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As soon as she heard the Supreme Court decision, LaVarne Burton began to worry. As CEO of the nonprofit American Kidney Fund, she knew that the court’s ruling on Marietta v. DaVita last June — which allows employer-sponsored health insurance plans to limit outpatient dialysis coverage — was going to put the health of kidney failure patients at risk.

A disproportionate number of people with kidney failure are low-income and from historically marginalized communities, making them unable to absorb even small increases in health care costs. Within hours, Burton received reports from people on dialysis saying that they were concerned they would be hit with massive bills, and that they would need to reduce their number of weekly sessions or stop dialysis completely if switching to Medicare wasn’t an option.


“I couldn’t believe the decision,” said Burton. “It really singles out patients who have kidney failure and treats them differently.”

People with kidney failure, also known as end-stage renal disease or ESRD, rely on a dialysis machine to perform the functions that their kidneys can’t. For most, this means spending upwards of 12 hours each week at a free-standing outpatient dialysis clinic. Even missing a single dialysis treatment can be deadly.

And so, for the nearly 800,000 Americans with kidney failure, the Marietta v. DaVita ruling remains a matter of life and death. So, too, is the ongoing jockeying among dialysis providers and private insurers about how to manage the skyrocketing costs of treating kidney failure.


“The patients are pawns in a very expensive game, and I think the patients are feeling that,” said Brent Miller, a nephrologist at the University of Indiana School of Medicine.

While it’s not yet clear how many insurance plans have changed their dialysis coverage as a result of the ruling, worry among patients that their life-saving treatments might be on the chopping block only adds to their stress, Miller said.

For Virna Elly, 50, of Baltimore, whose kidneys failed in 2004, the ongoing legislative battles also mean policymakers can’t devote their time and energy to investigating alternative strategies that might stem the tide of new ESRD diagnoses, and other changes that might help those with kidney failure.

“They’re reacting to the situation rather than trying to solve the problem at the root,” she said.

The life-saving power of affordable dialysis

Dialysis is the U.S. government’s first — and, to date, only — foray into socialized medicine. In October 1972, President Richard Nixon signed Public Law 92-603. The dull-sounding bill made most Americans whose kidneys had failed eligible for Medicare. Overnight, this provided them with access to the new, lifesaving technology of dialysis, transforming ESRD from a death sentence into a chronic disease.

Dialysis clinics began springing up around the country to serve patients with shiny new Medicare coverage. During the mid-1990s, corporations began to consolidate the small, independent mom-and-pop clinics that had until then dominated the dialysis market. And by 2021, two companies — DaVita, based in Denver, Colorado, and German-based Fresenius — controlled three-quarters of the U.S. market.

ESRD is a tremendously expensive disease to treat. Medicare pays a base rate of just $240 per dialysis session. So DaVita and Fresenius depend on the 20% of patients with private insurance for the bulk of their profits.

While Medicare dictates the amount that it will pay for services, private insurers must negotiate payment rates. With so much of the dialysis market controlled by two large firms, private insurers have been left with little room to maneuver.

A February 2022 paper published in JAMA Network Open detailed the results. Using nearly 2 million dialysis claims filed from 2012 and 2019, the researchers found private insurers paid an average of $1,287-$1,476 per dialysis session, over six times more than the Medicare base rate. The amount paid by private health plans also increased over the study period by 22.7%, compared to an increase in the Medicare base rate of only 0.3%.

“We were surprised at the magnitude of the difference,” said Riley League, one of the study’s co-authors and a doctoral student in health economics at Duke University. “It’s not unusual to see private insurers paying two or three times what Medicare is paying, but six times is quite a large difference.”

For self-funded employer insurance plans, the balance is even more skewed. Each contract that a dialysis provider negotiates with the insurer covers only a few potential dialysis patients. So few, in fact, that the large dialysis companies have little incentive to bargain with the insurers, as the impact of losing a few patients is minimal. The duopoly nature of the dialysis industry means that insurers can’t shop around, either.

The high prices that private insurers pay to dialysis clinics means it doesn’t take many policyholders with ESRD to effectively bankrupt a small plan, according to Ryan Work, senior vice president of government relations at the trade group Self-Insurance Institute of America. The high cost burden was one of the reasons the federal government opened Medicare to nearly all those with ESRD, he said, and this coverage is what is keeping dialysis costs from being even higher.

Who will pay?

One year after the Supreme Court Marietta decision, the health care system continues to grapple with what the ruling means for those with ESRD.

The case revolved around the question of what constitutes discrimination when it comes to health benefits. For people who have both private health insurance and Medicare, the Medicare Secondary Payer Statute requires the private insurer to provide the primary coverage, as long as the plan does not limit dialysis benefits just to those with ESRD. By limiting dialysis coverage for all subscribers, not just those with ESRD, the Marietta Memorial Hospital Employee Health Benefit Plan said it was not discriminating against those with kidney failure and was still in compliance with the Medicare Secondary Payer Act. Dialysis giant DaVita disagreed, and sued. The Supreme Court ruled in favor of Marietta, igniting a firestorm.

In July and August 2022, Politico reported, a bipartisan group in both the House of Representatives and Senate had proposed legislation to prevent insurers from imposing any “limits, restrictions, or conditions” on dialysis or other chronic diseases — a bill that used language provided by DaVita. The proposal died in committee, but a spokesperson from the National Kidney Fund said that the organization would be willing to revisit and support future bills, alongside their efforts to expand Medicaid coverage and work at the state and local levels.

In a statement, DaVita said that “Alongside the kidney care community, we are deeply disappointed by the outcome that upended an important protection for Americans with chronic kidney failure … Dialysis patients deserve better, and we’ll continue to advocate for patient choice in care and coverage.”

The American Kidney Fund’s Burton cautions that the story is more complex than just “greedy dialysis companies hunt big profits.” Without the extra amounts paid by private insurance, she said, DaVita, Fresenius, and other dialysis providers wouldn’t be able to keep their doors open. That said, the American Kidney Fund receives much of its funding from DaVita and Fresenius, meaning that it may have a stake in these debates.

In the end, no one wants to pay for dialysis, Burton said — and so the health insurance companies involved are trying to play pass-the-hot-potato instead of working towards a sustainable solution.

“Patients are not hot potatoes. They are people,” Burton said.