IN THE UNITED STATES DISTRICT COURT 

FOR THE NORTHERN DISTRICT OF TEXAS 

WICHITA FALLS DIVISION 

_____________________________________ 

BROOKS HOME CARE SERVICES, INC.

 Plaintiff, 

v.

XAVIER BECERRA, Secretary,

UNITED STATES DEPARTMENT OF 

HEALTH AND HUMAN SERVICES, 

 Defendant.

Civil Action. No. 7:22-CV-00088-O 

DEFENDANT XAVIER BECERRA’S MOTION TO DISMISS 

LEIGHA SIMONTON

United States Attorney 

 John F. Summers 

Assistant United States Attorney 

Texas Bar No. 24079417 

1100 Commerce Street, Third Floor 

Dallas, Texas 75242-1699 

Telephone: 214.659.8777 

Fax: 214.659.8807 

john.summers@usdoj.gov 

Attorneys for Defendant Xavier Becerra, 

Secretary, U.S. Department of Health 

and Human Services 

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TABLE OF CONTENTS

Introduction......................................................................................................................... 1

Background......................................................................................................................... 2

III. Argument and Authorities................................................................................................... 3

A. The Court Should Dismiss Brooks’ Complaint Under Rule 12(b)(1) 

Because the Court Lacks Subject Matter Jurisdiction Over Brooks’ Claims......... 3

The Legal Standard Governing Motions to Dismiss Under Rule 

12(b)(1). ...................................................................................................... 3

The Court Cannot Exercise Jurisdiction Under 28 U.S.C. § 1331 

Because 42 U.S.C. § 405(h) Expressly Precludes Federal Question 

Jurisdiction. ................................................................................................ 3

The Court Cannot Exercise Jurisdiction Under 42 U.S.C. §§ 

1395ii, 405(g), or 1395ff(b), Because Brooks Has Not Met 

Congress’s Express Jurisdictional Requirements....................................... 5

The Court Cannot Exercise Jurisdiction Over Brooks’ Claim on 

Behalf of Its Patients (Count 2) Because Brooks Lacks Standing to 

Do So........................................................................................................... 7

Brooks’ Other Specific Jurisdictional Arguments Fail............................... 8

B. The Court Should Dismiss the Complaint Because Brooks Fails to State a 

Claim..................................................................................................................... 13

1. The Legal Standard Governing Rule 12(b)(6).......................................... 13

2. Brooks Fails to State a Due Process Claim Because It Has No 

Constitutionally Protectable Property Interest......................................... 14

3. Brooks Fails to State an Ultra Vires Claim. ............................................. 15

4. Brooks Fails to State a Claim for Arbitrary and Capricious 

Conduct..................................................................................................... 15

5. Brooks Fails to State a Claim for Due Process Violations on 

Behalf of Medicare Patients...................................................................... 17

IV. Conclusion ........................................................................................................................ 17

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TABLE OF AUTHORITIES

Case Law

Abet Life, Inc. v. Azar, 

2020 WL 3491966 (S.D. Tex. June 26, 2020)...........................................................1, 12

Acute Care Ambul. Serv., L.L.C. v. Azar II,

No. 7:20-CV-00217, 2020 WL 7640206 (S.D. Tex. Dec. 3, 2020)..........................8, 15

Affiliated Professional Home Health Care Agency v. Shalala,

164 F.3D 282 (5th Cir. 1999) ......................................................................................... 11

American Medical Hospice Care LLC v. Azar, 

No. 5:20-cv-757, 2020 WL 9814144 (W.D. Tex. Dec. 9, 2020) ....................1, 5, 12, 15

Barrera-Montenego v. USA & DEA,

74 F.3d 657 (5th Cir. 1996)............................................................................................. 3

Bd. Of Regents of State Colleges v. Roth, 

408 U.S. 564 (1972) ...................................................................................................... 14

Bell Atl. Corp. v. Twombly, 

550 U.S. 544 (2007) ...................................................................................................... 14

Blue Valley Hosp., Inc. v. Azar, 

919 F.3d 1278 (10th Cir. 2019)..................................................................................... 13

Bridgett Memorial Healthcare, Inc. v. Azar, 

4:20-cv-1770 (S.D. Tex. Oct. 15, 2020)........................................................................ 12

Califano v. Sanders,

430 U.S. 99 (1977) ........................................................................................................ 10

Campbell v. City of San Antonio, 

43 F.3d 973 (5th Cir. 1995)........................................................................................... 13

Christopher v. Lawson, 

358 F. Supp. 3d 600 (S.D. Tex. 2019) ............................................................................. 7, 8

Env’t Integrity Project v. U.S. EPA,

969 F.3d 529 (5th Cir. 2020)......................................................................................... 16

Family Rehab., Inc. v. Azar, 

886 F.3d 496 (5th Cir. 2018)..................................................................................passim

Heckler v. Ringer, 

466 U.S. 602 (1984) ....................................................................................................4, 5

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Lujan v. Defenders of Wildlife, 

504 U.S. 555 (1992) ........................................................................................................ 8

Maka Hospice v. Azar, 

2020 WL 4284972 (C.D. Cal. July 24, 2020) ............................................................... 13

Mathews v. Eldridge, 

424 U.S. 319 (1976) ....................................................................................................5, 8

Motor Vehicle Mfrs. Ass’n v. State Farm Mut. Auto. Ins. Co.,

462 U.S. 29 (1983) ........................................................................................................ 16

Pers. Care Prods. v. Hawkins, 

635 F.3d 155 (5th Cir. 2011).....................................................................................2, 14

Physician Hosps. of Am. v. Sebelius, 

691 F.3d 649 (5th Cir. 2012).......................................................................................4, 5

Plotkin v. IP Access, 

407 F.3D 690 (5th Cir. 2005) ......................................................................................... 16

