Opinion
NOT TO BE PUBLISHED IN OFFICIAL REPORTS
APPEAL from the Superior Court of San Bernardino County. Super.Ct.No. RCVRS094786. Kenneth Andreen and Donald G. Umhofer, Judges.† Reversed.
Retired associate justice of the Court of Appeal, Fifth District, assigned by the Chief Justice pursuant to article VI, section 6 of the California Constitution.
Retired judge of the San Luis Obispo Superior Court assigned by the Chief Justice pursuant to article VI, section 6 of the California Constitution.
Balisok & Associates, Russell S. Balisok and Steven C. Wilheim for Plaintiffs and Appellants.
Sedgwick, Detert, Moran & Arnold, David M. Humiston, Douglas J. Collodel, and Julie A. Tracy for Defendants and Respondents.
OPINION
RICHLI Acting P.J.
Marjorie Whittaker — the mother of plaintiffs Kathryn Bennett, Merla Beltz, Rose Combs, and Kimberly Melendrez — allegedly died as a result of abuse and neglect by Upland Convalescent Hospital, Inc., a skilled nursing facility.
The federal government had contracted with defendants PacifiCare of California and PacifiCare Health Systems, LLC (collectively PacifiCare) to provide Medicare benefits to PacifiCare’s enrollees, including Whittaker. Plaintiffs allege that PacifiCare contributed to Whittaker’s death by contracting with incompetent providers, failing to pay providers enough, and giving providers financial incentives to deny or delay care.
The trial court granted PacifiCare’s motion for judgment on the pleadings, ruling that plaintiffs’ claims were expressly preempted by federal Medicare law. We will hold that PacifiCare has not carried its burden of overcoming the presumption that Congress does not intend to preempt the exercise of historic state police powers. Accordingly, we will reverse and remand.
I
FACTUAL BACKGROUND
Because this is an appeal from a judgment on the pleadings, we draw our facts from plaintiffs’ complaint.
Under an agreement between PacifiCare and the federal government, Medicare beneficiaries can enroll in PacifiCare’s “Secure Horizons” health care services plan. Enrollees must assign their Medicare benefits to PacifiCare; in return, PacifiCare must provide them with the same range of benefits that they would receive under Medicare.
PacifiCare contracted with Prime Care of Inland Valley, Inc. (Prime Care) for physician services. It also contracted with San Antonio Community Hospital, Inc. (the Hospital) for hospital services. It paid Prime Care and the Hospital on a “capitated” basis; that is, it paid each of them a fixed fee per enrollee per month. It also required them to enter into a revenue-sharing agreement with each other, which provided that, if Prime Care’s hospital admissions were below a certain target, the Hospital had to pay Prime Care; conversely, it they were above this target, Prime Care had to pay the Hospital. Allegedly, this arrangement “unduly influences physicians to avoid utilization of hospital services.”
Prime Care and the Hospital, in turn, contracted with Upland Convalescent Hospital, Inc. (Upland) for skilled nursing facility services. Upland “consistently (and by [a] substantial margin) failed to meet . . . patients’ basic standards of nursing, custodial and medical care.” It had been “routinely” cited by the state Department of Health Services for failing to meet basic standards of care. It was facing both eviction and loss of its Medicare certification.
Marjorie Whittaker was one of PacifiCare’s enrollees. On May 14, 2004, when she was 84 or 85 years old, she was admitted to the Hospital for a knee replacement operation. On May 17, 2004, even though she was not yet in a fit state to be discharged from the Hospital, she was transferred to Upland, supposedly for rehabilitation and therapy.
While at Upland, Whittaker was neglected, deprived of food and water “for extended periods of time,” and physically abused. On June 27, 2004, she was transferred back to the Hospital, where she was found to be “profoundly malnourished, dehydrated, septic from infections which had not been previously assessed or treated, and filthy.” Nevertheless, on June 30, 2004, she was transferred back to Upland, where on July 8, 2004, she died.
