Case 4:20-cv-03880-YGR Document 29 Filed 02/12/21 Page 1 of 12
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`UNITED STATES DISTRICT COURT
`NORTHERN DISTRICT OF CALIFORNIA
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`ANDREA GREGG, ET AL.,
`Plaintiffs,
`
`vs.
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`PROVIDENCE ST. JOSEPH HEALTH, ET AL.,
`AND DOES 1-100,
`Defendants.
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`CASE NO. 4:20-cv-03880-YGR
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`ORDER GRANTING MOTION TO REMAND;
`DENYING AS MOOT MOTION TO DISMISS
`
`Re: Dkt. No. 15
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`Plaintiffs Andrea Gregg and Charlene Davidson bring this putative class action against
`defendants Providence St. Joseph Health; Providence Health and Services; St. Joseph Health; St.
`Joseph Health System; St. Joseph Health Northern California, LLC; Queen of the Valley Medical
`Center; Santa Rosa Memorial Hospital; SRM Alliance Hospital Services d/b/a Petaluma Valley
`Hospital; St. Joseph Hospital of Eureka; and Redwood Memorial Hospital of Fortuna (collectively
`“defendants”) for unlawful, unfair, and fraudulent business practices in violation of California’s
`Unfair Competition Law, Cal. Bus. & Prof. Code § 17200, and for intentional interference with
`contractual relations. (Dkt. No. 1, Notice of Removal [NOR] at Exh. A [“Complaint”] ¶¶ 70, 86,
`98, 103-111.) Plaintiffs seek damages, restitution, injunctive, and other relief, individually and on
`behalf of a proposed class. (Complaint ¶¶ 1-4.) Plaintiffs originally filed their complaint in the
`California Superior Court, County of San Francisco, on March 26, 2020. (NOR at 1.) Defendants
`removed the action to this Court, asserting original jurisdiction based on existence of a federal
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`Case 4:20-cv-03880-YGR Document 29 Filed 02/12/21 Page 2 of 12
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`question and supplemental jurisdiction over California law claims. (Id. at 4.)
`Now before the Court are plaintiffs’ motion to remand (Dkt. No. 15) and defendants’
`motion to dismiss the complaint (Dkt. No. 11). Both motions are opposed.
`Having carefully considered the pleadings and the papers submitted, the matters properly
`subject to judicial notice,1 and for the reasons set forth more fully below, the Court ORDERS that
`the motion to remand is GRANTED. Although plaintiff Davidson’s claims reference her health
`insurance coverage under the federal Medicare program, defendants fail to establish that her
`claims “arise under” the federal Medicare statutes and regulations for purposes of federal
`jurisdiction. Given that jurisdiction has not been shown and this case must be remanded, the
`motion to dismiss is DENIED AS MOOT.
`I.
`BACKGROUND
`A.
`Allegations of the Complaint
`Plaintiffs are individuals who sought or received medical services in relation to injuries
`sustained in separate car accidents. (Complaint ¶¶ 7-8.) Andrea Gregg (“Gregg”) was injured in
`a car accident on November 2016 when she was read-ended. (Id. ¶ 7.) Charlene Davidson
`(“Davidson”) was injured in a car accident caused by a third party on June 2018. (Id. ¶ 8.) Both
`received medical services from defendant Queen of the Valley Medical Center (“QVMC”). (Id.
`¶¶ 74-75.) When admitted to QVMC, both provided information for their respective health
`insurance plans. (Id.) Gregg’s plan was with United Healthcare and Davidson was covered by
`both Medicare and a Kaiser Permanente supplemental insurance plan. (Id. ¶¶ 7-8.)
`Plaintiffs allege that, rather than billing their health insurance plans, defendants asserted
`liens under the California Hospital Lien Act (“HLA”), California Civil Code sections 3045.1-
`3045.6, against their prospective civil recoveries from their tortfeasors. (Id. ¶¶ 7-8, 74-75.)
`
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`1 Defendants request the Court to take judicial notice of the following documents: the
`complaint in Phillips v. Kaiser Found. Health Plan, Inc., N.D. Cal. Case No. 3:11-cv-02326-CRB,
`as attached to the notice of removal filed May 11, 2011; and excerpts of the Medicare Secondary
`Payer Manual, as well as a form Medicare provider agreement, from the federal Centers for
`Medicare & Medicaid Services (“CMS”) website. (Request for Judicial Notice [“RJN”], Dkt. No.
