Race, Health Care and the Law 
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Inadequate Protection Against Discrimination

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Vernellia R. Randall
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It is clear that the potential for continuing discrimination is significant. Any effort to create a just health care system will depend on the ability of advocates to litigate and prevent discrimination. Advocates' effectiveness will depend on the anti-discrimination provisions of the HSA. The Act contains express anti-discrimination enforcement provisions, but they are insufficient. A. Potentially Counterproductive Provisions
1. National Health Board

The Health Security Act is silent on the prohibition of discrimination by the National Health Board.

2. States

States are expressly prohibited from discriminating based on race, ethnicity, language, religion, national origin, socioeconomic status, disability or perceived health status, but only when setting Regional Health Alliance boundaries(255) Furthermore, if a state chooses to operate a statewide single-payer system, the state may not discriminate against health plans on the basis of race, sex, national origin, religion, mix of health professionals, location of the plan's headquarters, or organizational arrangement(256) As far as preventing discrimination by states, the Act has several flaws. First, it does not specifically forbid the states from discriminating in the design of the state system. The prohibition against discrimination focuses only on the drawing of boundaries of the regional alliance. No doubt many decisions will have the 'effect' of discriminating, but will be difficult to challenge on constitutional grounds.

Second, the HSA has insufficient protections against redlinin(257)

in developing the regional alliances. There are no limits on the number of regional alliances a state may create(258) On the other hand, the alliance area must be large enough to provide an adequate market share and thereby ensure effective negotiations with health plans(259) However, since health plans are not required to negotiate with all alliances within a state, insurance companies are likely to lobby to develop small, homogeneous alliances, so that they can target particular populations(260) While the Act includes a specific prohibition against establishing boundaries that discriminate, it is unclear whether this provision will apply to 'effect discrimination.' That is, if a state does not draw lines with an evident intent to isolate ethnic American communities, will the fact that the boundaries have the effect of discriminating be sufficient for a cause of action?

Third, the prohibition against splitting Metropolitan Statistical Areas ('MSAs') may be insufficient to protect ethnic Americans(261) It is uncertain what would happen if states created separate regional alliances for each MSA. Furthermore, The Act does not include Primary Metropolitan Statistical Areas ('PMSAs') which could be split. Splitting PMSAs would be devastating to many major cities that have significant ethnic American populations(262) Finally, states are not required to narrow health status disparities among different population groups. Without such requirements, states could implement systems which, while technically nondiscriminatory, in fact have an effect of not improving the health status of ethnic Americans. Such consequence would be as devastating as discrimination.

3. Regional Health Alliances

Regional health alliances are not permitted to discriminate against health plans on the basis of race, gender, ethnicity, religion, mix of health professionals, location of the plan's headquarters or organizational arrangement(263) They must assure that all eligible individuals in the alliance area enroll in a health plan(264) The HSA extends s 504 of the Rehabilitation Act of 1973(265) s 303 of the Age Discrimination Act of 1975(266) and s 601 of the Civil Rights Act of 196(267) to Regional Health Alliances(268) Unfortunately, the provisions regarding discrimination by the regional health alliances are similarly inadequate. Specifically, regional health alliances are not forbidden to engage in practices that have the effect of discriminating. Furthermore, the current interpretation of Title VI of the Civil Rights Act has proven inadequate in protecting ethnic Americans from cost-containment health care discrimination(269)

4. Corporate Health Alliances

The HSA provides that the provisions applicable to regional alliances relating to redlining and metropolitan statistical areas apply to the establishment of premium areas by corporate alliances(270) However, the same problems exist with corporate alliances that exist with regional alliances. Moreover, the Act does not require corporate health alliances not to discriminate. This oversight is likely to have significant effect on health plans owned by ethnic Americans or plans that serve a large portion of ethnic Americans. Since only employers who have 5000 or more employees can opt out of the regional alliance, the corporate alliances will be predominately middle- class European Americans(271) In attempting to serve this distinct population, corporate alliances are likely to discriminate by not contracting with health plans owned by ethnic Americans or that otherwise serve a large portion of ethnic Americans.

