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Doe v. CVS Pharmacy, Inc.

9th Circuit Court
No. 19-15074, 2020 U.S. App. LEXIS 18001
December 9, 2020

Keywords: Affordable Care Act (ACA), Americans with Disabilities Act (ADA), HIV/AIDS, Unruh Civil Rights Act, Unfair Competition Law (UCL), Employee Retirement Security Act (ERISA), California, Legal Authority.

Summary and Facts of the Case

Five individuals living with HIV/AIDS sued CVS pharmacy after a change in company policy. In the past, the group was able to use local pharmacies for their medications. In addition to their HIV/AIDS treatment, they were also taking additional medications unrelated to HIV/AIDS. Because of concern regarding possible negative impacts of drug interactions, they wished to continue using their community pharmacies who were most familiar with their pharmaceutical history. 

CVS Caremark, an enrollee health plan, required members to use “in-network” pharmacies, which did not include the individuals’ community pharmacies. The individuals in this case alleged that this change was discriminatory against persons with disabilities because there was not an opt-out option.

The individuals in this case claimed this CVS Caremark requirement was discriminatory under the Affordable Care Act (“the ACA”), the Americans with Disabilities Act (“the ADA”), the California Unruh Civil Rights Act (“the Unruh Act”), and that it denied benefits under the Employee Retirement Security Act (“ERISA”), as well as violated California’s Unfair Competition Law (“UCL”).

Doe v. CVS Pharmacy, Inc., was heard by the 9th District Court of Appeals after a district court ruled the individuals were not treated differently, because the plan applied to all medication, whether they are used to treat a disability.

Issue of the Case

Does the CVS Caremark benefit plan discriminate against people with disabilities?

Arguments and Analysis

1. Does Section 1557 of the ACA create a health-care specific anti-discrimination standard?

The 9th Circuit Court considered whether there was a specific anti-discrimination standard in the ACA. Based on the Sixth Circuit Court of Appeals decision of Doe v. BlueCross BlueShield of Tennessee, the Court determined that there was no specific anti-discrimination standard found in the law. The Court said the individuals in this case must show facts adequate to bring a claim under Section 504 of the Rehabilitation Act.

2. Do the individuals adequately allege facts to bring a claim under Section 504 of the Rehabilitation Act and are they able to bring a claim under the ACA?

The Court used the test in Choate. Mark H. v. Lemahieu. It first examined the nature of the benefit denied and determined the lower court made the benefit too narrow. The U.S. Supreme Court previously found that the ACA requires health plans to cover prescription drugs as an “essential health benefit” and the lower court was too restrictive in their finding.

The Court then looked at whether the health care plan provided a meaningful access to the benefit or services. The Court found that the individuals adequately showed that they were denied meaningful access to an ACA-provided benefit. They also adequately showed that a plan that appears unbiased on the surface can still be discriminatory. The new CVS Caremark plan made it more difficult for people with disabilities to access their medications, which is a violation of Section 504.

Finally, the Court ruled that the lower court was wrong in requiring the individuals to demonstrate how the CVS plan specifically impacted people with HIV/AIDS. They found this decision was inconsistent with the ruling in Choate, which did not require anyone to demonstrate distinct issues regarding HIV/AIDS. The individuals only had to demonstrate that they were not provided meaningful access to the benefit.

The Court rejected the district court’s dismissal of their ACA claim and returned the case to district court for further proceedings.

3. Should the claim of discrimination under the ADA have been dismissed?

The Court looked at the claim of disability discrimination under the ADA. The Court found that the claim of disability discrimination failed because a benefit plan is not a place of public accommodation. Because there is no building that is inaccessible, the plan itself is not a place of public accommodation. The Court affirmed the lower court dismissal of this claim.

4. Should the claim for benefits under ERISA have been dismissed?

The Court found that the ERISA claim must be dismissed because the individuals did not challenge the dismissal from the district court on appeal. Instead, the individuals argued that their health plans were not validly amended. Such legal claims are waived when they are not included or argued on appeal.

5. Should the claim under the UCL have been dismissed?

The Court ruled the individuals’ claim that CVS Caremark violated the UCL was without basis. Further, the Court found that the allegations of unfairness did not specifically state how the plan violated the UCL or went against public policy. The Court decided that the suit did not meet the UCL’s legal standards, and the district court was right to dismiss the claim.

Rulings

The Court of Appeals set aside the district court’s dismissal of the ACA and UCL claims to the extent it was based on violation of the ACA, but it upheld all other dismissals made by the district court.

Doe v. CVS Pharmacy, Inc, was scheduled to be heard by the Supreme Court in December 2021. On November 12, 2021, the case was dismissed under rule 46 of the court.

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