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

Background

This case involved an employer-sponsored group health plan that gives every participant the same limited reimbursement for outpatient dialysis and DaVita, a large dialysis provider that sued. DaVita argued the Plan’s low payments either singled out people with end-stage renal disease or improperly considered their Medicare eligibility. The District Court dismissed those claims, the Sixth Circuit reversed, and the Supreme Court agreed to resolve the disagreement between courts of appeals.

Reasoning

The core question was whether a uniform limit on outpatient dialysis benefits violates the federal rule that makes Medicare secondary for people with end-stage renal disease, or whether the law allows disparate-impact claims. The Court held that the statute forbids plans from providing different benefits to people with and without end-stage renal disease and from taking Medicare eligibility into account. Because the Plan applies the same terms to everyone, it neither differentiates nor takes Medicare eligibility into account. The Court also said the statute’s text does not create a disparate-impact cause of action and gives no objective benchmark for adequate dialysis coverage, so courts cannot impose a judicial minimum.

Real world impact

The decision means employer plans can maintain uniformly lower reimbursement rates for outpatient dialysis without automatically violating this federal rule. Dialysis providers and patients may find it harder to compel higher payments under this statute. The ruling sends disputes about the adequacy of dialysis coverage back to Congress, regulators, or other legal avenues, and the case was returned to the lower courts for further proceedings.

Dissents or concurrances

Justice Kagan, joined by Justice Sotomayor, disagreed in part and argued that treating dialysis differently effectively targets people with end-stage renal disease because dialysis is a near-perfect proxy for that condition, and that the statute’s language about "the need for renal dialysis" should cover such practices.