By Ronald Mann
June 21, 2022
at 11:46 a.m.
The court dismissed a claim by DaVita Inc. that low health insurance reimbursement rates violated federal law. (Camera photography via Shutterstock)
Tuesday opinion in Marietta Memorial Hospital Employees Health Benefit Plan v. DaVita Inc. laid out a roadmap for private insurers to shift the costs of end-stage kidney disease to Medicare, as the court approved a private health plan that singles out the provision of outpatient dialysis for low reimbursement, a plan likely to pushing these patients out of the private market and onto Medicare.
The case involved a coordination of benefits law, which splits the costs of medical care between private health plans and Medicare. In this particular case, the law obliges private insurers to cover dialysis costs for the first 30 months following the diagnosis of end-stage renal disease. Acknowledging that insurers might try to force these (expensive) customers out of their private plans and into the state-funded health insurance system, Congress prohibited insurers from discriminating against patients with kidney failure. terminal. Specifically, the law provides that a plan “cannot differentiate in the benefits it provides between people with end-stage kidney disease and other people covered by that plan.”
Marietta had the brilliant idea of being able to solve this problem by offering unusually low reimbursement rates for outpatient dialysis. This is an effective way to reduce costs for customers with end-stage renal disease, as approximately 99.5% of patients on ambulatory dialysis suffer from end-stage renal disease. DaVita (one of the two largest dialysis providers in the United States) objected, arguing that discrimination against patients who receive outpatient dialysis is the same as discrimination against patients with end-stage kidney disease. . The lower courts agreed, but the Supreme Court rejected that argument by a vote of 7 to 2.
Judge Brett Kavanaugh’s opinion justifying this result was succinct – not quite seven pages. He took a strictly literalist approach to the law. For him, the only thing that matters is that Marietta “provides the same benefits, including the same outpatient dialysis benefits, to people with and without end-stage renal disease.” As a result, he explained, “the scheme does not ‘differentiate in the benefits it provides’ between people with and without end-stage kidney disease. »
Kavanaugh characterized DaVita’s assertion as an argument “that the law permits liability…if [a] benefit limitation has a disparate impact on people with end-stage renal disease. He easily dismissed that claim, stating that the text of the law “required [an] an investigation of whether a regime provides different benefits” rather than an investigation of “the effects of undifferentiated regime conditions that treat all individuals equally”. For Kavanaugh, DaVita’s contrary interpretation is intolerable, as it “would ultimately require that group health plans maintain an (indefinite) minimum level of benefits for ambulatory dialysis,” which Congress clearly did not have. intended.
A dissent from Judge Elena Kagan (joined by Judge Sonia Sotomayor) argued that the decision “goes against … common sense”, explaining that “[o]ambulatory dialysis is an almost perfect substitute for end-stage renal disease. Repeating a comment from the closing argument, she argued that it “should make no difference” if “a proxy is only 99.5% (not 100%) accurate…. A tax on yarmulkes is still a tax on Jews, even though friends of other faiths may sometimes wear one at a Bar Mitzvah.
Perhaps the most important thing the judges couldn’t agree on was whether to describe the type of kidney disease as “end-stage” (with a hyphen) or “stage terminal” (without a hyphen). The majority, following the New York Times style, use hyphen; dissent, following congressional practice, does not.