In 2003, Congress enacted the latest version of the Medicare Act. It contained far broader language than previous versions on what State law claims it preempted: “The standards established under this part shall supersede any State law or regulation (other than State licensing laws or State laws relating to plan solvency) with respect to MA [Medicare Advantage] plans which are offered by MA organizations under this part.” (42 U.S.C. § 1395w-26(b)(3).)
The scope and meaning of this new preemption language is being litigated around the country, but as yet precious few cases have made their way through the appellate courts. One that has comes out of California. In Yarick v. PacifiCare of California (2009) 179 Cal. App. 4th 1158, the State’s intermediate Court of Appeal held the 2003 Act expressly preempted the enrollee’s statutorily-based state causes of action, and impliedly preempted state common law claims. Yarick also rejected plaintiffs’ argument that the licensing exception within the Medicare Act’s preemption clause could save the claims. Months before, the Ninth Circuit Court of Appeals had reached a similar conclusion, but then granted rehearing. (Uhm v. Humana, Inc. (9th Cir. Docket No. 06-35672). Since a grant of rehearing vacates a published opinion, the score rolled back to zero.
Now the score is back to Plans: 1; enrollees: 0. As of this writing, Yarick is the only published appellate case anywhere in the country to address the preemption defense on the merits. (Previously, the Eleventh Circuit Court of Appeals rejected an argument that the Medicare Act completely preempted state law claims to afford federal court’s subject matter jurisdiction. (Dial v. Healthspring of Alabama, Inc. (11th Cir. 2008) 541 F.3d 1044).) This is an important and recurring issue, and we haven’t heard the last of it. Expect to see all manner of decisions on this hot-button question from courts around the country. As those opinions come down, Appellate Strategist will report on them, and provide a running total box score.