Marietta Memorial Hospital Employee Health Benefit Plan v. DaVita Inc.

P R E L I M I N A R Y P R I N T
Volume 596 U. S. Part 2
Pages 880–891
OFFICIAL REPORTS
OF
T H E S U P R E M E C O U R T
June 21, 2022
REBECCA A. WOMELDORF
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880 OCTOBER
TERM, 2021
Syllabus
MARIETTA MEMORIAL HOSPITAL EMPLOYEE
HEAL
TH BENEFIT PLAN et al. v. DAVITA
INC. et al.
certiorari to the united states court of appeals for
the sixth circuit
No. 20–1641. Argued March 1, 2022—Decided June 21, 2022
Petitioner Marietta Memorial Hospital Employee Health Beneft Plan is
an employer-sponsored group health plan that offers all of its partici-
pants the same limited coverage for outpatient dialysis. Respondent
DaVita—a major provider of dialysis services—sued the Marietta Plan,
arguing that the Plan's limited coverage for outpatient dialysis violated
the Medicare Secondary Payer statute. The statute makes Medicare a
“secondary” payer to an individual's existing insurance plan for certain
medical services, including dialysis, when that plan already covers the
same services. 42 U. S. C. §§ 1395y(b)(1)(C), (2), (4). To prevent plans
from circumventing their primary-payer obligation for end-stage renal
disease treatment, the statute imposes two constraints relevant here.
First, a plan “may not differentiate in the benefts it provides between
individuals having end stage renal disease and other individuals covered
by such plan on the basis of the existence of end stage renal disease, the
need for renal dialysis, or in any other manner.” § 1395y(b)(1)(C)(ii).
Second, a plan “may not take into account that an individual is entitled
to or eligible for” Medicare due to end-stage renal disease. § 1395y(b)
(1)(C)(i); see § 426–1. The District Court dismissed DaVita's claims that
the Marietta Plan violated both statutory constraints. A divided panel
of the U. S. Court of Appeals for the Sixth Circuit reversed. Among
other things, the Court of Appeals ruled that the statute authorized
disparate-impact liability and that the limited payments for dialysis
treatment had a disparate impact on individuals with end-stage renal
disease.
Held: Section 1395y(b)(1)(C) does not authorize disparate-impact liability,
and the Marietta Plan's coverage terms for outpatient dialysis do not
violate § 1395y(b)(1)(C) because those terms apply uniformly to all cov-
ered individuals. Pp. 885–888.
(a) Section 1395y(b)(1)(C)(ii) prohibits a plan from differentiating in
benefts between individuals with and without end-stage renal disease.
Because the Marietta Plan's terms apply uniformly to individuals with
and without end-stage renal disease, the Plan does not “differentiate in
the benefts it provides between individuals” with and without end-

Cite
as: 596 U. S. 880 (2022)
881
Syllabus
stage renal disease. DaVita argues that the statute authorizes liability
e
ven when a plan limits benefts in a uniform way if the limitation on
benefts has a disparate impact on individuals with end-stage renal
disease. But the text of the statute cannot be read to encompass a
disparate-impact theory. The statutory provision simply coordinates
payments between group health plans and Medicare; the statute does
not dictate any particular level of dialysis coverage. Pp. 885–887.
(b) DaVita's contention that a plan that provides limited coverage for
outpatient dialysis impermissibly “take[s] into account” the Medicare
eligibility of plan participants with end-stage renal disease fails for the
same reason. Because the Marietta Plan provides the same outpatient
dialysis benefts to all Plan participants, whether or not a participant is
entitled to or eligible for Medicare, the Plan cannot be said to “take into
account” whether its participants are entitled to or eligible for Medicare.
Pp. 887–888.
978 F. 3d 326, reversed and remanded.
Kavanaugh, J., delivered the opinion of the Court, in which Roberts,
C. J., and Thomas, Breyer, Alito, Gorsuch, and Barrett JJ., joined.
Kagan, J., fled an opinion dissenting in part, in which Sotomayor, J.,
joined, post, p. 888.
