By Jeffrey H. Brochin, J.D.
When Congress prohibited health plans from excluding coverage for certain categories of services under the Patient Protection and Affordable Care Act (ACA) (P. L. 111-148) it did not mandate that plans cover any specific benefit within those categories, a federal district court in Wisconsin has ruled. The only way a particular service must be covered under 42 U.S.C. § 18022(b)(1) is if HHS says it must be covered, and because HHS did not say dialysis was within the scope of "chronic disease management" for 2013, no basis existed for the court saying so (Fresenius Medical Midwest Dialysis LLC v. Humana Insurance Company, February 5, 2018, Duffin, W.).
Background: Fresenius Medical Midwest Dialysis LLC (Fresenius) filed suit against Humana Insurance Company (Humana) challenging whether Humana could legally cap dialysis treatments coverage at $30,000 per insured for the year 2013. The parties filed cross motions for summary judgment both of which were denied by the court, and Fresenius filed a motion for reconsideration. For the reasons stated below, the court again denied Fresenius’ motion but granted that of Humana.
Defining ‘essential health benefit.’ Fresenius contended that dialysis was an essential health benefit under the ACA and that therefore Humana had to provide at least $2 million in coverage for each insured for dialysis in 2013. The court noted that "essential health benefit" is a term of art under the ACA that Congress left to the HHS to define under 42 U.S.C. § 18022(b)(1). But Congress did legislate that essential health benefits must include at a minimum certain general categories which Congress enumerated, and the items and services covered within those categories. Dialysis was not specifically listed.
Scope of plans left to states. Congress further left it up to HHS to ensure that the scope of the essential health benefits under the ACA was equal to the scope of benefits provided under a typical employer plan, as determined by HHS. To enable HHS to assess what sorts of benefits were typically covered by employers, Congress required the Department of Labor to conduct a survey of employer plans. HHS then left it to each state to articulate the scope of benefits in a typical employer plan in that state which they did by way of adoption of a "benchmark plan," which defined coverage effective for 2014. Wisconsin’s benchmark plan covered dialysis for 2014, over which there is no dispute; however, the instant case also included the issue of coverage for 2913 before Wisconsin defined dialysis as an essential health benefit.
Court misapplied the standard. Before essential health benefits were defined with the adoption of the state benchmark plans, HHS issued an interim final rule on June 28, 2010, that they would "take into account good faith efforts to comply with a reasonable interpretation of the term ‘essential health benefits’."
In its decision denying the parties’ summary judgment motions the court stated, "The parties agree that this ‘reasonable interpretation’ standard applies to the question of whether Humana complied with the ACA in capping dialysis benefits at $30,000 in 2013,’ and the court proceeded to apply the reasonable interpretation standard in its analysis. However, Fresenius objected that it had not agreed to the application of the standard, arguing that Humana’s reasonable interpretation standard had no support in the ACA itself and that the interim final rule was limited only to enforcement actions by a regulatory agency, which the instant case did not involve. The court acknowledged that it erred in concluding that Fresenius had agreed that the ‘reasonable interpretation’ standard applied to the question of whether Humana complied with the ACA in capping dialysis benefits at $30,000 in 2013.
Essential to ‘plan’ or to ‘patients’? The court next addressed the issue of whether the term "essential health benefits" referred to what was essential for the plan or for the patients. Fresenius argued that no benefits are essential to a health plan, pointing out that largegroup health plans are not required to provide any particular benefits. It further argued that the court’s conclusion was directly at odds with both the plain meaning of the terms Congress employed as well as the legislative history of the ACA. According to Fresenius, "essential" meant that the benefits were essential to the health of patients. That, of course, includes benefits that are essential to the survival of covered individuals, as dialysis is to persons suffering from end stage renal disease.
The court rejected Fresenius’s argument that, if the word "essential" in "essential health benefits" means anything, it must mean, at a minimum, necessary to prevent death. The court found that that is not what the statute means nor what Congress intended, rather, "essential" under § 18022 should be understood in the sense of "minimum" or "required" and assessed in the context of whether a plan meets the minimum standards to be considered a "qualified health plan" under the law. Therefore, an "essential health benefit" is one that the Secretary has concluded is necessary to comply with the parameters set forth by Congress to make the plan equal to the scope of benefits under a typical employer health plan.
Accordingly, the court ruled that it could not conclude that dialysis was an essential health benefit in 2013 under the category of chronic disease management because the Secretary had not yet said that it was. In using the term "essential health benefits," Congress referred to the minimum baseline of benefits a plan must offer to make it equivalent to a typical employer plan. When it prohibited plans from excluding coverage for certain categories of services such as "chronic disease management," Congress did not mandate that plans cover any specific benefit within those categories, and Congress left it to the Secretary to identify what products or services were covered within each of the categories it set forth.
Summary judgment was granted in favor of Fresenius with respect to claims regarding services provided in the 2014 calendar year, but was granted to Humana as to Fresenius’ claim that a cap of $30,000 for dialysis benefits was unlawful for the 2013 calendar year.
The case is No. 2:16-cv-00711-WED.
Attorneys: Alison Lima Andersen (Arent Fox LLP) and Joseph J. Sarmiento, IV (Meissner Tierney Fisher & Nichols SC) for Fresenius Medical Care Midwest Dialysis LLC, Bio-Medical Applications of Wisconsin Inc. and Wisconsin Renal Care Group LLC. Tamar B. Kelber (Gass Weber Mullins LLC) for Humana Insurance Co., Humana Wisconsin Health Organization Insurance Corp. and Humana Inc.
Companies: Fresenius Medical Care Midwest Dialysis LLC; Bio-Medical Applications of Wisconsin Inc; Wisconsin Renal Care Group LLC; Humana Insurance Co.; Humana Wisconsin Health Organization Insurance Corp.; Humana Inc.
Cases: CaseDecisions NewsFeed AccessNews AgencyNews EssentialBenefitNews GCNNews HealthInsuranceExchangeNews WisconsinNews
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