HHS Wants to Reinterpret the Affordable Care Act, Healthcare Discrimination

On August 4, 2022, the US Department of Health and Human Services (HHS) issued a Notice of Proposed Rulemaking to reinterpret section 1557 of the Affordable Care Act (ACA), which prohibits discrimination on the basis of race, color, national origin, sex, age or disability in a health program or activity, any part of which is receiving federal financial assistance. The proposed rule restores and strengthens certain civil right protections under federally funded health programs and HHS programs which were limited following the 2020 Trump-era version of the rule, specifically regarding discrimination on the basis of sex, including sexual orientation and gender identity, and returns certain protections for individuals with limited English proficiency. Additionally, the proposed rule bolsters protections against discrimination in healthcare by clarifying that funds received under several federal healthcare programs, including Medicare Part B, are included in the definition of federal financial assistance under the law.

Proposed Rule

In this proposed rule, HHS states that the nondiscrimination provisions will apply to “(1) every health program or activity, any part of which receives Federal financial assistance, directly or indirectly, from the Department; (2) every health program or activity administered by the Department; and (3) every program or activity administered by a Title I entity”. The proposal makes several important clarifications, namely that Section 1557 applies to every health program or activity administered by HHS, not only programs or activities administered by HHS under Title I of the ACA.

Medicare Part B and Federal Financial Assistance; Updated Definitions

The proposed rule seeks to update and adopt several definitions. As noted above, the regulation applies to recipients of federal financial assistance. HHS has proposed revising the definition of “Federal financial assistance” to include grants, loans and other types of assistance from the federal government, including credits, subsidies and contracts of insurance. Importantly, as proposed, HHS will now consider Medicare Part B to be federal financial assistance. Previously, Medicare Part B was noticeably absent from the HHS programs considered to provide federal financial assistance, which included (but was not limited to) Medicare Parts A, C and D and HHS grant programs.

HHS also proposes to define a “health program or activity” that is subject to Section 1557 to mean “any project, enterprise, venture or undertaking to provide or administer health-related services, health insurance coverage, or other health-related coverage; provide assistance to persons in obtaining health-related services, health insurance coverage, or other health-related coverage; provide clinical, pharmaceutical, or medical care; engage in health research; or provide health education for health care professionals or others.” HHS has suggested that “health care program or activity” would include all operations of an entity principally engaged in the provision or administration of health projects, enterprises, ventures or undertakings.

Health Insurance Issuers

Relatedly, the proposed rule reinstates Section 1557’s application to health insurance issuers and third-party administrators. Specifically, the proposal extends the prohibition on discrimination on the basis of race, color, national origin, sex, age or disability to the provision of health insurance (or other health-related coverage). The proposal would make Section 1557 applicable to covered entities that receive federal financial assistance and to HHS in its administration of health-related coverage programs.

Notice of Nondiscrimination

The proposed rule requires a recipient of federal financial assistance to provide a notice of nondiscrimination in its health programs and activities to participants, beneficiaries, applicants and the public. The proposed rule lists several detailed content requirements for the notice, including that “the covered entity does not discriminate on the basis of race, color, national origin (including limited English proficiency and primary language), sex (including pregnancy, sexual orientation, gender identity, or sex characteristics), age, or disability in its health programs or activities.” The notice must also state that the covered entity provides reasonable accommodations for individuals with disabilities, including auxiliary aids and services (such as qualified interpreters), and that language assistance services, including written translated documents and oral interpretation, are provided free of charge. The notice must be given annually and, upon request, be placed conspicuously on the covered entity health program’s website and be prominently displayed in physical locations where it is expected that individuals seeking service will see or hear the notice.

Notice of Availability of Language Assistance Services

The proposed rule reinstates the requirement that a covered entity provide a “notice of availability” stating that it provides language assistance services and auxiliary aids and services free of charge in its health programs and activities. The notice can be in the form of written translations or recorded audio or video clips. The notice must be provided in English and in the 15 most common languages spoken by LEP individuals of the relevant state(s). Upon request, the notice must be provided in alternative formats to individuals with disabilities to facilitate effective communication.

Updated Regulatory Language and Protections Against Sex Discrimination

The proposal codifies that discrimination on the basis of sex prohibited under Section 1557 includes sex stereotypes, characteristics (including intersex traits), pregnancy, sexual orientation and gender identity. Based on Supreme Court precedent, it is the view of HHS that Title IX’s prohibition “on the basis of sex” and Section 1557’s prohibition “on the ground prohibited under Title IX” include discrimination based on gender identity and sexual orientation. HHS also proposes a prohibition on discriminating on the basis of sex with respect to an individual’s marital, parental or family status. HHS is also seeking comment on whether it should include protections against discrimination on the basis of pregnancy-related conditions as a form of sex discrimination.

Nondiscrimination in Telehealth Services

In the first instance of telehealth being mentioned within the Section 1557 context, the proposed rule prohibits a covered entity from discriminating on the basis of race, color, national origin, sex, age or disability in the provision of telehealth services for its health programs and activities. HHS defines telehealth as “the use of electronic information and telecommunications technologies to support long-distance clinical health care, patient and professional health-related education, public health, and health administration.” HHS acknowledges the increased use of telehealth during the coronavirus pandemic and notes that, despite the benefits of telehealth, it is also subject to accessibility challenges and barriers to communication.

CMS Regulations Reinstated for Consistency

As part of its wide-ranging scope, the proposed rule aims to identify prohibited discrimination on the basis of sexual orientation and gender identity in certain Centers for Medicare & Medicaid Services (CMS) programs, such as the Children’s Health Insurance Program (CHIP) and the Program of All-Inclusive Care for the Elderly (PACE), by amending and reinstating 10 CMS regulations that were deleted by the 2020 Final Rule. CMS has also proposed to apply these protections to its Medicaid fee-for-service programs and managed care delivery systems.