John J. Kulewicz argued the cause for petitioners. With
h i m on the br iefs were Rodney A. Ho l aday, Dan i el E.
Shuey, Anthony Spina, Brent D. Craft, Emily E. St. Cyr,
William H. Prophater, Jr., and D. Wesley Newhouse.
Matthew Guarnieri argued the cause for the United
States as amicus curiae supporting reversal. With him on
the brief were Solicitor General Prelogar, Deputy Solicitor
General Kneedler, Deputy Assistant Attorney General Har-
rington, and Daniel Tenny.
Seth P. Waxman argued the cause for respondents. With
him on the brief were David W. Ogden, Kelly P. Dunbar, Ari
Holtzblatt, Jeffrey S. Bucholtz, Matthew Leland, Marisa C.
Maleck, and Alexander Kazam.*
*Briefs of amici curiae urging reversal were fled for the Pacifc Health
Coalition et al. by John R. Christiansen and Mary L. Stoll; and for the
Self-Insurance Institute of America, Inc., by Christopher J. Walker.
Briefs of amici curiae urging affrmance were fled for Dialysis Patient
Citizens by Nicholas J. Nelson and Jackson Williams; for the Kidney
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882 MARIETT
A MEMORIAL HOSPITAL EMPLOYEE HEALTH
BENEFIT PLAN v. DaVITA INC.
Opinion of the Court
Justice Kavanaugh delivered the opinion of the Court.
The
question in this case is whether a group health plan
that provides limited benefts for outpatient dialysis—but
does so uniformly for all plan participants—violates the
Medicare Secondary Payer statute. We agree with peti-
tioner Marietta and the United States as amicus curiae that
the answer is no. We therefore reverse the judgment of
the U. S. Court of Appeals for the Sixth Circuit and remand
the case for further proceedings consistent with this
opinion.
I
A
Medicare provides health insurance coverage for those
who are 65 or over, or are disabled. In 1972, Congress
extended Medicare coverage to individuals with end-stage
renal disease, regardless of age or disability. See Social Se-
curity Amendments of 1972, § 299I, 86 Stat. 1463; 42 U. S. C.
§ 426–1. That beneft now covers hundreds of thousands of
Americans with end-stage renal disease. In the aggregate,
the costs of healthcare for individuals with end-stage renal
disease are high, and Medicare spends about $50 billion annu-
ally on treatments for those individuals.
During the initial years of the Medicare program after its
enactment in 1965, Medicare acted as the frst payer for
many medical services, regardless of whether a Medicare
benefciary was also covered under another insurance plan,
such as an employer-sponsored group health plan. In 1980
and 1981, in part due to rising Medicare costs, Congress
enacted and amended the Medicare Secondary Payer statute.
That statute as amended makes Medicare a “secondary”
Care Council et al. by Michael E. Bern; for Kidney Care Partners by Paul
W. Hughes; for the National Association for the Advancement of Colored
People by Carter G. Phillips, Kwaku A. Akowuah, and Christopher A.
Eiswerth; for Thomas A. Scully by James F. Bennett; and for Congressman
William Thomas by Misha Tseytlin.
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as: 596 U. S. 880 (2022)
883
Opinion of the Court
payer to an individual's existing insurance plan for certain
medica
l services, including dialysis, when that plan already
covers the same services. See Medicare and Medicaid
Amendments of 1980, § 953, 94 Stat. 2647; Medicare and Med-
icaid Amendments of 1981, § 2146, 95 St at. 800; 42
U. S. C. §§ 1395y(b)(1)(C), (2), (4).
Given the signifcant costs of healthcare for those with
end-stage renal disease, Congress recognized that a plan
might try to circumvent the statute's primary-payer obliga-
tion by denying or reducing coverage for an individual who
has end-stage renal disease, thereby forcing Medicare to
incur more of those costs. To prevent such circumvention,
the statute imposed two specifc constraints on group health
plans. First, a plan “may not differentiate in the benefts it
provides between individuals having end stage renal disease
and other individuals covered by such plan on the basis of
the existence of end stage renal disease, the need for renal
dialysis, or in any other manner.” § 1395y(b)(1)(C)(ii). Sec-
ond, as relevant here, a plan “may not take into account that
an individual is entitled to or eligible for” Medicare due to
end-stage renal disease. § 1395y(b)(1)(C)(i); see § 426−1.
