Business Law

Quishenberry v. UnitedHealthcare, Inc. (July 13, 2023) __ Cal.5th __ [2023 WL 4511572]

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State-law tort and statutory claims against health insurer are expressly preempted by Medicare Part C. 

Larry Quishenberry’s father was insured under Medicare Part C, a federal program that subsidizes the cost of private healthcare plans for beneficiaries. Quishenberry’s father was hospitalized for a broken hip, then transferred to a skilled nursing facility where he developed severe pressure sores that were not properly treated. He died after discharge. Quishenberry sued his father’s health insurer and the healthcare services administrator who managed his father’s Medicare Advantage (MA) benefits, alleging state common law claims of negligence and wrongful death, and a claim under California’s Elder Abuse Act. Quishenberry claimed the insurer and administrator breached their duty to ensure his father received the skilled nursing benefits to which he was entitled under his healthcare plan as outlined by Medicare Part C and federal regulations. The trial court sustained defendants’ demurrers, ruling that Quishenberry’s state-law claims were preempted by Medicare Part C’s preemption provision. The Court of Appeal affirmed.  Quishenberry obtained review in the California Supreme Court. 

The Supreme Court affirmed. It explained that preemption may be either express or implied, to the extent federal and state laws conflict in addressing the same rights or restrictions. Medicare Part C’s express preemption provision states that the “standards established under” Part C “shall supersede any State law or regulation” concerning MA plans.  (42 U.S.C. § 1395w26(b)(3).) Accordingly, state-law standards that duplicate federal standards are preempted because the express preemption provision covers “any” duty affecting MA plans, regardless of whether they are based on federal standards. Such language contrasts with other federal laws that explicitly preempt state-law standards that “differ” from federal standards. Overruling prior appellate decisions, the Court held that the phrase “any State law or regulation” covers both statutory and common law duties, so that claims based on duties found in the Elder Abuse Act are preempted. It explained that the phrase “with respect to MA plans” covers both statutory and regulatory provisions referencing MA plans as well as generally applicable state law duties allowing regulation of MA plans.  Finally, the Court held that section 1395w26(b)(3) preempted all of Quishenberry’s claims because a trier of fact considering those claims would have to decide whether the insurer and plan administrator denied treatment that his father was entitled to receive under Medicare Part C and relevant federal regulations.

The bulletin describing this appellate decision was originally prepared for the California Society for Healthcare Attorneys (CSHA) by H. Thomas Watson, Peder K. Batalden, and Lacey Estudillo at the appellate firm Horvitz & Levy LLP, and is republished with permission.

For more information regarding this bulletin, please contact H. Thomas Watson, Horvitz & Levy LLP, at 818-995-0800 or htwatson@horvitzlevy.com.


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