The Volokh Conspiracy
Mostly law professors | Sometimes contrarian | Often libertarian | Always independent
I'll forgive you if you did not read Marietta Memorial Hospital Employee Health Benefit Plan v. DaVita Inc. It came out on June 21, the same day as Carson v. Makin, two days before Bruen, and three days before Dobbs. I didn't get to the case till July 12. I read everything so you don't have to. You're welcome.
The case considered whether a group health plan that does not cover outpatient dialysis for all plan participants violate the Medicare Secondary Payer statute. The Court split 7-2. Justice Breyer joined Justice Kavanaugh's majority opinion. Justice Kagan wrote a pithy, three-page dissent, joined by Justice Sotomayor.
In the final paragraph of Kagan's dissent, she calls on Congress to fix the statute:
As the majority recognizes, the MSPA's renal disease provisions were designed to prevent plans from foisting the cost of dialysis onto Medicare. See ante, at 2. Yet the Court now tells plans they can do just that, so long as they target dialysis, rather than the patients who rely on it, for disfavored coverage. Congress would not—and did not—craft a statute permitting such a maneuver. Now Congress will have to fix a statute this Court has broken. I respectfully dissent.
Surprise, surprise, Congress is working to fix the statute. And DaVita, the respondent in this case, helped draft the new bill. Indeed the draft bill mirrors DaVita's proposal! Politico has the scoop:
Roughly two months after dialysis giant DaVita lost a Supreme Court case involving insurance coverage for its services, Congress introduced bipartisan legislation that would be a boon for dialysis providers. Its language appears to be largely modeled from a proposal circulated by the company, according to documents obtained by POLITICO.
The recently introduced measure would obligate health plans to cover dialysis the same way they do treatments for other chronic illnesses — and, if enacted, would likely increase reimbursement amounts for companies like DaVita. It would also impact a multibillion-dollar line item in the Medicare budget, making it an attractive offset to an end-of-the-year government spending package.
The rent-seeking began even before the Supreme Court decision. Specifically, when the Biden Administration lined up opposite of DaVita, the wheels started to turn:
"Providers and patient groups in this area have been consistent in pushing for a fix in light of the ruling," a Republican Senate aide granted anonymity to speak about the advocacy told POLITICO. The lobbying began around December when the Biden administration filed a brief in support of the group health plan, the aide said, but "ramped up a ton" after the June 21 decision.
DaVita hit the gas after the Supreme Court decided the case.
Three weeks after DaVita's Supreme Court loss, Kathleen Waters, the company's chief legal officer, and Kelly Philson, one of its top lobbyists, drafted proposed legislative language that would make additions to the Medicare statute at issue in the case, according to the metadata within a Word document obtained by POLITICO. The proposal would create coverage parity for dialysis services "as compared to other covered medical services" provided by the plan. There is no outward indication the text is from DaVita.
And a bipartisan group introduced a bill that "largely mirrored" DaVita's proposal.
On July 29, a bipartisan group of 17 House members introduced a bill that largely mirrored the proposal, and Sens. Bob Menendez (D-N.J.) and Bill Cassidy (R-La.) followed with a Senate companion on Aug. 3. Instead of creating parity between dialysis treatments and other services generally, it would prohibit a group health plan from putting "limits, restrictions, or conditions" on dialysis benefits compared to services needed to treat other chronic conditions the plan covers.
"After the Supreme Court decision in June created a loophole, members of Congress who are concerned about the potential harmful impact to their constituents in this vulnerable patient population started working to restore the protections under the Medicare Secondary Payer Act," a DaVita spokesperson said in an emailed statement in response to an inquiry from POLITICO about the company's involvement in the proposal and its lobbying and campaign activity.
If only every losing party had the means to lobby Congress to turn an Article III defeat into an Article I victory.
In addition to spending roughly $4 million a year on its lobbying efforts, DaVita has a prolific political action committee.
Each of the 17 co-sponsors of the House bill has received campaign money from DaVita's PAC since January 2021, totaling $67,000, according to OpenSecrets, which tracks political spending. Five co-sponsors also received contributions to their leadership PACs, Federal Election Commission records show.
Amicus briefs are much, much cheaper.