UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF COLUMBIA

 

_________________________________________ 

 ) 

STIMLABS, LLC, et al., ) 

 ) 

Plaintiffs, ) 

 ) 

 v. ) Civil No. 22-cv-01988 (APM)

 ) 

XAVIER BECERRA, et al., ) 

Secretary of Health and Human Services, ) 

 ) 

Defendants. ) 

_________________________________________ ) 

MEMORANDUM OPINION

I. INTRODUCTION

Plaintiff StimLabs, LLC (“StimLabs”) is a biotechnology company that develops and sells 

products for wound care and amniotic fluid allografts. At issue in this case are two of its 

products—Ascent and Corplex P—which are categorized as human cell, tissue, and cellular and 

tissue-based products, or HCT/Ps. StimLabs’ Ascent and Corplex P “are used to cushion and 

protect open wound environments and to cushion, protect, and supplement fluid environments such 

as synovial joints and tendons, and are distinct from drugs and biologicals, which require metabolic 

activity to achieve a therapeutic effect.” Two companies that use those products join as plaintiffs: 

Plaintiff Anesthesia and Pain Consultants, PC (“APC”) is a physician-owned corporation that 

provides medical care, and Plaintiff Wound Institute of America, Inc. (“Wound Institute”) is a 

medical practice focused on surgical and non-surgical wound care. 

Plaintiffs brought this action to challenge purported policies barring reimbursement for the 

use of Ascent and Corplex P under the Medicare program. Plaintiffs allege that the Secretary of 

Health and Human Services (the “Secretary”) and the Administrator of the Center for Medicare 
2 

and Medicaid Services (“CMS”) (together, “Defendants”) unlawfully bypassed the notice-andcomment-rulemaking requirement for policies that change a substantive legal standard governing 

Medicare coverage and payment, and that Defendants applied those policy changes retroactively, 

contrary to law. Additionally, Plaintiffs assert that Defendants’ decision to stop covering Ascent 

and Corplex P is arbitrary and capricious under the Administrative Procedure Act (“APA”). 

Before the court are Plaintiffs’ motion for a preliminary injunction and Defendants’ motion 

to dismiss. The court concludes that Plaintiffs failed to exhaust their administrative remedies 

before filing suit. Therefore, the court lacks subject matter jurisdiction over this action. 

Accordingly, Defendants’ motion to dismiss is granted and Plaintiffs’ motion for a preliminary 

injunction is denied.

II. BACKGROUND

A. The Medicare Program and Coverage for Use of HCT/Ps 

The Medicare program is a nationwide health insurance program for the aged, blind, and 

disabled. Part B of the program covers hospital-outpatient services, physician services, and other 

services not covered by Part A. Among the covered services under Part B are “drugs and 

biologicals which are not usually self-administered by the patient.” 42 U.S.C. § 1395x(s)(2)(A). 

The Medicare program will not cover any service that is “not reasonable and necessary for the 

diagnosis or treatment of illness or injury or to improve the functioning of a malformed body 

member.” Id. § 1395y(a)(1)(A). The Secretary’s regulations limit Medicare coverage only to drug 

products that have been approved by the U.S. Food and Drug Administration (“FDA”). 

42 C.F.R. § 410.29 (2021). The regulations purportedly do “not require prior FDA approval for 

HCT/Ps,” like Ascent and Corplex P, “that are not regulated as drugs.” Compl. for Inj. and Decl. 

Relief, Mandamus, and Relief Under the All Writs Act, ECF No. 1 [hereinafter Compl.] ¶ 1. 
3 

Further, the Secretary has not published a final rule addressing Medicare coverage for HCT/Ps. 

Id. ¶ 64 

In November 2017, the FDA published guidance setting out the “FDA’s position for 

manufacturers” on what qualified as “minimal manipulation and homologous use”—a requirement 

for products to be regulated as HCT/Ps. Id. ¶ 49. The guidance provided a period of time during 

which the FDA “intended to exercise enforcement discretion while manufacturers determined 

whether their products met the HCT/P criteria, as freshly interpreted by the FDA,” relieving

manufacturers “of all premarket review and approval requirements” during this period. Id. The 

enforcement discretion was set to expire on May 31, 2021. Id. ¶ 50. 

On December 6, 2019, in the midst of the enforcement discretion period, the FDA issued 

a Guidance and Public Safety Notification (“FDA Notification”) that declared a specific subset of 

HCT/Ps as “experimental exosome biological products.” Id. ¶ 2. The FDA Notification did not 

apply to all HCT/Ps and, in fact, was “entirely silent as to HCT/Ps derived from amniotic cells, 

placental cells, or tissues,” like StimLab’s Ascent and Corplex P, which are not exosomes. 