Pylant v. Cuba, 

2015 WL 1275669, 3:14-cv-0745-P (N.D. Tex. Mar. 6, 2015) ..................................... 14

RenCare, Ltd. v. Humana Health Plan of Tex., Inc., 

395 F.3d 555 (5th Cir. 2004)........................................................................................... 4

Shalala v. Ill. Council on Long Term Care, 

529 U.S. 1 (2000) ................................................................................................8, 12, 13

Spokeo, Inc. v. Robbins,

136 S.Ct. 1540 (2016)...................................................................................................... 8

Stockman v. Fed. Election Comm’n, 

138 F.3d 144 (5th Cir. 1998)........................................................................................... 3

Texas v. U.S. EPA,

690 F.3d 670 (5th Cir. 2012)......................................................................................... 17

True Health Diagnostics, L.L.C. v. Azar, 

392 F. Supp. 3d 656 (E.D. Tex. 2019).... ..............................................................passim

Weinberger v. Salfi, 

422 U.S. 749 (1975) ....................................................................................................4, 5

Williams v. Parker, 

843 F.3d 617 (5th Cir. 2016)................................................................................................. 8

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Regulations

28 U.S.C. § 1331 .............................................................................................................4, 8

42 C.F.R. § 405.1132........................................................................................................... 7

42 C.F.R. § 405.370............................................................................................................. 7

42 C.F.R. § 405.370(a) ........................................................................................................ 2

42 C.F.R. § 405.371............................................................................................................. 5

42 C.F.R. § 405.371(a)(2)..........................................................................................1, 2, 14

42 C.F.R. § 405.371(b)(1)-(2) .........................................................................................2, 3

42 C.F.R. § 405.371(b)(1)(ii) ............................................................................................ 16

42 C.F.R. § 405.371(b)(3) ................................................................................................... 3

42 C.F.R. § 405.372(b)(2) ................................................................................................... 2

42 C.F.R. § 405.372(e) ..................................................................................................3, 14

42 C.F.R. § 405.372(c) ........................................................................................................ 1

42 C.F.R. § 405.372(e) ..................................................................................................3, 14

42 C.F.R. § 406.375(c) ........................................................................................................ 2

42 U.S.C. § 1395ff............................................................................................................... 6

42 U.S.C. § 1395ff(a) .......................................................................................................... 5

42 U.S.C. § 1395ff(a)(1)..................................................................................................6, 7

42 U.S.C. § 1395ff(a)(3)(B)(i) ..................................................................................6, 7, 11

42 U.S.C. § 1395ff(b).......................................................................................................... 5

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42 U.S.C. § 1395ff(b)(1)(A)............................................................................................4, 6

42 U.S.C. § 1395ff(d)(1)(A).............................................................................................. 11

42 U.S.C. § 1395ii ............................................................................................................... 5

42 U.S.C. § 1395y(o).................................................................................................2, 5, 15

42 U.S.C. § 1395y(o)(1)................................................................................................1, 14

42 U.S.C. § 405 ................................................................................................................... 4

42 U.S.C. § 405(g).......................................................................................................4, 5, 7

42 U.S.C. § 405(h).......................................................................................................4, 6, 7

Regulations

Medicare Program; Changes Concerning Suspension of Medicare Payments, and 

Determinations of Allowable Interest Expenses, 61 Fed. Reg. 63740, 63742-43 (Dec. 2, 

1996) (to be codified at 42 CFR Parts 401, 403, 405, 411, 413, 447, and 493).............. 2

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INTRODUCTION

The Secretary of the United Department of Health and Human Services temporarily 

suspended Plaintiff Brooks Home Care Services, Inc. (“Brooks”) Medicare payments based on 

credible allegations of fraud, as he is permitted to do. See 42 U.S.C. § 1395y(o)(1); 42 C.F.R. 

§§ 405.371(a)(2) and 405.372(c) (authorizing Secretary to impose payment suspensions while 

investigation on credible allegations of fraud is ongoing). Brooks contests that determination 

and asks the Court to lift it. Brooks’ complaint is near-verbatim to those filed by the same law 

firm in a myriad of other lawsuits across Texas.

1

 As did the plaintiffs there, Brooks here seeks a 

mandatory injunction ordering the Secretary to lift the suspension “until the COVID-19 national 

emergency ends or until Defendant can provide a hearing and decision in conformance with 

constitutionally required procedures.” Compl. ¶ 98. Brooks does not point to any statute, 

regulation, or rule that the Secretary violated when he suspended Brooks’ Medicare payments. 

Instead, Brooks wants this Court to step into the Secretary’s shoes and decide whether the 

Secretary appropriately exercised his discretion in suspending Brooks’ Medicare payments. But 

the Court does not have jurisdiction to grant the relief Brooks requests. Claims arising under the 

Medicare Act, like Brooks’ here, generally require administrative exhaustion. Brooks admits 

that it has not exhausted its administrative remedies. And Brooks’ attempts to excuse its failure 

to exhaust fail.

Even if the Court could exercise jurisdiction, the complaint also fails to plead a viable 

claim. To prevail on its constitutional claims, Brooks must be deprived of a property right, and 

1 See, e.g., True Health Diagnostics, LLC v. Azar, 392 F. Supp. 3d 656 (E.D. Tex. 2019); Abet 

Life, Inc. v. Azar, No. 2:420-cv-01169, 2020 WL 3491966 (S.D. Tex. June 26, 2020); Am. Med. 

Hospice Care LLC, v. Azar, No. 2020 WL 9814144 (No. 5:20-CV-757) (W.D. Tex. Dec. 9, 

2020).

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the Fifth Circuit has held that there is no property right in reimbursements while a fraud 

investigation is ongoing. See Pers. Care Prods. v. Hawkins, 635 F.3d 155, 159 (5th Cir. 2011). 

