Ardelyx, Inc. v. Robert F. Kennedy Jr.

United States Court of Appeals

FOR THE DISTRICT OF COLUMBIA CIRCUIT

Argued September 25, 2025 Decided June 26, 2026

No. 24-5290

ARDELYX, INC., ET AL.,

APPELLANTS

v.

ROBERT F. KENNEDY, JR., SECRETARY OF HEALTH AND

HUMAN SERVICES, ET AL.,

APPELLEES

Appeal from the United States District Court

for the District of Columbia

(No. 1:24-cv-02095)

Michael E. Bern argued the cause for appellants. With him

on the briefs were James E. McCollum, Jr., Amit K. Sharma,

Christine C. Smith, Alexander G. Siemers, Delia Tasky, and

Nicholas L. Schlossman.

Caroline D. Lopez, Attorney, U.S. Department of Justice,

argued the cause for appellees. With her on the brief were

Yaakov M. Roth, Acting Assistant Attorney General, Michael

S. Raab, Attorney, and David L. Hoskins, Deputy Associate

General Counsel for Litigation, U.S. Department of Health and

Human Services. Anna O. Mohan, Attorney, U.S. Department

of Justice, entered an appearance.

2

Before: CHILDS and PAN, Circuit Judges, and GINSBURG,

Senior Circuit Judge.

Opinion for the Court filed by Senior Circuit Judge

GINSBURG.

GINSBURG, Senior Circuit Judge: In 2008 the Congress

directed the Secretary of Health and Human Services to

“implement a payment system” that would provide a “single

payment” for the reimbursement of “renal dialysis services”

under Medicare, a federal health insurance program. See

42 U.S.C. § 1395rr(b)(14)(A)(i). In 2010 the Secretary, acting

through the Centers for Medicare & Medicaid Services,

defined “renal dialysis services” to include drugs with “only an

oral form” — i.e., oral-only drugs — furnished for the treat-

ment of end-stage renal disease. 42 C.F.R. § 413.171(3)

(2011). In 2024 the CMS identified XPHOZAH, an oral-only

drug manufactured by Ardelyx, Inc., as a renal dialysis service

covered by the new payment system starting on January 1,

2025. Before then, XPHOZAH, along with other orally admin-

istered drugs, had been reimbursed separately from the bundled

payment under Medicare Part D.

Ardelyx, together with a healthcare research and advocacy

organization and an organization representing the interests of

kidney patients, challenged the CMS’s definition of “renal

dialysis services” as including oral-only drugs and the identifi-

cation of XPHOZAH as a renal dialysis service. * The district

court dismissed Ardelyx’s complaint for lack of jurisdiction on

the ground that the challenged actions were “identification[s]

of renal dialysis services” within the meaning of 42 U.S.C.

*

The Department of Health and Human Services, the Secretary of

Health and Human Services, the CMS, and the Administrator of the

CMS are all defendants and appellees in this lawsuit. For simplicity

we refer to them collectively as the CMS.

3

§ 1395rr(b)(14)(G), which bars judicial review of such actions

by the Secretary. Ardelyx, Inc. v. Becerra (Ardelyx I), 757 F.

Supp. 3d 37, 46-47 (D.D.C. 2024). We agree and affirm the

dismissal of Ardelyx’s complaint.

I. Background

End-stage renal disease (ESRD) is a form of chronic

kidney disease in which an individual’s kidneys can no longer

function on their own. Patients with ESRD who do not receive

a kidney transplant will die unless they receive dialysis treat-

ment several times per week. Medicare covers the cost of dial-

ysis for patients suffering from ESRD. See 42 U.S.C. §§ 426-

1, 1395rr(a).

A. Statutes and Regulations

In 1981 the Congress established a prospective payment

system for the reimbursement of renal dialysis services in order

to curb runaway costs. See Omnibus Budget Reconciliation Act

of 1981, Pub. L. No. 97-35, § 2145, 95 Stat. 357, 799-800.

Under this system, renal dialysis facilities and other providers

of renal dialysis services would receive a prospective payment

per treatment at a prescribed rate, regardless of their actual

costs. See 48 Fed. Reg. 21254, 21260/3 (1983). This payment

covered services including “routinely provided drugs, labora-

tory tests, and supplies.” 75 Fed. Reg. 49030, 49032/1 (2010).

A facility could retain any amount of the prospective payment

that exceeded its actual costs. 48 Fed. Reg. at 21261/1. Certain

items, such as erythropoiesis stimulating agents (ESAs), orally

administered drugs, and most injectable drugs were reimbursed

separately under Medicare Parts B or D.

The Congress believed this system would “encourage the

more efficient delivery of dialysis services.” 42 U.S.C.

§ 1395rr(b)(7). The system, however, also gave facilities an

4

incentive to use the separately reimbursed items to treat ESRD

because doing so allowed them to increase their total reim-

bursement. By 2010 these separately reimbursed items

accounted for “40 percent of total spending for outpatient

maintenance dialysis.” 75 Fed. Reg. at 49032/2.

In order to bring that spending under control, the Congress

enacted the Medicare Improvements for Patients and Providers

Act of 2008, Pub. L. No. 110-275, § 153, 122 Stat. 2494, 2553.

The MIPPA instructed the Secretary to “implement a payment

system under which a single payment is made under this sub-

chapter to a provider of services or a renal dialysis facility for

renal dialysis services (as defined in subparagraph (B)) in lieu

of any other payment.” 42 U.S.C. § 1395rr(b)(14)(A)(i).

Subparagraph (B), § 1395rr(b)(14)(B), defines “renal dialysis

services” as follows:

5

For purposes of this paragraph, the term “renal

dialysis services” includes--

(i) items and services included in the

composite rate for renal dialysis

services as of December 31, 2010;

(ii) erythropoiesis stimulating agents

and any oral form of such agents that

are furnished to individuals for the

treatment of end stage renal disease;

(iii) other drugs and biologicals that are

furnished to individuals for the

treatment of end stage renal disease

and for which payment was (before

the application of this paragraph)

made separately under this

subchapter, and any oral equivalent

form of such drug or biological; and

(iv) diagnostic laboratory tests and other

items and services not described in

clause (i) that are furnished to

individuals for the treatment of end

stage renal disease. †

Subparagraph (B) goes on to exclude vaccines from the defini-

tion of “renal dialysis services.”

