United States v. 2020-11-24 | 19-15963 | DAVITA INC. V. AMY'SKITCHEN, INC. | precedential | opinion |

FOR PUBLICATION

UNITED STATES COURT OF APPEALS
FOR THE NINTH CIRCUIT

DAVITA INC.; STAR DIALYSIS, LLC,
Plaintiffs-Appellants,

v.

AMY’S KITCHEN, INC.; AMY’S
KITCHEN, INC. EMPLOYEE BENEFIT
HEALTH PLAN,
Defendants-Appellees.
No. 19-15963

D.C. No.
4:18-cv-06975-
JST

OPINION

Appeal from the United States District Court
for the Northern District of California
Jon S. Tigar, District Judge, Presiding

Argued and Submitted October 8, 2020
Seattle, Washington

Filed November 24, 2020

Before: Susan P. Graber and William A. Fletcher, Circuit
Judges, and Leslie E. Kobayashi,
*
District Judge.

Opinion by Judge Graber

*
The Honorable Leslie E. Kobayashi, United States District Judge
for the District of Hawaii, sitting by designation.

2 DAVITA V. AMY’S KITCHEN

SUMMARY
**

Medicare / ERISA
The panel affirmed the district court’s dismissal of an
action brought by two dialysis treatment providers under the
Medicare as Secondary Payer provisions of the Social
Security Act and the Employee Retirement Income Security
Act.
Plaintiffs alleged that the payment amounts they
received from the defendant health plan for dialysis
treatments for a patient with end-stage renal disease
(“ESRD”) violated the Medicare as Secondary Payment
(“MSP”) provisions. When a patient with ESRD enrolled in
both Medicare and a group health plan, the MSP allocates
primary-payer responsibility between Medicare and the
plan. Once the individual becomes eligible for Medicare,
which occurs after three months of dialysis treatment, the
plan remains the primary payer and Medicare becomes the
secondary payer during a 30-month coordination period.
The MSP also requires that during the coordination period,
a plan may not “take into account” a person’s eligibility for
Medicare due to ESDR. Further, a plan may not
“differentiate in the benefits it provides between individuals
having [ESDR] and other individuals covered by [the] plan
on the basis of the existence of [ESDR], the need for renal
dialysis, or in any other manner.”
The plan implemental a “Dialysis Benefit Preservation
Program,” which subjected dialysis-related claims to cost

**
This summary constitutes no part of the opinion of the court. It
has been prepared by court staff for the convenience of the reader.

DAVITA V. AMY’S KITCHEN 3

review by the plan administrator. The panel held that
because the plan reimbursed at the same rate for all dialysis
services, regardless of underlying diagnosis and regardless
of Medicare eligibility, the plan did not violate the MSP.
The panel concluded that the plan did not “take into account”
whether the covered individual was eligible for or enrolled
in Medicare during the coordination period. The panel
further concluded that the plan did not impermissibly
differentiate in the benefits it provided. Finding helpful a
decision of the Sixth Circuit but disagreeing with the Sixth
Circuit’s conclusion, the panel rejected the argument that the
MSP’s prohibition on differing treatment bars not only
actual differentiation but also all provisions that have a
disproportionate effect, or disparate impact, on persons with
ESRD.
Plaintiffs sought both recovery of benefits and equitable
relief under ERISA. The panel held that plaintiffs could seek
recovery of benefits on behalf of a plan beneficiary who had
assigned causes of action to them. Nonetheless, the
complaint failed to state a claim because all of its arguments
stemmed from its argument that the plan violated the MSP.
The panel held that plaintiffs could not bring equitable
claims because such claims were not encompassed by the
assignment form that the patient signed.

4 DAVITA V. AMY’S KITCHEN

COUNSEL

John Patrick Elwood (argued), Andrew T. Tutt, and Samuel
F. Callahan, Arnold & Porter Kaye Scholer LLP,
Washington, D.C., for Plaintiffs-Appellants.

Floyd G. Short (argued) and Katherine M. Peaslee, Susman
Godfrey LLP, Seattle, Washington, for Defendants-
Appellees.

Deanna J. Reichel, Fish & Richardson P.C., Minneapolis,
Minnesota, for Amicus Curiae Dialysis Patient Citizens.

Mary L. Stoll, Stoll Law Group, PLLC, Seattle, Washington,
for Amici Curiae Self-Insurance Institute of America, Inc.
and Pacific Health Coalition.

OPINION
GRABER, Circuit Judge:
Renal dialysis is a life-saving treatment for those with
serious kidney afflictions, including acute kidney injury and
end-stage renal disease (“ESRD”). Plaintiffs DaVita, Inc.,
and Star Dialysis (collectively, “DaVita”) provide dialysis
treatment to many patients and seek payment from any
applicable group health plan. One of DaVita’s patients is a
beneficiary of Defendant Amy’s Kitchen’s Employee
Benefit Health Plan (“Amy’s Plan” or “the Plan”), a health
plan offered and administered by Defendant Amy’s Kitchen,
Inc. (“Amy’s Kitchen”). The patient has ESRD and has
received routine maintenance dialysis from DaVita. Amy’s
Plan covers all types of dialysis, regardless of the underlying
diagnosis, but the Plan’s reimbursement rate for dialysis

