United States Court of Appeals

for the Fifth Circuit

No. 18-41120

Sahara Health Care, Incorporated, 

Plaintiff—Appellant,

versus

Alex M. Azar, II, Secretary, U.S. Department of Health 

and Human Services; Seema Verma, Administrator for 

the Centers for Medicare and Medicaid Services, 

Defendants—Appellees.

Appeals from the United States District Court

for the Southern District of Texas

USDC No. 7:18-CV-203

Before Elrod, Willett, and Oldham, Circuit Judges.

Jennifer Walker Elrod, Circuit Judge:*

Congress devised an intricate procedure for medical providers to dispute Medicare recoupment: four layers of administrative review, followed by 

review in a federal court. But over a period of five years, administrative 

* Judge Oldham concurs in the judgment only.

United States Court of Appeals

Fifth Circuit

FILED

September 18, 2020

Lyle W. Cayce

Clerk

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appeals for Medicare recoupment grew twelve-fold. At its peak, the backlog 

of appeals grew to a ten-year wait. This logjam resulted in a remarkable opinion by the D.C. Circuit, in which that court told Congress that it would likely 

mandamus the Secretary of Health and Human Services if the political 

branches “failed to make meaningful progress within a reasonable period of 

time—say, the close of the next full appropriations cycle.” See Am. Hosp. 

Ass’n v. Burwell, 812 F.3d 183, 193 (D.C. Cir. 2016). As they say, the best laid 

plans of mice and men oft go awry.1

 

Sahara Health Care is a provider stuck in this bureaucratic mire. The 

government told Sahara that past Medicare reimbursements had been overpaid and were ripe for recoupment. After step two of the four-step administrative review process (with fifth-step judicial review), HHS began to recoup 

overpayments from Sahara’s present and future reimbursements. Although 

the statute requires an ALJ hearing and decision within 90 days of a request, 

the current ALJ backlog results in a typical three-to-five year wait. 

Sahara sought injunctive relief, asserting that its statutory and due 

process rights were violated and that the government acted ultra vires by recouping payments without providing a timely ALJ hearing. The district court 

granted the government’s motion to dismiss, holding alternatively that Sahara lacked a protected property interest in forestalling the recoupment and 

that the government had provided adequate process. It also concluded that 

the government had not exceeded its statutory authority. Because we agree 

1 Cf. Robert Burns, To a Mouse (1785) (“The best-laid schemes o’mice an’ men / 

Gang aft agley[.]”).

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that the government provided Sahara adequate process and complied with 

the statute, we AFFIRM.

I.

The Medicare program processes over a billion claims each year. 

Ctrs. for Medicare & Medicaid Servs., The Medicare Recovery 

Audit Contractor (RAC) Program: An Evaluation of the 3-Year Demonstration at 9 (2008). It cannot inspect each claim as it comes. Instead, it generally 

pays facially valid claims, and conducts post-payment audits to detect overpayments. See 42 U.S.C. § 1395ddd; see generally Palomar Med. Ctr. v. Sebelius, 693 F.3d 1151, 1156–57 (9th Cir. 2012) (outlining the operation of the 

Medicare Prescription Drug, Improvement, and Modernization Act of 2003, 

Pub. L. No. 108–173, 117 Stat. 2066, (2003), which governs recoupment). 

Providers who wish to challenge an overpayment determination have access 

to four phases of administrative review culminating in a phase five judicial 

review. See 42 U.S.C. § 1395ff.

Sahara Health Care is a home health agency that depends on Medicare 

reimbursements for about 75% of its revenue. In 2017, a Medicare contractor 

audited a sample of Sahara’s claims and, after analysis and extrapolation, calculated that HHS had overpaid it about $3.6 million. The government 

wanted that money back. Sahara objected. After two levels of administrative 

review, Sahara had successfully reduced that number down to about $2.4 million (excluding interest). Sahara believed that was still excessive. It exercised 

its statutory right to an ALJ hearing within 90 days of a request. Unfortunately for Sahara, the massive administrative backlog resulted in a three-toCase: 18-41120 Document: 00515570391 Page: 3 Date Filed: 09/18/2020
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five year wait for a hearing. See Cumberland Cty. Hosp. Sys., Inc. v. Burwell, 

816 F.3d 48, 50–51 (4th Cir. 2016). This case arises from the conflict between 

the statutory right to a hearing within 90 days and the administrative reality 

that no such hearing occurs for years.

