Managed Care Outlook 2024

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When the U.S. Supreme Court declared the use of race in the college admissions process to be unconstitutional in June 2023, the impacts were felt far beyond academia. The decision and the rhetoric that has ensued have spawned anti-diversity litigation extending beyond higher education that has raised a universal concern about the sustainability of diversity, equity and inclusion (DEI) initiatives by corporations, including those in the managed care space. Below, we discuss some of the challenges raised and potential strategies to foster DEI in the corporate world in the face of this new case law.

By way of background, shortly after the decision Students for Fair Admissions, Inc. v. President & Fellows of Harvard College and Students for Fair Admissions v. The University of North Carolina (the SFFA decision), several significant actions took place:

  • The chair of the U.S. Equal Employment Opportunity Commission issued a statement opining that the Supreme Court’s decision did not address employer efforts to foster diverse and inclusive workforces or engage the talents of all qualified workers regardless of their background and thus did not negate employer DEI initiatives.
  • A collection of Republican state attorneys general issued a letter to corporations warning them that their DEI initiatives may run afoul of the law.
  • In response, a collection of Democratic state attorneys general issued a counter-letter detailing why most DEI initiatives did not run afoul of the law.
  • Senator Tom Cotton wrote to over 50 law firms warning them that they should be careful in advising their clients about the propriety of DEI initiatives in the wake of the Harvard and UNC decisions.
  • Edward Blum, founder of the Students for Fair Admission, and his nonprofit, the American Alliance for Equal Rights (AAER), sued several law firms alleging that diversity fellowships were unlawful and discriminatory.

Like many other corporations and industries, managed care thrives on the diversity of its workforces, and many have made commitments to foster diversity. With the recent ruling issued by the Supreme Court, a flurry of challenges have ensued, promising to reshape the way corporations, including managed care and related organizations, will implement their DEI initiatives.

Key takeaways
  • Supreme Court’s anti-race-based admissions decision paves the way for legal challenges, raising concerns about sustainability and legality of corporate DEI initiatives
  • Managed care organizations face legal warnings and lawsuits challenging DEI programs, emphasizing need for clear goals, evidence and non-discriminatory criteria
  • Lawsuits targeting law firm diversity programs may influence MCOs' external counsel choices
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