Pacific Surgical Institute of Pain Management, Inc. v. Becerra

• Court: District Court, S.D. California
• Decided: April 23, 2025
• Docket: 3:24-cv-01725
• Status: Unknown

Opinion

1 2 3 4 5 6 7 8 9 UNITED STATES DISTRICT COURT 10 SOUTHERN DISTRICT OF CALIFORNIA 11 12 PACIFIC SURGICAL INSTITUTE OF Case No. 24-cv-01725-BAS-DTF PAIN MANAGEMENT, INC., 13 ORDER GRANTING Petitioner, 14 RESPONDENT’S MOTION TO v. DISMISS PETITION FOR WRIT OF 15 MANDATE ROBERT F. KENNEDY, JR., 16 Respondent. (ECF No. 8) 17

18 19 20 Presently before the Court is Respondent’s Motion to Dismiss the Petition for Writ 21 of Mandate filed by Pacific Surgical Institute of Pain Management, Inc. (“Pacific 22 Surgical”). (ECF No. 8.) Pacific Surgical seeks mandamus relief concerning a dispute 23 over reimbursement under Title XVIII of the Social Security Act, 79 Stat. 291, as amended, 24 42 U.S.C. § 1395 et seq., commonly known as the Medicare Act. In Case No. 22-cv- 25 01521-BAS-WVG, this Court dismissed Petitioner’s prior petition for writ of mandamus 26 seeking to compel the U.S. Department of Health & Human Services (“HHS”) to pay 27 claims an administrative law judge (“ALJ”) had determined were covered by Medicare, 28 finding the Court lacked subject matter jurisdiction. The Ninth Circuit affirmed. 1 Petitioner seeks again to compel HHS to pay the amount allegedly due pursuant to 2 the ALJ’s decision. (ECF No. 1.) Respondent moves to dismiss under Federal Rule of 3 Civil Procedure 12(b)(1) for lack of subject matter jurisdiction and, alternatively, under 4 Rule 12(b)(6) for failure to state a claim upon which relief can be granted. (ECF No. 8.) 5 Respondent argues that Noridian Healthcare Solutions, LLC (“Noridian”), a Medicare 6 Administrative Contractor (“MAC”) responsible for managing regional Medicare policy 7 and reimbursement, has already issued payment in the amount it determined was owed 8 under the ALJ’s decision. (ECF No. 11.) As a result, Respondent contends that Pacific 9 Surgical’s claim is moot and that any challenge to Noridian’s payment calculation 10 effectuating the ALJ’s decision must first undergo administrative review. (Id.) 11 Having considered the parties’ arguments, the Court GRANTS Respondent’s Rule 12 12(b)(1) motion and DISMISSES the Complaint without prejudice for lack of subject 13 matter jurisdiction. 14 I. BACKGROUND 15 Pacific Surgical is a California corporation operating an ambulatory surgical center 16 located in San Diego, California, specializing in the treatment of chronic pain. (ECF No. 17 1 ¶ 1.) From September 17, 2013, through March 8, 2016, Pacific Surgical provided 18 Medicare-covered services to beneficiaries, including performing a procedure described as 19 the “percutaneous implantation of neurostimulator electrode array; peripheral nerve 20 (excludes sacral nerve) (CPT Code 64555).” (Id. ¶ 2 at 1:26–2:3.) 21 A MAC functioning as a fiscal intermediary for the U.S. Centers for Medicare & 22 Medicaid Services (“CMS”), a federal agency within HHS, initially processed and paid the 23 claims submitted by Pacific Surgical. (Id. ¶¶ 2, 3.) However, after conducting a post- 24 payment review of 511 claims, a Zone Program Integrity Contractor (“ZPIC”) identified a 25 100% error rate and determined that Pacific Surgical had received an overpayment totaling 26 $1,595,785.36. (Id. ¶ 3.) 27 Pacific Surgical requested a redetermination, and the MAC that initially paid 28 Petitioner upheld this overpayment determination on the basis that Medicare coverage 1 criteria were not met. (Id. ¶ 4.) Pacific Surgical requested a reconsideration by a Qualified 2 Independent Contractor (“QIC”), which also resulted in an unfavorable decision, leading 3 Medicare to recoup $1,191,249.97 while Pacific Surgical continued a multi-step 4 administrative appeals process. (Id. ¶ 5.) Pacific Surgical appealed the QIC’s decision, 5 and, on March 8, 2022, the Office of Medicare Hearings and Appeals (“OMHA”) 6 conducted a hearing before an ALJ. (Id. ¶ 6.) 