Quinones v. UnitedHealth Group Incorporated et al

Filing 49

ORDER GRANTING IN PART AND DENYING IN PART DEFENDANTS' MOTION FOR JUDGMENT ON THE PLEADINGS AS TO PLAINTIFF'S ALLEGATIONS RELATING TO MEDICARE BENEFITS re 31 Motion for Judgment on the Pleadings. Signed by JUDGE LESLIE E. KOBAY ASHI on 06/29/2015. The Court FINDS that, insofar as Plaintiff's claims challenge the coordination of benefits by Defendants, as the Medicare plan provider, they arise under the Medicare Act and therefore require exhaust ion. This finding applies to all claims except Counts I and IV, which allege claims under the Medicaid Act. Plaintiff necessarily brings these two claims pursuant to Medicaid, and not Medicare, statutes and regulations. The Court DENIES the Motion as to Counts I and IV, and GRANTS it as to the other claims.It DISMISSES WITH PREJUDICE for lack of jurisdiction Counts II, III, V, VI, VII and VIII, insofar as they challenge the coordination of benefits for acts taken by Defendants as plan provid ers for Plaintiff's Medicare plan. This includes, but is not limited to, the process by which Defendants denied Plaintiff's initial requests for a new Group 3 PMD, the denials themselves, and any delay in submission of the request to Plaint iff's Medicaid plan. Insofar as Plaintiff challenges decisions made and actions taken by Defendants in their roles as coverage providers under Plaintiff's Medicaid Plan, those claims remain. Defendants UnitedHealth Group Incorporated, UnitedHealthcare, Inc., and UnitedHealthcare Insurance Company's Motion for Judgment on the Pleadings as to Plaintiffs Allegations Relating to Medicare Benefits, filed April 1, 2015, is HEREBY GRANTED IN PART AND DENIED IN PART. (eps )CERTIFICATE OF SERVICEParticipants registered to receive electronic notifications received this document electronically at the e-mail address listed on the Notice of Electronic Filing (NEF). Participants not registered to receive electronic notifications were served by first class mail on the date of this docket entry

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF HAWAII
JUAN RIOS QUINONES,
Plaintiff,
vs.
UNITEDHEALTH GROUP
INCORPORATED;
UNITEDHEALTHCARE, INC.; and
UNITEDHEALTHCARE INSURANCE
CO.,
Defendants.

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CIVIL 14-00497 LEK-RLP

ORDER GRANTING IN PART AND DENYING IN PART
DEFENDANTS’ MOTION FOR JUDGMENT ON THE PLEADINGS AS
TO PLAINTIFF’S ALLEGATIONS RELATING TO MEDICARE BENEFITS
Before the Court is Defendants UnitedHealth Group
Incorporated, UnitedHealthcare, Inc., and UnitedHealthcare
Insurance Company’s (collectively “Defendants”) Motion for
Judgment on the Pleadings as to Plaintiff’s Allegations Relating
to Medicare Benefits (“Motion”), filed on April 1, 2015.
no. 31.]

[Dkt.

Plaintiff Juan Rios Quinones (“Plaintiff”) filed his

memorandum in opposition on May 18, 2015, and Defendants filed
their reply on May 22, 2015.

[Dkt. nos. 42, 44.]

came on for hearing on June 8, 2015.

This matter

After careful consideration

of the Motion, supporting and opposing memoranda, and the
arguments of counsel, Defendants’ Motion is HEREBY GRANTED IN
PART AND DENIED IN PART for the reasons set forth below.

BACKGROUND
On October 31, 2014, Plaintiff filed his sixty-page
Complaint for Declaratory and Injunctive Relief, and for
Compensatory and Punitive Damages (“Complaint”), asserting
various federal and state claims related to Defendants’ year-long
delay in preauthorizing Plaintiff for a new Personal Mobility
Device (“PMD”).

Plaintiff alleges that from birth he has been

fully disabled and he is eligible for Medicaid and Medicare as a
“dual eligible.”

