HHS proposes revision of its ACA Section 1557 rule, projects $3.6 billion in savings over next five years

On May 24, 2019, the Department of Health and Human Services (“HHS”) Office for Civil Rights (“OCR”) issued a proposed rule to revise its 2016 rule regarding certain forms of discrimination under Section 1557 of the Affordable Care Act (“ACA”). Section 1557 prohibits discrimination on the basis of race, color, national original, sex, age, or disability in certain health programs. HHS’s 2016 rule redefined “on the basis of sex” to include gender identity and termination of pregnancy and following this expanded definition, multiple states and healthcare entities filed federal lawsuits against HHS.

Consequently, in Franciscan Alliance, Inc. et al. v. Burwell, the U.S. District Court for the Northern District of Texas enjoined HHS’s attempt to prohibit discrimination on the basis of gender identity and termination of pregnancy as sex discrimination under Section 1557. The court concluded that the inclusion of gender identity and termination of pregnancy contravened other federal laws, including various civil rights laws, the Religious Freedom Restoration Act (“RFRA”), and the Administrative Procedure Act. On May 2, 2017, the Department of Labor (“DOJ”) submitted a motion for a voluntary remand and stay so HHS could reassess these challenged provisions of its 2016 rule.

Although HHS’s reassessment of its 2016 rule seeks to keep its commitment to enforce applicable civil rights laws and regulations in healthcare, the proposal will eliminate gender identity and termination of pregnancy as protected classes under Section 1557. In addition, it will eliminate mandatory notices and tagline requirements for individuals with limited English proficiency (“LEP”), which projects $3.6 billion in savings over the first five years after the rule’s finalization, implement protections for conscience-based objections, and revise the OCR’s enforcement mechanisms.

For more information, please see the proposed rule and accompanying factsheet. You can also review Compliancedashboard’s Section 1557 Nondiscrimination activity.



The information and content contained in this blog post are for general informational purposes only, and does not, and is not intended to, constitute legal advice.

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