Med-Cert Home Care, LLC v. Azar, II

IN THE UNITED STATES DISTRICT COURT

NORTHERN DISTRICT OF TEXAS

DALLAS DIVISION

MED-CERT HOME CARE, LLC, §

§

Plaintiff, §

§

v. § Civil Action No. 3:18-CV-02372-E

§

XAVIER BECERRA, Secretary of the §

United States Department of Health and §

Human Services; and CHIQUITA §

BROOKS-LASURE, Administrator for the §

Centers for Medicare and Medicaid Services, §

§

Defendants. §

MEMORANDUM OPINION AND ORDER

Before the Court are the following motions: (1) Plaintiff Med-Cert Home Care, LLC’s

(“Plaintiff” or “Med-Cert”) Motion for Summary Judgment, (ECF No. 71), and (2) Defendant

Xavier Becerra, Secretary of the United States Department of Health and Human Services

(“HHS”), and Defendant Chiquita Brooks-Lasure’s, Administrator for the Centers for Medicare

and Medicaid Services (“CMS”), (collectively, “Defendants”) Cross-Motion for Summary

Judgment, (ECF No. 73). For the reasons discussed below, the Court hereby (1) DENIES

Plaintiff’s Motion for Summary Judgment and (2) GRANTS Defendants’ Cross-Motion for

Summary Judgment.

I. BACKGROUND

This case arises out of a dispute over (1) a determination that Plaintiff was overpaid for

claims submitted to the Medicare program and (2) the subsequent administrative appeal of the

overpayment determination. Plaintiff is a home health agency that previously provided skilled

nursing care, restorative therapy, and other medical social services to patients in the patients’

homes, in assisted living facilities, and in retirement communities. (ECF No. 1, pg. 10). Plaintiff

has operated as a licensed Medicare certified agency since 2011. (ECF No. 72, pg. 6). Defendant

Xavier Becerra is the Secretary for HHS, which has overall responsibility for the Medicare

program. 42 U.S.C. § 1395hh(a)(1). Defendant Chiquita Brooks-Lasure is the Administrator for

the Centers for Medicare and Medicaid Services, which is a division of HHS and is responsible

for overseeing the Medicare program.

A. The Regulatory Framework

HHS and CMS contract with Medicare Administrative Contractors (“MACs”), which are

private government contractors that assist with Medicare program activities, including processing

claims, calculating the amount of benefits due, and making payments. 42 U.S.C. §§ 1395u(a),

1395kk-1(a), 1395ddd; 42 C.F.R. §§ 421.200 et seq. Given the volume of claims submitted

annually to the Medicare program by certified Medicare health providers, the Medicare program

“cannot inspect each claim as it comes. Instead, it generally pays facially valid claims, and

conducts post-payment audits to detect over payments.” Sahara Health Care, Inc. v. Azar, 975

F.3d 523, 525 (5th Cir. 2020) (citing 42 U.S.C. § 1395ddd) (additional citation omitted). Medicare

program payment audits are conducted by Zone Program Integrity Contractors (“ZPICs”), which

are private contractors working for the CMS. When a ZPIC identifies an overpayment, it notifies

the initial private contractor (the MAC), which then issues a demand letter to the provider.

“Providers who wish to challenge an overpayment determination have access to four

phases of administrative review culminating in a phase five judicial review.” Id. at 526 (citing 42

U.S.C. § 1395ff). The Fifth Circuit has outlined the regulatory framework governing the review

of overpayment determinations:

The first phase of administrative review is a “redetermination” from an [MAC]. See

42 U.S.C. § 1395ff(a)(3); 42 C.F.R. § 405.948. Second, a provider can seek

“reconsideration” from a qualified independent contractor [(“QIC”)]. See 42 U.S.C.

§ 1395ff(b)–(c), (g); 42 C.F.R. §§ 405.902, 405.904(a)(2). At steps one and two, a

provider may submit additional evidence and must put forth a written explanation

of its disagreement with the initial determination. 42 C.F.R. §§ 405.946(a);

405.966(a). If it wants to submit evidence, that is the time: “A provider of services

or supplier may not introduce evidence” after step two “unless there is good cause

which precluded the introduction of such evidence at or before that

reconsideration.” 42 U.S.C. § 1395ff(b)(3); 42 C.F.R. § 405.966(a)(2).

Redetermination at step one and reconsideration at step two result in reasoned,

written decisions. See 42 U.S.C. § 1395ff(a)(5) (requiring “written notice” with

“specific reasons” at step one); 42 C.F.R. § 405.956(b) (detailing content of step

one decision); 42 U.S.C. § 1395ff(c)(3)(E) (requiring “a detailed explanation of the

decision” at step two); 42 C.F.R. § 405.976(b) (detailing content of step two

decision). The process does not end there.

At step three, a provider is entitled to a hearing and decision from an

[Administrative Law Judge (“ALJ”)], who must “render a decision on such hearing

by not later than the end of the 90-day period” after the request was timely filed.

42 U.S.C. § 1395ff(d)(1)(A). Congress specified what happens when an ALJ

misses that deadline:

In the case of a failure by an administrative law judge to render a

decision by the end of the period described in paragraph (1), the

party requesting the hearing may request a review by [the Medicare

Appeals Council] notwithstanding any requirements for a hearing

for purposes of the party's right to such a review.

42 U.S.C. § 1395ff(d)(3)(A).

The Appeals [Council] then has 90 days to conduct a de novo review and issue a

decision, or 180 days if the case was “escalated” to skip the step-three hearing. 42

U.S.C. § 1395ff(d)(2)(A); 42 C.F.R. §§ 405.1100(c) (de novo review); 405.1100(d)

(180 days if escalated). Congress anticipated that the Appeals [Council] deadline

might pose some problems. After 180 days have passed without a board decision,

the statute permits a party to “seek judicial review, notwithstanding any

requirements for a hearing for purposes of the party's right to such a judicial

review.” 42 U.S.C. § 1395ff(d)(3)(B).

Recoupment is “the recovery by Medicare of any outstanding Medicare debt by

reducing present or future Medicare payments and applying the amount withheld

to the indebtedness.” 42 C.F.R. § 405.370. Congress prohibited HHS from

recouping payments during the first two stages of administrative review. 42 U.S.C.

§ 1395ff(f)(2)(A). After those two appeals, however, if a provider is still found to

have been overpaid, “recoupment remains in effect.” 42 C.F.R. § 405.379(d)(4)-

(5). HHS must provide an overpaid provider with notice and an opportunity to

respond in writing. 42 C.F.R. §§ 405.373(a), (b)(1).

If repayment of an overpayment would constitute an “extreme hardship, as

determined by the Secretary,” the agency “shall enter into a plan with the provider”

for repayment “over a period of at least 60 months but ... not longer than 5 years.”

42 U.S.C. § 1395ddd(f)(1)(A). That hardship safety valve has some exceptions that

work against insolvent providers. If “the Secretary has reason to believe that the

provider of services or supplier may file for bankruptcy or otherwise cease to do

business or discontinue participation” in the Medicare program, then the extended

repayment plan is off the table. 42 U.S.C. § 1395ddd(f)(1)(C)(i). A provider that

ultimately succeeds in overturning an overpayment determination receives the

wrongfully recouped payments with interest. 42 U.S.C. § 1395ddd(f)(2)(B).

Sahara Health Care, Inc. v. Azar, 975 F.3d 523, 526-27 (5th Cir. 2020).

B. Factual and Procedural Background

1. The Overpayment Determination and Administrative Appeal

In 2017, Health Integrity, L.L.C.—a ZPIC—completed a post-payment audit of a random

sample of 46 Medicare payments made to Plaintiff. (ECF No. 4, pg. 35). The ZPIC determined

(1) that Plaintiff was overpaid on 45 of those payments—97.8%—and (2) that the claims did not

meet the necessary Medicare requirements for the type of services provided. (ECF No. 4, pg. 41).

The overpayment rate for the audited claims was extrapolated to all of Plaintiff’s Medicare claims

with process dates between February 1, 2021, and September 3, 2016, resulting in an extrapolated

overpayment of $1,787,063.39. (ECF No. 4, pg. 35).

On April 26, 2017, Plaintiff appealed the ZPIC’s overpayment determination to the first

level of the Medicare administrative appeals process, requesting a “redetermination” from an

MAC. (ECF No. 4, pgs. 53-98). In support of its request for redetermination, Plaintiff provided

documentary and testimonial evidence. (ECF No. 72, pg. 7) (ECF No. 4, pgs. 53-98). On June 28,

2017, the MAC notified Plaintiff that it denied Plaintiff’s request for redetermination and upheld

the ZPIC’s overpayment determination. (ECF No. 4, pgs. 100-29).

Plaintiff then appealed the MAC’s decision and submitted a request for “reconsideration”

from a qualified independent contractor (“QIC”). (ECF No. 4, pgs. 130-37). On November 9, 2017,

the QIC notified Plaintiff that Plaintiff’s appeal of the MAC’s redetermination decision was

unsuccessful, thereby affirming the previous overpayment determination. (ECF No. 4, pgs. 144-

91). In its letter informing Plaintiff of its decision, the QIC informed Plaintiff that it had the right

to appeal the reconsideration decision to an Administrative Law Judge (“ALJ”). (ECF No. 4, pg.

191). The letter also stated that “the recoupment [of overpayment] will begin 31 days from the

date of this letter in the absence of an acceptable request for an extended repayment schedule.”

(ECF No. 4, pg. 144). On December 28, 2017, Plaintiff timely filed its request for an ALJ hearing.

(ECF No. 4, pgs. 193-216). Recoupment of the overpaid amount began in January 2018. (ECF No.

1, pg. 26).

2. The Federal Court Suit

On September 7, 2018, more than eight months after requesting an ALJ hearing, Plaintiff

sued Defendants in federal court. In its Verified Complaint for Temporary Restraining Order and

Preliminary Injunction (the “Complaint”), Plaintiff alleges that—even if it were to utilize the

Medicare program’s five-year hardship repayment program—it would be unable to pay the

estimated $33,000 monthly payment because Plaintiff generated an average net monthly income

of $7,953.00 at the time of filing. (ECF No. 1, pg. 16). Accordingly, Plaintiff sought: (1) “a

temporary restraining order and a preliminary injunction preventing the Defendants from

recouping the nearly $2 million alleged overpayment resulting from the claim disputed by Med-

Cert until Med-Cert has been afforded a hearing before an impartial and unbiased ALJ;” or, in the

alternative, (2) “an order requiring Defendants to immediately provide Med-Cert with the ALJ

hearing, as mandated by statute.” (ECF No. 1, pgs. 14-15). Plaintiff’s Complaint asserts the

following causes of action: (1) a claim for the violation of Plaintiff’s procedural due process rights,

(ECF No. 1, pgs. 31-32); (2) an ultra vires claim, alleging that “Defendants are recouping from

Med-Cert’s Medicare payments even though they cannot and will not provide an ALJ hearing

within the statutorily required time frame;” (3) a claim for injunctive relief under § 705 of the

Administrative Procedure Act (“APA”) “to prevent irreparable injury and preserve the Court’s

jurisdiction to review the result of the administrative appeals process related to the underlying

billing dispute,” (ECF No. 1, pg. 32-33); and (4) a claim for mandamus relief “requiring

Defendants to provide Med-Cert with a hearing before an ALJ and a decision from the ALJ within

90 days of the Court’s order,” (ECF No. 1, pgs. 34-35).