7 On August 5, 2022, ALJ Scott A. Tews issued a partially favorable decision based 8 on a de novo review of the record, concluding that some of the disputed claims were 9 covered by Medicare. (Id. ¶ 8; Ex. A.) Consequently, Pacific Surgical claimed that it was 10 entitled to recover $3,657,180.01 in Medicare underpayments. (Id. ¶ 8.) 11 Prior to the present action, Pacific Surgical filed a petition for a writ of mandamus 12 in this Court on October 6, 2022, seeking to compel Respondent to pay $3,657,180.01. 13 Pacific Surgical Inst. of Pain Mgmt., Inc. v. Becerra, 22-cv-01521-BAS-WVG, 2023 WL 14 6130810 (S.D. Cal. Sept. 19, 2023) (“Pacific Surgical I”). (ECF No. 8 at 7:11–24.) The 15 Court dismissed the case without prejudice, concluding that it lacked jurisdiction under 16 both the Medicare and federal mandamus statutes. Pacific Surgical I, 2023 WL 6130810, 17 at *6. Pacific Surgical appealed that dismissal to the Ninth Circuit, which affirmed the 18 decision. Pacific Surgical Inst. of Pain Mgmt., Inc. v. Becerra, No. 23-55798, 2024 WL 19 2862121, at *2 (9th Cir. June 6, 2024). 20 In the instant petition, Petitioner once more seeks a writ of mandamus under 28 21 U.S.C. § 1361, compelling Respondent to pay $3,657,180.01 following the ALJ’s decision. 22 (ECF No. 1 at ¶ 24.) Respondent moved to dismiss, asserting both lack of subject matter 23 jurisdiction and failure to state a claim upon which relief can be granted. (ECF No. 8.) 24 Respondent argues that the ALJ’s decision did not establish a specific amount owed, 25 precluding mandamus relief, and further contends that collateral estoppel bars relitigation 26 of this issue following the Ninth Circuit’s ruling in Pacific Surgical I. (Id. at 1:22–2:2.) 27 In response, Petitioner argues that the precise amount owed by Medicare can be 28 calculated with “mathematical precision,” and now totals $4,675,405.99. (ECF No. 10 at 1 2:6–11; Smith Decl. ¶ 4.) In reply, Respondent introduced the Declaration of Shannon 2 Oehlke to assert that, on September 11, 2024, Noridian effectuated the ALJ’s decision by 3 issuing a $753,234.92 payment to Pacific Surgical, thereby creating a new initial 4 determination under 42 C.F.R. § 405.1046(a)(3) that requires Pacific Surgical to first 5 exhaust its administrative remedies. (ECF No. 11 at 1:11–20, 3:27–4:4; Oehlke Decl. ¶¶ 4– 6 6.) Pacific Surgical objected and requested the Court permit an opportunity to respond or, 7 alternatively, strike the Oehlke Declaration, arguing that it constitutes new evidence 8 improperly submitted in a reply brief. (ECF No. 13.) Respondent argues that the 9 declaration was offered to rebut Pacific Surgical’s arguments regarding the amount 10 Respondent allegedly owed. (ECF No. 14.) 11 The Court granted Petitioner leave to file a surreply in response to the Oehlke 12 Declaration. (ECF No. 15.) In its Surreply, Petitioner argued that it “did receive some 13 funds… but none of those funds were for the services that were the subject of the ALJ 14 decision.” (ECF No. 16 at 3:19–21.) 15 II. LEGAL STANDARD 16 A motion to dismiss under Rule 12(b)(1) of the Federal Rules of Civil Procedure 17 challenges a federal court’s subject matter jurisdiction. “Federal courts are courts of 18 limited jurisdiction.” Kokkonen v. Guardian Life Ins. Co. of Am., 511 U.S. 375, 377 (1994). 19 “They possess only that power authorized by Constitution and statute.” Id. Once a party 20 challenges the court’s subject matter jurisdiction, “[t]he party seeking to invoke the court’s 21 jurisdiction bears the burden of establishing that jurisdiction exists.” Scott v. Breeland, 22 792 F.2d 925, 927 (9th Cir. 1986). 