The Congress also limited review of the Secretary’s

actions with respect to the services covered by the new pay-

ment system. As relevant here, the Congress provided that

†

For consistency with the district court’s opinion, we refer to these

categories as “subparts” of subparagraph (B).

6

“[t]here shall be no administrative or judicial review” of the

Secretary’s “identification of renal dialysis services included in

the bundled payment.” Subparagraph (G).

In 2009 the CMS published a notice of proposed rulemak-

ing to implement the new prospective payment system. See

74 Fed. Reg. 49922. The CMS explained that it believed sub-

part (B) (iii) required it to include in the bundled payment “all

drugs and biologicals formerly payable under either Medicare

Part B or Part D used to treat ESRD, regardless of the route of

administration,” one effect of which was to include oral-only

drugs. Id. at 49928/2-3. The CMS acknowledged that one could

read “any oral equivalent form of such drug or biological” at

the end of subpart (B)(iii) as “limit[ing] the scope of the drugs

and biologicals included in the bundle to only oral versions of

injectables (or other non-oral routes of administration).” Id. at

49928/3. Still, the CMS rejected that reading as “unduly

constrained” because it would undermine the Congress’s intent

to include “all renal dialysis services furnished to ESRD

patients in a comprehensive payment bundle.” Id. The CMS

alternatively invoked subpart (B)(iv), which covers “other

items and services not covered in [subpart (B)] (i),” to support

its inclusion of oral-only drugs in the bundled payment. Id.

In 2010 the CMS published the final rule implementing the

bundled payment system. 75 Fed. Reg. 49030. In response to

the “[m]any comments” it had received disagreeing with its

reading of “renal dialysis services” to include oral-only drugs,

see id. at 49038/2, the agency explained its view that the refer-

ence to oral equivalents in subpart (B)(iii) “pertains to the oral

versions of injectable drugs.” Id. at 49039/1. The CMS con-

strued the reference earlier in subpart (B)(iii) to “other drugs

[covered] under this [subchapter]” as including oral-only drugs

in the definition of “renal dialysis services.” Id. (cleaned up).

In case the agency was wrong about the scope of subpart

7

(B)(iii), it again invoked subpart (B)(iv) in further support of

its decision, characterizing that subpart as a “residual or catch

all category for drugs which do not fall under the scope of those

specified renal dialysis services identified” in subparts (ii) and

(iii). Id. As a result, the final rule defines “renal dialysis

services” reimbursed under the bundled payment to include:

Other drugs and biologicals that are furnished to

individuals for the treatment of ESRD and for

which payment was (prior to January 1, 2011)

made separately under Title XVIII of the Act

(including drugs and biologicals with only an

oral form).

42 C.F.R. § 413.171(3).

The CMS set an effective date of January 1, 2014 for the

inclusion of oral-only drugs in the bundled payment to allow

facilities, providers, pharmacies, and Medicare Part D plans to

make necessary adjustments. 75 Fed. Reg. at 49044/1. Before

the regulation went into effect, the Congress thrice delayed

implementation of the bundled payment with respect to oral-

only drugs, making the effective date January 1, 2025. See

American Taxpayer Relief Act of 2012, Pub. L. No. 112-240,

§ 632(b), 126 Stat. 2313, 2354 (2013) (delaying implementa-

tion until January 1, 2016); Protecting Access to Medicare Act

of 2014, Pub. L. No. 113-93, § 217(a), 128 Stat. 1040, 1061

(extending the delay until January 1, 2024); Achieving a Better

Life Experience Act of 2014, Pub. L. No. 113-295, § 204, 128

Stat. 4010, 4065 (extending the delay until January 1, 2025).

Along the way, the Congress also imposed other requirements

related to the inclusion of oral-only drugs in the bundled pay-

ment. See § 632(b), 126 Stat. at 2354 (ordering the CMS to

monitor the bone and mineral metabolism in ESRD patients

“[w]ith respect to the implementation of oral-only ESRD-

8

related drugs in the ESRD prospective payment system”);

§ 632(d), 126 Stat. at 2354-55 (directing the Government

Accountability Office to report on “the Secretary’s

preparations to implement payment for oral-only ESRD-

related drugs in the bundled prospective payment system”);

§ 217(d)(3), 128 Stat. at 1062-63 (requiring the CMS to

establish performance measures for facilities regarding the

quality of patient care “that are specific to the conditions

treated with oral-only drugs”).

B. The Identification of XPHOZAH

XPHOZAH is an oral-only drug manufactured by Ardelyx

to treat hyperphosphatemia, a condition characterized by an

abnormally high level of phosphate in the blood. Advanced

kidney failure is the leading cause of hyperphosphatemia,

which occurs in 80% of ESRD patients on maintenance dialy-

sis. Patients with ESRD may begin treating hyperphosphatemia

with phosphate binders, which prevent phosphate from enter-

ing the bloodstream by attaching to phosphate in the

gastrointestinal tract. Of those patients with ESRD on mainte-

nance dialysis who have hyperphosphatemia, however, 70%

experience an inadequate response to phosphate binders and

cannot maintain their target phosphate level.

In a declaration filed in support of its motion for a prelim-

inary injunction, Ardelyx describes XPHOZAH as a “novel

treatment option” for those patients. XPHOZAH blocks phos-

phate from entering the bloodstream through a different

mechanism of action than phosphate binders. According to its

FDA-approved label, XPHOZAH is indicated for use only by

“adults with chronic kidney disease . . . on dialysis as add-on

therapy in patients who have an inadequate response to phos-

phate binders or who are intolerant of any dose of phosphate

binder therapy.” The label also tells prescribers to “[i]nstruct

9

patients not to take XPHOZAH right before a hemodialysis

session.”