On February 15, 2019, United Stated District Court Senior Judge A. Joe Fish entered an

Order of Preliminary Injunction in this case, requiring Defendants to: (1) refrain from withholding

or offsetting Medicare payments and receivables to Plaintiff to effectuate the recoupment of the

alleged overpayments in the underlying claim; and (2) return to Plaintiff “any funds recouped and

credited to the alleged overpayment.” (ECF No. 30). On October 8, 2019, this case was transferred

to United States District Judge Ada E. Brown. (ECF No. 52). On March 11, 2020, this Court issued

a Memorandum Opinion and Order that: (1) granted Plaintiff’s Motion for Summary Judgment,

(ECF No. 40); (2) denied Defendants’ Cross-Motion for Summary Judgment, (ECF No. 42); and

(3) entered a permanent injunction against Defendant on Plaintiff’s procedural due process claim.

See generally Med-Cert Home Care, LLC v. Azar, 444 F. Supp. 3d 756 (N.D. Tex. 2020), rev’d

and remanded sub nom. Med-Cert Home Care, L.L.C. v. Becerra, 19 F.4th 828 (5th Cir. 2021).

That same day, the Court entered its Final Judgment and Permanent Injunction to that effect. (ECF

No. 57).

3. The Appeal of the Permanent Injunction

Defendants appealed the Court’s Final Judgment and Permanent Injunction to the United

States Court of Appeals for the Fifth Circuit. (ECF No. 60). On January 31, 2022, the Fifth Circuit

reversed and remanded the Court’s Final Judgment and Permanent Injunction due to an intervening

change in the law. See Med-Cert Home Care, L.L.C. v. Becerra, 19 F.4th 828, 829 (5th Cir. 2021)

(citing Sahara, 975 F.3d 523). The Fifth Circuit explained:

Med-Cert’s procedural due process claim is foreclosed by Sahara. There, we

explained that the provider’s inability to explain why “steps one and two, standing

alone, fail to satisfy the constitutional requirement” was fatal. Sahara, 975 F.3d at

531. Though the step-three ALJ hearing gives providers the chance to present live

testimony and to cross-examine witnesses, it does not (absent good cause) allow

the provider to supplement the evidence that it presented in steps one and two. Just

like the provider in Sahara, Med-Cert admits it “has no need to provide more

evidence.” This cuts against Med-Cert’s purported need for a live hearing because

the hearing will only rehash what has already been produced. See id. at 531–32.

Also in-line with the provider in Sahara, Med-Cert cannot “explain how the

possibility of cross-examination at the hearing would benefit it.” Id. at 531. Cross-

examination is most helpful when material facts are in dispute and the case turns

on the credibility or veracity of the government's witnesses. Id. That is not the case

here.

Med-Cert, 19 F.4th at 830. The Fifth Circuit (1) reversed this Court’s grant of summary judgment

and permanent injunction on the procedural due process claim, but (2) remanded this case for

consideration of Plaintiff’s alternative claims because this Court did not resolve those claims in

the first instance. Med-Cert, 19 F.4th at 831.

4. The Subsequent Proceedings after Remand

After the Fifth Circuit remanded this case and before the Parties filed their instant cross-

motions for summary judgment, Plaintiff received its ALJ hearing on May 17, 2022. (See ECF No.

72-1). On June 10, 2022, the ALJ issued a decision on the appeal. (ECF No. 72-1, pgs. 5-8).

Plaintiff then filed its request for review by the Medicare Appeals Council (“Appeals Council”)—

the fourth level of the administrative appeals process—on or about August 11, 2022. (ECF No 72-

1, pg. 3). As of the date of this Memorandum Opinion and Order, Plaintiff’s request for Appeals

Council review remains pending—that is, the Appeals Council has not issued its decision within

the 180 days.

On remand, the Parties have filed dueling motions for summary judgment on Plaintiff’s

remaining claims—that is, (1) the ultra vires claim, (2) the claim for injunctive relief under the

APA, and (3) the claim for mandamus relief. On February 7, 2023, Plaintiff filed its Motion for

Summary Judgment, (ECF No. 71), and accompanying Brief in Support of Its Motion for Summary

Judgment (the “Brief in Support”), (ECF No. 72). Because Plaintiff has received the ALJ hearing

that was the subject of its Complaint, Plaintiff now asserts in its Brief in Support an alternative

basis for summary judgment—the delay at the fourth level of the administrative appeals process.

(See ECF No. 72, pg. 5). Plaintiff seeks: (1) a preliminary injunction on the basis of its ultra vires

and APA claims enjoining Defendants from recouping the alleged overpayment amount while

Plaintiff awaits adjudication of its appeal to the Appeals Council, (ECF No. 72, pgs. 11-18); and,

in the alternative, (2) an order of mandamus requiring Defendants to “properly adjudicate its

administrative appeal,” (ECF No. 72, pgs. 18-25).

In Defendant(s)’ Cross-Motion for Summary Judgment, (ECF No. 73), and Consolidated

Brief in Support of Defendants’ Cross-Motion for Summary Judgment and Defendants’ Response

to Plaintiff’s Motion for Summary Judgment (“Defendants’ Consolidated Brief”), (ECF No. 75),

Defendants argue (1) that Plaintiff’s Motion for Summary Judgment should be denied and (2) the

remaining alternative claims should be dismissed. Specifically, Defendants argue that:

(1) Plaintiff’s claims are now moot because Plaintiff has received the ALJ hearing it requested in

its Complaint; (2) Plaintiff has effectively and improperly amended its claims through its

summary-judgment motion; and (3) Defendants are entitled to summary judgment on all three of

Plaintiff’s remaining alternative claims for relief. Both Plaintiff’s Motion for Summary Judgment

and Defendants’ Cross-Motion for Summary Judgment have been fully briefed and are ripe for

determination.

II. LEGAL STANDARD

Federal Rule of Civil Procedure 56 provides that “[t]he court shall grant summary judgment

if the movant shows that there is no genuine dispute as to any material fact and the movant is

entitled to summary judgment as a matter of law.” FED. R. CIV. P. 56(a); see also Celotex Corp. v.

Catrett, 477 U.S. 317, 322 (1986). On cross-motions for summary judgment, the court reviews

each party’s motion independently, viewing the evidence and inferences in the light most favorable

to the non-moving party. Baker Hughes, Inc. v. U.S., 943 F.3d 255, 259 (5th Cir. 2019). “[T]he

substantive law will identify which facts are material.” Anderson v. Liberty Lobby Inc., 477 U.S.

242, 248 (1986). A dispute of a material fact is “genuine” if the evidence is such that a reasonable

jury could return a verdict in favor of the non-moving party. Id. The moving party bears the burden

of showing that summary judgment is appropriate. Celotex Corp., 477 U.S. at 323. The moving

party meets its burden by informing the court of the basis of its motion and by identifying the

portions of the record which reveal there are no genuine material fact issues. Celotex Corp., 477

U.S. at 323; FED. R. CIV. P. 56.

When reviewing the evidence on a motion for summary judgment, the Court must decide

all reasonable doubts and inferences in the light most favorable to the non-movant. See Matsushita

Elec. Indus. Co. v. Zenith Radio, 475 U.S. 574, 587 (1986). The Court cannot make a credibility

determination in light of conflicting evidence or competing inference. Anderson, 477 U.S. at 255.

As long as there appears to be some support for the disputed allegations such that “reasonable

minds could differ as to the import of the evidence,” the motion for summary judgment must be

denied. Anderson, 477 U.S. at 250.

III. ANALYSIS

The Court concludes that Defendants are entitled to summary judgment on Plaintiff’s

remaining alternative claims, and consequently, Plaintiff’s remaining claims must be dismissed.

First, Plaintiff’s claims, as pleaded, are now moot because Plaintiff has received the ALJ hearing

which was the subject of the relief it requested the Complaint. Second, the Court concludes that

Plaintiff constructively requested leave to amend its pleadings through its Motion for Summary

Judgment. The Court denies the request for leave to amend because such amendments—as Plaintiff

asserts in the Motion for Summary Judgment—would be futile. Thus, Plaintiff’s claims are not

justiciable and must be dismissed. Finally, in the alternative, the Court concludes that—assuming

arguendo that the Court were to consider Plaintiff’s amendments—Defendants would be entitled

to summary judgment on Plaintiff’s remaining alternative claims for relief.

A. Plaintiff’s Alternative Claims for Relief are Dismissed as Non-Justiciable.

Upon concluding that Plaintiff did not have a viable procedural due process claim, the Fifth

Circuit remanded this case for consideration of Plaintiff’s alternative claims for relief in the first

instance by this Court. Med-Cert, 19 F.4th at 831. Those claims are: (1) an ultra vires claim,

seeking injunctive relief; (2) a claim for injunctive relief under the APA; and (3) a claim for

mandamus relief. The Court concludes that each of these claims are now moot because (1) Plaintiff

has received the relief it requested in its Complaint and (2) Plaintiff’s constructive request for leave

to amend its Complaint is denied as futile.

1. Plaintiff’s Alternative Claims for Relief, As Pleaded in the Complaint, are

Moot.

Plaintiff’s Complaint relates to the HHS’s delay in affording Plaintiff its requested ALJ

hearing at the third stage of the administrative appeals process. Defendants contend that Plaintiff’s

remaining alternative claims have been mooted by the occurrence of the ALJ hearing. For the

reasons discussed below, the Court agrees.

(i) The Alternative Claims for Relief in Plaintiff’s Complaint

Aside from the procedural due process claim, Plaintiff’s Complaint asserts three alternative

claims for relief. The first two underlie Plaintiff’s request for injunctive relief. The third is a claim

for mandamus relief. The entirety of the factual allegations contained in the Complaint relate to

the delay at the third level of the administrative appeal process—that its, at the time Plaintiff filed

the Complaint, Plaintiff had yet to receive an ALJ hearing eight months after requesting one. (See

ECF No. 1, pg. 26).

Plaintiff’s request for injunctive relief is based on (1) an ultra vires claim and (2) a claim

under the APA for a “preservation of status or rights” injunction, 5 U.S.C. §§ 704, 705.1 With

respect to the ultra vires claim, the Complaint states:

Defendants are required to provide Med-Cert with an ALJ hearing and decision

within 90 days of its request. 42 U.S.C. § 1395ff(d)(1)(A); 42 C.F.R. § 405.1016(a).