B
DaVita is one of the two major dialysis providers in the
United States. DaVita provides dialysis to hundreds of
thousands of individuals each year, including individuals in-
sured by their employers' group health plans.
The Marietta Memorial Hospital Employee Health Beneft
Plan is an employer-sponsored group health plan. The Plan
offers the same terms of coverage for outpatient dialysis to
all of its participants. But under the Plan, outpatient dial-
ysis services are subject to relatively limited reimburse-
ment rates.
In 2018, DaVita sued the Plan, arguing that the Plan's lim-
ited coverage for outpatient dialysis both (i) differentiates
between individuals with and without end-stage renal dis-
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884 MARIETT
A MEMORIAL HOSPITAL EMPLOYEE HEALTH
BENEFIT PLAN v. DaVITA INC.
Opinion of the Court
ease and (ii) takes into account the Medicare eligibility of
i
ndividuals with end-stage renal disease in violation of the
Medicare Secondary Payer statute. § 1395y(b)(1)(C).
The District Court dismissed DaVita's claims, concluding
that the Plan does not violate the anti-differentiation or take-
into-account provisions of the Medicare Secondary Payer
statute because the Plan's terms, including its terms for
outpatient dialysis treatments, apply uniformly to all Plan
participants.
A divided panel of the U. S. Court of Appeals for the Sixth
Circuit reversed. See 978 F. 3d 326 (2020). Among other
things, the Court of Appeals ruled that the statute author-
ized disparate-impact liability, and the Court concluded that
the limited payments for dialysis treatment had a disparate
impact on individuals with end-stage renal disease.
Judge Eric Murphy dissented in relevant part. He rea-
soned that the Plan's terms do not violate the statute be-
cause the Plan “offers the same benefts to all participants.”
Id., at 358 (opinion concurring in judgment in part and dis-
senting in part).
The Sixth Circuit's interpretation of the Medicare Second-
ary Payer statute departed from the holdings of district
courts that had considered the question. See DaVita, Inc.
v. Amy's Kitchen, Inc., 379 F. Supp. 3d 960 (ND Cal. 2019);
Dialysis of Des Moines, LLC v. Smithfeld Foods Healthcare
Plan, 2019 WL 8892581 (ED Va., Aug. 5, 2019); National
Renal Alliance, LLC v. Blue Cross & Blue Shield of Geor-
gia, Inc., 598 F. Supp. 2d 1344 (ND Ga. 2009). Moreover,
several weeks after the Sixth Circuit's decision, the Ninth
Circuit agreed with Judge Murphy's dissent and largely re-
jected the Sixth Circuit's analysis. See DaVita Inc. v.
Amy's Kitchen, Inc., 981 F. 3d 664 (2020).
Th is Cour t granted cer ti orar i to resolve the dis-
agreement between the Courts of Appeals. 595 U. S. –––
(2021).

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as: 596 U. S. 880 (2022)
885
Opinion of the Court
II
A
W
e frst consider DaVita's differentiation argument. To
reiterate, the relevant statutory provision states: A plan
“may not differentiate in the benefts it provides between
individuals having end stage renal disease and other individ-
uals covered by such plan on the basis of the existence of end
stage renal disease, the need for renal dialysis, or in any
other manner.” 42 U. S. C. § 1395y(b)(1)(C)(ii).
That statutory language prohibits a plan from differenti-
ating in benefts between individuals with and without end-
stage renal disease. For example, a group health plan may
not single out plan participants with end-stage renal disease
by imposing higher deductibles on them, or by covering
fewer services for them. See 42 CFR §§ 411.161(b)(2)(i)–
(iv). If a plan does not differentiate in the benefts provided
to individuals with and without end-stage renal disease, then
a plan has not violated that statutory provision, and the dif-
ferentiation inquiry ends there.