II
PROCEDURAL BACKGROUND
Plaintiffs filed this action against numerous defendants, including Upland, the Hospital, Prime Care, and PacifiCare. As against PacifiCare, they asserted the following causes of action:
Plaintiffs also asserted a cause of action against PacifiCare for intentional infliction of emotional distress. The trial court, however, sustained a demurrer to that cause of action, without leave to amend. Plaintiffs do not contend that this was error.
1. Negligence: PacifiCare allegedly (1) contracted with providers without first determining, after a reasonably diligent inquiry, that they could meet the reasonable needs of its enrollees; (2) gave providers undue financial incentives to deny or delay reasonably necessary care; and (3) failed to conduct utilization review so as to ensure that reasonably necessary care was provided to its enrollees.
2. Willful misconduct: PacifiCare allegedly (1) failed to pay providers adequate capitation rates, creating a conflict of interest between them and its enrollees; (2) insisted on the revenue-sharing agreement, which gave Prime Care an undue financial incentive to deny or delay hospital care; (3) contracted with unreliable and incompetent providers; and (4) used utilization review to limit its enrollees’ access to health care.
3. Elder abuse: This cause of action alleged that the conduct previously alleged constituted elder abuse.
4. Wrongful death: This cause of action alleged that the conduct previously alleged resulted in Whittaker’s death.
PacifiCare filed a motion for judgment on the pleadings, on two grounds: (1) plaintiffs’ claims were preempted by the Medicare Act; and (2) plaintiffs had failed to exhaust their administrative remedies. After hearing argument, the trial court granted the motion, based solely on preemption. Accordingly, it entered judgment in favor of PacifiCare and against plaintiffs. Plaintiffs filed a timely notice of appeal.
III
DISCUSSION
A. Statutory Background.
The Medicare Act (42 U.S.C. § 1395 et seq.), originally enacted in 1965 (Pub.L. No. 89-97 (July 30, 1965) 79 Stat. 291), provides federally subsidized health insurance for the aged and disabled. In broad general outline, Medicare Part A provides coverage for hospital-related services; it is an entitlement, funded by the government through taxation. (42 U.S.C. § 1395c et seq.) Medicare Part B provides coverage for other health services; it is elective and funded by premiums paid by participants. (42 U.S.C. § 1395j et seq.) The Centers for Medicare and Medicaid Services (CMS), a federal agency within the Department of Health and Human Services, administers the Medicare Act. (See 42 C.F.R. § 400.200; Robert F. Kennedy Medical Center v. Leavitt (9th Cir. 2008) 526 F.3d 557, 558.)
Prior to 1997, the Medicare Act contained no express preemption provision. (See McCall v. PacifiCare of Cal., Inc. (2001) 25 Cal.4th 412, 423.) In that year, however, Congress amended the Medicare Act by adding the Medicare + Choice program as Medicare Part C. (Pub.L. No. 105-33 (Aug. 5, 1997) § 4001, 111 Stat. 276, codified at 42 U.S.C. § 1395w-21 et seq.; see generally Zolezzi v. PacifiCare of California (2003) 105 Cal.App.4th 573, 579-580.) Medicare + Choice gave Medicare beneficiaries the option of enrolling in private, managed health care organizations, which provided the same benefits otherwise available under Medicare in exchange for fixed monthly capitation payments. (RenCare, Ltd. v. Humana Health Plan of Texas, Inc. (5th Cir. 2004) 395 F.3d 555, 556; Minnesota Senior Federation, Metropolitan Region v. U.S. (8th Cir. 2001) 273 F.3d 805, 807-808.)
The 1997 amendments authorized the Secretary of Health and Human Services (the Secretary) to establish certain standards for the Medicare + Choice program. (Pub.L. No. 105-33, supra, § 4001, 111 Stat. 317, codified at 42 U.S.C. § 1395w-26(b)(1).) The amendments also gave these standards express preemptive effect, as follows:
“(A) In general
“The standards established under this subsection shall supersede any State law or regulation . . . with respect to Medicare + Choice plans which are offered by Medicare + Choice organizations under this part to the extent such law or regulation is inconsistent with such standards.