Defendants are recouping from Med-Cert’s Medicare payments even though they

cannot and will not provide an ALJ hearing in the statutorily required time frame.

1 Section 704 of the APA states:

Agency action made reviewable by statute and final agency action for which there is no other

adequate remedy in a court are subject to judicial review. A preliminary, procedural, or intermediate

agency action or ruling not directly reviewable is subject to review on the review of the final agency

action. Except as otherwise expressly required by statute, agency action otherwise final is final for

the purposes of this section whether or not there has been presented or determined an application

for a declaratory order, for any form of reconsideration, or, unless the agency otherwise requires by

rule and provides that the action meanwhile is inoperative, for an appeal to superior agency

authority.

5 U.S.C. § 704. Section 705 of the APA states:

When an agency finds that justice so requires, it may postpone the effective date of action taken by

it, pending judicial review. On such conditions as may be required and to the extent necessary to

prevent irreparable injury, the reviewing court, including the court to which a case may be taken on

appeal from or on application for certiorari or other writ to 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 Court should enjoin Defendants from engaging in such ultra vires actions

against Med-Cert, which actions are contrary to the limitations on Defendants’

authority as set forth in Title XVII of the Social Security Act.

(ECF No. 1, pg. 32) (emphasis added in italics). With respect to the APA claim, the Complaint

states:

As outlined above, Med-Cert has meritorious challenges to the billing dispute

underlying the recoupment of Medicare payments, and will vigorously assert its

arguments during the administrative appeals process that has already been initiated

as promptly and expeditiously as the ALJ can accommodate. In the meantime, if

immediate injunctive relief is not granted “to preserve the status or rights pending

conclusion of the proceedings,” however [Plaintiff’s] right to administrative review

in an ALJ hearing will be eliminated by the inability of Med-Cert to remain in

existence due to the crippling effect of the threatened Medicare recoupment.

Furthermore, Med-Cert’s remaining employees and patients will suffer irreparable

harm in the absence of an injunction.

Accordingly, pursuant to 5 U.S.C § 705, issuance of the injunctive relief sought in

this case is necessary and appropriate in order to prevent irreparable injury and to

preserve the Court’s jurisdiction to review the result of the administrative appeals

process related to the underlying billing dispute.

(ECF No. 1, pgs. 33) (emphasis added in italics). Finally, with respect to Plaintiff’s claim for

mandamus relief, the Complaint states:

Med-Cert has a clear right to relief because Defendants have failed to provide Med-

Cert with an ALJ hearing and decision within 90 days, as required by statute.

Defendants have a clear duty to act because the action at issue is nondiscretionary.

[Wolcott v. Sebelius, 635 F.3d 757, 768 (5th Cir. 2011)]. Specifically, pursuant to

42 U.S.C. § 1395ff(d)(l)(A) and 42 C.F.R. § 405.1016, Defendants have a

nondiscretionary duty to provide Med-Cert with a de novo hearing before an ALJ,

and with a decision from the ALJ, within 90 days of [Plaintiff’s] timely request.

Med-Cert submitted a timely request for an ALJ hearing on December 28, 2017.

Therefore, 90-day period mandated by statute expired on March 28, 2018.

However, Med-Cert has received neither the hearing nor the decision mandated by

statute. Indeed, the hearing has not been scheduled nor has an ALJ been assigned.

Due to the backlog of appeals at the ALJ level, without intervention by this Court,

Med-Cert will be forced to wait three to five years to obtain the statutorily mandated

ALJ hearing.

In the absence of an injunction staying recoupment pending an ALJ hearing, Med-

Cert has no other adequate remedy because Defendants' choice to seek recoupment

from Med-Cert will cause Therefore, Med-Cert requests that this Court issue an

order of mandamus requiring Defendants to provide Med-Cert with a hearing

before an ALJ and a decision from the ALJ within 90 days of the Court’s order.

(ECF No. 1, pgs. 34-35) (emphasis added in italics). Thus, the Complaint’s factual allegations

relate solely to the ALJ hearing. Furthermore, the Complaint specifically requests the following

corresponding forms of relief:

1. That the Court issue a Temporary Restraining Order and an injunction

prohibiting the Defendants from recouping from Med-Cert’s Medicare payments

until such time as Med-Cert receives an ALJ hearing and decision;

2. In the alternative, that the Court issue an order of mandamus requiring

Defendants to provide Med-Cert with a hearing before an ALJ and a decision from

the ALJ within 90 days of the Court’s order;

3. Enter Judgment in Plaintiff’s favor;

4. Award Plaintiffs costs as allowable by 28 U.S.C. § 1920, and attorneys’ fees

as allowable by statute, if any, including, for example, the Equal Access to Justice

Act, 28 U.S.C. § 2412(d)(l )(A) based upon a finding that the Defendants’ position

is not substantially justified; and,

5. That the Court issue and award Plaintiff such other and further relief as the

Court deems just and proper.

(ECF No. 1, pg. 35) (emphasis added in italics). Thus, as with the Complaint’s factual allegations,

the specific relief requested in the Complaint relates solely to the ALJ hearing.

(ii) Whether the Provision of an ALJ Hearing Moots Plaintiff’s

Alternative Claims

“It is well-settled, that mootness is a threshold jurisdictional inquiry.” Louisiana Env’t

Action Network v. U.S. E.P.A., 382 F.3d 575, 580 (5th Cir. 2004) (hereinafter, “LEAN”) (citing

Deakins v. Monaghan, 484 U.S. 193, 199 (1988)). “In general, a claim becomes moot ‘when the

issues presented are no longer “live” or the parties lack a legally cognizable interest in the

outcome.’” LEAN, 382 F.3d at 581 (citing Murphy v. Hunt, 455 U.S. 478, 481, (1982) (per curiam))

(additional citations omitted). “If a dispute has been resolved or if it has evanesced because of

changed circumstances, including the passage of time, it is considered moot.” Am. Med. Ass’n v.

Bowen, 857 F.2d 267, 270 (5th Cir. 1988) (citing Matter of S.L.E. Inc., 674 F.2d 359, 364 (5th Cir.

1982)). However, the Fifth Circuit “has long been careful to note an exception to the general

principles of mootness in instances where some issues of a case have become moot but the case as

a whole remains alive because other issues have not become moot.” LEAN, 382 F.3d at 581

(citations and internal quotation marks omitted). Nonetheless, “where one claim has become moot

and the pleadings are insufficient to determine whether the plaintiff is entitled to another remedy,

the action should be dismissed as moot.” Powell v. McCormack, 395 U.S. 486, 499 (1969). The

Court concludes that Plaintiff’s claims for relief—as pleaded in Plaintiff’s Complaint—have been

mooted by the undisputed occurrence of the ALJ hearing.2

The Court finds instructive the Supreme Court’s decision in Super Tire Engineering Co. v.

McCorkle, 416 U.S. 115 (1974). In Super Tire, the plaintiffs were the owners of manufacturing

plants in New Jersey whose employees had gone on strike. 416 U.S. at 116-17. The striking

employees received public assistance through state welfare programs, so the plaintiffs sued the

state, alleging that the public assistance policy was null and void because it interfered with the

federal labor policy of free collective bargaining. Super Tire, 416 U.S. at 118-19. In their

complaint, the Super Tire plaintiffs sought (1) declaratory judgment that the regulations governing

the assistance program were unlawful and (2) injunctive relief against the state welfare

administrators from making public funds available to the striking employees. Super Tire, 416 U.S.

at 119-20. The strike ended before the Parties tried the case, yet the district court reached the merits

of the underlying dispute. Super Tire, 416 U.S. at 117.

2 As will be discussed below, the Court construes Plaintiff’s reorientation of its claims around the general deficiencies

in the administrative appeals process and request for declaratory judgment in its Motion for Summary Judgment and

accompanying Brief in Support as a request for leave to amend Plaintiff’s pleadings. See supra III.A.2. The Court

denies Plaintiff’s constructive request for leave because such amendments would be futile. See supra III.A.3.

The Supreme Court held that the termination of the strike mooted the plaintiffs’ claim for

injunctive relief, but not their claim for declaratory relief, explaining that:

The [intervening] union invites us to conclude that this controversy between the

petitioners and the State became moot when the particular economic strike

terminated upon execution of the new collective-bargaining agreement and the

return of the strikers [to work before the case was tried.] That conclusion,

however, is appropriate with respect to only one aspect of this lawsuit, that is,

the request for injunctive relief made in the context of official state action

during the pendency of the strike.

The petitioners here have sought, from the very beginning, declaratory relief

as well as an injunction. Clearly the District Court had “the duty to decide the

appropriateness of the declaratory request irrespective of its conclusion as to the

propriety of the issuance of the injunction.” Zwickler v. Koota, 389 U.S. 241, 254,

88 S.Ct. 391, 399, 19 L.Ed.2d 444 (1967); Roe v. Wade, 410 U.S. 113, 166, 93 S.Ct.

705, 733, 35 L.Ed.2d 147 (1973); Steffel v. Thompson, 415 U.S. 468—469, 94 S.Ct.

1209, 39 L.Ed.2d 505 (1974). Thus, even though the case for an injunction

dissolved with the subsequent settlement of the strike and the strikers’ return

to work, the parties to the principal controversy, that is, the corporate

petitioners and the New Jersey officials, may still retain sufficient interests and

injury as to justify the award of declaratory relief.

Super Tire, 416 U.S. at 121-22 (emphasis added in bold and bold italics).

Here, Plaintiff’s requested relief in the Complaint—(1) for an injunction prohibiting

recoupment until Defendants provide an ALJ hearing and (2) in the alternative, for an order of

mandamus requiring Defendants to provide an ALJ hearing within 90 days—have been mooted

by the occurrence of the ALJ Hearing—ending the third-level “delay” that animated these claims

as pled. As with the injunction at issue in Super Tire, the case for the injunctive and mandamus

relief Plaintiff requested dissolved with the subsequent provision of the ALJ hearing at issue. Super

Tire, 416, U.S. at 122; see also City of Austin v. Kinder Morgan Texas Pipeline, LLC, 528 F. Supp.

3d 670, 679-81 (W.D. Tex. 2021) (plaintiff’s claim for injunctive and declaratory relief requesting

a halt to the construction of a pipeline were moot because the construction was no longer on-

going); Sw. Airlines Co. v. Aircraft Mechanics Fraternal Ass’n, No. 3:17-CV-0431-N, 2020 WL

1325224 (N.D. Tex. Mar. 20, 2020) (company’s request for injunctive and declaratory relief

relating to a union’s activities during a contentious collective bargaining process were moot

because the company and the union reached a new collective bargaining agreement).

Plaintiff contends that its claims are not moot because they fall within the well-established

exception to the mootness doctrine for matters that are “capable of repetition, yet evading review.”