23 Moreover, “[a] Rule 12(b)(1) jurisdictional attack may be facial or factual.” Safe 24 Air for Everyone v. Meyer, 373 F.3d 1035, 1039 (9th Cir. 2004) (citation omitted). “In a 25 facial attack, the challenger asserts that the allegations contained in a complaint are 26 insufficient on their face to invoke federal jurisdiction. By contrast, in a factual attack, the 27 challenger disputes the truth of the allegations that, by themselves, would otherwise invoke 28 federal jurisdiction.” Id. In resolving a factual challenge, the court “may review evidence 1 beyond the complaint without converting the motion to dismiss into a motion for summary 2 judgment.” Id. at 1039. 3 Where, as here, a Rule 12(b)(1) motion is brought alongside a Rule 12(b)(6) motion, 4 it is appropriate for the court to first consider and address the disputed jurisdictional issues 5 under the former before analyzing the merits of a claim under the latter. See Maya v. 6 Centex Corp., 658 F.3d 1060, 1068 (9th Cir. 2011) (“The jurisdictional question of 7 standing precedes, and does not require, analysis of the merits.” (citation omitted)). If, 8 upon analysis of the Rule 12(b)(1) motion, the court finds it lacks subject matter 9 jurisdiction over the action or a claim pressed therein, it need not address the merits issues 10 raised in the collateral Rule 12(b)(6) motion. Toyota Landscaping Co., Inc. v. S. Cal. Dist. 11 Council of Laborers, 11 F.3d 114, 119 (9th Cir. 1993). When a court lacks subject matter 12 jurisdiction, it must dismiss the action, either upon a party’s motion or sua sponte. Fed. R. 13 Civ. P. 12(h)(3); see also Pistor v. Garcia, 791 F.3d 1104, 1111 (9th Cir. 2015). 14 “Ordinarily, a case dismissed for lack of subject matter jurisdiction should be dismissed 15 without prejudice so that a plaintiff may reassert his claims in a competent court.” Frigard 16 v. United States, 862 F.2d 201, 204 (9th Cir. 1988) (citation omitted). 17 III. ANALYSIS 18 A. Factual Attack on Subject Matter Jurisdiction 19 In its Reply brief, Respondent supports its Motion to Dismiss with the Declaration 20 of Shannon Oehlke, Reimbursement Supervisor at Noridian, which challenges the factual 21 basis of Pacific Surgical’s jurisdictional claims. (ECF No. 11 at 1:7–25; Oehlke Decl. 22 ¶¶ 4–6.) Shannon Oehlke asserts that the disputed payment has already been issued: 23 I have checked Noridian’s records regarding Noridian’s effectuation of the ALJ Decision as to Pacific Surgical. Those records indicate that during 24 Noridian’s effectuation of the ALJ Decision, Noridian calculated that Pacific 25 Surgical was due $753,234.92 under the ALJ Decision . . . Noridian’s records further indicate that the above-referenced $753,234.92 was released to 26 Pacific Surgical, as part of a combined payment of various items that totaled 27 $971,315.20, and which was released via electronic bank transfer to Pacific Surgical on September 11, 2024. 28 1 (Oehlke Decl. ¶¶ 4–6.) Respondent therefore contends that Pacific Surgical cannot 2 establish the requisite elements for mandamus jurisdiction because it lacks a clear and 3 certain right to specific monetary relief under the ALJ’s decision and has not exhausted its 4 administrative remedies prior to seeking relief in federal court. (ECF No. 11 at 1:16–25.) 5 The Court finds that to the extent Respondent raised new evidence or arguments on 6 reply, neither constituted an improper submission, as they were offered in direct rebuttal to 7 arguments raised in Petitioner’s opposition. See Applied Materials, Inc. v. Demaray LLC, 8 No. 5:20-CV-05676-EJD, 2020 WL 8515132, at *1 (N.D. Cal. Dec. 16, 2020). Here, 9 Respondent’s reply arguments and supporting declaration address Petitioner’s contention 10 regarding the amount allegedly owed and whether payment was issued. Accordingly, the 11 Court considers the facts in both Respondent’s reply and Petitioner’s surreply, along with 12 Petitioner’s petition for mandamus, without converting the motion to dismiss into one for 13 summary judgment. See Safe Air, 373 F.3d at 1039. 