“(B) Standards specifically superseded
“State standards relating to the following are superseded under this paragraph:
“(i) Benefit requirements.
“(ii) Requirements relating to inclusion or treatment of providers.
“(iii) Coverage determinations (including related appeals and grievance processes).” (Former 42 U.S.C. § 1395w-26(b)(3), Pub.L. No. 105-33, supra, § 4001, 111 Stat. 317; see generally Pagarigan v. Superior Court (2002) 102 Cal.App.4th 1121, 1139-1141.)
In 2000, Congress added a fourth category of specifically preempted state standards: “(iv) Requirements relating to marketing materials and summaries and schedules of benefits regarding a Medicare + Choice plan.” (Former 42 U.S.C. § 1395w-26(b)(3)(B)(iv), Pub.L. No. 106-554 (Dec. 21, 2000) § 614, 114 Stat. 2763.)
It was generally understood that these provisions did not preempt state-law tort or contract claims. (McCall v. PacifiCare of Cal., Inc., supra, 25 Cal.4th at p. 424, quoting and citing 63 Fed.Reg. 34967, 35012, 35013 (June 26, 1998).)
Finally, in 2003, Congress enacted the Medicare Prescription Drug, Improvement, and Modernization Act of 2003. (Pub.L. No. 108-173 (Dec. 8, 2003) 117 Stat. 2066, codified at 42 U.S.C. § 1301 et seq.) This renamed Medicare + Choice “Medicare Advantage” (MA). (Pub.L. No. 108-173, supra, § 201, 117 Stat. 2176, codified at 42 U.S.C. § 1395w-21.) It also completely rewrote the preemption provision, which now provides:
“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 plans which are offered by MA organizations under this part.” (Pub.L. No. 108-173, supra, § 232, 117 Stat. 2208, codified at 42 U.S.C. § 1395w-26(b)(3).)
B. Analysis.
“[B]ecause the States are independent sovereigns in our federal system, we have long presumed that Congress does not cavalierly pre-empt state-law causes of action. In all pre-emption cases, and particularly in those in which Congress has ‘legislated . . . in a field which the States have traditionally occupied,’ [citation], we ‘start with the assumption that the historic police powers of the States were not to be superseded by the Federal Act unless that was the clear and manifest purpose of Congress.’ [Citations.]” (Medtronic, Inc. v. Lohr (1996) 518 U.S. 470, 485 [116 S.Ct. 2240, 135 L.Ed.2d 700], quoting Rice v. Santa Fe Elevator Corp. (1947) 331 U.S. 218, 230 [67 S.Ct. 1146, 91 L.Ed. 1447].)
“[O]ur analysis of the scope of [a] statute’s pre-emption is guided by [the] oft-repeated comment . . . that ‘[t]he purpose of Congress is the ultimate touch-stone’ in every pre-emption case. [Citations.] As a result, any understanding of the scope of a pre-emption statute must rest primarily on ‘a fair understanding of congressional purpose.’ [Citation.] Congress’ intent, of course, primarily is discerned from the language of the pre-emption statute and the ‘statutory framework’ surrounding it. [Citation.] Also relevant, however, is the ‘structure and purpose of the statute as a whole,’ [citation], as revealed not only in the text, but through the reviewing court’s reasoned understanding of the way in which Congress intended the statute and its surrounding regulatory scheme to affect business, consumers, and the law.” (Medtronic, Inc. v. Lohr, supra, 518 U.S. at pp. 485-486, quoting Retail Clerks v. Schermerhorn (1963) 375 U.S. 96, 103 [84 S.Ct. 219, 11 L.Ed.2d 179], Cipollone v. Liggett Group, Inc. (1992) 505 U.S. 504, 530, fn. 27 [112 S.Ct. 2608, 120 L.Ed.2d 407], Gade v. National Solid Wastes Management Assn. (1992) 505 U.S. 88, 111 [112 S.Ct. 2374, 2390, 120 L.Ed.2d 73] [conc. opn. of Kennedy, J.], and id. at p. 98.)
