VI. THE HEALTH
SECURITY ACT INADEQUATELY PROTECTS AGAINST HEALTH CARE
HEALTH CARE REFORM
OF HEALTH CARE
FOR ETHNIC AMERICANS
AND THE POOR? Vernellia
60 Brooklyn Law Review 167-235 ( 1994).
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
A. Potentially Counterproductive Provisions
1. National Health Board
The Health Security Act is silent on the prohibition of
discrimination by the National Health Board.
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
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
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
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
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
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
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.
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
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
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
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
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).
Always Under Construction!
Professor Vernellia R. Randall
Institute on Race, Health Care and the Law
The University of Dayton School of Law
300 College Park
Dayton, OH 45469-2772
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Copyright @ 1993, 2008. Vernellia R. Randall
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