Court Opinion

ID: 9364339
Source: CourtListenerOpinion
Date Created: 2023-01-18 22:00:24.993098+00
Date Added: 2024-06-11T17:15:37.452798
License: Public Domain

United States Court of Appeals
                        For the First Circuit

Nos. 21-1297, 21-1379

 MEDICAID AND MEDICARE ADVANTAGE PRODUCTS ASSOCIATION OF PUERTO
 RICO, INC.; MMM HEALTHCARE, LLC; TRIPLE-S ADVANTAGE, INC.; MCS
   ADVANTAGE, INC.; HUMANA HEALTH PLANS OF PUERTO RICO, INC.,

                        Plaintiffs, Appellees,

                                  v.

    DOMINGO EMANUELLI HERNÁNDEZ, in his official capacity as
Attorney General for the Commonwealth of Puerto Rico; MARIANO A.
 MIER-ROMEU, in his official capacity as Puerto Rico Insurance
                          Commissioner,

                        Defendants, Appellants,

ASOCIACION DE HOSPITALES DE PUERTO RICO, INC.; MENNONITE GENERAL
 HOSPITAL, INC.; SAN JORGE CHILDREN'S HOSPITAL, INC.; HOSPITAL
 MENONITA CAGUAS, INC.; HOSPITAL MENONITA GUAYAMA, INC.; PUERTO
   RICO COLLEGE OF PHYSICIANS-SURGEONS; CLINICAL LABORATORIES
 ASSOCIATION INC.; PUERTO RICO ASSOCIATION OF RADIOLOGY IMAGING
                          CENTERS INC.,

                    Intervenors, Appellants.

         APPEALS FROM THE UNITED STATES DISTRICT COURT
                FOR THE DISTRICT OF PUERTO RICO

        [Hon. Silvia Carreño-Coll, U.S. District Judge]

                                Before

                  Lipez, Howard, and Thompson,
                        Circuit Judges.
     Mariola Abreu-Acevedo, Assistant Solicitor General, with whom
Fernando Figueroa-Santiago, Solicitor General of Puerto Rico, Omar
Andino-Figueroa, Deputy Solicitor General, and Carlos Lugo-Fiol
were on brief, for defendant-appellants.

     César T. Alcover, Carla S. Loubriel Carrión, Casellas Alcover
& Burgos, P.S.C., Luis Sánchez Betances, Jaime Sifre Rodríguez,
Jorge Flores de Jesús, Sánchez Betances, Sifre & Muñoz Noya, Omar
E Martinez-Vázquez, Martinez & Martinez, Luis E. Romero Nieves,
Luis M. Pellot-Juliá, and Pellot-González, P.S.C. on brief for
intervenor-appellants.

     Michael B. Kimberly, with whom Ankur J. Goel, Sarah P.
Hogarth, McDermott Will & Emery LLP, Luis R. Román-Negrón, SBGB
LLC, Roberto L. Prats-Palerm, RPP Law, José A. Hernández-Mayoral,
Hernández Mayoral Law Office, Mariacté Correa-Cestero, Ricardo
José Casellas-Santana, O'Neill & Borges LLC, Herman Colberg, and
Pietrantoni Méndez & Alvarez LLC were on brief, for appellees.

                        January 18, 2023
              LIPEZ, Circuit Judge.          Facing an exodus of healthcare

providers from Puerto Rico for more lucrative employment in the

continental United States, the Puerto Rico legislature passed Act

90,   which    requires   that   Medicare       Advantage    plans    compensate

healthcare providers in Puerto Rico at the same rate as providers

are   compensated     under   traditional       Medicare.      After       several

entities that manage Medicare Advantage plans challenged the law,

the district court determined in a thoughtful decision that Act 90

is preempted by federal law.       We affirm.

                                        I.

A.    Medicare Advantage Program

              The federal Medicare program, established by Title XVIII

of the Social Security Act, provides health insurance coverage to

people 65 years of age or older and certain other qualifying

beneficiaries, such as people with disabilities.                   See 42 U.S.C.