A.

The first phase of administrative review is a “redetermination” from 

an HHS contractor. 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. 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 

ALJ, who must “render a decision on such hearing by not later than the end 

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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 

HHS Appeals Board] 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 Board 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 Board 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).

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 

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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).

C.

A years-long administrative logjam helps explain why Sahara filed this 

lawsuit. Between 2009 and 2014, the number of ALJ appeals increased more 

than 1,200 percent. OMHA, HHS, Fiscal Year 2017 Justification of Estimates 

for Appropriations Committee 8 (FY 2017 Budget). The agency’s budget did 

not receive a similar increase. Cases piled up. At its peak in 2016, HHS had 

almost ten years of appeals pending. See Cumberland Cty. Hosp., 816 F.3d at 

50–51. The agency has since received a funding increase, and currently expects to clear the backlog by 2022. See Am. Hosp. Ass’n v. Azar, No. 14-cv851, 2018 WL 5723141 (D.D.C. Nov. 1, 2018). In fact, the Secretary is under 

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a mandamus order requiring such a timetable. See id. at *1. But 2022 is still 

a ways off, and multi-year waits are abundant.

D.

Sahara was notified of a $3.5 million overpayment determination in 

February 2017. It appealed. At step one (“redetermination”), after multiple 

requests and corrected decisions, the overpayment determination was partially upheld. Sahara went to step two (“reconsideration”), and ultimately 

received a revised overpayment demand of $2.4 million in July 2018. In June 

2018, Sahara timely requested an ALJ hearing.2 The next month, it requested an extended repayment schedule to pay down the debt over ten 

years. The agency denied the request, noting that it lacked statutory authority to extend schedules longer than five years. Sahara was financially unable 

to accept a five-year plan, which “would have had a devastating impact on 

the business’ [sic] financial well-being.”3

 

Four days after it requested an ALJ hearing, Sahara filed a lawsuit for 

injunctive relief in the Southern District of Texas. The district court granted 

the government’s motion to dismiss and denied Sahara’s motions for a preliminary injunction and temporary restraining order. The district court held 

that Sahara had no protected “property interest in the recoupment or forestalling of the recoupment.” The claim also failed, the district court 

2 The ALJ hearing was requested before the final reconsideration decision because 

reconsideration involves multiple submissions and decisions.

3 Since the filing of this appeal, Sahara entered a graduated repayment plan that 

currently requires payments of $10,000 per month, ramping up to $75,000 in February 

2021. 

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concluded, because Sahara received constitutionally adequate process. Finally, the district court dismissed the ultra vires claim, explaining that Sahara 

asserted “only conclusory statements” and that Medicare’s “backlog argument falls outside the Court’s jurisdiction.” Sahara appealed. 

II.

“This court reviews a district court’s decision to dismiss under rule 

12(b)(6) de novo.” O’Daniel v. Indus. Serv. Sols., 922 F.3d 299, 304 (5th Cir. 

2019). Accepting the plaintiff’s factual allegations as true, those facts must 

state a claim that is plausible on its face. Bowlby v. City of Aberdeen, 681 F.3d 

215, 219 (5th Cir. 2012). 

To be entitled to a preliminary injunction, Sahara must demonstrate 

that: (1) it is substantially likely to succeed on the merits of its claim; (2) it 

will suffer irreparable injury in the absence of injunctive relief; (3) the balance 

of the equities tips in its favor; and (4) the public interest is served by the 

injunction. Opulent Life Church v. City of Holly Springs, 697 F.3d 279, 288 

(5th Cir. 2012). We review the denial of injunctive relief for abuse of discretion. Id.

We have jurisdiction under the collateral-claim exception to the Medicare Act’s administrative exhaustion requirement. See Family Rehab., Inc. v. 