Id. ¶ 59. 

Nevertheless, in July 2021, after the FDA’s enforcement discretion period ended, Medicare 

Administrative Contractors (“MACs”) began denying reimbursement claims for Ascent and 

Corplex P based on the FDA Notification. Id. ¶¶ 2, 52–53. According to Plaintiffs, this change 

marked a sharp departure from Medicare’s past coverage of Ascent and Corplex P. Before May 

31, 2021, MACs “routinely covered and paid Medicare Part B claims for products composed of 

amniotic tissue, including Ascent and Corplex P, as reasonable and necessary.” Id. ¶ 52. 

However, in July 2021, “MACs began retroactively reopening claims” for Ascent and Corplex, 

without providing any notice to providers and suppliers of the change in Medicare coverage for 
4 

HCT/Ps, and without engaging in notice-and-comment rulemaking. Id. ¶ 53. In short, MACs 

began refusing to reimburse for the use of Ascent and Corplex P in treatment, despite the fact that 

they are not “experimental exosome biological products” and have not been categorized as such 

by the FDA. Id. ¶ 3. One MAC denied claims for services using Corplex P on the grounds that

“Corplex P was not approved by the FDA,” and another MAC denied claims for Ascent because

“Ascent was experimental/investigational.” Id. ¶¶ 54, 56. 

After a MAC began denying claims for Ascent, StimLabs took the matter up with CMS. It 

“contacted the Director, Coverage and Analysis Group at CMS to discuss the actions 

[and] . . . [o]ver the course of several months, StimLabs engaged in multiple email exchanges and 

several telephone calls to discuss the use of an unpublished policy memorandum, the absence of 

any notice that the coverage criteria had changed, and the use of a rationale that did not reflect the 

legal status of Ascent as an HCT/P.” Id. ¶ 55. 

B. The Technical Direction Letters

In February 2022, CMS issued two Technical Direction Letters (“TDLs”) regarding 

HCT/Ps. The TDLs (1) “declared that certain manipulated amniotic and/or placental tissue 

biologics for injections were experimental exosome biologic products and (2) directed the MACs 

to re-open and adjust any paid claims for dates of service December 6, 2019, and later for those 

HCT/Ps identified in the TDLs.” Id. ¶ 61 (internal quotation marks omitted). The “TDLs also 

directed the MACs to apply automatic claims denials, rather than the claim-by-claim 

determinations that otherwise apply in the absence of [a national coverage determination] or [a 

local coverage determination], specifically identifying . . . Ascent and Corplex P for such 

automatic denial.” Id. In addition to failing to adopt the TDLs through notice-and-comment, 

according to Plaintiffs, CMS further sought to obscure its actions. “CMS expressly directed the 
5 

MACs not to reference CMS’s TDLs in any ad hoc provider education regarding the Policies.” 

Id. 

On February 23, 2022, “MACs released policies on their websites stating that Medicare 

claims for manipulated, reconstituted, or injectable amniotic, or placental products would no 

longer be covered under Medicare.” Id. ¶ 58. The policies further stated that “claims with dates 

of service on or after December 9, 2019, would be reopened and retroactively denied.” Id. In 

early March 2022, “StimLabs again contacted CMS as well as the FDA to seek a resolution of the 

matter.” Id. ¶ 60. StimLabs met with the director of CMS’s Coverage and Analysis Group and 

had a conference call with an FDA Associate Director for Product Management, but the “contacts 

proved fruitless.” Id. 

The TDLs were short-lived. On March 25, 2022, CMS issued a third TDL that withdrew 

the first two. Id. ¶ 62. CMS instructed MACs to “suspend automatic denials of claims for amniotic 

and placental tissue product injections,” to “institute claim-by-claim review to determine whether 

a claim meets the reasonable and necessary criteria,” and “to reopen any claims that had been 

processed under the automatic denials.” Id. Despite the withdrawal of the TDLs, Plaintiffs allege 

that MACs “reinstituted their denials of Medicare claims for HCT/P products including Ascent 

and Corplex P . . . on the same rationale articulated in the TDLs, asserting that the claims can be 

denied because neither Ascent nor Corplex P has received premarket approval from the FDA, even 

though FDA approval is not required for HCT/P products.” Id. ¶ 63. In other words, Plaintiffs 

claim that, despite the February 2022 TDLs being rescinded, MACs continued to deny coverage 

for Ascent and Corplex P under their reasoning. 