In August 2023 — with the inclusion of oral-only drugs in

the bundle still more than a year away — Ardelyx submitted a

letter to the CMS asking it to continue excluding oral-only

drugs such as XPHOZAH from the definition of “renal dialysis

services” beyond January 1, 2025. Two months later,

XPHOZAH received FDA approval and first became available

to patients. XPHOZAH was initially covered under Medicare

Part D and reimbursed separately from the bundled payment.

On May 13, 2024 the CMS notified Ardelyx that it had

“identified XPHOZAH™ [as] a renal dialysis service under

42 C.F.R. 413.171, because it is furnished to individuals to

treat a condition associated with ESRD and is essential to the

delivery of maintenance dialysis.” The letter informed Ardelyx

that XPHOZAH would be included in the bundled payment for

renal dialysis services beginning January 1, 2025.

C. Procedural History

On July 17, 2024 Ardelyx and the other appellants filed

suit challenging both (1) the CMS’s rule defining “renal

dialysis services” to include oral-only drugs furnished for the

treatment of ESRD, 42 C.F.R. § 413.171(3), and (2) the CMS’s

identification of XPHOZAH as a “renal dialysis service”

included in the bundled payment. Ardelyx alleged these actions

were arbitrary and capricious, an abuse of discretion, not in

accordance with law, violative of statutory right, and in excess

of the CMS’s statutory authority, in violation of the

Administrative Procedure Act, 5 U.S.C. § 706(2)(A), (C). The

CMS moved to dismiss the complaint, arguing that sub-

paragraph (14)(G) deprived the district court of authority to

review the challenged actions. Ardelyx then moved for a

10

preliminary injunction or, alternatively, for expedited summary

judgment.

The district court granted the CMS’s motion to dismiss.

Ardelyx I, 757 F. Supp. 3d at 41. The district court first

explained that in order to determine whether the bar to judicial

review in subparagraph (14)(G) precluded it from reviewing

the challenged actions, it had to determine whether the disputed

actions were of the sort subparagraph (14)(B) authorized the

Secretary to take. Id. at 48. The district court concluded they

were.

The court first determined that defining “renal dialysis

services” to include oral-only drugs was an “identification”

within the meaning of the bar to judicial review in subpara-

graph (G), id. at 47, and was consistent with the definition of

“renal dialysis services” in subparagraph (B), id. at 52-56.

Specifically, the district court held that subpart (B)(iii)

“directly incorporates into ‘renal dialysis services’ oral-only

drugs by covering ‘drugs and biologicals,’ other than ESAs,

that were previously reimbursed separately from the bundle.”

Id. at 52. The court also read subparagraph (B), which lists four

types of things included in the definition of “renal dialysis

services,” as providing a non-exhaustive definition of that term.

Id.

The district court next determined the CMS had the

authority to identify XPHOZAH as a “renal dialysis service.”

The district court reasoned that XPHOZAH was furnished “for

the treatment of” ESRD because it treats a condition “caused

by or at least closely associated with kidney disease.” Id. at 58.

Having thus held the CMS had acted within its statutory

authority, the district court did not consider Ardelyx’s other

arguments. Id.

11

Ardelyx moved to alter or amend the judgment or, alterna-

tively, for an injunction pending appeal. The district court

denied that motion. Ardelyx, Inc. v. Becerra (Ardelyx II),

No. 24-cv-2095, 2024 WL 5186613 (D.D.C. Dec. 20, 2024).

Ardelyx filed a timely notice of appeal and sought an injunction

pending appeal, which we denied. As a result, the challenged

portion of the rule went into effect on January 1, 2025, and

XPHOZAH was included in the bundled payment.

II. Analysis

We review the district court’s dismissal of Ardelyx’s com-

plaint de novo. See Amgen, Inc. v. Smith, 357 F.3d 103, 108

(D.C. Cir. 2004). On questions of statutory interpretation, this

court “must exercise [its] independent judgment in deciding

whether an agency has acted within its statutory authority.”

Loper Bright Enters. v. Raimondo, 603 U.S. 369, 412 (2024).

A. The Judicial-Review Provision, Subparagraph (14)(G)

Ardelyx challenges the Secretary’s inclusion of oral-only

drugs generally, and XPHOZAH specifically, in the bundled

payment for renal dialysis services. At the outset, we must

determine the scope of our authority to review the challenged

actions. Recall that subparagraph (14)(G) bars judicial review

of “the identification of renal dialysis services included in the

bundled payment.” According to the CMS, we lack the author-

ity to review the challenged actions because they are

“identification[s] of renal dialysis services” within the meaning

of (14)(G). Ardelyx argues that (14)(G) does not cover the

challenged actions because the CMS lacked authority to take

those actions.

“We begin with the strong presumption that Congress

intends judicial review of administrative action.” Bowen v.

Mich. Acad. of Fam. Physicians, 476 U.S. 667, 670 (1986).

12

This presumption is “particularly strong” where, as here, a

party claims an agency has acted “in excess of delegated

authority.” Amgen, 357 F.3d at 111. As we have explained, the

Congress “rarely intends to foreclose review of action exceed-

ing agency authority.” Id. at 112. To overcome the

presumption, the party invoking the purported bar to judicial

review must provide “clear and convincing evidence that

Congress intended to preclude the suit.” Id. at 111 (cleaned up);

cf. McLaughlin Chiropractic Assocs., Inc. v. McKesson Corp.,

606 U.S. 146, 159 (2025) (“When Congress wants to bar a

district court in an enforcement proceeding from reviewing an

agency’s interpretation of a statute, Congress can and must say

so”). Most relevant here, the presumption can be overcome by

“specific language” evincing a “congressional intent to

preclude judicial review.” Ascension Borgess Hosp. v. Becerra,

61 F.4th 999, 1003 (D.C. Cir. 2023) (cleaned up).

At first blush, (14)(G) seems to be precisely that. It simply

says there “shall be no administrative or judicial review” of

“the identification of renal dialysis services included in the

bundled payment.” As the district court observed, “[t]his

stripping of judicial review . . . could not be clearer.” Ardelyx

I, 757 F. Supp. 3d at 47.