Azar, 886 F.3d 496, 504 (5th Cir. 2018).

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III.

In its complaint, Sahara asserted one count of procedural due process 

and one count of ultra vires acts.4 To succeed on a constitutional due process 

claim, Sahara must demonstrate that the balance of the private interest, government interest, and value of additional procedure weighs in its favor. See

Mathews v. Eldridge, 424 U.S. 319, 335 (1976). Its ultra vires claim is straightforward: Sahara argues that the government acted without statutory authority by recouping payments before it had provided an ALJ hearing. We reject 

each claim.5

4 District courts in this circuit have divided on the due process question. Compare, 

e.g., Sahara Health Care, Inc. v. Azar, 349 F. Supp. 3d 555, 579 (S.D. Tex. 2018)(dismissing 

due process claim), and Supreme Home Health Servs., Inc. v. Azar, 380 F. Supp. 3d 533, 556 

(W.D. La. 2019) (same), with Adams EMS, Inc. v. Azar, No. H-18-1443, 2018 WL 5264244, 

at *12 (S.D. Tex. Oct. 23, 2018) (granting injunctive relief on due process claim), and Family Rehab., Inc. v. Azar, No. 3:17-CV-3008-K, 2018 WL 3155911, at *4 (N.D. Tex. June 28, 

2018) (same).

5 In its reply brief, Sahara contends that collection of overpayments is “no longer 

legally enforceable” because: (1) the recoupment was promulgated under the Patient Protection and Affordable Care Act; (2) a district court held that ACA’s individual mandate 

was unconstitutional and inseverable from the ACA, see Texas v. United States, 340 F. Supp. 

3d 579, 585 (N.D. Tex. 2018); and (3) the federal government agreed. This argument has 

many flaws, but we limit ourselves to three. First, we ordinarily disregard arguments raised 

for the first time in a reply brief. See Hardman v. Colvin, 820 F.3d 142, 152 (5th Cir. 2016). 

Even if the argument were properly presented, we would reject it. The Secretary’s recoupment authority does not derive from the ACA. The laws authorizing recovery of overpayments are codified at 42 U.S.C. § 1395ddd(f). Congress enacted those provisions as part 

of the Medicare Prescription Drug, Improvement, and Modernization Act of 2003, Pub. 

L. No. 108–173, 117 Stat. 2066. The ACA amended subsections (a) and (h) and added subsection (i). See Pub. L. No. 111-148, 124 Stat. 119. It did not amend or affect subsection (f), 

and it has no relevance to this case. And even if recoupment were a part of the ACA, the 

federal government would still be allowed to enforce the statute while simultaneously contesting its constitutionality. See United States v. Windsor, 570 U.S. 744, 749–53 (2013). 

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A.

The Fifth Amendment guarantees that no person shall “be deprived 

of . . . property . . . without due process of law[.]” U.S. Const. amend. V. 

Administrative deprivations of property are governed by the “familiar procedural due process inspection instructed by Mathews v. Eldridge, 424 U.S. 319 

(1976)[.]” Nelson v. Colorado, 137 S. Ct. 1249, 1255 (2017). Under this exemplar of “th’ol’ totality of the circumstances test,” see United States v. 

Mead Corp., 533 U.S. 218, 241 (2001) (Scalia, J., dissenting) (internal quotation marks omitted), the court balances the private interest, the governmental interest, and the costs and benefits of additional procedures. Specifically, 

one looks to:

First, the private interest that will be affected by the official action; second, the risk of an erroneous deprivation of such interest through the procedures used, and the probable value, if any, 

of additional or substitute procedural safeguards; and finally, 

the Government’s interest, including the function involved 

and the fiscal and administrative burdens that the additional or 

substitute procedural requirement would entail.

Mathews, 424 U.S. at 335.

