Episode description

DaVita is the leading provider of dialysis treatment in the United States. Marietta Memorial Hospital Employee Health Benefit Plan is a self-funded plan governed by the Employee Retirement Income Security Act of 1974 (“ERISA”). Patient A is an anonymous individual with end-stage renal disease who is a member of the plan and has been receiving treatment by DaVita since April 15, 2017.

The Plan defines three tiers of reimbursement, and dialysis providers are categorically in the lowest tier and are considered out of network, entitling them to the lowest level of reimbursement relative to all other providers.

DaVita challenged the Plan as violating the Medicare Secondary Payer Act, which prohibits health plans from treating individuals with kidney failure differently in eligibility or access to benefits. The district court dismissed all of DaVita’s claims, and the U.S. Court of Appeals for the Sixth Circuit reversed in part, finding that DaVita had plausibly alleged that the Plan engaged in unlawful discrimination.

The case was decided on June 21, 2022. The Court held that Section 1395(y)(b)(1)(C) does not authorize disparate-impact liability, and the Marietta Plan’s coverage terms for outpatient dialysis do not violate §1395(y)(b)(1)(C) because those terms apply uniformly to all covered individuals. Justice Kavanaugh delivered the opinion of the Court, in which Chief Justice Roberts and Justices Thomas, Breyer, Alito, Gorsuch, and Barrett joined. Justice Kagan filed an opinion dissenting in part, in which Justice Sotomayor joined.

Credit: Oyez, LII Supreme Court Resources, Justia Supreme Court Center, available at: https://www.oyez.org/cases/2021/20-1641