By David Yucht, J.D.
The court rejected a claim that BlueCross violated the anti-discrimination provision of the Affordable Care Act (ACA) by requiring that a high-cost HIV medication be delivered by mail or picked up from a specialty pharmacy.
The Sixth Circuit Court of Appeals affirmed a lower court ruling rejecting a discrimination claim under the ACA against BlueCross BlueShield of Tennessee (BlueCross) for requiring that patients receive their high-cost HIV medicines by mail or at specialty pharmacies. His claims for breach of contract and for a violation of the Americans with Disabilities Act (ADA) were also rejected by the Sixth Circuit (Doe v. BlueCross BlueShield of Tennessee, Inc., June 4, 2019, Sutton, J.).
An HIV-positive patient’s high-cost medication was covered by BlueCross. He originally bought his medication from his local pharmacy. After a while, BlueCross required beneficiaries to obtain special high-cost medicines from a specialty network to be eligible for in-network prices. The patient was required to fill the HIV prescription either through the mail or by picking it up at certain pharmacies. He was concerned that his regular pharmacists would no longer be available to spot the effects of harmful drug interactions. He also worried that medicine deliveries to his house might compromise his privacy or risk damaging his medicine. He asked to opt out of this program. BlueCross declined. He filed a putative class action against BlueCross, alleging it discriminated against him and other HIV-positive beneficiaries in violation of the ACA as well as the ADA and that it breached the insurance contract. The district court granted BlueCross’s motion to dismiss. The patient appealed.
ACA-Discrimination. The Sixth Circuit affirmed the lower court ruling. The ACA provides that an individual shall not, on grounds prohibited under the Civil Rights Act, the Education Amendments, the Age Discrimination Act, or the Rehabilitation Act . . . be subjected to discrimination under, any health program . . . which is receiving Federal financial assistance." The appellate court noted that despite the patient’s assertion otherwise (with support of HHS interpretation), one may not "mix and match" the standards contained in these four statutory options and apply the most advantageous standards from the diverse laws to get the best results. For example, an ACA suit seeking relief under the Civil Rights Act, must apply standards contained in the Civil Rights Act. HHS was wrong to "interpret Section 1557 as authorizing a private right of action for claims of disparate impact discrimination on the basis of any of the criteria enumerated in the legislation." The appellate court noted that although agencies have authority to interpret statutes, they do not have authority to rewrite them.
Rehabilitation Act. The patient’s ACA/Rehabilitation Act claim failed. To state a claim under the Rehabilitation Act, as incorporated into the ACA, there must be allegations that an individual with a disability, who was otherwise qualified for participation in a health program, was denied the benefits of, or subjected to discrimination under the program solely by reason of his disability. Here, BlueCross did not exclude the patient from participating in the plan or deny him benefits covered by it. Moreover, the plan’s specialty medications program did not discriminate against him based on disability because the plan’s specialty medications list was neutral on its face and contained many medicines used by those who do not suffer from disabilities, such as drugs for high cholesterol or hay fever. Furthermore, according to the Sixth Circuit, disparate impact claims do not apply to matters under the Rehabilitation Act, but only claims of intentional discrimination. The patient also argued on appeal that BlueCross wrongfully denied his request for an accommodation, namely letting him buy the medicine at his local pharmacy. However, the patient waived that argument by failing to articulate it previously.
Other issues. The patient’s breach of contract claim and request for leave to amend also failed. The patient alleged that BlueCross breached its contract by violating its implied duty of good faith and fair dealing. However, the failure of his ACA and ADA claims doomed his argument that BlueCross violated its duty of good faith by inadequately covering his medication. The patient’s request for leave to amend failed because the patient did not explain to the district court how he intended to correct his complaint.
The case is No. 18-5897.
Attorneys: Edith M. Kallas (Whatley Kallas, LLP) for John Doe. Todd Kim (Reed Smith LLP) for BlueCross Blueshield of Tennessee, Inc.
Companies: BlueCross Blueshield of Tennessee, Inc.
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