Is There Unlawful Discrimination in Prescription Medication Benefit Plan?

ISSUE OF THE CASE

When members of an employee group file a lawsuit alleging discrimination because of requirements related to their prescription drug benefit plan, are their claims, rooted in the Americans With Disabilities Act (ADA), sufficient for the lawsuit to proceed?

FACTS OF THE CASE

A group of employees in a Western state filed a lawsuit in federal court against 2 sets of defendants. The first set included a national pharmacy chain, a specialty pharmacy it operated, and a pharmacy benefit manager operated by the chain. The second set of defendants included a collection of 3 employers, which had contracted with the first set of defendants to provide a prescription drug benefit program for their employees.

The crux of the complaint, stated by the court early on, was that “plaintiffs allege their benefit plans allow them to obtain their HIV/ AIDS medications at favorable ‘in-network’ prices only via mail” or at one of the brick-and-mortar pharmacies operated by the chain.

The court continued, summarizing the plaintiffs’ arguments this way: “Compared to the [nonchain] community pharmacies from which the plaintiffs were previously able to obtain their medications, the mail order and [brick-and-mortar] pick up options do not offer the same level of privacy, convenience, reliability, and service.”

Before the creation of the restricted network, the patients could obtain their HIV/AIDS medications at the contracted rate at any in-network pharmacy. Establishment of the new limited-outlets approach meant employees could obtain those medications at the discounted rate only from the brick-and-mortar pharmacies or the mail order outlet operated by the chain.

Emphasizing these changes, the plaintiffs claimed discrimination based on their disability, pointing to certain indignities associated with the new approach and the requirement that many members of the group were required to switch to new pharmacies. They identified concerns about privacy when it appeared that staff members in the pharmacies were not appropriately protective of the confidential nature of their medication discussions in front of others waiting to pick up prescriptions, pharmacists who were unfamiliar with the patients and their drug regimens, and problems with the mail order services. Moreover, if they went to an out-of-network pharmacy, they would be required to make a more substantial co-payment or pay full price for the medication.

The patients/plaintiffs acknowledged that although the new arrangement for their benefit plan applied more broadly to many employees other than the members of the group pursuing this legal claim, there was a disproportionate impact on this group of patients/plaintiffs because of their condition with HIV/AIDS. They also recognized that this new approach with its restrictions applied to all medications designated “specialty medications,” not merely those to treat HIV/AIDS.

The lawsuit was rather complex, because the plaintiffs advanced 8 separate legal arguments to attack the revised fringe benefit offering, with some rooted in federal regulations and statutes and others based on provisions in state law. However, a dominant theory underlying the case was an allegation that the ADA’s protections had been violated. All parties in both sets of defendants made a motion with the court to dismiss the lawsuit.

THE RULING

The judge at the US District Court agreed with the defendants that the matter should not move on to trial, and the case was dismissed.

THE COURT'S REASONING

The court began its written decision by reviewing decisions on the issue by other courts around the country and emphasizing that “no consensus has yet emerged as to the standard for assessing ADA antidiscrimination claims.”

It also emphasized that the plaintiffs have “alleged no statistical evidence sufficient to show that defendants’ program has a ‘significantly adverse or disproportionate impact’ on…HIV/AIDS patients.”

Dissecting the wording of the ADA, the court stressed the discrimination provisions of the law apply to places of public accommodation. The plaintiffs had attempted to frame community pharmacies as the “places of public accommodation” at the center of the case.

Nonetheless, the court pointed out the chain pharmacy locations at issue in this matter did not bar plaintiffs and other members of the class access to those pharmacies. Rather, the court concluded that the focus of the lawsuit was on the terms or requirements of the insurance benefit plan, something not covered by the provisions of the ADA cited by the plaintiffs.

The court also reviewed decisions from federal appellate courts around the country, all of which had concluded that ADA discrimination does not exist when a provision in an insurance plan applies equally to everyone under the plan. If there is no variation in coverage based on the disability, there is no discrimination.

The bottom line for the court was that the defendants’ motion to dismiss the case should be upheld, because the plaintiffs were still permitted to use their original pharmacies even following implementation of the restricted network approach.