Merge feature classes in feature datasets

I’m trying to merge a group of like feature classes which are contained within separate feature datasets. I can merge feature classes within a file geodatabase without having issues by creating a list of the feature classes and using Merge_management. The trouble comes when I need to do the same for feature classes contained in feature datasets. My code so far, looks like:

Output = filepath for new fc
for datasetList1 in arcpy.ListDatasets("","Feature")+ [""]
    PointsFC in arcpy.ListFeatureClasses("*_PointName*","Point",datasetList1):
    for points in PointsFC:
    arcpy.Merge_management(points,Output)
        print "Merged Points"

The error message I get states ‘PtsMerge already exists.
Failed to execute (Merge).’. Any help is always appreciated.