Here, according to the preemption provision, what has preemptive effect are “[t]he standards established” by the Secretary; what is preempted is “any State law or regulation . . . with respect to MA plans . . . offered by MA organizations . . . .” (42 U.S.C. § 1395w-26(b)(3).)
The Secretary has exercised his delegated power to establish MA standards by adopting regulations found at 42 Code of Federal Regulations section 422.1 et seq. PacifiCare has not pointed to any particular regulation that is in conflict with plaintiffs’ claims. It does note that, before it could act as an MA organization, CMS had to approve its MA plan. (42 C.F.R. § 422.501.) There is no evidence, however, that plaintiffs are challenging any aspect of the plan, as approved by CMS, as opposed to some aspect of the way the plan has been carried out.
Thus, PacifiCare has forfeited any potential significance of particular regulations such as 42 Code of Federal Regulations sections 422.112 (“Access to services”), 422.204 (“Provider selection and credentialing”), and 422.620 (“Notifying enrollees of hospital discharge appeal rights”).
Instead, PacifiCare relies on the breadth of the words “any” and “with respect to,” as used in “any State law or regulation . . . with respect to MA plans . . . offered by MA organizations . . . .” However, a state law of general application is not a law “with respect to” an MA plan solely because the MA plan is one of the universe of persons and entities to which the law applies. An employee of an MA plan who is driving a vehicle owned by an MA plan in the course of the MA plan’s business still must stop at a red light.
The Employee Retirement Income Security Act of 1974 (ERISA) (29 U.S.C. § 1001 et seq.) includes a preemption provision that uses analogous wording. It provides that, subject to specified exceptions, “the provisions of [ERISA] shall supersede any and all State laws insofar as they may now or hereafter relate to any employee benefit plan . . . .” (29 U.S.C. § 1144, subd. (a), italics added.) The United States Supreme Court has held “that a state law relates to an ERISA plan ‘if it has a connection with or reference to such a plan.’ [Citation.]” (Egelhoff v. Egelhoff ex rel. Breiner (2001) 532 U.S. 141, 147 [121 S.Ct. 1322, 149 L.Ed.2d 264], quoting Shaw v. Delta Air Lines, Inc. (1983) 463 U.S. 85, 97 [103 S.Ct. 2890, 77 L.Ed.2d 490]). “‘[T]o determine whether a state law has the forbidden connection, [the court] looks both to “the objectives of the ERISA statute as a guide to the scope of the state law that Congress understood would survive,” as well as to the nature of the effect of the state law on ERISA plans.’ [Citation.]” (Id. at p. 147, quoting California Div. of Labor Standards Enforcement v. Dillingham Constr., N.A., Inc. (1997) 519 U.S. 316, 325 [117 S.Ct. 832, 136 L.Ed.2d 791], quoting New York State Conference of Blue Cross & Blue Shield Plans v. Travelers Ins. Co. (1995) 514 U.S. 645, 656 [115 S.Ct. 1671, 131 L.Ed.2d 695].)