DAVITA V. AMY’S KITCHEN 5

differs from the rate it pays for many other services. The
Plan paid DaVita according to the Plan’ s terms.
Dissatisfied with the payment amounts that it received
from Amy’s Plan, DaVita brought this action, arguing that
the Plan’s dialysis provisions violate (1) the Medicare as
Secondary Payer provisions (“MSP”) of the Social Security
Act, (2) the Employee Retirement Income Security Act of
1974 (“ERISA”), and (3) state law. The district court
dismissed the federal claims and declined to exercise
supplemental jurisdiction over the state-law claims. With
respect to the MSP claim, the court held that, because the
Plan reimburses at the same rate for all dialysis services,
regardless of underlying diagnosis and regardless of
Medicare eligibility, the Plan does not violate the MSP.
Reviewing de novo and taking the allegations in the
complaint as true, Daewoo Elecs. Am., Inc. v. Opta Corp.,
875 F.3d 1241, 1246 (9th Cir. 2017), we agree with the
district court’s conclusions and therefore affirm.
FACTUAL AND PROCEDURAL HISTORY
Doctors classify chronic kidney disease into five stages.
The last stage, Stage 5, is known as kidney failure or ESRD.
More than 700,000 people in the United States have ESRD.
To survive, a person with ESRD requires either a kidney
transplant or routine maintenance dialysis, a treatment that
performs the functions of a kidney. 42 C.F.R. § 406.13(b);
see also Kidney Disease Statistics for the United States,
Nat’l Insts. of Health (December 2016),
https://www.niddk.nih.gov/health-information/health-statist
ics/kidney-disease. Most persons with ESRD never receive
a kidney transplant, so they receive regular maintenance
dialysis for the remainder of their lives. According to
DaVita, a person with ESRD typically receives dialysis three
times a week. Persons with ESRD are eligible for Medicare

6 DAVITA V. AMY’S KITCHEN

pursuant to 42 U.S.C. § 426-1 after the first three months of
regular dialysis treatment.
People with ESRD are not the only recipients of dialysis.
The other common recipients of dialysis are those with
“acute kidney injury,” described by the National Kidney
Foundation as “a sudden episode of kidney failure or kidney
damage that happens within a few hours or a few days.”
Acute Kidney Injury, Nat’l Kidney Found. (Oct. 30,
2020), https://www.kidney.org/atoz/content/AcuteKidneyIn
jury. Acute kidney injury has many different causes and
correlated diseases. Id. Recently, for example, a study cited
by the National Kidney Foundation concluded that “people
hospitalized with COVID-19 are at significant risk of [acute
kidney injury].” Kidney Disease and COVID-19, Nat’l
Kidney Found., https://www.kidney.org/coronavirus/kidney
-disease-covid-19 (last visited Nov. 16, 2020). Treatment of
acute kidney injury restores long-term kidney function.
Accordingly, unlike persons with ESRD, persons with acute
kidney injury generally recover enough kidney function so
that they no longer need dialysis. Similarly, unlike persons
with ESRD, persons with acute kidney injury are not eligible
for Medicare pursuant to 42 U.S.C. § 426-1.
When a patient with ESRD is enrolled in both Medicare
and a group health plan, the MSP allocates primary-payer
responsibility between Medicare and the plan. Once the
individual becomes eligible for Medicare, which occurs after
three months of dialysis treatment, the plan remains the
primary payer and Medicare becomes the secondary payer
during a 30-month coordination period. 42 U.S.C.
§ 1395y(b)(1)(C)(i). When the coordination period ends, the
plan may be the secondary payer thereafter. Id.
§ 1395y(b)(1)(C).

DAVITA V. AMY’S KITCHEN 7

The MSP also imposes two substantive requirements on
group health plans with respect to persons with ESRD. First,
during the coordination period, a plan may not “take into
account” a person’s eligibility for Medicare due to ESRD.
Id. § 1395y(b)(1)(C)(i). Second, a plan may not
“differentiate in the benefits it provides between individuals
having [ESRD] and other individuals covered by [the] plan
on the basis of the existence of [ESRD], the need for renal
dialysis, or in any other manner.” Id. § 1395y(b)(1)(C)(ii).
Amy’s Kitchen sells organic foods throughout the
United States and employs more than 2,400 people. Many
employees are eligible to enroll in Amy’s Plan, which is an
“employee benefit plan” pursuant to ERISA. Amy’s Plan is
a preferred provider organization health plan. A beneficiary
may visit any medical provider, some of which are “in-
network” and some of which are “out-of-network.” For
many medical services, the Plan provides no coverage at all,
whether that service is given by an in-network or an out-of-
network provider. But for most services covered by the Plan,
the processing of claims depends on whether the beneficiary
visits an in-network provider or an out-of-network provider.
Visiting an in-network provider generally results in lower
copayments and other advantages for beneficiaries. The
Plan typically pays in-network providers according to a rate
determined by contract and pays out-of-network providers,
in the words of the Plan, the “Customary, Usual, and
Reasonable Charge” for the service.
“Patient 1” is a beneficiary of Amy’s Plan who has
ESRD. Patient 1 began receiving regular dialysis treatment
in 2016 from DaVita. At the time, DaVita was an in-network
provider, and the Plan reimbursed DaVita at the appropriate
contractual rate.

8 DAVITA V. AMY’S KITCHEN

In 2017, Amy’s Plan modified its terms of coverage by
implementing a “Dialysis Benefit Preservation Program.”
The Plan explained that it had found evidence of “significant
inflation” of prices charged by dialysis providers; the use of
inflated revenues “to subsidize reduced prices to other types
of payers as incentives”; and “the specific targeting of the
Plan and other non-governmental and non-commercial plans
by the dialysis providers as profit centers.” The Plan
implemented the program because of its
fiduciary obligation to preserve Plan assets
against charges which (i) exceed reasonable
value due to factors not beneficial to covered
persons . . . and (ii) are used by the dialysis
providers for purposes contrary to the
covered persons’ interests, such as subsidies
for other plans and discriminatory profit-
taking.
The Program applies to all claims for “reimbursement of
products and services provided for purposes of outpatient
dialysis, regardless of the condition causing the need for
dialysis.” The Plan no longer uses the in-network/out-of-
network distinction for dialysis-related reimbursements.
Instead, “[a]ll dialysis-related claims will be subject to cost
review by the plan administrator to determine whether the
charges indicate the effects of market concentration or
discrimination in charges.”
With respect to dialysis-related claims, the
plan administrator shall determine the Usual
and Reasonable Charge based upon the
average payment actually made for
reasonably comparable services and/or
supplies to all providers of the same services