`19.) The Court GRANTS the unopposed request.
`2
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`Case 4:20-cv-03880-YGR Document 29 Filed 02/12/21 Page 3 of 12
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`Under the HLA, when a hospital provides “emergency and ongoing medical or other services to
`any person injured by reason of an accident or negligent or other wrongful act” (other than
`accidents covered by Workers’ Compensation), the hospital may assert a lien upon any claim for
`damages on account of those injuries “to the extent of the amount of the reasonable and
`necessary charges of the hospital” resulting from that accident. Cal. Civ. Code § 3045.1
`(emphasis supplied).2 Plaintiffs allege that, while the HLA limits a hospital’s lien to 50 percent of
`the final judgment or settlement, Cal. Civ. Code § 3045.4, it does not prohibit hospitals from
`pursuing patients for the balance of the retail amount. (Id. ¶ 68.) By sidestepping the patient’s
`health care insurance and seeking the higher “retail” bill through an HLA lien, the hospital
`deprives the patient of the benefit of their health plan coverage. (Id. ¶ 69.)
`Here, plaintiffs allege that QVMC refrained from billing their health insurance plans in
`order to assert HLA liens against potential tort recovery on their automobile accidents at “grossly
`inflated” retail rates. (Id. ¶¶ 76-77.) Both Gregg and Davidson learned QVMC did not submit
`bills to their health care plans when they received letters from QVMC administrators notifying
`them of the liens. (Id. ¶¶ 74-75.) Plaintiffs allege that their health insurance plans contain terms
`establishing that contractual rates constitute payment in full. (Id. ¶¶ 64, 71.) Plaintiffs allege that
`by not billing their health insurance plans, defendants denied them the benefit of the bargain of
`their health insurance contracts and abused the HLA in a way that was not intended by the
`Legislature. (Id. ¶¶ 76, 77.) Plaintiffs allege that the lien amounts exceeded the “reasonable and
`necessary” limitation in the HLA because the amounts were “in orders” higher than the amount
`QVMC would have accepted as payment in full had QVMC submitted bills to the plaintiffs’
`health insurance plans. (Id. ¶¶ 74-75.) Based on the foregoing, plaintiffs allege that defendants
`
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`2 Plaintiffs allege that, as held by the California Supreme Court in Parnell v. Adventist
`Health Systems/West, 35 Cal.4th 595 (2005), the HLA has been interpreted to prohibit hospitals
`from billing patients’ health plans at their contracted rate and then seeking the balance of a “list” or
`“retail” rate for services by means of an HLA lien, in a practice known as “balance billing,”
`because payment by the health plan had extinguished the debt completely. (Id. at ¶¶ 65-67.)
`Plaintiffs allege that Parnell did not address, and thus created incentives for, the practice of
`hospitals electing not to bill a patient’s health plan at all and instead recouping all costs by asserting
`an HLA lien. (Id. ¶¶ 69, 77.)
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`Case 4:20-cv-03880-YGR Document 29 Filed 02/12/21 Page 4 of 12
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`intentionally interfered with their contracts and engaged in unfair and unlawful practices under
`the UCL.
`Procedural Background
`B.
`Defendants removed the complaint from state court on the grounds that plaintiff
`Davidson’s claims are predicated on federal law and implicate federal questions under the
`Medicare Act.3 (NOR at 3.)4 Defendants contend that the allegations in the complaint rely on
`federal Medicare requirements since Davidson seeks to have Medicare pay for defendants’
`services rather than the third-party responsible for the injuries that necessitated her treatment.
`(Id.) Thus, defendants assert that Davidson essentially has made a claim for benefits under the
`Medicare Act that will require the Court to interpret, apply, and enforce federal Medicare laws
`and regulations, including those under the Medicare Secondary Payer (“MSP”) rules found in 42
`U.S.C. section 1395(y) and implementing regulations at 42 C.F.R. sections 422.1, et seq. (Id. at
`3.)5
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`3 Defendants assert that the Court may take supplemental jurisdiction, under 28 U.S.C.
