U.s. supreme court rules against davita over dialysis coverage

Tuesday, June 21, 2022
author picture Daniel Marino
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Brett Kavanaugh and Kidney Dialysis

Judge Kavanaugh recently questioned a group health plan that offers limited benefits for outpatient dialysis. The company‚ DaVita Inc.‚ is one of the nation's largest dialysis providers. In 2018‚ DaVita sued Marietta Memorial Hospital's employee health plan. DaVita argues that Medicare is a secondary payer for medical services and is pushing patients into Medicare too early.

By Nate Raymond (Reuters) - The U.S. Supreme Court rejected Tuesday's claim by dialysis provider DaVita Incs that an Ohio hospital employee health plan discriminates towards patients with end stage kidney disease. They reimburse them at very low rates‚ in the hope they will switch to Medicare. In a 7-2 decision https://fingfx.thomsonreuters.com/gfx/legaldocs/byvrjaqorve/06212022davita.pdf authored by conservative Justice Brett Kavanaugh‚ the court ruled that Marietta Memorial Hospitals employee health plan did not violate federal law by limiting benefits for outpatient dialysis because it did so without regard to whether patients had end-stage renal disease. The Denver-based DaVita had won the lower court. DaVita is a provider of kidney dialysis through an outpatient network. In 2018‚ DaVita sued claiming that the hospital plan was in violation the Medicare Secondary Paymenter statute. This law requires the government to pay only after the patient's existing insurance plans have paid. The law prohibits health insurance plans from separating beneficiaries with and without end-stage kidney disease because of the high price tag. End-stage kidney disease refers to a condition where the kidneys stop functioning. It can be treated only with dialysis or a transplant. Kavanaugh stated that Congress can mandate certain benefits for health plans‚ but the Medicare Secondary Paymenter statute doesn't dictate any specific level of dialysis coverage. Kavanaugh stated that neither the statute nor DaVita provide a foundation for determining whether coverage for outpatient dialysis is inadequate. DaVita shares‚ which are one of the largest providers of dialysis in the country‚ fell 15% after the ruling. Fresenius Medical Care‚ a German competitor‚ saw its shares fall 9%. We are disappointed that the Supreme Court has upended an important safeguard for Americans suffering from chronic kidney disease‚ Javier Rodriguez (DaVitas chief executive) stated in a statement. DaVitas attorneys had stated that a decision against them could lead to private plans adopting terms restricting coverage for costly dialysis treatments. This would force patients suffering from end-stage renal disease and Medicare to change to their plan. Fresenius stated in a statement that it doesn't expect this case to cause a significant change in how providers and insurers interact‚ as most people in the industry care about the health of their patients. John Kulewicz (a Mariettas lawyer) thanked the court and for its close reading of the Medicare Secondary Paymenter Act. Justice Elena Kagan joined Justice Sonia Sotomayor in disapproval in an opinion that was dissenting. She stated in her opinion that the ruling provided a huge and unexplainable way to circumvent a ban on health plans inflicting dialysis costs onto Medicare. Kagan stated that Congress would now have to amend a statute the Court had broken. Reporting by Nate Raymond‚ Boston. Editing by Will Dunham & Bill Berkrot.