Five More Proposed Changes to Ease Affordable Care Act Nondiscrimination Rule Issues

June 26, 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.

As discussed in a previous alert, the U.S. Department of Health and Human Services (HHS) Office for Civil Rights (OCR) recently issued a proposed rule amending 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.” As highlighted in the earlier alert, the proposed rule would remove certain mandatory notice and tagline requirements regarding 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.

In addition to those changes, five other proposed changes to OCR’s regulations are likely to ease certain burdens for healthcare providers and provide greater flexibility (particularly regarding individuals with LEP). The following outlines these additional changes, intended to reduce the burdens of the ACA nondiscrimination regulations.

1. Modifying the Applicability of the Section 1557 Regulations

Under the current regulatory regime, each covered entity must fulfill the nondiscrimination requirements in all of the entity’s programs. 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). Entities established under Title I of the ACA that administer a health program or activity are also considered covered entities. If a covered entity provides other services unrelated to the federal financial assistance, current law requires the same standards to apply to those unrelated services.

OCR proposes to changes this. For nonhealthcare providers primarily involved in nonhealthcare businesses, such as certain insurance companies, the proposed rule would apply Section 1557 nondiscrimination standards only to programs funded by HHS. For instance, OCR provides the example of short-term limited-duration insurance, which would not have to comply with the Section 1557 rules if finalized. 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 or operates on the ACA Marketplace. In conjunction with item 4 below, OCR anticipates this to provide significant savings to such insurance companies.

2. Increasing Flexibility Through “Individual Assessment of Entity Compliance With Language Access”

OCR proposes to grant greater flexibility to healthcare providers and other entities covered under this rule to determine their compliance needs based on the four-factor test described in McGuireWoods’ previous alert. Rather than continuing a “one size fits all” approach for such entities, OCR would allow this balancing test so entities may tailor their language access programs to the specific needs of the populations they serve. OCR described this individual assessment throughout the preamble to its proposed rule to focus LEP assistance in a manner that allows providers to best serve their communities without unwarranted costs.

OCR reinforces this flexibility by making clear its enforcement approach to individuals with LEP will be on a case-by-case basis, taking into account the provider’s individualized assessment. In general, however, certain standards will still apply. For instance, language assistance services, if required to be offered by an entity after such assessment, still must be offered at no cost, and be timely and accurate. Furthermore, if an entity determines such assistance requires translators or interpreters, such translators and interpreters must meet specific minimum qualifications, including ethical principles, confidentiality, proficiency, effective interpretation and ability to use specialized terminology as necessary in the healthcare setting. OCR will continue to prohibit providers from requiring LEP individuals to provide their own interpreter.

3. Revising Video Interpretation Standards

The proposed rule would eliminate certain technical and training standards related to video interpretation for LEP individuals, although these standards would still apply to individuals who are deaf or hard of hearing. OCR reasons that individuals with hearing impairments rely on viewing sign language interpreters, while foreign language speakers can usually rely on clear audio transmission for effective communication. Given the costs associated with equipment and training for video remote interpreting technology, OCR now believes the current rule’s video standards may not be justified for LEP individuals, particularly with respect to small providers.

OCR seeks comments, however, regarding which covered entities rely on remote video interpreting for LEP individuals, circumstances where a clear video signal (as opposed to audio) would be necessary for effective communication, the applicable costs of this service, and whether such standards improve the effectiveness of communication. For individuals with LEP, the entity must make an individualized assessment on ensuring access to care, while OCR will continue to require appropriate auxiliary aids for individuals with impaired sensory, manual or speaking skills. This may include video sign language interpreters or on-site interpreters. Providers may want to consider this case and the cost of such video equipment to determine whether they want to use this system for LEP individuals, as well. Such considerations may be helpful to articulate to OCR as it reviews comments to its proposed rule.

4. Simplifying Requirements for Health Insurers and Employers

The proposed rule would also eliminate certain marketing requirements applicable to health insurance issuers and their agents. For instance, the proposed rule would eliminate prohibitions on denying or limiting coverage to transgender individuals or for services related to gender transition. Instead, OCR proposes to maintain the requirement for insurers that such entities “comply with any applicable State laws and regulations regarding marketing by health insurance issuers.” The proposal would prohibit marketing practices or benefit designs that will “discriminate based on an individual’s race, color, national origin, present or predicted disability, age, sex, expected length of life, degree of medical dependency, quality of life, or other health conditions.”

Furthermore, OCR proposes to repeal provisions that impose liability on certain employee health benefit programs from otherwise covered entities under the Section 1557 rule, ostensibly relieving such programs from compliance with OCR’s nondiscrimination rules. OCR seeks comments on the costs incurred for design of such health benefits, including any detailed information, facts, surveys, audits or reports.

5. Repealing Grievance Requirements and Compliance Coordinator Requirements

OCR proposes to repeal the requirement for each covered entity with 15 or more employees to have a responsible employee (i.e., a Section 1557 compliance coordinator) and a written grievance procedure to handle complaints alleging violations of OCR’s nondiscrimination rules. OCR reasons that this will spare such covered entities from certain labor costs associated with processing grievances. Such discussion of the compliance coordinator and written grievance procedure, including contact information of the OCR, will also no longer be required, due to the previously described elimination of mandatory nondiscrimination notices. OCR expects this to save costs, including those to the federal government. In its preamble, OCR suggested that mandatory notices led to many customer service-type calls to the OCR, ones that did not involve discrimination but instead asked questions about the healthcare provider or other entity’s offerings, as the OCR phone number was prominently displayed on the mandatory notices it now proposes to eliminate.

The public currently has 60 days — until Aug. 13, 2019 — to comment on the proposed rule. Please consult one of the authors if you would like to discuss the potential implications of these proposed changes or submit a comment to OCR. Until such rule is finalized, the 2016 rule still governs healthcare providers’ behavior, such that nondiscrimination notices and the items above are still mandatory (except for items related to sex discrimination where courts have enjoined certain enforcement efforts). This rule is in keeping with other HHS efforts to ease burdens on providers, including CMS’ Patients Over Paperwork initiative, although as previously noted, certain communities may be concerned they will not receive the services they need.