1 2 3 4 5 6 7 8 UNITED STATES DISTRICT COURT 9 SOUTHERN DISTRICT OF CALIFORNIA 10 11 PACIFIC SURGICAL INSTITUTE OF Case No. 24-cv-01725-BAS-DTF PAIN MANAGEMENT, INC., 12 Petitioner, ORDER DENYING PETITIONER’S 13 v. MOTION FOR LEAVE TO FILE FIRST AMENDED VERIFIED 14 ROBERT F. KENNEDY, JR., PETITION (ECF No. 18) 15 Respondent.

16 17 Presently before the Court is Petitioner’s Motion for Leave to File First Amended 18 Verified Petition (ECF No. 18). For the reasons set forth below, the Court DENIES 19 Petitioner’s Motion to File Amended Petition. The Court hereby DIRECTS the Clerk of 20 the Court to close the case. 21 I. BACKGROUND 22 Pacific Surgical Institute of Pain Management, Inc., (“Petitioner”) is a California 23 corporation operating an ambulatory surgical center located in San Diego, California, 24 specializing in the treatment of chronic pain. (ECF No. 1 ¶ 1.) From September 17, 2013, 25 through March 8, 2016, Pacific Surgical provided Medicare-covered services to 26 beneficiaries. Pacific Surgical was initially granted Medicare reimbursements it submitted 27 to a Medicare Administrator Contractor (“MAC”), which initially processed Petitioner’s 28 requests and submitted to the U.S. Centers for Medicare & Medicaid Services (“CMS”), a 1 federal agency within the U.S. Department of Health and Human Services (“HHS”). (Id. 2 ¶¶ 2, 3.) However, a federal agency contractor, a Qualified Independent Contractor 3 (“QIC”), identified a 100% error rate in 511 claims and determined that Pacific Surgical 4 had received an overpayment. (Id. ¶ 3.) Pacific Surgical requested reconsideration by a 5 MAC and, subsequently, by a QIC—both of which resulted in unfavorable decisions. 6 Pacific Surgical then appealed the QIC’s decision to the Office of Medicare Hearings and 7 Appeals (“OMHA”), which conducted a hearing before an administrative law judge 8 (“ALJ”). (Id. ¶ 6.) On August 5, 2022, ALJ Scott A. Tews issued a partially favorable 9 decision based on a de novo review of the record, concluding that some of the disputed 10 claims were covered by Medicare. (Id. ¶ 8; Ex. A.) 11 On September 6, 2024, Petitioner initiated the present action by filing a writ of 12 mandamus under

, compelling Respondent Secretary of the HHS (then, 13 Xavier Becerra, but now, Robert F. Kennedy, Jr.) to pay a specified amount of money he 14 allegedly owed Petitioner in Medicare reimbursements following the ALJ’s decision. (Id. 15 ¶ 24.) On November 26, 2024, Respondent filed his motion to dismiss on grounds that 16 Petitioner failed to plead the Court has jurisdiction. (ECF No. 8.) On April 23, 2025, the 17 Court granted Respondent’s motion to dismiss for lack of subject matter jurisdiction, and 18 mandated that Petitioner file a motion for leave to amend pursuant to Federal Rule of Civil 19 Procedure 15(a)(2) “if Pacific Surgical believe[d] it can cure the jurisdictional deficiencies 20 herein.” (ECF No. 17 at 13.) Petitioner then filed its Motion to File Amended Petition, 21 seeking leave under Rule 15(a)(2) (ECF No. 18), and its Amended Petition (ECF No. 18- 22 2, Ex. A). Petitioner, once again, argued the Court has subject matter jurisdiction pursuant 23 to the Mandamus Act (ECF No. 18-2, Ex. A ¶ 6) and raised a new claim against Respondent 24 under 42 U.S.C. § 1395ddd(f)(2)(B), a provision of the Medicare Act (See ECF No. 18-2, 25 Ex. A ¶ 7). Respondent opposed on grounds, inter alia, that Petitioner’s Amended Petition 26 still fails to demonstrate that the Court has subject matter jurisdiction over the dispute. 27 (ECF No. 21 at 7.) Petitioner then filed a reply. (ECF No. 22.) 28 II. DISCUSSION 1 A. Lack of Subject Matter Jurisdiction 2 The Court previously held that it did not have subject matter jurisdiction under the 3 Mandamus Act to decide Petitioner’s claims because Petitioner has not presented the 4 relevant ALJ’s decision to the Medicare Appeals Council of HHS Departmental Appeals 5 Board for review prior to seeking federal judicial review. (ECF No. 17 at 7:19–21, 10– 6 13.) For the reasons below, the Court finds that Petitioner’s proposed amendments do not 7 correct the jurisdictional deficiency regarding subject matter jurisdiction. 8 Under