DAVITA V. AMY’S KITCHEN 9

and/or supplies by all types of plans in the
applicable market during the preceding
calendar year, based upon reasonably
available data, adjusted for the national
Consumer Price Index medical care rate of
inflation.
The “Usual and Reasonable Charge” differs from the
“Customary, Usual, and Reasonable Charge” that applies to
reimbursements for some other types of medical treatment.
DaVita alleges that the reimbursements that it received
beginning in 2017 were far less than the reimbursements that
it received in 2016. DaVita brought this action, alleging
claims on its own behalf and as an assignee of Patient 1’s
claims. DaVita alleges that the Plan’s 2017 implementation
of the dialysis-specific program violated the MSP, ERISA,
and state law. The district court dismissed with prejudice all
federal claims and declined to exercise supplemental
jurisdiction over the state-law claims. DaVita timely
appeals.
DISCUSSION
A. MSP Claim
The MSP imposes two substantive requirements on
group health plans with respect to persons with ESRD. A
group health plan:
(i) may not take into account that an
individual is entitled to or eligible for benefits
under this subchapter under section 426-1 of
this title [during the 30-month coordination
period]; and

10 DAVITA V. AMY’S KITCHEN

(ii) may not differentiate in the benefits it
provides between individuals having end
stage renal disease and other individuals
covered by such plan on the basis of the
existence of end stage renal disease, the need
for renal dialysis, or in any other manner[.]
42 U.S.C. § 1395y(b)(1)(C). Amy’s Plan uniformly
reimburses all dialysis treatments whether or not the
beneficiary is eligible for Medicare and whether or not the
beneficiary has ESRD. And dialysis is a treatment received
by many people: some are eligible for Medicare and some
are ineligible; some have ESRD and some do not have
ESRD. DaVita nevertheless argues that, because the Plan
allegedly pays less for dialysis treatments than for other
treatments, the Plan violates both of the MSP’s
requirements. For the reasons that follow, we disagree.
1. “Take Into Account”
The MSP prohibits a plan from taking into account
whether the covered individual is eligible for or enrolled in
Medicare during the coordination period, after which time
the plan may be the secondary payer. See id.
§ 1395y(b)(1)(C)(i) (providing that a plan “may not take into
account that an individual is entitled to or eligible for
[Medicare] benefits” (emphasis added)). The Plan plainly
did not take into account Patient 1’s eligibility for, or
enrollment in, Medicare. The Plan uniformly reimburses all
dialysis treatment, whether or not the beneficiary is eligible
for Medicare or enrolled in Medicare.
Notably, many persons who receive dialysis are
ineligible for Medicare: those with acute kidney injury are
not, by virtue of that injury, eligible for Medicare, and even
those who have ESRD are eligible for Medicare only after

DAVITA V. AMY’S KITCHEN 11

the first three months of dialysis treatment. Yet the Plan
takes no notice whatsoever of whether the claimant is
eligible for Medicare. Claims are paid at the same rate
whether the claimant has acute kidney injury, is in the first
months of ESRD treatment, or is eligible for Medicare.
Nor does it matter, for purposes of the MSP, that the Plan
calculates its reimbursement rate by taking into account,
along with other factors, the amount that Medicare pays for
dialysis treatment of other individuals. The MSP bars
consideration of the individual claimant’s eligibility for
Medicare, a factor that the Plan ignores.
Finally, our reading of the “take into account” provision
renders neither that provision nor the differentiation
provision superfluous. Both provisions serve functions that
the other does not. The “take into account” provision
prohibits a plan from taking Medicare eligibility into account
during the 30-month coordination period and permits a plan
to become the secondary payer after the coordination period.
Nothing in the differentiation provision concerns who pays
first. Similarly, the differentiation provision prohibits a plan
from differentiating against any person who has ESRD,
including a person who is ineligible for Medicare.
In sum, Amy’s Plan did not “take into account”
Patient 1’s eligibility for Medicare and thus comported with
the MSP’s first requirement.
2. Differentiation
The MSP provides that a plan “may not differentiate in
the benefits it provides between individuals having end stage
renal disease and other individuals covered by such plan on
the basis of the existence of end stage renal disease, the need
for renal dialysis, or in any other manner.” 42 U.S.C.

12 DAVITA V. AMY’S KITCHEN

§ 1395y(b)(1)(C)(ii). Under the Plan, individuals with
ESRD receive identical benefits, including dialysis benefits,
as those who do not have ESRD. Renal dialysis is a potential
treatment for all persons, not just for those with ESRD, and
the Plan uniformly reimburses a provider for renal dialysis
whether or not the patient has ESRD. Accordingly, the Plan
does not—in any way or for any reason—”differentiate in
the benefits it provides between individuals having end stage
renal disease and other individuals covered by such plan.”
Id.
The second half of the statutory text does not change that
conclusion. Plans may not provide differing benefits to
persons with ESRD “on the basis of the existence of end
stage renal disease, the need for renal dialysis, or in any other
manner.” Id. The clause is grammatically challenging to
interpret, because “on the basis of” appears to apply to “the
need for renal dialysis” but cannot meaningfully apply to “in
any other manner.” See DaVita, Inc. v. Marietta Mem’l
Hosp. Empl. Health Benefit Plan, 978 F.3d 326, 361 (6th Cir.
2020) (Murphy, J., concurring in part and dissenting in part)
(“This list likely contains a typo because it makes no sense
to say ‘on the basis of . . . in any other manner.’” (ellipsis in
original)). The corresponding regulation slips in an “or” to
address the grammatical issue, prohibiting differentiation
“on the basis of the existence of ESRD, or the need for renal
dialysis, or in any other manner.” 42 C.F.R. § 411.161(b)(1)
(emphasis added). But we need not dwell on the nuances.
Even the broadest possible reading of the second half of the
statutory text—prohibiting differentiation in the provision of
benefits for any reason and in any manner—does not change
our interpretation of the requirement as a whole.
A plan may not provide differing benefits to persons with
ESRD than to other insureds, no matter the reason and no