Brooks also fails to state claims for ultra vires and arbitrary and capricious agency conduct. 

This Court should join the growing consensus of courts, reject these lawsuits, and dismiss 

Brooks’ entire complaint. 

BACKGROUND 

“Medicare is a pay-first system. That is, once a Medicare provider submits claims for 

payment—without any records, documents, or proof that the services were provided or that the 

services meet Medicare requirements—CMS, through its contractors, automatically pays those 

claims within a couple of weeks after submission.” True Health Diagnostics, L.L.C. v. Azar, 392 

F. Supp. 3d 656, 677 (E.D. Tex. 2019). But the Secretary can suspend these payments when he

determines that “a credible allegation of fraud exists.”2

 42 U.S.C. § 1395y(o); 42 C.F.R. 

§ 405.371(a)(2). This suspension authority is designed to ensure that “sufficient funds are 

available to recover [any] overpayments,” which is “clearly necessary to protect the Trust Funds 

from loss.” 61 Fed. Reg. 63740, 63742-43 (Dec. 2, 1996). 

After a credible-fraud suspension finding, the provider is given an opportunity to rebut the 

finding and explain why the suspension should be lifted. 42 C.F.R. § 405.372(b)(2). The 

Secretary’s post-rebuttal decision is not appealable. 42 C.F.R. § 406.375(c). But neither is a 

lengthy suspension inevitable. Every 180 days the suspension is re-evaluated, and an appropriate 

entity must certify that the suspended provider remains under investigation. 42 C.F.R. 

2 “A credible allegation of fraud is an allegation from any source, including but not limited to the 

following: (1) Fraud hotline complaints, (2) Claims data mining, and (3) Patterns identified 

through provider audits, civil false claims cases, and law enforcement investigations.” 42 C.F.R. 

§ 405.370(a). “Allegations are considered to be credible when they have indicia of reliability.” 

Id.

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§ 405.371(b)(1)-(2). And after 18 months, good cause to lift the suspension is deemed to exist

unless certain requirements are met. 42 C.F.R. § 405.371(b)(3). 

Payments for services rendered after the suspension do not disappear. Instead, they are 

held essentially in escrow—if the suspension is lifted with no overpayment finding, the 

suspended funds are paid to the provider. 42 C.F.R. § 405.372(e). If the investigation discovers 

an overpayment, it recoups from the suspended payments and releases the rest. Id. Under the 

Medicare Act, any overpayment decision is a determination that can and must be appealed 

through Medicare’s administrative process before seeking review in district court.3 42 C.F.R. 

§ 405.372(e). 

III. ARGUMENT AND AUTHORITIES

A. The Court Should Dismiss Brooks’ Complaint Under Rule 12(b)(1) Because the 

Court Lacks Subject Matter Jurisdiction Over Brooks’ Claims

The Legal Standard Governing Motions to Dismiss Under Rule 12(b)(1). 

Federal courts require subject matter jurisdiction to rule on claims, and the party asserting 

jurisdiction has the burden to establish it. Stockman v. Fed. Election Comm’n, 138 F.3d 144, 151 

(5th Cir. 1998). Unlike in the 12(b)(6) context, a Court may dismiss for lack of subject 

jurisdiction on the pleadings alone, on the pleadings supplemented by undisputed facts in the 

record, or on the complaint supplemented by undisputed facts in the record and resolution of 

disputed facts. Barrera-Montenego v. USA & DEA, 74 F.3d 657, 660 (5th Cir. 1996). 

The Court Cannot Exercise Jurisdiction Under 28 U.S.C. § 1331 Because 42 

U.S.C. § 405(h) Expressly Precludes Federal Question Jurisdiction. 

“The Medicare Act severely restricts the authority of federal courts by requiring virtually 

3 This administrative process consists of five steps; the process is accurately described, among 

other places, in True Health Diagnostics, LLC, 392 F. Supp. 3d at 678. 

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all legal attacks under the Act be brought through the agency.” Physician Hosps. of Am. v. 

Sebelius, 691 F.3d 649, 653 (5th Cir. 2012) (internal quotation marks and citation omitted). 

Medicare claims are subject to the terms of 42 U.S.C. § 405; judicial review of such claims is 

available only after a “final decision” of the Secretary, which is obtained after exhausting the 

administrative appeal process. See 42 U.S.C. §§ 405(g), 1395ff(b)(1)(A); Physician Hosps. of 

Am., 691 F.3d at 653. But 42 U.S.C. § 405 is also “‘more than a codified requirement of 

administrative exhaustion.’” Physician Hosps. of Am., 691 F.3d at 654 (quoting Weinberger v. 

Salfi, 422 U.S. 749, 757 (1975)). The language of 42 U.S.C. § 405(h) “‘is sweeping and direct 

and . . . states that no action shall be brought under § 1331, not merely that only those actions 

shall be brought in which administrative remedies have been exhausted.’” Id. (quoting Salfi, 422

U.S. at 757).