[Complaint at ¶¶ 6-7.]

He requires a PMD to be

“mobile and productive, to engage in the activities open to other
enrollees in the State of Hawai`i’s Medicaid Programs, and to
otherwise participate in the community.”

[Id. at ¶ 8.]

Since approximately May 2011, all of Plaintiff’s
coverage has been coordinated by Defendants’ programs, Medicare
Advantage and QUEST Expanded Access.

Plaintiff alleges that he

decided to enroll in both Defendants’ Medicare and Medicaid
programs because Defendants’ agent represented to him that they
could provide prompt repair and replacement PMDs as needed.
Plaintiff alleges that, since Defendants provide insurance
coverage under state and federal law, and Medicaid on behalf of
the State of Hawai`i, they are state actors.

[Id. at ¶¶ 12-27,

70-76.]
Plaintiff alleges that, in January 2013 when his PMD
needed repairs, Defendants’ technician took it away for over a

2

week without leaving a replacement, resulting in Plaintiffs’
complete confinement to his apartment and reliance on friends.
On January 15, 2013, a team of Plaintiff’s health care providers
submitted to Defendants a comprehensive survey requesting a new
PMD with “Group 3” accessories, including “power tilt and
recline,” “power adjustable seat height,” and “power leg
elevation.”

The team reported that all accessories were

medically necessary for Plaintiff to perform normal daily tasks
unassisted, enable him to reposition himself in the PMD to limit
persistent pain, and transfer himself in and out of the PMD.
[Id. at ¶¶ 76-81, 85-95.]
Plaintiff further alleges that thereafter Defendants:
delayed in investigating and processing his claim, including
taking over five months to send their own specialists to
Plaintiff’s home for assessment; mishandled the request for
preauthorization; attempted to coerce Plaintiff to accept Group 2
accessories that were insufficient to serve him; denied his
coverage on June 11, 2013; and, after he appealed, again denied
his request on November 15, 2013.

After he hired an attorney to

further pursue his requests, in January 2014, Defendants
reassessed Plaintiff and granted coverage for a new Group 3 PMD.
[Id. at ¶¶ 96-149.]
Plaintiff alleges that, based on the year he was
without a fully functional Group 3 PMD, he was unnecessarily

3

confined to his apartment and segregated from the community, he
was at risk for injury while moving about the apartment, he
suffered depression, and experienced anger and other strong
emotions.

[Id. at ¶ 147.]

The Complaint includes the following

claims: violation of civil rights under the Medicaid Act,
pursuant to 42 U.S.C. § 1983 (“Count I”); violation of the
Americans with Disabilities Act of 1990 (“ADA”), 42 U.S.C.
§ 12101, et seq. (“Count II”); violation of the Rehabilitation
Act of 1973, 29 U.S.C. § 794 (“Count III”); violation of the
Medicaid statutes and regulations, 42 U.S.C. §§ 1396-1396v and 42
C.F.R. § 435.930(a) (“Count IV”); violation of Haw. Rev. Stat.
Chapter 489 (“Count V”); bad faith (“Count VI”); negligent
infliction of emotional distress (“Count VII”); intentional
infliction of emotional distress (“Count VIII”); and punitive
damages (“Count IX”).

[Id. at ¶¶ 147, 150-233.]

Plaintiff requests the following relief: a declaratory
judgment that Defendants must comply with all required policies,
procedures, customs and practices under Medicare and Medicaid to
ensure that wheelchairs and PMDs for the most vulnerable Hawai`i
residents are safe and in good repair; an injunction requiring
Defendants to provide loaner accessaries for the safety of dual
eligibles; an injunction appointing a special master to review
all of Defendants’ denials of coverage for wheelchairs or PMDs,
where the insureds claimed they were medically necessary; a

4

declaratory judgment that Defendants discriminated against
Plaintiff; a declaratory judgment that Defendants violated
“Hawai`i’s unfair competition insurance statute[;]” general,
special, and punitive damages; attorneys’ fees and costs; and all
other appropriate relief.