For example, in De Buono v. NYSA-ILA Medical & Clinical Services Fund (1997) 520 U.S. 806 [117 S.Ct. 1747, 138 L.Ed.2d 21], the State of New York imposed a tax (HFA) on the gross receipts of hospitals and certain similar health care facilities. An employee benefit plan that operated two New York hospitals (the Fund) argued that the tax, as applied to hospitals run by ERISA plans, was preempted by ERISA. (DeBuono, at pp. 809-810.) A federal court of appeals agreed, “reason[ing] that because the HFA ‘operates as an immediate tax on payments and contributions which were intended to pay for participants’ medical benefits,’ it directly affects ‘the very operations and functions that make the Fund what it is, a provider of medical, surgical, and hospital care to its participants and their beneficiaries.’ [Citation.] The HFA, concluded the court, thus ‘related to’ the Fund because it reduced the amount of Fund assets that would otherwise be available to provide plan members with benefits, and could cause the plan to limit its benefits, or to charge plan members higher fees.” (Id. at pp. 811-812.)
The Supreme Court, however, held that the tax was not preempted. (De Buono v. NYSA-ILA Medical and Clinical Services Fund, supra, 520 U.S. at pp. 812-816.) Rather, it was “one of ‘myriad state laws’ of general applicability that impose some burdens on the administration of ERISA plans but nevertheless do not ‘relate to’ them within the meaning of the governing statute.” (Id. at p. 815, quoting New York State Conference of Blue Cross & Blue Shield Plans v. Travelers Ins. Co., supra, 514 U.S. at p. 668.)
The court began by noting that, “[w]hile the HFA is a revenue raising measure, rather than a regulation of hospitals, it clearly operates in a field that ‘“has been traditionally occupied by the States.”’ [Citation.] Respondents therefore bear the considerable burden of overcoming ‘the starting presumption that Congress does not intend to supplant state law.’ [Citation.]” (De Buono v. NYSA-ILA Medical and Clinical Services Fund, supra, 520 U.S. at p. 814, fn. omitted, quoting Hillsborough County v. Automated Medical Laboratories, Inc. (1985) 471 U.S. 707, 715 [105 S.Ct. 2371, 85 L.Ed.2d 714], quoting Jones v. Rath Packing Co. (1977) 430 U.S. 519, 525 [97 S.Ct. 1305, 51 L.Ed.2d 604], and quoting New York State Conference of Blue Cross & Blue Shield Plans v. Travelers Ins. Co., supra, 514 U.S. at p. 654.)
“There is nothing in the operation of the HFA that convinces us it is the type of state law that Congress intended ERISA to supersede. This is not a case in which New York has forbidden a method of calculating pension benefits that federal law permits, or required employers to provide certain benefits. Nor is it a case in which the existence of a pension plan is a critical element of a state law cause of action, or one in which the state statute contains provisions that expressly refer to ERISA or ERISA plans.” (De Buono v. NYSA-ILA Medical and Clinical Services Fund, supra, 520 U.S. at pp. 814-815, fns. omitted.)
The court rejected the court of appeals’ reliance on the effect on the Fund: “The HFA is a tax on hospitals. Most hospitals are not owned or operated by ERISA funds. This particular ERISA fund has arranged to provide medical benefits for its plan beneficiaries by running hospitals directly, rather than by purchasing the same services at independently run hospitals. If the Fund had made the other choice, and had purchased health care services from a hospital, that facility would have passed the expense of the HFA onto the Fund and its plan beneficiaries through the rates it set for the services provided. The Fund would then have had to decide whether to cover a more limited range of services for its beneficiaries, or perhaps to charge plan members higher rates. Although the tax in such a circumstance would be ‘indirect,’ its impact on the Fund’s decisions would be in all relevant respects identical to the ‘direct’ impact felt here.” (De Buono v. NYSA-ILA Medical and Clinical Services Fund, supra, 520 U.S. at p. 816.)
California’s causes of action and remedies for negligence (Civ. Code, § 1714, subd. (a)), elder abuse (Welf. & Inst. Code, § 15600 et seq.), and wrongful death (Code Civ. Proc., § 377.60 et seq.) operate in the field of common law torts, a field traditionally reserved to the states. Hence, we begin with the presumption that Congress did not intend to preempt them. PacifiCare argues that the presumption does not apply because the Medicare Act is “a federal program” that “fills a health care void that was not occupied by the state . . . .” The question, however, is whether the assertedly preempted state statute — not the assertedly preemptive federal statute — is an exercise of historic state police powers.