As the district court also realized, however, the judicial

inquiry does not end there. A “jurisdiction-stripping provision

does not apply if the agency’s action fails to qualify as the kind

of action for which review is barred.” Am. Hosp. Ass’n v. Azar,

964 F.3d 1230, 1238 (D.C. Cir. 2020) (cleaned up).

Consequently, in order “to determine whether the judicial-

review bar applies in this case, we must decide whether the

challenged agency action[s]” are the sort of actions shielded

from review by (14)(G). Id.

13

We have previously applied this approach to another bar

to judicial review involving prospective payments under

Medicare. In 42 U.S.C. § 1395l(t)(12)(A), the Congress

provided that “[t]here shall be no administrative or judicial

review” of “the establishment of . . . other adjustments, and

methods described in paragraph 2(F).” In Amgen we consid-

ered whether we had authority to review a challenge to a rule

adjusting certain rates under Medicare Part B. 357 F.3d at 106-

08. The CMS said it made the adjustments under

§ 1395l(t)(2)(E), which authorized it to establish “other

adjustments as determined to be necessary to ensure equitable

payments.” Id. at 107. The CMS argued that subparagraph

(12)(A) barred judicial review of the adjustments. Before

dismissing the complaint, we had first to determine whether the

equitable adjustments authorized by subparagraph (2)(E)

qualified as “other adjustments” for purposes of the bar to

judicial review in (12)(A) and, if so, whether (2)(E) authorized

the Secretary to make the challenged adjustments. Id. at 111.

These determinations were necessary, we explained, because

the bar to judicial review “prevent[ed] review only of those

‘other adjustments’ that the Medicare Act authorizes the

[CMS] to make.” Id. at 112.

Similarly, in American Hospital Association we consid-

ered whether we had authority to review a challenge to a rate

reduction implemented by the Department of Health and

Human Services for a particular outpatient service. 964 F.3d at

1237. The agency had implemented the reduction pursuant to

§ 1395l(t)(2)(F), which authorized it to “develop a method for

controlling unnecessary increases in the volume of covered

[outpatient] services.” Id. at 1235. HHS again invoked the bar

to judicial review in (12)(A), which precludes review of “the

establishment of . . . methods described in paragraph (2)(F).”

Id. at 1237. The agency asked us to “dispose of the case on that

basis at the threshold without examining HHS’s authority to

14

implement the rate reduction.” Id. at 1237-38. We declined,

noting that the premise of the plaintiffs’ claim was that the chal-

lenged reduction was “not a ‘method described in paragraph

(2)(F)’ within the meaning of the statute.” Id. at 1238 (cleaned

up). Pursuant to the reasoning in Amgen, we held (12)(A)

barred us from reviewing the reduction only if it “qualified as

a ‘method for controlling unnecessary increases in volume’

under subparagraph (2)(F).” Id. at 1238-39 (cleaned up). We

then proceeded to consider that question. See id. at 1239-45.

The same reasoning applies here. Ardelyx claims the CMS

exceeded its statutory authority by including oral-only drugs,

including XPHOZAH, in the payment bundle. In order to

determine whether we have authority to review Ardelyx’s

claims, we must decide whether the agency’s actions qualify as

an “identification of renal dialysis services” within the mean-

ing of the bar to judicial review in subparagraph (14)(G). This,

in turn, requires us to consider the meaning of “renal dialysis

services” in subparagraph (14)(B).

The CMS insists we need not look past subparagraph

(14)(G) in order to dismiss Ardelyx’s challenge. According to

the CMS, the only question is whether the CMS purported to

identify or to “recognize” a drug as a renal dialysis service,

which it indisputably did in the May 13, 2024 letter to Ardelyx.

Needless to say, the CMS’s authority to include a particular

drug in the bundled payment does not turn upon its say-so.

Indeed, we have previously described this as a “preposterous

position” because a “bald assertion of power by an agency

cannot legitimize it.” COMSAT Corp. v. FCC, 114 F.3d 223,

227 (1997) (cleaned up); see Amgen, 357 F.3d at 113-14

(relying upon COMSAT to determine the scope of the bar to

judicial review); Am. Hosp., 964 F.3d at 1238 (same).

“Otherwise, agencies could characterize reviewable or

unauthorized action as falling within the scope of no-review

15

provisions whose application to such action Congress did not

intend.” Amgen, 357 F.3d at 113.

We are also unpersuaded by the CMS’s attempt to distin-

guish the reasoning of Amgen and American Hospital

Association. The CMS claims the bar to judicial review in those

cases expressly cross-referenced another provision, and

reasons that we needed to consider the cross-referenced provi-

sions only to determine the scope of the bar. Because (14)(G)

does not cross-reference any other provision, the agency says,

we need not look elsewhere.

As an initial matter, the CMS’s description of the bar to

judicial review we encountered in Amgen and in American

Hospital Association is not entirely accurate. Although that

provision included a specific cross-reference for “methods,” it

did not include one for “other adjustments” — the term at issue

in Amgen. Even without an applicable cross-reference, we

observed the use of “other adjustments” in the bar to judicial

review “matches the language . . . in § 1395l(t)(2)(E),

implying that Congress intended to reference adjustments

made pursuant to that subsection.” 357 F.3d at 113.

In this case, the CMS’s argument fails for a simpler reason:

The Congress expressly tied the bar to judicial review in

(14)(G) to the definition of “renal dialysis services” in (14)(B)

by defining that term “[f]or purposes of this paragraph” — i.e.,

paragraph (14). As the district court observed, this “obviate[s]

a need for an additional express link in” (14)(G) because that

provision also refers to “renal dialysis services.” Ardelyx I,

757 F.3d at 50. The term “renal dialysis services” has the same

meaning in both provisions, so we must look to the definition

in (14)(B) to determine the scope of (14)(G).

