HHS Proposes Eliminating Mandatory Notices, Gender Identity Protections From Nondiscrimination Rules

May 30, 2019

Update (July 1, 2020): The U.S. Department of Health and Human Services Office for Civil Rights recently issued a final rule amending provisions of its 2016 rule prohibiting certain forms of discrimination under the Affordable Care Act. For more details, please read our July 1, 2020 alert.

On May 24, the U.S. Department of Health and Human Services Office for Civil Rights issued a proposed rule reversing certain provisions of its 2016 rule prohibiting certain forms of discrimination under Section 1557 of the Affordable Care Act. Section 1557, incorporating other civil rights laws, “prohibits discrimination on the basis of race, color, national origin, sex, age, or disability in certain health programs and activities.” The proposed rule would remove certain mandatory notice and tagline requirements for individuals with limited English proficiency (LEP), eliminate gender identity and termination of pregnancy from the definition of “sex discrimination,” clarify protections for certain conscience-based objections and revise OCR’s enforcement mechanisms.

HHS stated the proposed rule seeks to align its regulations with recent court rulings with respect to sex discrimination. Furthermore, as highlighted in the factsheet accompanying the proposed rule, HHS sought to reduce approximately $3.6 billion in unnecessary regulatory costs over five years. The following outlines the major proposed changes to the ACA nondiscrimination regulations.

1. Eliminate Mandatory Nondiscrimination Notices

As discussed in a prior McGuireWoods alert, beginning in 2016, most healthcare providers and other entities covered under the regulations must publish and disseminate nondiscrimination notices, including disclosures for language assistance services for LEP individuals. Entities covered under this rule include those operating a health program or activity receiving, even in part, federal financial assistance (including Medicaid, Medicare Part A but not Part B, Medicare Advantage and meaningful use payments) and entities established under Title I of the ACA administering a health program or activity. For such covered entities, the required notices must meet several criteria, and include a tagline in at least 15 non-English languages describing the entity’s ability to provide free language assistance services. Such nondiscrimination notices and taglines must be distributed in all “significant communications and significant publications” to patients and customers.

According to HHS, those required to provide notice have reported that this rule required such entities to send “billions” of notices in aggregate each year, and HHS estimates that the cost of this requirement is $3.2 billion over a five-year period. Furthermore, HHS reports that the rule has not had a meaningful impact on language access since 2016, specifically suggesting that many providers have not been providing this notice. Therefore, the proposed rule would eliminate the requirement for entities to send notice and tagline inserts in communications to patients and customers.

2. Allow Providers to Balance Four Factors to Determine Whether Language Assistance Services Are Required for LEP Patients

Under the 2016 rule, most healthcare providers and other covered entities are required to take reasonable steps to provide LEP individuals with meaningful access to services, including language assistance. OCR proposes revising this regulatory text to require providers to take reasonable steps to ensure meaningful access, and added a four-factor balancing test to determine whether the provider is meeting this requirement.

The four factors are: (1) the number or proportion of LEP individuals the provider is likely to encounter; (2) the frequency with which LEP individuals receive services; (3) the nature and importance of the entity’s health program, activity or service; and (4) the resources available to the entity and costs of the services. Once a provider determines that language assistance services are required under this four-factor test, OCR would maintain the requirements surrounding the language assistance services that must be offered free of charge, required qualifications for bilingual or multilingual staff, translators and interpreters to assist and the limitations on requiring a patient’s family to assist. OCR also clarified that remote audio interpretation will be acceptable for LEP individuals, whereas video connection may be more appropriate for deaf individuals.

3. Eliminate Gender Identity and Termination of Pregnancy From the Definition of “Sex Discrimination”

As discussed above, Section 1557 directs HHS to apply existing civil rights laws and regulations to healthcare providers and ACA exchanges, including Title IX prohibitions on discrimination on the basis of sex. The 2016 rule defines discrimination “on the basis of sex” to include gender identity, or an individual’s “internal sense of gender, which may be different from an individual’s sex assigned at birth” that “may be male, female, neither, or a combination of male and female.” See 45 C.F.R. 92.4. The 2016 rule also includes “termination of pregnancy” and “sex stereotyping” under the definition of discrimination “on the basis of sex.”

The proposed rule would eliminate gender identity, sex stereotyping and termination of pregnancy from the definition of sex discrimination, stating that such definitions are inconsistent with various federal rulings imposing an injunction on the 2016 rule, the Religious Freedom Restoration Act (RFRA) and the Administrative Procedure Act (APA).

4. Implement Protections for Conscience-Based Objections

HHS acknowledges that protections already exist in federal law with respect to religious beliefs (i.e., RFRA and ACA provisions related to abortion services), but that such references were not included in the 2016 rule prohibiting discrimination in federal healthcare programs.

OCR proposes to incorporate such protections in its updated regulation by reference to the statutes concerning religious and abortion exemptions. The purpose of explicitly incorporating such federal laws is to bring greater clarity to the law, similar to the references to race, color, national origin, sex, age or disability discrimination prohibitions. This provision explicitly references Section 1553 of the ACA (prohibiting discrimination for those that do not provide assisted suicides), RFRA, the Weldon and Coats-Snowe Amendment prohibiting government entities from discrimination against healthcare providers who do not perform abortions, the Church Amendments (conscience protections for providers), and related conscience provisions in appropriations law (e.g., Consolidated Appropriations Act of 2019).

5. Revise OCR’s Enforcement Mechanisms

The proposed rule attempts to simplify OCR’s enforcement structure to avoid legal confusion and challenge. As discussed, Section 1557 applies multiple civil rights statutes to the healthcare setting. In the 2016 rule, OCR included a single enforcement structure for every type of discrimination claim. HHS proposes to return to the enforcement structure for each underlying civil rights statute instead of using the single structure, since courts have split on whether the new mechanism is appropriate or whether it deviated inappropriately from longstanding civil rights regulations.

Furthermore, for non-healthcare providers, such as insurance companies, HHS would revise the rules to apply Section 1557 nondiscrimination standards only to programs funded by HHS. For instance, HHS provides the example of short-term limited duration insurance, which would not have to comply with the rule because such insurers are not principally engaged in the business of healthcare, and those specific plans do not receive federal financial assistance, even if the insurer sells other HHS-funded insurance programs.

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HHS has submitted the proposed rule for publication in the Federal Register. Once it is published, the public will have 60 days to comment on the proposed rule. Please consult with one of the authors if you would like to discuss the potential implications of this proposed rule or submit a comment to OCR. The proposed rule could ease certain burdens for healthcare providers and protect certain religious freedoms, but certain changes may raise concern among the LEP community on whether LEP patients will receive the translation services they need.