Presentation Transcript

1. Preventing Old Tricks in the New World: East v. Blue Cross Blue Shield of Louisiana

   Update on Discriminatory Marketplace Practices A Presentation at “The Intersection between ACA and ADAP Summit” April 14, 2014 Scott A. Schoettes Senior Attorney and HIV Project Director
2. Our Mission Lambda Legal is a national organization committed to achieving the full recognition of civil rights of lesbians, gay men, bisexuals, transgender people and people living with HIV through impact litigation, education and public policy work.
3. Overview Events/conduct leading to the lawsuit Legal background Litigation strategy of the insurers Current status; remaining vigilant
4. Events Leading to LawsuitPrior to ACA Implementation: John East and 50-60 others receive insurance premium assistance for individual policies through the Louisiana (Ryan White) Health Insurance Program (HIP). All at or below 300% of the Federal Poverty Level All had an active health insurance policy more cost-effective than to provide care/medication directly through Ryan White BCBS is the largest insurer in Louisiana by far, and the only insurer in the state that includes Atripla in its formulary And what does BCBS see headed its way?
5. Events Leading to LawsuitPrior to ACA Implementation: Statistics on People Living with HIV in Louisiana Approximately 19,087 PLWH in Louisiana 84% are below 400% of federal poverty level and are eligible for Ryan White HIV/AIDS Program Assistance: That’s16,033people Of Those Eligible for Ryan White 25% are undiagnosed 25% are receiving Ryan White assistance 50% are diagnosed but not in care Harvard Center for Health Law Policy and Innovation, approximately 84% of the people living with HIV in Louisiana are [living below 400% of the federal poverty level and are therefore] eligible for assistance through the Ryan White HIV/AIDS Program. That means that in addition to John East—who courageously stepped forward to represent all lower-income people living with HIV in Louisiana—the proposed plaintiff class in the lawsuit is comprised of approximately 16,033 people living with HIV in Louisiana. Of those in the proposed plaintiff class, approximately only 25% are currently receiving Ryan White assistance, with about 25% undiagnosed and a full 50% diagnosed butnot currently in care.
6. Events Leading to LawsuitBlue Cross Blue Shield Takes Action Late December/early January: Those receiving Ryan White premium assistance hear that BCBS will no longer accept payment from third parties, including the Ryan White Program. Early January: Personnel from the Louisiana Health Insurance Program (HIP) make inquiries and confirm that BCBS will no longer be accepting such payments February 10: BCBS formally announces its policy, which says it will stop accepting such payments after February 28.
7. Events Leading to LawsuitBlue Cross Blue Shield Takes Action BCBS cites the CMS Guidance from November 2013: “[…] It has been suggested that hospitals, other healthcare providers, and other commercial entities may be considering supporting premium payments and cost-sharing obligations with respect to qualified health plans purchased by patients in the Marketplaces. HHS has significant concerns with this practice because it could skew the insurance risk pool and create an unlevel field in the Marketplaces. HHS discourages this practice and encourages issuers to reject such third party payments…”
8. Events Leading to LawsuitBlue Cross Blue Shield Cites CMS Policy BCBS cites the CMS Guidance from November 2013: “[…] It has been suggested that hospitals, other healthcare providers, and other commercial entitiesmay be considering supporting premium payments and cost-sharing obligations with respect to qualified health plans purchased by patients in the Marketplaces. HHS has significant concerns with this practice because it could skew the insurance risk pool and create an unlevel field in the Marketplaces. HHS discourages this practice and encourages issuers to reject such third party payments…”
9. Events Leading to Lawsuit HIV Advocates Respond and BCBS Digs In Efforts from within the state and by national advocates From HHS/CMS: “By statute, RWHAP funds […] may be used to support a Health Insurance Premium and Cost-Sharing Assistance Program, a core medical service, for eligible low-income HIV positive clients. […] RWHAP funds may be used to cover the cost of private health insurance premiums, deductibles, and co-payments to assist eligible low-income clients in maintaining health insurance […]” (published September 13, 2013 by HHS: Health Resources and Services Administration)
10. Events Leading to LawsuitHIV Advocates Respond and BCBS Digs In Advocates get CMS to issue new more specific guidance: “The November 4, 2013 FAQ does not apply to payments for premiums and cost sharing made on behalf of QHP enrollees by […]state and federal government programs […](such as the Ryan White HIV/AIDS Program). QHP issuers and Marketplaces are encouraged to accept such payments. […] Guidance from the Health Resources Services Administration (HRSA) on the Ryan White HIV/AIDS Program specifically describes how grantees can use grant funds to pay premiums and cost sharing for eligible individuals enrolled in QHPs.” (February 7, 2014)