`section 1367, over co-plaintiff Gregg’s claims since they are related to Davidson’s claims and part
`of the same controversy.
`4 Although not stated in their notice of removal, defendants suggest in their opposition brief
`that federal jurisdiction is also proper under the Class Action Fairness Act (“CAFA”). (See Dkt.
`No. 16 [“Oppo.”] at 10-13.) The NOR was expressly “based on federal question jurisdiction,” not
`CAFA. Defendants made only a passing reference to CAFA in a footnote to the NOR, alleging no
`factual basis to support CAFA jurisdiction. (See NOR at 2 n.1) The Court rejects this backdoor
`attempt to establish removal jurisdiction. See Dart Cherokee Basin Operating Co. v. Owens, 574
`U.S. 81, 87 (2014) (notice of removal must track general pleading requirements of Fed. R. Civ. P
`8(a)); Roa v. TS Staffing Servs., Inc., No. 2:14-CV-08424-ODW, 2015 WL 300413, at *2 (C.D.
`Cal. Jan. 22, 2015) (NOR based on CAFA must contain a short and plain statement of all grounds
`in 28 U.S.C. § 1332(d)).
`5 The MSP provisions, 42 U.S.C. section 1395y(b), “mak[e] Medicare insurance secondary
`to any ‘primary plan’ obligated to pay a Medicare recipient's medical expenses, including a third-
`party tortfeasor's automobile insurance.” Parra v. PacificCare of Ariz., Inc., 715 F.3d 1146, 1152
`(9th Cir. 2013) (citing 42 U.S.C. § 1395y(b)(2)(A)). Medicare-participating hospitals are required
`to maintain a system as part of their admissions process to identify any primary payers other than
`Medicare in order “[t]o bill other primary payers before Medicare” so that incorrect billing and
`overpayments can be prevented. 42 C.F.R. § 489.20(f)-(g). “The fact that Medicare payments are
`limited to the [diagnosis-related group or] DRG amount, or the reasonable charge, reasonable cost,
`capitation or fee schedule rate, does not affect the amount that a primary payer may pay.” 42 C.F.R.
`§ 411.31(a). “With respect to workers’ compensation plans, no-fault insurers, and employer group
`health plans, a provider or supplier may bill its full charges and expect those charges to be paid
`unless there are limits imposed by laws other than title XVIII of the Act or by agreements with the
`primary payer.” 42 C.F.R. § 411.31(b) (emphasis supplied).
`4
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`II.
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`APPLICABLE STANDARDS
`“Federal courts are courts of limited jurisdiction. They possess only that power authorized
`by Constitution and statute, which is not to be expanded by judicial decree.” Kokkonen v.
`Guardian Life Ins. Co. of Am., 511 U.S. 375, 377 (1994) (internal citations omitted). The
`removing party “has the burden to prove, by a preponderance of the evidence, that removal is
`proper.” Geographic Expeditions, Inc. v. Estate of Lhotka, 599 F.3d 1102, 1106-7 (9th Cir.
`2010). Removal jurisdiction based upon a federal question is determined from the complaint as it
`existed at the time of removal. Libhart v. Santa Monica Dairy, Co., 592 F.2d 1062, 1065 (citation
`omitted). The plaintiff is the master of their complaint and “may avoid federal jurisdiction by
`exclusive reliance on state law.” Caterpillar Inc. v. Williams, 482 U.S. 386, 392 (1987). Only
`state-court actions that could have been filed in federal court in the first instance may be removed.
`Id. Thus, there generally exists a “strong presumption against removal jurisdiction” when
`evaluating a motion to remand. Gaus v. Miles, Inc., 980 F.2d 564, 566 (9th Cir. 1992); cf. Dart,
`572 U.S. 81, 89 (presumption does not apply in cases of CAFA removal). “Federal jurisdiction
`must be rejected if there is any doubt as to the right of removal in the first instance.” Id. (citation
`omitted).
