Opinion ID: 204019
Heading Depth: 3
Heading Rank: 3

Heading: HCFA's Authority to Police Fraud

Text: Third, and relying on Buckman Company v. Plaintiffs' Legal Committee, 531 U.S. 341, 121 S.Ct. 1012, 148 L.Ed.2d 854 (2001), AstraZeneca argues that the Class 2 plaintiffs' state law claims fail because they conflict with the Medicare statute, which empowers HCFA with broad authority to investigate and punish Medicare fraud. [13] HCFA's jurisdiction to police fraud itself must be protected, the argument runs, because only that agency can properly balance the need for enforcement with the need to protect difficult and often competing policy objectives, including adequately compensating physicians for Part B drugs and their administration, as well as guarding against excessive Medicare payments. There is nothing inherently objectionable about the premise that a federal agency like HCFA is better positioned than a private plaintiff to balance the competing policy objectives of the program it administers, or the premise that, at times, the agency should take the laboring oar in combating fraud. But Buckman is not so broad as to sanction the conclusion that, simply because the deceptive practices at issue in this case depended on the structure of the Medicare program, it was therefore HCFA's exclusive dominion to combat them. On the contrary, Buckman addressed a more narrow scenario: the plaintiffs in that case employed a fraud-on-the-agency theory to attempt to create derivative standing for their own suits, which were based in state law but which sought remedies for fraudulent misrepresentations made to the Food and Drug Administration (FDA) during the approval process for certain medical devices. 531 U.S. at 343, 348, 121 S.Ct. 1012. In finding implied preemption, the Buckman court emphasized that, were plaintiffs to maintain their fraud-on-the-agency claims here, they would not be relying on traditional state tort law which had predated the federal enactments in question[] [relating to various information that must be submitted to obtain the FDA's approval for a medical device]. On the contrary, the existence of ... federal enactments is a critical element in their case. Id. at 353, 121 S.Ct. 1012. It also emphasized its concern that disclosures to the FDA, although deemed appropriate by the Administration, [would] later be judged insufficient in state court, thereby creating an incentive to submit a deluge of information that the Administration neither wants nor needs, resulting in additional burdens on the FDA[]. Id. at 351, 121 S.Ct. 1012. In comparison, this case involves neither misrepresentations made directly to HCFA nor any concerns similar to the administrative efficiency concerns noted by the Buckman court. Perhaps more conclusively, unlike Buckman, this case cannot be said to involve disclosures that are fairly understood as to have been deemed appropriate by the Administration. At issue here is a state law remedy for deceptive practices by a manufacturer against its customers. It is certainly true that the deception touched on a federal agency, but policing deceptive conduct is nonetheless a traditional area of state concern giving rise to a remedial scheme that is separate and distinct from, and predates, the federal law in question. [14] At most, the state consumer protection laws at issue here operate in tandem with the anti-fraud provisions of the Medicare statute, but this alone is not enough to require a finding of implied preemption. See Buckman, 531 U.S. at 352-53, 121 S.Ct. 1012 ( citing Medtronic, 518 U.S. at 481, 116 S.Ct. 2240).