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.