11. Events Leading to LawsuitHIV Advocates Respond and BCBS Digs In Conversation with staffer from Senator Landrieu’s office: “BCBS LA told me their decision was not due to the CMS guidance or any confusion (as we thought before) but was in fact due to adverse selection concerns.” Adverse selection: “The applicant might have information about the risk that is not known to the insurer, or the insurer might have access to the information but be unable to incorporate it fully into the price of coverage, due to factors such as antidiscrimination laws.” (National Association of Insurance Commissioners)
12. Events Leading to LawsuitOther Louisiana Insurers Follow Suit Vantage Health Plan Feb. 11: Vantage rep confirms to the TPA that Vantage no longer accepting RW payments Feb. 19: Billy Justice, Director of Marketing and Sales for Vantage, says in the press that Vantage has to follow the lead of BCBS, the state’s largest insurer: “We can’t be the only carrier left,” Justice said. “We have to do what the major players in market are doing.”
13. Events Leading to LawsuitOther Louisiana Insurers Follow Suit Louisiana Health Cooperative (LAHC) Feb. 11: Greg Cromer, CEO of LAHC, confirms to Louisiana Health Insurance Program representative that LAHC is not accepting Ryan White funds.
14. Events Leading to Lawsuit January 17: Lambda Legal first hears about the situation in Louisiana; begins coordinating with national and local HIV advocates. January 27: Lambda Legal sends letter to BCBS, asking it to reverse course and implying the possibility of litigation. We receive no response by deadline. February 10: Lambda Legal files a complaint against BCBS with HHS Office of Civil Rights. February 13: Lambda Legal files complaints against LAHC and Vantage with HHS Office of Civil Rights. February 20: Lambda Legal files a class action discrimination lawsuit, along with a request for emergency injunctive relief, against all three insurers on behalf of John East and all others similarly situated.
15. Legal Basis for the LawsuitSection 1557: Non-Discrimination Provision of ACA “[…] [A]n 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 794 of title 29 [the Rehabilitation Act], 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, including credits, subsidies, or contracts of insurance, or under any program or activity that is administered by an Executive Agency or any entity established under this title ...”
16. Legal Basis for the LawsuitSection 1557: Non-Discrimination Provision of ACA Advantages: Clearly applicable Private right of action Case law interpreting the Rehab Act Disadvantages: Case law interpreting the Rehab Act “On the ground prohibited under. . .” Scope of coverage
17. Legal Basis for the LawsuitSection 1311: Addressing Discriminatory Benefit Design and/or Marketing Practices “(c) Responsibilities of the Secretary. “(1) The Secretary shall, by regulation, establish criteria for the certification of health plans as qualified health plans. Such criteria shall require that, to be certified, a plan shall, at a minimum-- “(A) meet marketing requirements, and not employ marketing practices or benefit designs that have the effect of discouraging the enrollment in such plan by individuals with significant health needs…”
18. Legal Basis for the LawsuitSection 1311: Addressing Discriminatory Benefit Design and/or Marketing Practices Advantages: More targeted at/tailored to the conduct at issue Disadvantages: Private right of action? Remedies
19. Legal Basis for the LawsuitState Law Claims Equitable Estoppel Breach of Contract Breach of the Duty of Good Faith and Fair Dealing Negligent Misrepresentation
20. Legal Basis for the LawsuitState Law Claims Advantages: No federal “hook” needed Disadvantages: May not apply to new enrollees Each state is different Success hinges on unfair practice regardless
21. Litigation Strategy of the InsurersDeny and Delay February 21: Lambda Legal files for emergency injunctive relief (TRO) February 22-24: A flurry of motions/briefs from the insurers February 24: Court grants TRO; sets hearing for the next day at 12:00 p.m. February 25: The TRO Hearing All three Defendants claim they have never rejected Ryan White payments, which is only technically true. BCBS changes its tune; states it will continue accepting such payments through March 31. LAHC and Vantage claim they have no plans to reject such payments, despite statements to the contrary to members of the press and directly to HIP personnel. Based on these representations and promises to hold the status quo through the end of March, the Court vacates the TRO and sets the hearing on the preliminary injunction for two weeks later, on March 10.
