Health Law Daily Wrap Up, ADMINISTRATION OF MEDICARE/MEDICAID PROGRAMS—D. Kan.: Hospice provider’s challenge to Medicare enrollment revocation dismissed for lack of jurisdiction, (Sep 24, 2026)

By Ravindra Kumar Singh, B.L.

The provider abandoned administrative review after settling its re-enrollment bar and could not bypass Medicare’s exhaustion requirement through a related due process claim.

A Kansas hospice provider could not pursue Administrative Procedure Act (APA) and due process challenges to the revocation of its Medicare enrollment because it failed to exhaust the Medicare administrative review process. A federal district court in Kansas dismissed the action for lack of subject matter jurisdiction, finding that the provider ended its administrative appeal after settling with CMS to reduce its re-enrollment bar. Its constitutional claim did not qualify for an exception to exhaustion because it was neither collateral nor colorable (Prairie View Healthcare, Inc. v. Kennedy, No. 26-CV-2138-JAR-JBW (D. Kan. Sept. 16, 2026)).

Medicare enrollment. Prairie View Healthcare, Inc., a hospice provider in Kansas, had participated in Medicare since 2018. Beginning in 2021, the Medicare administrative contractor reviewed its claims through the Targeted Probe and Educate program.

The first review resulted in denial of all 16 claims examined. A second review produced 18 denials among 20 claims, while a third resulted in denial of all 22 claims. CMS subsequently determined that the hospice had a pattern or practice of submitting claims that failed to satisfy Medicare requirements under 42 C.F.R. §424.535(a)(8)(ii).

In November 2024, CMS revoked the hospice’s Medicare enrollment and billing privileges, imposed a 10-year re-enrollment bar, and placed it on the CMS Preclusion List. After CMS upheld the determination on reconsideration, the hospice requested an ALJ hearing.

Before a hearing occurred, the hospice settled with CMS, reducing the re-enrollment bar from 10 years to five years. It then requested dismissal of the administrative proceeding. Although it could have sought Departmental Appeals Board (DAB) review of the dismissal, it did not do so.

Federal court challenge. The hospice later sued HHS, CMS, the HHS Secretary, and the Medicare contractor. Three counts alleged that the enrollment action violated the APA because it was arbitrary and capricious, contrary to law, and procedurally deficient. A fourth asserted that the agency violated the Fifth Amendment Due Process Clause by failing to provide adequate notice and a meaningful opportunity to be heard before revocation.

The hospice conceded that its APA claims should be dismissed for failure to exhaust administrative review. It also conceded that the private Medicare contractor was not a proper party to its APA or constitutional claims.

Administrative exhaustion required. The Medicare Act incorporates 42 U.S.C. §§405(g) and 405(h), requiring challenges arising under Medicare to proceed through the administrative process before judicial review.

Relying on Shalala v. Illinois Council on Long Term Care, Inc., 529 U.S. 1 (2000), the court explained that the requirement channels virtually all Medicare disputes through the agency, allowing it to apply and interpret the governing statutes, regulations, and policies before judicial intervention.

Here, the settlement ended the hospice’s pursuit of administrative review, and it never sought DAB review. There was therefore no final administrative decision satisfying the statutory prerequisite to judicial review.

Due process claim not collateral. The hospice attempted to preserve its Fifth Amendment claim under Mathews v. Eldridge, 424 U.S. 319 (1976), which permits exhaustion to be excused in limited circumstances. It had to establish, among other requirements, a colorable constitutional claim collateral to the substantive issues in the administrative proceeding.

The hospice argued that its claim concerned whether it received audit results before revocation, whether two audits should have generated separate appealable determinations, and whether it had a meaningful opportunity to respond before losing enrollment.

But those questions largely repackaged the procedural objections underlying its APA claims. The due process count also sought the same substantive relief pursued administratively. Unlike the independent constitutional issue in Eldridge, resolving the hospice’s arguments would require examining the underlying Medicare dispute.

No colorable constitutional claim. Even if the due process theory were collateral, the court found it was not colorable. Relying on Blue Valley Hospital, Inc. v. Azar, 919 F.3d 1278 (10th Cir. 2019), the court noted that Tenth Circuit precedent foreclosed a Medicare provider’s asserted constitutional entitlement to a pre-termination hearing.

A provider’s financial interest in extensive pre-termination procedures was also limited because Medicare providers are not the program’s intended beneficiaries. By contrast, the government has a strong interest in efficiently administering Medicare enrollment requirements to protect elderly and disabled beneficiaries and control program costs.

The hospice did not apply the Eldridge balancing factors or explain why the additional pre-revocation procedures it sought were constitutionally required. Merely alleging a denial of due process could not establish jurisdiction because doing so would allow Medicare providers to circumvent the statutory exhaustion requirement by reframing administrative disputes as constitutional claims.

Accordingly, the court granted the government’s motion to dismiss for lack of subject matter jurisdiction and directed entry of judgment in its favor. Because jurisdiction was lacking, the alternative request for dismissal for failure to state a claim was denied as moot.

The case is No. 26-CV-2138-JAR-JBW.

Judge: Robinson, J.

Attorneys: Kristi Fulnecky (Fulnecky Law, LLC) for Prairie View Healthcare, Inc. Michelle A. Jacobs, U.S. Department of Justice, for Robert F. Kennedy, Jr.

Companies: Prairie View Healthcare, Inc.

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