9th Cir. Brings ACA Analysis in Line with Choate
Central point: To state a claim of disability discrimination under Section 1557 of the Affordable Care Act, plaintiffs must allege facts adequate to state a claim under Section 504 of the Rehabilitation Act.
Case: Does v. CVS Pharmacy Inc., No. 19-15074 (9th Cir. 12/09/20).
What happened: Five HIV/AIDS patients who had employer-sponsored health plans had been able to fill their prescriptions at community pharmacies but were then required to use CVS to remain "in network."
If the patients used a different pharmacy for their medication, they would have to pay "thousands more dollars per month." The patients sued under the ACA, alleging disability discrimination because they could no longer consult with specialty pharmacists for needed HIV/AIDS information or warnings about drug interactions.
The District Court dismissed the case, prompting the patients to appeal to the 9th Circuit.
Rule of law: Section 1557 provides that no one can be discriminated against under various federal antidiscrimination laws, including the Rehabilitation Act, by health programs that receive federal financial assistance.
What the court said: Returning to its July take on the ACA and Section 504 in Schmitt v. Kaiser Foundation Health Plan, 965 F.3d 945 (9th Cir. 2020), answered "no" to the question it left open: Can ACA plaintiffs claiming disability discrimination choose standards from other anti-discrimination statutes referenced in the law?
In this case, looking to the 6th Circuit's take in Doe v. BlueCross Blue Shield of Tennessee Inc., 926 F.3d 235 (6th Cir. 2019), the 9th Circuit explained that Section 1557's prohibiting discrimination "on the ground prohibited" under Title VI, Title IX, the Age Discrimination Act, or the Rehabilitation Act didn't lend itself to an interpretation that would allow a plaintiff to "pick the statute with the lightest standard" in pursuing a disability discrimination claim.
Instead, in the court's view "ground" refers to the source of discrimination. Thus, a disability discrimination claim under the ACA would be subject to the standard for determining discrimination in the Rehabilitation Act.
"If the claimant seeks relief for discrimination 'on the ground prohibited' by [Section] 504 of the Rehabilitation Act, ... he must show differential treatment 'solely by reason of' disability," the 9th Circuit wrote, quoting the 6th Circuit's reasoning.
In reaching its decision, the 9th Circuit brought its ACA analysis in line with Alexander v. Choate, 469 U.S. 287 (1985), in which the U.S. Supreme Court concluded that because people with disabilities had "meaningful and equal access" to Medicaid benefits, Tennessee was not required to provide people with disabilities with more days of inpatient coverage than it provided to people without disabilities.
Applying Choate, the 9th Circuit found that the patients adequately alleged they were denied meaningful access to their prescription drug benefit.
"Due to the structure of the [p]rogram as it relates to HIV/AIDS drugs, [the patients] claim, they cannot receive effective treatment under the [p]rogram because of their disability," the 9th Circuit pointed out.
Although the policy requiring patients to use a particular pharmacy was facially neutral, the patients claimed that changes in medication to treat the continual mutation of the virus requires pharmacists to review all of an HIV/AIDS patient's medications for side effects and adverse drug interactions, a benefit they no longer received under the program.
Because the Rehabilitation Act recognizes disparate impact claims, the 9th Circuit concluded that, following the standard of Choate, the patients adequately alleged that they were denied meaningful access to their prescription drug benefit. The 9th Circuit vacated and remanded the District Court's dismissal of the patients' ACA claim.
Takeaway: Section 1557 of the ACA does not create a health care-specific anti-discrimination standard. Instead, the Choate "meaningful access" standard of Section 504 applies.