Ct. 2778 (2025) (quoting Winter, 555 U.S. at 20). “The balance of the

equities and the public interest ‘merge when, as here, the Government is the opposing

4
Though Plaintiffs originally requested a permanent injunction, they conceded in their
reply brief that “entry of a permanent injunction at this time would be premature.” Reply at 25
n.7, ECF No. 18. At the April 1 hearing, however, Plaintiffs’ counsel backtracked and argued
for the first time that Counts 1 and 2 “will require a decision on the merits” because “they are
ultra vires claims,” such that “a permanent injunction is in order.” Hr’g Tr. at 3:3–8, 3:15–22.
Plaintiffs have provided no legal basis for this argument, which is contrary to the rule that “it is
generally inappropriate for a federal court at the preliminary-injunction stage to give a final
judgment on the merits.” Univ. of Texas v. Camenisch, 451 U.S. 390, 395 (1981); see Winter v.
Nat. Res. Def. Council, Inc., 555 U.S. 7, 32 (2008). The Court sees no reason to deviate from
this general rule and will consider only Plaintiffs’ requests for preliminary relief.

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party . . . .’” Singh v. Berger, 56 F.4th 88, 107 (D.C. Cir. 2022) (quoting Karem v. Trump, 960

F.3d 656, 668 (D.C. Cir. 2020)). The movant’s likelihood of success on the merits is the “most

important factor.” Aamer v. Obama, 742 F.3d 1023, 1038 (D.C. Cir. 2014). And “a failure to

show a likelihood of success on the merits alone is sufficient to defeat the motion.” Am.

Oversight v. Hegseth, 788 F. Supp. 3d 14, 21 (D.D.C. 2025) (citing Ark. Dairy Coop. Ass’n v.

USDA, 573 F.3d 815, 832 (D.C. Cir. 2009)).

Under the APA, a “reviewing court . . . may issue all necessary and appropriate process

to postpone the effective date of an agency action or to preserve status or rights pending

conclusion of the review proceedings.” 5 U.S.C. § 705. “The factors governing issuance of a

preliminary injunction also govern issuance of a § 705 stay.” District of Columbia v. USDA, 444

F. Supp. 3d 1, 15 (D.D.C. 2020); Save Long Beach Island, Inc. v. U.S. Dep’t of Com., No. 25-cv-

02214, 2025 WL 2996157, at *3 (D.D.C. Oct. 24, 2025).

IV. ANALYSIS

Plaintiffs have not demonstrated that they are entitled to the preliminary relief they seek.

As a first step, the Court analyzes Plaintiffs’ Article III standing. Then, the Court analyzes each

claim using Plaintiffs’ three categories: (1) claims that Defendants actions were ultra vires

(Counts One and Two), (2) claims that Defendants improperly changed Agency policy without a

reasoned explanation, and were thus arbitrary and capricious in violation of the APA (Counts

Three, Four, and Nine), and (3) claims that Defendants circumvented binding procedural

requirements, and were thus taken without required procedure in violation of the APA (Counts

Five, Six, Seven, and Eight). For many of these claims, this Court’s jurisdiction is either

precluded by a specific statute or by requirements of administrative channeling. To the extent

the Court can reach the merits of Plaintiffs’ claims, Plaintiffs have not made a clear showing that

13
they should prevail on their claims that Defendants’ actions were ultra vires or that the LCDs 5

were arbitrary and capricious or promulgated without required procedures under the APA.

Because the Court concludes that Plaintiffs have failed to show that they are likely to succeed on

the merits of any of their claims, they are not entitled to the preliminary relief they seek, and the

Court need not analyze the other preliminary injunction factors. Accordingly, the Court will

deny the motion for a stay and a preliminary injunction.

A. Standing

The Court briefly addresses Plaintiffs’ standing under Article III. Constitutional standing

“limits the category of litigants empowered to maintain a lawsuit in federal court to seek redress

for a legal wrong.” Spokeo, Inc. v. Robins, 578 U.S. 330, 338 (2016). “A plaintiff establishes

standing by showing ‘(i) that he suffered an injury in fact that is concrete, particularized, and

actual or imminent; (ii) that the injury was likely caused by the defendant; and (iii) that the injury

would likely be redressed by judicial relief.’” Jibril v. Mayorkas, 101 F.4th 857, 867 (D.C. Cir.),

cert. denied, 145 S. Ct. 550 (2024) (quoting TransUnion LLC v. Ramirez, 594 U.S. 413, 423

(2021)).

Defendants argue that none of the Patient Plaintiffs have demonstrated a concrete injury

to support their Article III standing. See Opp’n at 23–24. The Court disagrees. Two Patient

Plaintiffs currently have skin cancer and are in the process of scheduling or receiving IGSRT.

See Pls.’ Ex. D ¶ 16; Pls.’ Ex. G ¶ 12. They both claim that without Medicare coverage for

5
For ease of analysis the Court does not separately refer to the Billing Articles when
analyzing the LCDs. As discussed below, this Court’s jurisdiction to review the Patient
Plaintiffs’ challenges is limited to their challenges to the LCDs. See 42 U.S.C. § 1395ff(f)(3).
Moreover, Patient Plaintiffs do not identify any legal infirmity in the Billing Articles that does
not flow from the Final Rule or the LCDs, see generally PI Mot., so the Court sees no practical
reason to discuss them separately.

14
IGSRT, they will be forced to undergo invasive surgery—which presents heightened risks based

on personal health factors—or forgo treatment. See Pls.’ Ex. D ¶ 18–19; Pls.’ Ex. G ¶ 14–15.

Defendants liken these Patient Plaintiff claims to the Jane Doe in California Clinical Laboratory

Association v. Secretary of Health and Human Services, 104 F. Supp. 3d 66, 75 (D.D.C. 2015).

See Opp’n at 24. In that case, the court reached the unremarkable conclusion that a Medicare

beneficiary who has received the services at issue and who has not had to pay for those services

has not suffered any injury. Cal. Clinical Lab’y Ass’n, 104 F. Supp. 3d at 79 (“[I]t is undisputed

that Doe and her doctor were indeed able to access the test results at issue notwithstanding the

coverage denial and that she was not charged personally for any testing expenses.”). Moreover,

in that case, the plaintiffs did “not contend that Jane Doe’s doctor ha[d] ordered (or imminently

w[ould] order) further clinical testing of the type challenged.” Id. Thus, there was not a

substantial probability of a future injury. Id. at 79–80 (citing Sierra Club v. Jewell, 764 F.3d 1, 7

(D.C. Cir. 2014)).

In contrast, here, two Patient Plaintiffs who live in MAC jurisdictions with these LCDs

are currently seeking or undergoing IGSRT for their skin cancer—meaning they will likely either

not receive the Treatment, have to undergo surgery or forgo treatment altogether, or will have to

pay out of pocket for the Treatment. See Pls.’ Ex. D ¶¶ 4, 18–19; Pls.’ Ex. G ¶¶ 4, 14–15. These

Patient Plaintiffs are facing this choice currently, and the imminent physical or financial injury is

sufficient. No one disputes that the LCDs cause their quandary, or that enjoining the Agency

actions would remedy it. Accordingly, the Court concludes these Patient Plaintiffs have

established their standing. And because the other Patient Plaintiffs seek the same relief, for

purposes of deciding this preliminary motion, the Court will rely on “the rule that if many

15
plaintiffs seek the same relief and at least one of them has Article III standing, the court need not

determine whether others also do.” M.M.V. v. Garland, 1 F.4th 1100, 1110 (D.C. Cir. 2021).

Defendants do not challenge the Entity Plaintiffs’ Article III standing explicitly. See

Opp’n at 22–25. The Court agrees that SkinCure has established that it will suffer concrete

financial loss as a result of the challenged Agency actions in the form of lower reimbursement

rates for fewer claims. See Reply at 15–17. SkinCure thus has constitutional standing to

challenge the Agency actions causing its pocketbook injuries. See TransUnion, 594 U.S. at 425

(explaining that “monetary harms” are some of the “most obvious” that constitute concrete

injuries under Article III). And because PatientAct’s claims are coextensive with SkinCure’s,

the Court similarly need not decide at this preliminary stage whether PatientAct has standing of

its own. See M.M.V., 1 F.4th at 1110.

