Yarick v. PacifiCare of California (Torts)
Filed December 1, 2009, Fifth District
Cite as 2009 SOS 6902

Plaintif's Causes of Action Preempt Federal Law

Joseph Yarick (Yarick) received health care benefits under the federal Medicare Advantage program provided by Secure Horizons. When Yarick had surgery to repair his broken leg, he was admitted to San Joaquin Community Hospital. Eventually, he was transferred to Rosewood Health Facility (Rosewood) operated by American Baptist Homes of the West for rehabilitation and custodial care.

When his condition deteriorated, Rosewood discharged Yarick upon the objection of his family. Yarick’s family found him “slumped in a wheelchair and not responsive.” The family decided to transfer him at Mercy Hospital operated by Catholic Healthcare West (CHW).

At CHW, Yarick was diagnosed with multiple conditions like pneumonia and heart failure. The Bakersfield Family Medical Group pressured CHW to terminate its efforts at curing Yarick. Eventually, Yarick died despite efforts to cure him.

Lisa Yarick, as administrator, filed a complaint against Pacificare of California (Pacificare) alleging that the latter put financial pressures and incentives to the care providers because of their existing contracts with them.

Pacificare demurred to the complaint alleging that the causes of action were preempted by the 2003 Medicare Prescription Drug, Improvement and Modernization Act. The court sustained the demurrer and dismissed the complaint.

The California Court of Appeal, Fifth Appellate District, in affirming the lower court’s judgment, made the following ruling:

1. Federal regulations for health maintenance organization (HMO) under federal Medical Advantage program comprehensively provided standards for the establishment of quality-of-care review systems, provision of sufficient and timely services, and duty of the plan to ensure that providers give adequate and timely care that expressly preempt application of state law standards for HMOs.
2. The doctrine of conflict preemption applied because federal regulations provided that Centers for Medicare and Medicaid Services would not approve contracts that did not assure reasonable and timely access to medical services or that failed to provide a quality assurance program to prevent inappropriate medical decisions.
3. Licensing exception barred Lisa Yarick from pursuing her common law causes of action.