Back and forth to the future: HHS releases proposed non-discrimination rules | Ballard Spahr LLP

The Department of Health and Human Services (HHS) has released proposed settlement under the non-discrimination provisions of Section 1557 of the Affordable Care Act (ACA). The proposed rules revisit familiar ground, reinstating and augmenting a number of non-discrimination requirements in the regulations that were published in 2016 but later removed in rules published in 2020.

Section 1557 generally prohibits certain entities from discriminating on the basis of race, color, national origin (which raises the subject of discrimination based on English proficiency), sex, age and disability. It applies to health programs and activities that receive federal financial assistance and to health programs administered by an “executive agency” (all versions of the regulations limit their scope to HHS) or an entity established under certain provisions of the Affordable Care Act. The rules are based on other civil rights laws. However, while the 2020 regulations generally view Section 1557 as limited to those laws, the proposed new rules view Section 1557 as providing an independent prohibition of discrimination.

Changes to the proposed rule include:

• Broadening of the rules on discrimination based on sex. The change that has received the most attention is the expansion of the rule prohibiting discrimination based on sex. The 2016 regulations defined sex discrimination as including discrimination based on sex stereotypes and gender identity. The 2020 regulations removed the definition of “on the basis of sex” and narrowed the application of the provisions, but at least two courts ruled that this change was contrary to the law. Supreme Court Bostock Decision , which found that discrimination based on sexual orientation and gender identity violated federal civil rights rules under Title VII. The proposed new regulations restore, expand and refine the 2016 provisions, extending the prohibition of sex discrimination to sexual orientation, gender identity, sex stereotypes and sex characteristics (including intersex traits) and to pregnancy. The new regulations also reinstate specific rules — similar to those in the 2016 regulations — that address how these gender discrimination rules apply to health insurers, health plans and healthcare providers.
• Expanding Entities Covered by Section 1557. The proposed rules expand the entities that will be subject to the non-discrimination requirements of Section 1557. First, where the 2020 regulations merged HHS-administered health programs with those administered under certain provisions of the ACA (which essentially meant the ACA health insurance exchanges), the proposed rules also apply to other HHS-administered health programs and activities. Second, under the proposed rule, health insurers will again be subject to the requirements if they receive financial assistance from HHS. Third, under a new interpretation, Medicare Part B funds will be considered federal financial assistance, and providers receiving Medicare Part B funds will be subject to the rules.
• Revised notification requirements. The notification requirements under the 2016 regulations presented one of the most tangible compliance obligations for entities subject to Section 1557. The 2016 regulations required all material publications to include notices with slogans about the availability language assistance in the most common foreign languages ​​(usually 15 of them) in a particular state. The 2020 regulations eliminated this notice requirement. The proposed rules seek a compromise. They include two notice requirements. A non-discrimination notice meeting certain content requirements must be provided once a year and upon request. It must also be prominently displayed in an appropriate physical location and on the applicable website, if any. A notice of availability of language assistance services and auxiliary aids for people with disabilities must meet similar requirements, but must also be provided with specifically identified postings, including the Non-Discrimination Notice (above ), HIPAA Notice of Privacy Practices, Explanations of Employee Benefits (EOBs), manuals and communications that require an individual’s response. This second opinion must be provided in English and in the 15 most common foreign languages ​​in the State or States concerned. It must also be available in an alternate format, as needed to accommodate disabilities.
• Changes in internal operations. Entities covered by Section 1557 must establish written policies and procedures and provide training on those policies and procedures. The policies and procedures must state that the entity will not discriminate; address certain language access, communication and reasonable modification procedures; and–if the entity has at least 15 employees–establish a grievance procedure. HHS should publish sample policy and procedure documents. Entities must also provide training for those responsible for policies and procedures and those who implement them in their interactions with patients and plan members. If an entity has 15 or more employees, it must also appoint a Section 1557 Coordinator with broad responsibilities that include (at least overseeing) the implementation of certain compliance measures and the handling of complaints.
• New domains. The regulations introduce certain new requirements that require telehealth facilities and services to be accessible and that prohibit discrimination in the use of clinical algorithms to make decisions.
• Religious accommodations. The proposed rules establish a procedure for certain entities to obtain from HHS that they be exempted from certain requirements of the regulations or be entitled to a modification of these rules based on federal conscience or laws on religious freedom.

The publication of these regulations is not a particular surprise. The Biden administration has long signaled that it will revise the regulations for Section 1557, and they will likely remain largely intact when finalized. Healthcare providers, insurers and plan sponsors should consider whether they are subject to the new rules and consider what changes they will need to make to comply, especially since they have made changes based on 2020 regulations. Most rules will likely go into effect within a few months of being finalized, although health plans and insurers subject to the new rules will have at least an additional year to make revisions affecting plan design.