Dicrescenzo v. Unitedhealth Grp. Inc.
| Decision Date | 16 September 2015 |
| Docket Number | CIVIL NO. 15-00021 DKW-RLP |
| Court | U.S. District Court — District of Hawaii |
| Parties | RICHARD DICRESCENZO, Plaintiff, v. UNITEDHEALTH GROUP INCORPORATED, UNITEDHEALTHCARE, INC., UNITEDHEALTHCARE INSURANCE COMPANY, and JOHN DOES 1-99; JANE DOES 1-99; DOE ENTITIES 1-20; and DOE GOVERNMENTAL UNITS 1-10, Defendants. |
Plaintiff Richard DiCrescenzo is a disabled and elderly Hawai'i resident who requires skilled nursing and personal assistant services. DiCrescenzo brings claims against Defendants UnitedHealth Group, Incorporated, UnitedHealthcare, Inc., and UnitedHealthcare Insurance Company (collectively "Defendants" or "UHC") alleging that they continuously discriminated against him from September 2011 to the present while administering the State of Hawaii's QUEST ExpandedAccess Medicaid program. Dkt. No. 9 at 1-2 (Complaint ¶¶ 1-2). DiCrescenzo requests declaratory and injunctive relief, as well as monetary damages, for Defendants' alleged violations of state and federal law. Before the Court are the following four motions: (1) Defendants' Motion For Judgment On The Pleadings As To Plaintiff's Allegations Relating to Medicare Benefits ("MJOP No. 1" [Dkt. No. 27]); (2) Defendants' Motion For Judgment On The Pleadings For Count I (§ 1983) ("MJOP No. 2" [Dkt. No. 28]); (3) Defendants' Motion For Judgment On The Pleadings For Count IV In Part (Medicaid) ("MJOP No. 3" [Dkt. No. 29]); and (4) Defendants' Motion For Judgment On The Pleadings For Counts II And III (ADA and Rehabilitation Act) ("MJOP No. 4" [Dkt. No. 30]).
The Court GRANTS Defendants' MJOP No. 1 because DiCrescenzo has failed to exhaust his administrative remedies as required by the Medicare Act's administrative scheme. The Court GRANTS Defendants' MJOP No. 2 because DiCrescenzo has failed to allege facts sufficient to treat Defendants as state actors. However, the Court permits DiCrescenzo until October 2, 2015 to amend his Complaint as to the Section 1983 claim alleged in Count I. The Court DENIES Defendants' MJOP No. 3 as MOOT based on DiCrescenzo's admission that he is not alleging any claims under 42 U.S.C. § 1396a(a)(17). Lastly, the Court GRANTS Defendants' MJOP No. 4 because DiCrescenzo has failed to state aprima facie claim under Title III of the Americans with Disabilities Act ("ADA") or under the Rehabilitation Act.
DiCrescenzo suffered grievous injuries, including severe traumatic brain injury, in 1979 after being struck by a drunk driver. Complaint ¶ 9. Following the 1979 crash, DiCrescenzo was deemed fully disabled within the meaning of 29 U.S.C. § 705, 42 U.S.C. § 12102, and 42 U.S.C. §§ 415, 421. Complaint ¶ 10. DiCrescenzo is eligible for coverage under both Medicare and the State of Hawaii's Medicaid Plan. Complaint ¶ 11.
Prior to February 2009, DiCrescenzo received services that the State of Hawai'i Department of Human Services ("Department") had determined were the minimum medically necessary to ensure his personal safety and independence. Complaint ¶ 44. These services included: (1) skilled nursing services for medication management; and (2) personal assistants to maintain DiCrescenzo's apartment in a hygienic state and to escort him to the pharmacy, the grocery store, and doctor's appointments. Complaint ¶¶ 43-44.
In February 2009, UHC contracted with the State to provide or arrange medical assistance for aged, blind, and disabled Medicaid beneficiaries and forMedicare-Medicaid ("dual eligible") beneficiaries who were also enrolled in UHC's Medicare Advantage plan. Complaint ¶ 16. Following DiCrescenzo's enrollment with UHC, UHC continued to provide DiCrescenzo with personal assistance services consistent with what he had been previously provided under the State's fee-for-service program. Complaint ¶ 45.
In 2010, DiCrescenzo suffered a second brain injury, which worsened his functional disabilities. Complaint ¶ 47. DiCrescenzo's treating providers recommended, and UHC initially provided, 13 hours per week of personal assistance services (Level I). Complaint ¶ 49. In September 2011, however, UHC terminated this coverage, despite no change in DiCrescenzo's physical condition or enrollment status. Complaint ¶ 51. UHC continued to refuse this coverage from September 2011 until April 20, 2012, causing various types of hardship on DiCrescenzo. On April 20, 2012, UHC reinstated a few hours per week of personal assistance services (Level I). Complaint ¶ 61. UHC, however, has yet to restore the 13 hours per week of personal assistance services that Plaintiff seeks and has denied and/or delayed reimbursement for expenses incurred by DiCrescenzo as a result of the continuing reduction of personal assistance services. Complaint ¶¶ 92-94.