, district courts have “original jurisdiction of any action in 9 the nature of mandamus to compel an officer or employee of the United States or any 10 agency thereof to perform a duty owed to the plaintiff.” “Mandamus is an extraordinary 11 remedy . . . [and] is appropriately issued only when (1) the plaintiff’s claim is ‘clear and 12 certain’; (2) the defendant official’s duty to act is ministerial, and ‘so plainly prescribed as 13 to be free from doubt’; and (3) no other adequate remedy is available.” Barron v. Reich, 14

(9th Cir. 1994). Accordingly, “[t]he common-law writ of mandamus . 15 . . is intended to provide a remedy for a plaintiff only if he has exhausted all other avenues 16 of relief . . . .” Heckler v. Ringer,

(1984). As such, petitions for 17 mandamus do not evade the administrative exhaustion requirements set forth in 42 U.S.C. 18 § 405(g) of the Social Security Act, which applies to the Medicare Act. 19 1. Arising Under the Medicare Act 20 Title “42 U.S.C. § 405(h), made applicable to the Medicare Act by

1395ii, provides that § 405(g) . . . is the sole avenue for judicial review for all ‘claim[s] 22 arising under’ the Medicare Act.” Heckler, 466 U.S. at 614–15 (emphasis added). The 23 Supreme Court has interpreted the term “arising under” in this context “quite broadly.” Id. 24 “A claim ‘arises under’ the Medicare Act if the Act provides ‘both the standing and the 25 substantive basis’ for the claim, or if the claim is ‘inextricably intertwined with a claim for 26 benefits.’” Ramtin Massoudi MD Inc. v. Azar, No. 2:18-cv-1087-CAS(JPRx),

1940398, at *5 (C.D. Cal. Apr. 23, 2018) (quoting Heckler, 466 U.S. at 614–15). 28 1 The Court finds that Petitioner’s claims arise under the Medicare Act. Here, 2 Petitioner’s claim in the Amended Petition is brought under a statutory provision of the 3 Medicare Act: 42 U.S.C. § 1395ddd(f)(2)(B).1 (See ECF No. 18-2, Ex. A ¶ 7.) Through § 4 1395ddd(f)(2)(B), Petitioner alleges that it is entitled to $1,664,136.35 in Medicare 5 reimbursements that the Secretary of Health and Human Services allegedly recouped from 6 Petitioner prior to the ALJ Order reversing the agency’s prior adverse determination. (ECF 7 No. 18-2, Ex. A ¶ 9.) Thus, the Medicare Act provides “both the standing and the 8 substantive basis for Petitioner’s claims in the amended petition.” See Heckler,

at 614–15. Without needing to reach the issue of whether the claim is inextricably 10 intertwined with a claim for benefits under the Medicare Act, this alone is sufficient to 11 justify the Court’s finding that Plaintiff’s claim arises under the Medicare Act. 12 2. Presentment and Administrative Exhaustion 13 Given that Petitioner’s claim arises under the Medicare Act, the next step is to 14 consider whether Petitioner’s claims satisfy other requirements in

(g). 15 Section 405(g) “permits an individual to file suit in federal court ‘after any final decision 16 of the Secretary made after a hearing.’” Winter v. California Med. Rev., Inc.,

(9th Cir. 1989). This “final decision” condition consists of two elements: a 18 non-waivable requirement that “a claim for benefits shall have been presented to the 19 Secretary,” and a waivable requirement “that the administrative remedies prescribed by the 20 Secretary be exhausted.”