[Id. at pgs. 57-62.]

On December 24, 2014, Defendants filed their answer,
[dkt no. 19,] and on April 1, 2015, they filed four motions for
judgment on the pleadings, including the instant Motion.1

In the

Motion, Defendants move to dismiss in part or whole all of the
claims to the extent that they arise under the Medicare Act,2 and
Plaintiff did not exhaust his administrative remedies as
required.

Further, they argue that waiver of the exhaustion

requirement is inapplicable here.

The Court agrees, and grants

the Motion, dismissing all or part of each claim as follows.
STANDARD
I.

Medicare Exhaustion
“Judicial review of claims arising under the Medicare

Act is available only after the Secretary [of Health and Human
Services (“Secretary”)] renders a ‘final decision”’ on the claim,

1

In the other three motions, Defendants request dismissal
of the first four counts of the Complaint on independent grounds.
[Dkt. nos. 32, 33, 34.] Those motions are set for hearing in
July, August, and October. See EO, filed 4/3/15 (dkt. no. 36);
EO, filed 4/3/15 (dkt. no. 37); EO, filed 4/28/15 (dkt. no. 40).
2

Title XVIII of the Social Security Act, 79 Stat. 291 as
amended, 42 U.S.C. § 1395 et seq., is commonly referred to as the
“Medicare Act.”
5

in the same manner as is provided in 42 U.S.C. § 405(g) for old
age and disability claims arising under Title II of the Social
Security Act.”

Heckler v. Ringer, 466 U.S. 602, 605 (1984)

(footnote omitted).
Section 405(g) provides, in pertinent part:
Any individual, after any final decision of the
Secretary made after a hearing to which he was a
party, irrespective of the amount in controversy,
may obtain a review of such decision by a civil
action commenced within sixty days after the
mailing to him of notice of such decision or
within such further time as the Secretary may
allow. Such action shall be brought in the
district court of the United States for the
judicial district in which the plaintiff
resides . . . . The court shall have power to
enter, upon the pleadings and transcript of the
record, a judgment affirming, modifying, or
reversing the decision of the Secretary, with or
without remanding the cause for a rehearing. The
findings of the Secretary as to any fact, if
supported by substantial evidence, shall be
conclusive. . . . The judgment of the court shall
be final except that it shall be subject to review
in the same manner as a judgment in other civil
actions.
Further, § 405(h) provides:
The findings and decisions of the Secretary after
a hearing shall be binding upon all individuals
who were parties to the hearing. No findings of
fact or decision of the Secretary shall be
reviewed by any person, tribunal, or governmental
agency except as herein provided. No action
against the United States, the Secretary, or any
officer or employee thereof shall be brought under
section 1331 or 1346 of title 28 to recover on any
claim arising under this subchapter.
The Ninth Circuit has explained that, “[t]he Act’s exhaustion
requirement, 42 U.S.C. § 405(h), makes judicial review under a
6

related provision, 42 U.S.C. § 405(g), ‘the sole avenue for
judicial review’ for claims ‘arising under the Medicare Act.’”
Uhm v. Humana, Inc., 620 F.3d 1134, 1140 (9th Cir. 2010)
(footnotes and some quotation marks omitted) (quoting Heckler,
466 U.S. at 614–15, 104 S. Ct. 2013, 80 L. Ed. 2d 622).
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 the presentation of the
claims” is the Medicare Act, Heckler, 466 U.S. at
615, 104 S. Ct. 2013 (internal quotations
omitted); and (2) where the claims are
“inextricably intertwined” with a claim for
Medicare benefits, id. at 614, 104 S. Ct. 2013.
See also Kaiser [v. Blue Cross of California], 347
F.3d [1107,] 1112 [(9th Cir. 2003)]. One category
of claims that we and other courts have found to
“arise under” the Act are those cases that are
“‘[c]leverly concealed claims for benefits.’”
Kaiser, 347 F.3d at 1112 (quoting United States v.
Blue Cross & Blue Shield of Ala., Inc., 156 F.3d
1098, 1109 (11th Cir. 1998)).
Id. at 1141 (some alterations in Uhm).