Here, no federal-question jurisdiction exists for Brooks’ suit because section 405(h) 

expressly precludes such jurisdiction over all claims arising under the Medicare Act. See 42 

U.S.C. § 405(h) (providing that “[n]o action . . . shall be brought under section 1331”). “A claim 

arises under the Medicare Act if ‘both the standing and the substantive basis for the presentation’ 

of the claim is the Medicare Act, or if the claim is ‘inextricably intertwined’ with a claim for 

Medicare benefits.” RenCare, Ltd. v. Humana Health Plan of Tex., Inc., 395 F.3d 555, 557 (5th 

Cir. 2004) (quoting Heckler v. Ringer, 466 U.S. 602, 606, 623 (1984)) (internal citations

omitted). The term “arising under” is broadly construed to encompass all claims for relief, 

regardless of whether the claimant seeks benefits, declaratory relief, or injunctive relief. Ringer, 

466 U.S. at 615.

In this case, Brooks seeks—through a variety of claims and causes of action—to overturn 

the Secretary’s suspension of its Medicare payments. Brooks alleges that the Secretary violated 

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its property rights by imposing a payment suspension without a hearing and during the COVID19 pandemic. See, e.g., Compl. ¶¶ 49, 68. But Medicare statutes and regulations determine 

when Medicare suppliers are entitled to hearing and when the Secretary can suspend Medicare 

payments. See 42 U.S.C. §§ 1395ff(a),(b); 1395y(o); 42 C.F.R. § 405.371. Therefore, section 

1331 jurisdiction is barred under section 405(h) as Plaintiff’s claims challenging the payment 

suspension “arise under” the Medicare Act, as numerous courts have held. Am. Med. Hospice 

Care LLC v. Azar, No. 5:20-cv-757, 2020 WL 9814144, at *4 (W.D. Tex. Dec. 9, 2020) 

(concluding that substantively identical claims arose under the Medicare Act); see also Ringer, 

466 U.S. at 615; see also Mathews v. Eldridge, 424 U.S. 319, 327 (1976) (recognizing that 

section 405(h) bars federal question jurisdiction even where the claimant is challenging the 

procedures used to terminate program payments); Physician Hosps., 691 F.3d at 656 (“The 

Supreme Court has also explicitly rejected the argument that constitutional challenges are free 

from Section 405(h)’s requirements.” (citing Salfi, 422 U.S. at 760–61)).

The Court Cannot Exercise Jurisdiction Under 42 U.S.C. §§ 1395ii, 405(g), or

1395ff(b), Because Brooks Has Not Met Congress’s Express Jurisdictional 

Requirements. 

Brooks’ reliance on 42 U.S.C. §§ 1395ii, 1395ff(b), or 405(g)for jurisdiction is also 

unavailing. 

First, 42 U.S.C. § 1395ii does not establish subject matter jurisdiction over Brooks’

claims. By its plain language,4 section 1395ii does not authorize district courts to review 

4 Section 1395ii states “[t]he provisions of sections 406 and 416(j) of this title, and of 

subsections (a), (d), (e), (h), (i), (j), (k), and (l) of section 405 of this title, shall also apply with 

respect to this subchapter to the same extent as they are applicable with respect to subchapter II 

of this chapter, except that, in applying such provisions with respect to this subchapter, any 

reference therein to the Commissioner of Social Security or the Social Security Administration 

shall be considered a reference to the Secretary or the Department of Health and Human 

Services, respectively.”

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Medicare actions. Congress used section 1395ii to apply subsections (a), (d), (e), (h), (i), 

(j), (k), and (l) of 42 U.S.C. § 405(h) to the Medicare Act. Congress did not use section 

1395ii to apply subsection (g)—the provision providing judicial review—to the Medicare 

Act. As such, section 1395ii does not provide subject matter jurisdiction over Brooks’ 

action. 

Nor does 42 U.S.C. § 1395ff provide jurisdiction. When a claim for Medicare 

reimbursement is denied, Congress allows a claimant challenging that initial determination5 to 

seek “judicial review of the Secretary’s final decision after such hearing as provided in section 

405(g).” 42 U.S.C. § 1395ff(b)(1)(A). But Congress allows for a section 405(g) review only 

when the claimant first receives a redetermination decision on its claim. Id. at 

§ 1395ff(a)(3)(B)(i). Section 1395ff(a)(3)(B)(i) states that “[n]o initial determination may be 

reconsidered or appealed under subsection (b) unless the fiscal intermediary or carrier [i.e., 

Medicare contractor] has made a redetermination of that initial determination under this 

paragraph.” Brooks has not pleaded, alleged, or argued that it requested redetermination and 

received a redetermination decision. Therefore, there is no jurisdiction under section 405(g) 

because Brooks has not met Congress’s explicit requirements for a section 405(g) review.

Furthermore, even if Brooks met the requirements of section 1395ff(a)(3)(B)(i), “[u]nder 

42 U.S.C. § 405(g) and (h), federal courts are vested with jurisdiction over only a ‘final decision’ 

5 Initial determinations are determinations as to whether a claimant is entitled to benefits, the 

amount of benefits available, or any other determination with respect to a claim for benefits—

including an initial determination that payment may not be made, or may no longer be made, for 

an item or service. 42 U.S.C. § 1395ff(a)(1).

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of HHS when dealing with claims ‘arising under’ the [Medicare] Act.”6 Family Rehab., Inc. v. 

Azar, 886 F.3d 496, 500 (5th Cir. 2018) (footnote omitted). “Ordinarily, this means that a

[supplier] may come to district court only after either (1) satisfying all four stages of

administrative appeal . . . or (2) after the provider has escalated the claim to the Council and the 

Council acts or fails to act within 180 days.” Id. at 500-01 (citing 42 U.S.C. §§ 405(g), (h); 42 

C.F.R. § 405.1132). There is no dispute that Brooks has not obtained a final decision from the 

Medicare Appeals Council or otherwise used escalation to allow for jurisdiction under section 

405(g).7 See generally Compl. Instead, Brooks apparently concedes that its claims are not 

exhausted. See, e.g., Compl. ¶¶ 16-17 (alleging only jurisdictional exceptions). 

The Court Cannot Exercise Jurisdiction Over Brooks’ Claim on Behalf of Its 

Patients (Count 2) Because Brooks Lacks Standing to Do So. 