14 B. Mandamus Jurisdiction 15 Petitioner contends that this Court has mandamus jurisdiction pursuant to 28 U.S.C. 16 § 1361. (ECF No. 1 ¶ 15.) Petitioner argues that it is “asking for a Writ of Mandamus 17 under the Mandamus Act and therefore this action does not seek to rest jurisdiction in either 18 the Medicare Act or federal question jurisdiction.” (Id. ¶ 20.) 19 Under 28 U.S.C. § 1361, district courts have “original jurisdiction of any action in 20 the nature of mandamus to compel an officer or employee of the United States or any 21 agency thereof to perform a duty owed to the plaintiff.” “Mandamus is an extraordinary 22 remedy . . . [and] is appropriately issued only when (1) the plaintiff’s claim is ‘clear and 23 certain’; (2) the defendant official’s duty to act is ministerial, and ‘so plainly prescribed as 24 to be free from doubt’; and (3) no other adequate remedy is available.” Barron v. Reich, 25 13 F.3d 1370, 1374 (9th Cir. 1994) (quoting Fallini v. Hodel, 783 F.2d 1343, 1345 (9th 26 Cir. 1986)). Accordingly, “[t]he common-law writ of mandamus . . . is intended to provide 27 a remedy for a plaintiff only if he has exhausted all other avenues of relief . . . .” Heckler 28 v. Ringer, 466 U.S. 602, 616 (1984). As such, petitions for mandamus do not evade the 1 administrative exhaustion requirements set forth in 42 U.S.C. § 405(g) of the Social 2 Security Act, which applies to the Medicare Act. 3 Title “42 U.S.C. § 405(h), made applicable to the Medicare Act by 42 U.S.C. 4 § 1395ii, provides that § 405(g) . . . is the sole avenue for judicial review for all ‘claim[s] 5 arising under’ the Medicare Act.” Heckler, 466 U.S. at 614–15 (citing Weinberger v. Salfi, 6 422 U.S. 749, 760–61 (1975)). Therefore, unless parties have exhausted their 7 administrative remedies, jurisdiction under the Mandamus Act is unavailable. Hironymous 8 v. Bowen, 800 F.2d 888, 893 (9th Cir. 1986) (“The review procedure under section 405(g) 9 is thus the exclusive avenue for reviewing Hironymous’s claim. Because it is exclusive, 10 unless it is exhausted, jurisdiction under the Mandamus Act is unavailable.”); Acedo v. 11 Cnty. of San Diego, No. 20-55844, 2021 WL 5412401, at *1 (9th Cir. Nov. 19, 2021) (“The 12 district court properly dismissed for lack of subject matter jurisdiction Acedo’s mandamus 13 claim because Acedo failed to allege facts sufficient to show that he had exhausted his 14 administrative remedies before filing suit.”). Even if these requirements are satisfied, 15 whether to grant mandamus remains within the Court’s discretion. Or. Nat. Res. Council 16 v. Harrell, 52 F.3d 1499, 1508 (9th Cir. 1995). 17 As discussed below, Petitioner lacks a final, appealable decision by the Secretary of 18 HHS, which requires both presentment and administrative exhaustion. Accordingly, 19 because the absence of an adequate alternative remedy is a prerequisite for mandamus 20 relief—and Petitioner has an adequate alternative remedy available through the Medicare 21 administrative appeals process—the Court lacks subject matter jurisdiction under 28 22 U.S.C. § 1361. 23 C. Jurisdiction Arising Under the Medicare Act 24 Pacific Surgical contends that its claims do not arise under the Medicare Act. (Id. 25 ¶ 20.) However, Respondent argues Pacific Surgical’s demand that HHS pay and process 26 the services at issue is now moot, since Noridian has already effectuated the ALJ’s decision 27 by issuing a payment of $753,234.92—the amount Noridian determined was owed under 28 the ALJ’s decision. (ECF No. 11 at 2:7–25.) The Court agrees. The issue before the Court 1 is no longer whether Respondent must pay pursuant to the ALJ’s decision, but whether 2 Noridian’s payment calculation effectuating that decision is correct. 