This alleged new unwritten coverage policy threatens the viability of Plaintiffs’ businesses. 

StimLabs says “that a loss of Medicare coverage for Corplex P alone will result in a loss of 
6 

approximately 20% of its current revenue that cannot be compensated through damages.” Id. ¶ 65. 

Plaintiff APC has submitted Medicare reimbursement claims for its use of Ascent, and it has 

received overpayment notices totaling approximately $200,000. Id. ¶ 67. If forced to repay the 

overpayment demand, APC would have to close its practice. Id. ¶¶ 67, 85. The Complaint does 

not allege that Plaintiff Wound Institute has received an overpayment notice but does state that it

has “lost revenue” and “faces significant damage to its professional reputation and good will.” Id.

¶ 103. 

C. Procedural History

Plaintiffs filed this action and moved for preliminary injunctive and declaratory relief on 

July 8, 2022. See Compl.; Pls.’ Mot. for Inj. and Decl. Relief, ECF No. 6 [hereinafter Pls.’ Mot.], 

Pls.’ Mem. of P. & A. in Supp. of Pls.’ Mot., ECF No. 6-1 [hereinafter Pls.’ Inj. Mem.]. Plaintiffs 

allege that CMS’s unwritten blanket policy of denying coverage for the use of Ascent and 

Corplex P (1) violates 42 U.S.C. § 1395hh, which “expressly requires that a change in a 

substantive legal standard governing the scope of Medicare benefits or payments be subject to 

notice and comment rulemaking,” (2) is arbitrary and capricious in violation of Section 706 of 

APA, and (3) runs afoul of both 42 U.S.C. § 1395hh(e) and 42 C.F.R. § 405.980 due to the 

retroactive application of the new policy without a finding of good cause. Pls.’ Inj. Mem. at 2. 

Plaintiffs ask the court to declare the Secretary’s actions invalid and unlawful, and to enjoin the 

Secretary from implementing them. Id. at 45. 

Defendants filed a motion to dismiss on August 15, 2022. Defs.’ Mem. of P. & A. in Supp. 

of their Mot. and in Opp’n to Pls.’ Mot., ECF No. 17 [hereinafter Defs.’ Mot.]. As grounds for 

dismissal, Defendants argue both that the court lacks subject matter jurisdiction and that Plaintiffs 
7 

have failed to state a claim. See id. Because the court dismisses this action on jurisdictional 

grounds, it does not address the sufficiency of Plaintiffs’ pleading. 

III. DISCUSSION 

A. Federal Question Jurisdiction: 28 U.S.C. § 1331

The parties’ primary jurisdictional dispute centers on whether the court lacks general 

federal question jurisdiction to hear this action. It is “well established that section 405(h) of the 

Social Security Act (as incorporated into the Medicare Act through 42 U.S.C. § 1395ii) expressly 

limits the availability of general federal question jurisdiction in the Medicare context.” California 

Clinical Lab’y Ass’n v. Sec’y of Health & Hum. Servs., 104 F. Supp. 3d 66, 80 (D.D.C. 2015); 42 

U.S.C. § 405(h) (“No action . . . shall be brought under section 1331 . . . of Title 28 to recover on 

any claim arising under” the Medicare Act). Section 405(h) “channels most, if not all, Medicare 

claims through [the agency] review system.” Shalala v. Ill. Council on Long Term Care, Inc., 529 

U.S. 1, 8 (2000). Generally speaking, only after exhausting agency review procedures can 

claimants “seek judicial review [in federal court] pursuant to the Medicare Act.” Council for 

Urological Ints. v. Sebelius, 668 F.3d 704, 706 (D.C. Cir. 2011); see 42 U.S.C. § 1395ff(b)(1)(A) 

(providing for “judicial review of the Secretary’s final decision” following an administrative 

hearing). 

“This nearly absolute channeling requirement assures the agency greater opportunity to 

apply, interpret, or revise policies, regulations, or statutes without possibly premature interference 

by individual courts applying ‘ripeness’ and ‘exhaustion’ exceptions case by case.” Ill. Council, 

529 U.S. at 2. The Supreme Court has recognized that the “assurance comes at the price of 

occasional individual, delay-related hardship, but paying such a price in the context of a massive, 

complex health and safety program such as Medicare was justified in the judgment of Congress.” 
8 

Id. Thus, section 405(h) “is intended to postpone judicial review, not totally preclude it.” Council 

for Urological Ints., 668 F.3d at 708. 