(ECF No. 76, pg. 11) (citing Friends of the Earth, Inc. v. Laidlaw Env’t Servs. (TOC), Inc., 528

U.S. 167, 190 (2000)). However, Super Tire is instructive on this contention. The Supreme Court

held that the plaintiff’s claim for declaratory relief was not moot, invoking the “capable of

repetition, yet evading review” exception, because the declaratory relief originally requested was

not tied directly to the strike at issue, but rather attacked the validity of the public assistance

program generally. See Super Tire, 416 U.S. at 118-19. The Supreme Court concluded that the

claim for declaratory relief was not moot because the challenged policy was “not contingent, [had]

not evaporated, and, by its continuing and brooding presence, cast[] what may well [have been] a

substantial adverse effect on the interest of the petitioning parties.” Super Tire, 416 U.S. at 122.

Plaintiff argues that this is exactly what is happening here with Defendants’ alleged immense

backlog of Medicare appeals. (See ECF No. 76, pgs. 11-12). However, there is a key difference

between the case here and the case before the Supreme Court in Super Tire—that is, the plaintiffs

in Super Tire, unlike Plaintiff here, “sought, from the very beginning, declaratory relief as well as

an injunction.” Super Tire, 416 U.S. at 121 (emphasis added).

The specific relief Plaintiff requested in its Complaint—injunctive relief and an order of

mandamus relating solely to the delay at the third level of the appeals process—is moot. The case

for those claims dissolved once Plaintiff received its requested ALJ hearing. See Super Tire¸ 416

U.S. at 121-22. Unlike the plaintiffs in Super Tire, Plaintiff has not, from the very beginning,

sought declaratory relief challenging governmental policies and practices generally. (See generally

ECF No. 1). Only now, at the summary-judgment stage, does Plaintiff (1) frame its complaints

about the inadequacy of the administrative appeal process in general and (2) recast its claim for

injunctive relief as a claim for declaratory relief. As discussed below, the Court construes this

reframing as request for leave to amend, which is denied. Nevertheless, under these circumstances

and pleadings, the Court must conclude that Plaintiff’s claims for alternative relief, as pled in

Plaintiff’s Complaint, are moot and non-justiciable. See Powell, 395 U.S. at 499.

2. The Court Construes Plaintiff’s Motion for Summary Judgment as a

Request for Leave to Amend.

In the time since the Fifth Circuit remanded this case for consideration of Plaintiff’s

alternative claims for relief, Plaintiff has received its ALJ hearing and decision. After the ALJ

issued an unfavorable decision, Plaintiff filed a request for review by the Appeals Council. As of

the filing of Plaintiff’s Motion for Summary Judgment and the issuance of this Memorandum

Opinion and Order, Plaintiff has not received the requested Appeals Council review.

Even though Plaintiff has received the ALJ hearing it requested in its Complaint, Plaintiff

continues to seek summary judgment on its alternative claims for relief. Plaintiff’s Motion for

Summary Judgment recasts its requested relief and refocuses its arguments from the third-level

ALJ hearing to the delay in the fourth level of the administrative appeals process. (See ECF No.

72, pg. 9) (“The request has not been at the fourth level of the administrative appeals process for

179 days. The same delay at the ALJ has made its way to the fourth level. Defendant has once

again failed to process the appeal pursuant to 42 U.S.C. § 1395ff.”) (citations to the record

omitted). As opposed to its request for injunctive and mandamus relief in the Complaint, which

focused specifically on the third level of the administrative appeals process, Plaintiff’s Motion for

Summary Judgment requests relief related to deficiencies in the administrative appeals process,

writ large. Plaintiff also recasts its request for an injunction in terms of declaratory relief.

Specifically, Plaintiff’s Motion for Summary Judgment seeks:

1. A declaratory judgment that Defendant has acted ultra vires in failing to

provide an administrative appeals process pursuant to 42 U.S.C. §

1395ff and yet imposing recoupment to collect the Medicare overpayment.

2. A declaratory judgment granting Plaintiff’s request for permanent

injunction. Wherefore, Plaintiff respectfully requests that the Court should

grant Plaintiff’s motion for summary judgment and request for

preliminary injunction.

3. In the alternative, the issuance of an order of mandamus compelling

Defendants to properly adjudicate its administrative appeal pursuant to

42 U.S.C. § 1395ff.

(ECF No. 71, pg. 2) (emphasis added).

Plaintiff’s references to declaratory judgment in its Motion for Summary Judgment are the

first and only time Plaintiff has asserted such claims in this case. (Compare e.g., ECF No. 72, with

ECF No. 1). Moreover, Plaintiff bases the relief requested in the Motion for Summary Judgment

on delays at the fourth level of the administrative appeals process because it has already received

the relief it requested—the ALJ hearing—in its Complaint. Defendants argue that, by raising

factual allegations relating to the fourth-level delay in the Motion for Summary Judgment that

were not present in the Complaint, Plaintiff has attempted to amend its pleadings through its

summary-judgment motion. The Court agrees.

It is well-settled that “[a] claim which is not raised in the complaint but, rather, is raised

only in opposition to a motion for summary judgment is not properly before the court.” Cutrera v.

Bd. of Sup’rs of La. State Univ., 429 F.3d 108, 113 (5th Cir. 2005); see also Pittman v. U.S. Bank

NA, 840 F. App’x 788, 789–90 (5th Cir. 2021) (“Our precedent precludes a plaintiff from

advancing a new claim or reframing a previously presented one in response to a motion for

summary judgment.”) (citing Cutrera, 429 F.3d at 113); De Franceschi v. BAC Home Loans

Servicing, L.P., 477 F. App’x 200, 204 (5th Cir. 2012) (district court did not abuse its discretion

in declining to consider “new factual allegations and theories of liability not present in the

pleadings”) (citing Cutrera, 429 F.3d at 113) (additional citations omitted). Plaintiff argues that

Cutrera does not control here because: (1) the factual information related to the fourth-level delay

were included in the Motion for Summary Judgment, not a response to a summary-judgment

motion; and (2) the factual information are just “facts” and not a “new claim.” (ECF No. 76, pg.

12). Both of Plaintiff’s arguments are unavailing.

First, while Plaintiff’s new factual allegations and reframed claims for declaratory

judgment were in the Motion for Summary Judgment, rather than a response to a summary-

judgment motion, the Court finds Cutrera to be persuasive and believes that it is inappropriate for

parties to assert new factual allegations and claims in their motions for summary judgment. See

U.S. ex rel. DeKort v. Integrated Coast Guard Sys., 475 F. App’x 521, 522 (5th Cir. 2012) (“[T]he

district court did not err in denying DeKort's motion for partial summary judgment because he

attempted to raise a new claim, not asserted in his fifth amended complaint.”); see also Gilmour v.

Gates, McDonald and Co., 382 F.3d 1312, 1314–15 (11th Cir. 2004) (Plaintiffs may not “raise

new claims at the summary judgment stage. [. . .] At the summary judgment stage, the proper

procedure for plaintiffs to assert a new claim is to amend the complaint in accordance with Fed.

R. Civ. P. 15(a).”). Second, the prohibition on asserting new claims in opposition to summary-

judgment motions extends the assertion of new factual allegations and theories of liability as well.

See De Franceschi, 477 F. App’x at 204. Finally, Plaintiff’s Motion for Summary Judgment does

not simply include new factual allegation that are not present in the Complaint; Plaintiff also

recasts its claim for injunctive relief in the form of a claim for declaratory relief. (Compare ECF

No. 1, pg. 35 with ECF No. 71, pg. 2). Notwithstanding, the injury for which Plaintiff now

complains at the summary judgment stage—regarding the fourth level of the administrative

appeals process—could not have occurred at the time of Plaintiff’s Complaint, as the third-level

ALJ Hearing condition precedent had not occurred at that time. Thus, despite Plaintiff’s assertions

to the contrary, Plaintiff has demonstrably asserted a new claim at the summary-judgment stage.

In the Fifth Circuit, “when a claim is raised for the first time in a response to a summary

judgment motion, the district court should construe that claim as a motion to amend the complaint

under Federal Rule of Civil Procedure 15(a).” Riley v. Sch. Bd. Union Par., 379 F. App’x 335, 341

(5th Cir. 2010) (citing Stover v. Hattiesburg Pub. Sch. Dist., 549 F.3d 985, 989 n. 2 (5th Cir. 2008);

Sherman v. Hallbauer, 455 F.2d 1236, 1242 (5th Cir. 1972)). For the reasons discussed above, the

Court believes this maxim extends to new factual allegations, theories of liability, and claims

asserted for the first time in a motion for summary judgment. Riley, 379 F. App’x at 341.3 “Rule

15(a) applies where plaintiffs ‘expressly requested’ to amend even though their request ‘was not

contained in a properly captioned motion paper.’” U.S. ex rel. Willard v. Humana Health Plan of

Texas Inc., 336 F.3d 375, 387 (5th Cir. 2003) (quoting Balistreri v. Pacifica Police Dep’t, 901

F.2d 696, 701 (5th Cir.1988)).

Plaintiff has not “expressly requested” leave to amend its pleadings either in a properly

captions motion paper or in its Motion for Summary Judgment. However, Plaintiff has asserted a

new factual basis for relief—the fourth-level delay—and new claims—those for declaratory

relief—in its summary-judgment motion and accompanying brief. Accordingly, the Court

construes the Motion for Summary Judgment and Brief in Support as a motion for leave to amend

the Complaint under Rule 15(a). See Riley, 379 F. App’x at 341.

3 The Court notes that in the motion to dismiss context, a complaint must contain sufficient factual matter, accepted

as true, to “state a claim to relief that is plausible on its face.” Ashcroft v. Iqbal, 556 U.S. 662, 678, 129 S.Ct. 1937,

173 L.Ed. 2d 868 (2009) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570, 127 S.Ct. 1955, 167 L.Ed. 2d 929

(2007)). A claim has facial plausibility when the plaintiff pleads factual content that allows the court to draw the

reasonable inference that the defendant is liable for the misconduct alleged. Iqbal, 556 U.S. at 678, 129 S.Ct. 1937.

