John Doe v. Bluecross Blueshield of Tenn., Inc.

926 F.3d 235

John DOE, Plaintiff-Appellant,

v.BLUECROSS BLUESHIELD OF TENNESSEE, INC., Defendant-Appellee.

No. 18-5897

United States Court of Appeals, Sixth Circuit.

Argued: May 1, 2019

Decided and Filed: June 4, 2019

ARGUED: Jerry Flanagan, CONSUMER WATCHDOG, Los Angeles, California, for Appellant. Todd Kim, REED SMITH LLP, Washington, D.C., for Appellee. ON BRIEF: Jerry Flanagan, CONSUMER WATCHDOG, Los Angeles, California, Edith M. Kallas, WHATLEY KALLAS, LLP, New York, New York, Alan M. Mansfield, WHATLEY KALLAS, LLP, San Diego, California, Jerry Martin, Seth M. Hyatt, BARRETT JOHNSTON MARTIN & GARRISON, LLC, Nashville, Tennessee, for Appellant. Todd Kim, REED SMITH LLP, Washington, D.C., Bryan M. Webster, Abraham Judson Souza, REED SMITH LLP, Chicago, Illinois, for Appellee.

Before: GUY, SUTTON, and NALBANDIAN, Circuit Judges.

SUTTON, Circuit Judge.

Treating similarly situated people differently goes to the heart of invidious discrimination. But treating differently situated people differently usually counts as equal justice under law. Today’s case involves the second scenario in the context of an application of the antidiscrimination provisions of the Affordable Care Act.

John Doe receives HIV medicine through a health care plan administered by BlueCross BlueShield of Tennessee. Although Doe would like to pick up his medicine at his local pharmacy, his plan requires him, and anyone else who uses certain high-cost drugs, to get his medicine by mail or at a specialty pharmacy. Frustrated by that requirement, Doe sued BlueCross for discriminating against him on the basis of disability and for breaching their contract. The district court rejected the claims as a matter of law. We affirm.

I.

John Doe is HIV-positive and takes Genvoya to keep his condition under control. While advances in HIV/AIDS research continue to improve treatment for the disease, the most effective medicines can be expensive. Doe receives health insurance from BlueCross. Happily for him, the plan covers Genvoya.

Unhappily for him, BlueCross imposes requirements on where individuals obtain the medication. Doe originally bought Genvoya from his local pharmacy. But after February 2017, the pharmacy told him that BlueCross wouldn’t pay for the medication there any longer. BlueCross requires beneficiaries to obtain specialty medicines—usually high-cost medicines for chronic and serious diseases—from a specialty pharmacy network if they want to pay in-network (read lower) prices. That meant Doe could fill the HIV prescription only through mail order or by picking it up at certain brick-and-mortar pharmacies. So long as Doe used the specialty pharmacy network, his co-pay for each monthly batch of Genvoya would be $120. But if Doe continued to get the medicine at his local pharmacy, BlueCross wouldn’t cover it at all, leaving him to pay full freight at thousands of dollars per batch.

This development bothered Doe. He liked interacting with his regular pharmacists, who knew his medical history and who could spot the effects of harmful drug interactions. He also worried that medicine deliveries to his house might compromise his privacy or risk heat damage to the medicine. Doe asked BlueCross for permission to opt out of the specialty medications program. BlueCross declined.

Doe filed this putative class action against BlueCross, alleging that it discriminated against him and other HIV-positive beneficiaries in violation of the Affordable Care Act as well as the Americans with Disabilities Act and that it breached their insurance contract. The district court granted BlueCross’s motion to dismiss the complaint and denied Doe leave to amend.

II.

The Affordable Care Act claim . Doe contends that BlueCross discriminated against him on the basis of disability in violation of § 1557 of the Patient Protection and Affordable Care Act. The argument implicates two questions. Does the standard of liability include a relaxed form of disparate-impact discrimination? May Doe bring a private lawsuit to enforce the claim?

As for the standard of liability, the language of the statute is a good place to start. The first sentence of § 1557 provides that "an individual shall not, on the ground prohibited under title VI of the Civil Rights Act of 1964, title IX of the Education Amendments of 1972, the Age Discrimination Act of 1975, or section 504 of the Rehabilitation Act of 1973, be excluded from participation in, be denied the benefits of, or be subjected to discrimination under, any health program or activity, any part of which is receiving Federal financial assistance." 42 U.S.C. § 18116(a). This language brings the problem into view. Doe thinks that some of the incorporated statutes permit discrimination claims based on a relaxed disparate-impact theory of liability and that some of them do not. As he sees it, he may pick the statute with the lightest standard from this menu of four options and use that standard of liability in prosecuting his claim for disability discrimination.