5. Health Plans

There is no doubt that some health plans will try to avoid serving ethnic American and poor communities. These communities are often high-risk with a backlog of untreated or undertreated illness. There are a number of ways that a health plan can minimize or restrict, if not exclude, services to undesirable patients. Health plans could enroll individuals and then not provide meaningful access to covered services by either failing to provide supplemental support services needed to access services or by locating the services outside the immediate community. They could provide services in a culturally inadequate and inappropriate form. They could use utilization review and financial risk- shifting to deny or at least delay the receipt of specialist services. They could fill their rolls with European American middle-class enrollees and then claim a lack of capacity.

At first blush, provisions of the Act, as it relates to preventing these problems, appear comprehensive. For instance, the criteria for certifying plans includes evaluating each plan for its relationship with the community and its capacity to deliver the comprehensive benefits package, anti-discrimination protections, marketing, grievance procedures and quality assurance(272) These provisions, however, only help the states assure that plans have the general ability to serve ethnic American communities; they do not assure that the plans will not avoid the communities altogether, and nothing in the plan requires health plans to serve all parts of the regional alliance.

However, while health plans are allowed to serve only part of an alliance(273) health plans may not engage in any activity that has the effect of discriminating against an individual on the basis of race, national origin, gender, income, health status or anticipated need for health services(274) Furthermore, plans are prohibited either directly or through contractual arrangements from discriminating in the selection of providers(275) This provision is significant since it provides some protection in the event that a health plan refuses to contract with ethnic American providers. However, to provide additional protection for ethnic American communities, the HSA needs to protect the provider against discrimination based on the race, national origin, language, ethnicity and gender of the provider's patient.

Notwithstanding this important anti-discrimination language, the HSA includes language that substantially undermines the anti-discrimination protection. Except in the case of intentional discrimination, the Act specifically excuses a person from an action otherwise prohibited if the action is required because of business necessity(276) Furthermore, it fails to define business necessity. This is a significant problem for a health care system based on managed care (utilization review or financial risk-shifting). In such a system, plans have an inherent need to institute activities to contain cost. For instance, a plan may desire to contract with the most cost- effective physicians. The cost of providing services to inner-city patients is often 'higher' than that of the urban patient. Inner- city patients require more testing and more services. Thus, in comparing the inner-city physician, whose patients are comprised largely of ethnic Americans, to a physician with a largely European American patient population, a plan might decide not to contract with the physician serving the ethnic American population because the patients were not 'cost-effective'. If contracting based on 'cost- effectiveness' is a business necessity, then the health care plan will be able to discriminate in a way that essentially bars physicians who serve primarily ethnic American and poor patients.

Similarly, health care plans could decide to contract only with board- certified physicians as a means to screen physicians and as a marketing tool. However, board certification does not establish quality(277) Furthermore, a large number of ethnic American physicians are not board-certified(278) But, if the requirement is deemed a business necessity, then the health care plan will be able to discriminate in a way that in effect bars physicians who serve primarily ethnic American patients.

Likewise, health care plans use utilization review to determine whether a procedure or treatment is 'medically necessary.' Assume, for example, some type of cancer treatment (maybe a bone marrow transplant) is more often found not to be 'medically necessary' for ethnic American males than for European American males. Assume further that the health plan can justify this discriminatory care on the basis of medical protocols. The use of the protocols, therefore, may be a business necessity, and the health care plan can discriminate in the authorization of this treatment decision. Consequently, such a business necessity requirement would have the effect of excluding minority physicians. While health plans will have a provider advisory board, unfortunately its members will be selected by the providers in the plan, and there are no provisions to assure representation of ethnic American providers and providers who serve the poor. Furthermore, these potential problems cannot be corrected with regulations since the Act specifically provides that no regulation can overcome a determination (presumably a court's) of 'business necessity.(279) Thus, while the HSA has important language forbidding activity that has a discriminatory effect, it effectively nullifies the language by exempting activities that are done for a business necessity.

6. Enforcement

The key, of course, to the civil rights provision of the Health Security Act is the inclusion of substantial enforcement mechanisms. The Act has some significant provisions providing for a private cause of action for discrimination(280) Notwithstanding the significance of these provisions, substantial issues remain. For instance, merely incorporating by reference the standards for age and disability discrimination from the Age Discrimination Act and the Americans with Disabilities Act is not sufficient. Exactly what standards are being incorporated? Is the reasonable accommodation requirement of the Americans with Disabilities Act to be used with health plans? If so, why make reasonable accommodation a requirement of disability and not of other forms of discrimination?