1
The Marietta Plan provides the same benefts, including
the same outpatient dialysis benefts, to individuals with and
without end-stage renal disease. Indeed, DaVita does not
dispute that the Plan's terms apply uniformly to all Plan par-
ticipants. Therefore, the Plan does not “differentiate in the
1
If and only if a plan differentiates in benefts between those with and
those without end-stage renal disease, the next question would be whether
the plan differentiates “on the basis of ” (i) the existence of the disease,
( i i) the need for rena l dia lysis, or ( i i i) i n any other manner. 42
U. S. C. § 1395y(b)(1)(C)(ii). Those three circumstances, especially the
somewhat ungrammatically phrased catchall “in any other manner,” ap-
pear to cover the waterfront of possible bases on which a plan might differ-
entiate in the benefts provided to those with end-stage renal disease. In
other words, if there is differentiation, the differentiation is likely on an
impermissible basis. Therefore, the only meaningful question under this
statutory provision appears to be whether the plan differentiates in bene-
fts between those with and those without end-stage renal disease.

886 MARIETT
A MEMORIAL HOSPITAL EMPLOYEE HEALTH
BENEFIT PLAN v. DaVITA INC.
Opinion of the Court
benefts it provides between individuals” with and without
end-st
age renal disease. 42 U. S. C. § 1395y(b)(1)(C)(ii).
In response, DaVita primarily argues that the statute au-
thorizes liability even when a plan limits benefts in a uni-
form way if the limitation on benefts has a disparate impact
on individuals with end-stage renal disease.
To begin with, the text of the statute cannot be read to
encompass a disparate-impact theory. That text requires
inquiry into whether a plan provides different benefts to
(i) those with end-stage renal disease and (ii) those without
end-stage renal disease. The text does not ask about “the
effects of non-differentiating plan terms that treat all indi-
viduals equally.” 978 F. 3d, at 363 (opinion of Murphy, J.);
see also Amy's Kitchen, 981 F. 3d, at 674−675. In light of
that plain text, it comes as no surprise that the Centers
for Medicare and Medicaid Services have never adopted a
disparate-impact theory in their longstanding regulations
implementing this statute.
The disparate-impact theory not only is atextual but also
would be all but impossible to fairly implement. The prem-
ise of the disparate-impact theory is that the plan's benefts
for outpatient dialysis are inadequate. But what level of
benefts would be adequate, and how would courts determine
the level of benefts that qualifes as adequate?
Neither the statute nor DaVita offers a basis for determin-
ing when coverage for outpatient dialysis could be consid-
ered inadequate. And neither the statute nor DaVita sup-
plies an objective benchmark or comparator against which to
measure a plan's coverage for outpatient dialysis.
Absent some benchmark or comparator, courts would have
great diffculty trying to make an apples-to-apples compari-
son of a plan's coverage for outpatient dialysis against its
coverage for other services. Group health plans cover serv-
ices for many different health issues at varied rates. Those
rates may refect negotiations with third parties, the needs
of a particular plan's benefciaries, and other factors such as
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as: 596 U. S. 880 (2022)
887
Opinion of the Court
geography. Courts would be entirely at sea in trying to de-
ter
mine an appropriate benchmark or comparator for out-
patient dialysis. Put simply, DaVita's approach is a pre-
scription for judicial and administrative chaos, and further
demonstrates that DaVita's disparate-impact theory is not a
correct interpretation of the statute.
2
DaVita's position would ultimately require group health
plans to maintain some (undefned) minimum level of benefts
for outpatient dialysis. But this statutory provision simply
coordinates payments between group health plans and Medi-
care. As the Government itself acknowledges, the statute
does not dictate any particular level of dialysis coverage by
a group health plan. See Brief for United States as Amicus
Curiae 13. If Congress wanted to mandate that group
health plans provide particular benefts, or to require that
group health plans ensure parity between different kinds of
benefts, Congress knew how to write such a law. It did not
do so in this statute. To the extent that Congress wants to
create such a system going forward, Congress of course may
do so.