Further, the Supreme

Court has rejected the argument that “simply because a claim
somehow can be construed as ‘procedural,’ it is cognizable in
federal district court by way of federal-question jurisdiction.”
Heckler, 466 U.S. at 614; see also Kaiser, 347 F.3d at 1115
(citing Heckler, 466 U.S. at 637 for the proposition that
Ҥ 405(h) bars suits without regard to whether they are, on their
face, ‘procedural’ or ‘substantive’). Moreover, “even a state law
claim may ‘arise under’ the Medicare Act,” and “the fact that
plaintiffs seek damages beyond the reimbursement payments

7

available under Medicare does not exclude the possibility that
their case arises under Medicare.”

Uhm, 620 F.3d at 1142

(citations, internal quotation marks and brackets omitted).
II.

Waiver
Even if a claim “arises under” the Medicare Act, a

plaintiff may prove that, under the specific facts of the case,
exhaustion is unnecessary.

“[T]he exhaustion requirement of

§ 405(g) consists of a nonwaivable requirement that a claim for
benefits shall have been presented to the Secretary, and a
waivable requirement that the administrative remedies prescribed
by the Secretary be pursued fully by the claimant.”

Heckler, 466

U.S. at 617 (citations and internal quotation marks omitted).
As to the waivable element requiring full pursuit of
the Secretary’s remedies,
[t]he Ninth Circuit has “adopted a three-part test
for determining whether a particular case merits
judicial waiver of § 405(g)’s exhaustion
requirement. The claim must be (1) collateral to
a substantive claim of entitlement
(collaterality), (2) colorable in its showing that
denial of relief will cause irreparable harm
(irreparability), and (3) one whose resolution
would not serve the purposes of exhaustion
(futility).”
Morando v. Colvin, Civil No. 13-00485 LEK-KSC, 2014 WL 2215922,
at *3 (D. Hawai`i May 28, 2014) (quoting Kildare v. Saenz, 325
F.3d 1078, 1082 (9th Cir. 2003)).
“Exhaustion is generally required as a matter of
preventing premature interference with agency
processes, so that the agency may function
8

efficiently and so that it may have an opportunity
to correct its own errors, to afford the parties
and the courts the benefit of its experience and
expertise, and to compile a record which is
adequate for judicial review.”
Kaiser, 347 F.3d at 1115 n.4 (quoting Weinberger v. Salfi, 422
U.S. 749, 765, 95 S. Ct. 2457, 2467, 45 L. Ed. 2d 522 (1975)).
DISCUSSION
The crux of Defendants’ argument is that, no matter how
he pleads it, Plaintiff’s lawsuit arises under the Medicare Act
because it is inextricably intertwined with the denial of his
benefits request.

Plaintiff responds that, while on some level

his Complaint technically arises from his benefits request, he
does not request benefits or reimbursement, or anything that
could be remedied by the Secretary.

This litigation, he argues,

is about a scheme whereby an insurer - tasked with providing
coverage under both the insured’s primary and secondary insurance
plans – intentionally, and in a discriminatory manner, delayed
the coordination of benefits between the two plans.

Defendants

reply that, even if some parts of his claims challenge
Defendants’ actions related to Plaintiff’s Medicaid benefits, to
the extent that they challenge Defendants’ activities under
Medicare, the Secretary has an interest in their resolution, and
thus they require exhaustion.
This Court agrees with Defendants, and finds that
insofar as Plaintiff’s claims relate to the delay of the

9

coordination of benefits, they are inextricably intertwined with
the Medicare benefits decision, and Plaintiff must first present
them to the Secretary.

Further, since Plaintiff does not allege

presentment, and he has already received his PMD, there is no
basis for waiver, in particular, to avoid irreparable harm.
I.