B. Likelihood of Success

Having assured itself that at least one Plaintiff in each category of Plaintiffs has standing,

the Court now analyzes each of Plaintiffs’ three categories of claims, in the order Plaintiffs

presented them. “It is fundamental to federal jurisprudence that Article III courts . . . are courts

of limited jurisdiction.” NO Gas Pipeline v. FERC, 756 F.3d 764, 767 (D.C. Cir. 2014). That

said, the Supreme Court “has long recognized a ‘strong presumption’ in favor of judicial review

of final agency action” that applies “unless ‘a statute’s language or structure’ precludes judicial

review.” Am. Hosp. Ass’n v. Becerra, 596 U.S. 724, 733 (2022) (first quoting Weyerhaeuser Co.

v. U.S. Fish and Wildlife Serv., 586 U.S. 9, 23 (2018); and then quoting Mach Mining, LLC v.

EEOC, 575 U.S. 480, 486 (2015)). For each claim, the Court first determines whether it has

jurisdiction to reach the merits of the claim, and if so, analyzes those merits. Ultimately, the

Court concludes that it has jurisdiction to consider Plaintiffs’ ultra vires claims (Counts 1 and 2),

16
but that those claims fail on the merits, an unsurprising result given the high standard to succeed

on such claims. The Entity Plaintiffs’ challenges to the Final Rule under the APA (Counts 3 and

9) fail for two independent reasons: first, this Court lacks jurisdiction over these claims, which

require channeling through the Medicare administrative process, and second, the Entity Plaintiffs

essentially challenge the Final Rule’s RVUs, which are unreviewable under 42 U.S.C. § 1395w-

4(i)(1)(B). The Patient Plaintiffs’ APA claims (Counts 4–9), are also subject to the Medicare

Act’s channeling requirement, so they instead rely on 42 U.S.C. § 1395ff(f)(3), which excuses

exhaustion to challenge the legal validity of LCDs where no material facts are disputed. The

Court accordingly analyzes each of the Patient Plaintiffs’ claims to determine which raise purely

legal challenges subject to this Court’s jurisdiction, and then analyzes the merits of those legal

challenges. As discussed below, the Court concludes that Plaintiffs are not likely to succeed on

any of their claims.

1. Ultra Vires Claims

An ultra vires claim “is available where (i) there is no express statutory preclusion of all

judicial review; (ii) ‘there is no alternative procedure for review of the statutory claim; and

(iii) the agency plainly acts in excess of its delegated powers and contrary to a specific

prohibition in the statute that is clear and mandatory[.]’” Fed. Express Corp. v. U.S. Dep’t of

Com., 39 F.4th 756, 763 (D.C. Cir. 2022) (alteration in original) (quoting Nyunt v. Chairman,

Broad. Bd. of Governors, 589 F.3d 445, 449 (D.C. Cir. 2009)); see also Leedom v. Kyne, 358

U.S. 184, 187–88 (1958). Ultra vires claims “are confined to ‘extreme’ agency error where the

agency has ‘stepped so plainly beyond the bounds of [its statutory authority], or acted so clearly

in defiance of it, as to warrant the immediate intervention of an equity court[.]’” Fed. Express,

39 F.4th at 764 (alterations in original) (quoting Griffith v. FLRA, 842 F.2d 487, 493 (D.C. Cir.

17
1988)). Accordingly, “a challenged action must ‘contravene[ ] a clear and specific statutory

mandate’ to be susceptible to ultra vires review.” Nat’l Ass’n of Postal Supervisors v. U.S.

Postal Serv., 26 F.4th 960, 971 (D.C. Cir. 2022) (alteration in original) (quoting Nat’l Air Traffic

Controllers Ass’n AFL-CIO v. Fed. Serv. Impasses Panel, 437 F.3d 1256, 1264 (D.C. Cir.

2006)). Given this stringent standard, the D.C. Circuit has aptly analogized this claim to “a Hail

Mary pass—and in court as in football, the attempt rarely succeeds.” Nyunt, 589 F.3d at 449.

In Count 1, the Entity Plaintiffs assert that the Agency exceeded “clear statutory limits”

by considering “hospital outpatient data” when issuing the Physician Fee Schedule in the Final

Rule. Reply at 2. Instead, Plaintiffs argue, the Agency could only make its decisions “based on

certain information and data,” that is, “physician information.” Id.

The Entity Plaintiffs’ ultra vires challenges to the Final Rule and its RVUs fail on

multiple elements. For starters, there is express statutory preclusion of all judicial review. 42

U.S.C. § 1395w-4(i)(1). The relevant subsection titled “Restriction on Administrative and

Judicial Review” provides that “[t]here shall be no administrative or judicial review under

section 1395ff of this title or otherwise of . . . the determination of relative values and relative

value units under subsection (c).” Id. § 1395w-4(i)(1)(B) (emphasis added); see Am. Soc’y of

Cataract & Refractive Surgery v. Thompson, 279 F.3d 447, 453 (7th Cir. 2002) (“It would be

difficult for Congress to have written paragraph (B) in clearer terms prohibiting such a

challenge.”). Plaintiffs provide three reasons why their claims are not precluded by that plain

language, but none is persuasive.

First, Plaintiffs assert that their claims do not challenge the RVUs themselves, but instead

“challenge the source of the Agency’s underlying data.” PI Mot. at 17; Reply at 9. The

challenge for Plaintiffs is that § 1395w-4(i)(1)(F) also precludes judicial review of “the

18
collection and use of information in the determination of relative values under subsection

(c)(2)(M).” Subsection (c)(2)(M) permits the Secretary to “use information collected or

obtained . . . in the determination of relative values for services,” and specifies that “at the

Secretary’s discretion,” that information may include “[a]ny other element that would improve

the valuation of services under this section.” 42 U.S.C. § 1395w-4(c)(2)(M)(i)–(iii). Subsection

(c)(2)(M) also permits the Secretary to collect information by “[a]ny other mechanism

determined appropriate by the Secretary.” Id. § 1395w-4(c)(2)(M)(iv)(IV). Thus, the scope of

preclusion related to RVU determinations appears to also preclude challenges to the data source

for RVU determinations.

Second, Plaintiffs argue that the statutory bar on review in § 1395w-4(i)(1)(B) does not

apply because the Agency’s reliance on hospital outpatient data to determine the RVUs was

beyond the scope of its statutory authority, so much so that “the preclusion of review would not

apply to shield the Secretary’s unauthorized action.” See PI Mot. at 18; Amgen, Inc. v. Smith,

357 F.3d 103, 114 (D.C. Cir. 2004). This argument is based on a theory that “if the agency’s

action fails to qualify as the kind of action for which review is barred,” then “the jurisdiction-

stripping provision does not apply.” Am. Hosp. Ass’n v. Azar, 964 F.3d 1230, 1238 (D.C. Cir.

2020) (quoting Southwest Airlines Co. v. TSA, 554 F.3d 1065, 1071 (D.C. Cir. 2009)). But in

cases where that doctrine applies, review is permitted “not because an obvious legal error

justifie[s] disregarding an applicable statutory bar, but because the relevant statutory bar” is

“effectively coextensive with the merits.” DCH Reg’l Med. Ctr. v. Azar, 925 F.3d 503, 510

(D.C. Cir. 2019).