One of Brooks’ claims alleges that the Secretary violated its patients’ due process 

right of access to healthcare under Medicare. Compl. ¶¶ 77-83. But Brooks has no 

standing to do so. “Standing to sue is rooted in the traditional understanding of a case or 

controversy[] . . . [and] limits the category of litigants empowered to maintain a lawsuit in 

federal court to seek redress for a legal wrong.” Christopher v. Lawson, 358 F. Supp. 3d 

600, 606 (S.D. Tex. 2019) (quoting Williams v. Parker, 843 F.3d 617, 620 (5th Cir. 2016)); 

Spokeo, Inc. v. Robbins, 136 S.Ct. 1540, 1547 (2016). To establish Article III standing 

6 The Family Rehab decision refers to the “Medicaid Act” in the quoted passage, but in context it 

is clear that was an error and that “Medicare Act” was the intended reference. Family Rehab., 

886 F.3d at 500.

7 The Secretary’s fraud payment suspension is not even an initial determination under 

§ 1395ff(a)(1) and Brooks does not allege otherwise. Indeed, Medicare regulations define a 

payment suspension as “[t]he withholding of payment by a Medicare contractor from a provider 

or supplier of an approved Medicare payment amount before a determination of the amount of 

the overpayment exists, or until the resolution of an investigation of a credible allegation of 

fraud.” 42 C.F.R. § 405.370 (emphasis added). 

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required to invoke federal jurisdiction, a plaintiff must establish that it (1) suffered an 

injury in fact, (2) that the injury is fairly traceable to the alleged conduct of the defendant, 

and (3) that the injury is likely to be redressed by a favorable decision. Lujan v. Defenders 

of Wildlife, 504 U.S. 555, 560-61 (1992). The plaintiff bears the burden of establishing all 

three elements of standing. Spokeo, 136 S.Ct. at 1547.

Brooks cannot meet the standing elements for its patient-related claim because it 

must show an injury in fact to itself. An alleged violation of its patient’s due process rights 

cannot suffice. Acute Care Ambul. Serv., L.L.C. v. Azar II, No. 7:20-CV-00217, 2020 WL

7640206, at *5 (S.D. Tex. Dec. 3, 2020) (dismissing identical claim on standing grounds). 

Brooks’ Other Specific Jurisdictional Arguments Fail. 

Despite Brooks’ apparent concessions that its claims arise under the Medicare Act and 

that it has failed to exhaust its administrative remedies, Brooks nevertheless alleges preexhaustion subject-matter jurisdiction under two theories. First, Brooks alleges that its failure to 

exhaust administrative remedies is excused because its claims are “entirely collateral” to its 

claim of benefits under the Act. Compl. ¶ 16.

8 Second, Brooks alleges subject-matter 

jurisdiction exists through an exception, described in Illinois Council, 529 U.S. 1, allowing for 

constitutional claims where an administrative channeling requirement would “amount to no 

review at all.” Id. at 17; Compl. ¶ 17. Neither exception applies here. 

8 Brooks’s complaint alleges that jurisdiction arises under the general federal question 

jurisdiction statute, 28 U.S.C. § 1331 because it is entirely collateral to the Medicare Act claim. 

This is incorrect; an “entirely collateral” claim still arises under § 405(g). The “exception” is 

instead a judicially created doctrine that the Secretary be deemed to waive administrative 

exhaustion requirements of the Act for “entirely collateral” claims. See Shalala v. Ill. Council on 

Long Term Care, 529 U.S. 1, 15 (2000) (describing “entirely collateral” exception announced in 

Matthews v. Eldridge, 424 U.S. 319 (1976)). 

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The Entirely Collateral Claim Exception Does Not Apply. 

First, the collateral-claim “exception” to the exhaustion requirement does not apply. In 

certain circumstances, courts may exercise jurisdiction over non-exhausted claims arising under

the Medicare Act where (a) the claims are “entirely collateral to a substantive agency decision” 

and (b) “full relief cannot be obtained a post-deprivation hearing.” Family Rehab., Inc., 886 

F.3d at 501. In these scenarios, the Secretary is deemed to waive administrative exhaustion. Id.

Brooks here raises four claims: (1) Brooks’ procedural due process rights violated by 

HHS suspending Brooks’ payments based on a credible allegation of fraud, Compl. ¶¶ 70-76; 

(2) Brooks’ patient’s due process rights were violated by HHS suspending Brooks’ payments 

based on a credible-fraud allegation, id. ¶¶ 77-83; (3) HHS’s credible-fraud finding was arbitrary 

and capricious, id. ¶¶ 84-90; and (4) HHS acted ultra vires in suspending payments in a manner 

that allegedly violated Brooks’ rights to due process, id. ¶¶ 91-95. Brooks has failed to establish 

that any of the claims is entirely collateral to a substantive agency decision. 

A claim cannot be considered entirely collateral if it requires the Court to “immerse itself 

in the substance of the underlying Medicare claim” or make a “factual determination as to the 

application of the Medicare Act.” Family Rehab., Inc., 886 F.3d at 501 (internal quotations 

omitted). Yet Brooks’ claims here do both. Throughout its complaint, and in connection with all 

four of it claims, Brooks contests facts of the Secretary’s suspension decision—both the finding 

of a credible allegation of fraud and the failure to find good cause not to suspend based on 

access-to-healthcare factors—and Brooks seeks to force the Secretary to rescind that suspension 

(albeit only “temporarily”). See, e.g., Compl. ¶¶ 10-11, 55, 58-65, 88. Given the factual nature 

of the challenge, these claims are not entirely collateral. See Family Rehab., 886 F.3d at 501. 

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Brooks may contend, notwithstanding its factual attacks, that its request falls within the 

collateral-claim exception for each of its claims to the extent it seeks only an oral hearing before 

suspension. 

But Brooks would still be wrong. As an initial matter, no amount of liberal pleadings

construction could even arguably create jurisdiction for the APA (Count 3) or patient-based due 

process (Count 2) claims. “The APA does not afford an implied grant of subject-matter 

jurisdiction permitting federal judicial review of agency action.” Califano v. Sanders, 430 U.S. 

