NOT FOR PUBLICATION FILED

UNITED STATES COURT OF APPEALS DEC 9 2019

MOLLY C. DWYER, CLERK

U.S. COURT OF APPEALS

FOR THE NINTH CIRCUIT

H. BABAALI M.D. MEDICAL INC., No. 18-55745

Plaintiff-Appellant, D.C. No. 2:18-cv-00198-GW-PLA v.

ALEX M. AZAR II, Secretary of the MEMORANDUM* United States Department of Health and Human Services, and SEEMA VERMA, Administrator of the Centers for Medicare and Medicaid Services,

Defendants-Appellees.

Appeal from the United States District Court for the Central District of California George Wu, District Judge, Presiding

Argued and Submitted November 4, 2019 Pasadena, California

Before: FARRIS, McKEOWN, and PARKER,** Circuit Judges.

* This disposition is not appropriate for publication and is not precedent except as provided by Ninth Circuit Rule 36-3. ** The Honorable Barrington D. Parker, United States Circuit Judge for the Second Circuit, sitting by designation. 1 H. Babaali M.D. Medical Inc. (“Babaali”) is a Medicare provider that

provides treatment for venous reflux disease.1 A Medicare independent contractor

determined that Babaali had been overpaid for this service. Babaali disputed this

determination. After initiating but not completing administrative review of this

dispute, Babaali sought a writ of mandamus directing the Secretary of Health and

Human Services and the Administrator of the Centers for Medicare and Medicaid

Services to provide a hearing before an Administrative Law Judge and to stay

recoupment of the alleged overpayment until an ALJ issued a decision. See 28

U.S.C. § 1361.

Babaali also brought a claim under the Due Process Clause, invoking

jurisdiction pursuant to 42 U.S.C. § 405(g).2 The district court granted Defendants-

Appellants’ motion to dismiss, holding that the requirements for mandamus

jurisdiction had not been met and that Babaali had failed to exhaust its

administrative remedies. The court further denied Babaali’s motion for leave to

amend. This appeal followed.

1 We are mindful that H. Babaali M.D. is the name of both a physician and his medical corporation. Because only the corporation is a party here, we use the name “Babaali” to denote the corporation and employ the pronoun “it.” 2 The complaint set forth claims invoking several other bases for jurisdiction, but Babaali does not appeal the district court’s dismissal of those claims. 2 In general, a party is not entitled to relief under § 405(g) or to a writ of

mandamus unless that party has exhausted its administrative remedies. See, e.g.,

Shalala v. Ill. Council on Long Term Care, Inc., 529 U.S. 1, 15 (2000); Heckler v.

Ringer, 466 U.S. 602, 616-17 (1984); Agua Caliente Tribe of Cupeño Indians of

Pala Reservation v. Sweeney, 932 F.3d 1207, 1216 (9th Cir. 2019); Uhm v.

Humana, Inc., 620 F.3d 1134, 1140 (9th Cir. 2010). The district court, therefore,

correctly concluded that it lacked jurisdiction because Babaali failed to proceed

through the five-level Medicare appeal process set forth in 42 U.S.C. § 1395ff. See

Ill. Council, 529 U.S. at 13.

After progressing through two stages of review by independent contractors,

Babaali sought a hearing before an ALJ, pursuant to 42 C.F.R. § 405.1000(a).3 The

relevant statute provides that an ALJ “shall conduct and conclude a hearing . . . and

render a decision on such hearing by not later than the end of the 90-day period

beginning on the date a request for hearing has been timely filed.” 42 U.S.C. §

1395ff(d)(1)(A). If an ALJ does not render a decision within the 90-day period, a

Medicare provider may move directly to step four and escalate its claim to the

Departmental Appeals Board (“DAB”), which provides de novo review. Id. §

3 With two levels of review completed, the agency was entitled to begin recoupment as the appeal continued. See 42 U.S.C. § 1395ddd(f)(2)(A); 42 C.F.R. § 405.379(f)(1). 3 1395ff(d)(2)(B), (3)(A). Subsequently, if the DAB does not process the appeal

within 180 days, the provider may seek review in federal district court. Id. §

1395ff(d)(2)(A), (3)(B); 42 C.F.R. §§ 405.1100, 405.1132(a). Babaali did not

receive and still has not received an ALJ hearing because the agency is severely

backlogged. Presently, it is unable to provide such a hearing within 3.5 years of a

provider’s request.

However, rather than proceed to a step-four appeal to the DAB, Babaali filed

this suit. Consequently, it failed to exhaust its administrative remedies and is not

entitled to judicial review. See, e.g., Ill. Council, 529 U.S. at 13; Ringer, 466 U.S.

at 617; Kaiser v. Blue Cross of Cal., 347 F.3d 1107, 1115 (9th Cir. 2003).

Recognizing this failure, Babaali argues that the exhaustion requirement

should be waived. It contends that it would be denied due process if the agency

were able to recoup significant sums while it endured the multi-year wait for an

ALJ hearing. Although waivers are available under § 405(g), that provision also

includes an unwaivable requirement that a plaintiff first present its claim to the

agency. Kaiser, 347 F.3d at 1115. While Babaali did challenge the overpayment

determination before the agency, it never presented to the agency a request for a

stay of recoupment, nor did it seek an extended repayment plan. See 42 U.S.C. §

1395ddd(f)(1). As a result, it fails to meet the unwaivable presentment

4 requirement, and the Court may not entertain Babaali’s due process claim. Cf.

Haro v. Sebelius, 747 F.3d 1099, 1112-13 (9th Cir. 2014).

Babaali further challenges the district court’s denial of its motion for leave

to amend. It had sought leave to add a claim for mandamus relief on behalf of all

Medicare providers who had experienced similar significant delays receiving ALJ

hearings. The district court denied the motion, inter alia, on the ground of comity.

It noted ongoing parallel litigation in the U.S. District Court for the District of

Columbia, Am. Hosp. Ass’n v. Azar, No. 14-cv-851 (JEB), 2018 WL 5723141

(D.D.C. Nov. 1, 2018). Because that litigation had been protracted, Babaali was

within the class of providers covered by that litigation, and the case presented an

identical issue, the district court did not abuse its discretion by denying leave to

amend. See Kohn Law Grp., Inc. v. Auto Parts Mfg. Miss., Inc., 787 F.3d 1237,

1240 (9th Cir. 2015).

AFFIRMED.

5