GROUP HEALTH PLAN

Marietta Memorial Hospital Employee Health Benefit Plan v. DaVita, Inc.

Issues

Does a health insurance plan’s uniform classification of all dialysis providers as “out-of-network” violate the Medicare Secondary Payer Act by “tak[ing] into account” Medicare-eligibility of end-stage renal disease patients or “differentiat[ing]” in benefits eligible to Medicare-eligible end-stage renal disease patients?


This case asks the Supreme Court to decide what type of dialysis-reimbursement schemes are acceptable for group health plans considering that end-stage renal disease (“ESRD”) patients are eligible for Medicare. The Medicare Secondary Payer Act (“MSPA”) prohibits health plans from “tak[ing] into account” Medicare eligibility of ESRD patients and “differentiat[ing]” in benefits provided to Medicare-eligible ESRD patients. Marietta contends that its plan did not violate the “take into account” or “differentiation” provisions of the MSPA because the dialysis reimbursement applies equally to dialysis patients with and without ESRD and because the purpose of the MSPA is coordination-of-benefits for ESRD patients rather than anti-discrimination. DaVita counters that the design of Marietta’s plan is intended to induce ESRD-patient members to drop the Plan in favor of Medicare, and that the plan design differentiates based on the disparate impact that ESRD patients face when seeking dialysis reimbursement. The outcome of this case has heavy implications for ESRD access to care, dialysis-treatment reimbursement, and health insurance plan structuring.

Questions as Framed for the Court by the Parties

(1) Whether a group health plan that provides uniform reimbursement of all dialysis treatments observe the prohibition provided by the Medicare Secondary Payer Act that group health plans may not “take into account” the fact that a plan participant with end stage renal disease is eligible for Medicare benefits; (2) whether a plan that provides the same dialysis benefits to all plan participants, and reimburses dialysis providers uniformly regardless of whether the patient has end stage renal disease, observe the prohibition under the Medicare Secondary Payer Act that a group health plan also may not “differentiate” between individuals with end stage renal disease and others “in the benefits it provides”; and (3) whether the Medicare Secondary Payer Act is a coordination-of-benefits measure designed to protect Medicare, not an antidiscrimination law designed to protect certain providers from alleged disparate impact of uniform treatment.

DaVita and its subsidiary DVA Renal Healthcare (collectively “DaVita”) are well-known healthcare providers specializing in kidney care. DaVita, Inc. v. Marietta Mem. Hosp. at 2.

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