RIGHT
TO SUE
FOR DENIAL
OF MEDICARE BENEFITS
MCCALL
V. PACIFICARE
In McCall v. Pacificare of California, Inc. (2001) 01 CDOS 3477,
the California Supreme Court held that a Medicare beneficiary had the
right to sue an HMO under state law for damages after a denial of Medicare
benefits.
In McCall, the HMO for a patient who was a Medicare beneficiary
allegedly refused to refer the patient to a specialist for his pulmonary
condition. The patient filed
suit in state court and the HMO argued that claims for Medicare benefits
must be brought in federal court after exhaustion of administrative
remedies as required under the federal Medicare Act.
The Supreme Court held that claims that do not arise under the
Medicare Act could be brought in state court without exhaustion of
administrative remedies, and that claims that seek damages, but do not
seek to recover Medicare benefits, were claims that are not brought under
the Medicare Act. The Court
noted that while ERISA expressly and broadly preempted state law, no
intent to displace state law was express in the Medicare Act.
The Court noted that because the patient in McCall did not seek
to recover Medicare benefits in his suit, the claim did not necessarily
implicate a coverage determination by Medicare or fall within the scope of
Medicare administrative review. The
Court held that the following claims do not seek to recover Medicare
benefits and do not arise under the Medicare Act:
- negligent
or willful failure to provide appropriate treatment,
- negligent or willful failure to provide advice concerning health
condition or treatment options,
- negligent or willful failure to refer to specialist,
- fraudulent misrepresentation of nature and extent of services
covered
- breach of fiduciary duty in permitting financial interests to affect
decision making or failing to disclose such interest,
- negligent or intentional infliction of emotional distress, and
- violations of state and federal statutory duties that are unfair
practices under Business and Professions Code section 17200.
Such claims may be brought in state court, rather than federal court,
and the Medicare beneficiary need not exhaust his or her administrative
remedies, as required under the Medicare Act.
Such claims seek damages for the wrongful conduct of an HMO, but do
not seek to recover Medicare benefits.
McCall appears to provide the blueprint for actions against
HMO’s by Medicare beneficiaries in coverage disputes.