In sum, the Marietta Plan does not “differentiate in the
benefts it provides” to those with end-stage renal disease
and those without end-stage renal disease.
B
DaVita also contends that a plan that provides limited cov-
erage for outpatient dialysis impermissibly “take[s] into ac-
2
DaVita's related proxy theory—that singling out outpatient dialysis is
simply a proxy for singling out individuals with end-stage renal disease
because those individuals disproportionately receive outpatient dialysis—
likewise fnds no support in the statutory text. The statute requires
that a plan provide the same dialysis benefts regardless of whether an
individual has end-stage renal disease. If a plan provides the same bene-
fts to all individuals, the plan does not “differentiate in the benefts it
p ro v i des” to i ndiv idua ls w ith and w ithout end-st age rena l disease.
§ 1395y(b)(1)(C)(ii) (emphasis added). This statute is a coordination-of-
benefts statute, not a traditional antidiscrimination statute.
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888 MARIETT
A MEMORIAL HOSPITAL EMPLOYEE HEALTH
BENEFIT PLAN v. DaVITA INC.
Kagan, J., dissenting in part
count” the Medicare eligibility of plan participants with end-
st
age renal disease in violation of the statute. To reiterate,
that statutory provision states that a plan “may not take
into account that an individual is entitled to or eligible for”
Medicare. 42 U. S. C. § 1395y(b)(1)(C)(i); see also § 426–1.
For example, a plan may not terminate coverage, limit cover-
age, or charge higher premiums for an individual who has
Medicare coverage due to end-stage renal disease. See 42
CFR §§ 411.108(a)(3), (5)−(6).
As already discussed, the Marietta Plan's terms, including
its terms of coverage for outpatient dialysis, are uniform for
all individuals. Because the Plan provides the same outpa-
tient dialysis benefts to all Plan participants, whether or not
a participant is entitled to or eligible for Medicare, the Plan
cannot be said to “take into account” whether its participants
are entitled to or eligible for Medicare.
***
Because the Marietta Plan's terms as relevant here apply
uniformly to all covered individuals, the Plan does not “dif-
ferentiate in the benefts it provides” to individuals with end-
stage renal disease or “take into account” whether an indi-
vidual is entitled to or eligible for Medicare. We therefore
reverse the judgment of the U. S. Court of Appeals for the
Sixth Circuit and remand the case for further proceedings
consistent with this opinion.
It is so ordered.
Justice Kagan, with whom Justice Sotomayor joins,
dissenting in part.
Today the Court crafts for the Medicare Secondary Payer
Act (MSPA) a massive and inexplicable workaround. The
MSPA instructs that a group health plan “may not differenti-
ate in the benefts it provides between individuals having
end stage renal disease and other individuals covered by
such plan on the basis of the existence of end stage renal
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as: 596 U. S. 880 (2022)
889
Kagan, J., dissenting in part
disease, the need for renal dialysis, or in any other manner.”
42
U. S. C. § 1395y(b)(1)(C)(ii). The majority holds that the
plan here does not so “differentiate” because it draws distinc-
tions only between dialysis and other treatments—not be-
tween individuals with end stage renal disease and individu-
als without it. See ante, at 887, n. 2. That conclusion fies
i n the face of both common sense and the st atutory
text.*
One fact is key to understanding this case: Outpatient dial-
ysis is an almost perfect proxy for end stage renal disease.
Virtually everyone with end stage renal disease—and hardly
anyone else—undergoes outpatient dialysis. Ninety-seven
percent of people diagnosed with end stage renal disease—
all those who do not obtain a preemptive kidney transplant—
undergo dialysis. See National Institutes of Health, United
States Renal Data System, 2021 Ann. Data Rep.: End Stage
Renal Disease, ch. 1, fgure 1.2, https://adr.usrds.org/2021/
end-stage-renal-disease. And 99.5% of DaVita's outpatient
dialysis patients have or develop end stage renal disease.
