California Appellate Court Allows State Law Claims Against Private Medicare Plans

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The primary issue was whether Plaintiffs' numerous state law causes of action are preempted by title 42 United States Code section 1395w-26(b)(3) of the Medicare Act. It declares that, except for laws governing licensing and solvency, "[t]he standards established under this part shall supersede any State law or regulation . . . with respect to M[edicare ]A[dvantage] plans which are offered by M[edicare ]A[advantage] organizations . . . ." PacifiCare argued that Plaintiffs' claims against it were either expressly or at least impliedly preempted by section 1395w-26(b)(3). It further contended the statute's licensing law exception was inapplicable because that provision only applies to the acquisition of a license, not its maintenance. Plaintiffs disputed the preemption claim and alternately contended leave to amend should have been granted because some of the causes of action could be based on state tort laws.

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