At this year’s MedBen University roundtables, Senior Vice President & CPO Caroline Fraker provided an eye-opening example of why the June 2022 United States Supreme Court decision in the matter of Marietta Memorial Hospital Employee Health Benefit Plan v. DaVita Inc. is so important to self-funded plans and dialysis patients. MedBen, as Marietta Memorial’s third-party administrator, was also sued by DaVita in the underlying court case and was heavily involved in preparing for arguments before the Supreme Court.
Citing the ongoing dialysis of a MedBen client’s plan member, Fraker observed, “From December 2021 to date, the dialysis provider billed the plan over $2.7 million. But because the plan had dialysis carve-out, the plan only paid $54,000 – less than two percent of billed charges.”
In the June 2022 ruling, Justices upheld Marietta Memorial’s plan terms that keep dialysis costs lower for patients. “Carving out dialysis and paying benefits differently than other claims is not a violation of the Medicare Secondary Payer Act as long as you’re applying it equitably to all plan participants,” Fraker said. “The decision also affirms an employer’s right to design its health benefit plan in the way they deem most beneficial for employees.”
The ruling is particularly impactful in remedying what Fraker called “egregious” billing. “If you’re concerned that maybe the provider wasn’t paid enough, consider this: At a single dialysis session, for one injection of the anti-anemic drug Epoetin, the dialysis provider charged the plan $43,000. That’s a 12,500% markup over the drug’s average wholesale price,” Fraker said.
MedBen clients with questions regarding the Supreme Court decision are welcome to call Fraker at 800-851-0907.