NOT FOR PUBLICATION

UNITED STATES COURT OF APPEALS

FOR THE NINTH CIRCUIT

AMBERCITY HOSPICE, INC., a California 

corporation, 

Plaintiff-Appellant, 

 v. 

XAVIER BECERRA, Secretary of Health 

and Human Services, 

Defendant-Appellee.

No. 20-56242 

D.C. No. 

5:19-cv-00938-CJC-KK 

MEMORANDUM*

Appeal from the United States District Court

for the Central District of California

Cormac J. Carney, District Judge, Presiding

Submitted October 19, 2021**

Pasadena, California

Before: CALLAHAN, OWENS, and FORREST, Circuit Judges.

Ambercity Hospice, Inc. (Ambercity) appeals the district court’s decision

affirming that Health and Human Services’ (HHS) denial of Medicare coverage was 

based on the proper legal standard and supported by substantial evidence. It also

* This disposition is not appropriate for publication and is not precedent 

except as provided by Ninth Circuit Rule 36-3.

** The panel unanimously concludes this case is suitable for decision 

without oral argument. See Fed. R. App. P. 34(a)(2).

FILED

OCT 21 2021

MOLLY C. DWYER, CLERK

U.S. COURT OF APPEALS
2 

challenges the district court’s holding that Ambercity was not an innocent provider 

under the Medicare Act. Finally, Ambercity argues for the first time on appeal that 

HHS violated due process during the administrative appeals process. 

Under the Administrative Procedure Act, agency actions must be upheld 

unless they are “arbitrary, capricious, an abuse of discretion, or contrary to law.” 

Nat’l Fam. Farm Coal. v. EPA, 966 F.3d 893, 923 (9th Cir. 2020); see 5 U.S.C. 

§ 706. Moreover, the Medicare Act provides that “[t]he findings of [HHS] as to any 

fact, if supported by substantial evidence, shall be conclusive.” 42 U.S.C. § 405(g) 

(made applicable to the Medicare Act by 42 U.S.C. §§ 1395ii, 1395ff(b)(1)(A) and

42 C.F.R. § 405.1136(f)). Substantial evidence is evidence that “a reasonable mind 

might accept as adequate to support a conclusion.” Chu v. U.S. Commodity Futures 

Trading Comm’n, 823 F.3d 1245, 1250 (9th Cir. 2016) (quoting Gebhart v. SEC, 

595 F.3d 1034, 1043 (9th Cir. 2010). We review the district court’s decision de novo. 

Fournier v. Sebelius, 718 F.3d 1110, 1117 (9th Cir. 2013). We have jurisdiction 

under 42 U.S.C. §§ 405(g), 1395ff(b)(1)(A) and 28 U.S.C. § 1291, and we affirm. 

1. The district court did not err in holding that HHS’s decision was based 

on the correct legal standard and supported by substantial evidence. While a 

physician’s certification establishing the patient had a terminal illness is required, 

eligibility for Medicare coverage does not rest on clinical judgment alone. See 42 

U.S.C. § 1395y(a)(1)(C); 42 C.F.R. §§ 418.200, 424.5(a)(6). The governing 
3 

regulations impose documentation requirements that must be satisfied. 42 C.F.R. 

§§ 418.200, 418.22, 418.24, 418.56, 424.5(a)(6). For each claim at issue here, the 

record demonstrates that qualified doctors and nurses applied the Local Coverage 

Determination (LCD) standards and regulatory requirements and explained why 

coverage was not supported by the provided medical documentation. We conclude 

that HHS provided evidence that “a reasonable mind might accept as adequate to 

support” its coverage decisions. Chu, 823 F.3d at 1250.

2. The district court also did not err in holding that Ambercity was not an 

innocent provider under the Medicare Act. Providers are deemed to have

constructive knowledge of the coverage requirements contained in the Medicare Act

itself, as well as in its accompanying regulations, manual issuances, bulletins, and

other written guidelines. 42 CFR § 411.406; see Maximum Comfort Inc. v. Sec’y of 

Health & Hum. Servs., 512 F.3d 1081, 1088 (9th Cir. 2007). The regulations make 

clear that unless providers submit sufficient documentation to demonstrate that their 

services are “reasonable and necessary” for hospice care treatment, they will not 

receive coverage. 42 C.F.R. §§ 418.200, 424.5(a)(6); see also id. §§ 418.22, 418.24, 

418.56. Moreover, the relevant LCDs specifically explain what clinical evidence 

must be shown to meet the criteria for terminal illness. See Centers for Medicare and 

Medicaid Services, Local Coverage Determination L33393. And finally, 42 U.S.C. 

§ 1395ddd provides that initial payments are subject to review and reopening by 
4 

HHS. Therefore, because the statutes and regulations provide constructive notice of 

the requirements to receive coverage and the possibility of post-payment audit, the 

district court did not err in holding that Ambercity should not be compensated as an 

innocent provider. 

3. Finally, we decline to consider Ambercity’s due process argument

because it was not raised properly for decision in the district court. See Club One 

Casino, Inc. v. Bernhardt, 959 F.3d 1142, 1153 (9th Cir. 2020), cert. denied sub 

nom. Club One Casino, Inc. v. Haaland, 141 S. Ct. 2792 (2021). Ambercity did not 

raise its due process argument to the district court until its reply brief that was 

untimely filed, and the district court refused to consider it. The district court has 

discretion to ignore issues raised for the first time in reply, cf. El Pollo Loco, Inc. v. 

Hashim, 316 F.3d 1032, 1040-41 (9th Cir. 2003), and to ignore untimely filings, see

C.D. Cal. R. 7–12 (“The Court may decline to consider any memorandum or other 

document not filed within the deadline set by order or local rule.”). We see no abuse 

of discretion by the district court. Moreover, we see no “exceptional circumstances” 

justifying Ambercity’s failure to properly present its due process claim that warrant 

our considering this issue for the first time on appeal. Club One Casino, Inc., 959 

F.3d at 1153 (quoting El Paso City v. Am W. Airlines, Inc. (In re Am. W. Airlines, 

Inc.), 217 F.3d 1161, 1165 (9th Cir. 2000)). Indeed, Ambercity does not proffer any 
5 

exceptional circumstances for our consideration or even address the issue of its 

waiver. 

AFFIRMED.