DAVITA V. AMY’S KITCHEN 13

matter the manner. For example, a plan may not provide
differing benefits to persons with ESRD simply because an
individual has ESRD, or because an individual with ESRD
needs renal dialysis, or because an individual with ESRD has
a greater statistical chance of needing other services. See
42 U.S.C. § 1395y(b)(1)(C)(ii) (prohibiting differentiation
“on the basis of the existence of end stage renal disease, the
need for renal dialysis, or in any other manner”). And a plan
may not provide differing benefits to persons with ESRD by,
for example, terminating their coverage, charging higher
premiums, exacting higher co-payments, or requiring longer
waiting times. 42 C.F.R. § 411.611(b)(2)(i)–(iii). But the
pertinent question remains whether the plan provides
differing benefits to persons with ESRD than to all other
insureds. Because Amy’s Plan provides identical benefits,
including dialysis benefits, to all insured persons, the Plan
does not run afoul of the MSP.
We do not hold that all facially neutral plans comply with
the MSP. A facially neutral provision that, in effect,
operated to differentiate “between individuals having end
stage renal disease and other individuals covered by such
plan” would not comport with the MSP. 42 U.S.C.
§ 1395y(b)(1)(C)(ii). For example, a plan would violate the
MSP if it provided different coverage for routine
maintenance dialysis—that is, dialysis received only by
persons with ESRD—than for all other dialysis. See
42 C.F.R. § 411.161(b)(2)(v) (listing, as an example of a
prohibited differentiation, a plan’s “[f]ailure to cover routine
maintenance dialysis . . . when a plan covers other dialysis
services”). So, too, would a plan violate the MSP if it
declined to cover an ESRD-specific medication even though
it covered comparable non-ESRD-specific medications.
That is, provisions that affect only those with ESRD

14 DAVITA V. AMY’S KITCHEN

necessarily provide differing benefits to those with ESRD as
compared to other insureds.
But Amy’s Plan has no such differentiating effect. The
Plan treats all dialysis the same, and persons with ESRD are
not the exclusive recipients of dialysis. Many persons who
do not have ESRD receive dialysis as treatment for acute
kidney injury.
1

DaVita concedes that dialysis is not exclusively a
treatment for ESRD. But DaVita emphasizes that most
people who receive dialysis have ESRD, so that Amy’s Plan
has a remarkably disproportionate effect on persons with
ESRD. DaVita encourages us to hold that the MSP’s
prohibition on differing treatment bars not only actual
differentiation (whether by name or by exclusive effect) but
also all provisions that have a disproportionate effect, or
disparate impact, on persons with ESRD.
In assessing whether the MSP encompasses a disparate-
impact theory, we find helpful the Sixth Circuit’s recent
decision in Marietta, 978 F.3d at 347–52. Applying the
Supreme Court’s guidance in Texas Department of Housing
& Community Affairs v. Inclusive Communities Project, Inc.,
576 U.S. 519 (2015), the Sixth Circuit held that the MSP
encompasses a disparate-impact theory. Marietta, 978 F.3d
at 350–51. Judge Murphy disagreed with the majority’s
conclusion, writing separately to state his view that “a plan

1
In 2000, about 12,000 persons in the United States with acute
kidney injury received dialysis. Pavkov ME, Harding JL, Burrows NR.,
Trends in Hospitalizations for Acute Kidney Injury — United States,
2000–2014, Morbidity & Mortality Wkly. Rep., March 16, 2018,
67:289-293, Table, https://www.cdc.gov/mmwr/volumes/67/wr/mm671
0a2.htm. That number rose to 18,000 by 2006. Id. And in 2014, the
number climbed to more than 28,000. Id.

DAVITA V. AMY’S KITCHEN 15

that uniformly offers the same benefits to all groups does not
violate [the MSP’s differentiation] clause.” Id. at 360
(Murphy, J., dissenting in part). We agree with the Sixth
Circuit that the Supreme Court’s decision in Inclusive
Communities provides the appropriate framework for
considering whether a statute encompasses a disparate-
impact theory, but we disagree with the Marietta majority’s
conclusion.
Inclusive Communities considered whether the Fair
Housing Act (“FHA”) encompassed a disparate-impact
theory of liability. 576 U.S. at 533–34. The Court began its
analysis by discussing “two other antidiscrimination statutes
that preceded it”—Title VII of the Civil Rights Act of 1964,
and the Age Discrimination in Employment Act of 1967
(“ADEA”)—that the Court previously had held
encompassed disparate-impact liability. Id. at 530–33; see
Griggs v. Duke Power Co., 401 U.S. 424 (1971) (Title VII);
Smith v. City of Jackson, 544 U.S. 228 (2005) (ADEA). The
Court discussed the obvious similarities in text and structure
between the relevant provisions of Title VII and the ADEA,
on the one hand, and the relevant provisions of the FHA, on
the other. Inclusive Communities, 576 U.S. at 534–35. Title
VII provides:
It shall be an unlawful employment practice
for an employer—
(1) to fail or refuse to hire or to discharge any
individual, or otherwise to discriminate
against any individual with respect to his
compensation, terms, conditions, or
privileges of employment, because of such
individual’s race, color, religion, sex, or
national origin; or

16 DAVITA V. AMY’S KITCHEN

(2) to limit, segregate, or classify his
employees or applicants for employment in
any way which would deprive or tend to
deprive any individual of employment
opportunities or otherwise adversely affect
his status as an employee, because of such
individual’s race, color, religion, sex, or
national origin.
42 U.S.C. § 2000e-2(a) (emphases added); see Inclusive
Communities, 576 U.S. at 530–31 (quoting this text). The
ADEA provides:
It shall be unlawful for an employer—
(1) to fail or refuse to hire or to discharge any
individual or otherwise discriminate against
any individual with respect to his
compensation, terms, conditions, or
privileges of employment, because of such
individual’s age;
(2) to limit, segregate, or classify his
employees in any way which would deprive
or tend to deprive any individual of
employment opportunities or otherwise
adversely affect his status as an employee,
because of such individual’s age; or
(3) to reduce the wage rate of any employee
in order to comply with this chapter.
29 U.S.C. § 623(a) (emphases added); see Inclusive
Communities, 576 U.S. at 532 (quoting this text). The first
relevant FHA provision states:

DAVITA V. AMY’S KITCHEN 17

It shall be unlawful for any person or other
entity whose business includes engaging in
residential real estate-related transactions to
discriminate against any person in making
available such a transaction, or in the terms
or conditions of such a transaction, because
of race, color, religion, sex, handicap,
familial status, or national origin.
42 U.S.C. § 3605(a) (emphasis added); see Inclusive
Communities, 576 U.S. at 534 (quoting this text). The
second relevant FHA provision states that it is unlawful:
To refuse to sell or rent after the making of a
bona fide offer, or to refuse to negotiate for
the sale or rental of, or otherwise make
unavailable or deny, a dwelling to any person
because of race, color, religion, sex, familial
status, or national origin.
42 U.S.C. § 3604(a) (emphasis added); see Inclusive
Communities, 576 U.S. at 533 (quoting this text).
The Court noted that the only textual difference is that
Title VII and the ADEA use the phrase “or otherwise
adversely affect” while the FHA uses the phrase “or
otherwise make unavailable or deny.”
2
Inclusive

2
In its briefing to us, DaVita also cites the disparate-impact
provision in the Americans with Disabilities Act of 1990 (“ADA”),
42 U.S.C. § 12112. But that statute’s text, which prohibits many forms
of “discriminat[ion],” does not differ meaningfully from the relevant text
of Title VII or the ADEA. Id. § 12112(a); see also id. § 12112(b)(3)
(defining ways that an entity may impermissibly discriminate to include
“utilizing standards, criteria, or methods of administration . . . that have
the effect of discrimination on the basis of disability” (emphasis added)).

18 DAVITA V. AMY’S KITCHEN

Communities, 576 U.S. at 532–33. But the Court held that
the different wording was irrelevant because both
formulations, and the word “discriminate,” are “results-
oriented language,” which “counsels in favor of recognizing
disparate-impact liability.” Id. at 534. The Court explained
further:
It is true that Congress did not reiterate Title
VII’s exact language in the FHA, but that is
because to do so would have made the
relevant sentence awkward and unclear. A
provision making it unlawful to “refuse to
sell[,] . . . or otherwise [adversely affect], a
dwelling to any person” because of a
protected trait would be grammatically
obtuse, difficult to interpret, and far more
expansive in scope than Congress likely
intended.
Id. at 535 (alterations and ellipsis in original).
The Supreme Court next found later amendments to the
FHA, enacted in light of intervening court decisions, to be of
“crucial importance.” Id. In particular, “all nine Courts of
Appeals to have addressed the question had concluded that
the Fair Housing Act encompassed disparate-impact
claims.” Id. When Congress amended the FHA, it chose to
retain the relevant statutory text and, moreover, added three
new clauses that made sense only if the FHA encompassed
a disparate-impact theory of liability. Id. at 536–39.
Finally, the Court held that “[r]ecognition of disparate-
impact claims is consistent with the FHA’s central purpose.”
Id. at 539. “The FHA, like Title VII and the ADEA, was
enacted to eradicate discriminatory practices within a sector

DAVITA V. AMY’S KITCHEN 19

of our Nation’s economy.” Id.; see also id. at 528–30
(recounting the long history of discriminatory housing).
The Court made clear that its conclusion that the FHA
encompassed a disparate-impact theory resulted from
considering all of the factors just discussed: “The Court
holds that disparate-impact claims are cognizable under the
Fair Housing Act upon considering its results-oriented
language, the Court’s interpretation of similar language in
Title VII and the ADEA, Congress’ ratification of disparate-
impact claims in 1988 against the backdrop of the
unanimous view of nine Courts of Appeals, and the statutory
purpose.” Id. at 545–46; see also Smith, 544 U.S. at 237
(noting the unanimous holdings of the courts of appeal that
the ADEA’s prohibition encompasses disparate impacts).
Applying the teaching of Inclusive Communities, we
begin, as did the Sixth Circuit, with the statutory text:
[A group health plan] may not differentiate
in the benefits it provides between
individuals having end stage renal disease
and other individuals covered by such plan on
the basis of the existence of end stage renal
disease, the need for renal dialysis, or in any
other manner.
42 U.S.C. § 1395y(b)(1)(C)(ii) (emphases added). The
Sixth Circuit’s majority focused exclusively on the final five
words of the provision: “or in any other manner.” Marietta,
978 F.3d at 348–51. The court noted that, like the important
statutory passage in the FHA, that passage is “at the end of a
series of prohibitions that deal with disparate treatment” and
“is exceedingly broad.” Id. at 350 (emphasis omitted). From
those observations, the Sixth Circuit concluded that the

20 DAVITA V. AMY’S KITCHEN

MSP’s “non-differentiation provision permits a disparate
impact claim.” Id. at 351.
We respectfully suggest that the Marietta majority’s
analysis of whether the statute gives rise to a disparate-
impact claim was incomplete. Not every list of actions
followed by a broad catch-all clause means that Congress
intended to encompass a disparate-impact theory. Inclusive
Communities requires both a more detailed study of the
statutory text and a consideration of other relevant factors.
First, continuing with the textual analysis, a different
aspect of the provision strongly suggests that Congress did
not intend to create a disparate-impact theory of liability. In
particular, Congress chose to prohibit actions that
“differentiate” rather than “discriminate.” Just as the FHA’s
use of the word “discriminate” suggested disparate-impact
liability to the Supreme Court in light of the identical
wording of Title VII and the ADEA, Inclusive Communities,
576 U.S. at 534, Congress’ decision not to use the word
“discriminate” in the MSP strongly suggests that it did not
intend to encompass disparate-impact liability. The
presumption that different words carry different meanings is
ordinarily weak when applied, as here, to different Acts,
because “[w]e do not presume that when Congress legislates
it has firmly in mind every term of every pre-existing
statute.” Agredano v. Mutual of Omaha Cos., 75 F.3d 541,
544 (9th Cir. 1996). But Congress certainly was aware of
the important term “discriminate,” which long has carried a
particular meaning. We find it significant that Congress
chose to avoid that common term in favor of a different verb,
“differentiate.” See Hall v. United States, 566 U.S. 506, 516
(2012) (“We assume that Congress is aware of existing law
when it passes legislation.” (internal quotation marks
omitted)); see also Bare v. Barr, 975 F.3d 952, 968 (9th Cir.

