//  12/16/19  //  In-Depth Analysis

In June, the Department of Health and Human Services (HHS) proposed repealing much of its 2016 rule implementing the Affordable Care Act’s nondiscrimination provisions (known as Section 1557 or the Health Care Rights Law). The 2016 rule provided clear guidance on many aspects of the law’s prohibitions of health care discrimination based on race, national origin, age, sex, and disability. It followed a 2012 opinion letter, 2013 and 2015 comment periods, and numerous court rulings that anti-transgender bias is covered under the law. It led to HHS being able to resolve many complaints of health care discrimination, hospitals providing better training to staff, and insurance plans getting rid of antiquated exclusions.

HHS now wants to repeal the interpretation that the ACA prohibits discrimination against transgender people and those who’ve had abortions as forms of sex discrimination. They also propose to repeal numerous other provisions, including printed “taglines” to help notify patients with limited English proficiency that language help is available. The result is a proposal that could increase uncertainty in the health care sector, deter patients from seeking care, and encourage some entities to turn patients away. Since that time, HHS has also proposed to remove department-wide rules for nondiscrimination in health and human service grants, and its 2019 “Conscience” rule for health care staff has been vacated by three district courts, based in part on arguments similar to some of those made here.

The National Center for Transgender Equality (NCTE) was one of over 200,000 individuals and organizations who filed public comments. This post summarizes the arguments made in NCTE’s comments. We identified many flaws in the proposed rule’s legal and cost-benefit analysis that appear to be typical of the civil rights rulemaking in the Trump Administration.

On gender identity, HHS ignored a mountain of case law. Both before and since the 2016 rule, numerous federal circuit and district courts embraced its approach to sex discrimination. A court permanently enjoined Wisconsin’s anti-transgender Medicaid exclusion because it violates Section 1557. Despite all this, HHS argues it is required to repeal the 2016 rule because of a preliminary injunction from a district court against enforcing parts of it.

In December 2016, a Texas district court ruled that the 2016 rule’s provisions on discrimination based on gender identity or termination of pregnancy exceeded the statute and issued a nationwide preliminary injunction. The Administration chose to embrace that injunction instead of appealing it, in stark contrast to its efforts to narrow, stay, and appeal injunctions of countless Trump-era rules and policies. (After criticism for this apparent contradiction, the Administration has asked that a permanent injunction be limited to named parties, but HHS still relies on the injunction to support its proposed rule.)

HHS failed to give any reason for adopting the Texas court’s reasoning over the majority of courts that have held anti-transgender bias is sex-based. In fact, in its proposed rule it relegated several appeals court rulings to a footnote, and failed to even cite others. (Simultaneously, the Justice Department has asked the Supreme Court to rule next year that anti-transgender bias in the workplace is legal.) The Administration also failed to acknowledge case law that discrimination based on termination of pregnancy is covered under the law.

HHS gave no or nonsensical explanations for repealing numerous patient protections. The Proposed Rule wouldn’t just rescind references to gender identity bias. It would repeal the 2016 Rule almost entirely, including dozens of other provisions.

For several of these provisions—such as those on insurance discrimination, notices of patient rights, and grievance procedures—HHS claimed they were simply redundant of regulations adopted under other laws like Title VI of the Civil Rights Act and Title IX of the Education Amendments of 1972. But this isn’t true, because those rules don’t contain all the same requirements or apply to all the same entities.

HHS proposed to delete any recognition that Section 1557 forbids discrimination because a patient is pregnant or has had an abortion. HHS said it wouldn’t actually take a position on whether the law covers this or not, but cited the Franciscan Alliance ruling, which said it would be unlawful without incorporating Title IX’s abortion exception.

For other provisions, HHS didn’t give any reason at all for repealing them. This includes section 92.206, which prohibits sex discrimination in health services, including denying services typically associated with one sex solely because of a patient’s sex as assigned at birth or recorded in medical or insurance records.

HHS also didn’t even acknowledge it was repealing section 92.209, which prohibits discrimination based on a person’s association or relationship with someone of a particular race, color, national origin, age, disability, or sex. Courts have ruled consistently that civil rights laws cover discrimination against a person because of the protected characteristics of their spouse, parent, or child. HHS likely wants to strike this provision because associational discrimination is one of the primary legal theories for covering sexual orientation bias under sex discrimination laws, but it didn’t state any reason at all.