(quoting Mathews v. Eldridge,

(1976)); 21 see also Bowen v. City of New York,

, 482–83 (1986). The nonwaivable 22 element, called presentment, is a “crucial prerequisite” that must be considered first. 23 Eldridge, 424 U.S. at 329–30 (“As the nonwaivable jurisdictional element was satisfied, 24

25 1 42 U.S.C. § 1395ddd(f)(2)(B) states: Insofar as the determination on such appeal is against the provider of services or 26 supplier, interest on the overpayment shall accrue on and after the date of the original notice of overpayment. Insofar as such determination against the provider 27 of services or supplier is later reversed, the Secretary shall provide for repayment of the amount recouped plus interest at the same rate as would apply under the 28 1 we next consider the waivable element.”). The “nonwaivable . . . requirement [requires] 2 that an individual present a claim to the agency before raising it in court.” Shalala v. Ill. 3 Council on Long Term Care, Inc.,

(2000). 4 i. Presentment 5 As this Court previously held, where an ALJ decision has not specified an amount 6 of money owed to petitioner, determining the amount owed to the petitioner when 7 effectuating the ALJ’s decision requires a “new initial determination” under

405.1046(a)(3). (ECF No. 17 at 9.) In other words, to satisfy the presentment requirement 9 of

(g), Petitioner must first request the U.S. Department of Health and 10 Human Services to determine the exact amount of Medicare reimbursements it is entitled 11 to under the ALJ decision before seeking judicial review. Pac. Surgical Inst. of Pain 12 Mgmt., Inc. v. Kennedy,

, 1158 (S.D. Cal. 2025). The Court agrees 13 with Respondent that Petitioner has failed to seek an “an initial determination as to what 14 portion of the recouped funds was to be released under the ALJ Decision’s coverage 15 determinations” from the U.S. Department of Health and Human Services; and so, 16 Petitioner’s amended claims still do not meet the requirement of presentment in 42 U.S.C. 17 § 405(g). (ECF No. 21 at 3.) 18 ii. Administrative Exhaustion 19 Pacific Surgical has not alleged that it exhausted the four levels of administrative 20 review as to the MAC’s payment calculation as required by

(g).2 To have 21 exhausted administrative remedies, dissatisfied parties need to have appealed payment 22 determinations through a four-part administrative appeals process that culminates in a final 23 agency decision. See 42 U.S.C. § 1395ff; 42 C.F.R. Part 405, Subpart I. The administrative 24 appeals process consists of the following steps: 25

26 2 Petitioner has also failed to allege any bases for having the administrative exhaustion requirement judicially waived including whether the claim is: (1) “collateral to a substantive claim of entitlement 27 (collaterality)”; (2) “colorable in its showing that denial of relief will cause irreparable harm (irreparability)”; and (3) “one whose resolution would not serve the purposes of exhaustion (futility).” 28 1 1. Redetermination by a MAC of the initial determination. See

1395ff(a)(3);

et seq.; 3 2. Reconsideration by a QIC. See 42 U.S.C. § 1395ff(c);

et seq.; 4 3. De novo review and hearing before an ALJ. See 42 U.S.C. § 1395ff(d)(1); 42 C.F.R. 5 §§ 405.1002, 405.1006, 405.1014; and 6 4. Review and decision by the Medicare Appeals Council (“Council”) of the HHS 7 Departmental Appeals Board. See 42 U.S.C. § 1395ff(d);

, 8 405.1102(a). 9 The decision by the Council constitutes the “final decision” of the Secretary and is 10 judicially reviewable. See

(g)–(h), 1395ii;

. Only 11 after the Secretary renders a final decision may a party seek review of claims arising under 12 the Medicare Act in federal court. See 42 U.S.C. § 1395ff(b)(1)(A);

; 13

. 14 Conspicuously missing from any of Petitioner’s papers is any allegation that it 15 attempted to request the Council to determine the amount owed to Petitioner pursuant to 16 the ALJ decision—including whether the ALJ decision enables Petitioner to recover the 17 $1,664,136.35 that Petitioner is allegedly owed under § 1395ddd(f)(2)(B). Petitioner 18 instead seeks the Court’s permission to sidestep the Council’s review altogether, asserting 19 that claims under 42 U.S.C. § 1395ddd(f)(2)(B) are “not a part of Medicare’s 20 administrative appeals process.” (ECF No. 18-1 at 5.) Petitioner alleges in its Amended 21 Petition that, “there is no alternative remedy for [Petitioner] other than this Petition and no 22 administrative remedy exists to require the Secretary to comply with the law.” (ECF No. 23 18-2, Ex. A ¶ 13.) Thus, “the ALJ’s decision is enforceable by the Court.” (ECF No. 18- 24 2, Ex. A ¶ 6.) 25 Again, because the Court finds that Petitioner’s claims in its Amended Petition still 26 arise under the Medicare Act, Petitioner was required to first seek a final, appealable 27 decision by the Secretary of HHS by properly presenting and administratively exhausting 28 its claim before seeking judicial review. Because Petitioner did not seek final review by 1 the Secretary of the HHS, Petitioner does not fulfill the requirements for the Court to 2 assume subject matter jurisdiction pursuant to

