The U.S. Department of Health and Human Services (HHS) has issued a proposed rule entitled “Nondiscrimination in Health Programs and Activities.” The proposed rule, designed to advance health equity and protect people from discrimination, revises the implementing regulation for Section 1557 of the Affordable Care Act (ACA). The rule also proposes revisions to nondiscrimination provisions in Centers for Medicare & Medicaid Services (CMS) regulations.

Applies Section 1557 to All HHS-Administered Health Programs and Activities

Section 1557 of the ACA prohibits discrimination in certain health programs or activities based on race, color, national origin, sex, age, or disability. Under the 2020 rule, Section 1557’s nondiscrimination provision applies only to programs and activities that HHS conducts under Title I of the ACA. In contrast, the proposed rule expands the scope of Section 1557’s nondiscrimination provision to apply to all health programs and activities that HHS administers, including those through the Indian Health Service, CMS, and the National Institutes of Health (NIH). It applies the same nondiscrimination standards to HHS health programs and activities as to recipients of federal funds.

Clarifies that Section 1557 Applies to Health Insurance Issuers Receiving Federal Funds

The proposed rule also clarifies that Section 1557 of the ACA applies to health insurance issuers receiving federal financial assistance. As these issuers play a significant role in providing health care to Americans, the proposed rule establishes clear nondiscrimination standards in the insurance industry.

Adopts Sex Discrimination Standards from Federal Court Decisions

Consistent with the U.S. Supreme Court’s decision in Bostock v. Clayton County, 140 S. Ct. 1731 (2020) and the subsequent HHS Federal Register Notice, 86 Fed. Reg. 27984 (May 10, 2021), the proposed rule codifies that sex discrimination includes discrimination based on sexual orientation and gender identity. The proposed rule also specifies that discrimination based on sex includes discrimination based on the following: sex stereotypes, sex characteristics, including intersex traits, and pregnancy or related conditions, including pregnancy termination.

Implements Section 1557 Policy Establishment and Training Requirements

The proposed rule requires recipients of federal financial assistance, HHS health programs and activities, and State exchanges to establish clear policies and provide training to staff members on Section 1557.

Mandates Entities to Give Notice of Available Language Assistance Services and Auxiliary Aids

Under the proposed rule, covered entities must provide notice that language assistance services and auxiliary aids and services in English and at least the fifteen most common languages spoken in the relevant state or states are available. Entities also must provide these notices in alternate formats for individuals with disabilities. Entities must provide these notices to individuals at least annually unless they opt out and post them conspicuously in prominent physical locations and on their websites.

Prohibits the Use of Discriminatory Clinical Algorithms

Covered entities may not use clinical algorithms in their decision-making, which violates Section 1557’s nondiscrimination standards.

Outlines Process for Conscience and Religious Freedom Objections

The proposed rule sets forth a clear process by which an HHS federal financial recipient can notify the Office of Civil Rights (OCR) of their belief that the application of Section 1557 would violate their rights under federal conscience or religious freedom laws. If OCR receives such a notification, it must consider those views when responding to a complaint or determining whether to proceed with any investment or enforcement activity concerning that recipient’s compliance with Section 1557. OCR then must determine whether the recipient is entitled to an exemption from Section 1557 based on that conscience or religious freedom objection.

Extends the Application of Section 1557 to Telehealth

Under the proposed rule, covered entities must avoid discriminating against individuals when utilizing telehealth to deliver healthcare services. More specifically, entities must ensure these services are accessible to individuals with disabilities and those with limited English proficiency (LEP).

Construes Medicare Part B as Federal Financial Assistance

HHS takes the position in the proposed rule that Medicare Part B is federal financial assistance for the federal civil rights statutes that it enforces, including not only Section 1557 of the ACA but also Title VII of the Civil Rights Act, Section 504 of the Rehabilitation Act, Title IX of the Education Amendments of 1972, and the Age Discrimination Act.

Reinstates Protections Based on Sexual Orientation and Gender Identity in CMS Regulations

The 2020 rule eliminated language in at least ten provisions in the CMS regulations that prohibited discrimination based on sexual orientation and gender identity. The proposed rule restores these provisions and adds similar nondiscrimination language to additional provisions concerning Medicaid fee-for-service and managed care programs.