On June 12, HHS issued its new final rule under Section 1557 of the Affordable Care Act—the Act’s nondiscrimination provision. This final rule revises the Obama Administration’s 2016 regulation in numerous and significant respects. The new regulation will be effective on August 18, 2020 (60 days from June 19), and a summary of the key aspects of the new regulation for healthcare providers is provided below.

Application to Healthcare Entities: All Programs Remain Covered

Although HHS eliminated the definitions section of the regulation in its entirety, HHS states that Section 1557’s application to health program or activities that are principally engaged in the business of providing healthcare (and that receive Federal financial assistance) remains the same. Specifically, for such entities (which include for example, hospitals, health systems, or skilled-nursing facilities), Section 1557 continues to apply to the entirety of their operations.

Discrimination on the Basis of Sex

By far, one of the most consequential aspects of Section 1557 is its novel prohibition on sex discrimination in healthcare, which it accomplishes by reference to Title IX. And equally consequential was the 2016 regulation’s interpretation of Section 1557 as extending to discrimination on the basis of gender identity.

The new regulation, however, rescinds this interpretation and instead purports to interpret Section 1557’s prohibition on sex discrimination as applying only to “biological sex.” Yet commentators have already called the validity of this new interpretation into question given the Supreme Court’s landmark decision on Title VII in the employment context, which came only three days after HHS issued its new regulation under Section 1557. In short, for many legal analysts, it appears likely that the federal courts will ultimately interpret Title IX and Section 1557 to bar discrimination on the basis of sexual orientation and gender identity—just as the Supreme Court did with Title VII in the employment context.

At a minimum, hospitals and health systems should carefully monitor HHS’s response to the Supreme Court’s decision on Title VII, as well as decisions following in its wake, which will ultimately address Title IX and Section 1557’s substantively identical prohibition on sex discrimination. Healthcare providers should also continue to prioritize training and education as it relates to culturally appropriate care for LGBTQ individuals.

Rollback of Administrative Requirements

Consistent with the proposed rule, the final regulation eliminates the 2016 regulation’s notice and tagline requirements (although taglines are still required where necessary to provide meaningful access for individuals with Limited English Proficiency). The final regulation also eliminates the requirement that a covered entity with 15 or more employees have a compliance coordinator and written grievance procedure. However, this regulation does not affect separate, independent obligations that require covered entities to have grievance procedures in place for allegations of disability or sex discrimination.

Meaningful Access for Individuals with Limited English Proficiency

For the most part, HHS has retained the 2016 regulation’s provisions as it relates to a covered entity’s mandate to take reasonable steps to provide meaningful access for individuals with Limited English Proficiency, including the requirement that translation and interpretation services be provided through “qualified” translators and interpreters.

In one important revision, however, HHS’s new regulation states that it will consider the following four factors (which come from HHS’s 2003 LEP Guidance) when deciding whether a covered entity is satisfying its meaningful access obligation:

1. The number or proportion of limited English proficient individuals eligible to be served or likely to be encountered in the eligible service population;
2. The frequency with which LEP individuals come in contact with the entity’s health program, activity, or service;
3. The nature and importance of the entity’s health program, activity, or service; and
4. The resources available to the entity and costs.

HHS has also retained the regulation’s express prohibitions on certain conduct as it relates to interpretation services. Specifically, a covered entity shall not:

1. Require an individual with limited English proficiency to provide his or her own interpreter;
2. Rely on an adult accompanying an individual with limited English proficiency to interpret or facilitate communication, except (A) In an emergency involving an imminent threat to the safety or welfare of an individual or the public, where there is no qualified interpreter for the individual with limited English proficiency immediately available; or (B) Where the individual with limited English proficiency specifically requests that the accompanying adult interpret or facilitate communication, the accompanying adult agrees to provide such assistance, and reliance on that adult for such assistance is appropriate under the circumstances;
3. Rely on a minor child to interpret or facilitate communication, except in an emergency involving an imminent threat to the safety or welfare of an individual or the public, where there is no qualified interpreter for the individual with limited English proficiency immediately available; or
4. Rely on staff other than qualified bilingual/multilingual staff to communicate directly with individuals with limited English proficiency.

The new regulation does, however, eliminate the 2016 regulation’s recommendation that covered entities adopt and implement a language-access plan to ensure meaningful access.

Disability Discrimination

HHS has left the 2016 regulation’s provisions related to disability discrimination virtually untouched. Covered entities must therefore continue to provide auxiliary aids and services to deaf and hard-of-hearing individuals; provide electronic health information in digitally accessible formats; and ensure the physical accessibility of their facilities and medical equipment.

Importantly, this also means that the heightened “primary consideration” standard under Title II of the Americans with Disabilities Act continues to apply to covered entities under Section 1557. (From the new regulation’s preamble: “§ 92.102 of this final rule continues to incorporate the ADA Title II regulations at 28 CFR 35.160–164.”) Under this “primary consideration” standard, a covered entity “must honor” a patient’s expressed choice of auxiliary aid or service unless the covered entity can demonstrate that an equally effective alternative means is available or that the chosen means would fundamentally alter the program or present an undue financial or administrative burden. (See Dept. of Justice (DOJ), The Americans with Disabilities Act: Title II Technical Assistance Manual, § II-7.110 (1993), available at https://www.ada.gov/taman2.html (emphasis added); see also Bonnette v. D.C. Court of Appeals, 796 F. Supp.2d 164, 182 (D.D.C. 2011)).

Enforcement and Private Rights of Action Under Section 1557

Lastly, HHS has reversed course on the 2016 regulation’s interpretation of the private right of action available to a private litigant under Section 1557.

In short, the Obama Administration had interpreted Section 1557 to provide a private right of action for a disparate impact claim of discrimination (i.e. a claim for unintentional discrimination) on the basis of any of the enumerated classes in the statute: race, color, national origin, sex, age, and disability. For a number of reasons, this interpretation was incredibly important. Not least of which is that it provided a work-around to a 2001 Supreme Court decision that held that no such cause of action existed under Title VI of the Civil Rights Act of 1964, which bars discrimination in federally funded programs on the basis of race, color, and national origin. (Because HHS OCR has been historically inactive in bringing disparate impact claims in healthcare, this has meant that disparate impact discrimination litigation in healthcare has been virtually non-existent since 2001.)

When faced with this question, the federal courts have disagreed with one another—though the weight of authority tips away from the 2016 interpretation and in favor of the new regulation’s interpretation: namely, that Section 1557 does not provide a new cause of action for disparate impact discrimination on the basis of any enumerated class in the statute. The new regulation’s interpretation of Section 1557 likewise adopts the current majority view in the courts that Section 1557 does not create a new legal standard that applies across all protected classes. Instead, most courts have ruled (and the new regulation endorses this view) that the legal standards from the underlying civil rights statutes incorporated into Section 1557 apply depending on the nature of the claim. So, for example, for a disability-discrimination claim under Section 1557, the applicable legal standard that governs the claim would come from Section 504 of the Rehabilitation Act.

Conclusion

Healthcare providers should carefully monitor the impact of the Supreme Court’s landmark Title VII decision on sex discrimination in employment, while continuing to educate and train providers and staff on the importance of preventing discrimination on the basis of sex in healthcare.

Health systems should also consider investing additional resources into ensuring meaningful access for LEP individuals and equal access for individuals with disabilities, now that the more burdensome administrative requirements of the 2016 regulation have been eliminated. HHS is in fact explicit on this point, saying in the preamble to the new regulation that: “[B]ecause this final rule will lift unnecessary regulatory burdens on providers, the Department hopes that it will increase access to care, including in underserved and rural communities.”