In Illinois Council, the Court recognized an exception to the channeling requirement. The 

Court said that “§ 1395ii does not apply § 405(h) where application of § 405(h) would not simply 

channel review through the agency, but would mean no review at all.” Ill. Council, 529 U.S. at 

19 (emphasis added). In other words, for claims arising under the Medicare Act, if the channeling 

requirement leads to a “complete preclusion of judicial review,” a party need not present and 

exhaust its claims before coming to federal court. Id. at 23. The Illinois Council exception is a 

narrow one, however. It is “not intended to allow section 1331 federal question jurisdiction in 

every case where section 405(h) would prevent a particular individual or entity from seeking 

judicial review.” Council for Urological Ints., 668 F.3d at 711. 

Taken together, these principles require a “three-step analysis” to assess “whether a court 

has subject matter jurisdiction to hear a claim related to Medicare.” Sensory Neurostimulation, 

Inc. v. Azar, 977 F.3d 969, 976 (9th Cir. 2020). First, the court must determine whether the claim 

“arises under” the Medicare Act. Id. If it does, the court next “must decide whether the plaintiff 

has satisfied the channeling requirements by properly presenting the claim and exhausting the 

appropriate administrative channel.” Id. Finally, if plaintiff has not satisfied the channeling 

requirement, the court must inquire whether the “no review at all” exception applies. Id. “If it 

[does], the plaintiff may proceed in court under 28 U.S.C. § 1331 or some other jurisdictional 

predicate. If not, the plaintiff’s claim cannot proceed and must be dismissed for lack of subject 

matter jurisdiction.” Id. 

Here, the parties agree that Plaintiffs’ claims “arise under” the Medicare Act and that 

Plaintiffs have not satisfied the channeling requirement. Defs.’ Mot. at 10–17; Pls.’ Mem. of L. 
9 

in Opp. to Defs.’ Mot., ECF No. 23 [hereinafter Pls.’ Reply], at 7–12. Their dispute is over whether 

Plaintiffs meet the Illinois Council “no review at all” exception. Defs.’ Mot. at 16–17; Pls.’ Reply 

at 7–12. 

Plaintiffs effectively concede that APC and Wound Institute cannot meet the exception. 

Both are Medicare enrolled providers who are eligible to appeal the denial of coverage and 

overpayment notices for the use of StimLabs’ products. In fact, APC has filed an appeal and it 

remains pending in the administrative process. Pls.’ Mot., Pls.’ Ex. 3, ECF No. 6-4 [hereinafter 

Dooley Decl.], ¶¶ 6, 8. APC and Wound Institute therefore cannot establish that they are 

completely precluded from administrative review. 

Plaintiffs’ jurisdictional hopes thus rest on StimLabs. They contend that “StimLabs falls 

squarely within the exception to the ‘channeling’ requirement’” because “StimLabs is not a 

provider and as such is an affected party that has no avenue for administrative review.” Pls.’ Reply 

at 11. Plaintiffs continue, “StimLabs is not required to, nor is it acting as the assignee of a Medicare 

beneficiary or supplier” and “the resulting decision would only apply to that individual claim and 

would not result in a global resolution.” Id. Plaintiffs emphasize that they are challenging “the 

validity of the Policies and actions, not any present or past individual claim for Medicare 

reimbursement,” and that “the relief Plaintiffs seek is entirely procedural because their goal is to 

ensure that any consideration of their claims will be conducted only under valid regulations and 

that any reopenings comply with existing regulations.” Pls. Mem. at 19; Pls. Reply at 14. 

But the fact that, as a non-provider, StimLabs is unable to assert a claim directly, is 

challenging a policy and not an individual claim, and is seeking only procedural relief does not 

excuse it from the channeling requirement. To meet the Illinois Council exception, StimLabs still 

must show that there is not an “adequate proxy” that could raise claims on its behalf. Council for 
10 

Urological Ints., 668 F.3d at 712. It has not done so. Providers of StimLabs’ products, such as 

co-Plaintiffs APC and Wound Institute, are more than adequate proxies. Such providers have an 

obvious incentive to present claims and exhaust administrative remedies: if they do not challenge 

the denial of coverage and overpayment notices, they will be required to repay large sums to CMS

and will not be reimbursed for future use of the products. APC alone claims to have received over 

$200,000 in overpayment notices. Dooley Decl. ¶ 14. Moreover, these providers will not have to 

pursue administrative remedies on their own. StimLabs will offer a helping hand. According to 

StimLabs, it employs a Director of Reimbursement Support who is “responsible for filing appeals 

on StimLabs’ products including Ascent and Corplex P.” Pls.’ Mot., Pls.’ Ex. 10, ECF No. 6-11, 