These state statutes do not refer to an MA plan, nor is the existence of an MA plan an element of these claims. Once again, PacifiCare has not cited any federal statute or regulation that is inconsistent with plaintiffs’ claims. Hence, this is not a case in which California threatens to forbid an MA plan to do something that federal law permits, or requires an MA plan to do something that federal law allows it to choose not to do.
We recognize that a facially neutral state law can be preempted as applied. (E.g., Ingersoll-Rand Co. v. McClendon (1990) 498 U.S. 133, 140-142 [111 S.Ct. 478, 112 L.Ed.2d 474] [ERISA preempted wrongful discharge claim, which alleged that employer discharged employee to avoid making contributions to his pension fund].) Here, under the rubric of these state-law causes of action, plaintiffs are challenging the way PacifiCare (1) selects providers, (2) sets capitation rates for providers, (3) requires providers to enter into revenue-sharing agreements, and (4) conducts utilization review. Even so, there is nothing about these practices that is unique to an MA organization, as opposed to managed health care organizations generally. It does not appear that applying state tort law standards to these practices would subvert the objectives of the Medicare Act.
Indeed, it would appear that allowing plaintiffs’ action to proceed would generally be consistent with and might even further federal objectives. For example, plaintiffs allege that PacifiCare either willfully or negligently chose incompetent and unreliable providers. Requiring PacifiCare to pay any resulting damages is consistent with the overall federal goal of providing reasonable and necessary health care services to the aged and disabled. Admittedly, it may also reduce the funds available to PacifiCare to provide health care services to other enrollees. The same could be said, however, of the New York state tax in De Buono, or of “‘myriad state laws’ of general applicability . . . .” (Buono v. NYSA-ILA Medical and Clinical Services Fund, supra, 520 U.S. at p. 815.) This is too generic an effect to support preemption.
The Secretary’s administrative construction of the effect of the preemption provision is entitled to “‘great weight and respect . . . .’” (Sharon S. v. Superior Court (2003) 31 Cal.4th 417, 436, quoting Yamaha Corp. of America v. State Bd. of Equalization (1998) 19 Cal.4th 1, 12.) The Secretary has stated: “We also have considered how the changes made by [the 2003 amendment of the preemption provision] apply, if at all, to State tort or contract law that could affect MA organizations. Our previous position under the M[edicare] + C[hoice] program was that State tort or contract remedies may be available to enrollees whose coverage determination disputes go through the Medicare appeals process. We continue to believe that generally applicable State tort, contract, or consumer protection law would not be preempted . . . . First, we believe that [the preemption provision] was intended to preempt State standards governing health plans, not generally applicable State laws, such as labor laws, employment law, tax laws, etc. that incidentally could have applicability to MA organizations. We believe that contract laws and tort laws fall in this category, as they do not apply to the organization based on its status as a health plan, but instead apply generally. Even specific types of tort laws, such as malpractice law, apply generally to all medical practitioners, not to health plans specifically.
“We also note that tort law, and often contract law, generally are developed based on case law precedents established by courts, rather than statutes enacted by legislators or regulations promulgated by State officials. We believe that the Congress intended to preempt only the latter type of State standards.
“. . . [W]e believe that an enrollee should still have State remedies available in cases in which the legal issue before the court is independent of an issue related to the organization’s status as a health plan or MA organization.” (Medicare Program; Establishment of the Medicare Advantage Program, 69 Fed.Reg. 46866, 46913-46914 (Aug. 3, 2004).)
We find further support for our conclusion in Masey v. Humana, Inc. (M.D. Fla.) 2007 U.S. Dist. LEXIS 63556. There, the plaintiff sued an MA organization, alleging that it had mischaracterized drugs administered to her as only partially covered under Medicare Part D, rather than 100 percent covered under Medicare Part B. She asserted causes of action for breach of contract, breach of fiduciary duty, and violations of state consumer protection law. (Id. at pp. 2-3.)
