The U.S. Department of Health and Human Services (HHS) Office for Civil Rights (OCR) recently issued a final rule amending provisions of its 2016 rule prohibiting certain forms of discrimination under Section 1557 of the Affordable Care Act (ACA). Section 1557, incorporating other civil rights laws, “prohibits discrimination on the basis of race, color, national origin, sex, age, or disability in certain health programs and activities.”
The final rule makes several changes easing the 2016 rule, including eliminating gender identity and termination of pregnancy from the definition of “sex discrimination,” removing certain mandatory notice and tagline requirements for individuals with limited English proficiency (LEP), allowing a flexible approach to providing language assistance services for LEP individuals, clarifying protections for certain conscience-based objections, revising OCR’s enforcement mechanisms and repealing required grievance processes. The final rule will take effect Aug. 18, 2020.
McGuireWoods alerts on May 30, 2019, and June 26, 2019, discussed the proposed version of this rule. HHS received 198,845 comments in response to its 2019 proposed rule, including many from healthcare providers. The final rule mirrors the proposed rule, with only minor changes, but ultimately finalizes several major changes to the ACA nondiscrimination regulations outlined below, which may ease compliance concerns for healthcare providers.
Eliminates Gender Identity and Termination of Pregnancy From the Definition of “Sex Discrimination,” Which Will Face Litigation
The final rule eliminates provisions of the 2016 definition of discrimination “on the basis of sex” which encompassed discrimination on the basis of gender identity (“an individual’s internal sense of gender, which may be male, female, neither, or a combination of male and female”) and “sex stereotyping.” The rule also eliminates a provision of the same definition that included discrimination on the basis of “termination of pregnancy.” HHS reasoned that these were legislative changes going beyond the meaning of Title IX of the Education Amendments of 1972 discrimination “on the basis of sex” and cited certain court rulings enjoining the 2016 rule. HHS noted other policy reasons to revise these definitions for healthcare providers, including contradictory demands, interference with medical judgment, and potential conscience burdens.
This change may not withstand judicial scrutiny, however, in light of a recent U.S. Supreme Court ruling in Bostock v. Clay County, Georgia that Title VII of the Civil Rights Act of 1964, which prohibits discrimination “because of sex,” protects gay and transgender employees, as discussed in a June 16, 2020, alert. Already, at least one challenge to this final rule relying on Bostock has been brought. In part to address circumstances where a court delayed or suspended portions of the final rule with respect to sex discrimination changes, HHS retained a severability provision from the 2016 rule it proposed to remove, which could allow other provisions of the final rule (including the notice and tagline provision discussed below) to remain effective even if legal challenges to this change succeed.
Eliminates “Notice and Tagline” Nondiscrimination Requirements
The final rule eliminates a provision from the 2016 rule discussed in a prior McGuireWoods alert that required most healthcare providers to publish and disseminate, within all significant communications, nondiscrimination notices and tagline inserts in at least 15 non-English languages. This requirement included disclosures for language assistance services for LEP individuals. The rule applied to all entities operating a health program or activity receiving, even in part, federal financial assistance (including Medicaid, Medicare Part A but not Part B, Medicare Advantage and meaningful use payments) and entities established under Title I of the ACA administering a health program or activity. In its final rule, HHS noted that for some states, its 2016 rule effectively required providers give notice in a language spoken by fewer than 100 individuals in the provider’s state. HHS also rescinded the sample notice OCR provided (in English and many non-English languages) to fulfill this requirement.
While the final rule eliminates the Section 1557 requirement for such notices, including the requirement that all significant communications contain tagline inserts, providers may still need to post nondiscrimination notices under other civil rights laws in their physical location and on their website. HHS estimates that eliminating the notice and tagline insert requirement will result in an overall cost savings of $2.6 billion in the next five years. Anecdotally, many providers never implemented such notice and tagline requirements, so such a change may offer healthcare providers the opportunity to ensure compliance with other civil rights legal notice requirements.
Allows Providers to Balance Four Factors to Determine Whether Language Assistance Services Are Required for LEP Patients
The final rule allows OCR to use a “four-factor analysis” to determine whether covered entities have ensured meaningful access to LEP patients. This analysis replaces the 2016 rule’s mandate that most healthcare providers and other covered entities take reasonable steps to provide LEP individuals with language assistance. The four factors are:
- the number or proportion of LEP individuals the provider is likely to encounter;
- the frequency with which LEP individuals receive services;
- the nature and importance of the entity’s health program, activity or service; and
- the resources available to the entity and costs of the services.