Beyond gender identity, the most consequential proposed rollback is completely eliminating the obligation to provide patients with “taglines” in various languages letting them know language assistance is available. Some industry groups asked that these requirements be narrowed, but HHS wants to cut them completely, even though it could mean some patients can’t communicate with their providers.

HHS proposed to ignore statutory language about who is subject to Section 1557. HHS argues that health insurance is not a “health program or activity” and would exempt more health plans. It also argues that the phrase “any program or activity that is administered by an Executive Agency or any entity established under this title” excludes numerous federal programs that predate the ACA. This leaves patients without key protections in numerous areas.

HHS proposed grafting extra-textual exemptions onto Section 1557. In 2016, HHS carefully considered and rejected the view that Section 1557 should be read to incorporate all the statutory exceptions from the referenced statutes, including Title IX. It had good textual reasons for doing so, as well as good policy reasons.

Section 1557 explicitly incorporates the “grounds” and the “enforcement mechanisms” of Title VI, Title IX, the Rehabilitation Act, and the Age Discrimination Act. It does not incorporate the exceptions in those statutes, instead stating that discrimination on these grounds is prohibited “[e]xcept as otherwise provided for in” Title I of the ACA, which contains specific exemptions regarding abortion and assisted suicide. The text thus makes clear these are the only exceptions to the prohibition of discrimination based on race, color, national origin, age, sex, and disability.

Incorporating all the exemptions from the references statutes would also cause confusing, inconsistent, and unanticipated results, since none of those statutes were designed for the health care context. Title IX’s unusually broad religious and abortion exemptions, along with numerous others, were designed for the education context, not for the context of health care where the results of discrimination can be life-threatening. The same is true for the other referenced statutes. In the context of Title IX, it means religious organizations could choose to exempt themselves for the purpose of refusing to treat children of same-sex parents or women who have had sex outside marriage.

HHS completely failed to consider costs to patients and the health care system from encouraging discrimination. In a recent rule expanding exemptions for providers and health care staff who refuse to provide care based on religious or moral beliefs, HHS said that without the rule those staff “may experience real harms that are significant and sometimes devastating psychologically, emotionally, and/or financially.” HHS said it considered the potential costs of health care staff being shunned, stigmatized, fired, or pushed out of their profession, and the benefits of promoting “a culture of respect.” HHS didn’t have numbers for these costs and benefits, but decided that based on anecdotes and public comments it was worth the estimated $300 million costs of the rule.

The Department’s approach to the Section 1557 rule is radically different. The Department assumes industry will save hundreds of millions from ignoring discrimination based on gender identity and sex stereotypes, and billions more from eliminating patient rights notices and language taglines. The Department didn’t make any effort to calculate the costs to patients or society, saying it didn’t have enough information. Of course, that’s not how rulemaking works.

Comments on the proposed rule outline some of the many costs inherent in rolling back a civil rights regulation, particularly in the health care context. For example, research shows health care discrimination leads to be people being denied care, receiving delayed care, and avoiding seeking care in the future. Discrimination in insurance causes patients to incur out of pocket costs and received delayed care. Experiences of discrimination have measurable negative health impacts of their own. According to several major studies, high-profile civil rights policy decisions can directly impact health as well. For all these reasons, the proposed rollback could lead not only to costly litigation and shifting health care expanses to consumers, but also to excess morbidity and mortality in transgender and other minority populations. It’s hard to imagine how these costs could be offset, but HHS doesn’t even consider them.

HHS ignored the views of most medical professional associations and industry stakeholders. Usually, federal agencies give great weight to the views of medical experts and industry stakeholders—the latter especially during conservative administrations. Yet when it comes to civil rights, HHS appears far less interested in what industry has to say. As noted previously, most industry groups lobbied for narrowing, not eliminating, tagline rules. And the nation’s leading groups representing doctors, insurance companies, and hospitals in underserved communities warned against cutting back sex discrimination provisions, saying it would be bad for patients’ health.

A final rule could come sometime next year. While HHS says the proposal will help it “resolve” pending lawsuits, finalizing it will surely draw even more.


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