The statute precluding review here is not effectively coextensive. Plaintiffs do not

challenge whether the Agency determined “relative values and relative value units under

19
subsection (c).” 42 U.S.C. § 1395w-4(i)1(B). They challenge the inputs the Secretary used

when making that determination. See PI Mot. at 18 (“By relying on this inapposite, inapplicable,

and unauthorized data, the Agency exceeded its authority and issued an unlawful ‘determination

of relative values and relative value units.’” (quoting 42 U.S.C. § 1395w-4(i)(1)(B)). Thus,

because they do not challenge whether the Agency determined RVUs, but instead challenge how

the Agency made that determination, their challenge is not coextensive with the applicability of

the statute precluding review of RVU determinations. Moreover, whether the Agency used

appropriate data is indistinguishable from “the collection and use of information in the

determination of relative values,” for which review is also precluded. 42 U.S.C. § 1395w-

4(i)(1)(F). And here, the Court struggles to understand how to disentangle the data used to

calculate RVUs from the RVUs themselves; after all, the outpatient data provide “the entire basis

for the” RVUs. See Fla. Health Scis. Ctr., Inc. v. Sec’y of Health & Hum. Servs., 830 F.3d 515,

519 (D.C. Cir. 2016). Thus, this Court is not at liberty to disregard the statute precluding judicial

review. 6

Third, Plaintiffs argue that § 1395w-4(i)(1) is no bar because the Agency’s actions were

ultra vires, relying on Kyne. PI Mot. at 18–19. As for Count 1, this argument is entirely

circular—the Court asks whether there is statutory preclusion of judicial review as the first

6
At the motion hearing, Plaintiffs’ counsel raised an additional argument based on the
Medicare Act’s text. Plaintiffs’ counsel explained that 42 U.S.C. § 1395w-4(j)(3)’s definition of
“physicians’ services” includes, by cross-reference to 42 U.S.C. § 1395x(s)(4), “X-ray, radium,
and radioactive isotope therapy, including materials and services of technicians.” See Hr’g Tr.
at 12:5–19, 25:22–26:10. Plaintiffs’ counsel then directed the Court to 42 U.S.C. § 1395w-
4(c)(2)(C), which provides that the number of Practice Expense relative value units “shall be
determined based entirely on such relative practice expense resources.” Id. at 12:19–13:8,
26:12–27:4. Plaintiffs cited to neither § 1395w-4(j)(3) nor § 1395x in either of their briefs.
Accordingly, the Court need not consider this argument, United States ex rel. Davis v. District of
Columbia, 793 F.3d 120, 127 (D.C. Cir. 2015), but does so only to note that it sees no clear and
mandatory prohibition on the Agency considering hospital outpatient data in these provisions.

20
element under caselaw tracing to Kyne, so Kyne cannot obviate the need to determine whether

there is statutory preclusion. Section 1395w-4(i)(1) expressly precludes review.

Though the analysis of Count 1 could stop there, the Court briefly addresses the other two

elements of an ultra vires claim. The Court will address the availability of other review for these

statutory claims in its discussion of administrative channeling below, but notes that the Entity

Plaintiffs “are not Medicare providers or beneficiaries, and so will not have been denied claims

for services.” See Defs.’ Opp’n at 20. Even so, the Agency’s error in this case, if any, was not

plain or extreme. Plaintiffs fail to identify any “clear statutory limit[]” that prohibits the

Secretary from relying on hospital outpatient data when determining Physician Fee Schedule

RVUs. Reply at 2. Plaintiffs cite generally to 42 U.S.C. § 1395w-4, as well as to § 1395w-

4(c)(2)(M) specifically, but as discussed above, that statute appears to provide the Secretary with

broad discretion in determining RVUs. See PI Mot. at 21. Plaintiffs fail to identify any portion

of the statute that specifically prohibits the use of outpatient hospital OPPS figures to calculate

RVUs in “clear and mandatory” terms. See Fed. Express, 39 F.4th at 763. For these reasons,

Plaintiffs’ ultra vires claim in Count 1 fails.

In Count 2, the Patient Plaintiffs claim that the LCDs are ultra vires because “the MACs

used unauthorized criteria and heightened evidentiary requirements and therefore exceeded the

scope of their delegation.” Reply at 2–3. Plaintiffs concede that the Medicare Act permits the

Secretary to delegate to MACs the authority to develop LCDs, but argue that the LCDs are based

on factors that go “beyond the ‘reasonable and necessary’ standard.” PI Mot. at 23; 42 U.S.C.

§ 1395kk-1(a)(1), (4). This ultra vires claim also fails on multiple elements. First, Patient

Plaintiffs have multiple avenues for challenging the LCDs, either through an appeals process if

21
their claims are denied, 42 C.F.R. § 405.1062, or as an aggrieved party through the LCD review

process before an ALJ, 42 U.S.C. § 1395ff(f)(2)(A); 42 C.F.R. § 426.400–.490.

Second, the MACs did not act in plain excess of delegated powers or contrary to any

clear and mandatory prohibition. The MACs determined that “[u]se of HRUS to guide SRT

delivery and to assess lesion reduction during the superficial radiation treatment protocol is not

considered reasonable and necessary and is not supported by literature.” Final LCD at 10.

Before reaching that conclusion, the LCDs explained that “there are no randomized clinical

studies or prospective studies to show that the additional use of high-resolution ultrasound

guidance (HRUS) [with SRT] improves the short-term and long-term recurrence rates.” Id. at 9.

Plaintiffs argue that by doing so, “the MACs effectively denied coverage for the Treatment and

HRUS due to the lack of peer-reviewed RCTs [randomized clinical trials], foisting an extra-

statutory requirement contrary to § 1395y(a)(1)(A) and Agency guidance.” PI Mot. at 23. But

Plaintiffs fail to identify any rule prohibiting the MACs from considering the absence of random

clinical trial evidence in making a determination as to whether a treatment is “reasonable and

necessary.” Nothing in the text of 42 U.S.C. § 1395y(a)(1)(A) contains such a prohibition. Nor

does the provision of the Medicare Program Integrity Manual Plaintiffs cite support their

position; the language they cite from that Manual discusses criteria MACs should consider in

making a “reasonable and necessary” determination “[i]f no local coverage determination (LCD)

exists for a particular item or service,” not what criteria MACs must use, or not use, when

issuing an LCD. See Medicare Program Integrity Manual (CMS Pub. 100-08), Ch. 3, § 3.6.2.2;

PI Mot. at 23. If there is a statutory or regulatory limitation on MACs considering the absence of

RCTs in making LCDs, Plaintiffs have not identified it. Thus, this ultra vires claim fails.

22
In Count 2, Patient Plaintiffs also bring two additional challenges to the LCDs, invoking

this Court’s jurisdiction under 42 U.S.C. § 1395ff(f)(3). See Reply at 3. That statute provides:

In the case of a determination that may otherwise be subject to review under
paragraph (1)(A)(iii) [regarding National Coverage Determinations] or paragraph
(2)(A)(i) [regarding Local Coverage Determinations], where the moving party
alleges that—
(A) there are no material issues of fact in dispute, and
(B) the only issue of law is the constitutionality of a provision of this
subchapter, or that a regulation, determination, or ruling by the Secretary is
invalid,
the moving party may seek review by a court of competent jurisdiction without
filing a complaint under such paragraph and without otherwise exhausting other
administrative remedies.

42 U.S.C. § 1395ff(f)(3). As relevant here, this provision provides an avenue for review of

purely legal challenges to the LCDs and a “limited exception” to administrative exhaustion, but

only as to the Patient Plaintiffs. See Hays v. Leavitt, 583 F. Supp. 2d 62, 66 (D.D.C. 2008), aff’d

sub nom. Hays v. Sebelius, 589 F.3d 1279 (D.C. Cir. 2009); 42 U.S.C. § 1395ff(f)(5) (“An action

under this subsection seeking review of a national coverage determination or local coverage

determination may be initiated only by individuals entitled to benefits under part A, or enrolled

under part B, or both, who are in need of the items or services that are the subject of the coverage

determination.”).

Defendants resist that § 1395ff(f)(3) is available to Patient Plaintiffs to challenge the

LCDs here. See Defs.’ Opp’n at 27–28. For one, Defendants argue that “Plaintiffs have pled

away the potential applicability of subsection (f)(3)” because “the complaint alleges many

factual disputes.” Id. at 27. For example, Defendants highlight Plaintiffs’ allegation that peer-

reviewed studies show that the IGSRT technology is “efficacious, safe, and superior to previous

generations” of SRT technology without imaging. See Defs.’ Opp’n at 28; Compl. ¶ 124. This

allegation disputes the LCDs’ findings that “the effectiveness of this additional modality is

currently under active investigation.” Final LCD at 8; Compl. ¶ 124.

23
The Court is not convinced that the existence of some factual issues entirely precludes its

ability to review the validity of the LCDs here. See Hays, 583 F. Supp. 2d at 66 (finding that

while plaintiffs did “raise factual issues in their briefing” the court could analyze the narrower,

“purely legal” question “regarding the interpretation of the authority granted in the Act”). After

all, many of Plaintiffs challenges concern only an “issue of law” as to whether a “determination,”

the LCD, “is invalid.” See 42 U.S.C. § 1395ff(f)(3). For instance, Patient Plaintiffs assert APA

challenges to the LCDs. See Compl. Counts 4–9. “[W]hen a party seeks review of agency

action under the APA, the district judge sits as an appellate tribunal” and generally assesses the

entire case as “a question of law.” Am. Bioscience, Inc. v. Thompson, 269 F.3d 1077, 1083 (D.C.