Furthermore, the standards governing enforcement are incomplete. In particular, the Act does not address issues of burdens of proof or statutes of limitation. Given the importance of health care, the burden of proof should be shifted to the defendant to show that the practice is a business necessity. The level of proof should be heightened by requiring that the practice be 'substantially related to an essential business goal consistent with business necessity.' The plaintiff should be able to overcome a business necessity defense by demonstrating that other less discriminatory alternatives were available that would have substantially met the business goal or showing that the articulation of business necessity is merely a subterfuge. Furthermore, when the defendant's defense of business necessity is based on cost containment, cost control or financial issues, the defendant should retain the burden of proof to show that no less discriminatory alternatives were available. Additionally, any motivation for undertaking an unlawful health care practice should be made per se irrelevant.

Moreover, just as in the area of fraud and abuse, the HSA should enumerate specific forms of unlawful health care practices(281) Such enumeration would assure that certain forms of health care discrimination are prevented. However, to prevent the court from limiting the definition of discrimination to the enumerated examples, the Act should specifically state that the enumeration of specific forms of discrimination does not limit the generality of the prohibition. At the same time, however, efforts to overcome the effects of discrimination, to reduce the disparity in health care, or to assure access to culturally competent care should not be labeled unlawful health care practices.

Finally, the HSA fails to define the identity of an aggrieved person. This lack of definition of an 'aggrieved person' will result most certainly in a judicial interpretation which defines it as someone who has actually been the victim of discrimination. However, to discourage health care discrimination, an 'aggrieved person' should include not only the individual who has been injured, but also one who believes that he or she will be injured, as well as individuals engaged as testers and organizations engaged in testing. This is important because much of health care discrimination goes unreported or undetected.

7. Data Collection

Effective enforcement of civil rights is dependent on the availability of reliable, relevant data. Currently, no such system of data collection exists(282) The HSA requires that the National Health Board develop a health information system to collect and disseminate information(283) This system will collect data on enrollment, utilization, outcome, health care provider certification and consumer satisfaction(284) Unfortunately, the Act does not make it clear that data must be collected with respect to race, ethnicity, gender and disability. As for ethnic Americans the collection of information will be of little benefit if information about the consumer's race, ethnicity, gender, disability and socioeconomic status is not routinely collected.

8. Summary

Ethnic Americans have always had to contend with discrimination in health care. That discrimination was based on the behavior of providers. Now individuals will have to contend with not only provider discrimination, but regional alliance and health plan discrimination. This is a significant change which has the potential of completely undermining access to care. As greater pressure is placed on physicians to curtail treatment services, physicians may not ration across the board. Rather, they may more strictly ration services to vulnerable populations (i.e., ethnic Americans). As health care plans find their premiums caps insufficient, not only will they place increasingly strict gatekeeping requirements on physicians, they may also significantly increase their utilization review denials and they may do so in a discriminatory manner. The Act will not prevent these practices.

B. General Failures

The HSA fails generally in several respects. First, it forbids only limited discrimination by states and alliances and contains no direct prohibition against discrimination by providers. Because of the historical problems with determining to whom a discrimination law is applicable, the prohibition should be applicable to both public and private organizations and for profit and not- for-profit organizations. It should also be applicable both to an individual person and to a broad range of organizational forms including private organizations, sole proprietorship, partnerships, associations and corporations. Furthermore, health care providers should be specifically responsible for their discrimination.

Second, the Act takes an inconsistent approach to banning discrimination. On the one hand, it significantly broadens equal access by prohibiting discrimination based not only on race, national origin, age and disability but also on language, socioeconomic status, health status, affiliation, mix of health professionals or anticipated need for services. Unfortunately, the listing of protected groups is not consistent throughout the HSA. For instance, prohibiting activities by health plans has the effect of attracting or limiting enrollees on the basis of personal characteristics. Only the following characteristics are identified: health status, anticipated need for health care, age, occupation, or affiliation with any person or entity(285) In the same section, in prohibiting health care discrimination the characteristics identified are: race, national origin, sex, language, socioeconomic status, age, disability, health status, or anticipated need for health services. Furthermore, while alliances are required to ensure enrollment of all eligible individuals, the anti-discrimination provisions include only race, sex, national origin, religion, mix of health professionals, location of the plan's headquarters, or organizational arrangement, but not language, socioeconomic status, age, disability, health status, or anticipated need for health services. To ensure the civil rights of individuals under the complex reformed system, the listing of protected groups should be broad and uniform throughout the Act.