99, 107 (1977). Instead, a party seeking APA review must identify a jurisdictional grant from 

either the enabling statute or one of the general provisions under Title 28 of the United States 

Code. Sanders, 430 U.S. at 107. 

Through its APA claim, Brooks does not merely seek a hearing; it instead unequivocally 

second-guesses the agency’s findings. Brooks alleges that “had Defendant acted properly, it 

would not have imposed the suspension,” and that it is a “clear abuse of discretion for Defendant 

not to find that good cause [not to suspend] exists where the COVID-19 pandemic . . . will soon 

overwhelm America’s healthcare system.” Compl. ¶¶ 55, 88. Similarly, Brooks’ patient-based 

due process claim contests “imposing the Medicare payment suspension during the COVID-19 

pandemic.” Id. ¶ 79. These are plainly the types of “factual attacks” that cannot fall under the 

collateral-claim exception. See Family Rehab., 886 F.3d at 501; see also id. at 501 n.6 (noting 

that appellant conceded its APA claims could not fall under the collateral-claim exception). 

The analysis on Brooks’ remaining claims (Counts 1 and 4) is slightly different, but the 

result is the same. Brooks’ complaint relies chiefly on Family Rehabilitation (cited above). 

There, the Fifth Circuit held jurisdiction existed under the collateral claim exception where a 

Medicare provider had engaged in some but not all of the administrative appeal process. The 

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appellant alleged that procedural due process required that provider have its oral hearing 

(contemplated by congressional statute, see 42 U.S.C. § 1395ff(d)(1)(A)) before CMS could 

begin to recoup administratively determined overpayments. Family Rehab., 886 F.3d at 500. 

The provider sought an injunction against recoupment until the hearing could be held. Id. The 

Fifth Circuit concluded that a plaintiff may bring a claim absent full exhaustion if the claim 

“sound[s] only in constitutional or procedural law . . . and request[s] that benefits be maintained 

temporarily until the agency follows statutorily or constitutionally required procedures.” Family

Rehab, 886 F.3d at 503. Based on that legal conclusion, the Fifth Circuit held that appellants’ 

claims for an oral hearing fell under the collateral-claim exception. Id. 

 Brooks now seeks to extend Family Rehabilitation to a different scenario: the 

Secretary’s credible-allegation-of-fraud suspension. 

But the collateral-claim exception cannot extend to fit this scenario for at least three 

reasons. First, unlike Family Rehab, Brooks’ request here is inextricably intertwined with an 

attack on the Secretary’s suspension decision because the substance and the remedy are so 

closely related. While Family Rehab involved merely a delay in the Secretary’s efforts to 

recoup, Brooks’ request to lift the suspension is nearly identical to a request to overturn the 

suspension decision itself. See Affiliated Prof’l Home Health Care Agency v. Shalala, 164 F.3d 

282, 285 (5th Cir. 1999) (finding no jurisdiction despite portion of claim requesting to lift 

suspension of Medicare payment because such relief was “unquestionably administrative in 

nature”). Second, again unlike Family Rehab, Brooks asks the Court for substantive Medicare 

benefits; it requests an order to “lift the suspension,” which is functionally identical to ordering 

the Secretary to resume paying Brooks for services rendered. Compare Family Rehab, 886 F.3d 

at 504 (noting request merely to delay recoupment proceedings). Finally, Family Rehabilitation 

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involved a scenario in which the claimant received a redetermination decision as required by 42 

U.S.C. § 1395ff(a)(3)(B)(i), had engaged in some steps to exhaust administrative remedies, and 

sought an expressly available hearing. See Illinois Council, 529 U.S. at 15 (describing collateralclaim exception as excusing exhaustion only of “some (but not all)” administrative steps). Here,

by contrast, Brooks sued before the Secretary has made an appealable determination at all. See

Am. Med. Hospice Care, LLC, 2020 WL 9814144, at *5-6 (distinguishing Family Rehab on this 

basis). The congressional framework provides no right to a hearing in connection with a 

suspension decision.

9

 Id. In other words, Family Rehabilitation deemed some of the 

administrative-exhaustion requirements unnecessary to seek a hearing that Congress allowed. 

Brooks here seeks to sidestep all administrative exhaustion requirements to seek a hearing that 

Congress did not allow. 

Indeed, since Family Rehabilitation, district courts in this Circuit have frequently 

resolved whether claims nearly identical to Brooks’ fall under this narrow exception to the 

administrative-exhaustion requirement. With one exception,10 those courts all reach the same 

result: a challenge to the Secretary’s suspension decision—whether it is raised as procedural due 

process, ultra vires, or arbitrary and capricious agency action—is not entirely collateral to 

Brooks’ claim for benefits, and no jurisdiction exists. Am. Med. Hospice Care, 2020 WL 

9 Brooks’s complaint is unclear regarding its constitutional theory; Brooks makes no allegation 

of a statutorily mandated hearing it was not provided. But Brooks also does not allege that any 

statute is unconstitutional for failure to provide an oral hearing consistent with due process. 

10 Before ultimately dismissing the complaint under Rule 12(b)(6), Judge Alvarez found 

procedural due process claims seeking a lift of a credible-fraud-allegation suspension to be 

collateral. Acute Care, 2020 WL 7640206, at *5. But here the plaintiff seeks to contest the 

Secretary’s factual fraud allegation, a situation not addressed or described in the Acute Care 

decision. And although Judge Alvarez found the request for a temporary lift of the suspension 

pending a hearing analogous to the requested hearing in Family Rehabilitation, she did not 

wrestle with the distinctions described above. Acute Care, 2020 WL 7640206, at *5. 