To be sure, this approach may “merge consideration of the

legality of the [agency]’s action with consideration of this

16

court’s jurisdiction.” COMSAT, 114 F.3d at 227 (cleaned up).

Here, for example, the question whether the CMS exceeded its

authority by including oral-only drugs and XPHOZAH in the

bundled payment coincides with the question whether each of

those actions qualifies as an “identification of renal dialysis

services.” This inquiry does not, however, render the judicial-

review bar irrelevant. That bar “still forecloses inquiry into

whether the challenged agency decision is arbitrary, capricious,

or procedurally defective.” Am. Hosp., 964 F.3d at 1239

(cleaned up). If the CMS acted within its authority by including

oral-only drugs and XPHOZAH in the bundled payment, then

we lack authority to review whether those actions were

“reasonable and reasonably explained,” as required by the

APA. FCC v. Prometheus Radio Proj., 592 U.S. 414, 423

(2021). We review the merits of Ardelyx’s challenge, there-

fore, only “to the extent necessary to determine whether the

challenged agency actions fall within the scope of the preclu-

sion of judicial review.” Amgen, 357 F.3d at 113 (cleaned up).

B. Ardelyx’s Challenge to the Regulation, 42 C.F.R.

§ 413.171(3)

In this section we consider whether the CMS’s inclusion

of oral-only drugs in the bundled payment constitutes an

“identification of renal dialysis services.” Subparagraph

(14)(G). ‡ Recall that the CMS has defined “renal dialysis

services” to include drugs furnished for the treatment of ESRD

that have “only an oral form.” 42 C.F.R. § 413.171(3). Ardelyx

‡

The CMS erroneously implies that Ardelyx’s complaint did not

challenge the regulation defining “renal dialysis services” to include

oral-only drugs. Ardelyx’s complaint plainly challenges

§ 413.171(3). See Compl. ¶¶ 212-15 (arguing the CMS’s

promulgation of § 413.171(3) was “arbitrary, capricious, an abuse of

discretion, not in accordance with law, in excess of statutory

jurisdiction and authority, and short of statutory right”).

17

offers two reasons the bar to judicial review does not preclude

its challenge to this aspect of the rule. First, Ardelyx argues the

CMS’s promulgation of the rule was not an “identification” for

purposes of subparagraph (14)(G). Second, Ardelyx claims the

definition of “renal dialysis services” does not include oral-

only drugs, so the CMS lacks authority to include such drugs

in the bundled payment.

1. “Identification”

Ardelyx asserts that an “identification” within the bar to

review in (14)(G) means the selection of a particular drug

rather than a category of drugs. Because 42 C.F.R.

§ 413.171(3) speaks of a category, Ardelyx argues (14)(G)

does not preclude us from reviewing its challenge to the

regulation.

The statute does not define “identification,” so we give

that term its ordinary meaning. Taniguchi v. Kan Pacific

Saipan, Ltd., 566 U.S. 560, 566 (2012). The parties offer sev-

eral definitions of “identify.” The CMS refers us to the Oxford

English Dictionary, which defines to “identify” as to

“recognize as belonging to a particular category or kind.”

Ardelyx points to the Merriam-Webster Dictionary, where to

“identify” means to “state the identity of . . . something,” and

to the Federal Circuit, which has defined to “identify” as to

“recognize or establish an object as being a particular thing,”

Apple Inc. v. Omni MedSci, Inc., No. 2023-1034, 2024 WL

3084509, at *5 (June 21, 2024); see also Ardelyx I, 757 F.

Supp. 3d at 47 (defining to “identify” as to “recognize

something and say or prove what that thing is” (cleaned up)).

Each of these definitions is broad enough to cover the

CMS’s determination that oral-only drugs furnished for the

treatment of ESRD qualify as renal dialysis services. The CMS

has recognized something (oral-only drugs furnished for the

18

treatment of ESRD) as being a particular thing or as belonging

to a particular category, namely, renal dialysis services. The

CMS’s promulgation of the regulation thus fits comfortably

within the meaning of “identification” in (14)(G). Nothing in

the statute or in the definitions offered by Ardelyx supports its

narrower reading, which would preclude the CMS from mak-

ing categorical determinations about which drugs to include in

the bundle.

A contrary conclusion would too easily allow a plaintiff to

circumvent subparagraph (G) and challenge the inclusion of a

particular drug in the bundle. As the CMS notes, Ardelyx does

not challenge the regulation “in a vacuum”; it also challenges

the inclusion of XPHOZAH in the bundle “consistent with this

regulation.” Ardelyx does not argue that the May 13, 2024

letter selecting XPHOZAH for the bundle was not an

“identification.” Under Ardelyx’s reading of “identification,”

however, “almost any challenge to an [identification of a

particular drug] could be recast as a challenge to [the]

underlying [regulation],” DCH Reg. Med. Ctr. v. Azar,

925 F.3d 503, 506 (D.C. Cir. 2019), an artful dodge we cannot

allow. Accord Palisades Gen. Hosp. Inc. v. Leavitt, 426 F.3d

400, 405 (D.C. Cir. 2005) (“[W]hen a procedure is challenged

solely in order to reverse an individual . . . decision” covered

by a bar to judicial review, “judicial review is not permitted”).

For this reason, the CMS argues we lack jurisdiction to

consider Ardelyx’s challenge to the regulation because that

challenge is “inextricably intertwined” with the challenge to

the identification of XPHOZAH. Yet Ardelyx raises distinct

arguments as to why each action does not qualify as an

“identification of renal dialysis services.” For example, as just

discussed, Ardelyx argues the CMS’s promulgation of

§ 413.171(3) was not an “identification” for purposes of the bar

to judicial review; it does not raise that argument with respect

19

to XPHOZAH. Moreover, even if we viewed Ardelyx’s chal-

lenge to the regulation as “inextricably intertwined” with its

challenge to XPHOZAH, we would still have to consider

whether the CMS had authority to include XPHOZAH in the

bundle for the reasons discussed. We therefore consider both

of Ardelyx’s challenges below.

