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DaVita helped craft new bill to fix ‘loophole’ left by Supreme Court ruling, documents say

“Providers and patient groups in this area have consistently pushed for a solution in light of the ruling,” a Republican Senate aide who spoke on the plea told POLITICO. Lobbying began around December when the Biden administration filed a brief in support of the group health plan, the aide said, but “increased a ton” after the June 21 decision.

DaVita has flexed his political muscles to close what he calls a “loophole” created by public opinion – who said the current law, while prohibiting plans from offering different benefits to beneficiaries with end-stage kidney disease , is not explicit about the requirement for plans to cover dialysis services.

Three weeks after DaVita’s defeat in the Supreme Court, Kathleen Waters, the company’s chief legal officer, and Kelly Philson, one of its top lobbyists, drafted proposed legislative language it would make additions to the Medicare law at issue in the case, according to metadata in a Word document obtained by POLITICO. The proposal would create parity of coverage for dialysis services “compared to other covered medical services” provided by the scheme. There is no outward indication that the text is from DaVita.

While pushing for changes, advocates sought to assure lawmakers they weren’t trying to expand coverage, according to a Document synthesis also obtained by POLITICO. While the broad wording could be “played by a plan” to create a “‘skinny’ plan that does not cover chronic disease benefits,” the summary reads, it “underscores our intention not to create mandate”.

On July 29, a bipartisan group of 17 members of the House introduced a bill this widely reflected the proposition, and Sens. Bob Mendez (DN.J.) and Bill Cassidy (R-La.) followed by a companion of the Senate August 3. Instead of creating parity between dialysis treatments and other services in general, this would prohibit a collective health plan from put “limits, restrictions or conditions” on dialysis benefits versus services needed to treat other chronic conditions covered by the plan.

“After the Supreme Court’s decision in June created a loophole, members of Congress concerned about the potentially harmful impact to their constituents in this vulnerable patient population began working to restore protections under the Medicare Secondary Payer Act,” a DaVita spokesperson said in an emailed statement in response to a query from POLITICO regarding the company’s involvement in the proposal and its lobbying and campaigning activities.

In addition to spending about $4 million a year on its lobbying efforts, DaVita has a prolific political action committee.

Each of the House bill’s 17 co-sponsors 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, according to Federal Election Commission records.

Industries often contribute legislators who work on their issues, so it’s not unusual that DaVita has donated thousands of dollars to most of these members — who almost all sit on committees relevant to health policy — in the past. during recent election cycles.

But in May, Rep. Yvette Clarke (DN.Y.), the bill’s lead sponsor and vice chairman of the House Energy and Commerce Committee, received $14,500 in contributions from 10 DaVita executives and employees — a departure from the relatively small checks his campaign has generally received from its PAC over the years.

The donations include $2,500 from Waters — the lawyer who drafted the legislative proposal — and $2,000 from its CEO, Javier Rodriguez, according to FEC data. Records show that none of them, or any DaVita employees, had contributed to her before. The company has not commented on the contributions.

The issue is of “particular importance” to the congresswoman because of the prevalence of kidney failure among her constituents, Clarke’s office said in a statement.

“Throughout the legislative process, we always seek input from stakeholders – patient groups, providers, advocates and our constituents. We welcome suggestions from these stakeholders to ensure we get the best information to make good public policy decisions,” the statement read.

Cassidy and Menendez have not received any campaign contributions from DaVita’s PAC since the start of last year, but he did contribute $10,000 and $5,000, respectively, to their leadership PACs.

“Given that kidney disease has a disproportionate impact on minority communities and the Supreme Court’s decision could negatively impact access to care, I led the introduction of this Common Sense Bill. to ensure that health plans do not discriminate against patients with kidney disease as part of my long-standing commitment to reducing inequalities. in our healthcare system,” Menendez said in an emailed statement.

A spokesperson for Menendez said the office had not been in contact with DaVita or any of its lobbyists “about this bill or any other matter recently,” but noted that it had received comments from patient groups.

Cassidy’s office declined to comment.

In a statement, DaVita said, “Our teammates have been civically engaged for decades and will continue to advocate on behalf of this patient population in the future. This includes supporting members of Congress, both Democrats and Republicans, who have prioritized better kidney care policy for patients.

While the Supreme Court’s ruling was a blow to dialysis companies like DaVita and a source of anxiety for patients worried that the plans would reduce network coverage, it provided a roadmap for fine-tuning the law.

“If Congress wanted to mandate that group health plans provide particular benefits, or require that group health plans provide parity between different types of benefits, Congress knew how to write such a law,” Judge Brett wrote. Kavanaugh in the court’s decision. “He didn’t do it in this law.

Medicare, known for providing insurance to older Americans, also extends coverage to people with end-stage kidney disease, regardless of age.

If a person with advanced kidney disease has health insurance through their employer, Medicare acts as a “secondary payer” and temporarily pays for part of the tab. After that, Medicare becomes primary and the group health plan secondary.

Medicare spends $51 billion on beneficiaries with end-stage kidney disease, according to the United States Renal Data System Annual Report. People with advanced kidney disease need a kidney transplant or regular, expensive dialysis treatments to survive.

The Medicare Secondary Payer Act prohibits private plans from considering this eligibility when designing their benefit programs. The law states that a group health plan cannot terminate coverage, charge higher premiums, and “cannot differentiate the benefits it provides…on the basis of the existence of end-stage kidney disease, the need for kidney dialysis or in any other way. .”

DaVita claimed in its lawsuit that by taking dialysis care out of the network — and forcing the patient to pay more for those services — the plan impermissibly provides end-stage kidney disease patients with less coverage than other beneficiaries and knowingly pushed individuals towards Medicare, which reimburses at a much lower rate.

Kavanaugh disagreed, saying the plan provides the same level of coverage for dialysis services regardless of how far the patient’s kidney disease has progressed.

But dialysis is “a near-perfect proxy for end-stage kidney disease,” Judge Elena Kagan wrote in the dissenting opinion, because nearly all patients with kidney failure receive the treatment. The decision, she added, created a “massive and inexplicable workaround” for employer plans. Recently introduced legislation aims to strengthen the “cannot discriminate” part of the law.

Cameron Lynch, senior vice president of government relations for another dialysis giant, Fresenius Medical Care, noted that the court’s decision and dissent “refer to the need for legislative action to address this issue.”

“While the vast majority of healthcare industry players are interested in patient well-being, we are thrilled to see Congress introduce this important legislation to protect people newly diagnosed with kidney disease from potentially harmful behaviors. discriminatory,” Lynch said in an email. statement. The company did not respond to questions about its lobbying on the bill.

Dialysis companies, providers and groups representing patients say the decision paved the way for more plans to restrict dialysis coverage to cut costs. For patients, that could mean having to pay for both their employer-sponsored coverage — for things like vision and dental care — and Medicare for their kidney care or switching entirely to Medicare and foregoing additional benefits.

Payers, for their part, retort that the legislative effort is a cash grab on the part of the industry, which wants to ensure that it is reimbursed by the higher in-network rates offered by private plans.

By creating parity between kidney failure and all other chronic conditions, employers say, it effectively forces nearly full coverage and – because DaVita and Fresenius dominate 80% of the dialysis market – they have the power to increase the costs.

The bill “would require employer health plans to pay kidney dialysis monopolies regardless of the amounts these companies demand,” said a lobbyist who advocates for group health plans granted anonymity to speak freely. of legislation. “Ultimately, this will mean higher health care costs for anyone who obtains health insurance through an employer.”