§ 1395c; Akebia Therapeutics, Inc. v. Azar, 976 F.3d 86, 89 (1st

Cir. 2020).      The Secretary of the Department of Health and Human

Services ("HHS") administers the Medicare program through the

Centers for Medicare and Medicaid Services ("CMS"), an agency

housed within HHS.        See Visiting Nurse Ass'n Gregoria Auffant,

Inc. v. Thompson, 447 F.3d 68, 70 (1st Cir. 2006).                     Under the

"traditional"     Medicare    program    (Parts    A   and   B),     the   federal

government pays healthcare providers directly for a limited array

of specified services according to a fee-for-service schedule set

                                   - 3 -
by CMS.   See First Med. Health Plan, Inc. v. Vega-Ramos, 479 F.3d

46, 48 (1st Cir. 2007); 42 U.S.C. §§ 1395c to 1395i-6 (Part A); 42

U.S.C. §§ 1395j to 1395w-6 (Part B).

          The Medicare Advantage program, also known as Medicare

Part C, which is governed by the Medicare Prescription Drug,

Improvement, and Modernization Act of 2003 ("Medicare Advantage

Act"), Pub. L. No. 108-173, 117 Stat. 2066 (2003) (codified at 42

U.S.C. §§ 1395w-21 to 1395w-28), takes a different approach. Under

Medicare Advantage, CMS contracts with private organizations --

Medicare Advantage Organizations ("MAOs"), essentially private

insurers -- who in turn contract with healthcare providers to

supply core Medicare services as well as additional benefits, such

as hearing and dental care, which fall outside of the traditional

Medicare program.   See UnitedHealthcare Ins. Co. v. Becerra, 16

F.4th 867, 872-73 (D.C. Cir. 2021).

          Congress established the Medicare Advantage program to

expand the availability of private health plan options to Medicare

beneficiaries while generating cost savings for both the federal

government and for enrollees through market competition and the

greater use of managed care.   See Medicare Program; Establishment

of the Medicare Advantage Program, 70 Fed. Reg. 4588, 4589 (Jan.

28, 2005) (codified at 42 C.F.R. pts. 417, 422).         The Medicare

Advantage program aims to achieve these purposes through several

interrelated   policies.   Most   relevant   to   this   appeal,   MAOs

                               - 4 -
negotiate payment and network-inclusion terms with in-network

healthcare providers rather than paying these providers according

to a fixed fee-for-service schedule as under traditional Medicare.

See generally 42 U.S.C. § 1395w-23(a); 42 C.F.R. § 422.520(b)(2).

In lieu of fixed fee-for-service reimbursements, MAOs generally

receive a per-beneficiary monthly payment in return for providing

coverage   to   Medicare   Advantage    enrollees   for   all    traditional

Medicare services as well as additional services outside the

traditional Medicare program.         42 U.S.C. § 1395w-23(b).         Acting

through CMS, the Secretary of HHS determines an MAO's monthly

payment by comparing its bid -- the cost that the MAO estimates

for providing Medicare-covered services -- to a federal benchmark,

the   maximum   amount     the   federal    government    will   pay   under

traditional Medicare for providing those services in the plan's

geographic service area.1        See id.; UnitedHealthcare Ins. Co., 16

F.4th at 872-73.

      1If the bid an MAO plan tenders is less than the federal
benchmark, CMS pays the MAO its bid plus a rebate, which must be
returned to enrollees in the form of additional benefits or
coverage for services outside of traditional Medicare, such as
dental or hearing benefits.    42 U.S.C. §§ 1395w-23(a)(1)(B)(i),
(E); 1395w-24(b)(1)(C). If the MAO plan's bid is equal to or above
the federal benchmark, the compensation that the MAO receives from
CMS is the benchmark amount, and each enrollee in that plan will
incur an additional premium to cover the amount by which the bid
exceeds the federal benchmark.      Id. §§ 1395w-23(a)(1)(B)(ii),
1395w-24(b)(1)(A), 1395w-24(b)(2)(C).     During open enrollment
season, beneficiaries choose from among MAO plan offerings and
MAOs compete against one another for beneficiaries by providing
additional or supplemental benefits to those offered by

                                    - 5 -
          The Medicare Advantage Act also prohibits the Secretary

of HHS from modifying this payment approach, providing that

     [i]n order to promote competition under this part . . .
     the Secretary may not require any [MAO] to contract with
     a particular hospital, physician, or other entity or
     individual to furnish items and services under this
     subchapter or require a particular price structure for
     payment under such a contract . . . .