2. “Renal dialysis services”

Ardelyx’s principal challenge to 42 C.F.R. § 413.171(3) is

that the definition of “renal dialysis services” in (14)(B)

excludes oral-only drugs. That subparagraph lists four catego-

ries that the Congress “include[d]” in the definition of “renal

dialysis services.” Ardelyx maintains those categories provide

an exhaustive definition of “renal dialysis services,” and none

of them includes oral-only drugs that are not provided by dial-

ysis facilities during dialysis. The CMS justifies its inclusion

of oral-only drugs in the bundle in three ways. First, it argues

oral-only drugs fit within the definition of “renal dialysis

services” in the third enumerated category, subpart (B)(iii).

Second, it interprets the fourth enumerated category, subpart

(B)(iv), as a catchall provision covering “newly developed

items and services that are not otherwise covered by the prior

[subparts].” Third, it claims it has discretion to include in the

bundle drugs that are not expressly covered by the four catego-

ries in subparagraph (14)(B) because that subparagraph is a

non-exhaustive definition of renal dialysis services. Because

we agree with the agency’s first point, we do not reach its other

arguments.

Subpart (iii) defines “renal dialysis services” to include:

[(1a)] other drugs and biologicals that are

furnished to individuals for the treatment of end

stage renal disease and [(1b)] for which

payment was (before the application of this

20

paragraph) made separately under this

subchapter, and [(2)] any oral equivalent form

of such drug or biological.

Based upon the plain text of this subpart, we hold the CMS

has the authority to include oral-only drugs in the bundled pay-

ment. The first clause in the subpart establishes two criteria for

inclusion in the definition of a renal dialysis service. The first,

which we have denominated [1a], includes in the definition

“other drugs and biologicals” furnished for the treatment of

ESRD, of which the CMS claims XPHOZAH is one (a matter

we take up later); it does not exclude drugs based upon their

form of administration. Oral-only drugs also satisfy the second

criterion in the first clause [1b] if they were paid for “separately

under this subchapter” and “before the application of this

paragraph.” Id. As the district court said, “‘this subchapter’

refers to Subchapter XVIII, which includes Medicare Parts A,

B, C, and D,” and thus “‘separately under this subchapter’

includes all drugs paid [for] separately under any reimburse-

ment system.” Ardelyx II, 2024 WL 5186613, at *10. Ardelyx

does not challenge that conclusion on appeal. Ardelyx also

acknowledged in its complaint that under the prior payment

system, “orally administered ESRD drugs were generally cov-

ered separately under Medicare Part D.” Compl. ¶ 65.

Therefore, payment for certain oral-only drugs was “made

separately under this subchapter” and “before the application

of” the new bundled payment system. It follows, as the district

court said, that subpart (iii) “directly incorporates” oral-only

drugs in the definition of “renal dialysis services.” Ardelyx I,

757 F. Supp. 3d at 52.

Resisting this conclusion, Ardelyx focuses on the second

clause [2] of subpart (iii), which includes in the definition “any

oral equivalent form of such drug or biological” covered by the

first clause. Ardelyx argues that the express inclusion of oral

21

drugs in this clause implies the Congress intended to exclude

oral drugs from the first clause.

The CMS rejected this interpretation of the statute as

“unduly constrained.” 74 Fed. Reg. at 49928/3. We agree. The

Congress spoke clearly when it wanted to address drugs admin-

istered in a certain form and when it wanted to omit particular

items from the definition of “renal dialysis services.” It did so

by referring to oral drugs in both subparts (B)(ii) and (B)(iii),

and by expressly excluding vaccines from subparagraph (B).

The Congress did not exclude oral-only drugs from the first

clause of subpart (iii), and we may not read that limitation into

the statute. See Lomax v. Ortiz-Marquez, 140 S. Ct. 1721, 1725

(2020) (“Court[s] may not narrow a provision’s reach by

inserting words Congress chose to omit”); Centro de

Trabajadores Unidos v. Bessent, 167 F.4th 1218, 1231 (D.C.

Cir. 2026) (declining to read “address” to mean “current

address” in a statute authorizing the disclosure of taxpayer

information because the statute did “not specify what address

must be included”).

For similar reasons, we are unpersuaded by Ardelyx’s con-

tention that “renal dialysis services” include only drugs

“provided by dialysis facilities during dialysis.” That limitation

appears nowhere in the subpart (B)(iii) definition of “renal

dialysis services,” which instead refers broadly to drugs

furnished “for the treatment of” ESRD without regard to where

or when they are furnished. In the medical context, “treatment”

means “medical application of remedies so as to effect a cure,”

WEBSTER’S II DICTIONARY (3rd ed. 2005), and “management

and care to prevent, cure, ameliorate, or slow progression of a

medical condition,” MERRIAM-WEBSTER DICTIONARY ONLINE.

That definition easily encompasses a drug furnished to treat

ESRD even if it is administered outside of a dialysis treatment.

22

This reading also accords with the Congress’s intent to bring

more services into the bundled payment.

Ardelyx erroneously contends this reading renders the sec-

ond clause of subpart (iii) superfluous because the first clause

would cover all oral drugs and because there cannot be an “oral

equivalent form” of an oral-only drug. In fact, however, the

first clause covers only drugs furnished to treat

ESRD — regardless the form of administration — that were

separately reimbursed “before the application of” paragraph

(14). The second clause thus brings in any oral equivalent form

of a drug covered by the first clause that became or becomes

available after the application of paragraph (14). If an injecta-

ble drug is covered by the first clause, then the second clause

would cover a subsequently developed oral-equivalent form of

that drug. In those instances, the second clause is not superflu-

ous. That some drugs covered by the first clause will not have

an oral equivalent does not, as Ardelyx suggests, compel a

different reading of the statute. “Language in a statute is not

rendered superfluous merely because in some contexts that

language may not be pertinent.” United States v. Turkette,

452 U.S. 576, 583 n.5 (1981).

In a last gasp, Ardelyx notes that if the Congress had

intended subpart (B)(iii) to include oral-only drugs, then it

could have done so “using far fewer and simpler words.” Per-

haps so, but providing for the inclusion of “other drugs and

biologicals” is one clear and reasonably succinct way of includ-

ing certain drugs regardless of their form of administration.

