Prairie View Healthcare, Inc. v. Robert F. Kennedy, Jr., in his official capacity as Secretary, United States Department of Health and Human Services, et al.

District Court, D. Kansas·Decided September 16, 2026·No. 2:26-cv-02138·Unknown

Opinion

IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF KANSAS

PRAIRIE VIEW HEALTHCARE, INC.,

Plaintiff,

v. Case No. 26-CV-2138-JAR-JBW

ROBERT F. KENNEDY, JR., in his official capacity as Secretary, United States Department of Health and Human Services, et al.,

Defendant.

MEMORANDUM AND ORDER Plaintiff Prairie View Healthcare, Inc. brings this action against Defendants Robert F. Kennedy, Jr., in his official capacity as Secretary of the United States Department of Health and Human Services (“the Secretary”), the United States Department of Health and Human Services (“the Department”), the Centers for Medicare and Medicaid Services (“CMS”), and CGS Administrators, LLC (“CGS”), challenging the revocation of its Medicare enrollment. Before the Court is Defendants’ Motion to Dismiss (Doc. 14). The motion is fully briefed, and the Court is prepared to rule. For the reasons explained below, the Court dismisses the case for lack of jurisdiction. I. Background The following facts are alleged in Plaintiff’s Complaint or provided in attachments to Defendant’s motion.1 Plaintiff is a hospice provider in Wyandotte County, Kansas. Since 2018, Plaintiff has been enrolled in the Medicare program.

1 Mounkes v. Conklin, 922 F. Supp. 1501, 1505 (D. Kan. 1996) (“In deciding a Rule 12(b)(1) motion, the court may consider evidence outside the pleadings without converting the proceeding to one for summary judgment.”); see also In re Precedent Health Ctr. Operations, LLC, 392 F. App’x 618, 620 (10th Cir. 2010) In December 2021, CGS began reviewing Plaintiff’s hospice claims through the Targeted Probe and Educate program. During the first review in 2021, CGS reviewed sixteen claims that resulted in sixteen claim denials.2 During the second review in 2022, CGS reviewed twenty claims that resulted in eighteen denials.3 During the third review in 2024, CGS reviewed twenty- two claims, resulting in twenty-two denials.4

On November 19, 2024, CMS—acting through CGS—issued a letter (1) revoking Plaintiff’s Medicare enrollment and billing privileges, effective December 19, 2024; (2) imposing a ten-year re-enrollment bar, the maximum period permitted under regulations; and (3) placing Plaintiff on the CMS Preclusion List.5 These actions were taken based on CMS’s determination that Plaintiff had violated 42 C.F.R. 424.535(a)(8)(ii).6 On December 31, 2024, Plaintiff timely sought reconsideration of the revocation, re-enrollment bar, and CMS Preclusion List placement (collectively, “the Determination”). But, on March 26, 2025, CMS upheld the Determination.7 Although not reflected in the Complaint,8 it is uncontested that on June 11, 2025, Plaintiff

requested an ALJ hearing that the Departmental Appeals Board (“DAB”) docketed as No. C-25-

(considering evidence outside the complaint to conclude that it was “uncontested [that the plaintiff] . . . did not avail itself of available administrative remedies”). 2 Doc 1 ¶ 30. 3 Id. ¶ 31. 4 Id. ¶ 32. 5 Id. ¶¶ 38–39 6 Id. ¶ 38; see 42 C.F.R. 424.535(a)(8)(ii) (providing that revocation of a provider’s or supplier’s Medicare enrollment is proper if “CMS determines that the provider or supplier has a pattern or practice of submitting claims that fail to meet Medicare requirements”). 7 Doc. 1 ¶ 43; see also Doc. 14-3. 8 Plaintiff’s Complaint does not contain any factual allegations regarding the administrative review it sought. However, Plaintiff’s opposition brief incorporates and does not contest the attachments to Defendant’s brief. See, e.g., Doc. 15 at 2–3 (citing Docs. 14-5, 14-6, & 14-7). 714.9 However, before any hearing occurred, Plaintiff and CMS reached a settlement that reduced Plaintiff’s re-enrollment bar from ten years to five years (“the Settlement”).10 On August 27, 2025, Plaintiff notified the ALJ of the Settlement and requested dismissal.11 On August 28, 2025, the ALJ issued an order dismissing the case, informing the parties that they may request DAB review of the dismissal within 60 days of the ALJ’s Order for Dismissal.12

