Sirote & Permutt presents another bulletin in its Health Care Alert series addressing important issues related to health care reform, health insurance reform and health care statutory and regulatory compliance. Some of the bulletins, like this one, discuss the Patient Protection and Affordable Care Act and the Health Care Education and Affordability Reconciliation Act (together, the “Affordable Care Act,” or “ACA”) signed into law in March 2010. Other bulletins address statutory and regulatory issues beyond the Affordable Care Act that are relevant and important to health care providers. To see past issues of Health Care Beat, click here.
What You Need To Know
On, May 18, 2016, the Department of Health and Human Service's Office for Civil Rights (OCR) issued final regulations to implement Section 1557 of the ACA (“Section 1557”) which provides that an individual cannot be excluded from participation in, be denied the benefits of, or be subjected to discrimination under, any health program or activity, any part of which is receiving Federal financial assistance, or under any program or activity that is administered by an Executive Agency.
What You Need To Do
If you are a covered entity, as defined in the regulations and as discussed further below, you must (A) post a non-discrimination notice in significant publications and significant communications; in conspicuous physical locations where the covered entity interacts with the public; and in a conspicuous location on the covered entity's Web site; (B) take “reasonable steps to provide meaningful access” to individuals with limited English proficiency (“LEP”); (C) if you have 15 or more employees, identify a responsible employee that will bear responsibility for your Section 1557 compliance and that will also investigate any alleged discrimination based on race, color, national origin, sex, age, or disability; and (D) if you have 15 or more employees, adopt grievance procedures for responding to any Section 1557 complaints.
Section 1557 provides that, unless otherwise provided in Title I of the ACA, based on Title VI of the Civil Rights Act of 1964, Title IX of the Education Amendments of 1972, the Age Discrimination Act of 1975, or Section 504 of the Rehabilitation Act of 1973, an individual cannot be excluded from participation in, be denied the benefits of, or be subjected to discrimination under, any health program or activity, any part of which is receiving Federal financial assistance, or under any program or activity that is administered by an Executive Agency. Title I of the Affordable Care Act does not invalidate or limit the rights and remedies available to individuals aggrieved under these Federal laws or Title VII of the Civil Rights Act of 1964, or supersede state laws that provide additional protections against discrimination on these bases.
On, May 18, 2016, the OCR issued final regulations to implement this prohibition on discrimination in certain health programs and activities. The rules prohibit discrimination on the basis of race, color, national origin, sex, age or disability, and based on a known or believed association or relationship. Discrimination on the basis of sex includes discrimination on the basis of: pregnancy, childbirth, false pregnancy, termination of pregnancy or recovery from these situations; gender identity (including “gender expression” and “transgender status”) and sex stereotyping; and sexual orientation, where the evidence establishes that the discrimination is based on gender stereotypes. Although the rules prohibit discrimination on the basis of sex stereotyping and gender identity, the final rules do not go so far as to prohibit discrimination on the basis of sexual orientation. The final rules note that case law on this point is evolving and OCR will continue to monitor those developments.
In addition, a covered entity may not:
- Deny or limit coverage or a claim (or impose additional cost-sharing or other limitations or restrictions on coverage) for health services provided to a transgender individual based on the fact that the individual's sex assigned at birth or gender identity is different from the one to which such services are ordinarily available. (For example, the covered entity may not deny a mammogram or pap smear for a transgender man simply because their recorded gender is male.)
- Categorically exclude coverage for all health services related to gender transition, as such an exclusion or limitation systematically denies services and treatments for transgender individuals and is prohibited discrimination on the basis of sex.
- Deny or limit coverage or a claim (or impose additional cost-sharing or other limitations or restrictions on coverage) for specific health services related to gender transition if such denial or limitation results in discrimination against a transgender individual. If, for example, an issuer or State Medicaid agency denies a claim for coverage for a hysterectomy that a patient's provider says is medically necessary to treat gender dysphoria, OCR will evaluate the extent of the covered entity's coverage policy for hysterectomies under other circumstances.
These prohibitions may cause many plans that are subject to Section 1557 to revisit their plan design and/or exclusions, as many third-party administrators (“TPA”) routinely exclude services relating to gender dysphoria or gender reassignment. Notably, the rules do not mandatecoverage for gender transition related surgery, but if the plan intends to cover those types of procedures for other purposes (e.g., corrective surgery for a child born with under-developed genitalia or a hysterectomy for cancer treatment), then it would be difficult to exclude coverage for such service for a transgender individual with gender dysphoria.
This law does not address employment discrimination claims that are not related to an employee health benefit offered by an employer that is a covered entity, as discussed below. Compliance with, or exemption from, other Federal regulations regarding prohibited discrimination does not automatically establish compliance with, or exemption from, the requirements of Section 1557 and the regulations promulgated thereunder.