Cir. 2001). Thus, the factual issues in some of Patient Plaintiffs’ APA challenges to the LCDs

may not be “material to plaintiffs’ primary challenge,” here, whether the LCDs violated the APA

or were implemented without statutory authority. See Hays, 583 F. Supp. 2d at 66. The Court

will, of course, analyze each claim to determine whether it is susceptible to this sort of

narrowing. See, e.g., Greenwald v. Becerra, No. 17-cv-797, 2022 WL2046108, at *7 (D.D.C.

June 7, 2022) (finding jurisdiction under § 1395ff(f)(3)(B) to determine whether an LCD

conflicted with an NCD, reasoning that the “conflict [was] evident in the plain language of the

text, and additional facts or expert opinions would not eliminate the conflict”).

Returning to Count 2, Patient Plaintiffs argue that the LCDs are ultra vires because they

are impermissibly vague, in violation of the Fifth Amendment, and that the LCDs’ definition of

“qualified physician” impedes on States’ right to regulate medicine, in violation of the Tenth

Amendment. See Reply at 3. Specifically, Plaintiffs assert that the LCDs’ “ambiguous and

undefined language presents a substantial risk of being interpreted and applied in a manner that

would restrict board-certified dermatologists from providing the Treatment.” See PI Mot. at 23–

24
26. The Court agrees that these constitutional claims are purely legal, and that Patient Plaintiffs

may bring them in this Court under § 1395ff(f)(3). Though this Court has jurisdiction, these

claims fail on the merits.

Plaintiffs’ Fifth Amendment argument faults the LCDs’ definition of “qualified

personnel” as being unconstitutionally vague. See PI Mot. at 24. The Court disagrees. “[T]he

void for vagueness doctrine addresses at least two connected but discrete due process concerns:

first, that regulated parties should know what is required of them so they may act accordingly;

second, precision and guidance are necessary so that those enforcing the law do not act in an

arbitrary or discriminatory way.” FCC v. Fox Television Stations, Inc., 567 U.S. 239, 253

(2012). “In determining whether a party received fair notice, the Court considers whether, ‘by

reviewing the regulations and other public statements issued by the agency, a regulated party

acting in good faith would be able to identify, with “ascertainable certainty,” the standards with

which the agency expects parties to conform.’” Nissan Chem. Corp. v. U.S. Food & Drug

Admin., 744 F. Supp. 3d 1, 9 (D.D.C. 2024) (quoting General Elec. Co. v. EPA, 53 F.3d 1324,

1329 (D.C. Cir. 1995)).

Here, the LCDs explained that “[s]ervices will be considered medically reasonable and

necessary only if performed by appropriately trained providers.” Final LCD at 11. The LCDs go

on to define a “qualified physician for this service . . . as follows: training and expertise must

have been acquired within the framework of an accredited residency and/or fellowship program

in the applicable specialty/subspecialty (i.e., Radiation Oncology OR by a qualified dermatology

program and the dermatologist has didactic training and clinical experience in radiation

treatment).” Id. This definition does not appear vague on its face, as stating that only someone

experienced with radiation treatment should provide superficial radiation treatment seems both

25
clear and logical. Nevertheless, Plaintiffs insist that “qualified physician” is defined in “vague

and ambiguous terms that create a substantial risk of excluding dermatologists from providing

the Treatment.” PI Mot. at 25. Specifically, Plaintiffs assert that “approximately 96% of SRT

and Treatment claims are submitted by dermatologists,” but that the definition of qualified

physician will not include those dermatologists because “no such dermatology program” as

referenced in the definition “exists in practice.” See id. Even were it true that no such program

existed, that would not make the requirement “vague.” For example, Plaintiffs have not argued

that the definition is vague because they are not sure what experiences a dermatology program

would need to provide to be qualified. Plaintiffs simply have not explained what is vague about

the definition; instead, they appear to disagree with its limitation to restrict coverage from

services performed by dermatologists who were previously covered. But that does not make the

LCD unconstitutionally vague.

For Patient Plaintiffs’ other constitutional ultra vires theory, they assert that the LCDs’

definition of “qualified physician” somehow “contravenes state law and exceeds the Agency’s

authority” because it alters who can legally practice medicine and the scope of that practice. See

PI Mot. at 25–26. Plaintiffs argue that this alleged intrusion on the States’ police powers violates

the Tenth Amendment. See id. at 26. But the LCDs do not “regulate physicians’ scope of

practice.” But see id. Rather, they are determinations of whether certain procedures will be

covered under Medicare, not whether those procedures may be lawfully performed. Plaintiffs

fail to develop any persuasive argument explaining how these LCDs violate the Constitution.

In sum, the Court concludes that Plaintiffs are unlikely to succeed on their ultra vires

claims brought in Counts 1 and 2 of the Complaint. Accordingly, the Court will not grant

preliminary relief based on these claims.

26
2. Arbitrary-and-Capricious Claims

Under the APA, courts can set aside agency actions found to be “arbitrary, capricious, an

abuse of discretion, or otherwise not in accordance with law” or “in excess of statutory

jurisdiction, authority, or limitations, or short of statutory right.” 5 U.S.C. § 706(2)(A), (C).

“[A]n agency acts arbitrarily or capriciously if it ‘has relied on factors which Congress has not

intended it to consider, entirely failed to consider an important aspect of the problem, offered an

explanation for its decision that runs counter to the evidence before the agency, or is so

implausible that it could not be ascribed to a difference in view or the product of agency

expertise.’” Am. Wildlands v. Kempthorne, 530 F.3d 991, 997–98 (D.C. Cir. 2008) (quoting

Motor Vehicle Mfrs. Ass’n v. State Farm Mut. Auto. Ins. Co., 463 U.S. 29, 43 (1983)). Arbitrary-

and-capricious review is “highly deferential” and “presumes agency action to be valid.” Id., 530

F.3d at 997 (quoting Ethyl Corp. v. EPA, 541 F.2d 1, 34 (D.C. Cir. 1976)). The agency action

need only “be reasonable and reasonably explained.” Cmtys. for a Better Env’t v. EPA, 748 F.3d

333, 335 (D.C. Cir. 2014). Additionally, courts “will give an extreme degree of deference to the

agency when it is evaluating scientific data within its technical expertise.” Kennecott Greens

Creek Min. Co. v. Mine Safety & Health Admin., 476 F.3d 946, 954–55 (D.C. Cir. 2007) (citation

modified).

In Counts 3, 4, and 9, Plaintiffs allege that “Defendants improperly changed Agency

policy without a reasoned explanation.” Reply at 3. “Agencies are free to change their existing

policies as long as they provide a reasoned explanation for the change.” Encino Motorcars, LLC

v. Navarro, 579 U.S. 211, 221 (2016). A reasoned explanation displays awareness that the

agency is changing its position; shows that there are good reasons for the new policy, though

27
those reasons need not be better than the reasons for the old policy; and is permissible under the

statutory scheme. FCC v. Fox Television Stations, Inc., 556 U.S. 502, 515 (2009).

In Count 3, the Entity Plaintiffs contend that the Agency’s Final Rule departed from past

policy of reimbursing for the Treatment in full “by reclassifying the Treatment into four new

CPT codes and reimbursing ultrasound image guidance as a once-per-course add-on.” Reply

at 3. In Count 9, the Entity Plaintiffs challenge the Final Rule as “severely restricting coverage

for the Treatment when it is ‘reasonable and necessary’ for the treatment of non-melanoma skin

cancer,” and thus contrary to the Medicare Act. 7 Id. at 4–5. For both claims, the Entity

Plaintiffs invoke federal question jurisdiction under 28 U.S.C. § 1331. Id. at 3–5.

The Entity Plaintiffs’ APA claims challenging the Final Rule are precluded by the

Medicare Act’s channeling provisions. See 42 U.S.C. §§ 405(g)–(h), 1395ff(b)(1)(A); Am.

