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

June 28, 2022

In a 7-2 decision, the Supreme Court sided with the Marietta Plan holding that the Plan's coverage terms for outpatient dialysis do not violate the Medicare Secondary Payer Act ("MSPA") because those terms apply uniformly to all covered individuals.

DaVita, one of the largest providers of kidney care services in the U.S., sued the Plan in 2018 arguing that the Plan violated the MSPA by providing limited coverage for outpatient dialysis. The District Court dismissed DaVita's claims, and DaVita appealed. The Sixth Circuit reversed.

The Supreme Court's decision reversed the Sixth Circuit's ruling that the MSPA authorized disparate-impact liability and that the limited payments for dialysis treatment had a disparate impact on individuals with end-stage renal disease ("ESRD").

The Court stated that because the Plan's terms apply uniformly to all covered individuals, the Plan does not differentiate in the benefits it provides to individuals with ESRD or take into account whether an individual is entitled to or eligible for Medicare.

In conclusion, a group health plan that provides limited benefits for outpatient dialysis, uniformly for all plan participants, does not violate the MSPA.

To read the full opinion, click here.

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