¶ 3. Thus, this is not a case where, because “the only entities able to invoke Medicare Act review 

are highly unlikely to do so, their unwillingness to pursue a Medicare Act claim poses a serious 

‘practical roadblock’ to judicial review.” Council for Urological Ints., 668 F.3d at 712. The 

providers who use StimLabs’ products are an “adequate proxy” to present claims. See RICU LLC 

v. U.S. Dep’t of Health & Hum. Servs., 22 F.4th 1031, 1038–39 (D.C. Cir. 2022) (holding that the 

“client hospitals” of a telehealth medicine company were an adequate proxy to seek reimbursement 

for incurred physicians’ costs). 

Plaintiffs’ arguments to the contrary are unpersuasive. Citing Baxter Healthcare Corp. v. 

Weeks, Plaintiffs primarily contend that “StimLabs is not required to recruit parties to bring an 

administrative claim on its behalf.” Pls.’ Reply at 10 (citing Baxter Healthcare Corp. v. Weeks, 

643 F. Supp. 2d 111, 116 (D.D.C. 2018) (“[American Chiropractic Ass’n v. Leavitt, 431 F.3d 812 

(D.C. Cir. 2005)] does not require Baxter to recruit a physician or hospital to act as its proxy in an 

administrative process.”). Defendants respond that the language in Baxter is a “misstatement of 

the law[,] . . . misapplies D.C. Circuit precedent[,] and stands out as an aberration.” Defs.’ Reply 
11 

Mem. in Supp. of Mot. to Dismiss, ECF No. 24 [hereinafter Defs.’ Reply], at 6. The court agrees 

that Baxter does not withstand scrutiny. 

The D.C. Circuit’s recent decision in RICU illustrates why. In that case, the plaintiff was 

an inpatient telehealth company that specialized in remote critical care services and contracted 

with U.S.-trained intensive-care physicians who lived and worked abroad. 22 F.4th 1031, 1033 

(D.C. Cir. 2022). “[C]lient hospitals” paid the plaintiff for the services provided by these

physicians. Id. at 1033. CMS ruled that “Medicare could not reimburse any telehealth services 

furnished by medical providers outside the United States.” Id. at 1034. Not itself a provider, the 

plaintiff attempted to establish jurisdiction to sue under the Medicare Act by invoking the Illinois 

Council exception, but the D.C. Circuit rejected the effort. Id. at 1038–39. It held that the “client 

hospitals are adequate proxies to channel [the plaintiff’s] general claim that its services are eligible 

for Medicare reimbursement through a concrete claim for payment.” Id. at 1039. In reaching this

conclusion, the court considered whether the client hospitals’ interests aligned with the plaintiff’s, 

ultimately concluding that they did because “these [hospitals] want the Department [of Health and 

Human Services] to allow reimbursement so they can more readily maintain or even expand their 

contracts with [the plaintiff].” Id. 

The same is true here. Plaintiff StimLabs’ interests directly align with the interests of 

providers such as APC and Wound Institute. A favorable coverage determination will relieve 

providers of overpayment obligations, thus promoting their financial health, and will secure future 

use of the products. Furthermore, even if the court were to follow Baxter’s reasoning, StimLabs 

has already “recruited” a provider that can “seek administrative review of its claims.” Baxter, 643 

F. Supp. 2d at 116 (cleaned up). APC has filed an administrative appeal, presumably with 

StimLabs’ help, Pls.’ Ex. 3 ¶¶ 6–10, and the court is given no reason to think Wound Institute
12 

cannot do the same. Thus, the court need not speculate whether StimLabs could “recruit” a 

proxy—it already has done so. 

Plaintiffs’ reliance on the out-of-Circuit decision in Akebia Therapeutics v. Becerra also is 

misplaced. Pls.’ Reply 9–11; 548 F. Supp. 3d 274 (D. Mass 2021). There, the plaintiff was a drug 

manufacturer who sought judicial review of a CMS decision eliminating coverage for its drug. 

Akebia, 548 F. Supp. 3d at 276. The court determined the Illinois Council exception applied 

because the plaintiff was “not an association whose members could challenge CMS’s decision 

administratively,” was part of a “category of entities” (drug manufacturers) that are “wholly 

excluded from the Part D administrative review process,” and there was nothing to suggest the 

plaintiff “could act as a Part D participant’s assignee or appointed representative.” Id. at 286–87. 

