The U.S. Supreme Court recently granted certiorari in CVS, et
al., v. Doe, at al., Docket No. 20-1374, to determine whether
504 of the Rehabilitation Act of 1973 and the Affordable Care Act
(“ACA”) provides a disparate-impact cause of action for plaintiffs
alleging disability discrimination. In CVS, the
plaintiffs/respondents, five individuals living with HIV, allege
that CVS Pharmacy’s new requirement that they must obtain their
specialty medication through specialty pharmacists by mail or
through drop shipments at a CVS Pharmacy, and not at their local
pharmacy, is discriminatory. Several respondents requested to
opt-out of the program. However, their requests were denied and
they argued that they were forced to incur more costs in violation
of the Americans with Disabilities Act, ACA, Employee Retirement
Income Security Act, and other California Codes. The District Court
granted CVS’ motion to dismiss, finding that no disparate-impact
cause of action existed. However, the U.S. Court of Appeals
for the Ninth Circuit vacated the district court’s dismissal of the
ACA claim and the Unfair Competition Law (“UCL”) Business and
Professions Code §§ 17200 et seq. claim to the extent it is
predicated on a violation of the ACA. The Supreme Court by way of
this grant of certiorari agreed to consider whether respondents may
bring a private right of action for discrimination on the basis of
race, sex, age, and disability in federally funded health programs
and activities. Specifically, the issue before the Supreme Court is
whether section 504 of the Rehabilitation Act, and by extension the
ACA, provides a disparate-impact cause of action for plaintiffs
alleging disability discrimination In its briefing, CVS argues that
neither the Rehabilitation Act nor the ACA encompasses disparate
impact claims and that for the Supreme Court to find otherwise
“would eviscerate the contracting arrangements that underpin
America’s healthcare sector.” CVS relies on the Supreme Court’s
holding in Alexander v. Choate, 469 U.S. 287, 304 (1985),
for the proposition that section 504 guarantees equal opportunity,
not “equal results.” Notably, CVS argues that “[a]ll section
504 requires is that a plan make the same package of benefits
available to participants regardless of their disability
status—just as respondents’ plans do.” In response, Respondents
argue that the change in CVS’ policy means that if patients were to
pick up the specialty medications at their preferred local
neighborhood pharmacies, they would have to pay out-of-network
costs. Thus, such a policy has a disparate impact in that it
severely increases the costs incurred by HIV-positive patients who
they contend need to go to their local pharmacists who know their
medical histories and can help manage side effects and make
modifications as needed. Ultimately, the Supreme Court will
determine whether plaintiffs can use the ACA as a sword to cut
costs to get out-of-network benefits at the price of what they pay
for in-network services. A decision is expected later this year.