Third, the HSA only uses the 'effects' test to measure discrimination by health plans. While it specifically addresses forms of discrimination to the activities of the states and Alliance, the Act does not explicitly apply the 'effects test' to those activities. By including the 'effects test' in the health plan's prohibition against discrimination, some may argue that only intentional discrimination is prohibited in all other areas of the Act(286) This is a substantial problem since, in all likelihood, the type of discrimination which will be most prevalent by the National Health Board, States, Alliances (Regional and Corporate) and providers is 'effects' discrimination.

Finally, the HSA also fails to provide comprehensive protection based on language discrimination. For instance, neither the National Health Board, alliances nor health plans are forbidden from discriminating based on language. This is important to a large number of ethnic Americans who are most likely to be incorrectly denied service as a direct result of the HSA's failure to cover undocumented aliens.


255. FN255. HSA s 1202(b)(4). This is broader coverage than Title VI of the Civil Rights Act of 1964 which only prohibits discrimination based on race, color or national origin, or Title VII of the Civil Rights Act of 1964 which only prohibits discrimination based on race, color or national origin. This act includes ethnicity, language, socioeconomic status, disability or perceived health status as well.

256. FN256. Id. ss 1223(c)(4), 1328(a).

257. FN257. Redlining is the pattern of discrimination in which institutions refused to provide services to certain geographic areas. It most commonly occurs in connection with financial institutions. See Black's Law Dictionary 1150 (1979)

258. FN258. HSA s 1201(1).

259. FN259. Id. s 1202(b)(2)(A).

260. FN260. Wiley, supra note 80, at 10.

261. FN261. HSA s 1202(b)(5).

262. FN262. Wiley, supra note 80, at 13.

263. FN263. HSA s 1328(a).

264. FN264. Id. s 1323(a).

265. FN265. 29 U.S.C. s 794 (1988 & Supp. IV 1992).

266. FN266. 42 U.S.C. s 6102 (1988).

267. FN267. 42 U.S.C. s 2000d (1988).

268. FN268. HSA s 5239.

269. FN269. See generally Kenneth Wing, Title VI and Health Facilities: Forms Without Substance, 30 Hastings L.J. 137 (1978). 'With respect to the modern American health facility. Title VI is an illusory promise and an unused tool of public policy. The signing of a Title VI assurance form by a hospital or a nursing home is little more than the execution of another boilerplate form, one of many incident to the receipt of federal funds.' Id. at 190.

270. FN270. HSA s 1384(b)(2).

271. FN271. There has been discussion regarding allowing employers with less than 500 employees to opt out of regional alliances. If these discussions prove to be true, regional health alliances will becoming nothing more then ghetto plans for the low income, poor and underserved.

272. FN272. HSA s 1203.

273. FN273. Cf. id. ss 1404(a)(2), 1406.

274. FN274. Id. s 1402(c)(1).

275. FN275. Id. s 1402(c)(2). The prohibition includes race, national origin, or gender of the provider, or income, health status or anticipated need for health services of a patient of the provider. Id.

276. FN276. Id. s 1402(c)(3).

277. FN277. Consumers consider specialty board certification to be one of the fundamental criteria of medical competency. In theory, certification assures the public that a physician meets certain standards of knowledge, experience and skills set by other medical professionals to ensure high quality care in the specialty. In reality, certification is not a foolproof indicator of competence. While board certification may indicate that the doctor has advanced knowledge, experience and skills, a doctor does not have to be board-certified to be a good practitioner. Furthermore, board- certification does not guarantee that the doctor has advanced medical knowledge, experience and skills. See generally, Special Certification: Meaningful or Meaningless?, 8 People's Med. Soc'y Newsl. 1, 1-3 (1989).

