PHILADELPHIA (CN) – Accusing one insurer of exploiting turmoil in the dialysis industry, a nonprofit brought a federal complaint over a patient-dumping scheme it says will leave hundreds of cash-strapped men and women unable to pay for life-saving medical treatments.
The group Dialysis Patient Citizens notes in its May 12 lawsuit that comprehensive insurance coverage for people with end-stage renal disease is still fairly novel.
Before health care reform put in place by former President Barack Obama, according to the complaint, insurers for the most part had provisions about pre-existing conditions to deny coverage of these costly ESRD patients.
Dialysis Patient Citizens says insurers like Independence Blue Cross are desperate to make their plans profitable again by shedding or avoiding these patients.
“In furtherance of that goal,” the complaint states, “IBC developed a discriminatory scheme to decrease the number of ESRD patients it insured: it stopped accepting money on behalf of disabled ESRD patients who could not pay their own premiums and relied on charitable assistance from the AKF.”
Short for the American Kidney Fund, the AKF has been under fire for the last year based on allegations that it engaged in a scheme to steer ESRD patients into private insurance plans so that dialysis providers could recover more in reimbursements.
While the AKF offers grants to patients for treatments like dialysis, such grants do not cover insurance for kidney transplants and other ESRD treatments — benefitting only dialysis partners.
Dialysis Patient Citizen largely dances around this background in its complaint, saying only that the fund “is a perfect ‘proxy’ for the disability that IBC is targeting.”
“If IBC can refuse to accept grants that poor patients use to buy coverage for ESRD treatment, then IBC can substantially reduce its costs and enhance its margins,” the complaint states.
A representative for Independence declined to comment on the group’s lawsuit, citing a policy about pending litigation.
Though Dialysis Patient Citizen is not affiliated with the AKF, it notes that many of its members depend on grants that the fund offers to afford commercial insurance.
The group says IBC targets these patients by precluding any party with a “financial interest” in the payment of health insurance claims from providing premium assistance to a low-income patient.
In its letters to patients, according to the complaint, IBC mentioned that the Centers for Medicare & Medicaid Services has expressed “significant concerns” about health insurers taking third-party payments.
But Dialysis Patient Citizen calls these concerns “false and misleading.”
Serving only to mask its discriminatory conduct, the group says “IBC’s professed ‘concern’ about the AKF is a pretext for its own discriminatory intent.”
“Instead, IBC’s actual motivation was to avoid the high costs of providing coverage for ESRD and to ‘dump’ expensive ESRD patients from its insurance programs,” the complaint states.
The group notes that the insurer made no mention of the fact that two divisions of the U.S. Department of Health and Human Services “have expressly authorized and even encouraged the AKF’s payment of premiums on behalf of low income dialysis patients, and HHS has never withdrawn that guidance.”
“IBC also omitted telling the individual plaintiffs and other DPC members that CMS has known about and declined to prohibit charitable premium payments for decades,” the complaint continues.
CMS did target the dialysis charity with a regulation adopted in December 2016, but a federal judge in Texas blocked that rule with an injunction in January.
DPC filed its complaint in Philadelphia with four anonymous men and women battling ESRD.
In addition to IBC, the complaint takes aim at the subsidiary QCC Insurance Co.
The DPC is represented by Mark Gallant of Cozen O’Conner. He did not return a call requesting comment.