The rule notes that many plans not subject to Section 1557 may nonetheless use a TPA that is subject to Section 1557. OCR notes that use of a Section 1557-governed TPA alone will not render a plan subject to Section 1557. When evaluating whether there is a Section 1557 violation, OCR will attempt to discern whether the discrimination is in operation (in which case the liable entity would be the TPA), or in design (in which case the liable entity might be the plan sponsor, to the extent the plan is subject to Section 1557).
Finally, the regulations note that plans may not circumvent these standards based on a medical necessity standard. OCR notes that medical evidence does not support the argument that treatments related to gender dysphoria are, by their very nature, not medically necessary.
The rules under Section 1557 apply to covered entities. Covered entities include the following:
1.An entity operating a health program or activity, any part of which receives Federal financial assistance administered by the Department of Health and Human Services (“HHS”).
a.“Health program or activity” means the provision or administration of health-related services, health-related insurance coverage, or other health-related coverage, and the provision of assistance to individuals in obtaining health-related services or health-related insurance coverage.
b.If an organization is “principally engaged” in providing or administering health services or health insurance or health coverage, the law applies to the entire organization, not just the health program or activity receiving OCR funding. The rules specifically provide that this includes hospitals, health clinics, group health plans, health insurance issuers, physician's practices, community health centers, nursing facilities, residential or community-based treatment facilities, or other similar entities. (For example, all health plans offered by a hospital employer would be covered.)
c.“Federal financial assistance” means any grant, loan, credit, subsidy, contract (other than a procurement contract but including a contract of insurance), or any other arrangement by which the Federal government provides or otherwise makes available assistance in the form of: (i) funds; (ii) services of Federal personnel; or (iii) real and personal property or any interest in or use of such property, including: (A) transfers or leases of such property for less than fair market value or for reduced consideration; and (B) proceeds from a subsequent transfer or lease of such property if the Federal share of its fair market value is not returned to the Federal government. Federal financial assistance HHS provides or otherwise makes available includes Federal financial assistance that HHS plays a role in providing or administering, including all tax credits under Title I of the ACA, as well as payments, subsidies, or other funds extended by HHS to any entity providing health-related insurance coverage for payment to or on behalf of an individual obtaining health related insurance coverage from that entity or extended by HHS directly to such individual for payment to any entity providing health-related insurance coverage. Federal financial assist does not include Medicare Part B.
2.Federal and State Health Insurance Marketplaces; and
3.Employee Health Benefit Programs that receive Federal financial assistance administered by HHS, including:
a.health benefits (including benefits that are excepted benefits for purposes of HIPAA or the ACA) or health insurance that is provided to employees or their dependents and established, operated, sponsored or administered by, for, or on behalf of one or more employers, and provided or administered by an employer, a group health plan under ERISA §733(a)(1), a TPA, a health insurance issuer, or some other entity;
b.a wellness program provided or sponsored by an employer, even if the program is separate from the group health plan (e.g., the employer provides gift cards to employees who receive flu shots);
c.an employer-provided health clinic; or
d.long-term care coverage or insurance provided or administered by an employer, group health plan, TPA, or issuer for an employer's employees.
In the case of a self-insured group health plan that is being administered by a TPA, the OCR generally will apply the rules separately to the employer and the TPA. The OCR rules do not apply to the employer just because the self-insured plan's TPA receives Federal financial assistance. The rules do apply to the employer if the employer: (1) is not principally engaged in providing or administering health coverage, but operates a health program or activity that is not an employee health benefit program and that receives Federal financial assistance; however, the liability is limited to the extent to which it provides or administers employee health benefits and only for the employees in that health program or activity; (2) receives Federal financial assistance a primary objective of which is to fund the employee health benefit program; or (3) is principally engaged in providing or administering health services or health coverage and receives Federal financial assistance (e.g., a hospital). The fact that the employer's group health plan is administered by a TPA that is a covered entity is not taken into account for this purpose. In addition, an employer that falls within one of these liability categories cannot avoid liability for the nondiscriminatory provision of employee health benefits to its employees simply by creating a separate legal entity to administer its employee health benefit plan.
The entities also may be viewed separately when a plan has multiple participating employers. If the plan sponsor does not receive Federal financial assistance, it is each employer's obligation to ensure that the benefits it provides to employees through its health program or activity do not violate the rules.
Notably, the final regulations do not include an exemption based on religious beliefs. Notwithstanding the foregoing, the regulations note that where application of Section 1557 would result in a violation of applicable Federal statutory protections for religious freedom, OCR will not enforce the standards. In addition, the regulations do not exempt benefits excepted from the ACA market reforms and HIPAA portability rules.