Neither party sought DAB review of the dismissal.13 On March 13, 2026, Plaintiff filed its Complaint challenging the Determination on various grounds.14 Counts I–III allege Defendants’ actions violated the Administrative Procedure Act (“APA”)15 because they were (1) arbitrary and capricious;16 (2) not in accordance with the law;17 and (3) procedurally flawed.18 Count IV alleges that Defendants violated the Due

9 Doc. 14-5 ¶ I.C. 10 Doc. 14-5 at 2–3. 11 Doc. 14-6. 12 Doc. 14-7. 13 Doc. 15 at 3 (“That window closed in late October 2025 and has not been reopened.”). 14 Doc. 1. 15 5 U.S.C. § 706(2)(A)–(F). 16 Plaintiff claims that Defendants’ decision was arbitrary and capricious because (1) “CMS failed to properly consider all six factors required by 42 C.F.R. Section 424.535(a)(8)(ii)”; (2) “CMS relied on claim denials that were themselves erroneous and unsupported by a proper review of the documentation”; (3) “CMS failed to follow the procedures established in the Medicare Program Integrity Manual, including the minimum sample size requirements”; and (4) “CMS failed to follow the procedures established in the Medicare Program Integrity Manual and CGS’s own stated review practices, which specify that Targeted Probe and Educate reviews consist of prepayment samples of twenty to forty claims per round.” Doc. 1 ¶¶ 78–83. 17 Plaintiff claims Defendants’ decision was not in accordance with law because “CMS failed to properly apply the requirements of 42 C.F.R. Section 424.535(a)(8)(ii),” and “the underlying claim denials were erroneous and did not support a finding that Plaintiff submitted claims that failed to meet Medicare requirements.” Id. ¶¶ 88– 89. 18 Lastly, Plaintiff claims that Defendants failed to observe procedure required by law when making the decision because (1) “Defendants failed to follow the procedures established in the Medicare Program Integrity Manual for conducting reviews”; (2) “Defendants failed to use a sample size of at least 20 claims in the first review as established by CGS's own stated procedures for Targeted Probe and Educate reviews”; (3) “Defendants failed to issue separate decisions for the probe audit and the extrapolated audit, depriving Plaintiff of proper notice and the ability to appeal each decision separately”; and (4) “Defendants failed to provide Plaintiff with the results of the third audit prior to issuing the revocation notice.” Id. ¶¶ 94–97. Process Clause of the Fifth Amendment by failing to provide Plaintiff with adequate notice and a meaningful opportunity to be heard before instituting the Determination.19 On these grounds, Plaintiff sought an order declaring that the Determination violated the APA and the Due Process Clause of the Fifth Amendment and setting aside and vacating the Determination.20 Defendants moved to dismiss the case for lack of subject matter jurisdiction

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Prairie View Healthcare, Inc. v. Robert F. Kennedy, Jr., in his official capacity as Secretary, United States Department of Health and Human Services, et al., (D. Kan. 2026).

Prairie View Healthcare, Inc. v. Robert F. Kennedy, Jr., in his official capacity as Secretary, United States Department of Health and Human Services, et al. (Prairie View Healthcare, Inc. v. Robert F. Kennedy, Jr., in his official capacity as Secretary, United States Department of Health and Human Services, et al.) — published by Counsel Stack Legal Research, free access to 12M+ legal documents.

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