Exhaustion
Although the Complaint is rather detailed, it is not

clear whether or not Plaintiff brings his claims under his
Medicaid, as opposed to his Medicare, plan.

Defendants suggest

that this lack of precision is an intentional attempt to avoid
the preemption issue that is at the heart of the Motion.
in Supp. of Motion at 11-12.]

[Mem.

For instance, in the introductory

section, the Complaint alleges:
Defendants discriminated against [Plaintiff] in
the State of Hawai`i’s QUEST Expanded Access
Medicaid program on account of his disability in
denying him equal enjoyment of the goods,
services, facilities, privileges, advantages, and
covered benefits to which he had legitimate claims
of entitlement, and deliberately and intentionally
subjecting him to inescapably unsafe and dangerous
circumstances for over a year with evident
indifference to the potential that he would suffer
physical harm or even death.
[Complaint at ¶ 2.]

Here, he claims that Medicaid denied his

request for benefits.
On the other hand, in more detailed allegations later
in the Complaint he alleges that the denial was pursuant to his
Medicare plan.

For example, Plaintiff alleges that, “[e]ven if

10

Medicare did not cover the ‘Group 3’ PMD and requested
accessories, Medicaid did, and thus the denial was made in bad
faith because [Defendants] were contracted with the State of
Hawai`i to provide Plaintiff’s medically necessary medical
assistance in the Medicaid program.”

[Id. at ¶ 118.]

Here,

Plaintiff concedes that the denial was made pursuant to his
Medicare plan.

Based on numerous changes in position like this

one, it is not clear what exactly Plaintiff argues that
Defendants did wrong, and therefore it is virtually impossible to
determine whether his claims arise under the Medicare Act or, for
instance, the Medicaid Act.
However, in his opposition, Plaintiff clarifies his
theory of the case.

The following statements are illustrative.

He argues that:
- “Defendants improperly and unlawfully withheld the
requests [Plaintiff’s] treating providers submitted for
preauthorization of his PMD from his secondary
(Medicaid) coverage for nearly a year instead of
automatically submitting it when they ostensibly
decided it was not covered by their Medicare Advantage
plan.” [Mem. in Opp. at 6.]
- “[The Complaint] alleges the facts of Defendants’ scheme
to delay preauthorizing coverage of his PMD by denying
coverage under their Medicare Advantage plan while
withholding coordination of benefits with his Medicaid
plan coverage. . . . [T]hey employed their ownership
of a Medicare Advantage plan as part of a scheme to
deny benefits [Plaintiff] was ultimately entitled to
receive as a Medicaid beneficiary[.]” [Id. at 8.]
- “If indeed it was true that Medicare had issued the
advance determination of non-coverage, that denial
triggered Defendants’ duty to immediately submit the
11

preauthorization request to [Plaintiff’s] plan for a
Hawaii’s statutory medical necessity determination.”
[Id. at 12.]
From these statements, Plaintiff alleges that
Defendants discriminated against him by intentionally delaying
making a decision on his benefits request, denying his requests
under the Medicare plan, and delaying transferring his request to
the Medicaid plan.
Framed like this, the Court finds that Plaintiff’s
challenge to Defendants’ actions – in delaying the decision on a
Medicare benefit request and then withholding from the Medicaid
plan the benefit request and related application information –
“arises under” the Medicare Act.

The Supreme Court and the Ninth

Circuit have held that the test for whether a claim arises under
the Medicare Act is broad.

See, e.g., Heckler, 466 U.S. at 615

(explaining that the Supreme Court has “construed the ‘claim
arising under’ language quite broadly” and applying the “broad
test”); Ardary v. Aetna Health Plans of Cal., Inc., 98 F.3d 496,
500 (9th Cir. 1996) (recognizing that the Supreme Court
“instructed [it] to read the term ‘arising under’ broadly”
(citing Heckler)).

The result is no different even though:

Plaintiff does not request a benefit or reimbursement for a
benefit; some of his remedies are injunctive rather than
monetary; or the lawsuit challenges the process by which
Defendants denied the benefit rather than purely the substance of

12

the denial.

