Nondiscrimination in Health and Health Education Programs or Activities

Federal RegisterJun 14, 2019

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DEPARTMENT OF HEALTH AND HUMAN SERVICES

Centers for Medicare and Medicaid Services

42 CFR Parts 438, 440, and 460

Office of the Secretary

45 CFR Parts 86, 92, 147, 155, and 156

[Docket No.: HHS-OCR-2019-0007]

RIN 0945-AA11

Nondiscrimination in Health and Health Education Programs or Activities

AGENCY:

Centers for Medicare and Medicaid; Office for Civil Rights (OCR), Office of the Secretary, HHS.

ACTION:

Proposed rule.

SUMMARY:

The Department of Health and Human Services (“the Department”) is committed to ensuring the civil rights of all individuals who access or seek to access health programs or activities of covered entities under Section 1557 of the Patient Protection and Affordable Care Act. The Department proposes to revise its Section 1557 regulation in order to better comply with the mandates of Congress, address legal concerns, relieve billions of dollars in undue regulatory burdens, further substantive compliance, reduce confusion, and clarify the scope of Section 1557 in keeping with pre-existing civil rights statutes and regulations prohibiting discrimination on the basis of race, color, national origin, sex, age, and disability.

DATES:

Submit comments on or before August 13, 2019.

ADDRESSES:

You may submit comments to this proposed rule, identified by RIN 0945-AA11, by any of the following methods:

•

Federal eRulemaking Portal:

You may submit electronic comments at

http://www.regulations.gov

by searching for the Docket ID number HHS-OCR-2019-0007. Follow the instructions at

http://www.regulations.gov

online for submitting comments through this method.

•

Regular, Express, or Overnight Mail:

You may mail comments to U.S. Department of Health and Human Services, Office for Civil Rights, Attention: Section 1557 NPRM, RIN 0945-AA11, Hubert H. Humphrey Building, Room 509F, 200 Independence Avenue SW, Washington, DC 20201.

•

Hand Delivery/Courier:

You may hand deliver comments to the U.S. Department of Health and Human Services, Office for Civil Rights, Attention: Section 1557 NPRM, RIN 0945-AA11, Hubert H. Humphrey Building, Room 509F, 200 Independence Avenue SW, Washington, DC 20201.

All comments received by the methods and due date specified above will be posted without change to

http://www.regulations.gov,

including any personal information provided, and such posting may occur before or after the closing of the comment period.

We will consider all comments received by the date and time specified in the

DATES

section above, but, because of the large number of public comments we normally receive on

Federal Register

documents, we are not able to provide individual acknowledgements of receipt.

Please allow sufficient time for mailed comments to be timely received in the event of delivery or security delays. Because access to the interior of the Hubert H. Humphrey Building is not readily available to persons without Federal government identification, commenters are encouraged to leave their comments in the mail drop slots located in the lobby of the building. Electronic comments with attachments should be in Microsoft Word or Excel; however, we prefer Microsoft Word.

Please note that comments submitted by fax or email and those submitted after the comment period will not be accepted.

Docket:

For complete access to background documents or posted comments, go to

http://www.regulations.gov

and search for Docket ID number HHS-OCR-2019-0007.

FOR FURTHER INFORMATION CONTACT:

Luben Montoya, Supervisory Civil Rights Analyst, HHS Office for Civil Rights at (800) 368-1019 or (800) 537-7697 (TDD).

SUPPLEMENTARY INFORMATION:

Table of Contents

I. Executive Summary

A. Background on Section 1557 and Its Rulemaking

B. Litigation Challenging the Section 1557 Regulation

C. Summary of the Proposed Rule

D. Cost-Effective Design of the Proposed Rule

II. Reasons for the Proposed Rulemaking

A. Section 1557 of the PPACA Does Not Prevent or Limit Reconsideration of the Current Rule

B. The Final Rule Adopted Novel and Inconsistent Legal Interpretations of Long-Standing Civil Rights Law

1. The Final Rule Interpreted the Scope of Section 1557 Too Broadly

2. The Final Rule Improperly Blended Substantive Requirements and Enforcement Mechanisms of the Underlying Statutes

3. The Final Rule Inconsistently Applied Federal Nondiscrimination Law

4. The Final Rule Created New Provisions Concerning Language Access Requirements Not Adequately Justified by Law or Policy

5. The Final Rule's Definition of Discrimination “On the Basis of Sex” Has Been Enjoined by Federal Courts

a. Background on Title IX of the Education Amendments

b. HHS's Title IX Regulations

c. Need for Consistency Among Components of HHS

d. Pending Federal Litigation Over Section 1557 Regulation, Title IX, and Title VII

e. HHS's Inconsistency With Other Federal Departments

f. Need for Consistency With the Department of Justice on Implementation and Enforcement of Nondiscrimination Laws

g. Clarity and Sensitive Balancing of Competing Interests at the Local Level

C. The Costs of the Final Rule Were Unnecessary and Unjustified

1. The Section 1557 Regulation Imposed Substantially Higher Regulatory Costs Than Predicted

2. The Section 1557 Regulation's Burdens Are Not Justified by Need

III. Nondiscrimination in Health Programs and Activities

Provisions of the Proposed Section 1557 Rule at 45 CFR part 92

Proposed “Subpart A—General Provisions”

Proposed “45 CFR 92.1 Purpose.”