42 U.S.C. § 1395w-24(a)(6)(B)(iii) (emphasis added).   Lastly, but

crucially for purposes of this appeal, the Medicare Advantage Act

contains the following preemption clause:

     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 [Medicare Advantage] plans which are
     offered by [Medicare Advantage] organizations under this
     part.

42 U.S.C. § 1395w-26(b)(3).

B.   Puerto Rico Act 90

          In 2019, the Legislative Assembly of Puerto Rico passed,

and the Governor signed into law, Act 90-2019 ("Act 90"), which

requires that MAOs pay Puerto Rico healthcare providers no less

than the fixed fee-for-service Medicare reimbursement rate.     Act

90-2019, 2019 P.R. Laws 660 (codified at P.R. Laws Ann. tit. 26,

traditional Medicare, broader access to in-network providers, or
lower out-of-pocket costs as compared to other MAOs. See Medicare
Program; Establishment of the Medicare Advantage Program, 70 Fed.
Reg. at 4589.   Thus, under Medicare Advantage's market-oriented
approach, MAOs assume the risk of individual beneficiaries' health
care costs.

                              - 6 -
§   1915(7)).     The     legislation,    which   amends   the   Puerto   Rico

Insurance Code, is an "attempt to address a major public health

crisis afflicting the island for more than a decade: the mass

exodus of medical professionals in pursuit of better economic

opportunity elsewhere in the United States."            Medicaid & Medicare

Advantage Prods. Ass'n of P.R. v. Emanuelli-Hernández, Civ. No.

19-1940 (SCC), 2021 WL 792742, at *1 (Mar. 1, 2021).2                  As the

Puerto Rico Senate explained in the bill that became Act 90, a

significant factor in this severe retention problem is that even

traditional Medicare's fee-for-service rates "established by CMS

for Puerto Rico physicians are lower than those established for

physicians in any other state or territory of the United States."

Id. at *8.    Further, under Medicare Advantage, "insurers in Puerto

Rico . . . pay rates even below the already-low rates paid by CMS

under     [traditional]    Medicare,     thus   encouraging   the   flight   of

medical professionals to other jurisdictions where reimbursement

rates are higher."        Id.   With Act 90, the Puerto Rico legislature

sought to encourage medical professionals to remain in Puerto Rico

"by eliminating insurers' practice of paying providers below the

      2 In Act 90's Statement of Motives, the Puerto Rico
legislature asserted that "[f]or the 2009-2014 period, there was
an average annual loss of 472 physicians and 347 medical
specialists in Puerto Rico.      In 2016, nearly 600 physicians
cancelled their Puerto Rico licenses to move to the United States."
Act 90, 2019 P.R. Laws at 661.

                                    - 7 -
minimum   reimbursement    rates      paid    by   CMS    under   [traditional]

Medicare."   Id.

            To that end,       Act 90 requires MAOs to pay Medicare

Advantage providers in Puerto Rico at least as much as the federal

government would compensate those entities under the corresponding

fee-for-service    schedule     set    by    CMS   for   traditional   Medicare

services.     Referred    to    as    the     "Mandated    Price    Provision,"

subsection 7 of section 1 states, in relevant part:

      No agreement, contract, addendum, or stipulation between
      a Medicare Advantage health service organization . . .
      and a service provider, relating to the services offered
      to Medicare Advantage shall include a clause providing
      for the payment of fees that are less favorable for the
      service provider or lower than those established in the
      fee-for-service schedule developed annually by . . .
      [CMS] for Puerto Rico.

