DaVita CEO: In ruling, US Supreme Court took ‘narrow’ view of dialysis payment provision
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U.S. Supreme Court justices made a “narrow” interpretation of Medicare’s Secondary Payer provision when ruling against DaVita Inc. in a case about how group health plans pay for dialysis care, the company CEO told investors.
“ ... We believe that the ruling ignores the long history of protection offered under the Medicare Secondary Payer Act [MSPA] to the dialysis patient population,” Javier J. Rodriguez, DaVita Inc. CEO, said during the conference call. “ ... the majority opinion was based on a narrow interpretation of the language in the MSPA.
“Importantly, the majority opinion specifically acknowledges that the purpose and the intent of the MSPA was to prevent plans from pushing beneficiaries onto Medicare prematurely by cutting off or offering lesser benefits to those people entitled to Medicare,” Rodriquez said during the call. “This decision does not undercut or disagree with that purpose, but rather, the majority felt that the specific language of the MSPA requires clarity.”
In the case, the Supreme Court voted 7-2 to overturn a lower court ruling on a lawsuit filed by DaVita against a small hospital system in Ohio, claiming its health plan discriminated against employees requiring dialysis care.
Supreme Court justices argued that all employees of Marietta Memorial Hospital’s health benefit plan were offered the same coverage for outpatient dialysis. “The question in this case is whether a group health plan that provides limited benefits for outpatient dialysis — but does so uniformly for all plan participants — violates the Medicare Secondary Payer statute,” Justice Brett M. Kavanaugh wrote in delivering the opinion of the majority. “We agree with petitioner Marietta and the United States as amicus curiae that the answer is no.”
Rodriquez said the Marietta Memorial Hospital’s health benefit plan was a small contract for DaVita, but he could not predict how the Supreme Court ruling would impact decisions by Marietta and other health care plans to make changes in the future that would push more patients to pursue Medicare plans. “We are not in a position to predict if and when these [health care] plans may change their behavior in light of the Marietta decision,” he told investors. “That said, to help you get a feel for the dollars at stake, every shift of 10% of this segment to Medicare fee for service is approximately $20 million in operating income ... We believe the MSPA was just one of several barriers to prevent the majority of health insurance plans and self-insured employers from pursuing discriminatory plan design.”
Rodriquez said health care plans have already completed changes to programs for the upcoming year, so he did not expect any immediate impact. “This process is already well underway, so any changes to incorporate the Supreme Court's decision most likely would take effect in 2024 and beyond unless a plan attempted to be very aggressive.
“It is, of course, possible that we could see exceptions of it; but still overall, we believe the 2023 impact to be limited.”
Several kidney care associations have reacted to the U.S. Supreme Court decision.
Reference:
DaVita Inc. schedules special investor conference call. https://investors.davita.com/2022-06-22-DaVita-Inc-Schedules-Special-Investor-Conference-Call. Published June 22, 2022. Accessed June 23, 2022.
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