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Biden administration proposes substantial revisions to health care non-discrimination rules | Manatt, Phelps & Phillips, LLP

The big picture

On July 25, the Department of Health and Human Services (HHS) released a proposed rule interpreting Section 1557 of the Affordable Care Act (ACA), which prohibits any health program or activity receiving federal financial assistance from discriminating on the basis of race, color, national origin , gender, age or disability. Section 1557 has a long and tangled history of rulemaking, reversals and legal challenges. With this proposed rule, the Biden administration seeks to restore and expand Obama-era health care non-discrimination regulations that were amended or removed by the Trump administration and have been repeatedly challenged. challenged in federal courts.

The broad proposal is outlined as part of the Biden administration’s agenda to advance health equity and civil rights. If finalized as proposed, this far-reaching proposal:

  • Broadly apply Section 1557 to all entities receiving federal financial assistance, including the following:
    • If a health insurance issuer is subject to Section 1557 with respect to any of its sectors of activity, it must comply with article 1557 with regard to everything lines of business, including any activity as a third-party administrator of employer-sponsored plans;
    • For the first time, providers who receive payments for outpatient services through Medicare Part B would be subject to the requirements of Section 1557, consistent with HHS’s longstanding approach for providers who receive payments for inpatient services or residential under Medicare Part A;
  • Codify provisions that prohibit discrimination based on sexual orientation and gender identity (consistent with the Biden administration’s 2021 policy announcement that he would enforce Section 1557 in accordance with the Supreme Court’s decision in Bostock v. County of Clayton (140 S. Ct. 1731 (2020)), which held that “sex-based” discrimination includes discrimination based on sexual orientation or gender identity;
  • Clarify that health coverage cannot use discriminatory benefit design, provider networks, or marketing, including a categorical exclusion or limitation of coverage for all or certain gender transition-related health services benefits that give preference to institutional care over living at home or in the community for people with disabilities;
  • Reinstate requirements for entities covered by Section 1557 to distribute non-discrimination notices and notices regarding the availability of language assistance (often referred to as “slogans”);
  • Strengthen support requirements for people with limited English proficiency (LEP);
  • Create a formal process by which individuals and entities subject to Section 1557 may request an exception to the application of Section 1557 based on the Federal Conscience and Religious Liberty Act;
  • Clarify the application of Section 1557 to technological innovations such as telehealth, clinical algorithms, and “machine translation” (i.e. linguistic translation performed by an algorithm without human supervision);
  • Require written compliance policies and grievance procedures on Section 1557 rules; and
  • Solicit feedback on how Section 1557 might apply to health plan provider network decisions and valuation methodologies.

If finalized as proposed, the revised standards in Section 1557 could have significant implications for patients, providers, and payers, as well as third parties who contract with providers and payers for products and services such as as software-based clinical decision aids or translation support. Comments on the proposed rule will be due 60 days after the rule is posted in the Federal Registerwhich is to take place on August 4.