The NCSL Blog

09

By Lisa Soronen

In CVS Pharmacy v. Doe, the U.S. Supreme Court will decide whether disability disparate impact claims may be brought under Section 504 of the Rehabilitation Act and therefore under Section 1557 of the Affordable Care Act (ACA).

Supreme CourtThe Does are individuals living with HIV/AIDS who rely on employer-sponsored health plans for their medications.

Per their prescription plan, to receive “in-network” prices they can only obtain specialized medication via mail or pick up at a CVS pharmacy. This means they must “forego essential counseling and consultation from specialty pharmacists.”

The Does sued CVS for disparate impact disability discrimination under the ACA.

Section 1557 of the ACA prohibits federally funded health programs from discriminating based on race, color, national origin, sex, age or disability. Section 1557 of the ACA incorporates the anti-discrimination provisions of various civil rights statutes including, for disability, Section 504 of the Rehabilitation Act. So, to be able to sue for disparate impact disability discrimination under the ACA it must likewise be possible to sue for disparate impact disability discrimination under the Rehabilitation Act.

In its certiorari petition, CVS alleges that the Supreme Court “expressly left open whether . . .  the Rehabilitation Act, provides a disparate-impact claim for disability discrimination” in Alexander v. Choate (1985). The court agreed to decide that question.

The 9th Circuit assumed disparate-impact claims could be brought under Choate, statingthe Supreme Court concluded that not all disparate-impact showings qualify as prima-facie cases under Section 504.” The 9th Circuit then applied the “test outlined in Choate” for assessing Section 504 claims and concluded the Does stated a claim for disability discrimination under the ACA.

According to the 9th Circuit, Choate required it to look to the ACA to determine “whether Does adequately alleged they were denied meaningful access to an ACA-provided benefit.” The ACA requires that health plans cover prescription drugs as an "essential health benefit." The 9th Circuit concluded: “Does have adequately alleged that they were denied meaningful access to their prescription drug benefit, including medically appropriate dispensing of their medications and access to necessary counseling.”

The 9th Circuit opined that it didn’t matter the process for obtaining specialty medicine was facially neutral; it applied to all specialty medicine not just HIV/AIDS medicine. “[T]the program burdens HIV/AIDS patients differently because of their unique pharmaceutical needs. Specifically, they claim 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.”

Section 504 of the Rehabilitation Act applies to all states and local governments that receive federal funds. Allowing disparate impact claims will increase Section 504 litigation.  

Lisa Soronen is executive director of the State and Local Legal Center and a regular contributor to the NCSL Blog on judicial issues.

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This blog offers updates on the National Conference of State Legislatures' research and training, the latest on federalism and the state legislative institution, and posts about state legislators and legislative staff. The blog is edited by NCSL staff and written primarily by NCSL's experts on public policy and the state legislative institution.