(Reuters) - A U.S. judge on Thursday put on hold a new federal rule that dialysis providers have said would prevent dialysis patients from using charitable assistance to buy private health insurance.
U.S. District Judge Amos Mazzant in Sherman, Texas stopped the rule from taking effect Friday as planned. The decision is a victory for dialysis providers Fresenius Medical Care, DaVita Inc and U.S. Renal Care Inc, which filed a lawsuit to block the rule last week.
The order is temporary, preserving the status quo while Mazzant considers the merits of the lawsuit. Mazzant said the companies had shown a reasonable probability that they would succeed.
The rule, announced by the U.S. Department of Health and Human Services on Dec. 14, would require dialysis providers to disclose to insurers any charitable assistance their patients are receiving for their care. The providers said insurers would use that information to refuse coverage to their patients.
Because of the high cost of dialysis, which treats end-stage kidney disease, many patients receive financial assistance from charities, most prominently the American Kidney Fund.
Fresenius, DaVita and U.S. Renal Care all donate to AKF, according to their lawsuit. Fresenius and DaVita both revealed last week that they had received subpoenas from federal prosecutors about their ties to the organization.
In announcing its rule, HHS said it believed financial assistance was being used to steer patients eligible for Medicare or Medicaid to sign up instead for private insurance on the federal Affordable Care Act's marketplaces, which pays providers more.
Such steering could harm patients by making it harder for them to get kidney transplants, the ideal treatment in many cases, HHS said. Charitable non-profits like AKF do not pay for transplants or post-transplant care, the agency said.
The agency also said steering could hinder the functioning of the ACA's marketplaces.
But the dialysis companies said in their lawsuit that many patients prefer private insurance because it provides better coverage, and that the new rule would let insurers discriminate against them.
They said HHS's true motive was not to protect patients, but to entice insurers to stay on the ACA exchanges, which some have fled due to rising costs.
The companies said HHS violated federal law by rushing the rule without a required public notice and comment period so it would take effect before Republican President-elect Donald Trump, who has promised to repeal the ACA, takes office.
Reporting by Brendan Pierson in New York; Editing by Lisa Shumaker