HHS FINAL RULE IMPLEMENTING ACA §1557 (NONDISCRIMINATION) O’Donoghue & O’Donoghue LLP 1

Introduction May 18, 2016, HHS issued its final rule implementing section 1557 of the ACA. Section 1557, the ACA’s nondiscrimination provision, prohibits discrimination on the basis of race, color, national origin, sex, age, or disability in certain health programs and activities. 2

Introduction The final rule— Clarifies HHS’ interpretation of Section 1557, and Establishes new implementation standards for Section 1557 with respect to the prohibition against sex discrimination, national origin discrimination, and disability discrimination in health programs. 3

Covered Entities The final rule applies to health insurers, hospitals, clinics, group health plans and other entities that receive federal funds from HHS. i.e., group health plans that— Participate in CMMS’ Retiree Drug Subsidy Program Self-insured Employer Group Waiver Plans (EGWP) Insured EGWPs? Maybe (review your contract with the insurer) 4

Covered Entities HHS contends that the final rule creates minimal “new” compliance obligations, but: Many covered group health plans and TPAs will need to take certain actions to comply with the final rule’s nondiscrimination requirements and the specific prohibitions against discrimination in health programs. 5

Effective Dates Effective date of the final rule is July 18, 2016, but HHS has already begun enforcement efforts addressing ACA’s non-discrimination provision based on its interpretation of the statutory provisions. 6

HHS’s Definition of Discrimination on the Basis of Sex HHS’ definition of discrimination “on the basis of sex” 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. “sex stereotyping” refers to perceived notions of masculinity or femininity, including perceptions of how individuals represent or communicate their gender to others. “gender identity” means an individual's personal identification of gender. And the final rule advises that a person’s identification of gender may be different from an individual's sex assigned at birth. 7

HHS’s Definition of Discrimination on the Basis of Sex Many group health plans covered by the final rule will need to amend their plans and operating procedures to eliminate discrimination on the basis of “sex stereotyping” and “gender identity.” 8

Discrimination on the Basis of Sex The final rule contains provisions addressing gender identity discrimination in the provision of health services related to gender transition: 1. categorically or automatically excluding from coverage, or limiting coverage for, all health services related to gender transition; 2. otherwise denying or limiting coverage, or a health claim, for specific health services related to gender transition if such denial or limitation results in discrimination against a transgender individual. 9

Discrimination on the Basis of Sex Plans are not required to cover particular treatments or procedures, but denials must be based on neutral, nondiscriminatory reasons that are not pretext for discrimination. 10

Discrimination on the Basis of Sex HHS notes that the medical community has already recognized the medical necessity of gender transition related care. In 2013, HHS invalidated Medicare's coverage exclusion for sexual reassignment surgery, because “the record indicated that the blanket denial of coverage was not reasonably based on the state of current medical science.” 11

Protections against Disability Discrimination The final rule requires covered entities to take “appropriate steps to ensure that communications with individuals with disabilities are as effective as communications with others in health programs and activities.” 12

Protections against Disability Discrimination The final rule requires covered entities to provide an individual with a disability a choice of an “auxiliary aid or service” to understand communications about health programs or activities. Auxiliary aids and services include, but are not limited to, qualified interpreters, real-time computer-aided transcription services, assistive listening devices, closed caption decoders, qualified reading materials 13

Protections against Disability Discrimination Covered entities must take reasonable steps to avoid disability-based discrimination, unless doing so would “fundamentally alter the nature of the health program or activity.” 14

Protections against Disability Discrimination Covered entities must: Ensure that their health programs or activities provided through electronic and information technology are accessible to individuals with disabilities – such as individuals with visual disabilities – “unless doing so would impose undue financial and administrative burdens or would result in a fundamental alteration in the nature of an entity's health program or activity.” 15

Access to Individuals with Limited English Proficiency Covered entities must take reasonable steps to provide meaningful access to individuals with limited English proficiency who are eligible to be served or likely to be encountered within the entity’s health programs and activities. 16

Access to Individuals with Limited English Proficiency While HHS states that the level, type and manner of language assistance services will vary based on the relevant facts, including the operations and capacity of the covered entity... 17