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9814144, at *5-6; Dkt. 27, Bridgett Memorial Healthcare, Inc. v. Azar, 4:20-cv-1770 (S.D. Tex. 

Oct. 15, 2020); Abet Life, Inc. v. Azar, 2020 WL 3491966, at *2 (S.D. Tex. June 26, 2020); True 

Health Diagnostics, 392 F. Supp. 3d at 681-82. See also Blue Valley Hosp., Inc. v. Azar, 919 

F.3d 1278, 1286 (10th Cir. 2019); Maka Hospice v. Azar, 2020 WL 4284972, at *2 (C.D. Cal. 

July 24, 2020). Brooks’ claims are not entirely collateral to its administrative claims. 

The “No Review at All” Exception Does Not Apply. 

Brooks also relies on a second exception to administrative exhaustion for claims arising 

under the Medicare Act: the “no review at all” exception described in Illinois Council, 529 U.S. 

1. This narrow exception applies only where there would be a complete preclusion of judicial 

review of any kind if federal question jurisdiction were not granted. Family Rehab., Inc., 886 

F.3d at 505 (quoting Ill. Council, 529 U.S. at 23). “[I]t is not enough to assert that judicial 

review will be delayed and that [Brooks] itself will be prejudiced by that delay”; indeed, review 

is considered available as long as “there potentially were other parties with an interest and a right 

to seek administrative review.” See id. Here, while Brooks alleges it cannot survive waiting for 

an initial determination to then appeal, many providers have challenged suspensions, and many 

of those providers are not as reliant on Medicare payments that Brooks alleges to be. Family 

Rehab., Inc., 886 F.3d at 505 (rejecting “no review at all” exception in similar contexts based on 

similar rationales). 

B. The Court Should Dismiss the Complaint Because Brooks Fails to State a Claim 

1. The Legal Standard Governing Rule 12(b)(6). 

In deciding a Rule 12(b)(6) motion to dismiss, the Court evaluates the sufficiency of the 

complaint by accepting “all well-pleaded facts as true and viewing those facts in the light most 

favorable to [the plaintiff].” Campbell v. City of San Antonio, 43 F.3d 973, 975 (5th Cir. 1995). 

The complaint’s factual allegations “must be enough to raise a right to relief above the 

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Defendant Xavier Becerra’s Motion to Dismiss – Page 14

speculative level . . . on the assumption that all the allegations in the complaint are true (even if 

doubtful in fact).” Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007). While the Court must 

typically limit its 12(b)(6) analysis to the pleadings themselves, the Court may consider any 

documents referred to in the complaint or any other documents that are “central to a claim.” 

Pylant v. Cuba, 2015 WL 1275669, 3:14-cv-0745-P, at *2 (N.D. Tex. Mar. 6, 2015). 

2. Brooks Fails to State a Due Process Claim Because It Has No Constitutionally 

Protectable Property Interest.

Even if jurisdiction existed, Brooks’ due process claims still fail because there is no 

protectable property interest at stake. To create a constitutionally protectable property interest, a 

“unilateral expectation of benefit” is not enough. Pers. Care Prods., 635 F.3d at 158. Instead, 

the property interest, if any, must arise from “rules or understandings that secure certain benefits 

and that support claims of entitlement to those benefits.” Id. (quoting Bd. Of Regents of State 

Colleges v. Roth, 408 U.S. 564, 577 (1972)). 

The Medicare Act makes clear that there is no property right in receiving Medicare 

payments pending a fraud investigation. To the contrary, the Act instead confirms that no such 

right exists; the regulations expressly permit suspension of payments and require that suspended 

payments be first applied to reduce or eliminate any overpayments. 42 U.S.C. § 1395y(o)(1); 42 

C.F.R. §§ 405.371(a)(2), 405.372(e). Because the statutory and regulatory framework expressly 

empowers the Secretary to suspend based on credible allegations of fraud, there is “no property 

interest in [a provider’s] present reimbursement claims while past claims are under investigation 

for fraud.” Personal Care Prods., Inc., 635 F.3d at 159 (writing in the Medicaid context).11 See 

11 It is irrelevant that Personal Care was decided based on Medicaid statutes and regulations 

rather than Medicare. The decision ultimately hinged on the statutory scheme and the conclusion 

that the Medicaid statutory scheme did not create a property right in Medicaid payments pending 

fraud investigations. Pers. Care Prods., 635 F.3d at 159. Similarly here, the relevant statutory 

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Defendant Xavier Becerra’s Motion to Dismiss – Page 15

also Acute Care Ambuls., 2020 WL 7640206, at *9 (while declining to resolve the question, 

reasoning that “[t]he writing on the wall seems clear: there is no property interest in Medicare 

payments.”). Put another way, “[i]t is not a colorable constitutional violation of due process to 

withhold payments temporarily to a provider without a hearing.” Am. Med. Hospice Care, 2020 

WL 9814144, at *6. Because there is no property interest, there is no due process claim, so

Brooks’ constitutional claim fails. 

3. Brooks Fails to State an Ultra Vires Claim. 

Brooks also fails to state a claim for ultra vires conduct. Brooks alleges that the 

Secretary acted “ultra vires in failing to give notice and an opportunity for a hearing . . . yet 

imposing Medicare payment suspension during the COVID-19 Pandemic and national 

emergency.” Compl. ¶ 92. There is no statute or regulation requiring such a hearing, and 

Congress specifically allows payment suspension when there is a credible allegation of fraud. 

42. U.S.C. § 1395y(o). Because there is no statute or regulation requiring such a hearing, 

Brooks’ claim must be constitutional; it is then essentially a mirror image to Brooks’ proceduraldue-process claim, and it fails for the same reasons. See infra Section II.B.2. Accordingly, 

Brooks cannot show that the Secretary’s actions were ultra vires to the Medicare statutes. Thus, 

Brooks fails to state a claim. See Acute Care Ambul. Servs., 2020 WL 7640206, at *14 

(dismissing substantively identical claim on the merits). 