See Brief for Respondents 6.
Because that is so, common sense suggests that we should
not care whether a health plan differentiates in benefts by
targeting people with end stage renal disease, or instead by
targeting the use of dialysis. When “status and conduct”
are proxies for each other, “[o]ur decisions have declined to
distinguish” between them. Christian Legal Soc. Chapter
of Univ. of Cal., Hastings College of Law v. Martinez, 561
U. S. 661, 689 (2010). So, for example, we have explained
that a penalty for “homosexual conduct” is a penalty for “ho-
mosexual persons.” Lawrence v. Texas, 539 U. S. 558, 575
(2003). And likewise, a “tax on wearing yarmulkes is a tax
*Like the majority, I am unpersuaded by DaVita's arguments concern-
ing disparate-impact liability and the MSPA's separate take-into-account
clause. See ante, at 886–888. But I part ways with the majority as to
DaVita's “proxy” theory (which the majority relegates to a footnote). See
ante, at 887, n. 2.
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890 MARIETT
A MEMORIAL HOSPITAL EMPLOYEE HEALTH
BENEFIT PLAN v. DaVITA INC.
Kagan, J., dissenting in part
on Jews.” Bray v. Alexandria Women's Health Clinic, 506
U
. S. 263, 270 (1993). The same goes here: A reimburse-
ment limit for outpatient dialysis is in reality a reimburse-
ment limit for people with end stage renal disease. And so
a plan singling out dialysis for disfavored coverage “differen-
tiate[s] i n the benefits it prov ides between i ndiv idua ls
having end stage renal disease and other individuals.”
§ 1395y(b)(1)(C)(ii). That is so even if, as petitioner Marietta
notes, dialysis is also a treatment for some miniscule number
of people with acute kidney injury. See Reply Brief 13.
That a proxy is only 99.5% (not 100%) accurate should make
no difference. A tax on yarmulkes remains a tax on Jews,
even if friends of other faiths might occasionally don one at
a Bar Mitzvah.
And if common sense were not enough, statutory text
would come to the rescue. Congress was well aware of the
relationship between end stage renal disease and dialysis—
and the text it wrote refects that knowledge. The statute
proscribes not just differentiation “on the basis of the exist-
ence of end stage renal disease,” but also “on the basis of
. . . the need for renal dialysis, or in any other manner.”
§ 1395y(b)(1)(C)(ii). The back half of that provision prevents
exactly the circumvention the majority today allows. It
bars plans from differentiating between people with and
without end stage renal disease even when that differentia-
tion is accomplished indirectly—by targeting their treat-
ment, or by relying on some other proxy for the condition.
So contra the majority, the statutory text does indeed pro-
hibit differentiation as to services—and not only as to indi-
viduals. See ante, at 887, n. 2.
That reading also fts with the statute's purpose. As the
majority recognizes, the MSPA's renal disease provisions
were designed to prevent plans from foisting the cost of dial-
ysis onto Medicare. See ante, at 883. Yet the Court now
tells plans they can do just that, so long as they target dial-
ysis, rather than the patients who rely on it, for disfavored

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891
Kagan, J., dissenting in part
coverage. Congress would not—and did not—craft a stat-
ute
permitting such a maneuver. Now Congress will have
to fix a st atute th is Cour t has broken. I respec tfu l ly
dissent.
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Reporter’s Note
The attached opinion has been revised to refect the usual publication
and citation style of the United States Reports. The revised pagination
makes available the offcial United States Reports citation in advance of
publication. The syllabus has been prepared by the Reporter of Decisions
for the convenience of the reader and constitutes no part of the opinion of
the Court. A list of counsel who argued or fled briefs in this case, and
who were members of the bar of this Court at the time this case was
argued, has been inserted following the syllabus. Other revisions may
include adjustments to formatting, captions, citation form, and any errant
punctuation. The following additional edits were made:
None