DAVITA V. AMY’S KITCHEN 21

2020) (“We must presume that Congress intended a different
meaning when it uses different words in connection with the
same subject.” (internal quotation marks omitted)).
Read as a whole, then, the statutory text does not suggest
that Congress intended to sweep in actions that
disproportionately affect persons with ESRD under a
disparate-impact theory. We may agree with the Sixth
Circuit that the phrase “or in any other manner” is “results-
oriented” in a sense. Marietta, 978 F.3d at 350 & n.15. But
the statutory text makes clear that the pertinent inquiry
remains whether the plan’s provisions “result” in different
benefits for persons with ESRD, not whether the plan’s
provisions disproportionately affect persons with ESRD or
otherwise “discriminate” against persons with ESRD.
Nor is there any indication that Congress acquiesced in a
disparate-impact theory that has been widely adopted by the
federal courts. If anything, the MSP’s statutory history and
additional provisions suggest the opposite conclusion. For
example, until just a couple of months ago, no court had held
that the MSP encompasses a disparate-impact theory of
liability. See, e.g., Nat’l Renal All., LLC v. Blue Cross &
Blue Shield of Ga., Inc., 598 F. Supp. 2d 1344, 1354–55
(N.D. Ga. 2009) (rejecting, as failing to state a claim, an
assertion that a plan’s uniform reimbursement for all dialysis
constituted differentiation under the MSP). Additionally,
and unlike the FHA, no other provision in the MSP assumes
that the differentiation provision encompasses disparate-
impact liability. Indeed, nearly every provision in the MSP
concerns topics other than ESRD. In sum, one factor that
was “of crucial importance,” Inclusive Communities,
576 U.S. at 535, in concluding that the FHA encompasses
disparate impacts is, at best, completely absent with respect
to the MSP.

22 DAVITA V. AMY’S KITCHEN

Finally, we consider the statute’s “central purpose.” Id.
at 539. This factor, too, strongly suggests that Congress did
not intend a disparate-impact theory of liability in the MSP.
All of the anti-discrimination statutes cited by DaVita and
the Sixth Circuit sought to address, as their sole or central
purpose, a history of discrimination against a minority class
of persons. As their titles suggest, the Fair Housing Act,
Title VII of the Civil Rights Act, the Age Discrimination in
Employment Act, and the Americans with Disabilities Act
all aimed, as their central purpose, to address longstanding
and entrenched discriminatory practices.
By sharp contrast, there is little evidence, either in the
legislative history of the MSP or in other sources, that
persons with ESRD have been subjected to historical or
entrenched societal discrimination akin to the discrimination
faced by the classes of persons protected by the FHA, Title
VII, the ADEA, and the ADA.
3
As we hold in DaVita v.
Virginia Mason Memorial Hospital, No. 19-35692, — F.3d
— (9th Cir. 2020), ensuring equal health-care benefits for
insureds who have ESRD, in limited circumstances, is one
of the purposes of the Medicare as Secondary Payer
provisions. But the tightly cabined nature of the anti-
differentiation provision of the MSP suggests a carefully
circumscribed concern, not a remedy for widespread

3
DaVita directs us primarily to a Senate Report in 1981—eight
years before Congress added the differentiation provision—that
expressed “concern[]” that employers might engage in “job
discrimination” against persons entitled to Medicare. S. Rep. No. 97-
139, at 736 (1981). Congress directed the relevant Secretary to
“investigate promptly complaints of this nature[] and report his findings
to the Congress.” Id. That level of concern pales in comparison to, for
example, Congress’ deep concern with the entrenched historical
discrimination in housing on the basis of race. Inclusive Communities,
576 U.S. at 528–30.

DAVITA V. AMY’S KITCHEN 23

injustice. Moreover, the “central purpose,” Inclusive
Communities, 576 U.S. at 539, of the MSP provisions
remains a congressional aim to save Medicare money. See
Zinman v. Shalala, 67 F.3d 841, 845 (9th Cir. 1995) (noting
that “the overarching statutory purpose” of the Medicare as
Secondary Payer provisions is to “reduc[e] Medicare costs”).
Although this case concerns a plan’s reimbursement
rates for dialysis, a disparate-impact theory presumably
could give rise to a broad array of challenges. Notably,
approximately half of persons with ESRD have diabetes or
cardiovascular disease, and cardiovascular disease
“contributes to more than half of all deaths among patients
with ESRD.” Kidney Disease Statistics for the United
States, Nat’l Insts. of Health (December 2016),
https://www.niddk.nih.gov/health-information/health-statist
ics/kidney-disease. Accordingly, a plan that provided less
preferential coverage for those ailments might
disproportionately affect persons with ESRD. Embracing a
disparate-impact theory of liability would create uncertainty
for insurers as to permissible provisions related to those
illnesses. We doubt that Congress intended, in a statute
aimed almost entirely at saving Medicare money, to require
group health plans to ensure that its plans have no
disproportionate effects on persons with ESRD. Rather, we
conclude that Congress meant what it said: a plan may not
“differentiate in the benefits it provides between individuals
having [ESRD] and other individuals covered by such plan.”
42 U.S.C. § 1395y(b)(1)(C)(ii).
In sum, consideration of the relevant factors described in
Inclusive Communities confirms our reading of the statutory
text. Congress prohibited group health plans from offering
different benefits to persons with ESRD than to others, but