To successfully invoke the Due Process Clause, a plaintiff must 

demonstrate that it has a protected property or liberty interest at issue. See 

Bd. of Regents of State Colleges v. Roth, 408 U.S. 564, 569–71 (1972). Sahara 

maintains that it has a property interest in “Medicare payments it has earned 

for services rendered on properly billed claims.” This court has rejected a 

similar theory, where providers argued that they had “a property interest in 

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legitimately earned, current [Medicaid] reimbursements that are not subject 

to investigation.” See Pers. Care Prods., Inc. v. Hawkins, 635 F.3d 155, 159 

(5th Cir. 2011). But because we conclude that the government provided Sahara adequate process, we decline to decide the property interest question.

6 

Cf. Accident, Injury & Rehab., PC v. Azar, 943 F.3d 195, 204 (4th Cir. 2019) 

(rejecting identical due process claim while declining to determine whether 

provider had protected property interest).

Looking to the first and third Mathews factors, Sahara’s private interest in adding a hearing outweighs the government’s interest in efficient recoupment administration. But turning to the second Mathews factor, the sufficiency of the current procedures and the minimal benefit of the live hearing 

weighs so strongly against Sahara that we reject its due process claim.

1.

Sahara’s private interest will be greatly affected by beginning recoupment. Counsel represents that “the government’s recoupment will force Sahara out of business[.]” In the district court, the Administrator of Sahara 

declared that about 75% of the company’s revenue comes from the Medicare 

program and that full recoupment would cause the company to close. What 

is more, Medicare recoupments are not subject to an automatic stay in bankruptcy. See Med-Cert, 2019 WL 426465, at *9. Wrongly recouped funds will 

6 Even though the district court ruled that there is not a protected property interest 

at issue, the government declined to address whether Sahara possesses a valid property 

interest. In its briefing to this court, it offered only that “there is no need for this Court to 

resolve the issue.” Similarly, at oral argument, the government demurred on the question, 

emphasizing that, “We’re not saying rule that there’s no property interest here.” 

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be repaid with interest. See 42 U.S.C. § 1395ddd(f)(2)(B). But that will be 

cold comfort if Sahara has already closed its doors. The government correctly notes that providers are aware of the overpayment/recoupment regime. And since this appeal was filed, Sahara has entered a graduated repayment plan that ramps up from $10,000 to $75,000 on February 1, 2021. In 

sum, however, the threat to Sahara is real, and its private interest faces great 

harm.

The government interest, in comparison, is slight. Medicare possesses a broad systematic concern in recouping overpayments from providers. And the government has a valuable interest in conserving scarce administrative and financial resources. But as Sahara correctly notes, if at the end 

of the day, a provider is found to have been overpaid, the government gets its 

due sooner or later (with interest). The only questions here are when Sahara 

will pay and whether it will receive a hearing first. Accordingly, the private 

interest outweighs government interest.

Nonetheless, the adequate process that Sahara has received and the 

procedural protections it has chosen to forego weigh strongly, and decisively,

against it. The constitutional minimum of due process guarantees that “notice and an opportunity to be heard be granted at a meaningful time and in a 

meaningful manner.” Gibson v. Tex. Dep’t of Ins., 700 F.3d 227, 239 (5th Cir. 

2012) (quoting Fuentes v. Shevin, 407 U.S. 67, 80, 92 (1972)) (internal quotation marks omitted). There is no dispute that Sahara received notice. The 

issue is whether it received a meaningful opportunity to be heard.

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2.

“The type of hearing necessary—the process due—is a function of

the context of the individual case.” Jones v. La Bd. of Sup’rs of Univ. of La.

Sys., 809 F.3d 231, 236 (5th Cir. 2015). Sahara has already received two 

meaningful opportunities to be heard. At step one, it could submit a written 

statement and additional evidence. 42 U.S.C. § 1395ff(a)(3); 42 C.F.R. 

§ 405.948. The independent contractor provided a written, reasoned decision. 42 U.S.C. § 1395ff(a)(5). At step two, a different independent contractor delivered a reasoned, written decision after Sahara had the opportunity to 

provide additional evidence and written arguments of fact and law. 42 U.S.C. 

