SCOTUS on dialysis and DaVita

 The Supreme Court delivered a number of decisions recently, and the news coverage has rightly focused on the decisions that will increase guns and decrease abortions.  

But another decision has implications for how dialysis is financed for patients with kidney failure. It's going to take some time for all the adjustments that will now start to be made to determine what this means for the financing of kidney care.

Briefly, all kidney failure patients are eligible for Medicare coverage for dialysis, but private insurers covered the first 30 months (and pay much more than Medicare rates).  The case concerns a health insurance program that sought not to pay those rates, and in the case of MARIETTA MEMORIAL HOSPITAL EMPLOYEE HEALTH BENEFIT PLAN ET AL. v. DAVITA INC. ET AL.  the Supreme Court ruled in favor of the health plan.

Here's the story from Reuters:

U.S. Supreme Court rules against DaVita over dialysis coverage  By Nate Raymon

"June 21 (Reuters) - The U.S. Supreme Court on Tuesday rejected dialysis provider DaVita Inc's (DVA.N) claims that an Ohio hospital's employee health plan discriminates against patients with end-stage kidney disease by reimbursing them at low rates in hopes they would switch to Medicare.

"In a 7-2 decision authored by conservative Justice Brett Kavanaugh, the court ruled that Marietta Memorial Hospital's 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. A lower court had ruled in favor of Denver-based DaVita.Following the ruling, shares of DaVita, one of the nation's two largest dialysis providers, closed 15% lower. Shares of German rival Fresenius Medical Care (FMEG.DE) dropped 9%."

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Here's a blog from the law firm that won the case, Vorys, Sater, Seymour and Pease LLP :

6/21/22 Vorys Wins 7-2 at U.S. Supreme Court in Marietta Memorial Hospital Employee Health Benefit Plan v. DaVita Inc 

"On June 21, 2022, the U.S. Supreme Court released its decision in Marietta Memorial Hospital Employee Health Benefit Plan v. DaVita Inc. siding with petitioners (our side) and our client Marietta Memorial Hospital, its employee group health plan and health plan third-party administrator, for which Vorys argued the case.  The Court found that the group health plan does not impermissibly “‘differentiate in the benefits it provides’ to individuals with end-stage renal disease or ‘take into account’ whether an individual is entitled to or eligible for Medicare.”  The Supreme Court decision overturned a split decision by the U. S. Court of Appeals for the Sixth Circuit.

...

"The case began on December 19, 2018, when DaVita, a commercial dialysis provider, sued Marietta Memorial Hospital, a small community hospital located in Marietta, Ohio; the Hospital’s medical plan, the Marietta Memorial Hospital Employee Health Benefit Plan; and the Hospital’s third-party administrator, Medical Benefits Mutual Life Insurance Company, in the United States District Court for the Southern District of Ohio.  DaVita, a large, for-profit dialysis provider, alleged violations of the Medicare Secondary Payer Act (MSPA) and Employee Retirement Income Security Act (ERISA).  The Defendants, represented by Vorys, filed a motion to dismiss, which the District Court granted. 

"DaVita appealed to the United States Court of Appeals for the Sixth Circuit, which disagreed with the District Court decision.  Marietta appealed the district court decision to the U.S. Supreme Court. 

"On November 5, 2021, the U.S. Supreme Court granted a writ of certiorari, agreeing to hear the case.   In recognition of the importance of the case, the office of the Solicitor General of the United States filed an amicus brief, joined in the oral argument and urged the U.S. Supreme Court to rule in favor of the Marietta Memorial Hospital, its group health plan and the third-party administrator.  Oral arguments took place on March 1, 2022."