Hosp. Ass’n v. Azar, 895 F.3d 822, 825 (D.C. Cir. 2018). 42 U.S.C. § 1395ii provides that

§ 405(h) “shall also apply with respect to this subchapter [regarding Medicare benefits] to the

same extent as they are applicable with respect to subchapter II [regarding Social Security

benefits]” and specifies that “any reference therein to the Commissioner of Social Security or the

Social Security Administration shall be considered a reference to the Secretary or the

Department of Health and Human Services, respectively.” 42 U.S.C. § 1395ii. In turn, § 405(h)

divests courts of jurisdiction under 28 U.S.C. §§ 1331 and 1346 “on any claim arising under” the

Medicare Act, “except as herein provided.” Id. § 405(h). Instead of general federal question

jurisdiction, the Medicare statute provides that “any individual dissatisfied with any initial

determination . . . shall be entitled to reconsideration of the determination, and . . . a hearing

7
The Court notes that Plaintiffs at times suggest this claim is an arbitrary-and-capricious
claim, but at other times base this argument on the action being in excess of statutory authority.
See Reply at 1, 5. Under either theory, this claim fails.

28
thereon by the Secretary . . . and . . . to judicial review of the Secretary’s final decision after such

hearing as is provided in section 405(g) of this title.” Id. § 1395ff(b)(1)(A). And § 405(g)

provides that “[a]ny individual, after any final decision of the [Secretary] made after a hearing to

which he was a party, irrespective of the amount in controversy, may obtain a review of such

decision by a civil action.” Id. § 405(g). So together, the Medicare statute incorporates the

Social Security statute’s review scheme, including its divesting of general federal question

jurisdiction to channel appeals through the Agency’s review process before permitting judicial

review. See Am. Hosp. Ass’n, 895 F.3d at 825; Heckler v. Ringer, 466 U.S. 602, 614–15 (1984)

(“The third sentence of 42 U.S.C. § 405(h), made applicable to the Medicare Act by 42 U.S.C.

§ 1395ii, provides that § 405(g), to the exclusion of 28 U.S.C. § 1331, is the sole avenue for

judicial review for all ‘claim[s] arising under’ the Medicare Act.” (alterations in original)

(footnote omitted)). Thus, to obtain judicial review under § 405(g), the plaintiff must, at a

minimum, have “presented” the claim to the Secretary. Am. Hosp. Ass’n, 895 F.3d at 825

(explaining that the presentment “requirement is not waivable, because without presentment

‘there can be no “decision” of any type,’ which § 405(g) clearly requires” (quoting Mathews v.

Eldridge, 424 U.S. 319, 328 (1976))). “There are, however, narrow exceptions to these

channeling and exhaustion requirements, which derive from the Medicare Act itself,” including

§ 1395ff(f)(3) as discussed above, “as well as from Supreme Court precedent.” Henry v. Azar,

518 F. Supp. 3d 520, 527 (D.D.C. 2021) (citing Shalala v. Ill. Council on Long Term Care, Inc.,

529 U.S. 1, 19 (2000)).

The Supreme Court has explained that “§ 1395ii does not apply § 405(h) where

application of § 405(h) would not simply channel review through the agency, but would mean no

review at all.” Ill. Council, 529 U.S. at 19; Am. Hosp. Ass’n, 895 F.3d at 825. The D.C. Circuit

29
has clarified that “the Illinois Council exception is not intended to allow section 1331 federal

question jurisdiction in every case where section 405(h) would prevent a particular individual or

entity from seeking judicial review.” Council for Urological Ints. v. Sebelius, 668 F.3d 704, 708,

711 (D.C. Cir. 2011). Rather, where an adequate proxy with aligned interests is willing and able

to pursue the plaintiff’s claims through the Medicare administrative channels “as a practical

matter,” jurisdiction under § 1331 is still precluded. Id. at 711–12; see Am. Chiropractic Ass’n,

Inc. v. Leavitt, 431 F.3d 812, 816 (D.C. Cir. 2005).

Here, the Entity Plaintiffs 8 claim that “SkinCure and PatientsACT undoubtedly cannot

‘channel’ their claims through the agency because the administrative review process is not

available to them.” PI Mot. at 15. Further, they argue that “(1) there are no potential proxies for

SkinCure or PatientsACT, (2) no potential proxy has brought a claim, and (3) SkinCure and

PatientsACT are unable to become assignees of the potential proxies.” Id. at 16. So, the Entity

Plaintiffs assert that the Illinois Council exception applies and makes the Medicare Act’s

channeling provisions inapplicable to them. See Reply at 6.

The Court is not convinced. The parties do not dispute that the Entity Plaintiffs will not

be denied claims for services, and accordingly will not have access to the Medicare review

channels. Reply at 7; Opp’n at 20; 42 C.F.R. §§ 405.906(a), 405.912(a). SkinCure could not

channel its claims because it “does not provide clinical care or bill for medical services” and

instead operates through its dermatology practice partners. Compl. ¶ 58. Similarly, PatientsAct

8
Plaintiffs do not assert that the Illinois Council exception to administrative channeling
would apply to Patient Plaintiffs, who have not yet been denied reimbursement and thus have not
presented any claim to the Secretary for review. See PI Mot. at 14–16; 42 U.S.C.
§ 1395ff(b)(1)(A) (“[A]ny individual dissatisfied with any initial determination . . . shall be
entitled to reconsideration of the determination, and . . . a hearing thereon by the
Secretary . . . .”); 42 C.F.R. §§ 405.904, 405.906.

30
could not directly channel its claims regarding the Treatment coverage for PatientsAct’s

members. Id. ¶ 137.

But it is unclear to the Court why these dermatology practice partners and individual

beneficiaries do not have aligned interests and would not be willing and able to pursue these

claims through administrative channels, serving as adequate proxies to bring SkinCure and

PatientAct’s claims. In fact, the dermatology practice partners’ financial incentive to bring these

claims appears to be almost equal to SkinCure’s, as SkinCure alleges that it receives

“approximately 54% of total reimbursements paid to practice partners.” 9 Compl. ¶ 139; see

RICU LLC v. U.S. Dep’t of Health & Hum. Servs., 22 F.4th 1031, 1039 (D.C. Cir. 2022) (holding

that the plaintiff’s client hospitals were adequate proxies that were incentivized to pursue claims

that plaintiff’s services are eligible for Medicare reimbursement). Further, the presence of

individual patient beneficiaries in this litigation suggests that other beneficiaries would be

willing to pursue claims through administrative channels. Moreover, Plaintiffs allege that

“SkinCure and its hundreds of dermatology practice partners, PatientsACT and its members, the

individual Plaintiffs, and tens-of-thousands of Medicare beneficiaries nationwide will suffer

immediate and irreparable harm due to the Agency’s Action.” Compl. ¶ 136 (emphases added).

If these practice partners and patient members will all suffer immediate and irreparable harm, as

Plaintiffs allege, it is unclear to the Court why they would not be adequately incentivized to

bring their challenges through Medicare administrative channels.

Plaintiffs’ reliance on Council for Urological Interests is unavailing. See Reply at 7–8.

In that case, the D.C. Circuit found that hospitals were not adequate proxies for the plaintiff,

9
At the April 1 hearing, Plaintiffs’ counsel acknowledged that these dermatology
practice partners “have a financial incentive of their own,” but argued that SkinCure’s interest is
greater in the aggregate. See Hr’g Tr. at 9:2–20. Even so, their financial interests are aligned.

31
whose members were “physician-owned joint ventures formed to purchase specialized

equipment for urologic laser surgery.” Council for Urological Ints., 668 F.3d at 706, 713. Like

this case, “the hospital bill[ed] Medicare for the technical fee for each surgical procedure

performed and then passe[d] on a pre-negotiated portion of that fee to the joint venture on a per-

procedure basis.” Id. at 706. The Secretary “promulgated new regulations prohibiting most such

arrangements” based on concerns of “perceived overutilization of services by physicians who

stood to profit by referring patients to facilities or entities in which they had a financial interest.”