Access to Individuals with Limited English Proficiency The final rule does set forth certain requirements a covered entity must satisfy to comply: When providing language assistance services, the services must: be provided free of charge; be accurate and timely; protect the privacy and independence of the individual. 18

Access to Individuals with Limited English Proficiency Language Assistance Services: include— oral language assistance through a qualified interpreter or bilingual staff member, written translation of documents and websites by a qualified interpreter, and taglines in non-English languages in plan communications indicating the availability of language assistance services free of charge. 19

Access to Individuals with Limited English Proficiency A covered entity: Must offer a qualified interpreter for an individual with limited English proficiency when oral interpretation “is a reasonable step to provide meaningful access for the individual” and Cannot require the individual to provide their own interpreter. 20

Access to Individuals with Limited English Proficiency A covered entity is not permitted to allow an individual to rely on an adult or child acquaintance to interpret or facilitate communication, except in cases of: emergency involving an imminent threat to the safety or welfare of an individual or the public and where no qualified interpreter is available; or when specifically requested by the individual and appropriate under the circumstances. A covered entity cannot rely on staff other than “qualified bilingual/multilingual staff” to communicate directly with individuals with limited English proficiency. 21

Specific Compliance Provisions As a condition of any application for federal financial assistance, a covered entity must submit an “assurance” form, certifying that its health programs and activities will be operated in compliance with Section

Specific Compliance Provisions Covered entities must provide nondiscrimination notices identifying: Its nondiscrimination policy; Its policy on providing appropriate auxiliary aids and services and how to obtain the aids and services; Its provision of language assistance services; The individual designated for investigating grievances under the its grievance policy; and How to file a discrimination complaint with OCR. These notices must be available within 90 days of July 18,

Specific Compliance Provisions The notices must also include taglines in the top 15 languages spoken on a state-wide basis, or the aggregate of the top 15 language spoken in the states in which the entity operates, indicating that language assistance services are available free of charge HHS published sample nondiscrimination notices and sample taglines in the top 25 languages spoken nationally that can be modified by the covered entity. 24

Specific Compliance Provisions Covered entities that employ 15 or more persons must adopt grievance procedures that incorporate due process standards and provide for the prompt and equitable resolution of grievances alleging violations of Section HHS published sample grievance procedures in the appendix to the final rule. 25

Specific Enforcement Provisions The final rule’s enforcement provisions include: requiring covered entities to keep records and submit compliance reports to OCR conducting compliance reviews and complaint investigations; and providing technical assistance and guidance. The enforcement mechanisms provide for suspension of, termination of, or refusal to continue federal financial assistance to a covered entity. In administrative and judicial actions, compensatory damages are available for violations of §1557. A private right of action and compensatory damages for violations of §1557 are also available to affected individuals, either under existing federal law or under the final rule. 26

To-Do List A covered entity should review its current capacity to: Provide appropriate auxiliary aids and services, such as alternative formats and sign language interpreters, where necessary for effective communication. Provide language assistance services for individuals with limited English proficiency. Make all communications and materials provided through electronic and information technology accessible to individuals with disabilities, unless doing so would impose undue financial or administrative burdens on the Plan. 27

To-Do List Designate a compliance officer to ensure compliance with §1557. If applicable, adopt grievance procedures. Draft a nondiscrimination notice with the appropriate taglines. (notice included in all significant publications and communications and made available in a conspicuous location accessible on its website). Draft nondiscrimination statement for “small-sized” significant publications, with taglines in the top two languages spoken by individuals with limited English proficiency of the relevant State or States. 28

To-Do List Adopt a Language Access Plan. identifies how and under what circumstances the covered entity will provide assistance to individuals with limited English proficiency; explains how it will determine an individual’s primary language; identifies a telephonic oral interpretation service to access qualified interpreters when the need arises; identifies a translation service to be able to access qualified translators when the need arises; identifies the types of language assistance services that may be required under particular circumstances; and identifies any documents for which written translations should be routinely available Personnel will have to be trained in accordance with the language access plan. 29