Alabama Pain Center thought it knew all about pain, but nothing had prepared it for the bill it received when CMS decided to retroactively “reprice” certain compounded drugs:  $25 million.

The clinic is fighting back.  On Dec. 29 it filed a federal lawsuit seeking a declaration that CMS’s action—and the bill—are illegal.

As told in the clinic’s filing, CMS had delegated to Cahaba Government Benefit Administrators the authority to set the rules and rates for certain compounded drugs.  Going back as far as 2008, Cahaba had specifically approved the clinic’s methods and rates.  Then last September CMS issued a letter directing that the clinic’s–but no other provider’s–drugs be “repriced.”  Sixty claims were reviewed and the results then extrapolated to thousands of claims over three and a half years.  The bottom line was $25 million.

The clinic’s several legal theories provide something of a checklist for providers who find themselves in a similar situation with CMS:  (a) the repricing contravenes the authority legally vested in Cahaba; (b) singling out one clinic among all providers is illegal; (c) the repricing  violates the Constitutional prohibition on ex post facto laws; (d) the repricing letter constitutes “final agency action” issued in violation of administrative procedural requirements; (e) the repricing is arbitrary and capricious; and (f) it’s illegal to apply the results of a 60-claim review to thousands of claims.