Ninth Circuit Says Physician Can Pursue Due Process Claim over Ten-Year Medicare Bar
- September 18, 2026
- Written by AHLA Legal Staff
A physician did not have to exhaust administrative remedies to pursue a claim that the Centers for Medicare & Medicaid Services (CMS) violated his due process rights when it barred him from participating in Medicare for ten years, the Ninth Circuit held in a nonpublished opinion issued September 15.
The Ninth Circuit reversed the dismissal of his due process claim, although it agreed with the lower court that Dr. Mansur H. Lee could not move forward with his ultra vires claim without satisfying the exhaustion requirement.
Lee, a board-certified internal medicine and hospice and palliative medicine physician, served as the medical director at Passion and Love Hospice from July 2019 through March 2025. After concluding that the Passion and Love’s reimbursement claims lacked documentation to support patients’ terminal illness prognoses, CMS notified Lee that the agency was revoking his Medicare billing privileges and imposing a ten-year enrollment bar because his medical director role at the hospice was an affiliation that posed an undue risk of fraud and abuse to the program.
Lee sued in federal district court after CMS denied reconsideration and upheld its initial determination, alleging that due process required a pre-deprivation hearing and that the imposition of sanctions amounted to ultra vires agency action. The district court dismissed the action for lack of subject matter jurisdiction because Lee, whose appeal was still pending before an administrative law judge, had not exhausted his administrative remedies.
Unlike the ultra vires claim, the Eighth Circuit found the exhaustion requirement was waived as to his due process claim, which challenged the amount of process he received before being subject to public sanction and therefore was collateral to his substantive claim of entitlement.
Lee also made a colorable showing of irreparable injury, including that he lost his job as a hospitalist following the Medicare enrollment bar.
Finally, Lee demonstrated that exhaustion would be futile for his due process claim. Given the constitutional nature of the due process challenge, “‘there [is] nothing to be gained from permitting the compilation of a detailed factual record, or from agency expertise,’” the appeals court observed.
Lee v. Kennedy, No. 26-1820 (9th Cir. Sept. 15, 2026).