The Supreme Court and the Ninth Circuit have

rejected all of these arguments.

See, e.g., Uhm, 620 F.3d at

1141-42 (discussing Heckler, Kaiser, and Ardary and expressly
rejecting these arguments).

The coordination of benefits under

the Medicare Act is still “inextricably intertwined” with
Plaintiff’s Medicare benefits request.
Plaintiff argues that requiring exhaustion would be
erroneous because there is nothing that the Secretary can do to
remedy the harm he suffered.

This argument is inconsistent with

the allegations in his Complaint.

In fact, Plaintiff requests a

declaratory judgment that Defendants “institute and comply with
specific policies, procedures, customs and practices” related to
the PMDs offered under their “Medicaid or Medicare coverage[.]”
Further, he requests “injunctive relief appointing a special
master to review [Defendants’] denials of coverage for
wheelchairs or PMDs[.]”

[Complaint at pgs. 57-58.]

These

remedies seek this Court’s oversight of Medicare policies and
procedures, which is clearly within the purview of the Secretary
in enforcing the Medicare Act.
Ardary – which Plaintiff analogizes to, and relies
heavily upon – supports this point.

In Ardary, the Ninth Circuit

held that a wrongful death suit did not arise under the Medicare
Act, where the decedent relied on representations by the insurer
in purchasing her plan that she would be airlifted from a remote

13

hospital in the event of emergency; she died when she suffered a
heart attack and was not airlifted.

See 98 F.3d at 497-98.

In

Uhm, the Ninth Circuit explained that in Ardary exhaustion was
not required because the lawsuit “was ‘at bottom not seeking to
recover benefits’ and because the injury complained about could
not have been redressed at all via the Medicare Act’s
administrative review process.”

Uhm, 620 F.3d at 1142 (quoting

Ardary, 98 F.3d at 500) (italics in Uhm; other emphases added).
The family in Ardary sought “general and punitive damages on the
basis of six state law theories of recovery” for the loss of
decedent’s life.

98 F.3d at 498.

Unlike Ardary, here

Plaintiff’s injury could be partly redressed by the Secretary,
and for that reason exhaustion makes sense.3
Since Plaintiff’s coordination of benefits theory is
inextricably intertwined with a Medicare benefits decision, the
Court CONCLUDES that his claims arise at least in part under the
Medicare Act, and require Plaintiff to seek administrative review
3

The Court, however, is not convinced by Defendants’
contention that the Ninth Circuit’s interpretation of Ardary in
Kaiser, which preceded Uhm, necessarily forecloses Plaintiff’s
interpretation of Ardary as covering his claim. See Reply at 1012. In Kaiser, the Ninth Circuit explained that “the Ardary
analysis convinces us that its holding does not extend beyond
patients and torts committed in the sale or provision of medical
services.” 347 F.3d at 1113. It is arguable whether delaying
making a decision on Plaintiff’s request for a new PMD could be
interpreted to be a delay in the “provision of a medical
service,” and thus fall within the Ardary rule. This is
immaterial, however, since the later interpretation in Uhm
further clarified (and limited) Ardary.
14

from the Secretary before raising them in federal court.
II.

Waiver
It is Plaintiff’s burden to prove that this Court

should waive the exhaustion requirement.

Plaintiff argues that

presentment is not necessary because there is nothing for the
Secretary to decide, and waiver is proper because: his claims are
collateral to any benefits decision; the statute of limitations
will run if he pursues administrative review, leading to
irreparable harm; and the Secretary will lack jurisdiction and
therefore exhaustion would be futile.

[Mem. in Opp. at 18-22.]

These arguments fail.
First, the presentment requirement is jurisdictional
and nonwaivable.

See Johnson v. Shalala, 2 F.3d 918, 921 (9th

Cir. 1993) (“The presentment requirement is jurisdictional, and
therefore cannot be waived by the Secretary or the courts.”).