“[T]he mere possibility of clearer phrasing cannot defeat the

most natural reading of a statute.” Caraco Pharm. Lab’ys, Ltd.

v. Novo Nordisk A/S, 566 U.S. 399, 416 (2012).

We believe subpart (B)(iii) on its face defeats Ardelyx’s

challenge to the regulation. Seeking help elsewhere, Ardelyx

23

cites one failed bill introduced in the House of Representatives

that would have expressly added oral-only drugs to subpart

(B)(iii), as though they were not already included in that

subpart. See America’s Affordable Health Choices Act of

2009, H.R. 3200, 111th Cong. § 1232(b)(1). Because the bill

did not pass, Ardelyx believes this shows the Congress did not

intend for subpart (B)(iii) to cover oral-only drugs. “Failed

legislative proposals,” however, “are a particularly dangerous

ground on which to rest an interpretation of a prior statute”

because “several equally tenable inferences may be drawn from

such inaction, including the inference that the existing

legislation already incorporated the offered change.” United

States v. Craft, 535 U.S. 274, 287 (2002) (cleaned up); see also

Knapp Med. Ctr. v. Hargan, 875 F.3d 1125, 1130 (D.C. Cir.

2017) (“We can infer nothing from the Congress’s

consideration and rejection of a differently worded provision

in a separate piece of legislation”).

Subsequent congressional enactments, on the other hand,

have the force of law and reflect the Congress’s understanding

of the pre-existing state of the law. Consequently, these actions

may inform our analysis because “the meaning of one statute

may be affected by other Acts, particularly where Congress has

spoken subsequently and more specifically to the topic at

hand.” FDA v. Brown & Williamson Tobacco Corp., 529 U.S.

120, 133 (2000). Indeed, “it is well established that a court can,

and should, interpret the text of one statute in the light of text

of surrounding statutes, even those subsequently enacted.” Vt.

Agency of Nat. Res. v. United States ex rel. Stevens, 529 U.S.

765, 786 n.17 (2000).

The relevant post-enactment history demonstrates that the

Congress was aware of the CMS’s position regarding oral-only

drugs and subpart (B)(iii) and repeatedly acted in a manner

consistent with that position rather than undermining or

24

correcting it. See Brown & Williamson, 529 U.S. at 155-56. As

we have seen in its notice of proposed rulemaking and in the

final rule, issued in 2009 and 2010 respectively, the CMS

interpreted subpart (B)(iii) as including all drugs furnished for

the treatment of ESRD “regardless of the route of

administration.” 74 Fed. Reg. at 49928/3; see 75 Fed. Reg. at

49039/1. Consequently, the final regulation defined “renal

dialysis services” to include “drugs and biologicals with only

an oral form.” 42 C.F.R. § 413.171(3).

Against this backdrop, the Congress passed legislation that

reflected its awareness of the CMS’s position. “When Congress

revisits a statute giving rise to a longstanding administrative

interpretation without pertinent change, the congressional fail-

ure to revise or repeal the agency’s interpretation is persuasive

evidence that the interpretation is the one intended by

Congress.” CFTC v. Schor, 478 U.S. 833, 846 (1986) (cleaned

up).

On three occasions in 2013 and 2014 the Congress

expressly acknowledged the CMS’s inclusion of oral-only

drugs in the bundle without disapproving or amending subpar-

agraph (B). See § 632(b)(1), 126 Stat. at 2354 (2013) (delaying

the implementation of the bundled payment system to oral-only

drugs until January 1, 2016); § 217(a)(1), 128 Stat. at 1061

(2014) (extending the delay until January 1, 2024); and § 204,

128 Stat. at 4065 (2014) (extending the delay until January 1,

2025); see also § 632(a), 126 Stat. at 2354 (amending para-

graph (14) by adding subparagraph (I), which refers to “oral-

only ESRD-related drugs, as such term is used in the final rule

promulgated by the Secretary” (citing 75 Fed. Reg. 49030)). At

the same time, the Congress ordered additional agency action

to collect data on and assess the effect of oral-only drugs and

their treatment of ESRD. See § 632(b)(2), 126 Stat. at 2354

(ordering the CMS to monitor the bone and mineral metabo-

25

lism in ESRD patients “[w]ith respect to the implementation of

oral-only ESRD-related drugs in the ESRD prospective pay-

ment system”); § 632(d), 126 Stat. at 2354-55 (ordering the

GAO to report on the Secretary’s preparations for adding oral-

only drugs to the bundled payment); § 217(c)(1), 128 Stat. at

1062 (ordering the CMS to “establish a process

for . . . determining when a product is no longer an oral-only

drug” as “part of the promulgation of [the] annual rule for the

Medicare [ESRD] prospective payment system under

[paragraph (14)] for calendar year 2016”); and § 217(d)(3), 128

Stat. at 1062-63 (directing the CMS to establish performance

measures for facilities regarding the quality of patient care

“specific to the conditions treated with oral-only drugs”).

These congressional enactments not only left the CMS’s

definition of “renal dialysis services” unchanged; as the CMS

notes, they would make no sense if the Congress had excluded

oral-only drugs from the definition of “renal dialysis services.”

The only logical conclusion is that the Congress agreed with,

and acted upon the basis of, the CMS’s interpretation of the

statute.