22. Litigation Strategy of the InsurersFrom the TRO to the Preliminary Injunction February 25 – March 10: Lambda Legal and Ropes & Gray feverishly prepare for the hearing on the preliminary injunction. Advocacy continues to get the Feds to take action. About March 3: We hear that a rule is coming, but no one knows when or what it will say. March 5: Both sides file papers in support of/opposing preliminary injunction. March 6-7: Opposing counsel gets wind that a rule is coming and, of course, ask the Court to postpone the hearing until we see what the rule says. March 7: We oppose postponing the hearing on the preliminary injunction in letter to the Court (and continue feverishly preparing).
23. Litigation Strategy of the InsurersHearing on the Preliminary Injunction Court refuses to postpone the hearing Court hears argument on “lack of standing” with respect to Vantage and LAHC Our first witness: a representative from HAART, the third-party administrator of the Ryan White funds testifies before lunch. After lunch, the insurers agree they will accept payments from the Ryan White program through the end of the year.
24. Current Status & Constant VigilanceInterim Final Rule March 19: CMS publishes interim final rule in Federal Register “We have become aware that, despite related policy clarifications, some QHP issuers continue to reject payments of premium and cost sharing by the Ryan White HIV/AIDS Program. In particular, this QHP issuer practice is causing access problems for persons who rely on the Ryan White HIV/AIDS Program for assistance. […] We are including within the new requirement that QHPs and SADPs must accept third party premium and cost-sharing payments from […] the Ryan White HIV/AIDS Program[…].” “This standard applies to all individual market QHPs, regardless of whether they are offered through an FFE, an SBE, or outside of the Exchanges.”
25. Current Status & Constant VigilanceInterim Final Rule March 19: CMS publishes interim final rule in Federal Register “[F]ailure to comply with the requirement to accept third party payments […] could constitute a violation […] as “substantial non-compliance with [an] Exchange standard.” “Depending upon the circumstances, [it] could also [be] a ‘practice that would reasonably be expected to have the effect of denying or discouraging enrollment into a QHP[…]’ [and] may be subject to a maximum penalty of $100 per day, per each individual who is adversely affected by the QHP or SADP issuer's non-compliance. […]”
26. Current Status & Constant VigilanceInterim Final Rule Open Questions: Are BCBS and other insurers going to ask CMS to modify the rule? If the rule does not apply to non-Exchange plans (or plans that are not QHP’s), should it be made to apply to such plans?
27. Current Status & Constant VigilanceEast v. BCBS of Louisiana, et al. Back before the Court for a status hearing on May 14 Insurers have not exactly been angels since agreeing to accept payments through Nov. 15 Did Blue Cross Blue Shield lose the battle but win the war?
28. Current Status & Constant Vigilance Insurers are going to continue to look for ways to avoid insuring PLWH, particularly lower-income PLWH “Smoking gun” of intentional discrimination will be rare, so claims of disparate impact need to be fortified Regulation and Section 1311 Enforcement (discriminatory benefit designs and marketing practices) Required use of mail order pharmacies HIV meds placed in higher tiers, with higher deductibles and co-pays Other? Upbeat end: insurers lobby for Medicaid expansion?
29. Lambda Legalwww.lambdalegal.org Midwest Regional Office 105 W. Adams, Suite 2600 Chicago, IL 60603 Legal Help Desk 312.663.4413 (Chicago) 866.542.8336 (National)