DaVita, Inc. v. Marietta Mem’l Hosp. Emp. Health Benefit Plan, 2019 WL 4574500 (S.D. Ohio 2019)
A dialysis provider (on its own behalf and in its role as a patient’s assignee) sued the employer/ plan administrator and the TPA of a self-insured health plan because the plan classified all dialysis providers as “out-of-network,” thus reimbursing them at a lower rate than other medical providers. The provider argued that the plan’s disfavored treatment of dialysis providers amounted to discrimination against plan participants with end-stage renal disease (ESRD) in violation of the Medicare Secondary Payer (MSP) rules. (The MSP rules prohibit group health plans from “taking into account” a participant’s ESRD-based Medicare eligibility or “differentiating” in the benefits provided to individuals eligible for ESRD-based Medicare.) Acknowledging that the plan provision applied equally to all covered individuals receiving dialysis—including those without ESRD and those ineligible for Medicare—the provider nevertheless argued that the lower reimbursement rate had a disparate impact on individuals with ESRD, who comprise a disproportionately large number of those receiving dialysis.
The court rejected the provider’s disparate impact claim, finding that the MSP rules do not require plans to meet this type of “results-oriented” standard. Rather, plans are held to two clear standards—they may not take into account a participant’s ESRD or Medicare eligibility, and they may not differentiate in the benefits provided based on that status. The court made clear that the MSP rules do not prohibit a plan from limiting the utilization of a covered service such as dialysis, so long as the limits apply uniformly to all plan enrollees. Finding no violation, the court dismissed the case.
EBIA Comment: As the court noted, dialysis providers (including the provider in this case) have been litigating similar cases across the country (see, for example, our Checkpoint article). Thus far, it appears they face an uphill battle against plans with utilization limitations applicable to all plan participants. For more information, see EBIA’s Group Health Plan Mandates manual at Sections XXIV.A (“What Are the Medicare Secondary Payer (MSP) Requirements and Who Must Comply?”), XXIV.C (“Overview of Medicare”), and XXIV.H (“MSP Requirements: ESRD-Based Medicare Eligibility or Entitlement”). See also EBIA’s Self-Insured Health Plans manual at Section XXV.C (“Coordination of Benefits With Medicare, TRICARE, and Medicaid”).
Contributing Editors: EBIA Staff.