3 Moreover, Respondent asserts that whether Noridian’s payment calculation properly 4 effectuated the ALJ’s decision is a claim that arises under the Medicare Act and is subject 5 to administrative exhaustion requirements: “Under Ninth Circuit authority, Pacific Surgical 6 first must exhaust its administrative remedies as to the effectuation of the ALJ Decision, 7 and the specific amount paid out thereto, prior to seeking relief in district court.” (Id. at 8 2:26–3:2.) The Court agrees and finds that Noridian’s payment decision constitutes a “new 9 initial determination” under 42 C.F.R. § 405.1046(a)(3). Accordingly, to the extent Pacific 10 Surgical challenges the appropriateness of Noridian’s payment calculation, its claim 11 “arises under” the Medicare Act and must therefore satisfy the requirements of 42 U.S.C. 12 § 405(g) to obtain judicial review. 13 The Supreme Court has interpreted the term “arising under” in this context “quite 14 broadly.” Heckler, 466 U.S. at 614–15. “A claim ‘arises under’ the Medicare Act if the 15 Act provides ‘both the standing and the substantive basis’ for the claim, or if the claim is 16 ‘inextricably intertwined with a claim for benefits.’” Ramtin Massoudi MD Inc. v. Azar, 17 No. 2:18–cv–1087–CAS(JPRx), 2018 WL 1940398, at *5 (C.D. Cal. Apr. 23, 2018) 18 (quoting Heckler, 466 U.S. at 614–15). “A claim is ‘inextricably intertwined’ if it does not 19 involve issues separate from the party’s claim that it is entitled to benefits and/or if those 20 claims are not completely separate from its substantive claim to benefits.” Pinnacle Peak 21 Neurology LLC v. Noridian Healthcare Sols. LLC, No. CV-16-03614-PHX-DJH, 2018 WL 22 10357126, at *4 (D. Ariz. Mar. 13, 2018) (quoting Nicohole Med. Equip. & Supply, Inc. v. 23 TriCenturion, Inc., 694 F.3d 340, 348 (3d Cir. 2012)). Here, a determination of whether 24 Noridian’s calculated payment amount correctly effectuated the ALJ’s decision is 25 inextricably intertwined with Pacific Surgical’s substantive claim to benefits. See Kaiser 26 v. Blue Cross of Cal., 347 F.3d 1107, 1114 (9th Cir. 2003) (finding that claims dealing with 27 the “appropriateness of [a defendant’s] decisions with respect to the compensation [a 28 1 provider] should have received for the services it provided to Medicare beneficiaries” are 2 “inextricably intertwined” with claims for Medicare benefits). 3 Furthermore, Section 405(g) “permits an individual to file suit in federal court ‘after 4 any final decision of the Secretary made after a hearing.’” Winter v. California Med. Rev., 5 Inc., 900 F.2d 1322, 1325 (9th Cir. 1989) (quoting 42 U.S.C. § 405(g)). The “final 6 decision” requirement is “central to the requisite grant of subject-matter jurisdiction.” 7 Weinberger, 422 U.S. at 764. It consists of two elements: a waivable element “that the 8 administrative remedies prescribed by the Secretary be exhausted” and a nonwaivable 9 element “that a claim for benefits shall have been presented to the Secretary.” Mathews v. 10 Eldridge, 424 U.S. 319, 328 (1976). The nonwaivable element, called presentment, is a 11 “crucial prerequisite” that must be considered first. Id. at 329–30 (“As the nonwaivable 12 jurisdictional element was satisfied, we next consider the waivable element.”). The 13 “nonwaivable . . . requirement [requires] that an individual present a claim to the agency 14 before raising it in court.” Shalala v. Ill. Council on Long Term Care, Inc., 529 U.S. 1, 15 15 (2000). 16 1. Presentment Requirement 17 Pacific Surgical has not alleged that it has satisfied the nonwaivable presentment 18 requirement regarding Noridian’s payment calculation effectuating the ALJ’s decision. As 19 Respondent correctly notes, the Ninth Circuit’s reasoning in Pinnacle Peak Neurology, 20 LLC v. Noridian Healthcare Solutions, LLC, 773 F. App’x 910, 911 (9th Cir. 2019), is 21 directly applicable to the present petition: 22 [T]he ALJ decision is not the decision at issue; Noridian’s payment calculation effectuating the ALJ decision is. The ALJ decision only made 23 coverage determinations and related coding findings relevant to the 24 calculation of payments. It did not specify any amount of money that Noridian was to pay PPN. After the ALJ issued its decision, Noridian independently 25 calculated the payments due to PPN. “The amount of payment determined by 26 the contractor in effectuating the ALJ’s or attorney adjudicator’s decision is a new initial determination” for such purposes. 42 C.F.R. § 405.1046(a)(3). 27