(g). 3 B. Lack of Grounds to Amend Pleadings under Rule 15(a) 4 Federal Rule of Civil Procedure 15(a) permits parties to amend their pleadings with 5 the opposing party’s written consent or the court’s leave. Rule 15(a)(2) states: “In all other 6 cases, a party may amend its pleading only with the opposing party’s written consent or 7 the court’s leave. The court should freely give leave when justice so requires.” When the 8 opposing party has not given its written consent for leave to amend, as is the case here, the 9 Ninth Circuit considers five factors in determining whether leave to amend should be 10 granted: “(1) bad faith, (2) undue delay, (3) prejudice to the opposing party, (4) futility of 11 amendment; and (5) whether [the] plaintiff has previously amended his complaint.” In re 12 W. States Wholesale Nat. Gas Antitrust Litig.,

(9th Cir. 2013) (citing 13 Allen v. City of Beverly Hills,

(9th Cir. 1990)). 14 1. Futility 15 The Court finds that the amendments in Plaintiff’s Amended Petition are futile, 16 providing grounds for the Court to DENY Plaintiff’s Motion to File Amended Petition. 17 “While the Court is to ‘freely give leave [to amend] when justice so requires’ under Rule 18 15(a)(2), it need not do so if a jurisdictional infirmity is incurable such that any amendment 19 to the complaint ‘would be futile.’” Akkerman v. United States,

(C.D.

) (citing Ebner v. Fresh, Inc.,

(9th Cir. 2016)). “Amendment 21 is futile if the proposed amended complaint does not establish a court’s subject matter 22 jurisdiction over the action.” Dela Cruz v. Washington Mut. Bank, FA, No. C-13-04136- 23 RMW,

, at *3 (N.D. Cal. Jan. 27, 2014). 24 In this case, the Court previously dismissed Petitioner’s earlier motion because it 25 failed to demonstrate that the Court had subject matter jurisdiction, including under the 26 Mandamus Act, to decide the case. (ECF No. 17.) The issue of whether Petitioner’s 27 amendments are futile depends on whether the claims alleged therein now bring the case 28 within the Court’s jurisdiction. 1 For the reasons above, the Court finds Petitioner’s amendments still do not prove 2 ||that the Court has subject matter jurisdiction to decide Petitioner’s claims. Thus, Court 3 || finds that Petitioner’s amendments are futile and fail to establish that the Court has subject 4 || matter jurisdiction over the action. See Dela Cruz,

, at *3. 5 2. Remaining Factors 6 “Futility alone can justify the denial of a motion to amend.” Johnson v. Buckley,

, 1077 (9th Cir. 2004). Here, the Court need not consider the remaining 8 || factors to determine the propriety of leave to amend, because Plaintiff's amendments in its 9 || proposed Amended Petition (ECF No. 18-2, Ex. A), are futile and subject to dismissal as 10 || lacking subject matter jurisdiction under the Mandamus Act. 11 CONCLUSION 12 Finding that the Court still lacks subject matter jurisdiction to decide this action and 13 Petitioner’s proposed amendments are futile under Rule 15(a) based on failure to 14 || correct jurisdictional infirmities, the Court DENIES Petitioner’s Motion to File Amended 15 || Petition. (ECF No. 18.) The Court hereby DIRECTS the Clerk of the Court to enter a 16 ||judgment dismissing this action without prejudice for lack of subject matter jurisdiction 17 || and close the case. 18 IT IS SO ORDERED. 19 20 || DATED: October 9, 2025 (yatta Bahar >] H n. Cynthia Bashant, Chief Judge United States District Court 22 23 24 25 26 27 28

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