The court further reasoned that the exception applied because “an individual Part D participant can 

challenge only an individual coverage determination . . . not a generally-applicable decision by the 

Government.” Id. at 297. But Akebia does not move the dial because it rejects the very D.C. 

Circuit precedent to which this court is bound. The court in Akebia described Council for 

Urological Interests as an “outlier and generally at odds with the trend in the case law that the 

applicability of the ‘no review’ exception depends on whether there is something the plaintiff can 

do to facilitate administrative review.” Id. at 286 n.14 (observing that “under the logic of Council 

for Urological Interests, the fact that Akebia cannot bring about administrative review could be 

considered unimportant because Part D participants are incentivized to do so (and have)”). This 

court, of course, is not free to dismiss Council for Urological Interests as an “outlier.” 

In short, because providers of StimLabs’ products are an adequate proxy to channel 

StimLabs’ general claim that its products are eligible for Medicare coverage, the Illinois Council 

exception does not apply, and thus the court lacks federal question jurisdiction over this action. 
13 

B. Medicare Act Jurisdiction: 42 U.S.C. § 405(g) 

Alternatively, Plaintiffs contend that they have met the jurisdictional requirements of 

42 U.S.C. § 405(g). Pls.’ Reply at 12–16. According to Plaintiffs, they both presented their claims 

to the agency and qualify for waiver of the exhaustion requirement because the challenges they 

have raised are “collateral to the claims for benefits.” Id. at 12–13 (quoting Bowen v. City of New 

York, 476 U.S. 467, 483 (1986)). Specifically, Plaintiffs assert that “the ‘exhaustion’ requirement 

should be waived because the Plaintiffs’ arguments are ‘entirely collateral’ to any claims that could 

be raised in an administrative proceeding because those proceedings are limited to reviews of 

individual claims and cannot make a determination that the Secretary failed to comply with 

Section 1395hh(a)(2) or the limits on reopenings of Medicare claims.” Id. at 14. 

Section 405(g) creates two prerequisites for judicial review: (1) “a plaintiff’s claim must 

have been presented to the Secretary,” and (2) “a plaintiff must fully exhaust the administrative 

remedies prescribed by the Secretary.” RICU, 22 F.4th at 1036 (quoting Mathews v. Eldridge, 424 

U.S. 319, 328 (1976)) (cleaned up). The presentment requirement is a “nonwaivable element” of 

jurisdiction. Mathews, 424 U.S. at 328; RICU, 22 F.4th at 1036 (“Section[] 405(g) . . . effectively 

preclude[s] the exercise of district court jurisdiction in the absence of presentment of a concrete 

dispute, regardless of the nature of the claim at issue.”). Exhaustion is waivable, and “[w]aiver is 

warranted if the claim is (1) collateral to a substantive claim of entitlement (collaterality);

(2) colorable in its showing that denial of relief will cause irreparable harm (irreparability); 

and (3) one whose resolution would not serve the purposes of exhaustion (futility).” Sensory 

Neurostimulation, 977 F.3d at 981 (internal quotation marks omitted); see also Bowen, 476 U.S. 

at 483 (stating that courts can waive § 405(g)’s exhaustion requirement where the claim is “entirely 
14 

collateral to [a] substantive claim of entitlement” and “the claim rest[s] ‘on the proposition that 

full relief cannot be obtained at a postdeprivation hearing’”) (quoting Mathews, 424 U.S. at 331). 

At the outset, the court concludes that StimLabs has not met the presentment requirement. 

Plaintiffs insist that StimLabs presented a claim because its representatives “repeatedly contacted 

multiple agencies, including a MAC, CMS, and the FDA in order to explain” its position on 

coverage. Pls.’ Reply at 14 (citing Pls.’ Mot., Pls.’ Ex. 2, ECF No. 6-3, ¶ 9 (StimLabs provided 

coverage criteria to a MAC); id. ¶¶ 13–14 (StimLabs expressed “concerns” to CMS through emails 

and phone calls about a MAC’s auditing and denial of Ascent claims); id. ¶¶ 20–22 (StimLabs 

advised a MAC that clinical trials were not required for its products); Pls.’ Mot., Pls.’ Ex. 6, ECF 

No. 6-7, ¶¶ 2–3 (describing two telephone communications between counsel for StimLabs and 

representatives of CMS and FDA)). But that is not correct. “Presentment instead demand[s] that 

the Department have ‘an opportunity to rule on a concrete claim for reimbursement.’” RICU, 22 

F.4th at 1036 (quoting Heckler v. Ringer, 466 U.S. 602, 622 (1984)). Merely raising concerns 

generally about coverage decisions outside of the administrative process for a specific claim, as 

StimLabs did here, is not sufficient. See id. at 1037 (holding that mere request for guidance on 

how to apply an interim rule did not satisfy the presentment requirement). 