Id. at 705–06. In concluding that the hospitals were not adequate proxies, the court based its

decision on “several unique characteristics of the hospitals’ relationship to” the plaintiff “and to

the challenged regulations.” Id. at 713. For example, the plaintiff alleged “that the hospitals had

no incentive to challenge” the regulations because the hospitals wanted to reassert control over

doctors and to limit their control over medical equipment purchases. Id. Moreover, the hospitals

were financially benefitting from the regulations by purchasing equipment at reduced prices or

contracting with unregulated entities. Id. Thus, the court concluded that the hospitals had “little

incentive to pursue the [plaintiff’s] challenge to the regulations.” Id. As proving the point that

the hospitals were not adequate proxies, the court noted that “not one hospital ha[d] challenged

the regulations despite having had three years to do so.” Id. Thus, the Illinois Council exception

applied. Id. at 703–14.

Here, Entity Plaintiffs’ Complaint and arguments fail to provide any explanation why the

dermatology practice partners or patients would not be adequate proxies. Plaintiffs assert that

providers and Medicare beneficiaries are “highly unlikely” to present these claims to the Agency

because they “would take on enormous risk by administering and receiving the Treatment just to

tee up a coverage determination claim.” Reply at 8. Plaintiffs do not elaborate on what they

32
mean by “risk,” but if these services are profitable to providers, then the Court sees no reason

why they would not risk foregoing payment for a single service to preserve a revenue stream.

And unlike in Council for Urological Interests, SkinCure and its provider partners are “not

structurally adverse.” See Henry, 518 F. Supp. 3d at 531. The only other argument Plaintiffs

articulate regarding proxies is that because patients are “already fighting for their lives” they may

not litigate fully and would likely settle for reimbursement of their own claims. Reply at 8. As

mentioned above, the presence of Patient Plaintiffs in this case appears to refute that claim. And

the fact that no proxy has brought a claim is uncompelling here, where the policy just became

effective this year and where Plaintiffs fail to identify a claim that has been denied. See Council

for Urological Ints., 668 F.3d at 713. Thus, the Illinois Council exception does not apply to

SkinCure or PatientAct’s claims, and this Court lacks jurisdiction under 28 U.S.C. § 1331 to

consider the claims brought by them in Counts 3 and 9. 10

Even were the Court to find that the Illinois Council exception applied, these claims

would still be barred to the extent they challenge the Final Rule’s “determination of relative

values and relative value units.” 42 U.S.C. § 1395w-4(i)(1)(B). For the reasons discussed

above, those challenges are precluded by the Medicare Act’s plain text.

In Count 4, the Patient Plaintiffs allege that the LCDs arbitrarily and capriciously depart

from Agency policy without a reasoned explanation by “requir[ing] RCTs as a prerequisite for

Medicare coverage” and “impos[ing] a new definition of ‘qualified physician’ that precludes

dermatologists from delivering the Treatment.” Reply at 4. The Patient Plaintiffs argue that this

10
In a footnote in their Reply brief, Plaintiffs suggest that this Court should deem
Plaintiffs’ claims exhausted on grounds of futility. See Reply at 8 n.1. The Court need not
consider this argument, however, because Plaintiffs have not satisfied channeling’s first and non-
waivable requirement, presentment of their claim to the Secretary. See Mathews v. Eldridge, 424
U.S. 319, 328 (1976).

33
Court has jurisdiction over these claims under § 1395ff(f)(3) because “there are no material

issues of fact in dispute” and “the only issue of law is . . . that a . . . determination . . . is invalid.”

42 U.S.C. § 1395ff(f)(3)(A)–(B). The Court agrees that these APA claims present purely legal

issues that are appropriate for this Court to adjudicate. See Hays, 583 F. Supp. 2d at 66.

The Patient Plaintiffs’ first theory of this claim asserts that the MACs applied a “de facto

RCT requirement” in making the LCDs, an allegedly unexplained departure from agency

guidelines and precedent that was arbitrary and capricious. PI Mot. at 28–31. Notably, Plaintiffs

do not cite to any provision in the LCDs establishing an RCT requirement for IGSRT. The

portion of the LCDs that Plaintiffs quote appears to come from the “History/Background and

General Information” portion, and provides that “there are no prospective or randomized clinical

trials (RCTs) in the peer-reviewed literature that compare the outcomes in recurrence rates (long-

term 5 years or more, short-term less than 2 years) between MMS [Mohs] or surgical excisions

and SRT.” Final LCD at 9. But the LCD goes on to find multiple conditions in which “the use

of SRT is considered reasonable and necessary.” Id. at 10. Thus, it is unclear what Plaintiffs

mean when they characterize this language as creating a “de facto RCT requirement,” especially

with regard to IGSRT, as opposed to SRT. And while Plaintiffs assert that the “MACs’ sole

justification” for deeming IGSRT not reasonable and necessary “was the absence of RCTs or

prospective studies supporting the Treatment,” in the section with the heading “Analysis of

Evidence (Rationale for Determination),” the LCDs explained that:

from the retrospective studies cited above, there is no evidence to support that the
addition of HRUS to SRT is required for the treatment of low-risk BCC or low-risk
SCC. Comparing HRUS/SRT with prior older technology SRT does not provide
additional meaningful comparisons since newer technology machines for
delivering SRT have different energy settings and more recent published data with
SRT shows nearly equivalent recurrence rates with longer periods of follow-up. In
addition, when comparisons were made to the SRT studies without HRUS, no
corrections were made for the fact that the SRT studies without HRUS had also

34
included more aggressive lesions and histological subtypes and often larger
cutaneous tumors. The smaller more favorable lesions were more preponderant in
the retrospective IGSRT studies that were published. Therefore, the quality of
evidence is low to support the use of HRUS with SRT.

Final LCD at 22 (footnotes omitted). Thus, the MACs’ explanation of their concerns regarding

the lack of quality evidence supporting the necessity of image guidance refutes Plaintiffs’

contrary assertion that the MACs were simply imposing a new RCT requirement. 11

The Patient Plaintiffs’ second theory of this claim asserts that the MACs acted arbitrarily

and capriciously by failing to supply a reasoned analysis for their definition of “qualified

physician.” PI Mot. at 31–33. The Court disagrees. In response to a comment that IGSRT “is a

safe and effective treatment that should remain a covered Medicare benefit in dermatology

practices,” the MACs responded that “[t]he LCD does not prohibit dermatologists from

performing SRT, it expects that any provider utilizing these services has the experience and

training necessary to deliver SRT in a safe manner.” LCD Responses to Comments at 10.

Though brief, the idea that a person providing radiation therapy should have the experience and

training to deliver radiation therapy in a safe manner does not require much explanation to be

reasonable. Moreover, the LCD cited to a paper titled “Practice and Educational Gaps in

Radiation Therapy in Dermatology” and noted that “most dermatology programs do not provide

didactic or clinical experience in radiotherapy” when discussing best practices in residency

education. See Final LCD at 14 (citing Cognetta AB Jr, Wolfe CM, Goldberg DJ, Hong HG.

Practice and educational gaps in radiation therapy in dermatology. Dermatol Clin.

2016;34(3):319-333). Thus, the MACs’ decision to attempt to address those gaps in their LCDs

11
Dispelling the notion that the LCDs institute an RCT requirement also disposes of
Plaintiffs’ argument that the MACs acted arbitrarily by requiring RCTs for certain treatments but
not others. See PI Mot. at 31.

35
by requiring providers to have training in radiation therapy in order to be reimbursed for

providing radiation therapy is reasonable, even accepting that it will reduce the number of

dermatologists who may be covered to perform SRT in the near term. 12 For these reasons, the

Court concludes that Plaintiff Patients are unlikely to succeed on the merits of their APA claims

in Count 4.

In Count 9, the Patient Plaintiffs claim that the LCDs “eliminat[e] coverage for the

Treatment,” despite it being “reasonable and necessary,” and that this constitutes Agency action

“not in accordance with the law”—that is, the Medicare Act—and “in excess of statutory

jurisdiction, authority, or limitations, or short of statutory right.” Reply at 5 (quoting 5 U.S.C.

§ 706(2)(A), (C)). The Patient Plaintiffs argue that this Court has jurisdiction over this claim

under § 1395ff(f)(3), id., but the Court disagrees.