P.R. Laws Ann. tit. 26, § 1915(7).            The Mandated Price Provision

provides that "[a]ny condition, stipulation or agreement [between

an MAO and a service provider] that is inconsistent with [the

provision] shall be deemed void."            Id.

C.    District Court Proceedings

            Shortly after Act 90 became law, appellees, a trade

organization representing MAOs and several individual MAOs, filed

suit seeking a declaratory judgment and an injunction barring

enforcement of the Mandated Price Provision.3              In their complaint,

      3 On appeal, the government appellants initially challenged
the   district court's determination that Act 90's termination

                                      - 8 -
appellees asserted that the Medicare Advantage Act preempts the

challenged provision, and that the provision also violates the

U.S. Constitution's Contract and Takings Clauses.                 Appellants, the

Attorney General and the Insurance Commissioner of Puerto Rico,

moved to dismiss the complaint arguing, in relevant part, that the

provision is not preempted and that the suit should therefore be

dismissed for failure to state a claim pursuant to Federal Rule of

Civil Procedure 12(b)(6).          Various hospitals and organizations

representing      healthcare    professionals       in     Puerto   Rico   --    the

intervenor-appellants -- intervened as a matter of right pursuant

to Federal Rule of Civil Procedure 24(a)(2).

            Appellees opposed the motion to dismiss and cross-moved

for partial summary judgment on the preemption claim. The district

court ultimately ruled in favor of the appellees, holding that the

Medicare    Advantage   Act     expressly       preempts    the   Mandated    Price

Provision    in   Act   90.      The     district    court    therefore      denied

appellants'    motion   to     dismiss    and    granted     appellees'    summary

judgment motion as a motion for judgment on the pleadings.                      This

appeal followed.4

provision -- which prohibits MAOs from terminating providers
without just cause -- was also preempted by federal law. At oral
argument, however, counsel for appellants conceded that this
provision is preempted by the Medicare Advantage Act's preemption
clause and the regulations governing the termination of provider
contracts by MAOs. See 42 C.F.R. § 422.202(d).
     4 The government appellants and the intervenor-appellants
filed separate appeals, which this court consolidated. See Fed.

                                       - 9 -
                                         II.

            The Supremacy Clause of the U.S. Constitution, which

makes federal law "the supreme Law of the Land," U.S. Const. art.

VI, cl. 2, means that Congress "has the power to pre-empt state

law."     Me. Forest Prods. Council v. Cormier, 51 F.4th 1, 6 (1st

Cir. 2022) (quoting Arizona v. United States, 567 U.S. 387, 399

2012)).     The test for federal preemption of a Puerto Rico law is

the same as the test under the Supremacy Clause for preemption of

the law of a state.             P.R. Dep't of Consumer Affairs v. Isla

Petroleum Corp., 485 U.S. 495, 499 (1988).

            Federal preemption of state law "may be either expressed

or   implied,     and    is    compelled    whether    Congress'      command   is

explicitly      stated    in     the    statute's    language    or     implicitly

contained in its structure and purpose."                    Gade v. Nat'l Solid

Wastes Mgmt. Ass'n, 505 U.S. 88, 98 (1992) (internal quotation

marks   omitted).        Where    a    federal    statute    contains    a   clause

expressly purporting to preempt state law, "we focus on the plain

wording of the clause, which necessarily contains the best evidence

of Congress' preemptive intent."                 Chamber of Com. of U.S. v.

Whiting,    563   U.S.    582,    594    (2011)   (internal     quotation    marks

omitted).     Congressional "intent 'is the ultimate touchstone' of

an express preemption analysis."            First Med. Health Plan, Inc. v.

R. App. P. 3(b)(2).

                                        - 10 -
Vega-Ramos, 479 F.3d 46, 51 (1st Cir. 2007) (quoting Medtronic,

Inc. v. Lohr, 518 U.S. 470, 485 (1996)).