Notice Requirements – Significant Publications and Significant Communications
Each covered entity must post:
- A notice conveying the following information:
- That the covered entity does not discriminate on the basis of race, color, national origin, sex, age, or disability in its health programs and activities;
- That the covered entity provides appropriate auxiliary aids and services, including qualified interpreters for individuals with disabilities and information in alternate formats, free of charge and in a timely manner, when such aids and services are necessary to ensure an equal opportunity to participate to individuals with disabilities;
- That the covered entity provides language assistance services, including translated documents and oral interpretation, free of charge and in a timely manner, when such services are necessary to provide meaningful access to individuals with LEP;
- How to obtain the aids, services and assistance described above;
- The availability of a grievance procedure and the contact information for the Civil Rights Coordinator with whom the grievance may be filed (only applicable to covered entities that employ 15 or more persons); and
- How to file a discrimination complaint with the OCR.
- Taglines in at least the top 15 languages spoken by individuals with LEP of the relevant state or states (for example, in Alabama the top 15 spoken languages are: Spanish or Spanish Creole, Korean, Chinese, Vietnamese, Arabic, German, French, Gujarati, Tagalog, Hindi, Laotian, Russian, Portuguese, Turkish, and Japanese). Translated taglines and notices are published on the OCR's website.
A sample notice is available on the OCR's website and must be posted in a conspicuously visible font size:
- In significant publications and significant communications targeted to beneficiaries, enrollees, applicants, and members of the public;
- In conspicuous physical locations where the covered entity interacts with the public; and
- In a conspicuous location on the covered entity's Web site.
The OCR did not define the term “significant publications and significant communications” but instead stated that it will interpret this term “broadly.” It also made it clear that it will not limit the term to include only those communications or publications for a broad audience and stated that in some instances communications directed at individuals may be more important than a mass mailing.
Although covered entities must place the above notice in “significant publications and significant communications” the preamble to the final rule makes it clear that entities may exhaust their current stock of significant publications and communications prior to incorporating the required notice.
The rule distinguishes “significant publications and significant communications” from “significant publications and significant publications that are small-sized.” Although “small-sized” is not defined, examples include tri-fold brochures, pamphlets, and postcards. Covered entities do not have to include the full notice and all 15 translated taglines in small-sized communications, but must include a shortened nondiscrimination statement and taglines in the top two languages other than English (for example, in Alabama the top two spoken languages are Spanish and Korean).
Reasonable Steps to Provide Meaningful Access to LEP Individuals
Covered entities must also take “reasonable steps to provide meaningful access” to LEP individuals. Although the regulations do not provide steadfast rules for how the OCR will evaluate compliance, it will give weight to whether or not the covered entity has a “language access plan.” In addition to the above, the LEP language assistance service requirements must meet the following criteria (45 CFR § 92.201). The language access plan must be:
1.Free of charge;
2.Accurate and timely;
3.Protect the privacy and independence of the individual;
4.Use qualified interpreters when required to provide meaningful access to LEP individuals; and
5.Use qualified translators when translating written or electronic documents.
The final regulations also define limitations for those individuals that may not serve as interpreters for LEP individuals. Covered entities cannot require an LEP individual to provide his or her own interpreter and cannot require an accompanying adult to serve as the LEP patient's interpreter. An accompanying adult may serve as an interpreter in an emergency situation or if the LEP patient specifically consents to this arrangement. Furthermore, minor children cannot serve as the LEP patient's interpreter unless it is an emergency or another qualified interpreter is not immediately available. Finally, the covered entity cannot rely on bilingual or multilingual staff to communicate directly with LEP patients unless the staff are qualified to serve in this capacity in compliance with the final regulations. The preamble states that if a treating health care practitioner serves as an interpreter that it may adversely affect the patient relationship.
In addition to the above, covered entities that employ 15 or more employees are responsible for (A) identifying a responsible employee that will bear responsibility for its Section 1557 compliance and that will also investigate any alleged discrimination based on race, color, national origin, sex, age, or disability; and (B) adopting grievance procedures for responding to any Section 1557 complaints. Although the preamble makes it clear that covered entities can adapt existing grievance procedures it provides an example grievance procedure in Appendix C to the final rule.
Individuals alleging discrimination do not have to exhaust a covered entity's internal grievance procedures before pursuing other avenues. The existing enforcement mechanisms available under those laws referenced in Section 1557 permit private rights of action. Thus, individuals alleging discrimination are permitted to file a private suit alleging a violation of Section 1557 prior to pursuing an entity's internal grievance procedures. The rule also permits compensatory damages for any Section 1557 violations (45 CFR § 92.301).
The rule is generally effective July 18, 2016 (60 days following issuance of the final regulations). Notwithstanding the foregoing, the rules contain a delayed effective date in two circumstances:
- If the rule requires changes to a health plan design, the rule applies the first day of the first plan year beginning on or after January 1, 2017.
- The notice and tagline requirements discussed above are effective October 16, 2016, except that covered entities may exhaust their current stock of hard copy publications rather than printing entirely new publications.