28 1 (emphasis in original). Accordingly, Noridian’s payment calculation effectuating the 2 ALJ’s decision constitutes a “new initial determination” under 42 C.F.R. § 405.1046(a)(3), 3 and Pacific Surgical must first present its claim to the agency—thereby satisfying the 4 presentment requirement of 42 U.S.C. § 405(g)—before seeking judicial review. 5 2. Administrative Exhaustion Requirement 6 Similarly, Pacific Surgical has not alleged that it exhausted the four levels of 7 administrative review as to Noridian’s payment calculation as required by 42 U.S.C. 8 § 405(g). Dissatisfied parties may appeal payment determinations through a four-part 9 administrative appeals process that culminates in a final agency decision. See 42 U.S.C. 10 § 1395ff; 42 C.F.R. Part 405, Subpart I. The administrative appeals process consists of the 11 following steps: 12 1. Redetermination by a MAC of the initial determination. See 42 U.S.C. 13 § 1395ff(a)(3); 42 C.F.R. § 405.940 et seq.; 14 2. Reconsideration by a QIC. See 42 U.S.C. § 1395ff(c); 42 C.F.R. § 405.960 et 15 seq.; 16 3. De novo review and hearing before an ALJ. See 42 U.S.C. § 1395ff(d)(1); 42 17 C.F.R. §§ 405.1002, 405.1006, 405.1014; and 18 4. Review and decision by the Medicare Appeals Council (“Council”) of the HHS 19 Departmental Appeals Board. See 42 U.S.C. § 1395ff(d); 42 C.F.R. §§ 405.1100, 20 405.1102(a). 21 The decision by the Council constitutes the “final decision” of the Secretary and is 22 judicially reviewable. See 42 U.S.C. §§ 405(g)–(h), 1395ii; 42 C.F.R. § 405.1136. Only 23 after the Secretary renders a final decision may a party seek review of claims arising under 24 the Medicare Act in federal court. See 42 U.S.C. § 1395ff(b)(1)(A); 42 C.F.R. § 405.1136; 25 42 C.F.R. § 405.1130. 26 Here, Pacific Surgical does not have a final, appealable decision by the Secretary of 27 HHS concerning Noridian’s payment calculation because it has not exhausted the 28 administrative appeals process. Petitioner initially asserted: “The ALJ issued a decision 1 which has not been appealed to the Medicare Appeals Council and is a final determination 2 reviewable and enforceable by this Court. There are no further administrative remedies 3 beyond the final determination made by the ALJ.” (ECF No. 1 ¶ 7.) Petitioner also 4 attempted to distinguish the instant case from its prior action, Pacific Surgical I, arguing 5 that “[t]he instant Petition is entirely different . . . because it seeks enforcement of a final 6 determination after exhaustion of administrative remedies under the Mandamus Act.” (Id. 7 ¶ 12.) Lastly, Petitioner asserted that “[a] favorable determination was made in favor of 8 Petitioner through the administrative process before Medicare and its OMHA. That 9 determination is final and not appealable.” (Id. ¶ 18.) However, these assertions reflect a 10 misunderstanding of the applicable regulatory framework. 11 Furthermore, Petitioner’s response to the Oehlke Declaration in its Surreply does not 12 alter this conclusion. As previously discussed, once a MAC effectuates an ALJ decision 13 and determines the payment amount, that determination constitutes a “new initial 14 determination,” thereby initiating a fresh administrative appeals process. See 42 C.F.R. 15 § 405.1046(a)(3). In its Surreply, Petitioner affirmatively acknowledges receipt of 16 Noridian’s payment: “Ms. Oehlke states in [her] declaration that [Pacific Surgical] was 17 paid $753,234.92 for services that totaled $971,315.20. This is correct. . . .” (Smith Decl. 18 ¶ 4.) However, Petitioner takes issue with the calculation of Noridian’s payment: “none of 19 those claims were those ordered [to be] paid by Medicare’s ALJ . . . .” (Id.) In other words, 20 Pacific Surgical does not dispute that it received payment; rather, it contends that Noridian 21 paid the wrong claims. Notably, the Surreply does not go so far as to challenge Noridian’s 22 payment as unrelated to its efforts to effectuate the ALJ’s decision. 