On May 6, 2024, the U.S. Department of Health and Human Services Office for Civil Rights (OCR) and the Centers for Medicare & Medicaid Services (CMS) published their final rule on nondiscrimination in the Federal Register (the 2024 rule) under Section 1557 of the Affordable Care Act (ACA). The 2024 rule departs in significant ways from the 2020 rule and will apply to nearly every healthcare provider in the country.
Section 1557 prohibits discrimination on the basis of race, color, national origin, sex, age or disability in health programs or activities that receive federal funding, including Medicare and Medicaid. The 2024 rule is effective 60 days after publication in the Federal Register, although covered entities have between 120 and 365 days after the effective date to comply with certain provisions.
The new rule (i) applies to a greater number of programs and services, including recipients of Medicare Part B funds, health insurance issuers that receive federal financial assistance across their offerings and the state and federal health insurance marketplaces, (ii) subjects patient care decision support tools and telehealth to the requirements of nondiscrimination and (iii) requires that nondiscrimination on the basis of sex include sexual orientation and gender identity, consistent with the U.S. Supreme Court’s holding in Bostock v. Clayton County.
The 2024 rule also specifies that discrimination on the basis of sex includes pregnancy or related conditions, but in the wake of the U.S. Supreme Court’s 2022 opinion in Dobbs v. Jackson Women’s Health Organization, it does not provide specific examples or how this will apply. However, the 2024 rule also includes provisions for the exercise of federal religious freedom and conscience laws, including procedures for seeking exemption before or during the course of an investigation. The 2024 rule does not promote particular medical treatment, require provision of particular procedures, mandate coverage of any particular care or set any standard of care. On May 7, 2024, the state of Florida and the Catholic Medical Association sued HHS, seeking to enjoin this rule on the basis that it is arbitrary and capricious and conflicts with Florida law. Even though more lawsuits regarding these provisions are expected, providers should prepare to comply with the requirements discussed below, particularly the elements of the 2024 rule that will not be subject to litigation involving nondiscrimination on the basis of sex.
Background
Section 1557 of the ACA, 42 U.S.C. § 18116, became law in 2010. OCR finalized the first Section 1557 regulation in 2016 (the 2016 rule), as McGuireWoods discussed in a previous legal alert. The 2016 rule provided that, among other issues, sex discrimination includes discrimination on the basis of gender identity and sex stereotyping, several provisions of which were enjoined by courts. It also required covered entities to provide certain language assistance to individuals with limited English proficiency and auxiliary aids and services for individuals with disabilities.
In 2020, OCR issued its second Section 1557 regulation (the 2020 rule), which limited the scope of the previous rule, as McGuireWoods addressed in a previous legal alert. Two years later, HHS issued a notice of proposed rulemaking (the 2022 NPRM) that rejected several of the 2020 limitations, returning to policy closer to the 2016 rule. The 2024 rule largely is consistent with the 2022 NPRM.
Broader Scope
Pursuant to the 2024 rule, HHS expands the applicability of Section 1557 to include Medicare Part B, as was originally proposed in the 2022 NPRM. HHS now considers funds received under Medicare Part B to be included within the definition of federal financial assistance for the purpose of coverage under the federal civil rights statutes enforced by HHS, specifically Title VI of the Civil Rights Act of 1964, Section 504 of the Rehabilitation Act of 1973, Title IX of the Education Amendments of 1972, the Age Discrimination Act of 1975 and Section 1557 of the ACA. OCR does not expect this to cause significant changes to healthcare providers, as HHS already enforced those same provisions against Medicare Part A, Part C, Part D and Medicaid fund recipients. However, there likely are some providers who will be subject to such nondiscrimination provisions for the first time.
Additionally, the 2024 rule clarifies that Section 1557 applies to the state and federal health insurance marketplace (and all plans offered by issuers that participate in those marketplaces that receive federal financial assistance) and other covered entities that administer health insurance coverage. As a reminder, Section 1557 applies generally to covered entities, or health programs or activities that receive HHS funding, health programs or activities administered by HHS, which, according to HHS, would include hospitals, health clinics, health insurance issuers, state Medicaid agencies, community health centers, physicians’ practices and home healthcare agencies. All covered entities, including the newly subject Medicare Part B recipients and health benefit plan benefit design entities, will be required to comply with the obligations of the 2024 rule, even if the receipt of federal funds comprises a small part of the business. By contrast, the CMS FAQ notes that Section 1557 regulations do not apply to employment practices, including the provision of employee health benefits. Additional provider-focused requirements as outlined in the 2024 rule follow.
