SCOTUS sides with group health plan over dialysis coverage
The decision was a victory for insurers and likely will have a significant impact on group health plan coverage of dialysis services.
An Ohio group health plan did not violate federal law by offering limited coverage for outpatient dialysis, the U.S. Supreme Court ruled on Tuesday.
The court sided with Marietta Memorial Hospital’s employee health plan in a case brought by DaVita, one of the largest dialysis providers in the United States, according to CQRollcall. The plan covers dialysis providers only as out of network and reimburses them at a lower rate, leading DaVita to file a lawsuit in 2018.
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Justice Brett M. Kavanaugh, writing for the majority in the 7-2 decision, said that although the plan pays lower reimbursement rates for dialysis than for other treatments, it does not discriminate against patients with end-stage renal disease. That is because it offers the same level of coverage for all patients with kidney disease in keeping with federal law.
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The decision reversed a 6th Circuit Court ruling that the plan violated the Medicare Secondary Payer Act, which allows Medicare to be the secondary payer to an individual’s private insurance for certain services, including dialysis for end-stage renal disease patients. DaVita argued that the plan violated that statute.
Under the law, group health plans aren’t allowed to take Medicare coverage into consideration when designing their benefits, and they can’t offer different benefits to patients with more advanced stages of kidney failure. The congressional intent was to keep health plans from forcing kidney disease patients into Medicare.
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DaVita argued the plan violated the statute by offering lower levels of coverage for dialysis and had a bigger impact on patients with end-stage renal disease. Marietta countered 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 decision was a victory for insurers and likely will have a significant impact on group health plan coverage of dialysis services.
“Neither the statute nor DaVita offers a basis for determining when coverage for outpatient dialysis could be considered inadequate,” the majority opinion read. “And neither the statute nor DaVita supplies an objective benchmark or comparator against which to measure a plan’s coverage 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. Under the law, a plan can’t end coverage, limit coverage or charge higher premiums for patients who have Medicare because of an end-stage renal disease diagnosis.
“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.
Justices Elena Kagan and Sonia Sotomayor dissented in part, writing that the court crafted a “massive and inexplicable workaround” to the Medicare Secondary Payer Act.
“One fact is key to understanding this case: Outpatient dialysis is an almost perfect proxy for end-stage renal disease,” they wrote, noting that most people with end-stage renal disease undergo outpatient dialysis.
A reimbursement limit for outpatient dialysis is in reality a reimbursement limit for people with end-stage renal disease, they wrote, so a plan singling out dialysis for disfavored coverage “differentiates in the benefits it provides between individuals having end stage renal disease and other individuals.”