Potential discrimination is at issue in a case against the insurer for mandating use of a specialty pharmacy.
ISSUE OF THE CASE
When a health insurance plan in a southern state informs a patient who is HIV positive that it will not provide coverage for his medications if he obtains them from his local pharmacy, may the patient maintain a lawsuit for discrimination under a provision in the Affordable Care Act (ACA) or the Rehabilitation Act?
FACTS OF THE CASE
A patient had health insurance coverage under a policy administered by a Blue Cross/Blue Shield plan. The insurance underwriter issued a requirement that members obtain certain high-cost medications from a specialty pharmacy network for in-network, lower-cost coverage to apply. Using the insurer’s specified specialty-pharmacy source would have meant that the patient would pay $120 for a monthly supply of the medication he consumed. If he continued to use his hometown pharmacy, the insurer would not cover any of the expense, meaning that he would have to pay thousands of dollars per month himself. This meant that the patient could no longer use his local pharmacy to provide his medications.
The insured individual liked his relationship with his hometown pharmacist, who knew his health history and could spot potentially harmful drug interactions. The patient was also concerned that having the medication delivered to his home by the specialty pharmacy might compromise his privacy or risk temperature damage to the medication. He asked the insurer to let him opt out of the specialty-pharmacy mandate, but that request was declined by the insurer.
The patient felt this was a discriminatory decision by the plan, and he filed a putative class action lawsuit against the insurer in federal court. In order for a claim to proceed as a class action lawsuit, the court must certify the class of individuals adversely affected. Until that certification has been made by the court, the claim is referred to as a “putative” class action.
The patient advanced 3 bases for his claim of discrimination by the insurer: It discriminated against him and other beneficiaries who were HIV positive under an antidiscrimination provision in the ACA, it was discriminatory under the Americans with Disabilities Act, and it breached his contract of insurance with the underwriter. The insurance company made a motion with the trial court to dismiss the complaint, and the trial court judge granted that motion and denied the plaintiff the opportunity to amend his complaint. The insured patient appealed that decision to the relevant federal appellate court.
The US Court of Appeals with jurisdiction over the geographic area in question examined each of the plaintiff’s arguments in turn, denying all bases advanced by the insurance beneficiary. It upheld all the rulings of the trial court judge in the matter.
THE COURT’S REASONING
Turning first to the claim rooted in a provision of the ACA, a thorough review of that statute’s wording led the appellate court judges to the conclusion that the antidiscrimination provision in the ACA was linked to the standards defining discrimination appearing in the Rehabilitation Act of 1973.
That earlier statute uses this standard; The differential treatment must be based “solely by reason of the individual’s disability.”
If the differential treatment was linked to some other reason, that action did not equate to “the kind of discrimination barred by the law.”
Looking at the specific provisions of the insurance plan and the operating policies implemented by the insurer, the court concluded that the insurance plan did not deny him benefits, nor did it discriminate against him based on disability.
Specific wording for the decision addresses that: “The plan’s specialty medications list is neutral on its face. Some of the included medicines are apt to be used by those with disabilities. But plenty of others are not, such as medicines used to treat high cholesterol, osteoporosis, or allergic rhinitis.…”
The court continued, clarifying its focus: “The common trait linking the listed drugs is cost, not the disabled status of their users. Because the specialty medications program does not distinguish based on disability, much less ‘solely’ so, it does not convey any discriminatory intent.”
Focusing on a prior court decision, this panel of 3 judges concluded that the applicable federal statutes did not prohibit “disparate-impact discrimination.” Disparate-impact discrimination occurs when an entity acts for a nondiscriminatory reason but nevertheless disproportionately harms a protected group.
In this case, the court ruled that the relevant statute bars discrimination “solely by reason of his or her disability.”
In the view of these judges, that language does not encompass actions taken for nondiscriminatory reasons.
Turning to the Americans with Disabilities Act, the court focused on the prohibition of discrimination in the enjoyment of public accommodations “by any person who owns, leases [or leases to], or operates a place of public accommodation.”
Although a pharmacy is considered a place of public accommodation, the insurance company does not “own, lease, or operate” the plaintiff’s pharmacy, so that argument came up short.
The appellate court also rejected the arguments tied to breach of the contract of insurance. Because the first 2 discrimination claims did not prevail, the contract-based argument failed, as well: “The failure of his statutory claims dooms his argument that the insurer violated its duty of dealing in good faith.”
The plaintiff had already been permitted to amend the wording of his complaint that launched the matter once.
On appeal, he presented “few hints about what amendments he would make.”
As a result, the appellate court did not extend an opportunity to amend it once again.