`Defendants here removed the complaint from state court on the grounds that plaintiff
`Davidson’s claims are “founded on a claim or right arising under the Constitution, treaties or laws
`of the United States.” 28 U.S.C. § 1441(a); see also 28 U.S.C. § 1331.6 Specifically, the NOR
`alleges that Davidson’s claims arise under federal Medicare laws. Where a complaint does not
`allege a violation of a federal law, treaty, or Constitutional right, the Supreme Court has
`recognized a “slim category” of cases which may nevertheless be considered to “arise under”
`federal law. Empire Healthchoice Assurance v. McVeigh, 547 U.S. 677, 701 (2006). “A case
`aris[es] under federal law . . . if a well-pleaded complaint establishes either that federal law
`
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`6 Defendants assert supplemental jurisdiction over plaintiff Gregg’s state law claims. See
`28 U.S.C. § 1367(a) (“in any civil action in which the district courts have original jurisdiction, the
`district courts shall have supplemental jurisdiction over all other claims that are so related to claims
`in the action within such original jurisdiction that they form part of the same case or controversy
`under Article III of the United States Constitution.”).
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`creates the cause of action or that the plaintiff’s right to relief necessarily depends on resolution of
`a substantial question of federal law.” Id. at 689-90. Invocation of a “federal issue” is not a
`“password opening federal courts to any state action embracing a point of federal law.” Grable &
`Sons Metal Products, Inc. v. Darue Engineering & Mfg., 545 U.S. 308, 314 (2005). “[T]he
`question is, does a state-law claim necessarily raise a federal issue, actually disputed and
`substantial, which a federal forum may entertain without disturbing any congressionally approved
`balance of federal and state judicial responsibilities.” Id.
`Unless Congress has “so completely pre-empted a particular area that any civil complaint
`raising this select group of claims is necessarily federal in character,” no federal jurisdiction will
`be found. Metropolitan Life Ins. Co. v. Taylor, 481 U.S. 58, 63 (1987). “[A] case may not be
`removed to federal court on the basis of a federal defense, including the defense of pre-emption,
`even if the defense is anticipated in the plaintiff’s complaint, and even if both parties concede that
`the federal defense is the only question truly at issue.” Caterpillar 482 U.S. at 393 (1987)
`(emphasis in original).
`III. DISCUSSION
`A.
`Framework
`Plaintiffs move to remand on the grounds that the claims here do not arise under the
`Medicare Act but instead are based entirely on a violation of California statutory law, the Hospital
`Lien Act. Davidson alleges that defendants refused to bill her health care service plans (Medicare
`and Kaiser) and accept the plan’s contracted rates, but instead asserted a lien at a grossly inflated
`“customary” rate against any damages award or settlement Davidson may receive. She contends
`the crux of the issue is whether defendants violated state law by asserting liens to charge rates that
`are not “reasonable and necessary” under the HLA. Defendants counter that Davidson’s claims
`actually arise under the Medicare Act and are a disguised claim for denial of Medicare benefits
`since each claim effectively alleges she was entitled to limit QVMC’s lien to the amount it would
`have been reimbursed under Medicare.
`“The Supreme Court has identified two circumstances in which a claim ‘arises under’ the
`Medicare Act: (1) where the ‘standing and the substantive basis for representation of the claims’
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`is the Medicare Act; and (2) where the claims are ‘inextricably intertwined’ with a claim for
`Medicare benefits.” Do Sung Uhm v. Humana, Inc., 620 F.3d 1134, 1141 (9th Cir. 2010) (citing
`Heckler v. Ringer, 466 U.S. 602, 614-615 (1984)); see also Kaiser v. Blue Cross of California,
`347 F.3d 1107, 1112 (9th Cir. 2003) (same). “One category of claims that [the Ninth Circuit] and
`other courts have found to ‘arise under’ the Act are those cases that are ‘[c]leverly concealed
`claims for benefits.’” Id. “[W]here, at bottom, a plaintiff is complaining about the denial of
`Medicare benefits . . . the claim ‘arises under’ the Medicare Act.” Id. at 1142-43.
`B.