3. The Court Denies Leave to Amend Because Amendment Would be Futile.

“Under Rule 15(a), ‘leave to amend shall be freely given when justice so requires,’ and

should be granted absent some justification for refusal.” U.S. ex rel. Willard, 336 F.3d at 386

(quoting Foman v. Davis, 371 U.S. 178, 182 (1962)). District courts are “entrusted with the

discretion to grant or deny a motion to amend[.]” Marucci Sports, L.L.C. v. Nat’l Collegiate

Athletic Ass’n, 751 F.3d 368, 378 (5th Cir. 2014). In deciding whether to grant or deny a motion

to amend, the Court “may consider a variety of factors including ‘undue delay, bad faith or dilatory

motive on the part of the movant, repeated failures to cure deficiencies by amendments previously

allowed, undue prejudice to the opposing party . . . , and futility of the amendment.’” Marucci

Sports, 751 F.3d at 378 (internal citation omitted); see also, e.g., Foman v. Davis, 371 U.S. 178,

182 (1962) (enumerating the same). Courts may also deny leave to amend if the proposed

amendments “would fundamentally alter the nature of the case.” Mayeaux v. Louisiana Health

Serv. & Indem. Co., 376 F.3d 420, 427 (5th Cir. 2004) (citing Lowrey v. Texas A & M Univ. Sys.,

117 F.3d 242, 246 n. 2 (5th Cir. 1997)).

For the reasons discussed below, the Court denies Plaintiff’s constructive request for leave

to amend. Plaintiff has attempted to amend its Complaint at the summary-judgment stage by:

(1) reframing its allegations around (a) the fourth-level delay and (b) deficiencies in the Medicare

appeals process writ-large; and (2) recasting its claim for injunctive relief as claims for declaratory

relief. The Court concludes that these amendments would be futile. Because Plaintiff’s claims as

pleaded in its Complaint are now moot and the Court denies Plaintiff the opportunity to amend its

Complaint at this late stage, the Court concludes that Plaintiff’s claims must be dismissed as non-

justiciable.

(i) Plaintiff’s Requested Injunction

Plaintiff’s request regarding injunctive relief at the summary-judgment stage is unclear. In

its Motion for Summary Judgment, Plaintiff requests: (1) declaratory judgment that Defendants

acted ultra vires in “failing to provide an administrative appeals process pursuant to 42 U.S.C. §

1395ff” yet recouping the overpayment amount; and (2) “declaratory judgment granting Plaintiff’s

request for permanent injunction” and “grant Plaintiff’s motion for summary judgment and request

for preliminary injunction.” (ECF No. 71, pg. 2) (emphasis added). However, in its Brief in

Support, Plaintiff argues that it is entitled to a permanent injunction based on (1) its ultra vires

claim and (2) its APA claim. (ECF No. 72, pgs. 11-18). Despite Plaintiff’s attempt to recast its

claim as one for declaratory relief, the Court treats these as a request for injunctive relief based on

the ultra vires claim and the APA claim.

The elements of a permanent injunction are essentially the same as for a preliminary

injunction with the exception that the plaintiff must show actual success on the merits rather than

a mere likelihood of success. Amoco Prod. Co. v. Village of Gambell, 480 U.S. 531, 546 n.12

(1987). The party seeking a permanent injunction must show: (1) success on the merits, (2) the

failure to grant the injunction will result in irreparable injury, (3) the injury outweighs any damage

that the injunction will cause to the opposing party, and (4) the injunction will not disserve the

public interest. United Motorcoach Ass’n v. City of Austin, 851 F.3d 489, 492–93 (5th Cir. 2017);

VRC LLC v. City of Dallas, 460 F.3d 607, 611 (5th Cir. 2006).

Plaintiff’s Motion for Summary Judgment is unclear as to whether Plaintiff is seeking a

preliminary injunction or a permanent injunction. Regardless of whether Plaintiff seeks

preliminary or permanent injunctive relief, the Court concludes Plaintiff’s proposed amendment

to refocus the ultra vires and APA claims on the fourth-level delay would be futile. Specifically,

the Court concludes that, even if the Court were to allow Plaintiff to amend its pleadings through

its Motion for Summary Judgment, (1) Plaintiff is not entitled to relief on its ultra vires claim, and

(2) the Court lacks jurisdiction over Plaintiff’s APA claim.

(a) Plaintiff Would Not be Entitled to Relief on its Ultra Vires

Claim Even If the Court Allowed Plaintiff’s Amendment.

In its summary-judgment briefing, Plaintiff argues that it is entitled to injunctive relief

because Defendants acted ultra vires in recouping the overpayment amount while the Appeals

Council has not provided the requested review within the time required. (ECF No. 72, pgs. 12-13).

(ECF No. 72, pg. 12) (citing 42 C.F.R. §§ 405.1100-405.1140). Defendants argue that—even if

the Court were to consider the merits of Plaintiff’s ultra vires claim with respect to the fourth-level

delay—the Court should grant Defendants summary judgment and dismiss that claim. In light of

controlling precedent discussed hereunder, the Court concludes that allowing Plaintiff to amend

its pleadings to refocus its ultra vires claim on the delayed decision of the Appeals Council would

be futile because Defendants have not acted ultra vires in recouping overpayments without

providing a timely Appeals Council decision.

The Fifth Circuit has explained that ultra vires claims relating to recoupment of

overpayment amounts after the second level of the administrative review process fail, even if there

have been delays in the appeals process. See Sahara, 975 F.3d at 533-34. In Sahara Health Care,

Incorporated v. Azar, the Fifth Circuit held that a provider failed to state a claim for ultra vires

actions where the provider alleged that HHS and CMS violated federal law by “initiat[ing]

recoupment of [the provider’s] current payments even though [they] failed to provide an

administrative appeal in accordance with 42 U.S.C. § 1395ff.” Sahara, 975 F.3d at 533. There, the

provider sued for injunctive relief preventing HHS and CMS from recouping payments without

providing a timely ALJ hearing. Sahara, 975 F.3d at 525. The Fifth Circuit explained:

The statute entitles a provider to two steps of administrative review before the

government recoups funds. See 42 U.S.C. § 1395ff(a)(3) (step one); 42 U.S.C. §

1395ff(b)(1)(A) (step two). Sahara received that review. The statute does not

prohibit recoupment after step two. Cf. 42 U.S.C. § 1395ddd(f)(2)(A) (prohibiting

recoupment during steps one and two); 42 C.F.R. § 405.379(d)(4)–(5) (authorizing

recoupment after step two). Congress afforded a provider who has not received a

timely ALJ hearing the right to escalate to the Appeals [Council]. 42 U.S.C. §

1395ff(d)(3)(A). Sahara rejected that remedy. The Secretary and the Administrator

acted within their statutory limits and we affirm the district court's dismissal of

Sahara’s ultra vires claim.

Sahara’s out-of-circuit authority does not save it. It relies on a D.C. Circuit case

that, in dicta, remarked that “nothing suggests that Congress intended escalation to

serve as an adequate or exclusive remedy where, as here, a systemic failure causes

virtually all appeals to be decided well after the statutory deadlines.” See [Am.

Hosp. Ass’n v. Burwell, 812 F.3d 183, 191 (D.C. Cir. 2016)]. But American

Hospital was a very unusual case. Hospitals sought to mandamus the Secretary of

HHS to comply with the 90-day hearing requirement and to solve the problem of

the multi-year backlog. Id. at 185. The court held that mandamus jurisdiction

existed, but that issuance of the writ was premature. It told Congress that “given

the unique circumstances of this case, the clarity of the statutory duty likely will

require issuance of the writ if the political branches have failed to make meaningful

progress within a reasonable period of time—say, the close of the next full

appropriations cycle.” Id. at 193.

Congress heeded that warning and appropriated $182.3 million to address the

appeals backlog, “more than doubl[ing] [the agency’s] FY 2017 disposition

capacity.” Am. Hosp. Ass’n v. Azar, No. 14-cv-851, 2018 WL 5723141, at *2

(D.D.C. Nov. 1, 2018). As a result, the agency is under a mandamus order to

eliminate the backlog by the end of fiscal year 2022. See id. at *3. The “unique

circumstances” that justified the American Hospital decision are no longer present.

See Am. Hosp. Ass’n, 812 F.3d at 193. The case is inapposite to Sahara’s present

claim.

Sahara fails to state a claim for ultra vires actions. The district court did not err by

denying injunctive relief on that ground.

Sahara, 975 F.3d at 533-34.

The Court concludes that the same reasoning in Sahara applies here. Plaintiff received both

the first step (redetermination) and the second step (reconsideration) of the administrative appeals

process before recoupment began. (See ECF No. 1, pgs. 23-26). Plaintiff, like the provider in

Sahara, had the option to escalate its appeal when it did not receive an ALJ hearing within 90

days. See 42 U.S.C. § 1395ff(d)(3)(A). Plaintiff also has the option to escalate its appeal to federal

court now that it has not received a decision from the Appeals Council within 90 days. See 42

U.S.C. § 1395ff(d)(3)(B). Congress has chosen escalation as the prescribed remedy for undue

delays in the administrative appeals process. See Sahara, 975 F.3d at 533 (“Sahara rejected that

remedy. The Secretary and the Administrator acted within their statutory limits and we affirm the

district court’s dismissal of Sahara’s ultra vires claim.”).4 Here, Plaintiff has rejected that

prescribed remedy. In light of the Fifth Circuit’s holding that a similarly situated provider was

unable to state a claim for ultra vires actions, the Court concludes that Plaintiff is not entitled to

relief on its ultra vires claim. 5 As such, the Court denies Plaintiff leave to amend its pleadings to

reorient this case around the delays at the fourth level of the administrative appeals process because

such amendment would be futile.

(b) The Court Would Lack Subject-Matter Jurisdiction over

Plaintiff’s APA Claim Even If the Court Allowed

Plaintiff’s Amendment.

In its summary judgment briefing, Plaintiff argues that it is entitled to a “preservation of

status or rights” injunction under the APA preventing Defendants from recouping the alleged

overpayments because it has not received a decision from the Appeals Council within the required

4 The Sahara court further explained:

Our only sister circuit to face this question reached the same conclusion. The Fourth Circuit recently

vacated an injunction that barred “HHS from pursuing recoupment efforts until [the plaintiff-

provider] could challenge the recoupment amounts in a hearing before an ALJ.” See Accident, Injury

& Rehab., 943 F.3d at 197. The court discussed two fatal flaws to the plaintiff's theory. First, the

provider was myopically focused on the tree of the hearing while it ignored the forest of the full

comprehensive five-step scheme of procedural protections. See id. at 204. Second, the provider, by

seeking an injunction instead of the statutorily prescribed escalation procedures, could not then

“complain that its election denie[d] it due process.” Id. We agree on both points. The step-three

hearing is just one part of a procedurally protective whole. And Sahara cannot complain about

lacking due process when the privation (foregoing escalation and judicial review) was its own

choice.

Sahara Health Care, Inc. v. Azar, 975 F.3d 523, 532–33 (5th Cir. 2020) (emphasis added).

5 For the same reasons, the Court concludes that Defendants are entitled to summary judgment on Plaintiff’s ultra

vires claims. See infra Section III.C.

timeframe. (ECF No. 72, pgs. 13-15). Defendants argue that, even if Plaintiff’s APA claim is not

moot, this Court does not have subject-matter jurisdiction over the APA claim because: (1) “the

APA does not provide an independent basis for jurisdiction;” (2) the APA [] does not provide a

mechanism to override the jurisdictional requirements of 42 U.S.C. § 405(g);” and (3) “there is no

final agency action in this case under the APA.” (ECF No. 75, pg. 25). The Court agrees with

Defendants and concludes that allowing Plaintiff to amend its pleadings to refocus its APA claim

on the fourth level of the administrative appeals process would be futile because the Court lacks

subject-matter jurisdiction over the APA claim.