The statute does not permit this reading. In the abstract, the word "ground" picks up the basis on which the insurer takes an action. See 6 Oxford English Dictionary 876 (2d ed. 1989). In the concrete context of this law, the word "ground" refers to the forbidden source of discrimination: race, color, and national origin (Title VI); sex (Title IX); age (Age Discrimination Act); and disability (Rehabilitation Act). When "ground" is paired with "prohibited," as in "on the ground prohibited," the statute picks up the type of discrimination—the standard for determining discrimination—prohibited under each of the four incorporated statutes. If the claimant seeks relief for discrimination "on the ground prohibited" by § 504 of the Rehabilitation Act, for example, he must show differential treatment "solely by reason of" disability, 29 U.S.C. § 794(a), not some other standard of care. See Lewis v. Humboldt Acquisition Corp. , 681 F.3d 312, 315–16 (6th Cir. 2012) (en banc). Otherwise, the health insurer’s actions do not amount to the kind of "discrimination" barred by the law.

Think of it this way. The Affordable Care Act prohibits discrimination based on several grounds. But it does not change the nature of those grounds any more than it adds a new form of discrimination, say discrimination based on political perspective, to the law. By referring to four statutes, Congress incorporated the legal standards that define discrimination under each one. See Panama R. Co. v. Johnson , 264 U.S. 375, 392, 44 S.Ct. 391, 68 L.Ed. 748 (1924).

The second sentence of the section reinforces this conclusion. It says that "[t]he enforcement mechanisms provided for and available under such title VI, title IX, section 504, or such Age Discrimination Act shall apply for purposes of violations of this subsection." 42 U.S.C. § 18116(a). "Enforcement" refers to compelling adherence to the duty in each law. 5 Oxford English Dictionary , supra , at 245. And a "mechanism" is the means of producing each end. 9 id. at 536. The phrase "enforcement mechanism" thus covers the distinct methods available under the four listed statutes for compelling compliance with the substantive requirements of each statute. If the first sentence created a brand-new single standard for what qualifies as discrimination, why would Congress use four distinct families of enforcement mechanisms to compel compliance with that standard rather than creating a matching single mechanism? We can think of no answer. Here, as is so often the case, Occam’s Razor provides a handy guide.

Pulling all of this together, the statute prohibits discrimination against the disabled in the provision of federally supported health programs under § 504 of the Rehabilitation Act. In doing so, the Affordable Care Act picks up the standard of care for showing a violation of § 504 , not the other laws incorporated by the statute or for that matter any other statute.

This approach also makes short work of the second statutory question: May Doe enforce the law through a private right of action? Yes. Because the Rehabilitation Act contains a private right of action, see Barnes v. Gorman , 536 U.S. 181, 185, 122 S.Ct. 2097, 153 L.Ed.2d 230 (2002), the enforcement mechanism sentence permits Doe to bring this lawsuit to enforce that prohibition under the Affordable Care Act as well.

Doe accepts some of this analysis. He agrees that the Act gives him a private cause of action to sue for disability discrimination for the reasons just given. But he thinks the enforcement mechanism sentence allows him to use any of the four substantive legal standards for proving discrimination and apply it to any of the four classifications.

Picking your own adventure, however, is not what that sentence says. The phrase "enforcement mechanism" refers to the process for compelling compliance with a substantive right, not the substantive right itself. As we have said before, in interpreting § 504 of the Rehabilitation Act no less, "[e]nforcement provisions generally do not alter substantive standards of care." Lewis , 681 F.3d at 316. Had Congress wished to make all of the enforcement mechanisms available for any classification, it would have said "[t]he enforcement mechanisms provided for and available under title VI, title IX, section 504, and such Age Discrimination Act shall apply"—instead of the or it opted to use.

Context does Doe’s argument no favors either. Each antidiscrimination statute has its own highly reticulated set of enforcement rules adapted for the type of discrimination that each law targets. For example, Title VI, Title IX, and § 504 do not require the exhaustion of administrative remedies before bringing a private cause of action, while the Age Discrimination Act does. See 42 U.S.C. § 6104(e)(2), (f) (Age Discrimination Act); Cannon v. Univ. of Chi. , 441 U.S. 677, 706 n.41, 99 S.Ct. 1946, 60 L.Ed.2d 560 (1979) (Title IX); Tuck v. HCA Health Servs. of Tenn., Inc. , 7 F.3d 465, 470–71 (6th...