`Analysis
`Defendants argue that Davidson’s claims arise under the Medicare Act and are essentially
`a complaint about denial of Medicare benefits since she seeks to limit the amount QVMC could
`recover for her medical bills to the amount it would have received if it had submitted to the bills
`to Medicare pursuant to the terms of its Medicare Provider Agreement. Defendants rely primarily
`on three cases: the Ninth Circuit’s decision in Uhm, 620 F.3d 1134, and the district court
`decisions in Phillips v. Kaiser Found. Health Plan, Inc., 953 F.Supp.2d 1078 (N.D. Cal. 2011)
`and Morales v. Providence Health and Servs., Inc., No. LA CV15-04156 JAK (PLAx), 2015 WL
`13768982 (C.D. Cal. Dec. 14, 2015) aff’d sub nom., Morales v. Providence Health Sys.-S. Cal.,
`702 F.Appx.550, No. 16-55072, 2017 WL 3207058, *4 (9th Cir. July 28, 2017). The Court has
`considered each of the cases. While on their face the factual scenarios appear similar, the
`allegations of the well-pleaded complaint here focus not on the violation of the Medicare statute
`or regulations, but on the pure application of California law. As set forth below, the Court
`reviews and then considers the decisions in the context of this case.
`First, in Uhm, plaintiffs sued Humana alleging that they had contracted with Humana as a
`Medicare Part D prescription drug insurance provider but Humana had failed to provide the
`prescription benefits as promised, breaching the contract. Uhm, 620 F.3d at 1128. Humana
`argued that plaintiffs’ claims were really complaints about denial of Medicare benefits and, as
`such, were subject to the exhaustion requirements for denial of benefits under the Medicare
`statute. Id. at 1142-43. The Ninth Circuit agreed with Humana, finding that plaintiffs had not
`alleged “that Humana promised anything more than to abide by the requirements of the
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`[Medicare] Act” nor had they “alleged [the] contract imposed upon Humana any duties above and
`beyond compliance with the Act itself.” Uhm, 620 F.3d at 1142-44 (emphasis supplied).7
`Next, in Phillips, an enrollee in a Kaiser-run Medicare Advantage insurance plan, was
`injured in a car accident. Phillips v. Kaiser Found. Health Plan, Inc., 953 F.Supp.2d 1078, 1082
`(N.D. Cal. 2011). Kaiser both provided her medical treatment and, as insurer, paid for it. Id.
`After her treatment, plaintiff made a claim for compensation arising from the car accident and the
`claim settled for $100,000. Id. at 1083. Kaiser then asserted that it was entitled to recover
`$88,205.46 from that settlement under a lien pursuant to the Healthcare Lien Act, California Civil
`Code section 3040,8 and the federal Medicare Advantage statute’s secondary payer provisions.
`Id. Phillips sued Kaiser on behalf of a putative class for violation of the California UCL and
`Consumer Legal Remedies Act, alleging that Kaiser “ha[d] no right to recover against her under
`federal law . . . [and no] authority . . . to recover at rates in excess of Medicare [fee for service]
`rates, notwithstanding . . . section 3040.” Id. at 1083 (emphasis supplied).9 The court in Phillips
`dismissed plaintiff’s claims on grounds of express preemption and failure to exhaust under the
`Medicare Act. Id. at 1087-88. The court ruled that, “[t]o the extent [Phillips] is claiming that
`Kaiser is running afoul of the Medicare Act by collecting reimbursement from her in an amount
`greater than what is permitted under that Act she is making a claim for [Medicare] benefits and
`must exhaust that claim.” Id. at 1089 (emphasis supplied).10 Thus, again, the alleged violation of
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`7 The court in Uhm further held that plaintiffs’ claims for common law fraud and violation
`of consumer fraud statutes, based upon misrepresentations in Humana’s prescription drug
`marketing materials, were expressly preempted by a provision in the Medicare Prescription Drug
`Program stating that state standards with respect to “marketing materials and summaries and
`schedules of benefits regarding a Medicare+Choice plan” were superseded. Id. at 1148-49 (citing
`42 U.S.C. § 1395w–26(b)(3)). No such express preemption grounds are argued here.
`8 The Health Care Lien act in section 3040 is a separate and distinct provision from the
`Hospital Lien Act in sections 3045.1 et seq.
`9 The court denied a motion to remand on grounds that jurisdiction was established under
`CAFA. Id. at 1087.
`10 The court in Phillips first asserted jurisdiction under CAFA. With respect to is
`conclusion regarding an alternative view of the complaint, this Court declines to follow its analysis.