            As we have explained, "[i]n determining the preemptive

scope of a congressional enactment, [we] rely on the plain language

of the statute and its legislative history to develop a reasoned

understanding of the way in which Congress intended the statute to

operate."    Id. (internal quotation marks omitted).   Further, to

determine "whether a Federal act overrides a state law, the entire

scheme of the statute must . . . be considered . . . . If the

purpose of the act cannot otherwise be accomplished -- if its

operation within its chosen field [would] be frustrated and its

provisions be refused their natural effect -- the state law must

yield to the regulation of Congress within the sphere of its

delegated power."   Crosby v. Nat'l Foreign Trade Council, 530 U.S.

363, 373 (2000) (quoting Savage v. Jones, 225 U.S. 501, 533

(1912)).

                                III.

            The question before us, then, is whether the Medicare

Advantage Act's preemption clause applies to Act 90's Mandated

Price Provision, such that the provision is expressly preempted by

federal law.     We review de novo a district court's grant of

judgment on the pleadings.    Perez-Acevedo v. Rivero-Cubano, 520

F.3d 26, 29 (1st Cir. 2008).      Moreover, "a federal preemption

ruling presents a pure question of law subject to plenary review."

                               - 11 -
United States v. R.I. Insurers' Insolvency Fund, 80 F.3d 616, 619

(1st Cir. 1996).       "The burden to prove preemption is on the

plaintiffs."   Capron v. Off. of Att'y Gen. of Mass., 944 F.3d 9,

21 (1st Cir. 2019).

          We begin with a threshold issue: whether the presumption

against   preemption    applies.     This   substantive   canon   of

construction, as explained by the Supreme Court, means that federal

law should not be interpreted to preempt state law "unless that

was the clear and manifest purpose of Congress."   Rice v. Santa Fe

Elevator Corp., 331 U.S. 218, 230 (1947).     However, the Supreme

Court has also recently stated that where a "statute contains an

express pre-emption clause, [courts] do not invoke any presumption

against pre-emption."    Puerto Rico v. Franklin Cal. Tax-Free Tr.,

579 U.S. 115, 125 (2016) (internal quotation marks omitted).

Although appellants offer various arguments, based on pre-Franklin

case law, that the presumption should apply in this case, the

Supreme Court's broad language in Franklin forecloses us from

applying the presumption against preemption in interpreting the

Medicare Advantage Act's express preemption clause.5

     5 In applying Franklin's broad language outside that case's
specific context of the Bankruptcy Code's preemption clause, we
join other circuit courts that have applied Franklin to other
statutes. See, e.g., Pharm. Care Mgmt. Ass'n v. Wehbi, 18 F.4th
956, 967 (8th Cir. 2021) (applying Franklin to ERISA and to
Medicare Part D's preemption provision, which is identical to 42
U.S.C. § 1395w-26(b)(3)); Dialysis Newco, Inc. v. Cmty. Health
Sys. Grp. Health Plan, 938 F.3d 246, 258-59 (5th Cir. 2019)

                               - 12 -
              Turning to that preemption clause, we conclude that the

plain language and legislative history demonstrate                   Congress's

intent   to    preempt   a   state    law   like    Act   90's   Mandated   Price

Provision.      As the district court noted, the preemption clause's

use of the "modifying term 'any' before 'State law or regulation'

and the inclusion of two listed exceptions" suggest "that Congress

intended for all state laws or regulations that purport[] to

regulate [Medicare Advantage] plans offered by MAOs . . . [to be]

preempted."     Medicaid and Medicare Advantage Prods. Ass'n of P.R.,

2021 WL 792742, at *9.       That is, the clause's plain language sweeps

broadly and would certainly            encompass a state law, like             the

Mandated Price Provision, that specifically attempts to govern

Medicare Advantage's payment structure.

