Supreme Court Sides with Self-Insured Industry in Dialysis MSPA Case

June 22, 2022 - Yesterday, the U.S. Supreme Court, in a 7-2 opinion, found in favor of arguments put forward by the Self-Insurance Institute of America, Inc. (SIIA) and other industry participants in the case of DaVita v. Marietta Hospital, finding that the Marietta Hospital Employee Health Benefit Plan did not violate the Medicare Secondary Payer Act (MSPA) in limiting dialysis payments to DaVita. This case, one of three federal appeals court cases by DaVita, challenged the authority of plan sponsors to carve out benefits for high-cost treatments under the MSPA. The Court’s full decision can be found here. 

This latest legal victory is part of SIIA’s ongoing and broader mission of protecting and promoting the business interests of companies involved in the self-insurance/captive insurance marketplace. 

This important decision by the Supreme Court ensures that self-insured plan designs can continue to appropriately manage and pay for dialysis treatment for patients, without unnecessary payment increases to dialysis providers. SIIA is pleased that the ruling confirmed the ability of health plans to provide common-sense cost containment measures when it comes to high-cost services such as dialysis for those patients that need it the most.

In the majority opinion, the Supreme Court found that Marietta’s employer health plan does not violate the MSPA because it provides the same benefits, including the same outpatient dialysis benefits, to individuals with and without end-stage renal disease. The Court held that group health plans like Marietta’s can utilize cost-control designs under the MSPA so long as the plans offer the same terms of coverage for outpatient dialysis to all of its participants.

The MSPA outlines coordination of benefits with Medicare for plan members entitled to dual plan/Medicare coverage for any reason. For some time, dialysis companies have promoted an idea that Congress intended the MSPA to restrict group health plans from setting reimbursement rates for dialysis services at anything other than an unspecified “most favored nation” rate. 

Under DaVita’s interpretation of the MSPA, self-insured plans, which generally have great flexibility in determining healthcare coverage, would have to sacrifice coverage of other medical services to pay for dialysis services at a rate as high as twenty-five times that of Medicare. These substantial cost increases would not benefit individuals with end-stage renal disease, who would continue to receive the same services. Nor would it save Medicare money. Rather, it would financially benefit dialysis providers. SIIA believes the Supreme Court correctly concluded that such an interpretation is contrary to the text of the statute as well as statutory design and purpose when Congress enacted the MSPA to make Medicare the secondary payer.

With only two dialysis providers controlling nearly 90% of dialysis facilities, it is becoming increasingly necessary that self-insured health plans have the ability to appropriately control dialysis cost, which have risen exponentially against inflation. Put simply, plans adopting cost containment strategies such as network carve-outs and Medicare-rate based pricing, should not be in violation of the MSPA. 

If you would like more information on this case, or would like more information on SIIA membership, please contact Ryan Work at