HHS Issues New Affordable Care Act Section 1557 Nondiscrimination Regulations

Seyfarth Synopsis: New regulations effective August 6, 2024 restore and expand scope of civil rights protections under Section 1557 of the Affordable Care Act.

Section 1557 of the Affordable Care Act (“Section 1557”) prohibits health programs and activities that receive Federal financial assistance (“FFA”) (as well as State-based health insurance Exchanges and health programs and activities of the Health and Human Services agency) (“covered entities”) from discriminating on the basis of race, color, national origin, disability, age, or sex. Regulations implementing Section 1557 have been the subject of Presidential administration tug-of-war since their original 2016 issuance. New Section 1557 regulations published on May 6, 2024, which go into effect August 6, 2024, restore some repealed 2016 provisions and add provisions to enhance nondiscrimination requirements to which covered healthcare providers must adhere.  

Section 1557 Rulemaking History

After President Obama signed the Affordable Care Act (“ACA”) into law in 2010, the entity charged with enforcing the ACA, the U.S. Department of Health and Human Services Office for Civil Rights (“OCR”) first issued  regulations implementing Section 1557 on May 18, 2016 (“2016 Rule”).  On June 14, 2019, the Trump Administration HHS published a Section 1557 notice of proposed rulemaking (“NPRM”), proposing to rescind and replace large portions of the 2016 Rule that the Administration contended exceeded Section 1557’s legislative authority or were unnecessary or duplicative.On June 19, 2020, OCR published the revised Section 1557 final rule (“2020 Rule”) in the Federal Register.

On July 25, 2022, the Biden Administration HHS OCR posted a new Section 1557 NPRM which – after over 85,000 comments – led to the May 6, 2024, issuance of expansive restored and expanded regulations (“Final Rule”), for the stated purpose to “advance health equity and reduce disparities in health care”. The 2020 Rule remains in effect, save for the parts enjoined or set aside by courts, until the August 6, 2024 effective date of the Final Rule.

Overview of the Final Rule

The Final Rule restores Section 1557 protections against discrimination based on sexual orientation, gender identity, and disability, as well as religious objections. It also expands the reach of the Rule to  Part B Medicare providers, private health insurance plans and the use of AI patient decision-making tools.

The Final Rule’s key components include the following:

• Coverage of Part B – For the first time, HHS will consider Medicare Part B payments as a form of Federal financial assistance (“FFA”), meaning that healthcare providers that accept Medicare Part B and were not otherwise subject to Title VI or Section 1557 now are, at least as to those programs and services covered by Medicare Part B.
• Application to Health Insurance Plans – The Final Rule applies to every health program or activity that receives FFA directly or indirectly, in whole or in part, from the HHS; (2) every health program or activity administered by HHS; and (3) every program or activity administered by a Title I entity, which include State Exchanges (including those on the Federal platform) and Federally-facilitated Exchanges created under Title I of the ACA.
• LGBTQI Protections – Re-codifies into regulation HHS’ position that Section 1557’s prohibition against discrimination based on sex includes LGBTQI+ patients. A FAQ addresses the Final Rule’s impact on coverage of treatment of gender dysphoria – that providers do not have an affirmative obligation to offer any health care, including gender-affirming care, that they, in the provider’s discretion, do not think is clinically appropriate or if religious freedom and conscience protections apply. The Final Rule does not require covered entities to cover a particular health service for the treatment of gender dysphoria for any individual; rather, it prohibits covered entities from excluding categories of services in a discriminatory way.

• Language Assistance and Accessibility- The Final Rule requires covered entities to proactively inform people know that language assistance and accessibility services are available to patients at no cost, and  “clarifies” that covered health programs and activities offered via telehealth must be accessible to individuals with limited English proficiency and individuals with disabilities.
• Use of Artificial Intelligence in Health Care – The Final Rule explicitly states that nondiscrimination principles under Section 1557 apply to the use of patient care decision support tools in clinical care, and requires covered providers “to take steps to identify and mitigate discrimination when they use AI and other forms of decision support tools for care.”
• Conscience protections – The Final Rule re-states federal protections for religious freedom and conscience and makes clear that recipients may simply rely on those protections or seek assurance of them from HHS.

Stay tuned for podcasts, webinars, and articles on specific provisions of the Final Rule in the weeks to come.