              The   legislative      history   of    the    preemption      clause

confirms that Congress intended to broadly preempt state laws

regarding Medicare Advantage plans.                Prior to its amendment in

2003, the preemption clause read as follows:

     The standards established under this subsection shall
     supersede any State law or regulation . . . with respect
     to [Medicare Part C] plans . . . to the extent that such

(applying Franklin to ERISA); EagleMed LLC v. Cox, 868 F.3d 893,
899, 903 (10th Cir. 2017) (applying Franklin to the Airline
Deregulation Act's express preemption clause); Watson v. Air
Methods Corp., 870 F.3d 812, 817 (8th Cir. 2017) (en banc) (same).
But see Shuker v. Smith & Nephew, PLC, 885 F.3d 760, 771 n.9 (3d
Cir. 2018) (declining to apply Franklin to the Food, Drug, and
Cosmetic Act because the case involved products liability claims
historically regulated by the states).

                                      - 13 -
      law   or   regulation          is   inconsistent       with    such
      standards. . . .

42 U.S.C. § 1395w-26(b)(3)(A) (2002); Balanced Budget Act of 1997,

Pub. L. No. 105-33, § 1856(b)(3)(A), 111 Stat. 251, 319; see also

Mass. Ass'n of Health Maint. Orgs. v. Ruthardt, 194 F.3d 176, 178

(1st Cir. 1999).        The 2003 amendment removed the requirement that

a   state   law   be    "inconsistent     with"    federal   standards   to    be

preempted.    See Medicare Advantage Act § 232(a).                As the Eighth

Circuit recently commented, "the effect of the 2003 amendment was

to expand the scope of express Medicare preemption from conflict

preemption to field preemption." Pharm. Care Mgmt. Ass'n v. Wehbi,

18 F.4th 956, 971 (8th Cir. 2021).

            While we are not sure that the labels of "conflict" and

"field" preemption are especially helpful where, as here, we seek

to determine congressional intent behind an express preemption

clause, we agree with the Eighth Circuit that the amendment clearly

expanded the scope of preemption beyond those laws that directly

conflict with federal standards.            Indeed, CMS has noted that the

2003 amendment "relieves uncertainty of which State laws are

preempted by 'preempting the field' of State laws [apart from the

two noted exceptions of licensing and solvency laws]."                 Medicare

Program; Establishment of the Medicare Advantage Program, 70 Fed.

Reg. at 4694.          Moreover, CMS observed that the 2003 amendment

"reversed"    the      presumption   that   a     conflict   is   required    for

                                     - 14 -
preemption, and noted that under the current provision, state laws

that in any way relate to Medicare Advantage "standards" are

"presumed to be preempted unless they relate to licensure or

solvency."     Medicare Program; Medicare Prescription Drug Benefit,

70 Fed. Reg. 4194, 4319 (Jan. 28, 2005) (codified at 42 C.F.R.

pts. 400, 403, 411, 417, 423).      In short, the Medicare Advantage

Act's preemption clause does what it purports to do: it extends

preemption to "any State law or regulation (other than State

licensing laws or State laws relating to plan solvency) with

respect   to   [Medicare   Advantage]   plans."    42    U.S.C.    § 1395w-

26(b)(3).

            There is another    important    indication that Congress

intended to preclude states from dictating price structures under

Medicare Advantage.     In a clause entitled "Noninterference," the

Medicare Advantage Act provides:

     In order to promote competition under this part . . .
     the Secretary [of HHS] may not require any [Medicare
     Advantage] organization to contract with a particular
     hospital, physician, or other entity or individual to
     furnish items and services under this subchapter or
     require a particular price structure for payment under
     such a contract . . . .

42   U.S.C.    § 1395w-24(a)(6)(B)(iii)     (emphasis    added).       This

provision only specifically constrains the ability of a federal

agency -- HHS -- to dictate the price structure for Medicare

Advantage contracts.       It stands to reason,         however,   that if

Congress has precluded HHS from dictating the pricing structure to

                                 - 15 -
achieve Medicare Advantage's goal of promoting competition, it

would not have intended to allow states to do so.

