Proposed Rule Expected to Affect Healthcare Providers

Emily Scott, Hirschler Fleishler, lawyer, attorney

By Emily M. Scott

Unlike some portions of the Patient Protection and Affordable Care Act (ACA), which have been subject to nearly continuous legal challenges and public debate for the past five years, Section 1557 — the ACA’s nondiscrimination provision — has not received much attention. That may be about to change.

On Sept. 8, 2015, the Office of Civil Rights (OCR) at the Department of Health and Human Services (HHS) issued a proposed rule interpreting Section 1557. HHS is accepting comments on the proposed rule, entitled “Nondiscrimination in Health Programs and Activities,” through Nov. 6, 2015. Once the rule is finalized, it becomes effective in 60 days — a relatively short period of time for covered entities to comply.

Accordingly, covered entities should be mindful of the proposed rule’s requirements and prepared to implement any necessary changes to their compliance programs.

The Proposed Rule

Section 1557 of the ACA expands the protections of several existing antidiscrimination statutes to healthcare programs and activities. Specifically, Section 1557 prohibits discrimination — e.g., denial of health coverage — based on four major categories:

  • Disability (via Section 504 of the Rehabilitation Act of 1973);
  • Age (through the Age Discrimination Act of 1975);
  • Race / color / national origin (in Title VI of the Civil Rights Act); and
  • Sex (in Title IX of the Education Amendments of 1975).

The proposed rule also adopts and applies the implementing regulations and jurisprudence interpreting these civil rights statutes. Most importantly, the rule recognizes a private right of action for damages for violations of Section 1557. And unlike most civil rights claims, this right of action (with the exception of age discrimination claims) is not subject to the requirement to exhaust administrative remedies before filing suit. 

Covered Entities: To Whom Will the Proposed Rule Apply?

Facilities

The scope of the proposed rule is extremely broad. The requirements apply to any entity receiving federal financial assistance through Medicare or Medicaid, which includes hospitals, skilled nursing facilities, home health agencies, intermediate care facilities, dialysis centers, ambulatory surgical centers, federally qualified health centers, laboratories, community health centers, health related schools, state Medicaid and public health entities, and issuers of qualified health plans. Moreover, the requirements apply to all physicians who receive federal money from any source other than Medicare Part B, which HHS estimates to be more than 900,000 licensed physicians. 

Insurers

As noted above, the proposed rule applies to insurers who offer qualified health plans in the state or federal marketplace. Further, every health insurance plan issued by the insurer — not just those offered on the marketplace — must meet the requirements. Insurers may not deny, limit, cancel or refuse to renew health insurance or related coverage because an individual belongs to a protected category. And while the rule does not go so far as to mandate coverage for gender transition services, it does prohibit policies with a categorical exclusion of such services.

Antidiscrimination Requirements

Disability

The proposed rule requires covered entities to take reasonable steps to ensure that individuals with disabilities have “meaningful access” to healthcare services. This is meant to be a flexible standard, and reasonableness should be determined on a case-by-case basis. Facilities also must take reasonable steps to ensure that the information technology and electronic services available to non-disabled patients are likewise available to individuals with disabilities. However, covered entities need not provide such services if so doing would cause an undue administrative or financial burden or fundamentally alter the nature of a program of activity. One example of a fundamental alteration could be inclusion of a sign language interpreter in a group therapy session.

National Origin / Race

The U.S. Supreme Court long has held that discrimination against individuals with Limited English Proficiency (LEP) is a form of prohibited national origin discrimination. To comply with the proposed rule against such discrimination, covered entities must provide LEP persons with enhanced language assistance. Again, the required standard is meant to be flexible enough to adapt to a variety of circumstances. Covered entities must post notices of consumer rights explaining the availability of communication assistance in the top 15 languages spoken by LEP individuals nationally. (HHS will provide these multilingual tag lines to save costs and ensure consistency.) A covered entity may not use a child to interpret for the patient (except in an emergency), or require the patient to supply his/her own interpreter. In some cases, even the use of a bilingual nurse is prohibited — if, for example, there is a potential conflict of interest regarding the nurse’s care of the patient.

Sex

Covered entities are likely to be accustomed to rules prohibiting discrimination on the basis of disability or race. The provisions of the rule addressing the expansion of Title IX (sex discrimination) may be less familiar. The proposed rule makes clear that discrimination on the basis of sex includes “sex stereotyping and gender identity,” and specifically prohibits discrimination against transgendered individuals. However, the rule does not specifically prohibit health services discrimination based on sexual orientation — although HHS clearly supports prohibiting sexual orientation discrimination as a matter of policy. 

Under the rule, covered entities may not deny health care or health coverage based on a person’s sex, including his/her gender identity. Covered entities are required to treat individuals according to their gender identity, but cannot deny services to a transgendered person because the treatment is not aligned with the patient’s gender identity. For example, a hospital may not deny medically necessary treatment for prostate cancer to a patient who identifies as a woman. Finally, insurers may not issue policies with blanket exclusions for all medical services related to gender transition.

Conclusion

Section 1557 has been in effect — and enforced — since 2010. The proposed rule provides valuable additional information about HHS’s priorities in addressing discrimination in health care. Covered entities may respond to HHS’s request for comments about the proposed rule through November 6, 2015. In the meantime, entities covered by the broad scope of the proposed rule are encouraged to consult legal counsel and begin implementing any necessary compliance measures. 

Emily M. Scott is a partner and member of the Health Care Practice at Hirschler Fleischer (Richmond, Va.). Scott’s practice focuses primarily on assisting healthcare providers with contract matters, business torts, employment disputes and hospital staffing issues, including credentialing, peer review and bylaw compliance. She may be reached at (804) 771-9593 or by email at escott@hf-law.com.

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