Material factual disputes preclude this Court from having jurisdiction over this claim

under § 1395ff(f)(3). Patient Plaintiffs’ arguments make that evident. For example, they argue

that “the evidence presented to Defendants during the comment period clearly demonstrated the

Treatment’s efficacy as a Cancer treatment.” Reply at 5; see also PI Mot. at 41 (arguing that the

LCD “conflicts with Agency guidance, ignores substantial peer-reviewed evidence, and flouts

thirty QIC and ALJ decisions finding the Treatment medically reasonable and necessary”). 13

12
To the extent Plaintiffs argue that “some dermatologists interpret the Agency’s
explanation of ‘qualified physician’ to mean that no dermatology residency programs provide the
required experience and training,” the LCDs acknowledgement that “most” programs do not
provide the required experience implies that some programs do, negating “some dermatologists”
interpretation. See PI Mot. at 33; Final LCD at 14; LCD Responses to Comments at 10.
13
As Defendants point out, the fact that 30 QICs and ALJs in previous individual claim
disputes concluded that IGSRT was reasonable and necessary is not compelling because
(1) those decisions were not precedential or binding on the MACs, and (2) the fact that those
appeals occurred suggests that coverage for the Treatment was not as uniform as Plaintiffs
suggest. See Defs.’ Opp’n at 32 n.3.

36
Thus, Patient Plaintiffs challenge the weight of evidence presented to the MACs when

determining whether IGSRT was “reasonable and necessary.” While Plaintiffs try to frame this

issue as a legal, statutory interpretation question, their arguments are aimed at factual

determinations; for example, Plaintiffs argue that “the Treatment is proven to be safe and

effective.” PI Mot. at 41. But that is the exact type of dispute that is better-suited for an ALJ

who can “consult with appropriate scientific and clinical experts” in assessing the validity of an

LCD. See 42 U.S.C. § 1395ff(f)(2)(A)(i)(II); Opp’n at 28. In this regard, the Court agrees with

Defendants that the “factual disputes that Plaintiffs themselves identify prevent them from

satisfying subsection (f)(3)(A).” Opp’n at 28. Unlike in Greenwald, where the court determined

that additional facts or expert opinions were not needed to determine if the LCD and NCD at

issue conflicted, here, the efficacy of a cancer treatment, particularly the necessity of additional

imaging while providing a radiation treatment, is a quintessential factual dispute for which

additional expert evidence would be illuminating. See Greenwald, 2022 WL 2046108, at *7.

And as a practical matter, if this claim presents a purely legal issue that is exempt from

the Medicare Act’s channeling and exhaustion requirements, then the Court sees no reason why

every NCD or LCD that deems any treatment not “reasonable and necessary” would not be

immediately reviewable in federal district court under § 1395ff(f)(3), removing the role of the

Agency in exercising its expertise to weigh in on these science-driven decisions. Surely the

exhaustion exception in § 1395ff(f)(3) was not meant to swallow the rule. Accordingly, the

Court concludes that Patient Plaintiffs’ claim in Count 9 involves disputed material facts, and

that this Court lacks jurisdiction to consider it.

37
In sum, for Plaintiffs’ arbitrary and capricious claims (Counts 3, 4, and 9), the Court

concludes that it lacks subject matter jurisdiction over the Entity Plaintiffs’ claims, and that the

Patient Plaintiffs’ claims are either similarly precluded or unlikely to succeed on the merits.

3. Without-Required-Procedure Claims

Under the APA, courts can also set aside agency actions found to be “without observance

of procedure required by law.” 5 U.S.C. § 706(2)(D). In Counts 5 through 8, Patient Plaintiffs

claim that the LCDs were implemented by “circumvent[ing] binding procedural requirements”

on multiple theories. See Reply at 1–2, 5–6. For each theory, Patient Plaintiffs invoke this

Court’s jurisdiction under § 1395ff(f)(3). Id. at 5–6. These four related theories all characterize

the local LCDs as national NCDs. See PI Mot. at 33–41. But Plaintiffs calling an LCD a

national policy does not make it so. As discussed below, Patient Plaintiffs are unlikely to

succeed on any of these claims.

In Count 5, the Patient Plaintiffs claim that the LCDs “establish a new substantive legal

standard governing Medicare coverage and payment for the Treatment and therefore required

formal notice and comment rulemaking under 42 U.S.C. § 1395hh(b)(1).” Reply at 5; see PI

Mot. at 33. The Court agrees that it has jurisdiction to consider this purely legal challenge under

§ 1395ff(f)(3).

The Medicare statute provides that “[n]o rule, requirement, or other statement of policy

(other than a national coverage determination) that establishes or changes a substantive legal

standard governing the scope of benefits, the payment for services, or the eligibility of

individuals, entities, or organizations to furnish or receive services or benefits under this

subchapter shall take effect unless it is promulgated by the Secretary.” 42 U.S.C. § 1395hh(a)(2)

(emphasis added). Subject to certain exceptions, “before issuing in final form any regulation

38
under subsection (a), the Secretary shall provide for notice of the proposed regulation in the

Federal Register and a period of not less than 60 days for public comment thereon.” Id.

§ 1395hh(b)(1). These provisions specifically exclude NCDs, which have their own notice-and-

comment process, including a shorter 30-day period for public comment. See id. § 1395y(l)(1)–

(4). And the Medicare Act also prescribes a process for promulgating LCDs. Id. § 1395y(l)(5).

Plaintiffs argue that the MACs were required to go through notice-and-comment

rulemaking because the LCDs established or changed a substantive legal standard. See PI Mot.

at 33; 42 U.S.C. § 1395hh(a)(2). The Ninth Circuit, which Plaintiffs state is “the only appellate

court to squarely address the issue,” PI Mot. at 34, has rejected this argument, Agendia, Inc. v.

Becerra, 4 F.4th 896, 897 (9th Cir. 2021). The Court agrees with the Ninth Circuit’s reasoning.

The court in Agendia held “that § 1395hh’s notice-and-comment requirement does not

apply to local coverage determinations” because they “do not ‘establish[] or change[] a

substantive legal standard.’” 4 F.4th at 897, 900 (quoting 42 U.S.C. § 1395hh(a)(2)). The court

explained that an LCD does not establish or change the “reasonable and necessary” standard, but

rather “guides the application of that legal standard in a particular claim adjudication.” Id.

at 900. As the court emphasized, though LCDs are controlling on a particular MAC’s claim

determinations, they do not bind other agency adjudicators. Id. “A qualified independent

contractor, an ALJ, and the Council all ultimately must apply the statutory reasonable and

necessary standard to determine whether to approve a claim.” Id. The court also based its

decision on a structural aspect of the statute: since NCDs, which are nationally binding, are

expressly exempt from § 1395hh(a)(2)’s more formal notice-and-comment rulemaking

requirements and are subject to a shorter notice-and-comment process, it would make little sense

39
to subject LCDs, “which are not binding, to a more demanding procedure than their national,

binding counterparts.” Id.

The court also rejected Agendia’s argument based on Azar v. Allina Health Services, 587

U.S. 566 (2019). Id. at 901–02. In Allina, the Supreme Court explained that “substantive legal

standard” as used in § 1395hh(a)(2) is not equivalent to the term “substantive rule” in the APA,

such that the APA’s exemption of interpretive rules from notice and comment does not apply in

the Medicare context. See Allina, 587 U.S. at 579. That holding was beside the point in

Agendia, however, because regardless of whether the LCDs were interpretive, they merely

guided application of the already-established “reasonable and necessary” standard, so they did

not require notice and comment. See Agendia, 4 F.4th at 902.

Patient Plaintiffs reprise many of the arguments rejected in Agendia. See PI Mot. at 33–

34. Though Plaintiffs suggest that the LCDs are somehow binding beyond the MACs, they back

off that assertion and clarify that LCDs are only “afforded ‘substantial deference’ by QICs,

ALJs, and the Appeals Council in later appeals.” Id. at 33 (citing Porzecanski v. Azar, 943 F.3d

472, 480 (D.D.C. 2019)). The case they cite supports that LCDs are not binding and thus do not

establish or change the “reasonable and necessary” standard. See Porzecanski, 943 F.3d at 480

(“An LCD is also binding only at the initial determination stage and does not dictate the qualified

independent contractor’s reconsideration decision.” (citing 42 U.S.C. § 1395ff(c)(3)(B)(ii)(II)));

id. (“Likewise, notwithstanding LCDs are afforded ‘substantial deference . . . if they are

applicable to a particular case,’ ALJs and the Council are not bound to follow the determination

made by the issuing contractor.” (alteration in original) (quoting 42 C.F.R. § 405.1062(a))).