              Commentary in the Federal Register further supports a

conclusion that the Medicare Advantage Act was intended to preempt

state    laws    dictating     pricing      structures     under     the   Medicare

Advantage program.        For example, CMS has explicitly noted that

"payments for local and regional [Medicare Advantage] plans will

be based on competitive bids rather than administered pricing."

Medicare Program; Establishment of the Medicare Advantage Program,

70 Fed. Reg. at 4589 (emphasis added).               Thus, when the preemption

clause   is     considered     in    the   context   of   Medicare    Advantage's

regulatory      scheme,   it    is   apparent    that     Congress    intended   to

prohibit all governmental bodies -- federal and state -- from

dictating compensation for in-network providers, allowing MAOs the

flexibility to compete with one another for enrollees.                     See id.

              Appellants concede that, after the 2003 amendment, the

Medicare Advantage Act's preemption provision "does not require a

conflict (i.e., inconsistency) between state and federal standards

for preemption to occur." However, they read the preemption clause

to still require the existence of a federal "standard" that

specifically "addresses the subject of the state regulation."                     In

other words, appellants contend that the Medicare Advantage Act's

preemption clause does not supersede Act 90's Mandated Price

Provision because neither the Medicare Advantage Act nor federal

                                       - 16 -
regulations supply a "specific, overlapping federal standard"

governing MAO pricing structures.                Appellants' position is both

factually and legally unavailing.6

               First, the standards establishing Medicare Advantage's

competitive bidding system and forbidding administered pricing,

discussed above, are federal standards addressing the subject of

the Mandated Price Provision.              Second, requiring the existence of

a more specific standard would mean, for all intents and purposes,

limiting the preemption clause to cases of direct "conflict"

preemption, which, as we have explained, is an approach foreclosed

by the preemption clause's plain statutory language (preempting

"any       State   law   or   regulation")      and   the   history   of   the   2003

amendment.          Third,    while   it   is    true   that   Congress    has   not

specifically prevented states from dictating pricing structures,

as it has done with respect to the federal government itself, see

42 U.S.C. § 1395w-24(a)(6)(B)(iii), requiring the existence of a

standard explicitly prohibiting states from regulating MAO pricing

structures would largely eviscerate the effect of the expansive

preemption clause.

       6Neither the statute nor regulations define the term
"standards" in the Medicare Advantage Act's preemption clause, nor
have we done so. We agree with the Eighth Circuit that "standards"
in this context should be understood simply to mean "statutory
provision[s] or . . . regulation[s] promulgated under [Medicare
Advantage] and published in the Code of Federal Regulations."
Wehbi, 18 F.4th at 971.

                                       - 17 -
             Finally, and perhaps most        importantly, although the

Medicare Advantage Act's preemption clause sweeps more broadly

than conflict preemption, it is clear that Act 90's Mandated Price

Provision does indeed "conflict" with the federal statutory and

regulatory regime -- in other words, the federal standards --

created to ensure that Medicare Advantage contracts "will be based

on competitive bids rather than administered pricing."              Medicare

Program; Establishment of the Medicare Advantage Program, 70 Fed.

Reg. at 4589 (emphasis added).      As appellees note, "[t]he Mandated

Price Provision regulates with respect to [Medicare Advantage]

plans in the same area as -- indeed (though not required for

preemption), in direct conflict with -- . . . federal standards by

requiring [Medicare Advantage] plans to pay providers at least as

much   as   the   federal   government     would   pay   under   traditional

Medicare."     In short, whatever preemption terminology is used, the

Mandated Price Provision is preempted by the plain language of the

Medicare     Advantage   Act's   express    preemption    clause    and   the

Congressional intent it evinces.

                                   IV.

             We do not minimize the seriousness of the threat Puerto

Rico faces from the flight of medical professionals.               Nor do we

overlook the difficulties Puerto Rico faces in addressing this

crisis.     But on the specific question of whether Act 90's Mandated

                                  - 18 -
Price Provision is preempted by federal law, the answer is clear.

We therefore affirm the judgment of the district court.

         So ordered.   Each side to bear its own costs.

                             - 19 -