Plaintiff asserts that the Court has jurisdiction over its APA pursuant to one of the

provisions of that law—5 U.S.C. § 705. (See ECF No. 1, pgs. 16, 33). However, as Defendants

correctly point out, this provision of the APA simply indicates that courts may take action to

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

conclusion of the review proceedings.” 5 U.S.C. § 705. In fact, it is well-settled that the APA “does

not create an independent grant of jurisdiction to bring suit.” Stockman v. Fed. Election Comm’n,

138 F. 3d 144, 151 n. 13 (5th Cir. 1998) (citing Califano v. Sanders, 430 U.S. 99, 107 (1977)

(explaining that “the APA does not afford an implied grant of subject[-]matter jurisdiction

permitting judicial review of agency action”)). Accordingly, the Court’s subject-matter jurisdiction

must arise from Plaintiff’s alternative jurisdictional arguments—that is, a provision of the Social

Security Act, 42 U.S.C. § 405(g), and the provision of the Medicare Act which makes 42 U.S.C.

§ 405(g) applicable to Medicare, 42 U.S.C. § 1395ff(b)(1)(A).6

“The Medicare Act severely restricts the authority of federal courts by requiring ‘virtually

all legal attacks’ under the Act be brought through the agency.” Physician Hosps. of Am. v.

6 Medicare cases usually are excluded from the general grant of federal-question jurisdiction in 28 U.S.C. § 1331

absent exhaustion of the agency appeals. Fam. Rehab., Inc. v. Azar, 886 F.3d 496, 501 n. 4 (5th Cir. 2018).

Sebelius, 691 F.3d 649 (5th Cir. 2012) (quoting Shalala v. Ill. Council on Long Term Care, Inc.,

529 U.S. 1, 13 (2000)). Under 42 U.S.C. § 405 (h), § 405(g) is the sole avenue for judicial review

for all “claims arising under” the Medicare Act, even to the exclusion of federal-question

jurisdiction under 28 U.S.C. 1331. Heckler v. Ringer, 466 U.S. 602, 614-15 (1984) (citations

omitted). Accordingly, federal courts only have jurisdiction over “final decision[s]” of HHS when

dealing with claims “arising under” the Medicare Act. Family Rehab., Inc. v. Azar, 886 F.3d 496,

500 (5th Cir. 2018). It is undisputed that Plaintiff’s claims arise under the Medicare Act.

“Judicial review for claims ‘arising under’ the Medicare Act normally becomes available

only after a party first presents the claim to the Secretary [of the HHS] and receives a final

decision.” Supreme Home Health Servs., Inc. v. Azar, 380 F. Supp. 3d 533, 547 (W.D. La. 2019)

(citing Physician Hosps. of Am., 691 F.3d at 653), aff’d, 812 F. App’x 229 (5th Cir. 2020). In other

words:

[J]urisdiction under section 405(g) is determined under a two prong test. First, there

must have been a presentment to the Secretary . . . . This element can never be

waived and no decision of any type can be rendered if this requirement is not

satisfied . . . . Second, the claimant must have exhausted his administrative review.

Affiliated Prof’l Home Health Care Agency v. Shalala, 164 F.3d 282, 285 (5th Cir.1999) (emphasis

added) (citing Mathews v. Eldridge, 424 U.S. 319, 328 (1976)). It is undisputed that Plaintiff has

presented its claims to the Secretary by availing itself of the administrative appeals process. See

Supreme Home Health Servs., 380 F. Supp. At 547 (“[T]he court readily finds that Supreme

presented its claim to the Secretary, if not by initiating the administrative appeals process, then by

requesting review before an ALJ.”).

Defendants contend, however, that Plaintiff has failed to satisfy the second of § 405(g)’s

requirements—the exhaustion prong—because it has not obtained a final decision. (ECF No. 75,

pgs. 27-28). With respect to the exhaustion prong, the Fifth Circuit has explained:

[A] provider may come to district court only after either (1) satisfying all four

stages of administrative appeal, i.e., after the [Appeals] Council has rendered a

decision, or (2) after the provider has escalated the claim to the [Appeals] Council

and the [Appeals] Council acts or fails to act within 180 days. [42 U.S.C.] §§

405(g), (h); 42 C.F.R. § 405.1132.

Family Rehab., 886 F.3d 496, 500-01 (emphasis added). It is undisputed that neither of these

conditions under the exhaustion prong has occurred here. Therefore, Plaintiff must establish that

it meets an exception to exhaustion.

The Supreme Court and the Fifth Circuit have three recognized exceptions to § 405(g)’s

exhaustion requirement: “(1) the Eldridge collateral-claim exception under § 405(g); (2) the

preclusion-of-judicial-review exception under 28 U.S.C. § 1331; and (3) mandamus jurisdiction

under 28 U.S.C. § 1361.” Adams EMS, Inc. v. Azar, No. CV H-18-1443, 2018 WL 5264244, at *5

(S.D. Tex. Oct. 23, 2018) (citing Family Rehab., 886 F.3d at 501 (citing, in turn, Eldridge, 424

U.S. at 326-32; Ill. Council, 529 U.S. at 19; Randall D. Wolcott, M.D., P.A. v. Sebelius, 635 F.3d

757, 764 (5th Cir. 2011)). The Court concludes that, even if Plaintiff were allowed to amend its

APA claim in the manner put forth in the Motion for Summary Judgment and Brief in Support, the

Court would not have subject-matter jurisdiction over the APA claim because none of the three

exceptions to the requirements of § 405(g) apply.

(1) The Collateral Claim Exception

In its Complaint, Plaintiff invokes the “collateral-claim exception” to § 405(g)’s

channeling requirement, under which courts have jurisdiction “over claims (a) that are ‘entirely

collateral’ to a substantive agency decision and (b) for which ‘full relief cannot be obtained at a

post[-]deprivation hearing’” Family Rehab., 886 F.3d at 501 (quoting Eldridge, 424 U.S. at 330-

32); (ECF No. 1, pgs. 16-17; ECF No. 77, pg. 15). In Family Rehab., the Fifth Circuit distilled the

first prong of this exception into two maxims. First, “[i]f the court must examine the merits of the

underlying dispute, delve into the statutes and regulations, or make independent judgments as to

plaintiffs’ eligibility under a statute,” or “if plaintiffs request relief that is proper under the organic

statute—by requesting that benefits or a provider status be permanently reinstated,” then the claims

are not collateral. Family Rehab., 886 F.3d at 503 (emphasis in original) (citing and discussing

Ringer, 466 U.S. at 610, 614; Affiliated Prof’l Home Health, 164 F.3d at 284-86). Second, if the

claims “sound only in constitutional or procedural law” and “request that benefits be maintained

temporarily until the agency follows the statutorily or required procedures,” they are collateral.

Family Rehab., 886 F.3d at 503 (citing and discussing Eldridge, 424 U.S. at 319, 324-25, 330-32;

Bowen v. City of New York, 476 U.S. 467, 473-74, 483 (1986)). Under the second prong of the

exception, plaintiffs must raise “‘at least a colorable claim’ that erroneous recoupment will

‘damage [them] in a way not recompensable through retroactive payments.’” Family Rehab., 886

F.3d at 504 (quoting Eldridge, 424 U.S. at 331).

The Court concludes that Plaintiff’s APA claim is not collateral. On this point, the Court

finds the decision of a court in the Southern District of Texas to be persuasive. In Sahara Health

Care, Inc. v. Azar, 349 F. Supp. 3d 555 (S.D. Tex. 2018), aff’d, 975 F.3d 523 (5th Cir. 2020), the

district court considered a case very similar to this one: a Medicare provider facing recoupment of

Medicare overpayments did not receive an ALJ hearing within 90 days, so it sued HHS and CMS,

asserting (1) an ultra vires claim, (2) a procedural due process claim, and (3) a claim for a

“preservation of status of rights” injunction under the APA. The Sahara district court explained:

By nature, Plaintiff’s APA claim is not collateral because it requires the Court to

delve into the statute and regulations, and to make independent judgments as to

Plaintiff’s eligibility under the statute. The provision cited relates to Plaintiff’s

eligibility and status under the statute by Plaintiff’s “preservation of status” and

assertion of rights under the APA. It should be noted the Fifth Circuit in Family

Rehab. did not consider Family Rehab’s APA claim because Family Rehab

conceded its APA claim was not collateral. [Family Rehab., 886 F.3d at 501 n. 6.]

Finally, since jurisdiction and an adequate remedy under § 405(g) exists for

Plaintiff [(continuation through the administrative appeals process)], the Court

lacks jurisdiction to review Plaintiff’s APA claim.

Sahara, 349 F. Supp. 3d at 566 (emphasis added).

The Court adopts the reasoning in Sahara and the numerous other courts in this circuit that

have made similar determinations. See, e.g., Supreme Home Health, 380 F. Supp. 3d at 548-551

(Finding that, prior to the Fifth Circuit’s ruling on the viability of procedural due process and ultra

vires claims in Sahara, 975 F.3d 523, those claims were collateral, but holding that the court lacked

jurisdiction over the APA claim because “the APA does not provide a mechanism to override

§ 405(h)’s jurisdictional requirements and does not authorize district courts subject matter to issue

Medicare injunction suits”) (citing Sahara, 349 F. Supp. 3d at 565); Arthritis Treatment of Tex.,

PLLC v. Azar, 3:16-cv-6592664, at *5-6 (N.D. Tex. Dec. 14, 2018) (finding that it lacked

jurisdiction over a provider’s APA claim challenging the amount of an alleged overpayment); Tex.

Med. Enterprises, Inc. v. Seblius, No. 9:13-cv-27, at *4 (E.D. Tex. Jun. 24, 2013) (finding that it

lacked APA jurisdiction over a provider’s APA claim challenging the terms of repayment of

Medicare overpayments); Citadel Healthcare Services Inc. v. Sebelius, 3:10-cv-1077-BH, 2010

WL 5101389, at *4-5 (N.D. Tex. Dec. 8, 2010) (“Although Plaintiff has framed the claim in

constitutional terms by alleging a denial of appeal rights and overpayment notice, it essentially

seeks to prevent improper recoupment and suspension of its Medicare payments, which is clearly

an administrative remedy.”). Accordingly, the Court concludes that, even if Plaintiff were allowed

to amend its Complaint through its Motion for Summary Judgment, Plaintiff’s APA claim would

not satisfy the collateral-claim exception to § 405(g)’s exhaustion requirement.

