Section 1557 Protects Transgender Patients – Again

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On Monday, the Department of Health and Human Services (“HHS”) announced that the prohibition against discrimination “on the basis of sex” under Section 1557 of the Affordable Care Act (“Section 1557”) once again includes gender identity and protects transgender patients from discrimination by covered entities.[1] 

Section 1557 prohibits discrimination on the basis of race, color, national origin, disability, age, and sex in health programs and activities that receive federal financial assistance.[2]  The statute itself is a patchwork of nondiscrimination laws – it borrows prohibitions against discrimination on specific bases from existing civil rights laws. The prohibition against sex discrimination under Section 1557 flows from its reference to Title IX of the Education Amendments of 1972 (“Title IX”).[3] 

At its inception in 2010, Section 1557 protected against discrimination based on gender identity.  The law was challenged in 2016, and in 2019, HHS issued a notice of proposed rulemaking pertaining to Section 1557.[4]  In June 2020, HHS issued its final rule, scrapping health care protections based on gender identity on the grounds that the protections stretched “the plain meaning of the underlying civil rights statutes” too far.[5]

But just three days before HHS issued its final rule, the Supreme Court had issued its decision in Bostock v. Clayton County, holding that the prohibition against discrimination “on the basis of sex” under Title VII includes sexual orientation and gender identity.[6]  HHS’s announcement yesterday resolves the “accordion-like quagmire” we described in a June 2020 legal update under which “on the basis of sex” included gender identity and sexual orientation under Title VII – but was interpreted by at least one executive branch agency to exclude the same under Section 1557 vis-à-vis Title IX.[7]

In March 2021, by memorandum to Federal Agency Civil Rights Directors and General Counsels, the U.S. Department of Justice (“DOJ”), Civil Rights Division shared its view that the Supreme Court’s analysis of Title VII in Bostock also applies to Title IX.[8]  In short, Title IX’s prohibition against discrimination “on the basis of sex” also prohibits discrimination based on sexual orientation and gender identity.[9] 

Citing the Bostock decision, a string of case law since, and the DOJ memorandum, HHS said that it would interpret and enforce the prohibition against sex discrimination under Section 1557 to include sexual orientation and gender identity.[10]  HHS said that “[t]his interpretation will guide OCR in processing complaints and conducting investigations.”[11]  And like the Supreme Court did in Bostock, HHS acknowledged the Religious Freedom Restoration Act – and said it would continue to comply with that law “and all other legal requirements.”[12]

We can expect  HHS to now begin in earnest to enforce Section 1557 consistently with the Bostock decision.  In future updates,  we will discuss various fact patterns and scenarios which we anticipate as subject of potential complaints as well as enforcement actions by HHS.

[1] Notification of Interpretation and Enforcement of Section 1557 of the Affordable Care Act and Title IX of the Education Amendments of 1972, https://www.hhs.gov/sites/default/files/ocr-bostock-notification.pdf (last accessed May 11, 2021).

[2] Section 1557 of the Patient Protection and Affordable Care Act, Nondiscrimination Requirements, 45 C.F.R. § 92.2 (2020).

[3] Id. 

[4] HHS Finalizes Rule on Section 1557, June 12, 2020, https://www.hhs.gov/about/news/2020/06/12/hhs-finalizes-rule-section-1557-protecting-civil-rights-health care.html (last accessed May 11, 2021).

[5] Final Rule, June 12, 2020, https://www.federalregister.gov/documents/2020/06/19/2020-11758/nondiscrimination-in-health-and-health-education-programs-or-activities-delegation-of-authority (last accessed May 11, 2021)

[6] Bostock v. Clayton County, 590 U.S. __ (2020), https://www.supremecourt.gov/opinions/19pdf/17-1618_hfci.pdf (last accessed May 11, 2021).

[7] HHS Issues Final Rule on Section 1557, https://www.seyfarth.com/news-insights/hhs-issues-final-rule-on-section-1557.html (last accessed May 11, 2021).

[8] Memorandum to Federal Agency Civil Rights Directors and General Counsels, https://www.justice.gov/crt/page/file/1383026/download (last accessed May 11, 2021).

[9] Id.

[10] Notification of Interpretation and Enforcement of Section 1557 of the Affordable Care Act and Title IX of the Education Amendments of 1972, https://www.hhs.gov/sites/default/files/ocr-bostock-notification.pdf (last accessed May 11, 2021).

[11] Id.

[12] Id.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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