(Story updated on January 27, 2017)
A District Court judge in Texas ordered the CMS to hold off on a final rule requiring dialysis centers that help patients pay private insurance premiums to disclose what plans in their region pay for and how that compares to Medicaid and Medicare.
The CMS issued the rule in an attempt to stop providers from steering patients eligible for Medicaid or Medicare into private insurance as a way to receive higher reimbursement rates.
The rule was set to go into effect Jan. 14 but U.S. District Judge Amos Mazzant issued a temporary restraining order on the rule until he made a decision. His order, issued Wednesday, placed a stay on the CMS rule.
Dialysis providers DaVita and U.S. Renal Care sued the CMS last month, saying the rule would allow insurers to deny coverage to dialysis patients because of their conditions.
Mazzant ruled that the CMS violated the Administrative Procedures Act when it issued the interim rule, failing to provide appropriate notice of the rule or enough time to comment.
The rule requires dialysis providers to reach out to plans to ensure they will accept insurance subsidies from a charitable organization and will do so for a full calendar year to ensure continuity of care.
A CMS spokesman declined a request for comment. The agency previously said it issued the rule because it believed the market was prone to abuse.
Mazzant also called the rule “arbitrary and capricious.” He concluded that the CMS failed to consider how the rule could potentially cause private insurers to deny insurance coverage to Medicare-eligible dialysis patients.
In a statement, DaVita said it was pleased with the court's decision and urged the CMS to eliminate the rule. “We ask the new administration and the CMS to not only eliminate this rule, but to take action to prevent insurance companies from discriminating against a vulnerable group of patients and ensure continued access to charitable premium assistance that has served as an essential patient safety net for the last 20 years.”
Last year, UnitedHealth Group alleged it was charged more by dialysis treatment chain American Renal Associates because the chain steered Medicare- and Medicaid-eligible patients to the insurers' plans and then helped the patients pay for the premiums through a charity.
That charity, the American Kidney Fund, is the largest charitable premium assistance program for dialysis patients. It too, has publicly urged the CMS to withdraw the final rule.
The CMS estimates it will cost these facilities nearly $700 million in administrative costs to comply with the rule between 2017 and 2026.
Correction, January 27, 2017:
The rule has not yet gone into effect. An earlier version of this story had an incorrect effective date.