As

Defendants explain, presentment serves a channeling function.
[Reply at 15-16.]

“[I]t assures the agency greater opportunity

to apply, interpret, or revise policies, regulations, or statutes
without possibly premature interference by different individual
courts[.]”

Shalala v. Ill. Council on Long Term Care, Inc., 529

U.S. 1, 13 (2000).

A determination as to an injunction, or even

an award of damages, for delay in the coordination of benefits
here would usurp the decision-making power of the Secretary.
Further, the fact that Plaintiff appealed the initial

15

denials does not suffice to fulfill the presentment requirement.
See Heckler, 466 U.S. at 606 (“the Secretary has provided that a
‘final decision’ is rendered on a Medicare claim only after the
individual claimant has pressed his claim through all designated
levels of administrative review” (emphasis added) (footnote
omitted)); see also Spagnolo v. U.S. Soc. Sec. Admin., No. CV
11-00353 DAE-RLP, 2011 WL 2945808, at *2 (D. Hawai`i July 19,
2011) (“A ‘final decision’ is rendered only after the individual
has ‘pressed his claim’ through all levels of administrative
review.” (quoting Heckler, 466 U.S. at 605)).

Plaintiff neither

alleges that he exhausted his administrative remedies, nor
contests Defendants’ argument that he did not.

Therefore, he

must exhaust his claims through the administrative process, and
present those claims to the Secretary.
Second, exhaustion serves a purpose here and waiver is
not appropriate.

As noted, Plaintiff requests a partial

injunction over the benefits process.

At the very least, this

request is not collateral to benefits decisions.

Even if the

Court determined that coordination of benefits was collateral to
a benefits decision, Plaintiff does not make any colorable
showing that requiring exhaustion would lead to irreparable
injury.

The only injury Plaintiff mentions is the running of the

statute of limitations.

See Mem. in Opp. at 21 (“In the absence

of tolling the applicable statute of limitations, [Plaintiff’s]

16

claims, which include claims for injunctive relief and
declarations, could be barred before he is permitted to refile
them.”).

It is not clear, however, to which statute of

limitations he is referring.

Section § 405(g) provides a sixty-

day statute of limitations for filing after an insured receives
notice of a contrary decision by the Secretary.
would clearly not require tolling.

This statute

Plaintiff does not cite the

statute of limitations for benefits appeals, but this Court
questions whether, if he had let that statute run in pursuing the
instant lawsuit, that type of injury could support waiver.

It

makes little sense that it would since it would create an
exception that swallows the rule requiring exhaustion.
The only conceivable, legitimate injury would be if
Plaintiff still did not have access to his PMD.
Plaintiff has conceded that he received his PMD.
at ¶ 145.

However,
See Complaint

And he makes no argument as to how the past decision-

making process by Defendants could harm that benefit in the
future.

See, e.g., Kaiser, 347 F.3d at 1115 (“past injury does

not meet the irreparability requirement for waiver” (emphasis in
Kaiser)).
Finally, Plaintiff has made no showing that exhaustion
would be futile.

Although the Secretary may not have any

expertise, for instance, regarding civil rights law, she can make

17

factual determinations which would inform this Court’s review.4
Moreover, the Secretary is in a better position than this Court
to determine whether Defendants acted properly in analyzing
Plaintiff’s benefit request.

She will know whether Defendants

violated administrative regulations and practices in how they
reviewed and initially denied Plaintiff’s requests for the
Group 3 PMD.

The Court therefore finds that exhaustion would

“not be futile in the context of the system.”

See id. (footnote

omitted).
For all of these reasons, Plaintiff must present his
challenge to Defendants’ coordination of benefits to the
Secretary.