In addition, DiCrescenzo alleges that UHC failed to arrange for medically necessary services, such as eyeglasses, which DiCrescenzo's ophthalmologist ordered on September 16, 2014. Complaint ¶¶ 92, 208.
On January 20, 2015, DiCrescenzo filed a Complaint for Declaratory and Injunctive Relief, and for Compensatory and Punitive Damages ("Complaint"), asserting various federal and state claims related to UHC's alleged discrimination in arranging for personal assistance. Dkt. No. 9 ("Complaint"). Count I alleges a violation of Civil Rights under the Medicaid Act, 42 U.S.C. § 1983; Count II alleges a violation of the ADA; Count III alleges a violation of Section 504 of the Rehabilitation Act of 1973; Count IV alleges a violation of the Medicaid statute and regulations; Count V alleges a violation of Chapter 489 of the Hawai'i Revised Statutes (HRS); Count VI alleges the tort of bad faith; Count VII alleges negligent infliction of emotional distress; Count VIII alleges intentional infliction of emotional distress; and Count IX alleges punitive damages.
On May 13, 2015, UHC filed the aforementioned four motions for judgment on the pleadings. Dkt. Nos. 27-30. The Court held a hearing on all four motions on June 26, 2015. Dkt. No. 43.
I. Judgment on the Pleadings
Federal Rule of Civil Procedure 12(c) permits parties to move for judgment on the pleadings after the pleadings are closed. Fed. R. Civ. P. 12(c). "Analysis under Rule 12(c) is 'substantially identical' to analysis under Rule 12(b)(6) because, under both rules, 'a court must determine whether the facts alleged in the complaint, taken as true, entitle the plaintiff to a legal remedy.'" Chavez v. United States, 683 F.3d 1102, 1108 (9th Cir. 2012) (quoting Brooks v. Dunlop Mfg. Inc., No. 10-04341 CRB, 2011 WL 6140912, at *3 (N.D. Cal. Dec. 9, 2011)).
For a Rule 12(c) motion, the allegations of the nonmoving party are accepted as true, while the contradicting allegations of the moving party are assumed to be false. See MacDonald v. Grace Church Seattle, 457 F.3d 1079, 1081 (9th Cir. 2006). "The Court inquires whether the complaint at issue contains 'sufficient factual matter, accepted as true, to state a claim of relief that is plausible on its face.'" Harris v. Cnty. of Orange, 682 F.3d 1126, 1131 (9th Cir. 2012) (quoting Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009)). Therefore, "'[a] judgment on the pleadings is properly granted when, taking all the allegations in the non-moving party's pleadings as true, the moving party is entitled to judgment as a matter of law.'" Marshall Naify Revocable Trust v. United States, 672 F.3d 620, 623 (9th Cir. 2012) (quoting Fajardo v. Cnty. of L.A., 179 F.3d 698, 699 (9th Cir. 1999)).
Presently before the Court are Defendants' MJOP Nos. 1, 2, 3, and 4. The Court considers each in turn.
The dispositive issue in MJOP No. 1 is whether DiCrescenzo's claims are subject to the exclusive review provisions of the Medicare Act. DiCrescenzo clarified in his opposition brief that "[t]he only benefit [that underlies his claims] which was arguably a Medicare benefit . . . was [his] eyeglasses." Dkt. No. 32 at 4. As such, MJOP No. 1 primarily relates to Count VI, which alleges the tort of bad faith. See Complaint ¶ 213 ().
UHC argues that "[t]o the extent [DiCrescenzo's] claims are based upon the alleged delay, denial, or mishandling of a claim for benefits with respect to his eyeglasses, those claims 'arise under' the Medicare laws and must go through the mandatory administrative channels." Dkt. No. 38 at 5.
The Court agrees. Insofar as DiCrescenzo's claims relate to the delay or mishandling of the coordination of benefits with respect to his eyeglasses, they are inextricably intertwined with a Medicare benefits decision, and DiCrescenzo must first present them to the Secretary of Health and Human Services (the "Secretary").That has not occurred. DiCrescenzo has not alleged presentment, nor has he represented that he has even attempted it. As such, the Court grants UHC's MJOP No. 1.
The Medicare Act is part of the Social Security Act, which establishes a federal subsidized health insurance program for elderly and certain disabled persons. 42 U.S.C. §§ 1395 et seq. To ensure the orderly and efficient function of this enormous federal program, Congress has entrusted its administration to the Secretary. 42 U.S.C. § 1395hh.
The administrative procedure set forth in the Medicare Act is mandatory for all claims "arising under" the Act:
The third sentence of 42 U.S.C. § 405(h), made applicable to the Medicare Act by 42 U.S.C. § 1395ii, provides that § 405(g), to the exclusion of 28 U.S.C. § 1331, is the sole avenue for judicial review for all "claim[s] arising under" the Medicare Act. Thus, to be true to the language of the statute, the inquiry in determining whether § 405(h) bars federal-question jurisdiction must be whether the claim...
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