§ 1395ff(c)(3)(E); 42 C.F.R. § 405.976(b). Sahara’s claims were reviewed by 

a “panel of clinical experts consisting of a physician and a licensed health care 

professional” and a “statistician who evaluated the validity of the statistical 

sampling and extrapolation.” This was not an exercise in rubberstamping: 

those two reviews lowered Sahara’s overpay amount from $3,573,595.61 to 

$2,416,157.10. And these two steps were just a part of the “comprehensive 

whole that ends with an opportunity for timely judicial review.” See Accident, 

Injury & Rehab., 943 F.3d at 204.

Sahara does not explain why steps one and two, standing alone, fail to 

satisfy the constitutional requirement. Instead, Sahara dwells on the procedural additions of the step-three ALJ hearing. According to Sahara, “an ALJ 

hearing provides essential procedural safeguards . . . in its Medicare appeal 

of the alleged overpayment.” It is true that a step-three hearing may offer 

“the opportunity to have a live hearing, present testimony, cross-examine 

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witnesses, and submit written statements of law and fact.” Family Rehab., 

Inc. v. Azar, 886 F.3d 496, 499 (5th Cir. 2018) (citing 42 C.F.R. 

§ 405.1036(c)–(d)). But Sahara fails to demonstrate what value the hearing 

would add to the process Sahara has already received or is otherwise entitled 

to receive.

First, Sahara concedes that the hearing will not develop the factual 

record. Absent good cause, additional evidence can only be provided in steps 

one and two. See 42 U.S.C. § 1395ff(b)(3). And Sahara does not argue that 

it can demonstrate good cause. Similarly, the step-three hearing does not 

permit a provider to compel discovery beyond the administrative record that 

was compiled at steps one and two. See 42 C.F.R. § 405.1036(f)(1); id.

§§ 405.1012, 405.1037(a).

Second, Sahara does not explain how the possibility of cross-examination at the hearing would benefit it. Cross-examination or a live hearing may 

be constitutionally required “where credibility [is] critical.” See Walsh v. 

Hodge, No. 19-10785, 2020 WL 5525397, at *6 (5th Cir. Sept. 15, 2020); see 

also Mathews, 424 U.S. at 343–44 (analyzing whether “issues of witness credibility and veracity . . . are critical to the decisionmaking process”); accord

Doe v. Baum, 903 F.3d 575, 584 (6th Cir. 2018) (explaining, in context of Title 

IX disciplinary hearing, that “if credibility is in dispute and material to the 

outcome, due process requires cross-examination”); cf. Nondiscrimination on 

the Basis of Sex in Education Programs or Activities Receiving Federal Financial 

Assistance, 85 Fed. Reg. 30,026 (May 19, 2020) (to be codified at 34 C.F.R. 

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pt. 106) (requiring postsecondary institutions to hold live disciplinary hearings and allow cross-examination in Title IX sexual misconduct proceedings). 

Sahara does not submit that the credibility or veracity of the government’s witnesses are at issue here. Cf. Jones v. La. Bd. of Sup’rs of Univ. of 

La. Sys., 809 F.3d 231, 237 (5th Cir. 2015) (noting that “[i]t is difficult to see 

exactly where veracity or credibility would come into play” in a decision,

based on applying organization policies to a paper record, which was “unrelated to the [plaintiff’s] actions”). Indeed, Sahara does not identify a single 

point of inquiry it would pursue or a single dispute of material fact that it 

would address if given the opportunity to cross-examine the government’s 

witnesses. Cf. Plummer v. Univ. of Houston, 860 F.3d 767, 783 (5th Cir. 2017) 

(Jones, J., dissenting) (“[A]dditional or substitute safeguards would have enhanced the quality of factfinding and adjudication by providing a confrontation right if material fact issues existed.”) (emphasis added). In short, Sahara 

does not explain what, in this case, cross-examination would add.

Third, even if Sahara received the hearing that it requests, it is unlikely 

that it would even receive the opportunity to cross-examine a witness. At the 

hearing, the ALJ “may not issue a subpoena to CMS or its contractors, on 

his or her own initiative or at the request of a party, to compel an appearance, 

testimony, or the production of evidence.” 42 C.F.R. § 405.1036(f)(1). In 

other words, cross examination is only available if HHS chooses it to be. Sahara does not assert that this regulation or the statutory scheme is unlawful. 