23 Thus, Petitioner disputes the appropriateness of Noridian’s payment calculation— 24 specifically, whether it covered the correct claims subject to the ALJ’s decision. Because 25 such a dispute concerns “the amount of payment determined by the contractor in 26 effectuating the ALJ’s . . . decision,” it constitutes a new initial determination under 42 27 C.F.R. § 405.1046(a)(3). Moreover, because Pacific Surgical has not alleged exhaustion 28 of the administrative appeals process related to this new initial determination, it must do 1 so before seeking judicial review. Furthermore, the ALJ’s coverage decision, while 2 favorable to Petitioner, is not a final, appealable decision by the Secretary of HHS as 3 required by 42 U.S.C. § 405(g). 4 Accordingly, this Court lacks subject matter jurisdiction under the Medicare Act 5 because Pacific Surgical has not obtained a final decision, which requires both presentment 6 and administrative exhaustion, and is therefore barred from seeking judicial review. 7 IV. CONCLUSION AND ORDER 8 Pacific Surgical’s petition is, at its core, a request for Medicare benefits. Now that 9 Noridian has issued payment effectuating the ALJ’s decision, Pacific Surgical’s request for 10 the Court to compel payment is moot. The sole remaining issue is whether Noridian’s 11 payment calculation appropriately effectuated the ALJ’s decision. Resolution of that issue 12 would require the Court to evaluate the correctness of Noridian’s payment calculation— 13 whether it covered the right claims pursuant to the ALJ’s decision—a determination that 14 constitutes a “new initial determination” under Medicare regulations. See 42 C.F.R. 15 § 405.1046(a)(3). As such, Pacific Surgical must first seek a final, appealable decision by 16 the Secretary of HHS by properly presenting and administratively exhausting its claim 17 before seeking judicial review. 18 Because Pacific Surgical has neither presented its claim nor exhausted its 19 administrative remedies, the Court lacks subject matter jurisdiction under the Medicare 20 Act. Additionally, Pacific Surgical has not demonstrated that it lacks an adequate remedy 21 to satisfy the requirement for mandamus relief under 28 U.S.C. § 1361. 22 Accordingly, the Court GRANTS Respondent’s Motion to Dismiss under Federal 23 Rule of Civil Procedure 12(b)(1) (ECF No. 8) and DISMISSES the Complaint 24 25 26 1 Pacific Surgical does not ask the Court to waive the full exhaustion requirement. The Court 27 finds, however, that nothing in the Petition indicates that Pacific Surgical meets the requirements for waiver of the exhaustion requirement. See Johnson v. Shalala, 2 F.3d 918, 921 (9th Cir. 1993) (noting 28 1 || WITHOUT PREJUDICE for lack of subject matter jurisdiction.” If Pacific Surgical 2 || believes it can cure the jurisdictional deficiencies identified herein, it must file a motion 3 || for leave to amend pursuant to Federal Rule of Civil Procedure 15(a)(2) no later than May 4 ||7, 2025. If no such motion is filed by that date, the Clerk of Court is directed to enter 5 judgment and close the case. 6 IT IS SO ORDERED. 7 ~ 8 || DATED: April 23, 2025 (yatta Bahar □□ 9 H n. Cynthia Bashant, Chief Judge United States District Court 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 2 Because the Court concludes that dismissal is appropriate under Rule 12(b)(1), it need not reach 3g || Respondent’s alternative argument that the Petition fails to state a claim upon which relief may be granted under Rule 12(b)(6). 412.