24 DAVITA V. AMY’S KITCHEN

it did not bar other differences that merely have a
disproportionate effect on persons with ESRD.
Although congressional intent is clear, we also note that
the MSP’s implementing regulations provide no support for
a disparate-impact claim. In both Smith, 544 U.S. at 239,
and Griggs, 401 U.S. at 433–34, the Supreme Court
interpreted the pertinent statutory provision as
encompassing a disparate-impact theory partly because the
relevant agency had interpreted the statute in that manner.
Similarly, although the Court in Inclusive Communities did
not discuss the agency’s interpretation in its analysis, the
Court noted at the outset that “the Secretary of Housing and
Urban Development issued a regulation interpreting the
FHA to encompass disparate-impact liability,” including by
establishing a multi-step “burden-shifting framework.”
576 U.S. at 527 (abbreviation omitted).
The relevant regulations here tell a different story.
Perhaps most convincingly, the agency expressly approved
a plan provision that would have a clearly disproportionate
effect on those with ESRD:
(c) Uniform Limitations on particular
services permissible. A plan is not prohibited
from limiting covered utilization of a
particular service as long as the limitation
applies uniformly to all plan enrollees. For
instance, if a plan limits its coverage of renal
dialysis sessions to 30 per year for all plan
enrollees, the plan would not be
differentiating in the benefits it provides
between plan enrollees who have ESRD and
those who do not.

DAVITA V. AMY’S KITCHEN 25

42 C.F.R. § 411.161(c). Persons with ESRD typically
require three dialysis sessions a week, so the hypothetical
limitation would apply to all persons with ESRD. Persons
with acute kidney injury, by contrast, rarely require
30 sessions of dialysis. In other words, even though the
regulation’s hypothetical limitation would have an
overwhelmingly disparate effect on persons with ESRD, the
agency expressly approved the limitation as consistent with
the MSP’s differentiation provision.
Similarly, the agency’s illustrative examples in
§ 411.161(b)(2)
4
all comport with our understanding of the

4
The regulation provides:
(2) [Group health plan] actions that constitute
differentiation in plan benefits (and that may also
constitute “taking into account” Medicare eligibility or
entitlement) include, but are not limited to the
following:
(i) Terminating coverage of individuals with
ESRD, when there is no basis for such termination
unrelated to ESRD (such as failure to pay plan
premiums) that would result in termination for
individuals who do not have ESRD.
(ii) Imposing on persons who have ESRD, but not
on others enrolled in the plan, benefit limitations
such as less comprehensive health plan coverage,
reductions in benefits, exclusions of benefits, a
higher deductible or coinsurance, a longer waiting
period, a lower annual or lifetime benefit limit, or
more restrictive preexisting illness limitations.
(iii) Charging individuals with ESRD higher
premiums.

26 DAVITA V. AMY’S KITCHEN

statutory text. For example, a group health plan may not
provide “less comprehensive health plan coverage” to
“persons who have ESRD” and may not charge “individuals
with ESRD higher premiums.” 42 C.F.R.
§ 411.161(b)(2)(ii)–(iii). As is most relevant here, a plan
may not decline to cover “routine maintenance dialysis” if it
covers “other dialysis services,” and a plan must pay
identically for dialysis for persons with ESRD as for dialysis
for persons who do not have ESRD. Id. § 411.161(b)(2)(iv)–
(v). That is, a plan may not cover an exclusively-ESRD
treatment differently than a comparable non-ESRD
treatment; but nothing suggests that a plan must cover all
dialysis treatments to the same extent as, say, chemotherapy
or insulin treatments.
We acknowledge one potential exception to the
foregoing analysis. One of the regulation’s examples of
impermissible differentiation is a plan’s failure to cover
kidney transplants when the plan covers other organ
transplants. Id. § 411.161(b)(2)(v). DaVita cites an article
published in 2015 on the topic of kidney transplants,

(iv) Paying providers and suppliers less for
services furnished to individuals who have ESRD
than for the same services furnished to those who
do not have ESRD, such as paying 80 percent of
the Medicare rate for renal dialysis on behalf of a
plan enrollee who has ESRD and the usual,
reasonable and customary charge for renal
dialysis on behalf of an enrollee who does not
have ESRD.
(v) Failure to cover routine maintenance dialysis
or kidney transplants, when a plan covers other
dialysis services or other organ transplants.
42 C.F.R. § 411.161(b).

DAVITA V. AMY’S KITCHEN 27

Educational Guidance on Patient Referral to Kidney
Transplantation, U.S. Dept. of Health & Hum. Servs., (Sept.
2015), https://optn.transplant.hrsa.gov/resources/guidance/e
ducational-guidance-on-patient-referral-to-kidney-transplan
tation. “With advances in surgical technique,
immunosuppression, and post-transplant care, criteria for
kidney transplantation have evolved dramatically.” Id.
Given the long waiting times for finding a suitable kidney
donor, the article recommends that doctors consider
referring some patients, especially those with rapidly
progressive kidney disease, for evaluation for a kidney
transplant even if the patient is in stage 4 of chronic kidney
disease, one stage shy of ESRD (stage 5). Id. DaVita asserts
that some patients receive a kidney transplant before their
disease progresses to ESRD. The regulation therefore
suggests, in DaVita’s view, that a disparate-impact theory is
available.
The regulatory history does not reveal, when the agency
promulgated the regulation in 1995, whether persons with
stage 4 kidney disease received transplants; if so, whether
the agency was aware of that fact; and if so, what the
agency’s reason for including the example was. We need
not investigate those questions, though, because even if we
assume that the agency included one example that would
support a disparate-impact claim, it suggests, at most, that
the regulation is inconsistent with respect to the availability
of a disparate-impact claim. See Marietta, 978 F.3d at 351
(“Put simply, the non-differentiation regulations do more to
confuse than to clarify.”). Whether we view the
implementing regulations for the MSP as foreclosing
entirely a disparate-impact theory or as inconsistent on the
question, those regulations are wholly unlike the
implementing regulations for Title VII, the ADEA, and the
FHA, which clearly allowed disparate-impact claims. The

