Supreme Court to Hear Argument on Federal Law Governing Dialysis Coverage Under Employer Group Health Plans
On November 5th, the Supreme Court granted a petition for certiorari filed by Marietta Memorial Hospital and its co-defendants. The case is Marietta Memorial Hospital Employee Health Benefit Plan v. DaVita, Inc. (No. 20-1641), and is one in several similar cases that dialysis giant DaVita filed against group health plans and their employer sponsors beginning in late 2018.[1] This particular case began in federal district court in Ohio with a win for the employer and the group health plan that the Sixth Circuit later reversed on appeal.
In these actions, DaVita has zeroed in on the coverage provisions for dialysis in health plans and argued that they violate a particular section of the Medicare Secondary Payer Act. That section prohibits employers and their group health plans from (1) “taking into account” that a participant is eligible for Medicare; and (2) differentiating in coverage between participants with end stage renal disease (ESRD) and those without it.
The crux of these disputes and the split between the Sixth Circuit and Ninth Circuit involves the uniformity exception found in the implementing regulations for this prohibition. In essence, the uniformity exception allows group health plans to limit dialysis coverage so long as the limitation applies uniformly to participants who have ESRD and those who do not. The example provided in the regulation states: “For instance, if a plan limits its coverage of renal dialysis sessions to 30 per year for all plan enrollees, the plan would not be differentiating in the benefits it provides between plan enrollees who have ESRD and those who do not.” 42 C.F.R. § 411.161(c).
The Supreme Court will hear argument on three issues that employers should be aware of. The first two directly implicate the uniformity exception while the third focuses more generally on the intent and purpose of the Act. The first issue asks the Court to determine whether a group health plan’s uniform reimbursement of all dialysis treatments complies with the Act’s prohibitions. The second issue asks the Court to decide whether a group health plan’s provision of the same dialysis benefits to all participants complies with the Act’s prohibitions. On both of these first two issues, the Sixth Circuit says “yes” while the Ninth Circuit says “no.”
The third issue seeks a decision on whether the Act is a coordination-of-benefits measure designed to protect Medicare as opposed to an antidiscrimination law designed to protect dialysis providers from alleged disparate impact of uniform treatment provisions in group health care plans.
No date has been set yet on oral argument for this case. But we will post an update to this post when that date comes out and will continue to follow this through to an opinion next year.
[1] Graydon successfully defended one of its clients in one of these actions in Virginia federal court. DaVita also sued at least two other group health plans and employers in federal courts in Idaho and California during this same timeframe.
[1] Graydon successfully defended one of its clients in one of these actions in Virginia federal court. DaVita also sued at least two other group health plans and employers in federal courts in Idaho and California during this same timeframe.