(2) The Preclusion of Review Exception

Plaintiff also invokes the “preclusion-of-judicial-review exception.” “In Shalala v. Illinois

Council on Long Term Care, Inc., the Supreme Court recognized that a court may exercise

jurisdiction over Medicare claims under 28 U.S.C. § 1331 if administrative obstacles ‘would not

simply channel review through [HHS], but would mean no review at all.’” Supreme Home Health,

380 F. Supp. 3d at 551 (citing Adams EMS, 2018 WL 5264244, at *6 (citing, in turn, Ill. Council,

529 U.S. at 15)). However, “this exception is narrow and applies only when channeling a claim

through [HHS] would result in the ‘complete preclusion of judicial review.’” Family Rehab., 886

F.3d at 504-05 (emphasis in original) (quoting Ill. Council, 529 U.S. at 23). Thus, a provider “must

show that bringing its claim administratively is ‘a legal impossibility,’ or that it faces ‘a serious

practical roadblock to having [its] claims reviewed in any capacity, administratively or

judicially.’” Family Rehab., 886 F.3d at 505 (quoting Physician Hosps., 691 F.3d at 655, 659).

In support of Plaintiff’s invocation of this exception, Plaintiff argues that it “has suffered

and has been harmed by a substantial delay in multiple stages of an appeal process that should

take less than a year. The challenging of this delay is not something that can be done when a ‘final

agency decision’ has been issued.” (ECF No. 76, pg. 16). Plaintiff’s argument fails for two reasons.

First, Plaintiff has not invoked 28 U.S.C. § 1331 as a basis for subject-matter jurisdiction over its

APA claim, or indeed over any of its claims. (See ECF No. 1, pgs. 16-18). Second, even if it had,

the Fifth Circuit in Family Rehab. specifically rejected this sort of argument in the context of the

preclusion of review exception, explaining:

Family Rehab alleges that bringing its claim administratively faces serious

obstacles from the colossal backlog in Medicare appeals and HHS's ostensibly

Sisyphean attempts to combat the problem. But it is not enough to assert that

judicial review will be delayed and that Family Rehab itself will be prejudiced

by that delay. Indeed, we have required channeling so long as “there potentially

were other parties with an interest and a right to seek administrative review.” Given

the thousands of ongoing Medicare appeals—including by providers who have

come already to our circuit—there is no dearth of third parties with both the

incentive and capacity to challenge the timeliness of ALJ hearings. Jurisdiction is

not available under § 1331.

Family Rehab., 886 F.3d at 505 (footnotes omitted); see also Supreme Home Health, 380 F. Supp.

3d at 551 (the “colossal backlog in Medicare appeals” does not suffice to render “judicial review

completely unavailable”) (citing Family Rehab., 886 F. 3d at 505); Arthritis Treatment of Tex.,

2018 WL 6592664, at *6 (finding the preclusion of review exception did not apply). Accordingly,

the Court concludes that, even if Plaintiff were allowed to amend its pleadings, the Plaintiff’s APA

claim would not satisfy the preclusion of review exception.

(3) Mandamus Jurisdiction

Plaintiff does not explicitly invoke the mandamus jurisdiction exception to the channeling

requirements of § 405 in arguing that the Court has jurisdiction over the APA claim. However,

because Plaintiff invokes mandamus jurisdiction as the basis for the Court’s jurisdiction over the

claim for mandamus relief, the Court addresses the mandamus exception to § 405 out of an

abundance of caution.

“Under the Mandamus and Venue Act, 28 U.S.C. § 1361, a district court has ‘jurisdiction

[over] any action in the nature of mandamus to compel an officer or employee of the United States

or any agency thereof to perform a duty owed to the plaintiff.’” Wolcott, 635 F.3d at 766 (quoting

28 U.S.C. § 1361). Section 405(h) “does not preclude § 1361 jurisdiction to review otherwise

unreviewable procedural issues.” Wolcott, 635 F.3d at 766. Section 1361, however, “does not grant

jurisdiction to consider actions asking for other types of relief—such as injunctive relief.” Wolcott,

635 F.3d at 766. In Wolcott, the Fifth Circuit held that § 1361 could not serve as the basis for

jurisdiction over a claim for injunctive relief because:

An injunction is a remedy to restrain the doing of injurious acts or to require the

undoing of injurious acts and the restoration of the status quo, whereas mandamus

commands the performance of a particular duty that rests on the defendant or

respondent, by operation of law or because of official status.

Wolcott, 635 F.3d at 766 (citation and internal quotation marks omitted). Accordingly, the Court

concludes that the mandamus exception does not apply to Plaintiff’s request for injunctive relief

under the APA. See Supreme Home Health, 380 F. Supp. 3d at 551 (finding that the mandamus

jurisdiction exception did not apply to plaintiff’s claim for injunctive relief prohibiting HHS and

CMS from recouping Medicare overpayments while plaintiff waited for their ALJ hearing).

In sum, the Court concludes that, even if Plaintiff were allowed to amend its pleadings

through its Motion for Summary Judgment, such amendment would be futile with respect to the

APA claim because the Court lacks subject-matter jurisdiction over that claim, and the claim does

not satisfy any of the established exceptions to § 405(g)’s exhaustion requirement.

(ii) Plaintiff’s Requested Order of Mandamus

Finally, the Court turns to Plaintiff’s request for an order of mandamus. As noted above,

Plaintiff’s Complaint requests, in the alternative to injunctive relief, “an order of mandamus

requiring Defendants to provide Med-Cert with a hearing before an ALJ and a decision from the

ALJ.” (ECF No. 1, pg. 35) (emphasis added). However, in its Motion for Summary Judgment,

Plaintiff requests different relief with respect to its mandamus claim—that is, “the issuance of an

order of mandamus compelling Defendants to properly adjudicate its administrative appeal

pursuant to 42 U.S.C. § 1395ff.” (ECF No. 71, pg. 2) (emphasis added). Defendants argue that,

even if Plaintiff’s claim for mandamus relief is not moot, Plaintiff cannot establish that it is entitled

to this “drastic remedy.” (ECF No. 75, pg. 29). The Court concludes that allowing Plaintiff to

amend its mandamus claim to attack the general inadequacy of the administrative appeals process

would be futile because, even if such amendment were to be allowed, Plaintiff has not established

that it is entitled to mandamus relief.

“Mandamus may only issue when (1) the plaintiff has a clear right to relief, (2) the

defendant has a clear duty to act, and (3) no other adequate remedy exists.” Wolcott, 635 F.3d at

768. “The third element requires the exhaustion of any adequate administrative remedy before a

court may issue mandamus.” Wolcott, 635 F.3d at 768. “An alternative remedy, including an

administrative remedy, is adequate if it is capable of affording full relief as to the very subject

matter in question.” Wolcott, 635 F.3d at 768. “Even when a court finds that all three elements are

satisfied, the decision to grant or deny the writ remains within the court’s discretion because of the

extraordinary nature of that remedy.” Wolcott, 635 F.3d at 768 (citing United States v. Denson,

603 F.2d 1143, 1146 (5th Cir. 1979)). The Court concludes that, even if Plaintiff were allowed to

amend its claims, Plaintiff would not be entitled to mandamus relief because it cannot establish

that: (1) it has a clear and indisputable right to relief or (2) no other adequate remedy exists.

Plaintiff contends that it has a clear and undisputable right to receive its requested review

from the Appeals Council within 90 days. In support of its argument, Plaintiff focuses on the

mandatory language of the Medicare Act and the specified timeframes the Act sets. (See ECF No.

72, pgs. 12, 22); see 42 U.S.C. § 1395ff(d)(2)(A).7 However, as has been discussed above,

providers may “escalate” to federal court for judicial review of the underlying recoupment

determination if the Appeals Council does not make its decision on the request for review within

90 days. See 42 U.S.C. § 1395ff(d)(3)(B) (“In the case of failure by the [Appeals Council] to render

a decision by the end of the period described in [§ 1395ff(d)(2)], the party requesting the hearing

may seek judicial review¸ notwithstanding any requirements for a hearing for the purposes of the

party’s right to such judicial review.”); Sahara, 975 F.3d at 526.

Thus, “Congress has specifically contemplated [the] possibility” that the Appeals Council

cannot accomplish the task of rendering a decision within the 90-day timeframe and “provided a

different remedy as part of its comprehensive statutory scheme.” Infinity Healthcare Servs., Inc.

v. Azar, 349 F. Supp. 3d 587, 602 (S.D. Tex. 2018). In Cumberland County Hospital System, Inc.

v. Burwell, 816 F.3d 48 (4th Cir. 2016), the Fourth Circuit addressed a similar claim for mandamus

7 The Appeals Council “shall conduct and conclude a review of the decision [of the ALJ] and make a decision or

remand the case to the [ALJ] for reconsideration by not later than the end of the 90-day period beginning on the date

a request for review has been filed.” 42 U.S.C. § 1395ff(d)(2)(A) (emphasis added).

relief to the one before the Court here. There, a Medicare provider did not receive an ALJ hearing

within the required 90-day timeframe due to the immense administrative backlog plaguing the

Medical appeals process and sued HHS seeking an order of mandamus compelling the agency to

immediately adjudicate its appeal. Cumberland Cnty. Hosp. Sys., 816 F.3d at 49-50. The Fourth

Circuit affirmed the district court’s dismissal of the mandamus claim, explaining:

While the [Medicare] statute imposes deadlines for completion at each step of the

process, it also anticipates that the deadlines may not be met and thus gives the

healthcare provider the option of bypassing each step and escalating the claim to

the next level, ultimately reaching judicial review by a United States district court

within a relatively prompt time.

Cumberland Cnty. Hosp. Sys., Inc. v. Burwell, 816 F.3d 48, 54 (4th Cir. 2016). While the Medicare

Act does set a 90-day deadline for Appeals Council decisions in mandatory language, Congress

specifically laid out the consequences of failure to meet that deadline. See 42 U.S.C. §

1395ff(d)(3)(B) (“In the case of failure by the [Appeals Council] to render a decision . . . .”). In

Cumberland County Hospital System, the Fourth Circuit explained the significance of Congress

creating a comprehensive regulatory scheme that provides for escalation:

[I]nstead of creating a right to go to court to enforce the 90-day deadline,

Congress specifically gave the healthcare provider a choice of either waiting

for the ALJ hearing beyond the 90-day deadline or continuing within the

administrative process by escalation to the next level of review. The Hospital

System’s argument focuses on only the provision creating the 90-day time frame

and fails to account for its context in the comprehensive administrative process.

Our reading of the statute cannot be so restricted. See King v. Burwell, ––– U.S. ––

––, 135 S.Ct. 2480, 2492, 192 L.Ed.2d 483 (2015) (noting that it is a “fundamental

canon of statutory construction that the words of a statute must be read in their

context and with a view to their place in the overall statutory scheme” (quoting Util.