4. Brooks Fails to State a Claim for Arbitrary and Capricious Conduct. 

Brooks also contends that the Secretary engaged in arbitrary and capricious regulatory 

action (Count 3). But that claim fails, too. Brooks asserts that the Secretary’s suspension of its 

and regulatory Medicare scheme vests the Secretary with authority to suspend payments, as the 

Secretary has done.

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Defendant Xavier Becerra’s Motion to Dismiss – Page 16

Medicare payments was arbitrary and capricious because the Secretary failed to find good cause 

not to suspend Brooks’ Medicare payments due to the alleged inability for local Medicare 

beneficiaries to find adequate care if Brooks could not provide it. Compl. ¶¶ 84-90. An agency 

decision is arbitrary or capricious only if:

the agency has relied on factors which Congress has not intended it to consider, 

entirely failed to consider an important aspect of the problem, offered an 

explanation for its decision that runs counter to the evidence before the agency, or 

is so implausible that it could not be ascribed to a difference in view or the 

product of agency expertise. 

Env’t Integrity Project v. U.S. EPA, 969 F.3d 529, 539, 540 (5th Cir. 2020) (quoting Motor 

Vehicle Mfrs. Ass’n v. State Farm Mut. Auto. Ins. Co., 462 U.S. 29, 43 (1983)). 

Here, CMS, through Qlarant,

12 declined Brooks’ request to lift the suspension based on 

alleged beneficiary access issues set forth in 42 C.F.R. § 405.371(b)(1)(ii). Based on the fact 

that “there are at least 299 other home health agencies providing services to Medicare 

beneficiaries in the Dallas, Texas area,” App004, Qlarant expressly found that “the payment 

suspension does not pose a danger to beneficiary life or health.” Id. Other than Brooks’ 

conclusory statement that Qlarant’s finding is incorrect, Brooks provides no explanation as to 

how the Secretary relied on factors which Congress has not intended it to consider, offered an 

explanation that runs counter to the evidence before the agency, or made an conclusion that is so 

implausible that it could not be ascribed to a difference in view or the product of agency 

expertise. 13 See Plotkin v. IP Access, 407 F.3d 690, 696 (5th Cir. 2005) (noting that conclusory 

12 Qlarant is the Unified Program Integrity Contractor for the Southwest region. Qlarant is in 

charge of certain program integrity issues within its region under the direction of CMS. 

13 While Brooks’s complaint does allege its factual disagreements with the credible allegation of 

fraud finding, its arbitrary-and-capricious claim relies only on the Secretary’s failure to find good 

cause not to suspend based on patient-access issues. See Compl. ¶¶ 84-90. In any event, while 

Brooks sets forth its legal position concerning the credible-allegation-of-fraud finding, it still 

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Defendant Xavier Becerra’s Motion to Dismiss – Page 17

allegations are not accepted as true). Even if the Court has jurisdiction over it, the Court should 

dismiss Brooks’ arbitrary and capricious claim as well. 

5. Brooks Fails to State a Claim for Due Process Violations on Behalf of 

Medicare Patients 

Finally, Brooks alleges that the Secretary is violating Brooks’ “patients’ right to access 

such home health services by imposing the suspension during the COVID-19 pandemic and 

national emergency.” Compl. ¶ 79. Assuming Brooks has the standing to bring claims for its 

patients, Brooks does not explain how imposing the suspension based upon credible allegations 

of fraud at this time would prevent its patients from receiving services elsewhere. See True 

Health Diagnostics, 392 F. Supp. 3d at 681 (noting that laboratory services pose less of a risk of 

patient harm). Qlarant has already factually determined that the suspension poses no risk of 

patient-care access, App004 (“Based on the availability of laboratory services in the area served 

by Brooks, CMS has determined the payment suspension does not pose a danger to beneficiary 

life or health.”), and that factual finding is entitled to deference. Texas v. U.S. EPA, 690 F.3d 

670, 677 (5th Cir. 2012) (noting that courts are most deferential to agency fact finding within the 

agency’s expertise). Brooks also fails to explain how the suspension imposed here violates a 

patients’ right to equal protection. Because Brooks has only provided conclusory statements to 

support its right to relief, and because the Secretary has already made contrary factual findings, 

Brooks cannot plead a plausible claim. The Court should dismiss this claim as well. 

IV. CONCLUSION

For the reasons stated above, the Court should dismiss entire Brooks’ Complaint with 

prejudice and enter final judgment in the Secretary’s favor. 

fails to allege any facts making it plausible that the Secretary acted in an arbitrary or capricious 

manner. Compl. ¶¶ 58-65; see also App002-008 (addressing Brooks’ arguments). 

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Defendant Xavier Becerra’s Motion to Dismiss – Page 18

Dated: January 13, 2023 

Respectfully submitted, 

LEIGHA SIMONTON

UNITED STATES ATTORNEY 

/s/ John F. Summers 

John F. Summers 

Assistant United States Attorney

Texas Bar No. 24079417 

1100 Commerce Street, Third Floor 

Dallas, Texas 75242-1699 

Telephone: 214.659.8777 

Fax: 214.659.8807 

john.summers@usdoj.gov 

Attorneys for Defendant Xavier Becerra, 

Secretary, U.S. Department of Health and 

Human Services 

CERTIFICATE OF SERVICE 

On January 13, 2023, I electronically filed the above motion to dismiss with the 

clerk of court for the U.S. District Court, Northern District of Texas. I certify that I have 

served all parties electronically or by another manner authorized by Federal Rule of Civil 

Procedure 5(b)(2). 

 

/s/ John F. Summers 

John F. Summers 

Assistant United States Attorney

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