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U.S. Supreme Court Rules Against DaVita Over Dialysis Coverage | U.S. News®



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

In a 7-2 decision authored by conservative Justice Brett Kavanaugh, the court ruled that Marietta Memorial Hospital’s employee health plan did not violate federal law by limiting benefits for outpatient dialysis because it did so without regard to whether patients had end-stage renal disease. A lower court had ruled in favor of Denver-based DaVita.

Given the high costs of care for end-stage renal disease, the law bars health plans from differentiating benefits it provides people with the disease and those without it.

Kavanaugh wrote that while Congress could mandate health plans provide particular benefits, the Medicare Secondary Payer statute does not dictate any particular level of dialysis coverage by a health plan.

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

Following the ruling, shares of DaVita, one of the two largest dialysis providers in the country, fell 10.5% in midday trading. Shares in German rival Fresenius Medical Care dropped 9%.

End-stage renal disease is a condition in which a person’s kidneys cease functioning. 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 upend an important protection for Americans with chronic kidney failure,” Javier Rodriguez, DaVita’s chief executive, said in a statement.

John Kulewicz, a lawyer for Marietta’s plan, thanked the court “for the close reading that it has given to the Medicare Secondary Payer Act.”

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

(Reporting by Nate Raymond in Boston; Editing by Will Dunham)

Copyright 2022 Thomson Reuters.

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