Air Regulatory Grp. v. EPA, 573 U.S. 302, 134 S.Ct. 2427, 2441, 189 L.Ed.2d 372

(2014) (internal quotation marks omitted))); FDA v. Brown & Williamson Tobacco

Corp., 529 U.S. 120, 120 S.Ct. 1291, 146 L.Ed.2d 121 (2000) (noting that “a

reviewing court should not confine itself to examining a particular statutory

provision in isolation”).

Thus, when taken in context, § 1395ff(d) must be understood to provide a 90-

day deadline for an ALJ’s decision, thereby encouraging the process to

proceed expeditiously, and to give the healthcare provider two options if the

deadline is not met: bypassing the ALJ hearing and obtaining review by the

Departmental Appeals Board, or waiting beyond the 90-day period for the

ALJ to conduct a hearing and render a decision. In giving the healthcare

provider these options, Congress anticipated that the 90-day deadline might not be

met and provided its chosen remedy.

Cumberland Cnty. Hosp. Sys., 816 F.3d at 55 (emphasis added).

Plaintiff does not cite—nor has the Court located—any binding authority holding that

Medicare providers have a clear and undisputable right to a decision by the Appeals Council within

90 days. Under these circumstances, the Court—like other courts in this circuit—finds the Fourth

Circuit’s reasoning persuasive. See, e.g., Inland Fam. Prac. Ctr., LLC v. Azar, No. 2:18-CV-140-

KS-MTP, 2021 WL 2583552 (S.D. Miss. June 23, 2021) (denying mandamus relief to a provider

requesting an order from the district court compelling the ALJ to render a decision after the 90-

day deadline passed, concluding that the escalation procedures constituted another adequate

remedy) (citing Cumberland Cnty. Hosp. Sys., 816 F.3d at 54-55); Superior Home Health Servs.,

L.L.C. v. Azar, No. 5:15-CV-00636-RCL, 2018 WL 3717121 (W.D. Tex. Aug. 3, 2018)

(dismissing provider’s procedural due process claim relating to a delay at the ALJ stage, finding

that, because the Medicare Act explicitly spells out the escalation remedies, “Congress anticipated

delays yet declined to set for further remedy than that provided in the statute” and “[f]urther

remedies beyond the statutory text must come from Congress”) (citing Cumberland Cnty. Hosp.

Sys., 816 F.3d at 55); Infinity Healthcare Servs., 349 F. Supp. 3d at 602-03 (finding that a provider

did not establish that it was statutorily entitled to suspension of recoupment because an ALJ

hearing could not be accomplished within 90 days) (citing Cumberland Cnty. Hosp. Sys., 816 F.3d

at 54-55). While Cumberland dealt with delays at the ALJ stage, its logic still operates here.

Congress provided statutory remedies for the failure of both an ALJ and the Appeals Council to

render a timely decision in 42 U.S.C. § 1395ff(d)(3), which it notably and unambiguously titled

“Consequences of failure to meet deadlines”—that is, escalation. Plaintiff rejected that remedy

with respect to the ALJ. It now rejects that remedy once again by seeking an order of this Court

requiring the Appeals Council to adjudicate its request for review, rather than seeking judicial

review of the underlying overpayment determination.

Because the Medicare Act specifically provides procedural remedies for providers facing

delays in the administrative appeals process, the Court concludes that Plaintiff does not have a

“clear right” to a mandamus order here. Wolcott, 635 F.3d at 768. Additionally, because there is

an available remedy for the failure of the Appeals Council to render a timely decision—escalation

to judicial review of the underlying overpayment determination—Plaintiff cannot establish that

“no other adequate remedy exists” besides an order of mandamus requiring the agency to provide

an Appeals Council decision. Wolcott, 635 F.3d at 768. Escalation in accordance with the Medicare

Act is “adequate because, despite the undisputed backlog of Medicare appeals, it is ‘capable of

affording full relief as to the very subject matter in question.’” Inland Fam. Prac. Ctr., 2021 WL

2583552, at *2 (quoting Wolcott, 635 F.3d at 768). As such, the Court concludes that allowing

Plaintiff to amend its mandamus claim would be futile because Plaintiff cannot establish that it is

entitled to mandamus relief.

Moreover, even if Plaintiff could establish that all three elements required for mandamus

relief are met, the Court would decline to exercise its discretionary power to issue mandamus relief.

See Wolcott, 635 F.3d at 768 (“[T]he decision to grant or deny [mandamus relief] remains within

the court’s discretion because of the extraordinary nature of that remedy.”). It is undisputed that

Plaintiff has been effected due to the backlog of Medicare appeals. However, granting Plaintiff’s

requested mandamus relief would only serve to move Plaintiff to the front of the line in the appeals

process, and would not serve to ameliorate the underlying quagmire. As the D.C. Circuit, which

deals with a heavy docket of administrative law cases, explained:

Assuming constant resources for [an administrative agency], a judicial order

putting [a plaintiff] at the head of the queue simply moves all others back one

space and produces no net gain. Agency officials not working on [administrative]

matters presumably have not just been “twiddl[ing] their thumbs”. See Board of

Trade v. SEC, 883 F.2d 525, 531 (7th Cir.1989). Perhaps Congress should earmark

more funds specifically to the [agency], . . . but that is a problem for the political

branches to work out.

. . . .

In short, we have no basis for reordering agency priorities. The agency is in a

unique—and authoritative—position to view its projects as a whole, estimate

the prospects for each, and allocate its resources in the optimal way. Such

budget flexibility as Congress has allowed the agency is not for us to hijack.

In re Barr Lab’ys, Inc., 930 F.2d 72, 75 (D.C. Cir. 1991) (emphasis added) (declining to grant

mandamus relief to a drug company complaining that the FDA failed to approve or deny its generic

drug within the time required by statute); see also Ebanks v. Shulkin, 877 F.3d 1037, 1039–40

(Fed. Cir. 2017) (“[W]e question the appropriateness of granting individual relief to veterans who

claim unreasonable delays in VA’s first-come-first-served queue. Granting a mandamus petition

in such circumstances may result in no more than line-jumping without resolving the underlying

problem of overall delay.”) (citing In re Barr, 930 F.2d at 75). Jaraba v. Blinken, 568 F. Supp. 3d

720, 738 (W.D. Tex. 2021) (“[C]ourts have refused to issue judicial orders that would just put the

litigants ‘at the head of the queue ... and produce[ ] no net gain.’”) (quoting In re Barr, 930 F.2d

at 75). While the Court sympathizes with Plaintiff’s plight, it declines to direct HHS and CMS

how they should allocate their scarce financial resources. “[T]he political branches are best-suited

to alleviate [the Medicare appeals process’s] crippling delays,” and “Article III’s treatment of the

ailing Article II patient in the manner Med-Cert urges” is neither “possible [nor] desirable.”

Cumberland Cnty. Hosp. Sys., 816 F.3d at 56-57.

The Court concludes that, even if Plaintiff were allowed to amend its mandamus claim,

Plaintiff would be unable to satisfy two of the three necessary elements for mandamus relief.

Moreover, even if Plaintiff could satisfy all three elements, the Court would decline to exercise its

discretionary power to grant mandamus relief because the allocation of scarce administrative

resources is a task best left to the political branches. See Cumberland Cnty. Hosp. Sys., 816 F.3d

at 56-57. Accordingly, the Court denies Plaintiff’s constructive request to amend its mandamus

claim because any such amendment would be futile.

4. Plaintiff’s Remaining Claims for Relief are Dismissed

Plaintiff’s alternative claims for relief, as pleaded in the Complaint, are now moot because

Plaintiff received the ALJ hearing it requested in its Complaint. See Super Tire, 416 U.S. at 122.

Additionally, the Court denies Plaintiff’s constructive request for leave to amend its pleadings to

recast the gravamen of its factual allegations and assert claims for declaratory judgment because

such amendment—as put forth in the Motion for Summary Judgment and Brief in Support—would

be futile. Under these circumstances, there is no live controversy before the Court. Payne v.

Progressive Fin. Servs., Inc., 748 F.3d 605, 607 (5th Cir. 2014) (“A live controversy must exist at

every stage of the litigation.”). As such, the Court Plaintiff’s alternative claims for relief are

dismissed as moot. See Powell, 395 U.S. at 499 (“[W]here one claim has become moot and the

pleadings are insufficient to determine whether the plaintiff is entitled to another remedy, the

action should be dismissed as moot.”); Goldin v. Bartholow, 166 F.3d 710, 717 (5th Cir. 1999)

(“A moot case presents no Aritcle III case or controversy, and a court has no constitutional

jurisdiction to resolve the issue it presents.”).

B. Alternatively, Defendant is Entitled to Summary Judgment on Plaintiff’s

Remaining Alternative Claims for Relief

Alternatively—assuming arguendo the Court were to allow Plaintiff to amend its claims

to refocus them on the fourth-level delay and the appeals system writ large—the Court would reach

the same result(s): a denial of Plaintiff’s Motion for Summary Judgment and a grant of Defendants’

Cross-Motion for Summary Judgment. For the same reasons Plaintiff’s constructive amendments

are futile, the Court concludes that Defendant is entitled to summary judgment on all of Plaintiff’s

remaining alternative claims for relief. See FED. R. CIV. P. 56(a) (The court shall grant summary

judgment if the movant shows that there is no genuine dispute as to any material fact and the

movant is entitled to summary judgment as a matter of law.”).

With respect to the ultra vires claim, Defendant is entitled to summary judgment because

Defendants have established that they did not violate the Medicare Act by failing to provide

Plaintiff with an Appeals Council decision within 90 days of Plaintiff’s request for review. See

supra III.A.3(i)(a); Sahara, 975 F.3d at 533-34. Second, Defendants are entitled to summary

judgment on Plaintiff’s APA claim because the Court lacks subject-matter jurisdiction over that

claim. See supra III.A.3(i)(b). Third, Defendants are entitled to summary judgment on Plaintiff’s

claim for mandamus relief because: (1) Plaintiff has not established that (a) they had a “clear right”

to receive a decision from the Appeals Council within 90 days of their request for review or (b)

“no other adequate remedy exists,” Wolcott, 635 F.3d at 768; and, even if Plaintiff had so

established, (2) the Court would decline to exercise its discretionary power to grant mandamus

relief. See supra III.A.3(ii). Accordingly, the Court concludes that there are no genuine disputes

of material fact and Defendants are entitled to summary judgment as a matter of law. See FED. R.

CIV. P. 56(a); Celotex, 477 U.S. at 322.

IV. CONCLUSION

For the foregoing reasons, the Court (1) DENIES Plaintiff’s Motion for Summary

Judgment and (2) GRANTS Defendants’ Cross-Motion for Summary Judgment. Plaintiff’s ultra

vires claim and mandamus claim are hereby dismissed with prejudice. Plaintiff’s APA claim is

hereby dismissed without prejudice.

SO ORDERED: September 21, 2023.