Supreme Court overturns lower court ruling supporting higher dialysis payments to DaVita
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The U.S. Supreme Court has overturned a lower court ruling on a lawsuit filed by DaVita Inc. against a hospital system in Ohio claiming its health plan discriminated against employees requiring dialysis care.
In its 7-2 vote, 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.”
The decision by the Supreme Court reversed the judgment of the U. S. Court of Appeals for the 6th Circuit that sided with DaVita, agreeing that Marietta’s limited reimbursement for dialysis treatment had a disparate impact on patients with end-stage renal disease.
“Alongside the kidney care community, we are deeply disappointed by today’s Supreme Court decision to upend an important protection for Americans with chronic kidney failure,” Javier Rodriguez, CEO for DaVita, said in a press release. “The [Medicare Secondary Payment Act] MSPA was created to protect some of the most vulnerable patients in the health care system who deserve unobstructed access to the coverage that best suits their individual health needs.
“Today’s narrow interpretation of this statute limits its ability to achieve this purpose. Dialysis patients deserve better, and we’ll continue to advocate for patient choice in care and coverage,” Rodriguez said in the release.
In an amicus brief, the Kidney Care Council (KCC) wrote, “In seeking to overturn the 6th Circuit’s decision, petitioners advocate for a result that would nullify the protections and objectives of the [MSPA], by interpreting that statute to permit group health plans to discriminate against individuals who have chronic renal disease and require dialysis. Such a result would mark a sharp departure from the status quo, encouraging private insurers to shift the financial burden of treating ESRD patients to Medicare — an outcome manifestly contrary to the MSPA’s text and purpose.
“That would not only impose a burden on the Medicare Trust Fund at odds with the MSPA, but seriously erode the stability and viability of the model for providing dialysis care to ESRD patients in the United States,” the KCC wrote.
Limited coverage
DaVita sued Marietta’s health care plan in 2018, arguing that the company’s limited coverage for outpatient dialysis differentiates between individuals with and those without ESRD.
According to the ruling, Congress amended the Medicare Secondary Payer statute to make Medicare a “secondary” payer to an individual’s existing insurance plan for certain medical services, including dialysis, in an effort to curb rising costs for kidney care.
“Given the significant costs of health care for those with end-stage renal disease, Congress recognized that a [insurance] plan might try to circumvent the statute’s primary-payer obligation by denying or reducing coverage for an individual who has end-stage renal disease, thereby forcing Medicare to incur more of those costs,” Kavanaugh wrote. “To prevent such circumvention, the statute imposed two specific constraints on group health plans. First, a plan ‘may not differentiate in the benefits it provides between individuals having end-stage renal disease and other individuals covered by such plan on the basis of the existence of end- stage renal disease, the need for renal dialysis, or in any other manner.’”
“Second, as relevant here, a plan ‘may not take into account that an individual is entitled to or eligible for’ Medicare due to end-stage renal disease,” Kavanaugh wrote.
“Section 1395y(b)(1)(C) does not authorize disparate-impact liability, and the Marietta plan’s coverage terms for outpatient dialysis do not violate §1395y(b)(1)(C) because those terms apply uniformly to all covered individuals,” Kavanaugh wrote. “Because the Marietta plan’s terms apply uniformly to individuals with and without [ESRD], the plan does not ‘differentiate in the benefits it provides between individuals’ with and without end-stage renal disease,” Kavanaugh wrote.
Dissenting view
In writing the dissenting view, Justices Elena Kagan and Sonia Sotomayor wrote, “The MSPA instructs that a group health plan ‘may not differentiate in the benefits it provides between individuals having end-stage renal disease and other individuals covered by such plan on the basis of the existence of end stage renal disease, the need for renal dialysis, or in any other manner.’”
“The majority holds that the plan here does not so ‘differentiate’ because it draws distinctions only between dialysis and other treatments — not between individuals with end-stage renal disease and individuals without it.
“That conclusion flies in the face of both common sense and the statutory text,” Kagan and Sotomayor wrote.
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