250 F. Supp. 3d 692
D. Haw.2017Background
- Juan Rios Quinones is a Medicare–Medicaid "dual eligible" member whose Personal Mobility Device (PMD) needs and replacement requests were coordinated by UnitedHealth entities (Defendants).
- Plaintiff sued asserting violations of Medicaid statutes/regulations (Count IV), bad faith (Count VI), negligent and intentional infliction of emotional distress (Counts VII & VIII), and a supplemental claim for breach of a continuing duty of good faith / "malicious defense" (Count X), among other allegations relating to PMD repairs, replacements, and loaner equipment.
- Procedurally, the Court previously ruled that claims intertwined with Medicare benefit decisions require administrative exhaustion under the Medicare Act; the parties were later permitted to file targeted summary judgment motions on the remaining counts.
- Factual timeline: multiple PMD preauthorization requests were submitted (Feb 2013 First Request; May–June 2013 Second Request withdrawn after advice to resubmit; Nov 2013 Third Request denied by Medicare but forwarded to Medicaid and approved Nov 19, 2013; additional assessments and a Fourth Request led to delivery of a PMD in Feb 2014).
- Defendants contend delays were either due to Medicare's primary-role determinations, provider withdrawals/resubmissions, vendor delays, or other non-defendant causes; Defendants never issued a denial as the Medicaid plan for the disputed requests they handled.
- The Court found no genuine dispute of material fact and granted Defendants summary judgment on Counts IV, VI, VII, VIII, and Count X; Plaintiff’s motion for partial summary judgment was denied as moot and the case was closed absent reconsideration.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Defendants violated Medicaid statutes/regulations by delaying or denying PMD maintenance/repair or failing to provide a loaner PMD (Count IV) | Quinones contends Medicaid unreasonably delayed/denied medically necessary PMD benefits and failed to provide a loaner when Medicare coverage was not confirmed | Defendants show Medicare is primary for PMD repairs/maintenance; delays/denials were not caused by the Medicaid plan and some requests were withdrawn or were addressed by Medicare first | Court: Claims relating to PMD repair/maintenance and loaner PMD are intertwined with Medicare decisions and must be dismissed; no Medicaid violation shown — summary judgment for Defendants |
| Whether Defendants denied or unreasonably delayed authorizations for a replacement PMD | Quinones asserts his requests were effectively submitted Feb 5, 2013 and that Medicaid should have provided/approved sooner | Defendants trace the actual submissions/withdrawals: First/Second Requests processed with Medicare primary; Second was withdrawn to resubmit to Medicare; Medicaid approved later (Nov 19, 2013) and final PMD delivered after subsequent assessment and authorization; delays attributable to provider/vendor steps, not Defendants | Court: No genuine dispute that Defendants acted within allowed timeframes; no unlawful denial/delay by Medicaid — summary judgment for Defendants |
| Whether Defendants committed the tort of bad faith in handling PMD claims (Count VI) | Quinones alleges Defendants withheld approval to coerce lesser benefits and engaged in bad-faith handling, citing 42 C.F.R. § 433.139(c) | Defendants argue they acted properly, followed coordination-of-benefits rules, and never denied Medicaid coverage that would support bad-faith liability | Court: No bad-faith tort shown; § 433.139(c) inapplicable here; summary judgment for Defendants |
| Whether Plaintiffs may pursue malicious-defense / continuing duty of good faith (Count X) and related IIED/NIED claims based on litigation tactics | Quinones asserts malicious defense and IIED/NIED based on Defendants’ alleged litigation misconduct and third‑party threats/false statements | Defendants contend Hawaii law does not recognize malicious defense as a separate tort and that alleged litigation conduct does not support IIED/NIED absent outrageous, direct conduct causing extreme distress | Court: Hawaii does not recognize a malicious‑defense cause of action; IIED/NIED fail because underlying liability not established and alleged litigation tactics do not state cognizable IIED — summary judgment for Defendants |
Key Cases Cited
- Heckler v. Ringer, 466 U.S. 602 (Sup. Ct.) (Medicare/benefit-related claims are broadly treated as "arising under" the Medicare Act for purposes of administrative exhaustion)
- Ardary v. Aetna Health Plans of Cal., Inc., 98 F.3d 496 (9th Cir.) (instructing broad reading of claims "arising under" the Medicare Act)
- Young v. Allstate Ins. Co., [citation="119 Hawai'i 403"] (Haw. 2008) (Hawaii Supreme Court declined to recognize malicious‑defense tort and explained remedies exist via sanctions and IIED where appropriate)
- Miller v. Hartford Life Ins. Co., [citation="126 Hawai'i 165"] (Haw. 2011) (Hawaii requires proof of insurer breach of implied covenant before emotional‑distress damages for insurance bad faith)
- Enoka v. AIG Haw. Ins. Co., [citation="109 Hawai'i 537"] (Haw. 2006) (defining "outrageous" conduct element in IIED claims)