278. FN278. Many minority providers have lacked the money and time to become board- certified, a requirement for working for many HMOs. Janice Sommerville, Managed Care May Help, Hurt Inner-City Medicine, 36 Amer. Med. News 12 (Oct. 25, 1993).

279. FN279. HSA s 1402(c)(3).

280. FN280. The HSA provides that an aggrieved person has a private right to enforce state responsibilities under s 1983 of the Civil Rights Act. Aggrieved persons will also have private enforcement rights if the federal government fails to carry out its responsibilities related to the operation of the Alliance or if health alliances fail to fulfill their responsibilities. Id. ss 5236, 5236. Furthermore, 'essential community providers' may bring civil suits against health plans which fail to enter participation or payment agreements with them. Id. s 5240.

As to discrimination claims, the Act provides that any person who is discriminated against may commence a civil action against the plan in either a state court or federal district court. Id. s 5239(a)(1). The HSA provides that the standards used to determine whether a violation has occurred in a complaint alleging age discrimination shall be the standards applied under the Age Discrimination Act of 1975, 42 U.S.C. s 6101, and that the standards used to determine whether a violation has occurred in a complaint alleging disability discrimination shall be the standards applied under the Americans with Disabilities Act of 1990, 42 U.S.C. s 12101. An aggrieved person may recover compensatory and punitive damages and any other appropriate relief. HSA s 5239(a)(3). The court may allow the prevailing party, other than the United States, to recover a reasonable attorney's fee (including expert fees) as part of the costs, and the United States shall be liable for costs the same as a private person. Id. s 5239(a)(4).

In addition to the private cause of action, the Act allows HHS to refer discrimination by a health plan to the Attorney General with a recommendation that an appropriate civil action be instituted or to terminate the participation of the health plan in an alliance. Id. s 5239(b). The Attorney General may bring a civil action in a federal district court for such relief as may be appropriate, including injunctive relief. Id. s 5239(c). The court may award equitable relief, compensatory and punitive damages, and may assess a civil money penalty against the health plan. Id. The civil money penalty may not exceeding $50,000 for a first violation and may not exceed $100,000 for any subsequent violation. Id. s 5239(c)(3).

281. FN281. For example, the Act should prohibit the following: denying an individual any service, financial aid or other benefit; providing different service, financial aid or other benefit to an individual; providing a service in a different manner from that provided to others; segregating an individual or providing separate treatment in any matter related to the receipt of any service, financial aid or other benefit; restricting an individual's enjoyment of any advantage or privilege enjoyed by others receiving any service, financial aid or other benefit; treating an individual differently from others when determining whether she satisfies any admission, enrollment, quota, eligibility, membership or other requirement or condition which individuals must meet to be provided any service, financial aid or other benefit; denying an individual an opportunity to participate in a plan, program, activity or insurance through the provision of services or otherwise without affording him an opportunity which is different from that afforded to others (including the opportunity to participate in the plan, program, activity or insurance as an employee or contractor); denying an individual the opportunity to participate as a member of a planning or advisory body that is an integral part of the plan, program, activity or insurance. Furthermore, it should be a specific unlawful health care practice for a plan, program, activity or insurance to discriminate against a person based onlanguage ability or linguistic characteristics.

282. FN282. Title VI requires HHS to collect data and information from applicants and recipients of federal financial assistance. 28 C.F.R. ss 42.406(a), 80.6 (1993). Unfortunately, the information about race is not collected uniformly. Jane Perkins, Race Discrimination in America's Health Care System, Clearinghouse Rev. 371, 377 (Special Issue 1993).

283. FN283. HSA s 5101(a).

284. FN284. Id. s 5101(e).

285. FN285. Id. s 1402(a) (prohibiting health plan underwriting).

286. FN286. Cf. id. s 1201(b)(4) (prohibiting discrimination by states in setting boundaries); s 1203(d) (prohibiting discrimination by states against health plans based on domicile of the entity); s 1223(d)(4) (prohibiting discrimination against health plans in a state's single-payer system); s 1328(a) (prohibiting discrimination by regional alliances against health care plans); s 1605 (prohibiting discrimination by employers based on the health status of employees); and s 1607(a)(3) (prohibiting discrimination by employers based on the plan selected by employees).


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Professor Vernellia R. Randall
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The University of Dayton School of Law
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