Morales v. Providence Health System-Southern California ( 2017 )

NOT FOR PUBLICATION FILED
UNITED STATES COURT OF APPEALS JUL 28 2017
MOLLY C. DWYER, CLERK
U.S. COURT OF APPEALS
FOR THE NINTH CIRCUIT
RENATE MORALES, on behalf of herself No. 16-55072
and all other persons similarly situated,
D.C. No.
Plaintiff-Appellant, 2:15-cv-04516-JAK-PLA
v.
MEMORANDUM*
PROVIDENCE HEALTH SYSTEM -
SOUTHERN CALIFORNIA, Erroneously
Sued As Providence Health and Services,
Inc.,
Defendant-Appellee.
Appeal from the United States District Court
for the Central District of California
John A. Kronstadt, District Judge, Presiding
Argued and Submitted June 5, 2017
Pasadena, California
Before: BEA and HURWITZ, Circuit Judges, and MOTZ,** District Judge.
After a fall, Renate Morales received twenty physical therapy sessions at a
Providence Health System – Southern California (“Providence”) facility. Medicare
*
This disposition is not appropriate for publication and is not precedent
except as provided by Ninth Circuit Rule 36-3.
**
The Honorable J. Frederick Motz, United States District Judge for the
District of Maryland, sitting by designation.
made conditional payments for the first twelve sessions, subject to any recovery
from an alleged tortfeasor. Instead of billing Medicare for the remaining eight
sessions, Providence placed a lien on Morales’ tort claim. In this putative class
action, Morales claims that Providence’s failure to bill Medicare constitutes breach
of contract, fraud, negligent misrepresentation, violation of the California Unfair
Competition Law and Consumer Legal Remedies Act, and breach of the covenant
of good faith and fair dealing. The district court dismissed Morales’ first amended
complaint without prejudice for failure to exhaust administrative remedies. We
affirm.
1. Providence argues that this court does not have jurisdiction over this appeal
because the district court dismissal was without prejudice. But, if “a district court
terminates an action for a claimant’s failure to exhaust administrative remedies, we
will treat the matter as final unless the claimant could begin anew or continue the
administrative process.” Barboza v. Cal. Ass’n of Prof’l Firefighters, 651 F.3d 1073,
1076 (9th Cir. 2011). No administrative remedies remain for Morales. The time to
appeal administratively any denial of benefits has run. See 42 U.S.C.
§ 1395ff(b)(1)(A); 42 C.F.R. §§ 405.924(b)(12)(ii), 405.980(b)(1)-(2) (setting a
time limit on reopening of an initial determination). The dispute resolution process
in 42 U.S.C. § 1395y(b)(2)(B)(vii)(IV), which the district court cited, applies only
to conditional Medicare reimbursements, not to the failure of a Medicare provider
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to submit a payment in the first place. See id. § 1395y(b)(2)(B)(i)-(ii). We therefore
have jurisdiction over this appeal.
2. The Medicare Act’s exhaustion requirement, 42 U.S.C. § 405(h), applies
to judicial review of claims “arising under” the Act. Uhm v. Humana, Inc., 620 F.3d
1134, 1140 (9th Cir. 2010) (quoting Heckler v. Ringer, 466 U.S. 602, 614-15
(1984)); see § 405(h) (“No findings of fact or decision of the [Secretary] shall be
reviewed by any person, tribunal, or governmental agency except as herein
provided.”); § 405(g) (providing that review may be sought in district court only
“after any final decision of the [Secretary] made after a hearing”). A claim arises
under the Act “(1) where the ‘standing and the substantive basis for the presentation
of the claims’ is the Medicare Act . . . and (2) where the claims are ‘inextricably
intertwined’ with a claim for Medicare benefits.” Uhm, 620 F.3d at 1140 (quoting
Heckler, 466 U.S. at 614-15). Each of Morales’ claims is “at bottom . . . complaining
about the denial of Medicare benefits” and therefore is subject to the exhaustion
requirement. Id. at 1142-43.
3. Morales concedes she did not exhaust administrative remedies, but argues
that § 405 does not apply because she is “not seeking review of any decision of the
Secretary and is not suing the United States, the Secretary, or any officer or
employee thereof.” But, Uhm was also a suit by a Medicare beneficiary against a
private entity and the Secretary was not a party. Id. at 1145. Morales also argues
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that she could not be required to exhaust administrative remedies because none
existed. But, as the district court noted, “[t]o the extent Plaintiff is claiming that
[Defendants are] running afoul of the Medicare Act by collecting reimbursement
from her in an amount greater than what is permitted under that Act she is making a
claim for benefits.” The administrative appeals process under 42 U.S.C. § 1395ff
governs benefits determinations. Alternatively, Morales could have submitted the
relevant claims directly to Medicare. See 42 C.F.R. § 405.904; see also 20 C.F.R. §
422.510(b) (prescribing the use of Form SSA-1490 for patients to request payment).
AFFIRMED.1
1
We deny both Morales’ and Providence’s motions for judicial notice. Dkt.
16, 21.
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