Unlike StimLabs, APC is challenging through the Medicare administrative appeals process

specific adverse decisions with respect to its use of Ascent. Dooley Decl. ¶¶ 6–8 (stating that APC 

has “appealed through the Redetermination phase of the Medicare appeals process” and has further 

appealed to “the qualified independent contractor responsible for the appeal of [the MAC’s] 

decision”). Still, Plaintiffs have not shown that APC has met the presentment requirement. 

“[A]ll aspects” of a claim must be channeled. Heckler, 466 U.S. at 614. That means a claimant 

cannot bring a challenge in federal court that it has not raised before the agency. See Am. Hosp. 
15 

Ass’n v. Azar, 895 F.3d 822, 826 (D.C. Cir. 2018) (holding that the plaintiffs had not satisfied the 

presentment requirement where none of them “had challenged the new reimbursement regulation 

in the context of a specific administrative claim for payment”). Plaintiffs have put neither APC’s 

appeal nor the MAC’s determination letter before the court, so the court cannot say for sure on 

what grounds APC contested the overpayment notice. APC’s declarant has described the basis for 

the MAC’s adverse ruling, but that summary makes it seem that APC’s claim was denied because 

the MAC deemed the use of Ascent not to be “reasonable and necessary.” Dooley Decl. ¶ 7 (noting 

that the MAC’s decision rested in part on Ascent being “experimental/investigational”). Thus, 

when Plaintiffs filed this suit, none of them appear to have challenged CMS’s purported unwritten 

policy on the grounds advanced here “in the context of a specific administrative claim for 

payment.” Am. Hosp. Ass’n, 895 F.3d at 826. Accordingly, the court finds that Plaintiffs have 

failed to meet the “presentment” requirement under § 405(g). 

Waiver of the exhaustion requirement also would not be appropriate. Plaintiffs’ challenge 

here is not “collateral to the claims for benefits.” Bowen, 476 U.S. at 483. It is directly related to 

the reasons for the denials themselves. According to Plaintiffs, Medicare’s policy of covering only 

approved FDA drug products does not apply to HCT/Ps because they “are not regulated as drugs” 

and thus do “not require prior FDA approval.” Compl. ¶¶ 20, 42 (“These HCT/Ps are not regulated 

as drugs, biologics, or medical devices and no premarket submissions are required for FDA review 

or approval.”). Yet, they allege, since the rescission of the TDLs, MACs have continued to reopen 

and wrongly deny coverage for their products, often “on the same rationale articulated in the TDLs, 

asserting that the claims can be denied because neither Ascent nor Corplex P has received 

premarket approval from the FDA, even though FDA approval is not required for HCT/P 

products.” Id. ¶ 63 (emphasis added). Thus, Plaintiffs’ complaint, at bottom, seems to be that 
16 

CMS’s “unwritten policy” of denying coverage for Ascent and Corplex P is based on a basic 

misunderstanding of their products, see id. ¶ 59 (asserting that StimLabs’ products are not exosome 

products that were the subject of the FDA’s December 2019 Public Safety Notification), and a

mistaken application of its own regulations, which do not require FDA approval for HCT/Ps, id. 

¶ 20. Such challenges are not “collateral” to the benefits denials. See Bowen, 476 U.S. at 483. 

They are central to the benefits denials themselves. 

Additionally, waiver of the exhaustion requirement is unwarranted because no Plaintiff has 

plausibly established that it would be irreparably harmed if it were required to channel its claims. 

Plaintiffs maintain that, “[o]n information and belief, StimLabs estimates that a loss of Medicare 

coverage for Corplex P alone will result in a loss of approximately 20% of its current revenue that 

cannot be compensated through damages.” Compl. ¶ 65; Pls. Mot., Ex. 4, ECF No. 6-5 [hereinafter 

Steele Decl.] ¶ 13. But it is settled in this Circuit that “[r]ecoverable monetary loss may constitute 

irreparable harm only where the loss threatens the very existence of the movant’s business.” Wis. 

Gas Co. v. FERC, 758 F.2d 669, 674 (D.C. Cir. 1985).

1

 StimLabs’ claimed revenue loss does not 

meet that stringent standard. APC also contends that it has received approximately $200,000 in 

overpayment demands, “which if fully recouped could result in the shuttering of [the] practice.” 