This balancing test is intended to be a flexible, fact-specific standard that ensures meaningful access by LEP individuals to critical services while not imposing undue burdens on small businesses and organizations. For those providers that determine language assistance services are required, based on this four-factor analysis, the rule maintains the requirements surrounding the language assistance services that must be offered free of charge; specific qualifications for bilingual or multilingual staff, translators and interpreters to assist; and limits on the patient’s family to fulfil this role. HHS also clarified that remote audio interpretation will be acceptable for LEP individuals, assuming it is appropriate under the four-factor analysis, whereas video connection may be more appropriate for hearing-impaired individuals.
Implements Protections for Conscience-Based Objections
The final rule clarifies protections for providers with conscience-based objections to certain services (such as abortion services or assisted suicides). Such protections already exist in federal law, but the final rule explicitly incorporates by reference such protections, which were not included in the 2016 rule prohibiting discrimination in federal healthcare programs. HHS noted that the rule should be construed consistently with existing law and that the final rule does not construe the existing statutes more broadly or narrowly than they have already been construed. (For example, the new rule would not extend a right of conscience to entities or health systems in addition to a right of conscience already extended to individuals under existing law.) Indeed, in the 2019 proposed rule, HHS explained its purpose in explicitly incorporating such federal laws is to bring greater clarity to the law, similar to the references to race, color, national origin, sex, age or disability discrimination prohibitions in the Section 1557 regulations.
Revises OCR’s Enforcement Mechanisms
The final rule reverts to the pre-2016 rule enforcement structure for all types of discrimination claims. As discussed, Section 1557 applies multiple civil rights statutes to healthcare settings (e.g., Title VI of the Civil Rights Act of 1964, Title IX, Section 504 of the Rehabilitation Act of 1973, and the Age Discrimination Act of 1975). While OCR will continue to enforce these pre-existing statutes and regulations, the final rule eliminates the single enforcement structure created by the 2016 rule that spanned these various statutes and discrimination claims and, according to HHS, “blended different legal theories and enforcement regimes and risked confusion or inappropriate application of standards from one civil rights law to another.” HHS noted concern that some courts had refused to apply the single mechanism as an inappropriate deviation from longstanding civil rights laws.
Furthermore, the final rule revises the scope of HHS’ enforcement authority to apply only to entities “principally engaged in healthcare” as well as to healthcare activities of other entities to the extent those activities are funded by HHS. Specifically, the final rule does not generally apply to short-term limited duration insurance providers, as they are neither funded by HHS nor “principally engaged” in the business of healthcare. The 2016 rule applied these nondiscrimination rules to such entities as engaged in healthcare, even if it was only a small portion of their business.
Repeals Grievance Requirements and Compliance Coordinator Requirements
The final rule repeals the requirement for most healthcare providers and other covered entities with 15 or more employees to have a responsible employee (i.e., a Section 1557 compliance coordinator) and a written grievance procedure to handle complaints alleging violations of these nondiscrimination rules. In the proposed rule, OCR reasoned that this would spare such covered entities from certain labor costs associated with processing grievances. It also noted it expected to reduce costs to the government itself as mandatory notices for grievance procedures led to many customer service-type calls to OCR, ones that did not involve discrimination but instead asked questions about the healthcare provider or other entity’s service offerings. In the final rule, HHS noted that it believed that grievance requirements and compliance coordinator requirements could be replaced by existing mechanisms in civil rights laws. Anecdotally, similar to the taglines and discrimination notices discussed above, many providers did not fulfill these requirements from the 2016 rule, so the actual impact of these changes may be more limited than HHS anticipates.
HHS announced these changes, assuring that the final rule “maintains vigorous enforcement of federal civil rights laws” while also “reliev[ing] the American people of approximately $2.9 billion in undue and ineffective regulatory burdens over five years.” In addition to the high-level summary of the major rule changes discussed above, HHS also finalizes revisions to certain regulations promulgated by the Centers for Medicare & Medicaid Services for healthcare facility participation in certain federal healthcare programs consistent with the changes to the Section 1557 regulations.