The 9th U.S. Circuit Court of Appeals on Tuesday knocked out major pieces of California’s 2019 effort to clamp down on how dialysis companies benefit when patients get help paying their insurance premiums. The ruling wipes out key reimbursement caps and patient-disclosure rules in Assembly Bill 290, while other parts of the law are still being fought over. For now, charity-run premium-assistance programs that help some dialysis patients keep private coverage can continue operating without immediate changes.
What the Court Said
In a set of published opinions, the appellate panel held that several of AB 290’s restrictions violated associational and First Amendment rights and therefore could not survive, reversing parts of the lower court’s decision. The judges zeroed in on the reimbursement-cap and patient-disclosure provisions, finding they were not narrowly tailored to the state’s stated goals. The written opinions, now part of the federal record, spell out the legal reasoning and the panel’s holdings in the consolidated appeals. Full opinions are posted at Justia.
What AB 290 Would Have Done
Backers of the law argued it was aimed at stopping what lawmakers called profit-maximizing tactics that steer people with kidney failure into higher-paying private plans. AB 290, signed by Gov. Gavin Newsom in 2019, would have capped reimbursements for privately insured patients who receive third-party premium help at Medicare rates and required charities that pay premiums to disclose which patients they assist. CalMatters explains how the bill was structured to change reimbursements and reporting.
How Big the Cost Gap Is
The gap between what private individual plans and Medicare pay for dialysis is huge. A 2021 study in JAMA Internal Medicine found that individual-market plans paid roughly three times Medicare rates for outpatient dialysis and that average monthly spending for people with end-stage kidney disease in the individual market was about 33 times higher than for enrollees without the condition. That disparity sits at the heart of policymakers’ claims that premium-assistance programs can skew insurance risk pools. JAMA Internal Medicine lays out those figures.
The Contested Practice and the Parties
The lawsuits center on donations from large dialysis chains to patient-assistance organizations and on whether those donations effectively nudge patients toward private coverage that pays higher rates. Plaintiffs in the combined cases include major providers such as DaVita and Fresenius, as well as the American Kidney Fund, which critics say receives significant financial support from the industry. CalMatters and the court record detail the statutory provisions at issue and the parties that went to court to block them.
Reactions from Providers and Patient Groups
The decision drew swift applause from dialysis companies and from the charity that joined the litigation. Corporate defendants cast the ruling as a safeguard for patients’ access to uninterrupted care, while leaders of the American Kidney Fund labeled it a win for people who rely on premium assistance to keep treatment within financial reach. Bloomberg Law reported on the industry’s response, and KPBS, which republished the coverage, quoted the American Kidney Fund’s statement.
What Comes Next
State regulators say they are reviewing the ruling and weighing their options, while stressing that little changes on the ground for most patients in the short term. After a panel decision like this, the usual next moves can include post-decision filings such as a petition for rehearing en banc in the Ninth Circuit or, later, a petition asking the U.S. Supreme Court to step in, although none of the parties has publicly announced plans for a further appeal. For now, California agencies that defended AB 290 say they are assessing the impact and what to do next. KPBS reported those comments from the agencies.
Even with this ruling, the broader fights over consolidation in the dialysis industry, who should shoulder the cost of expensive chronic care, and how best to protect vulnerable patients are almost certain to continue in Sacramento and in the courts. Lawmakers and health advocates on all sides say the decision will reshape, but not resolve, California’s ongoing effort to rein in the rising price tag of kidney care.