While, ultimately, the Secretary might find that

certain issues that Plaintiff raises are beyond her Medicare Act
authority, it makes practical sense to have her review
Plaintiff’s claims first.
The foregoing analyses regarding whether Plaintiff’s
claims “arise under” the Medicare Act, are “inextricably
intertwined” with a benefits decision, and waiver is proper are
best encapsulated by the Ninth Circuit’s statement in Kaiser:
If a court were to prematurely tackle a question
inextricably intertwined with an issue properly
resolved by an agency, the court would defeat the
purposes of § 405(g) and (h) even if the question
was not one that the agency has the authority to
answer fully. More specifically, even if the

4

The Court notes that currently the Secretary is Sylvia
Mathews Burwell.
18

claims raised here are broader than those suitable
for resolution by the [Secretary], deciding
[Plaintiff’s] claims would mean also passing
judgment on questions which are appropriately
first answered by the [Secretary]. This is why
all inextricably intertwined claims must first be
raised in an administrative process. In that
process, the agency, with the benefit of its
experience and expertise, can resolve whatever
issues it can, limiting the number of issues
before judicial review (and limiting review on
those issues according to the appropriate standard
of deference). On other issues, the [Secretary]
may make a determination that it is without
authority to decide and grant the provider a right
to obtain judicial review.
See 347 F.3d at 1116.

The Court thus CONCLUDES that Plaintiff’s

claims regarding the coordination of benefits must be exhausted,
and waiver in this case is not proper.
III. Summary and Application
The Court FINDS that, insofar as Plaintiff’s claims
challenge the coordination of benefits by Defendants, as the
Medicare plan provider, they arise under the Medicare Act and
therefore require exhaustion.

This finding applies to all claims

except Counts I and IV, which allege claims under the Medicaid
Act.

Plaintiff necessarily brings these two claims pursuant to

Medicaid, and not Medicare, statutes and regulations.

The Court

DENIES the Motion as to Counts I and IV, and GRANTS it as to the
other claims.
It DISMISSES WITH PREJUDICE for lack of jurisdiction
Counts II, III, V, VI, VII and VIII, insofar as they challenge
the coordination of benefits for acts taken by Defendants as plan
19

providers for Plaintiff’s Medicare plan.5

See, e.g., Heilman v.

Sanchez, 583 F. App’x 837, 839-40 (9th Cir. 2014) (holding that
“the district court did not abuse its discretion by refusing to
grant leave to amend because those aspects of the complaint could
not be cured by amendment” (citing Weilburg v. Shapiro, 488 F.3d
1202, 1205 (9th Cir. 2007))).

This includes, but is not limited

to, the process by which Defendants denied Plaintiff’s initial
requests for a new Group 3 PMD, the denials themselves, and any
delay in submission of the request to Plaintiff’s Medicaid plan.
Insofar as Plaintiff challenges decisions made and actions taken
by Defendants in their roles as coverage providers under
Plaintiff’s Medicaid Plan, those claims remain.
CONCLUSION
On the basis of the foregoing, Defendants UnitedHealth
Group Incorporated, UnitedHealthcare, Inc., and UnitedHealthcare
Insurance Company’s Motion for Judgment on the Pleadings as to

5

Insofar as “punitive damages are a remedy rather than an
independent cause of action,” Cortez v. Skol, 776 F.3d 1046, 1050
n.2 (9th Cir. 2015), this Court also DISMISSES WITH PREJUDICE
Count IX in its entirety.
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Plaintiff’s Allegations Relating to Medicare Benefits, filed
April 1, 2015, is HEREBY GRANTED IN PART AND DENIED IN PART.
IT IS SO ORDERED.
DATED AT HONOLULU, HAWAII, June 30, 2015.

/s/ Leslie E. Kobayashi
Leslie E. Kobayashi
United States District Judge

JUAN RIOS QUINONES VS. UNITEDHEALTH GROUP INCORPORATED ET AL.;
CIVIL 14-00497 LEK-RLP; ORDER GRANTING IN PART AND DENYING IN
PART DEFENDANTS’ MOTION FOR JUDGMENT ON THE PLEADINGS AS
TO PLAINTIFF’S ALLEGATIONS RELATING TO MEDICARE BENEFITS

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