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Midwest Dialysis LLC v. Humana Insurance Co.

United States District Court, E.D. Wisconsin

September 5, 2017

MIDWEST DIALYSIS LLC, et al., Plaintiffs,
v.
HUMANA INSURANCE COMPANY, et al., Defendants.

          DECISION AND ORDER

          WILLIAM E. DUFFIN U.S. Magistrate Judge.

         I. Introduction

         Plaintiffs Fresenius Medical Care Midwest Dialysis, LLC, Bio-Medical Applications of Wisconsin, Inc., and Wisconsin Renal Care Group, LLC (collectively, Fresenius) provide dialysis treatments to patients who suffer from end stage renal disease, a chronic kidney disease. (ECF No. 54, ¶¶ 1-3; ECF No. 56, ¶ 1.)

         Defendants Humana Insurance Company, Humana Wisconsin Health Organization Insurance Corporation, and/or Humana, Inc. (collectively, Humana) provided or administered health benefit plans for defendants Holy Redeemer Academy, Mee Enterprises, Inc., Spiros Industries Inc., OEC Graphics, Inc., Ascential Service LLC, Meat Processors Inc., Building Service, Inc., and Kald Tool & Die Corporation. Persons covered by these plans received dialysis from Fresenius, and under an agreement with Fresenius Humana reimbursed Fresenius up to an annual limit of $30, 000 per person. (ECF No. 56, ¶ 12.) Contending that this annual limit on dialysis benefits is unlawful as of 2013 in light of the Patient Protection and Affordable Care Act (ACA), Pub. L. No. 111-148, Fresenius filed this action.

         The parties have filed cross-motions for partial summary judgment. The briefing on the motions is complete and the motions are ready for resolution. All parties consented to the full jurisdiction of a magistrate judge. (ECF Nos. 4, 38.) The court has jurisdiction pursuant to 29 U.S.C. § 1132(e)(1) and 28 U.S.C. § 1331.

         II. Summary Judgment

         “The court shall grant summary judgment if the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law.” Fed.R.Civ.P. 56(a). Not all factual disputes will preclude summary judgment. Carroll v. Lynch, 698 F.3d 561, 563 (7th Cir. 2012). A factual dispute is only “genuine” when the “evidence is such that a reasonable jury could return a verdict for the nonmoving party.” Id. The “court may not make credibility determinations, weigh the evidence, or decide which inferences to draw from the facts; these are jobs for a factfinder.” Washington v. Haupert, 481 F.3d 543, 550 (7th Cir. 2007) (quoting Payne v. Pauley, 337 F.3d 767, 770 (7th Cir. 2003)). “To survive summary judgment, the non- movant must produce sufficient admissible evidence, taken in the light most favorable to it, to return a jury verdict in its favor.” Fleishman v. Cont'l Cas. Co., 698 F.3d 598, 603 (7th Cir. 2012) (quoting Berry v. Chi. Transit Auth., 618 F.3d 688, 690-91 (7th Cir. 2010)).

         III. Analysis

         Congress enacted the ACA in 2010 in an effort to comprehensively reform the nation's health care system. Nat'l Fed'n of Indep. Bus. v. Sebelius, 567 U.S. 519, 590, 132 S.Ct. 2566, 2609, 183 L.Ed.2d 450, 500 (2012) (Ginsburg, J., dissenting in part). The ACA is a sprawling and complicated piece of legislation comprising ten titles and spanning over 900 pages with hundreds of provisions. Id. at 538-39. Most relevant here, the ACA generally barred insurers from imposing annual or lifetime limits on anything that is an “essential health benefit”. (ECF No. 56, ¶ 17.) This prohibition on annual caps for essential health benefits was phased in so that for plans beginning on or after September 23, 2012, the limit could be no less than $2 million. 45 C.F.R. § 147.126(d)(1)(iii) (Oct. 1. 2013 ed.). The limit was eliminated entirely for plan years starting in 2014. There is no dispute that the ACA's requirements regarding essential health benefits apply to the defendants and their plans.

         “Essential health benefit” is a term of art under the ACA that Congress left to the Secretary of the Department of Health and Human Services (HHS) to define. 42 U.S.C. § 18022(b). Having said that, Congress said that the Secretary shall make sure essential health benefits include at least the following general categories and the items and services covered within the categories:

(A) Ambulatory patient services.
(B) Emergency services.
(C) Hospitalization.
(D) Maternity and newborn ...

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