On June 21, 2022, the U.S. Supreme Court released its decision in Marietta Memorial Hospital Employee Health Benefit Plan v. DaVita Inc. siding with Marietta Memorial Hospital, its employee group health plan and the plan’s third-party administrator, Medical Benefits Administrators, Inc. (“MedBen”). The Court found that the health plan does not “‘differentiate in the benefits it provides’ to individuals with end-stage renal disease or ‘take into account’ whether an individual is entitled to or eligible for Medicare.” The Supreme Court decision overturned a split decision by the U. S. Court of Appeals for the Sixth Circuit.
DaVita, a commercial dialysis provider, sued Marietta Memorial Hospital, the Hospital’s self-funded medical Plan, and MedBen alleging violations of the Medicare Secondary Payer Act (MSPA) and Employee Retirement Income Security Act (ERISA). Although the case was dismissed by the District Court, DaVita appealed to the United States Court of Appeals for the Sixth Circuit, which disagreed with the District Court decision. The district court decision was appealed to the U.S. Supreme Court and on November 5, 2021, the U.S. Supreme Court granted a writ of certiorari (petition for review). In recognition of the importance of the case, the office of the Solicitor General of the United States filed an amicus (“friend of the court”) brief, joined in the oral argument, and urged the U.S. Supreme Court to rule in favor of the Marietta Memorial Hospital, the Plan, and MedBen.
This decision is not only a win for the Hospital, the Plan, and MedBen – but it is a win for employer plan sponsors, their employees, and dialysis patients. The decision upheld the terms of the Plan, which keep dialysis costs lower for patients and maximize the resources available to cover other health care needs of plan members. More broadly, the decision confirms that the Plan’s terms are within the law and consistent with the MSPA.
MedBen thanks the Supreme Court of the United States for hearing the case – approximately 1% of all requests are accepted – as well as all of those who supported this effort. In addition to the Solicitor General of the United States, we specifically express appreciation to the Health Care Administrators Association (HCAA), the Self-Insurance Institute of America, Inc. (SIIA), and the Pacific Health Coalition, the National Labor Alliance of Health Care Cost Coalitions, Inc., ASEA/AFSCME Local 52 Health Benefits Trust, Public Employees Local 71 Trust Fund, APEA-AFT Health and Welfare Trust and Alaska Pipe Trades U.S. Local 367 Health and Security Trust for their invaluable support. We would also like to thank Vorys, Sater, Seymour, and Pease Partner and Appellate Group Co-Chair John Kulewicz, who argued the case before the U.S. Supreme Court, along with our entire Vorys litigation team.
You can download the decision from the Supreme Court website. Clients with questions regarding the decision are welcome to call Senior Vice President Caroline Fraker at 800-851-0907.