Eight New Requirements for Healthcare Provider Covered Entities Under the Final Rule
1. Implement a Section 1557 coordinator within 120 days of the effective date or by Nov. 2, 2024. The 2024 rule provides deadlines with reference to the effective date. McGuireWoods has included the anticipated dates, but these are unofficial deadlines and could be impacted by weekends, holidays and subsequent pronouncements.
A covered entity that employs 15 or more persons must designate and authorize at least one employee, a “Section 1557 Coordinator,” to coordinate compliance with its responsibilities under Section 1557 within its health programs and activities. This includes the investigation of any alleged noncompliance. Additionally, the Section 1557 coordinator must coordinate implementation of the entity’s (i) language access procedures, (ii) effective communication procedures, (iii) reasonable modification procedures and (iv) training for all such compliance.
2. Implement new Section 1557 policies and procedures within one year of the effective date or by July 5, 2025.
The 2024 rule requires covered entities to have policies and procedures to comply with its nondiscrimination requirements discussed below, which must include an effective date and be reasonably designed, taking into account the size, complexity and type of health programs or activities undertaken by a covered entity to ensure compliance with Section 1557. As discussed below, covered entities must have the following policies: (i) nondiscrimination policy, (ii) grievance procedures, (iii) language access procedures, (iv) effective communication procedures and (v) reasonable modification procedures. The 2024 rule requires certain provisions in each of the policies. HHS provides examples of such policies.
While many organizations already have an existing nondiscrimination policy, they likely will need to be updated to account for the requirements under the 2024 rule. The policy must stipulate that the covered entity does not discriminate on the basis of national origin (which includes limited English proficiency and primary language speakers) and sex (which is consistent with the scope of sex discrimination described above), among other traits. Further, the policy must state that the covered entity provides language assistance services and appropriate auxiliary aids and services free of charge, when necessary, for compliance with Section 1557 and that the covered entity will provide reasonable modifications for individuals with disabilities. These policies were not required under any previous rule, except that the 2016 rule created requirements for covered entities to make reasonable modifications to policies for individuals with disabilities.
3. Implement Section 1557 training within 30 days of the new policies and procedures, and no later than one year of the effective date or July 5, 2025.
The covered entity must train relevant employees of its health programs and activities on the civil rights policies and procedures of the 2024 rule, as necessary and appropriate for employees to carry out their functions within the covered entity. Relevant employees are defined broadly to include “permanent and temporary employees whose roles and responsibilities entail interacting with patients and members of the public, making decisions that directly or indirectly affect patients’ healthcare, including the covered entity’s executive leadership team and legal counsel, and performing tasks and making decisions that directly or indirectly affect patients’ financial obligations, including billing and collections.” This may cover most, if not all, employees of a small practice or entire departments at large hospitals. Implementation of such training must be done no later than 30 days after implementation of the policies and procedures described above. New hires must also be trained when appropriate, and covered entities should consider periodic training unless otherwise required by the 2024 rule, such as when a material change in policy occurs.
4. Provide patients a notice of nondiscrimination within 120 days of the effective date or by Nov. 2, 2024.
A covered entity must provide a notice of nondiscrimination to participants, beneficiaries, enrollees and applicants of its health programs and activities, as well as to members of the public. The 2024 rule stipulates several requirements of this notice, which must be provided to such people annually, upon request, at a conspicuous location on its website, if applicable, and in clear and prominent locations in its physical offices. A sample notice informing individuals about nondiscrimination and accessibility requirements can be found here, including sample notices in 47 languages besides English. This is a return to the requirement and sample notice provided in 2016 rule appendix A, but was removed from the 2020 rule.
5. Provide patients a notice of availability of language assistance services and auxiliary aids and services within one year of the effective date or by July 5, 2025.
The 2024 rule requires that covered entities provide a notice of availability of language assistance services and auxiliary aids and services, which largely is a return to the requirements under the 2016 rule. Unlike the 2016 rule’s controversial requirement to include such notice in all material communication, known as taglines, this notice must be provided annually, upon request, at a conspicuous location on the covered entity’s website, if applicable, and in clear and prominent locations in its physical offices. These notes must be in English and in the 15 languages most commonly spoken by individuals with limited English proficiency of the relevant state or states in which the covered entity operates.