`Phillips, supra, 953 F. Supp. 2d at 1090 (equating a claim for unfair and unlawful creditor actions
`to a claim for benefits).
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`the Medicare Act was ultimately dispositive.
`Finally, in Morales, plaintiff alleged that defendant medical providers erroneously billed
`plaintiff by filing a lien against settlement proceeds in her tort action rather than billing Medicare.
`Morales, 2015 WL 13768982, *1 (C.D. Cal. Dec. 14, 2015). Plaintiff alleged state law claims
`which defendants removed to federal court on the grounds that the claims arose under federal law.
`Id. at 2. The court found federal question jurisdiction was established because each of plaintiff’s
`state law claims was “premised on the contention that [d]efendants violated the Medicare Act by
`billing [p]laintiff, rather than Medicare, for the services at issue” since plaintiff alleged defendants
`were “barred by 42 U.S.C. § 1395cc from charging [p]laintiff for any services for which she was
`entitled to have Medicare pay.” Id. at *3 (emphasis supplied). Thus, the court concluded, “[i]n
`substance, [plaintiff’s] claims seek the recovery of improperly denied Medicare
`benefits. . . . [since] the [complaint] alleges no more than that Defendants were required to
`comply with the Medicare Act, but failed to do so.” Id. at *3-4.
`The instant complaint, while alleging similar fact patterns, actually asserts the exact
`opposite of the claims in Phillips and Morales. Davidson argues that, even if the Medicare
`Secondary Payer requirements authorize and direct medical providers to seek payment from other
`payers via liens, the amount of the liens sought by defendants here is unlawful under governing
`California law because it violates the HLA’s “reasonable and necessary” limitation in an effort to
`sidestep the balance billing practices found unlawful by the California Supreme Court in Parnell,
`35 Cal.4th at 607.11 (See Complaint ¶¶ 70-77.) Thus, California law is the controlling framework
`of the claims here and the complaint is not one for benefits arising under the Medicare Act.
`Defendants’ argument that the claims are so intertwined with the Medicare Act that they
`would require interpretation of the statute and regulations to determine the lawfulness of the liens
`does not persuade. The parties are in agreement that the Medicare regulations and the Medicare
`
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`11 Defendants’ citation to New York City Health & Hospitals Corp. v. WellCare of New
`York, 769 F. Supp. 2d 250 (S.D.N.Y. 2011) is distinguishable on similar grounds. See id. at 256
`(“in order to prevail on its breach of contract claim, HHC will have to prove that WellCare’s failure
`to pay [certain amounts] violated Medicare law and regulations.” (emphasis supplied)).
`9
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`Secondary Payer Manual (“MSP Manual”) authorize and instruct hospital medical providers to
`seek recovery from a primary payer, including by means of a lien on a judgment or settlement.
`See 42. C.F.R. § 489.20(g) (providers commit “[t]o bill other primary payers before Medicare”);
`MSP Manual at § 40.2(B) (RJN, Exh. B) (“Generally, providers, physicians, and other suppliers
`must bill liability insurance prior to the expiration of the promptly period rather than bill
`Medicare. (The filing of an acceptable lien against a beneficiary’s liability insurance settlement is
`considered billing the liability insurance.)”.) The MSP Manual further clarifies that:
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`The MSP provisions do not create lien rights when those rights do not exist
`under State law. Where permitted by State law, a provider, physician, or other
`supplier may file a lien for full charges against a beneficiary’s liability
`settlement.
`(Id. at 40.2(F), emphasis supplied.). Thus, the MSP Manual expressly acknowledges that state
`law governs lien rights and specifically the right to file a lien for “full charges.” No conflict with
`or interpretation of federal Medicare rules appears. Unlike Phillips and Morales, Davidson does
`not challenge the right of defendants to assert a lien, as authorized by the Medicare statute, but
`instead alleges that the amount of the lien was not “permitted by State law” because it violated the
`HLA’s “reasonable and necessary” limitation.12
`Defendants’ citation to other decisions permitting Medicare providers to first seek
`payment by pursuing liens against patients’ tort recoveries for full charges does not aid their
`“arising under” argument. To the contrary, those decisions underscore the fact that state lien laws
`control the propriety of the filing and amount of the lien to be recovered from a patient’s tort
`liability recovery. See Oregon Ass'n of Hosps. v. Bowen, 708 F. Supp. 1135, 1136 (D. Or. 1989)
`(finding that federal Medicare administration agency had no authority to order the Medicare
`provider to refund the difference between Medicare rate and “full charges” when provider filed a
`lien pursuant to Oregon state lien law); Joiner v. Med. Ctr. E., Inc., 709 So. 2d 1209, 1221 (Ala.
