A California appeals court rules that federal Medicare law preempts a lawsuit against a Medicare Advantage insurer for allegedly breaching duties owed to an elderly man by not paying providers enough to offer necessary care. Yarick v. Pacificare of California (Cal. App., 5th Distr., No. F057032, Dec. 1, 2009).
Joseph Yarick, an elderly man, had health insurance coverage provided by Pacificare of California, a Medicare Advantage (MA) insurer. Following a fall in early 2006, Mr. Yarick was admitted to a hospital for treatment of a broken leg, followed by a period of rehabilitation and custodial care at a nursing facility. When Mr. Yarick's condition deteriorated, the facility discharged him. When Mr. Yarick's family arrived to pick him up, they found him slumped over in his wheelchair and unresponsive. Mr. Yarick was transported to another hospital where he was determined to have multiple ailments, including pneumonia and congestive heart failure. Hospital officials urged Mr. Yarick's family to substitute paliative care for efforts to cure him. The family refused and Mr. Yarick died a short time later.
The administrator of Mr. Yarick's estate sued Pacificare for negligence, elder abuse and wrongful death. The complaint asserted that the insurer's contracts with the various health care providers that treated Mr. Yarick offered insufficient payment to permit them to provide care based on a patient's reasonable needs, thus "requiring the providers to substitute a standard of financial expediency." The estate argued that Pacificare breached various state statutory and common law duties of care owed to Mr. Yarick. Pacificare countered that the estate's claims were preempted by federal Medicare law and moved to dismiss. The trial court dismissed the suit, and the estate appealed.
The Court of Appeals of California affirms the dismissal, ruling that the federal Medicare statute expressly and impliedly preempts the application of standards established pursuant to state law. In addition, the court determines that "[w]hile all common law claims against MA organizations are not preempted merely because of the organization's MA status, these causes of action for breach of state statutory duties are preempted."
To download the full text of this decision in PDF format, go to: https://www.courtinfo.ca.gov/opinions/documents/F057032.PDF.
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