28 DAVITA V. AMY’S KITCHEN

regulations therefore provide no support for a disparate-
impact claim.
In conclusion, a plan that provides identical benefits to
someone with ESRD as to someone without ESRD does not
“differentiate” between those two classes. That simplistic
approach must yield for treatments that apply exclusively to
ESRD patients, because differential coverage of ESRD-
specific treatments is no different than differential treatment
of persons with ESRD. But for treatments that apply both to
those with ESRD and those without ESRD, a plan’s
provision of identical benefits does not “differentiate” on
any basis at all.
Because Amy’s Plan provides identical benefits,
including dialysis benefits, to persons with ESRD as to all
other insureds and does not consider an individual’s
eligibility for Medicare, Amy’s Plan comports with the
MSP.
5

B. ERISA Claims
ERISA authorizes a beneficiary to bring claims seeking
“to recover benefits due to him under the terms of his plan.”
29 U.S.C. § 1132(a)(1)(B). Separate ERISA provisions
authorize a beneficiary to bring equitable claims, seeking
either injunctive or equitable relief. Id. § 1132(a)(1)(A) &
(a)(3). DaVita asserts both types of claims.

5
Because both the 2016 version and the 2017 version of Amy’s Plan
comported with the MSP, it is irrelevant that the 2017 amendment
modified only the dialysis provisions of Amy’s Plan. See Curtiss-Wright
Corp. v. Schoonejongen, 514 U.S. 73, 78 (1995) (“[P]lan sponsors are
generally free under ERISA, for any reason at any time, to adopt, modify,
or terminate welfare plans.”).

DAVITA V. AMY’S KITCHEN 29

As DaVita acknowledges, it cannot bring ERISA claims
on its own behalf. See id. § 1132(a)(1)(B) (allowing a claim
for benefits “by a participant or beneficiary”); id.
§ 1132(a)(3) (allowing equitable claims “by a participant,
beneficiary, or fiduciary”); Spinedex Physical Therapy USA
Inc. v. United Healthcare of Ariz., Inc., 770 F.3d 1282, 1289
(9th Cir. 2014) (“As a non-participant health care provider,
Spinedex cannot bring claims for benefits on its own
behalf.”). DaVita seeks, instead, to bring claims on behalf
of Patient 1, who signed a form assigning some causes of
action to DaVita.
The assignment form plainly encompasses a claim
seeking to recover benefits, so DaVita may bring that claim.
See Spinedex, 770 F.3d at 1288–91 (holding that a valid
assignment of rights allows a third party to bring the
beneficiary’s claim). But the complaint fails to state a claim.
All of DaVita’s arguments stem from its argument, which
we reject, that the Plan violates the MSP. Under the clear
terms of the Plan, Patient 1 received all the “benefits due to
him [or her] under the terms of [the] plan.” 29 U.S.C.
§ 1132(a)(1)(B).
We conclude that DaVita may not bring the equitable
claims, however, because the assignment form did not
encompass an assignment of equitable claims. “The
question of what rights and remedies pass with a given
assignment depends upon the intent of the parties.” DB
Healthcare, LLC v. Blue Cross Blue Shield of Ariz., Inc.,
852 F.3d 868, 876 (9th Cir. 2017) (internal quotation marks
omitted). To make that determination, “we look at the
language and context of the authorization[].” Id. at 877.
By signing the assignment form, Patient 1 agreed to
thirteen numbered items. The fifth item included this
sentence:

30 DAVITA V. AMY’S KITCHEN

I hereby assign to DaVita all of my right, title
and interest in any cause of action and/or any
payment due to me (or my estate) under any
employee benefit plan, insurance plan, union
trust fund, or similar plan (“Plan”), under
which I am a participant or beneficiary, for
services, drugs or supplies provided by
DaVita to me for purposes of creating an
assignment of benefits under ERISA or any
other applicable law.
The Sixth Circuit recently held that a nearly identical
assignment did not assign equitable claims, and we agree
with its analysis on this point. Marietta, 978 F.3d at 344–
45. The wording of the assignment itself suggests only an
assignment of a claim for benefits: Patient 1 assigned “all of
[Patient 1’s] right, title and interest in any cause of action . . .
under any employee benefit plan . . . for purposes of creating
an assignment of benefits under ERISA or any other
applicable law.” (Emphasis added). The most natural
reading of that sentence is that Patient 1 assigned all possible
causes of action for the payment of benefits. The assignment
of “any cause of action” is not superfluous because it refers
to the causes of action available “under ERISA or any other
applicable law,” such as state contract law.
The broader context of the sentence confirms that
interpretation. The title of numbered item five is
“Assignment of Benefits; Lien.” And all of the remaining
sentences of the same paragraph—such as how the patient
should handle payments, the “automatic lien,” and the
pursuit of “collections”—pertain strictly to payments.
Zooming out further still, the overall purpose of the
document similarly focuses exclusively on responsibility for
payments, affirming that the patient “is personally

DAVITA V. AMY’S KITCHEN 31

responsible for payments”; noting that the patient is
“assigning rights to payments from my insurer”; and
“authorizing DaVita to obtain the necessary information to
obtain such payments.” (Emphases added.) As in Spinedex,
770 F.3d at 1292, “the entirety of the Assignment indicates
that [Patient 1] intended to assign to [DaVita] only [his or
her] rights to bring suit for payment of benefits.” See also
DB Healthcare, 852 F.3d at 876–77 (holding that an
assignment implicit in “I Hereby Authorize My Insurance
Benefits to Be Paid Directly to the Physician” encompassed
only a claim for benefits and not equitable claims).
AFFIRMED.