New civil rights regulations (the “Final Rule”) from the U.S. Department of Health and Human Services (“DHHS”) Office for Civil Rights (“OCR”) are effective July 18, 2016. They require federally assisted health care providers, plans and insurers, and health plans operating on state or federal exchanges, to adopt new civil rights policies and procedures. Providers and others subject to the Final Rule must act now in order to comply with the new requirements and avoid legal risk.

Who is Affected?

The Final Rule implements §1557 of the Affordable Care Act (“§1557”), which significantly expanded health care-related civil rights obligations. Section 1557 affects “all health programs and activities, any part of which receives Federal financial assistance from any Federal agency.” Those that receive their federal financial assistance from DHHS are affected by the Final Rule. “Health program or activity” is defined broadly as “provision or administration of health-related services or health-related insurance coverage and the provision of assistance in obtaining health-related services or health-related insurance coverage.” This includes federally assisted health care providers, health plans, and insurers. Federal financial assistance means grants, loans, and other types of assistance, and specifically includes subsidies and contracts of insurance. Receipt of Medicare Parts A, C and D, Medicaid, HRSA grants, and NIH research grants triggers application of §1557. Practitioners and suppliers that receive Medicare payment only under Part B are nevertheless subject to the Final Rule if they receive Medicaid funds or other federal financial assistance.

The Final Rule calls entities affected by it “Covered Entities.” The scope is deliberately broad in order to further the Affordable Care Act’s goal of facilitating the availability of health care to every American.

Key Provisions

The Final Rule prohibits discrimination on the basis of many familiar protected classifications—race, color, national origin, age and disability. Importantly, for the first time §1557 and the Final Rule also expressly prohibit discrimination on the basis of sex. In addition to broadly prohibiting discrimination in general, the Final Rule also requires many specific actions to prevent discrimination on the basis of national origin and disability. The Final Rule supplements, but does not displace, state non-discrimination requirements. Highlights of the Final Rule include:

Sex Discrimination: Sex discrimination includes discrimination on the basis of gender, but also includes discrimination on the basis of “pregnancy, false pregnancy, termination of pregnancy, or recovery therefrom, childbirth or related medical conditions, sex stereotyping, and gender identity.” “Gender identity” means an individual’s internal sense of gender, which may be different from an individual’s sex assigned at birth. Per OCR, the way an individual expresses gender identity is frequently called “gender expression,” and may or may not conform to stereotypes associated with a particular gender. Gender may be expressed through, for example, dress, grooming, mannerisms, speech patterns, and social interactions. Transgender individuals are thus expressly protected in health care for the first time, as are lesbian, gay and bisexual individuals if discrimination against them is based upon sex stereotypes.

Civil Rights Coordinator and Grievance Process: Any Covered Entity with 15 or more employees must appoint a civil rights coordinator and establish internal grievance procedures that guarantee due process to aggrieved individuals.

Notice of Non-Discrimination: By October 16, 2016, all Covered Entities must post a notice in significant publications, in physical locations, and on their website, informing readers that the Covered Entity does not discriminate on the basis of race, color, national origin, sex, age or disability. The Final Rule specifies the content of the notice.

Foreign Language Taglines: Also by October 16, 2016, all Covered Entities must post “taglines” announcing the availability of foreign language assistance services for individuals with limited English proficiency. These must be posted in the top 15 languages spoken in the Covered Entity’s state, or aggregated states if the Covered Entity operates in multiple states. The taglines must be posted in the same places as the notice of non-discrimination. The tagline requirement is in addition to providing effective language assistance services to all limited English proficient individuals who interact with the Covered Entity, no matter what language they speak. Additionally, OCR strongly encourages, but does not specifically require, Covered Entities to engage in advance language assistance planning in order to be ready to meet the needs of all individuals with limited English proficiency.

Accessibility of Electronic Information: All Covered Entities must make all electronic information and communications (e.g. websites, mobile apps, patient portals, electronic billing and the like) fully accessible to individuals with sensory impairments that affect communication. Electronic text must be accessible to visually impaired individuals using screen reader technology. Electronic audio information must be accessible to individuals with hearing impairments. This is in addition to ensuring accessibility for all other kinds of communication using assistive devices and techniques such as sign language interpreters, TTDs and TTYs, Braille transcriptions, taped information, and other techniques.

Private Right of Action: In addition to administrative penalties (including compensatory damages, remedial actions, and loss of federal financial assistance) the Final Rule expressly permits private rights of action by aggrieved individuals. It also specifically permits these actions on a theory called “disparate impact,” which will significantly broaden Covered Entities’ exposure to liability for discriminatory actions. A “disparate impact” theory permits a finding of liability when a policy or procedure that is neutral on its face disproportionately affects a protected group.

Entities affected by the Final Rule must act promptly to avoid the risk of administrative penalties and civil litigation.