However, in addition to the mandate above, instead of all material communications, the notice must also be included in written and electronic communications to patients when they receive other patient forms, specifically when the following are provided: notice of nondiscrimination, notice of privacy practice, application and intake forms, notices of denial, explanations of benefits, communications related to an individual’s rights that require a response, communications related to a public health emergency, communications related to compliance with the No Surprises Act, consent forms and instructions for medical powers of attorney or living wills, discharge papers, complaint forms and patient handbooks. A sample notice, and translated examples, can be found at the HHS site.
6. Ensure meaningful access for individuals with limited English proficiency (LEP), which may include interpreter and translation services, by the effective date or July 5, 2024.
A covered entity must take reasonable steps to provide meaningful access to each individual with LEP. This requires that language assistance services be provided free of charge, be accurate and timely, and protect the privacy and the independent decision-making ability of the individual with LEP. In certain cases, this may require a qualified interpreter and translation services, but the 2024 rule does not allow patients to provide their own interpreter, rely on an adult not otherwise qualified as an interpreter or rely on a minor child to interpret. The 2024 rule stipulates that these services may be provided through video or audio remote interpreting services, each of which requires satisfaction with certain conditions to comply with the 2024 rule. These are similar requirements to the 2016 rule, which were limited by the 2020 rule, but have been updated for video and audio technology.
7. Ensure effective communication and accessibility for individuals with disabilities, including the requirement to make reasonable modifications by the effective date or July 5, 2024.
While civil rights protections previously required businesses to take steps to ensure that communications with individuals with disabilities are effective, the 2024 rule proscribes certain steps to ensure that covered entities are effectively communicating with individuals with disabilities (including companions with disabilities) in its health programs and activities in a way that is as effective as communications with nondisabled individuals. A covered entity must provide appropriate auxiliary aids and services when necessary to afford individuals with disabilities an equal opportunity to participate in, and enjoy the benefits of, the health program or activity in question. Like qualified interpreters and translation services, such auxiliary aids and services must be provided free of charge, in accessible formats, in a timely manner, and in such a way as to protect the privacy and the independence of the individual with a disability.
Further, the 2024 rule requires accessibility to physical locations and accessibility of information and communication technology. This includes a requirement that the covered entity make reasonable modifications, consistent with the regulations implementing the Americans with Disability Act, to ensure compliance unless doing so would fundamentally alter the nature of the health program or activity. Most of these requirements were in the 2016 rule.
8. Identify and mitigate nondiscrimination in the use of patient care decision support tools within 300 days of the effective date or by May 1, 2025.
A covered entity must not discriminate through the use of patient care decision support tools. Beyond this, the 2024 rule requires ongoing reasonable efforts to identify such support tools and take appropriate steps to mitigate the risk of discrimination through use of these tools. This requirement is most notable if the particular tool employs inputs such as race. This is a new obligation not found in previous proposed or final rules.
The 2024 Rule defines such tools to include “any automated or non-automated tool, mechanism, method, technology, or combination thereof used by a covered entity to support clinical decision-making in its health programs or activities.” Some examples that the 2024 Rule provided include flowcharts, clinical guidelines, complex computer algorithms, decision support interventions and models that could be used for screening, risk prediction, diagnosis, prognosis, clinical decision-making, treatment planning, healthcare operations and allocation of resources. This likely covers certain artificial intelligence, machine learning and predictive analytics tools when used to decide or inform the course of patient care or treatment.
While the 2024 rule recognizes that covered entities often use patient care decision support tools in their healthcare decision-making, the 2024 rule also stresses that a covered entity has an ongoing duty to make reasonable efforts to identify the use of such tools that employ input variables or factors that measure race, color, national origin, sex, age or disability and to make reasonable efforts to mitigate the risk of discrimination resulting from the tool’s use in its health programs or activities. McGuireWoods will work with clients to consider additional checklists and policies in adopting such tools to mitigate the risks of discrimination.
Key Takeaways
The 2024 rule takes significant steps to codify nondiscrimination provisions in the wake of several Supreme Court cases. The 2024 rule will require a heavy lift from healthcare providers to ensure compliance, especially to the extent they do not have existing relationships with qualified interpreters of translation services or did not keep them in response to the 2016 rule. Further, covered entities will need to monitor deadlines to ensure compliance, as certain provisions have varying deadlines that range from 60 days after publication (or by July 5, 2024), to almost one year later (as indicated above).
