The Supreme Court ruled against DaVita in favor of the health plan

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In decision 7-2, the Supreme Court sided with the health plan for its coverage for outpatient dialysis services.

DaVita, a major dialysis provider, is suing Marietta Memorial’s health benefits plan, claiming its limited coverage violates the statute.

Judges ruled against DaVita in a statement released Tuesday. Judge Brett Cavanaugh presented the Court’s opinion, which was joined by Chief Justice John Roberts and Judges Clarence Thomas, Stephen Brier, Samuel Alito, Neil Gorsuch and Amy Connie Barrett. Judge Elena Kagan gave an opinion, partly dissenting, which was joined by Judge Sonia Sotomayor.

Judge Cavanaugh said the question was whether a group health plan that provided limited benefits for outpatient dialysis – but did the same for all participants in the plan – violated Medicare’s secondary payer status.

“We agree with petitioner Marietta and the United States as amicus curiae that the answer is no,” Cavanaugh wrote. “We therefore set aside the decision of the United States Court of Appeals for the Sixth District and remand the case for further proceedings in accordance with this opinion.”


DaVita is a major dialysis provider in the United States.

DaVita is suing Marietta Memorial’s 2018 health benefit plan, saying its limited outpatient dialysis coverage violates Medicare’s secondary payer status.

The statutes make Medicare a secondary payer of existing insurance coverage for certain medical services, including dialysis.

To prevent circumvention of plans to circumvent the payer’s primary obligation to treat end-stage renal disease, the law imposes two restrictions, according to the ruling: The plans may not differ in the benefits it provides to people with end-stage renal disease. disease and other persons in need of renal dialysis; and they may not take into account that a person is eligible or eligible for Medicare.

DaVita claims that the Marietta plan violates both restrictions. The district court rejected DaVita’s claims. The U.S. Court of Appeals dismissed the ruling and overturned the lower court’s ruling, saying it had a different effect on people with end-stage kidney disease.

Judge Brett Cavanaugh, the majority writer, said that the conditions for covering Marietta’s plans for outpatient dialysis did not violate the statute, as those conditions applied equally to all those covered.

“Because the conditions of the Marietta plan apply equally to people with and without end-stage kidney disease, the plan does not” differentiate the benefits it provides between people “with and without end-stage kidney disease,” Cavanaugh wrote.

He continued: “DaVita argues that the law allows liability, even when the plan limits benefits in the same way, if the limitation of benefits has a different impact on people with end-stage renal disease. But the text of the statute cannot be read to encompass a theory of different effects. The legal provision simply coordinates payments between group health plans and Medicare; the statutes do not dictate any specific level of dialysis coverage. ”

Judges Kagan and Sotomayor disagree. In his opinion of the minority, Kagan wrote: “The limitation on reimbursement of the costs of outpatient dialysis is in fact a limitation on the reimbursement of costs for people with end-stage renal disease.[s] in the benefits it provides between individuals with end-stage renal disease and other individuals. “

This is because, she said, 97% of people diagnosed with end-stage kidney disease – all those who do not receive preventative kidney transplants – undergo dialysis. Ninety-nine and a half percent of DaVita’s outpatient dialysis patients have or develop end-stage kidney disease, Kagan said.

“The majority believes that the plan here does not make so much ‘differentiation’, as it distinguishes only between dialysis and other treatments – not between individuals with end-stage kidney disease and individuals without it. This conclusion is in the face of common sense and the legal text. One fact is key to understanding this case: outpatient dialysis is almost the ideal remedy for end-stage kidney disease. ”


Medicare provides health insurance for those who are 65 years of age or older or have a disability. In 1972, Congress extended Medicare coverage to people with end-stage renal disease, regardless of age or disability.

This benefit covers hundreds of thousands of Americans with end-stage kidney disease at a high cost to Medicare: approximately $ 50 billion a year, according to the Supreme Court ruling.

Initially, Medicare acted as the first payer for many medical services, regardless of whether the Medicare beneficiary was also covered by another insurance plan, such as an employer-sponsored group health plan.

In 1980 and 1981, in part because of rising costs for Medicare, Congress passed and amended the statutes of Medicare’s secondary payers, the court said. This statute, as amended, makes Medicare a “secondary” payer to a person’s existing insurance plan for certain medical services, including dialysis, when that plan already covers the same services.

“Given the significant health care costs for those with end-stage renal disease, Congress recognized that a plan could try to circumvent the primary payer obligation by denying or reducing coverage for a person with end-stage renal disease. , thus forcing Medicare to bear more of these costs, “the decision said. “To prevent such circumvention, the statute imposed two specific restrictions on group health plans.

Twitter: @SusanJMorse
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