Class Action

Medicare Class Action Defense Cases–Uhm v. Humana: Ninth Circuit Affirms Dismissal Of Class Action Complaint Holding State Law Claims Concerning Medicare Prescription Drug Benefits Fell Within Express Preemption Of Federal Law

By Michael J. Hassen

Class Action Claims Concerning Medicare Prescription Drug Benefits Fell Within Express Preemption Provision of Medicare Prescription Drug Improvement and Modernization Act of 2003 so District Court did not Err in Grant Defense Motion to Dismiss Class Action Complaint Ninth Circuit Holds

Plaintiffs filed a putative class action complaint against Humana Health Plan, Inc. and Humana, Inc. (collectively “Humana”) concerning medication benefits under Medicare. Uhm v. Humana Inc., ___ F.3d ___ (9th Cir. August 25, 2008) [Slip Opn., at 11553-54]. The class action complaint alleged that defendants failed to provide plaintiffs with the materials necessary for them to obtain Medicare prescription drug benefits, and that plaintiffs “were forced to buy their prescription medications out-of-pocket at costs higher than those provided by Humana’s plan, despite the fact that the PDP premium was deducted from their social security checks.” Id., at 11555. The class action alleged theories of “breach of contract, violation of several state consumer protection statutes, unjust enrichment, fraud, and fraud in the inducement,” and sought to represent a class consisting of “all persons who paid, or agreed to pay, Medicare Part D prescription drug coverage premiums to Humana and who did not receive those prescription drug benefits in either a timely fashion or at all.” Id., at 11555-56. Defense attorneys moved to dismiss the class action on the ground that plaintiffs’ claims “are preempted by the express preemption provision of the Medicare Prescription Drug Improvement and Modernization Act of 2003.” Id., at 11553. The district court granted the defense motion and dismissed the class action on the grounds of preemption: The district court found that the class action claims fell within the scope of the administrative review process established by the concluded that the standards promulgated by CMS under the Act governed the Uhms’ grievances as alleged in the complaint, that the administrative process established by the Medicare Prescription Drug Improvement and Modernization Act and so were “were preempted by the Act’s express preemption provision.” Id., at 11556. The district court also denied plaintiffs’ motion for reconsideration, which argued in part that “unlike Humana Health Plan, Inc., Humana, Inc. is not regulated under the Act, and therefore the claims against Humana, Inc. cannot be preempted.” Id., at 11553. The Ninth Circuit affirmed.

Due to the limited number of Medicare prescription drug class action cases, we do not discuss the opinion in any detail. We note only the Circuit Court’s conclusion, “Because the allegations brought by the Uhms fall precisely within the ambit of the federal standards provided for in the Act and its implementing regulations, the Uhms’ claims are preempted.” Uhm, at 11573. The opinion is provided below for ease of reference to those interested in the details of the Ninth Circuit’s analysis.

Full post as published by Class Action Defense Blog on September 11, 2008 (boomark / email).