The district court held that the preemption provision did not bar these claims. It relied on the Secretary’s interpretation of the preemption provision as not preempting state-law tort or contract actions. (Masey v. Humana, Inc., supra, 2007 U.S. Dist. LEXIS 63556 at pp. 14-15.) It added, “[t]he Secretary stated that state consumer protection standards were not subject to preemption as long as the state law did not conflict with a M[edicare] + C[hoice] program requirement. [Citation.]” (Id. at p. 16.) Thus, “even assuming that a beneficiary’s claim involves a coverage determination, . . . the claim may give rise to a tort or contact case under state law. In such a situation, a state claim is not superseded.” (Id. at pp. 14-15.)
PacifiCare relies on First Medical Health Plan, Inc. v. Vega (D.P.R. 2005) 406 F.Supp.2d 150, vacated (1st Cir. 2007) 479 F.3d 46. We may assume, without deciding, that this decision still has some precedential value despite having been vacated by a higher court, because it is inapposite. There, the challenged Puerto Rican statute prohibited MA organizations from having health care affiliates. The court concluded that it was in “direct conflict” with Title 42 United States Code section 1395w-27(d)(4), which merely required MA organizations to disclose any health care affiliates. (First Medical Health Plan, Inc., at p. 154.) The key distinction between this case and First Medical is that, as we noted earlier, PacifiCare has not argued that any particular federal regulation preempts plaintiffs’ claims.
In its briefs, PacifiCare also relied on Uhm v. Humana, Inc., supra, 2006 U.S. Dist. LEXIS 41185. However, an appeal of that decision was then pending in the Ninth Circuit. Thereafter, the Ninth Circuit issued its opinion in Uhm v. Humana Inc. (9th Cir. 2008) 540 F.3d 980. It held that, under the preemption provisions of both Medicare Part C and Part D (see id. at pp. 983-984), “[s]tate common law is preempted to the extent that there are federal standards. . . . State common law actions, however, may stand in arenas where neither Congress nor CMS has established standards.” (Id. at p. 985.) It then went on to hold, much like the First Circuit in First Medical, that particular Medicare regulations did preempt particular claims that the plaintiffs were making. (Id. at pp. 988-991.) At oral argument, PacifiCare disclaimed any further reliance on Uhm.
PacifiCare does argue that the legislative history of the preemption provision demonstrates “Congress’ intent to progressively expand Medicare preemption until Medicare, like ERISA, would be governed exclusively by federal laws.” It is incontrovertible that Congress has repeatedly expanded preemption under the Medicare Act, in 1997, 2000, and most recently in 2003. Even so, it has not expanded it infinitely. A general Congressional intent to expand preemption is little help in deciding just how far the expansion has gone.
We therefore conclude that the trial court erred by granting judgment on the pleadings in favor of PacifiCare.
IV
DISPOSITION
The judgment is reversed. Plaintiffs are awarded costs on appeal against PacifiCare.
We concur: KING, J., MILLER, J.
[†] It was Judge Andreen who actually granted defendants’ motion for judgment on the pleadings. Judge Umhofer then entered judgment pursuant to Judge Andreen’s minute order. (See Code Civ. Proc., § 635.)
PacifiCare has also forfeited any potential significance of 42 Code of Federal Regulations sections 422.560-422.626, dealing with MA grievance procedures. At trial, in its motion for judgment on the pleadings, PacifiCare did argue that plaintiffs had failed to exhaust their administrative remedies under the grievance procedures. Plaintiffs therefore argued in their opening brief that these procedures did not apply to them. In its respondent’s brief, PacifiCare did not bother to respond to this argument; we deem it to have forfeited any contrary contention.
We therefore express no opinion on the significance (if any) of these regulations with respect to a preemption analysis in an appropriate case.