3. “Before the application of this paragraph”

Here we address briefly one remaining dispute regarding

the scope of subpart (B)(iii). The first clause in that subpart

covers a drug only if payment for that drug was made sepa-

rately “before the application of this paragraph.” The district

court concluded that “before the application of this paragraph”

in that provision means before January 1, 2025 for oral-only

drugs such as XPHOZAH because the Congress delayed the

implementation of 42 C.F.R. § 413.171(3) until then. Ardelyx

I, 757 F. Supp. 3d at 53. The CMS seemed to agree with the

district court in its brief in this court, whereas Ardelyx’s brief

argues that approach would create a “nonsensical patchwork”

26

in which “before the application of this paragraph” takes on a

different meaning based upon a drug’s form of administration:

before January 1, 2011 for non-oral drugs, and before January

1, 2025 for oral-only drugs. Ardelyx also asserts this reading of

the statute would exclude from the bundle several injectable

drugs approved after 2011 that the CMS has included and

would preclude adding to the bundle any oral-only drugs

launched after January 1, 2025. Ardelyx instead suggests

“before the application of this paragraph” means before

January 1, 2011 for all drugs. §

We need not decide the meaning of the disputed phrase.

Despite the differing interpretations before us, we fail to see

how its meaning affects the outcome of this appeal. Recall that

the regulation applies to oral-only drugs “for which payment

was (prior to January 1, 2011) made separately.” § 413.171(3).

If we accept Ardelyx’s position that “before application of this

paragraph” means before January 1, 2011, then the regulation

uses the same date as the statute. If we adopt the district court’s

conclusion that “before the application of this paragraph”

means before January 1, 2025 for oral-only drugs, then the reg-

ulation still works with the statute. As that court observed,

“Any oral-only drug for which payment was made separately

prior to January 2011, per § 413.171(3), is necessarily one for

which payment was made separately . . . before January 1,

2025.” Ardelyx I, 757 F. Supp. 3d at 54. Either way, the CMS

acted within its delegated authority by promulgating the regu-

lation.

§

In a post-argument letter, the CMS offered an alternative interpre-

tation: “at the time that the paragraph is actually applied to any newly

developed drug, ‘payment was . . . made separately under this

subchapter’ for that drug.” We do not address the CMS’s belated

position below.

27

If Ardelyx had argued the CMS lacked authority to include

XPHOZAH in the bundle because it was not available before

January 2011, then we would need to resolve the meaning of

“before the application of this paragraph” as applied to oral-

only drugs, including XPHOZAH. Ardelyx did raise that argu-

ment in its motion asking the district court to alter the judg-

ment, but it did not pursue the argument on appeal. Indeed, the

only argument Ardelyx makes with respect to the identification

of XPHOZAH is that the CMS exceeded its authority because

XPHOZAH is not “furnished . . . for the treatment of” ESRD

but rather “to treat hyperphosphatemia,” to the merits of which

we turn below. That argument does not depend on our resolu-

tion of Ardelyx’s objections to the final rule or on the meaning

of “before the application of this paragraph” in subpart (B)(iii).

We therefore have no need to address the precise meaning

of “before the application of this paragraph.” Insofar as the

meaning of this phrase may matter for the identification of any

other drugs as “renal dialysis services,” those drugs are not

before the court.

In sum, we conclude that subpart (B)(iii) defines “renal

dialysis services” to include oral-only drugs furnished for the

treatment of ESRD and for which payment was made sepa-

rately “before the application of [that] paragraph.” Because the

regulation, 42 C.F.R. § 413.171(3), accords with the statutory

definition, subparagraph (14)(G) precludes us from reviewing

the regulation any further.

C. Ardelyx’s Challenge to the Identification of

XPHOZAH

Finally, as just mentioned, Ardelyx challenges the CMS’s

identification of XPHOZAH as a renal dialysis service covered

by the bundled payment. Even if the CMS can include some

oral-only drugs in the bundle, Ardelyx argues, the CMS cannot

28

include XPHOZAH because it is not furnished for the treat-

ment of ESRD. Again, “XPHOZAH is furnished to treat

hyperphosphatemia, not ESRD.”

Ardelyx relies upon an unduly narrow reading of the

phrase “for the treatment of [ESRD]” in subpart (B)(iii). Con-

sider subpart (B)(ii), which defines “renal dialysis services” to

include “erythropoiesis stimulating agents and any oral form of

such agents that are furnished to individuals for the treatment

of [ESRD].” ESAs treat anemia, a condition often caused by

renal disease. Subpart (B)(ii) thus indicates the Congress

intended the phrase “furnished . . . for the treatment of

[ESRD]” to cover drugs that treat a condition commonly

caused by ESRD. To read that phrase differently in a

neighboring provision would run afoul of the “presumption that

a given term is used to mean the same thing throughout a

statute.” Brown v. Gardner, 513 U.S. 115, 118 (1994).

Also, as we have seen, above at 21, “treatment” as used in

the definition of “renal dialysis services” in (B)(iii) includes the

management and care of a medical condition. That definition

includes not only drugs that treat ESRD specifically but also

drugs such as XPHOZAH that treat conditions closely associ-

ated with ESRD.

Hyperphosphatemia, which is most commonly caused by

ESRD, occurs in 80% of ESRD patients on maintenance dialy-

sis. Of those patients, 70% cannot maintain their target phos-

phate levels with phosphate binders. This is where XPHOZAH

comes in.

As the CMS emphasizes, XPHOZAH’s only approved use

is to treat hyperphosphatemia “in adults with chronic kidney

disease (CKD) on dialysis as add-on therapy in patients who

have an inadequate response to phosphate binders or who are

intolerant of any dose of phosphate binder therapy.” Indeed,

29

Ardelyx itself said in a declaration supporting its motion for a

preliminary injunction that XPHOZAH is “approved as an add-

on therapy for patients with ESRD on maintenance dialysis.” It

is therefore unsurprising that even Ardelyx describes

XPHOZAH, in that same declaration, as a “treatment option”

for patients with ESRD on dialysis who experience an inade-

quate response to phosphate binders.

Finally, Ardelyx claims the CMS’s identification of

XPHOZAH “is at odds” with its exclusion of other drugs that

treat conditions commonly associated with or caused by ESRD.

This argument goes to the quality of the CMS’s reasoning

rather than the scope of its authority. Per subparagraph (14)(G),

therefore, we lack jurisdiction to consider it.

III. Conclusion

For the foregoing reasons, the district court order

dismissing Ardelyx’s complaint is

Affirmed.