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April 13, 1998

BERNARD WARTENBERG, Plaintiff, against AETNA U.S. HEALTHCARE, INC., Defendant.

The opinion of the court was delivered by: TRAGER


 TRAGER, District Judge:

 Bernard Wartenberg, plaintiff pro se, filed this suit against defendant Aetna U.S. Healthcare, Inc., for the wrongful death of plaintiff's aunt, Betty Lieberman, due to the alleged misconduct and negligence of defendant. The defendant has filed a motion to dismiss. For the reasons stated below, the defendant's motion is denied, and the case is remanded to the Civil Court of the City of New York because this court lacks jurisdiction over this action, and therefore, the removal was improper. *fn1"


 Plaintiff is the nephew of Betty Lieberman, whom plaintiff alleges died as a result of misconduct and negligence on the part of Aetna U.S. Healthcare, Inc. ("AUSH"), a health maintenance organization ("HMO") permitted by the U.S. Department of Health and Human Services, Health Care Financing Administration ("HCFA"), to administer medicare benefits. Lieberman moved into her nephew's house when she was in her nineties and lived in his house for approximately seven years prior to the events which gave rise to this lawsuit. During this time, plaintiff took care of Lieberman and managed all of her affairs.

 Plaintiff asserts that representatives of AUSH solicited plaintiff and Lieberman for an insurance policy while they were having dinner in a diner. According to plaintiff, promising to alleviate plaintiff's responsibility of managing his elderly aunt's medical affairs, these representatives painted a rosy picture of managed healthcare to plaintiff, who consented to allow AUSH to assume the responsibility of administering Ms. Lieberman's medicare reimbursements. As a result of this solicitation, Lieberman, a medicare beneficiary, enrolled in a medicare benefit plan administered by AUSH.

 The complaint alleges that on the eve of Thanksgiving, 1996, Lieberman was admitted to a hospital emergency room due to a bout of extreme difficulty in breathing and a severe case of pneumonia. She remained in the hospital for six days. Before she recovered from these illnesses, and although she was in no condition to be discharged, Lieberman was discharged from the hospital to a nursing facility where she received skilled care. Lieberman's medicare benefit plan with AUSH entitled her to receive up to one hundred days of skilled care. However, within three days of Lieberman's admission to the skilled care facility, plaintiff was notified by AUSH that Lieberman was being discharged from the facility. AUSH gave plaintiff an ultimatum, either he removed his aunt from the facility immediately or he would be responsible for all future expenses. Lieberman was still extremely ill when she was discharged from the skilled care facility and returned to plaintiff's home. She remained in plaintiff's home for less than one week before being readmitted to the hospital in critical condition. In the hospital, Lieberman received tube feeding, continuous oxygen via mask, multiple intravenous antibiotics, and a catheter for urinary elimination. Despite her grave condition, Lieberman was once again discharged from the hospital, allegedly under AUSH's pressure, and readmitted to a skilled care facility. Within forty-eight hours, she was returned to the hospital in acute respiratory distress, where she was attached to a respirator and placed in the intensive care unit. Plaintiff claims that Lieberman could not endure recurrent admissions to and discharges from three hospitals and two nursing homes in fifty-five days, and she died on January 21, 1997.

 Plaintiff alleges that AUSH caused Lieberman's death by transferring her from hospital to hospital, from facility to facility, and by making imprudent medical decisions on her behalf for the sole reason of saving money, and without regard to Lieberman's life-threatening condition. Plaintiff also alleges that, at a minimum, AUSH should have permitted Lieberman to stay in the skilled care facility for the full one hundred days upon her initial discharge from the hospital, as provided by the medicare plan between AUSH and Lieberman. In his ad damnum clause, plaintiff does not seek recovery of medicare benefits in his complaint. Rather, he seeks burial costs and punitive damages for Lieberman's death.

 Plaintiff initially filed a summons with complaint with the Civil Court of the City of New York, on May 30, 1997. On June 11, 1997, AUSH filed an answer to the complaint and pled a general denial. On July 16, 1997, the defendant removed the action to the United States District Court for the Eastern District of New York, on the ground that the claims asserted in plaintiff's complaint are preempted by the Medicare Act, 42 U.S.C. § 1395 et. seq., which governs the contract between defendant and plaintiff's decedent.

 Once in federal court, AUSH moved to dismiss the complaint on three grounds. First, AUSH argues that since plaintiff's claims arise under and are preempted by the Medicare Act, plaintiff is required to exhaust his administrative remedies as provided under the Medicare and Social Security Acts before proceeding to federal court, and that his failure to do so deprives this court of subject matter jurisdiction. Second, AUSH argues that plaintiff lacks standing to sue, since he is attempting to assert rights belonging to the estate of his deceased aunt without having been appointed administrator or executor of Lieberman's estate. Third, AUSH argues that New York law requires a finding of actual damages before punitive damages may be awarded. Defendant argues that plaintiff's failure to plead actual damages in addition to punitive damages should bar his recovery.



 The initial and decisive issue to be resolved is whether the wrongful death, negligence and other state tort law claims alleged by plaintiff on behalf of his deceased aunt arise under and are, therefore, preempted by the Medicare Act. As previously mentioned, plaintiff is not seeking to recover medicare benefits, but rather is seeking damages based both on the HMO's conduct in wrongfully discharging his aunt from various hospitals and skilled care facilities, and on the HMO's improper denial of services which were promised by the HMO in the medicare plan with the plaintiff's aunt. If such claims are not preempted by the Medicare Act, then removal of this case from state court to federal court was not proper, and the action must be remanded to state court. However, if such claims are in fact preempted by the Medicare Act, plaintiff would need to first exhaust his administrative remedies, as provided under the Act, before judicial review would be proper. For the reasons set forth below, the court finds that plaintiff's claims are not preempted by the Medicare Act, and since there is no other basis for jurisdiction in federal court, the action must be remanded to state court for further proceedings.

 The Medicare Act (the "Act") appears in Part A of Title XVIII of the Social Security Act, 42 U.S.C. § 1395 et. seq. The Act provides insurance to eligible medicare beneficiaries for the cost of hospital and related post-hospital expenses. The Act also provides for the delegation of medicare benefit administration to HMOs which are authorized to ...

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