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Obamacare Bias Claims Move Toward Consensus, But Still in Flux

Feb. 28, 2020, 9:55 AM

Courts construing the Affordable Care Act’s antidiscrimination provision appear to be moving toward a consensus on the standards applicable to cases brought under the law that will affect litigation strategies going forward.

One recent decision said that plaintiffs bringing claims under Obamacare’s antidiscrimination section must comply with the preexisting legal standards and enforcement mechanisms for the four civil rights laws referenced in the law.

It’s consistent with other recent court decisions on Section 1557, Andrew C. Stevens, a litigation associate at Arnall Golden Gregory LLP in Atlanta, told Bloomberg Law.

But other courts have said Section 1557 expanded the legal standards for bringing discrimination suits against health-care entities beyond the boundaries set by the civil rights laws, Stevens said.

So, while it now seems providers have viable defenses based on the underlying laws, it will take time for the rules governing these claims to “solidify” as more cases make their way through the courts, Nathaniel Glasser, a member of Epstein Becker Green’s Washington office, told Bloomberg Law.

It’s “a contentious issue” that the U.S. Supreme Court eventually may have to resolve, Stevens said.

‘Any Ground’

Section 1557 of the Affordable Care Act prohibits health-care programs that receive federal financial assistance from discriminating against people based on “any ground prohibited” by Title VI, Title IX, the Age Discrimination Act, or Section 504 of the Rehabilitation Act. That is, it provides a cause of action for discrimination based on sex, race, color, national origin, age, or disability.

Rudolph Papa sued Pennsylvania’s Main Line Health Systems and its doctors under the section, alleging the doctors treated him differently than they would have treated a younger person who presented with the same symptoms.

In mid-February, the U.S. District Court for the Eastern District of Pennsylvania dismissed Papa’s Section 1557 age discrimination claim based on his failure to comply with the Age Discrimination Act’s exhaustion of administrative remedies requirement before filing his court complaint.

The Age Discrimination Act is the only one of the four underlying laws that mandates bringing a complaint to the appropriate agency before filing a lawsuit.

Result ‘Not Surprising’

The result in Papa’s case isn’t surprising, Stevens and Glasser said.

Just last June, the only federal appeals court to construe Section 1557 said people suing under the law must comply with the “highly reticulated set of enforcement rules” associated with each individual antidiscrimination law cited in the statute.

A person may not pick and choose from among the procedural requirements and remedies incorporated in the four laws, the U.S. Court of Appeals for the Sixth Circuit said in Doe v. BlueCross BlueShield of Tennessee Inc. The ACA prohibits discrimination based on various grounds, but it doesn’t “change the nature of those grounds any more than it adds a new form of discrimination,” the court said.

Answering an open question, the court concluded that a disparate impact claim isn’t available under Section 504 of the Rehabilitation Act. Thus, Doe couldn’t pursue a disparate impact disability bias claim under Section 1557, it said.

An older case from the Eastern District of Pennsylvania, SEPTA v. Gilead Sciences Inc., reached the same result. The “various different standards and burdens of proof” in each of the underlying civil rights acts apply to Section 1557 claims, the court said in dismissing a claim alleging that Gilead’s pricing scheme for its Hepatitis C drugs violated the law.

Singular Standard Favored

In one of the earliest cases construing Section 1557, however, the U.S. District Court for the District of Minnesota held that the law provides a “new, health-specific, anti-discrimination cause of action that is subject to a singular standard, regardless of” the type of discrimination alleged.

To hold otherwise would create an “absurd inconsistency” in which people bringing suit under Section 1557 would be shut out of some remedies, or limited in how to bring actions, based on the protected class to which they belonged, the court said in Rumble v. Fairview Health Services.

The case was dismissed in 2017 after the parties reached a confidential settlement, but other courts have adopted this reasoning.

The case is Papa v. Diamandi, 2020 BL 54625, E.D. Pa., No. 19-cv-846, 2/13/20.

To contact the reporter on this story: Mary Anne Pazanowski in Washington at mpazanowski@bloomberglaw.com

To contact the editors responsible for this story: Rob Tricchinelli at rtricchinelli@bloomberglaw.com; Nicholas Datlowe at ndatlowe@bloomberglaw.com

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