In January 2011 the California Court of Appeal filed its Opinion in KGV Easy Leasing, Inc. v. NHIC Corporation, Case No. B216828. In the opinion, the Court affirmed in full the judgment of the Superior Court in favor of Conkle, Kremer & Engel’s client NHIC, resulting in the dismissal of the KGV complaint.

CK&E’s client is a fiscal intermediary for the United States Government processing Medicare claims. KGV, a provider of medical tests, including so-called “nerve conductivity tests,” had alleged in repeated filings that it could maintain claims against NHIC for actions that NHIC allegedly took in the course of denying KGV’s Medicare reimbursement claims. After CK&E succeeded in having KGV’s federal court claims dismissed, KGV attempted to pursue its claims in California state court.

In the Los Angeles Superior Court, CK&E moved for dismissal of KGV’s complaint against NHIC on several grounds, including official immunity, failure to state a claim, and lack of jurisdiction in the state court. The jurisdictional argument was premised on the exclusive administrative remedy available to providers for claims arising under Medicare Act contained in 42 U.S.C. section 405(g). KGV argued that its claims could be pursued in state court because they were for damages, not Medicare benefits. The Superior Court agreed with CK&E’s arguments, and dismissed KGV’s complaint. KGV appealed the dismissal.

The Court of Appeal agreed completely with NHIC’s position that KGV’s causes of action “arise under” the Medicare Act or are “inextricably intertwined” with the processing of Medicare claims, so the Superior Court lacked subject matter jurisdiction over them. As a result, the Court of Appeal affirmed the dismissal in favor of CK&E’s client, NHIC.

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