Thus, the lack of ability to bind the Agency further supports the Court’s conclusion that these

40
LCDs did not establish or change a substantive legal standard, and so did not require notice-and-

comment. Thus, the Patient Plaintiffs are not likely to succeed on the merits of Count 5.

In Count 6, Patient Plaintiffs assert, in the alternative to Count 5, that the LCDs “operate

as a de facto NCD without following the required procedures for promulgating an NCD.” Reply

at 5; see PI Mot. at 34–36. In Count 7, the Patient Plaintiffs further challenge the LCDs as “de

facto NCDs issued without following the required [Coverage with Evidence Development] CED

framework.” Reply at 6; see PI Mot. at 36–37. The Court limits its analysis to the purely legal

issues raised by these claims. See 42 U.S.C. § 1395ff(f)(3).

These claims both hinge on the casting of the LCDs as “de facto NCDs.” This argument

falls apart quickly. First, a “national coverage determination” is “a determination by the

Secretary with respect to whether or not a particular item or service is covered nationally under

this subchapter.” Id. § 1395y(l)(6)(A). Here, the LCDs are determinations neither made by the

Secretary nor regarding national coverage. While Plaintiffs assert that the LCDs “impact over

59% of Medicare claims, [and] 9 of the 12 Medicare MACs,” PI Mot. at 35, that is not

nationwide coverage. Further, the Court is not even persuaded that coordinated LCDs affecting

every MAC would constitute NCDs just because they actually had nationwide applicability,

because they would still not be determinations made “by the Secretary.” See 42 U.S.C.

§ 1395y(l)(6)(A).

Though the statutory scheme explicitly provides for the Secretary to “evaluate new local

coverage determinations to determine which determinations should be adopted nationally,” id.

§ 1395y(l)(5)(A), the Secretary has made no such determination here. Similarly, the Agency

may have had the authority to initiate a CED process, but Plaintiffs fail to identify any source of

law requiring the Agency to do so. In fact, Plaintiffs cite no case law at all to support their CED

41
theory. Even if the LCDs are the result of “a coordinated lobbying effort . . . to effectuate a

change to national coverage policy,” PI Mot. at 35–36, that too does not make them national

coverage determinations of the Secretary. Plaintiffs assert, without any citation, that “[w]hen

multiple identical Final LCDs and Billing Articles act in tandem with an Agency MPFS Rule, a

uniform national coverage policy is created.” Id. at 36. Again, Plaintiffs do not explain how the

combination of these developments makes a non-binding local determination a binding national

one. Just as an agency’s labeling of its actions is not conclusive, cf. Pros. & Patients for

Customized Care v. Shalala, 56 F.3d 592, 596 (5th Cir. 1995), neither is Plaintiffs’. Rather, the

Court “must adhere to this plain language in the Medicare Act” and conclude that Patient

Plaintiffs have not challenged an NCD, so their claims in Counts 6 and 7 related to procedures

required for NCDs are unlikely to succeed. See Henry, 518 F. Supp. 3d at 529.

In Count 8, the Patient Plaintiffs claim that the LCDs “extend[]” the Final Rule “in an

arbitrary and capricious manner.” 14 Reply at 6. Plaintiffs assert that the LCDs are arbitrary and

capricious because “the MACs acted at the Agency’s direction” and represent “a blatant Agency

attempt to circumvent the APA.” PI Mot. at 37. The Court concludes that it lacks jurisdiction to

hear this claim.

Plaintiffs argue that “the Agency has made a policy determination to remove coverage,”

but do not explain what they mean by “remove coverage,” and appear to refer to reasoning in the

Final Rule, not the LCDs. PI Mot. at 38. But then, Plaintiffs all but admit that the Final Rule did

not deny coverage when they assert that “the Agency had the MACs initiate the Final LCDs and

the Billing Articles, rather than follow the proper process for effectuating billing changes.” Id.

14
The Court notes that Plaintiffs refer to this action as arbitrary and capricious, but group
this claim with their other procedural claims. See Reply at 1–6.

42
Though Plaintiffs’ arguments in this discussion lacks clarity, they appear to focus in substance

on the Final Rule establishing new RVUs, which, as discussed above, this Court lacks

jurisdiction to review. See id. at 37–41; 42 U.S.C. § 1395w-4(i)(1)(B).

To the extent this claim challenges Agency action beyond the Final Rule’s RVUs, the

Court lacks jurisdiction under § 1395ff(f)(3). First, the Court agrees with Defendants that

§ 1395ff(f)(3) provides jurisdiction to challenge only NCDs and LCDs, not any final rule. See

42 U.S.C. § 1395ff(f)(3); Opp’n at 26. Second, Patient Plaintiffs’ allegations in this claim raise

material factual disputes. Plaintiffs’ Complaint repeatedly alleges that the MACs acted “at the

agency’s direction” or that the “Agency directed the MACs to issue” the LCDs. See, e.g.,

Compl. ¶¶ 247–49, 251, 255. But Plaintiffs offer nothing but conclusory allegations of

coordination. To refute those assertions, Defendants submitted a declaration 15 of a Contractor

Medical Director for one of the MACs who oversaw the workgroup responsible for developing

the LCDs. Perez Decl. ¶ 11, ECF No. 17-2 (“Neither the Secretary of Health and Human

Services nor CMS instructed us to issue the proposed or final local coverage determinations, the

responses to comments, or the related billing and coding articles that implement the

determinations.”). In addition to disputing that the Secretary directed the LCDs, his declaration

also explains that two MACs “did not participate, nor, to date, have they issued any local

coverage determinations regarding the use of high resolution ultrasound in connection with the

15
Plaintiffs argue that the Court should not consider this declaration because it was not
before the Agency when it made its decisions. See Reply at 23–24. “The D.C. Circuit has,
however, endorsed review of extra-record materials ‘in cases where relief is at issue, especially
at the preliminary injunction stage.’” See Conserve Sw. Utah v. U.S. Dep’t of the Interior,
No. 26-cv-317, 2026 WL 569034, at *19 n.7 (D.D.C. Mar. 1, 2026) (quoting Esch v. Yeutter, 876
F.2d 976, 991 (D.C. Cir. 1989)). And because Plaintiffs put the question of Agency direction
and coordination at issue before the Administrative Record has been prepared, the Court finds it
appropriate to consider this declaration.

43
provision of superficial radiation therapy.” Id. ¶ 8. Thus, there is a factual dispute as to whether

these actions were coordinated or national in scope, which appears material based on Plaintiffs’

theory that these actions were part of a conspiracy to thwart the procedural safeguards of the

Medicare Act and APA. As a result, this Court lacks jurisdiction. In sum, the Court concludes

that none of Patient Plaintiffs’ procedural claims (Counts 5–8) is likely to succeed on the merits.

***

Ultimately, the Court concludes that Plaintiffs have failed to show that they are likely to

succeed on the merits of any of their claims. “[U]pon finding that a plaintiff has failed to show a

likelihood of success on the merits, the Court may deny a motion for preliminary injunction

without analyzing the remaining factors.” Smith v. Henderson, 944 F. Supp. 2d 89, 96 (D.D.C.

2013); see also Ark. Dairy Coop. Ass’n v. USDA, 573 F.3d 815, 832 (D.C. Cir. 2009) (explaining

that the court “need not proceed to review the other three preliminary injunction factors” where

plaintiffs had not shown a likelihood of success on the merits). The Court will accordingly deny

Plaintiffs’ motion on this ground without reaching the other factors.

V. CONCLUSION

For the foregoing reasons, Plaintiffs’ Motion for Stay and Preliminary and Permanent

Injunction (ECF Nos. 11, 14) is DENIED; and Plaintiffs’ Sealed Motion for Leave to File Under

Seal Portions of Plaintiffs’ Motion and Select Exhibits (ECF No. 10) is GRANTED. An order

consistent with this Memorandum Opinion is separately and contemporaneously issued.

Dated: April 10, 2026 RUDOLPH CONTRERAS
United States District Judge

44

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Source: Frix Law Library, https://www.frixlaw.com/law-library/cases/11308263. Public record. Not legal advice.