Perhaps that is because Sahara does not even assert that it desires to 

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subpoena any witness, much less identify who those witnesses would be and 

why their presence would add value. 

Sahara contends that the step-three hearing “provides essential procedural safeguards,” but cannot explain what those safeguards are. The stepthree hearing does not allow a provider to supplement the record and does 

not ensure that any government witnesses will be available. That means that 

“the very procedural safeguards that [Sahara] argues are critical are far from 

assured even at the ALJ hearing level.” Accident, Injury & Rehab., 943 F.3d 

at 204 (holding that the Medicare recoupment escalation procedure provided 

due process where the step-three ALJ hearing was functionally unavailable). 

In other words, Sahara’s “argument relies on a faulty understanding of the 

relative benefits of an ALJ hearing and judicial review.” Id. And Sahara does 

not allege that the recoupment procedure itself is structured in an unconstitutional way. 

Here, “the risk of erroneous deprivation and the likely value of any 

additional procedures” is “the factor most important to resolution of this 

case.” Gilbert v. Homar, 520 U.S. 924, 933 (1997). Sahara has failed to 

demonstrate why that factor weighs in its favor. Accordingly, it has failed to

demonstrate why the overall Mathews balance favors it as well. 

3.

Congress foresaw that an ALJ backlog may arise. It provided a solution: a provider may “escalate” an appeal directly from step two to step four 

(Appeals Board review) if no decision has been rendered 90 days after timely 

notice. 42 U.S.C. § 1395ff(d)(3)(A). Sahara chose not to take that route, 

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which would have resulted in a de novo decision rendered within 180 days. 

See 42 U.S.C. § 1395ff(d)(2)(A); 42 C.F.R. § 405.1100(c). And if the Appeals Board were to exceed 180 days, Sahara could receive (admittedly deferential) judicial review before an Article III judge. See 42 U.S.C. 

§ 1395ff(d)(2)(A); Am. Hosp. Ass’n, 812 F.3d at 191. 

The Constitution entrusts the political branches, not the judiciary, 

with making difficult and value-laden policy decisions. There were an infinite 

number of schemes Congress could have reasonably selected. Congress settled on one that guarantees at least two levels of administrative review and 

judicial review. And in the case of a backlog, Congress provided the ability 

to bypass long waits on the way to judicial review. Sahara rejected that option. At bottom, Sahara believes a different scheme would be better. But we 

lack the power to change it. “[U]nless Congress exceeds its authority or trespasses on a protected area, judges are bound to respect its decisions—no matter what policy disagreements they may have with Congress’s choices.” 

Diarmuid F. O’Scannlain, The Role of the Federal Judge in the Constitutional 

Structure: An Originalist Perspective, 50 San Diego L. Rev. 517, 520 (2013). 

We have no opinion on the prudence of Congress’s choice—and we do not 

need one. The Due Process Clause, not personal opinion, determines the 

outcome.

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, 

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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 received some procedure, chose to forego additional protections, and cannot demonstrate the additional value of the hearing it requests.

The procedure it received was constitutionally adequate, and we affirm the 

district court’s dismissal of Sahara’s due process claim. We likewise affirm 

the district court’s denial of injunctive relief.

B.

Sahara devotes a single page to its ultra vires argument. It argues that 

injunctive relief is appropriate because “[t]he government has initiated recoupment of Sahara’s current payments” even though it “failed to provide 

an administrative appeal in accordance with 42 U.S.C. § 1395ff.” This claim 

fails too. 

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. 

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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 Board. 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 ̧ 812 F.3d at 191. 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 

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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.

* * *

An unwieldly backlog of cases has prevented Sahara Health Care from 

receiving a hearing from an administrative law judge. Congress predicted this 

might happen, and provided a statutory solution: the ability to escalate the 

appeal, culminating in judicial review. Sahara has chosen not to avail itself of 

that option. Given that choice, it cannot complain that it was denied due 

process or that the government acted ultra vires. We AFFIRM the judgment 

of the district court.

Case: 18-41120 Document: 00515570391 Page: 20 Date Filed: 09/18/2020