Dooley Decl. ¶ 14 (emphasis added). That recoupment “could result” in business harm is too thin 

a reed on which to plausibly establish irreparable harm. 

1 StimLabs also asserts that the downstream effects of CMS’s actions will cause “approximately $23 Million in losses 

associated with the discontinuation of Corplex P products this year alone,” which along with potential repayments to 

customers, threatens StimLabs’ “ability to continue as a going concern.” Steele Decl. ¶¶ 15–16. But this magnitude 

of losses appears speculative. StimLabs does not, for example, explain what percentage of its providers depend on 

Medicare for reimbursement, such that they are likely to discontinue using its products. Moreover, to the extent that 

CMS’s denial of coverage has resulted in providers demanding refunds, that would appear to be a consequence of 

StimLabs’ apparent business decision to indemnify its customers in the event of coverage denials, not any agency 

action.
17 

C. Mandamus Act Jurisdiction: 28 U.S.C. § 1361

Plaintiffs also invoke the court’s jurisdiction pursuant to the Mandamus Act, 28 U.S.C. 

§ 1361. The D.C. Circuit has held that mandamus jurisdiction is not precluded by § 405(h). 

Monmouth Med. Ctr. v. Thompson, 257 F.3d 807, 813 (D.C. Cir. 2001). Such relief is available 

in the Medicare Act context, however, only “to review otherwise unreviewable procedural issues” 

that are “unrelated to the merits.” Randall D. Wolcott, M.D., P.A. v. Sebelius, 635 F.3d 757, 765–

66 (5th Cir. 2011). As discussed already, Plaintiffs’ procedural claims here are not unrelated to 

the merits; on the contrary, they rest on Plaintiffs’ merits contention that CMS in fact has changed 

its coverage policy. For that reason alone, the exercise of mandamus jurisdiction is not appropriate.

Additionally, mandamus relief is available only if: “(1) the plaintiff has a clear right to 

relief; (2) the defendant has a clear duty to act; and (3) there is no other adequate remedy available 

to the plaintiff.” Council of & for the Blind of Del. Cnty. Valley, Inc. v. Regan, 709 F.2d 1521, 

1533 (D.C. Cir. 1983). Even if all jurisdictional requirements are met, “a court may grant relief 

only when it finds compelling equitable grounds.” Am. Hosp. Ass’n v. Burwell, 812 F.3d 183, 189 

(D.C. Cir. 2016) (internal quotation marks omitted). “The party seeking mandamus has the burden 

of showing that its right to issuance of the writ is clear and indisputable.” Id. (internal quotation 

marks omitted).

Here, Plaintiffs have not met their burden. For starters, Plaintiffs have not shown that the 

administrative appeals process is not an adequate remedy. This by itself bars mandamus 

jurisdiction. See Monmouth, 257 F.3d at 810 (“[W]e must first examine all other possible avenues 

of relief to ensure that the hospitals have fully exhausted those which were available.”); id. at 813 

(stating that mandamus is available only when the claimant has exhausted administrative 

remedies). 
18 

Moreover, mandamus relief is unavailable because there is no clear, “ministerial” duty to 

act. Plaintiffs argue that “the Secretary has a clear duty to inform the MACs that they may no 

longer follow the policy in question and to instruct them to stop engaging the reopening of claims 

on grounds that are prohibited by statute.” Pls.’ Reply at 19. Similar mandamus requests have 

been rejected by district courts in this Circuit. For example, in California Clinical, the plaintiff 

sought “[a]n order mandating the Secretary and her agents, including MACs, to comply with all

applicable provisions of the Constitution and the Medicare Act,” similarly over a dispute regarding 

the Secretary’s alleged failure to engage in notice-and-comment rulemaking. 104 F. Supp. 3d at

83–84. Then-Judge Ketanji Brown Jackson rejected mandamus jurisdiction, because the plaintiff 

had “neither demonstrated that it has any clear right to an order requiring the Secretary to comply 

with these procedural mandates, nor has it shown that the Secretary has any clear, nondiscretionary 

duty to act under the provisions at issue.” Id. at 84. The same is true here. 

Simply put, Plaintiffs have not plausibly established that this is the type of “extraordinary 

case” in which the “drastic remedy” of mandamus would be proper. Id. at 83.

IV. CONCLUSION

For the foregoing reasons, Defendants’ Motion to Dismiss, ECF No. 17, is granted, and 

Plaintiffs’ Motion for Preliminary Injunction, ECF No. 6, is denied. A separate, final order 

accompanies this Memorandum Opinion. 

 

Dated: October 21, 2022 Amit P. Mehta

 United States District Judge