In a Final Rule issued on May 6, 2024, the U.S. Department of Health and Human Services (“DHHS”) finalized regulations implementing Section 1557 of the Affordable Care Act (“Section 1557”). The Final Rule updates and strengthens protections for individuals who participate in health programs or activities that receive Federal financial assistance (“Covered Entities,” as further defined below).

Covered Entities will need to appoint a Section 1557 coordinator, implement policies and procedures, provide training, distribute and post notices containing specified content and provide auxiliary aids and services to individuals with disabilities and to those with limited English proficiency. The Final Rule will become effective on July 5, 2024, but many of the requirements imposed on Covered Entities have delayed compliance dates, as discussed below.

Expansion of Section 1557 Regulations

Section 1557 prohibits Covered Entities from refusing to treat an individual, or otherwise discriminating against an individual, on the basis of race, color, national origin, sex, age or disability. DHHS had previously promulgated implementing regulations in 2016, parts of which were largely repealed in 2020. Relying on relevant court decisions and public feedback, DHHS is expanding the definition of discrimination on the basis of sex in the Final Rule to specifically include discrimination based on sex characteristics, which includes: (i) intersex traits; (ii) pregnancy or related conditions; (iii) sexual orientation; (iv) gender identity; and (v) sex stereotypes.

The non-discrimination prohibition will also be specifically applicable to services provided in-person or through telehealth and to services provided through the use of patient care decision support tools.

DHHS is also expanding its interpretation of “Federal financial assistance” to include Medicare Part B payments, thus broadening the reach of the discrimination prohibition to physician practices. Recognizing that Part B providers who do not receive any other Federal financial assistance (and were not previously subject to Section 1557 requirements) will need additional time to come into compliance with Section 1557, DHHS is providing a one-year delay until May 6, 2025, for these providers. Other Covered Entities include hospitals, health clinics, health insurance issuers (including but not limited to Medicare Advantage Organizations and Medicaid Managed Care Organizations), pharmacies, community-based health care providers, nursing facilities, residential or community-based treatment facilities and others. 

Specific Requirements

Chief among the new and/or expanded requirements are the following:

Section 1557 Coordinators. Covered Entities that employ 15 or more persons must designate at least one person as a coordinator to carry out the Covered Entity’s responsibilities, including, but not limited to, receiving, reviewing and processing grievances, coordinating the Covered Entity’s language access and communication procedures, and overseeing training of relevant persons. Covered Entities must appoint a Section 1557 coordinator no later than November 4, 2024.

Policies and Procedures. No later than July 5, 2025, Covered Entities must implement reasonably-designed written policies and procedures that address non-discrimination, grievance procedures, language access procedures, effective communication procedures and reasonable modification processes.

Training. Relevant employees must be trained on the required policies and procedures as soon as possible, but no later than 30 days following implementation of the required policies. Covered Entities must also train newly hired relevant employees on the required policies. Relevant employees include those whose roles and responsibilities entail: interacting with patients and members of the public; making decisions that directly or indirectly affect patients’ health care, (including the executive leadership team and legal counsel); and performing tasks and making decisions that directly or indirectly affect patients’ financial obligations, including billing and collections.

Effective Communication. The Final Rule requires Covered Entities to provide appropriate auxiliary aids and services to individuals with disabilities, as well as those with limited English proficiency, free of charge to enable meaningful access to services. The Final Rule also establishes standards for accessible buildings and facilities and electronic communication, including specific requirements for interpreter, translation and machine translation services, as well as video and audio remote interpreting services. This portion of the Final Rule will be effective on July 5, 2024.

Notices. Covered Entities will be required to provide two notices:

1. Notice of Non-discrimination. Covered Entities must provide a notice of non-discrimination annually and upon request to participants, beneficiaries, enrollees and applicants of their health care programs and activities, as applicable to the Covered Entity. The notice must also be made publicly available, which will require the Covered Entity to post the notice at a conspicuous location on its website and in no smaller than 20-point sans serif font in physical locations that are accessible to individuals with poor vision. The notice must include a statement affirming that the Covered Entity:

  • does not discriminate on the basis of race, color, national origin (including limited English proficiency and primary language), sex (consistent with the expanded definition described above) age, or disability;
  • provides reasonable modifications for individuals with disabilities, and appropriate auxiliary aids and services, including qualified interpreters for individuals with disabilities and information in alternate formats, such as braille or large print, free of charge and in a timely manner, as necessary; and
  • provides language assistance services, including electronic and written translated documents and oral interpretation, free of charge and in a timely manner, as necessary.

    In addition, the notice must advise how to obtain the reasonable modifications, appropriate auxiliary aids and services, and language assistance services from the Covered Entity; include contact information for the designated Section 1557 coordinator(s); describe the Covered Entity’s grievance procedures; and provide information on how to file a discrimination complaint with the DHHS Office of Civil Rights. The compliance date for this notice is November 4, 2024.

    2. Notice of Availability of Language Assistance Services and Auxiliary Aids and Services. This notice must be provided in English and at least the 15 languages most commonly spoken by individuals with limited English proficiency of the relevant State(s) in which a Covered Entity operates, and must be provided in alternate formats for individuals with disabilities who require auxiliary aids and services to ensure effective communication. The notice must be given annually, upon request, on the Covered Entity’s website and where it is reasonable to expect individuals to be able to read or hear the notice. In addition, the Final Rule requires this notice to be included in many electronic and written communications when these forms are provided by the Covered Entity,

    • Notice of HIPAA Privacy Practices;
    • Application and intake forms;
    • Notices of denial or termination of eligibility, benefits or services, including Explanations of Benefits, and notices of appeal and grievance rights;
    • Communications related to a public health emergency;
    • Consent forms and instructions related to medical procedures or operations, medical power of attorney or living will (with an option of providing only one notice for all documents bundled together);
    • Discharge papers; and
    • Communications related to the cost and payment of care with respect to an individual, including medical billing and collections materials, and good faith estimates required by the No Surprises Act.

    Covered Entities must be in compliance with this notice requirement by July 5, 2025.

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    The Final Rule is voluminous and this blog posting does not cover all of the mandated requirements. Health plans, providers and facilities should review their current non-discrimination policies and the new requirements and update their documents and operations as appropriate, keeping in mind the various compliance dates.

    If you have questions or need assistance, please reach out to a member of the Sheppard Mullin Healthcare Team.