U.S. Supreme Court rules against DaVita over dialysis coverage

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

In a 7-2 decision written by conservative judge Brett Kavanaugh, the court ruled that Marietta Memorial Hospital’s employee health plan did not violate federal law by limiting the benefits of ambulatory dialysis because it l did so regardless of whether the patients had end-stage renal disease or not. A lower court had ruled in favor of Denver-based DaVita.

DaVita, which provides kidney dialysis services through a network of outpatient clinics, filed a lawsuit in 2018, arguing that the hospital’s plan violated Medicare’s Secondary Payer Act, under which Medicare, the government health care program for people age 65 and older, pays only after a patient decides. the existing insurance scheme does.

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Given the high costs of care for end-stage kidney disease, the law prohibits health plans from differentiating the benefits they provide to people with the disease and those without.

Kavanaugh wrote that while Congress could require health plans to provide particular benefits, Medicare’s secondary payer law does not dictate any particular level of dialysis coverage by a health plan.

“Neither the law nor DaVita offers a basis for determining when outpatient dialysis coverage might be considered inadequate,” Kavanaugh wrote.

Following the decision, shares of DaVita, one of the country’s two largest dialysis providers, fell 10.5% by midday. Shares of German rival Fresenius Medical Care (FMEG.DE) fell 9%.

DaVita’s attorneys had said a ruling against the company could open the door for other private health plans to enact terms that limit coverage for expensive dialysis treatments, forcing end-stage kidney disease patients to switch to Medicare. .

End-stage renal disease is a condition in which a person’s kidneys stop working. It can be treated with a kidney transplant or dialysis.

“Alongside the kidney care community, we are deeply disappointed by today’s Supreme Court decision to overturn important protection for Americans with chronic kidney disease,” said Javier Rodriguez, CEO of DaVita, in a statement.

John Kulewicz, an attorney for Marietta’s plan, thanked the court “for the careful reading it gave to the Medicare Secondary Payer Act.”

Justice Elena Kagan, in a dissenting opinion joined by fellow liberal Justice Sonia Sotomayor, said the ruling created a ‘massive and inexplicable workaround’ to a ban aimed at preventing health plans from ‘passing on’ the cost dialysis to Medicare.

“Now Congress will have to fix a statute that this Court has violated,” Kagan wrote.

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Reporting by Nate Raymond in Boston; Editing by Will Dunham

Our standards: The Thomson Reuters Trust Principles.

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