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Supreme Court sides with insurer in dialysis coverage case

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Supreme Court sides with insurer in dialysis coverage case

Posted June 21, 2022 at 2: 04pm

The Supreme Court ruled 7-2 Tuesday that a group health plan in Ohio didn’t violate federal law by offering limited coverage for outpatient dialysis in a case brought by DaVita, one of the largest dialysis providers in the U.S.

The court sided with Marietta Memorial Hospital’s employee health plan, with Justice Brett M. Kavanaugh writing in the majority opinion that while the plan pays lower reimbursement rates for dialysis than for other treatments, it does not discriminate against patients with end-stage renal disease because it offers the same level of coverage for all patients with kidney disease in keeping with federal law.

The plan does not cover dialysis providers and they are reimbursed at a lower rate. DaVita filed a lawsuit in 2018.

The decision overturned a 6th Circuit finding that the plan was in violation of the Medicare Secondary Payer Act. This allows Medicare to act as the secondary payer for private insurance policies for certain services such as dialysis. DaVita claimed that the plan was in violation of this statute.

The law states that group health plans can’t take Medicare coverage into account when designing benefits and cannot offer benefits for patients suffering from more severe stages of renal failure. The intent of Congress was to prevent health plans from pushing kidney disease patients into Medicare.

DaVita claimed that the plan infringed two parts of the statute because it offered lower coverage for dialysis, and had more impact on end-stage kidney disease patients.

Marietta argued that its plan applied coverage uniformly to individuals with and without end-stage renal disease and didn’t consider Medicare coverage when designing its plan.

The court agreed, which is a victory for insurance companies that should have an impact on the coverage of dialysis services by group plans.

“Neither the statute nor DaVita offers a basis for determining when coverage for outpatient dialysis could be considered inadequate,” the majority opinion read. The majority opinion stated that neither DaVita nor the statute provide an objective reference or comparison against which to assess a plan’s outpatient dialysis coverage.

Siding in DaVita would cause “judicial and administrative chaos,” with courts trying determine appropriate reimbursement rates.

“Group plans provide services to many health conditions at different rates. These rates could reflect negotiation with third parties or the needs of particular beneficiaries. “Courts would be entirely at sea in trying to determine an appropriate benchmark or comparator for outpatient dialysis.”

The court also ruled that the plan did not take into account Medicare eligibility for end-stage renal disease patients by paying lower reimbursement rates.

A plan cannot deny coverage, reduce coverage, or charge premiums to patients with Medicare for end-stage renal disease.

“Because the plan provides the same outpatient dialysis benefits to all plan participants, whether or not a participant is entitled to or eligible for Medicare, the plan cannot be said to ‘take into account’ whether its participants are entitled to or eligible for Medicare,” Kavanaugh wrote. The opinion says that the Medicare Secondary Payer statute “coordinates payments among group health plans Medicare and Medicare”, but doesn’t impose any level of dialysis coverage by plans.

” Congress is able to create laws that require group health insurance plans to provide certain benefits or ensure that benefits are equal between all types of benefits. Kavanaugh stated that it did not in this statute.

Justice Elena Kagan, and Sonia Sotomayor voted in part against the bill. They wrote that the court had created a “massive” and inexplicable loophole to the Medicare Secondary Payer Act.

“This case is key because outpatient dialysis can be used as a proxy for end-stage kidney disease,” Kagan & Sotomayor stated, noting the fact that almost all people suffering from end-stage renal diseases receive outpatient dialysis.

” A reimbursement limit to cover outpatient dialysis actually refers to a limit on reimbursement for patients with end-stage renal disease. They wrote that a plan that excludes dialysis from disfavored coverage “differentiates the benefits it provides between individuals with end-stage renal disease and others.”

Javier Rodriguez, DaVita’s CEO, stated that the Supreme Court had made a decision to end an important protection to Americans suffering from chronic kidney disease. “

He stated that the Medicare Secondary Paymenter Act was established “to safeguard some of the most vulnerable patients within the health care system and who should have unimpeded access to the coverage best suited for their health needs.” “

“Today’s narrow interpretation of this statute limits its ability to achieve this purpose,” he said. “Dialysis patients deserve better, and we’ll continue to advocate for patient choice in care and coverage.”

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