Source: https://www.ropesgray.com/en/newsroom/alerts/2017/11/The-Broad-Reach-Of-Medicares-Act-Preemption-Provision
Timestamp: 2019-04-25 14:23:21+00:00

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This article by partners Jeffrey J. Bushofsky and Laura G. Hoey and associate Samuel Perrone was published by Law360 on November 28, 2017.
Civil actions alleging state-law claims premised on violations of Medicare’s rules may turn on specific procedures outlined in the Medicare Act — which contains an express preemption provision — and its implementing regulations. The doctrine of preemption can be invoked to contend that federal law displaces state or local laws that encroach on areas governed by federal laws and regulations.1 Preemption may be express when Congress has stated its intent to supersede state or local laws or, instead, implied from the nature of the federal laws and regulations at issue.2 Accordingly, when defending claims involving Medicare, it is important to consider whether they may be preempted. A recent decision from a federal district court in the Northern District of Illinois,3 highlights the reach of Medicare preemption.
Taken together, these cases illustrate the broad reach of the Medicare Act’s preemption provision. If successfully invoked, preemption can result in dismissal at the motion-to-dismiss stage, so defense counsel should take a close look at any claim touching on Medicare rules to determine whether the Medicare Act might preempt the claim.
1 15-103 Moore's Federal Practice - Civil § 103.45 (2017).
3 Mayberry v. Walgreens Co., et al., No. 17 C 1748, 2017 WL 4228205 (N.D. Ill. Sept. 21, 2017) (Der-Yeghiayan, J.). The suit also named as defendants Albertsons Companies Inc., individually and d/b/a “Osco Drug,” SUPERVALU INC., individually and d/b/a “Osco Drug,” and CVS Pharmacy Inc.
4 42 U.S.C. § 1395w-26(b)(3); see 42 U.S.C. § 1395w-112(g) (“The provisions of sections 1395w-24(g) and 1395w-26(b)(3) of this title shall apply with respect to [Prescription Drug Plan] sponsors and prescription drug plans under this part in the same manner as such sections apply to [Medicare Advantage] organizations and [Medicare Advantage] plans under part C of this subchapter.”).
5 42 U.S.C. § 1395w-26(b)(3)(A) (2000).
6 See Do Sung Uhm v. Humana Inc., 620 F.3d 1134, 1149 (9th Cir. 2010) (Paez, J.).
7 H.R. Rep. No. 108-391, at 557.
8 620 F.3d at 1152–57.
10 Rudek v. Presence Our Lady of Resurrection Med. Ctr., No. 13 C 06022, 2014 WL 5441845 (N.D. Ill. Oct. 27, 2014) (Tharp, J.).
13 2017 WL 4228205, at *2–3. As in Uhm, 620 F.3d at 1144, the court held further that it lacked subject-matter jurisdiction over the plaintiff’s claims because he had failed to exhaust administrative remedies under the Medicare Act. Id. at *3.

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