`1998) (Alabama Supreme Court decision that reasonableness of the amount of a lien was a matter
`
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`12 While MSP regulations provide that the rules established for the Medicare Advantage
`program preempt state laws, including billing primary payers, nothing in the regulation or any other
`authority cited by defendants suggest that state laws regulating hospital and health care provider
`liens are preempted. See 42 C.F.R. § 422.108(f).
`10
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`Case 4:20-cv-03880-YGR Document 29 Filed 02/12/21 Page 11 of 12
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`of state law, not Medicare regulations or guidance).
`Moreover, even in the context of a provider’s alleged denial of Medicare benefits by virtue
`of denying patients services covered by Medicare, the Ninth Circuit has cautioned that the
`“arising under” language (and concomitant requirement to administratively exhaust claims for
`Medicare benefits) cannot be read so broadly as to preclude a claim against a Medicare provider
`for its tortious or wrongful conduct. Ardary v. Aetna Health Plans of California, Inc., 98 F.3d
`496, 501 (9th Cir. 1996), as amended on denial of reh'g and reh'g en banc (Dec. 26, 1996). “We
`find nothing in the legislative history to suggest that the Act was designed to abolish all state
`remedies which might exist against a private Medicare provider for torts committed during its
`administration of Medicare benefits pursuant to a contract with HCFA.” Id.; see also Hofler v.
`Aetna US Healthcare of California, Inc., 296 F.3d 764, 769 (9th Cir. 2002), abrogated on other
`grounds by Martin v. Franklin Capital Corp., 546 U.S. 132 (2005) (state law wrongful death
`claims alleging denial of treatment against HMO did not “arise under” Medicare); Vaccarino v.
`Aetna, Inc., No. EDCV1802349JGBSHKX, 2018 WL 6249707, at *4 (C.D. Cal. Nov. 29, 2018)
`(claims concerning harm to a patient caused by denial of Medicare coverage for chemotherapy did
`not “arise under” Medicare Act).
`Here, Davidson does not allege that she was denied Medicare benefits, nor does she seek
`to recover them. Instead, she seeks to limit the state law liens filed by QVMC to their
`“reasonable and necessary” amount under state law, the measure of which would be the rates
`QVMC normally would have been able to recover from Davidson’s health insurance coverage.
`The mere reference to Medicare rates does not convert the claim here into one arising under the
`Medicare Act.
`In sum, defendants have failed to meet their burden to establish that the action here falls
`within the “slim category” of state law claims “arising under” federal law for purposes of federal
`question jurisdiction. Having failed to establish that jurisdiction is proper, the case must be
`remanded.
`//
`//
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`Case 4:20-cv-03880-YGR Document 29 Filed 02/12/21 Page 12 of 12
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`IV. CONCLUSION
`For the foregoing reasons, the Court GRANTS plaintiffs’ motion to remand. The motion to
`dismiss is MOOT.
`The Clerk of the Court is DIRECTED to remand this action to the Superior Court of
`California, County of San Francisco.13
`This Order terminates Docket Number 15.
`IT IS SO ORDERED.
`Dated: February 12, 2021
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`YVONNE GONZALEZ ROGERS
`UNITED STATES DISTRICT COURT JUDGE
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`13 Defendants contend that any remand should be to the County of Napa. Plaintiffs stated
`in their complaint that the Superior Court of California, County of Napa, was the appropriate venue
`but, at the time of filing, the Napa County courthouse was not accepting new filings due to the
`coronavirus pandemic. (Complaint ¶ 6.) Nevertheless, the Court finds it proper to remand this
`action to San Francisco County, the county from which it was removed, leaving to the state court
`the question of whether a venue change, by motion or stipulation, is appropriate.
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