United States District Court, D. Montana, Butte Division
MEMORANDUM AND ORDER
E.HADDON UNITED STATES DISTRICT JUDGE
filed a Verified Complaint and Jury Demand in the Montana
Eighteenth Judicial District Court on October 4,
2017. Defendants removed to this Court on
November 3, 2017. An Amended Complaint was filed on November
in the Amended Complaint included: (1) that Plaintiff
obtained supplemental "Medicare Part D Benefits"
from Defendant United Healthcare Services ("UHS"),
and its administrator, OptumRx
("Optum"); (2) that UHS, Optum, and unnamed
Defendants (collectively "Defendants") failed to
make a timely decision denying or approving coverage for the
drug Zyvox, thereby exacerbating Plaintiffs infections and
leading to the partial amputation of his feet; and (3) that
Defendants improperly denied coverage for Zyvox when it
should have been apparent that it was covered under the Part
Amended Complaint pleaded five causes of action: (1)
Negligence; (2) Intentional/negligent infliction of emotional
distress; (3) Professional negligence; (4) Respondeat
superior; and (5) Breach of Contract. Defendants moved to dismiss
on December 14, 2017. The motion is opposed.
Rule of Civil Procedure 12(b)(6) provides for dismissal if a
plaintiff lacks a "cognizable legal theory" to
support a legal claim. A state law claim is to be dismissed
for failure to state a claim if it is preempted by federal
law. The Court must "assume the facts
alleged as true" when deciding a rule 12(b)(6) motion to
dismiss. Claims are to be dismissed if pleaded
allegations are insufficient on their face to invoke federal
jurisdiction. Failure to exhaust administrative
remedies may be asserted as a barrier to
state law claims are expressly preempted
Part D Voluntary Prescription Drug Benefit Program
("Part D") is provided for in 42 U.S.C. §
1395w-101 et seq. It was implemented by the Medicare
Prescription Drug Improvement and Modernization Act of 2003
(the "Medicare Act"). Under Part D, insurers
contract with the Centers for Medicare and Medicaid Services
("CMS") to provide prescription drug coverage for
Medicare Act applied an existing express preemption provision
from Part C to Part D plans:
(3) Relation to State laws 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 [Part D] plans which are offered by
[Part D] organizations under this part.
Ninth Circuit has interpreted 42 U.S.C. § l395w-26(b)(3)
to preempt state common law and statutory claims,
particularly if the state standard: (1) falls within a
specified category of Medicare Act standards; and (2) is
inconsistent with the federal standards.
Uhm, plaintiffs enrolled in Part D coverage with
defendant and paid premiums. When the coverage start-date
arrived, defendant informed plaintiffs that they were not
recognized members. Plaintiffs sued, inter alia,
for violation of state consumer protection statutes and for
common law fraud. The circuit held both claims were
preempted. It emphasized that application of state
law standards would "undermine CMS's ability to
create its own standards for what constitutes
'misleading' information about Medicare Part
D." In this case, Plaintiffs state common
law claims grounded upon claimed lack of timeliness of
Defendants' determination of coverage are, likewise,
preempted by the Medicare Act.
claim expressly preempted.
first cause of action, negligence, is summed up by the
allegation that "defendants breached their duty to
conduct a reasonable investigation based on all available
information and affirm or deny coverage within a reasonable
time under the circumstances after the prior approval
request." The claim is preempted.
regulations govern the timeliness of coverage determinations
for prescription drugs. Part D establishes specific time
limits for decisions on particular types of drug coverage
requests. A process for redetermination and for
grievance procedures if insurers fail to comply is also
provided for by regulation.
law-based decision, turning on reasonableness under the
circumstances, would be inconsistent with the specific
federal standards. Any state law claim requiring such a
decision is expressly preempted.
negligence claim is based on an untimely coverage decision.
It is grounded in the concept of what a "reasonable time
under the circumstances" would be under Montana
law. It conflicts with the Medicare Act's
applicable regulation program. The negligence claim is
Negligence and Respondent Superior claims expressly
third cause of action, professional negligence, is grounded
in allegations against unnamed defendants, who are
pharmacists employed by UHS and Optum. It asserts the unnamed
defendants had "a duty to use the ordinary care and
diligence usually exercised and possessed by members of the
profession." It further alleges that the unnamed
"defendants failed to make a timely decision on coverage
... in a situation they knew [or] should have known was an
emergency based on the type of medication prescribed and
other information that was available." Whether a
defendant breached a professional duty depends, under Montana
law, on the standard of care applicable to the profession, as
established by an expert witness in that field.
professional negligence claim, based in part on the
timeliness of unnamed defendants' coverage decisions, is
preempted by the Medicare Act for the same reasons as the
general negligence claim. Standards specifically established
by the Medicare Act regulations are inconsistent with the
state common law. A ruling based on the state law standard
would be at variance with the standards applicable to Part D
insurers across the states and undermine CMS's ability to
regulate Part D insurers and enforce Medicare Act
regulations. The professional negligence claim is preempted.
respondeat superior cause of action, based solely on the
professional negligence of the unnamed defendants, is
likewise subject to dismissal due to preemption of the
underlying negligence claims.
of emotional distress claims preempted.
second cause of action, intentional/negligent infliction of
emotional distress, alleges "deliberate indifference to
the high degree of harm that would befall Alston if an
immediate decision was not ...