Proposed “45 CFR 92.2 Nondiscrimination requirements.”

Proposed “45 CFR 92.3 Scope of application.”

Proposed “45 CFR 92.4 Assurances.”

Proposed “45 CFR 92.5 Enforcement mechanisms.”

Proposed “45 CFR 92.6 Relationship to other laws.”

Proposed “Subpart B—Specific Application to Health Programs or Activities”

Proposed “45 CFR 92.101 Meaningful access for individuals with limited English proficiency.”

Proposed “45 CFR 92.102 Effective communication for individuals with disabilities.”

Proposed “45 CFR 92.103 Accessibility standards for buildings and facilities.”

Proposed “45 CFR 92.104 Accessibility of information and communication technology.”

Proposed “45 CFR 92.105 Requirement to make reasonable modifications.”

Request for Comments on Proposed 45 CFR 92.102 Through 92.105

B. Current Section 1557 Regulation Provisions Proposed for Repeal or Reconsideration

1. Taglines, Notices, Language Access Plans, and Video Interpretation Standards

2. Redundant Provisions Duplicative of Pre-Existing Regulations

IV. Need for Conforming Amendments

A. Nondiscrimination in Education Programs or Activities

Proposed “45 CFR 86.18 Amendments to conform to statutory exemptions.”

B. Proposed Conforming Amendments

C. Technical Amendments

V. Interim Treatment of Subregulatory Guidance

VI. Regulatory Impact Analysis

A. Executive Orders 12866 and Related Executive Orders on Regulatory Review

1. Summary of the Proposed Rule

2. Need for the Proposed Rule

3. Consideration of Regulatory Alternatives

4. Considerations for Cost-Effective Design

5. Methodology for Cost-Benefit Analysis

6. Cost-Benefit Analysis

a. Overview

b. Generally Applicable Tangible and Intangible Benefits and Burdens

c. Baseline Assumptions

d. Covered Entities

(1) Entities Covered by Section 1557

(a) Entities With a Health Program or Activity, Any Part of Which Receives Federal Financial Assistance From the Department

(b) Programs or Activities Administered by the Department Under Title I of the PPACA

(2) Entities Covered by Title IX

e. Cost Savings From Eliminating Notice and Taglines Requirement

f. Cost Arising From Removal of Notice and Taglines Requirement

g. Cost Savings From Changes to Language Access Plan Provisions

h. Cost Savings Attributed to Covered Entities' Handling of Certain Grievances

i. Additional Costs for Training and Familiarization Under the Proposed Rule

(1) Number of Covered Entities That May Train Workers

(2) Number of Individuals Who Will Receive Training

(3) Total Cost of Training

j. Additional Costs for Revising Policies and Procedures

k. Other Costs Due to Reversion to Previous Practices

l. Other Benefits or Costs

7. Impact on State, Local, and Tribal Entities Under Executive Orders 12866, 13132, and 13175

a. State and Local Governments

b. Tribal Governments

8. Avoidance of Inconsistent, Incompatible, or Duplicative Regulations

B. Executive Order 13771 on Reducing and Controlling Regulatory Costs

C. Congressional Review Act

D. Unfunded Mandates Reform Act

E. Regulatory Flexibility Act and Executive Order 13272 on Proper Consideration of Small Entities in Agency Rulemaking

F. Executive Order 12250 on Leadership and Coordination of Nondiscrimination Laws

G. Paperwork Reduction Act

VII. Effective Date

VIII. Delegation of Authority

IX. Request for Comment

I. Executive Summary

A. Background on Section 1557 and Its Rulemaking

Section 1557 of the Patient Protection and Affordable Care Act (“PPACA”)

prohibits discrimination on the basis of race, color, national origin, sex, age, or disability under any health program or activity that receives Federal financial assistance, or under any program or activity that is administered by an executive agency under Title I of the PPACA or by an entity established under such Title. Section 1557 cites Title VI of the Civil Rights Act of 1964 (42 U.S.C. 2000d

et seq.

) (“Title VI”), Title IX of the Education Amendments of 1972 (20 U.S.C. 1681

et seq.

) (“Title IX”), the Age Discrimination Act of 1975 (42 U.S.C. 6101

et seq.

) (“Age Act”), and Section 504 of the Rehabilitation Act of 1973 (29 U.S.C. 794) (“Section 504”).

It further states that “[t]he enforcement mechanisms provided for and available” under those laws “shall apply for purposes of violations” of Section 1557.

Patient Protection and Affordable Care Act, Public Law 111-148, sec. 1557, 124 Stat. 119, 260 (Mar. 23, 2010) (codified at 42 U.S.C. 18116). In this Notice of Proposed Rulemaking, we refer interchangeably to Section 1557 and 42 U.S.C. 18116.

While Section 1557 does not incorporate nondiscrimination provisions by reference to Title VII, it provides that nothing in Title I of the PPACA is to be construed as invalidating or limiting the rights, remedies, procedures, or legal standards available under certain civil rights laws, and mentions Title VII specifically. 42 U.S.C. 18116(b).

42 U.S.C. 18116(a).

Section 1557 authorizes, but does not require, the Secretary of Health and Human Services (“Secretary”) to promulgate regulations implementing Section 1557's nondiscrimination requirements.

42 U.S.C. 18116(c).

On August 1, 2013, the Department issued a Request for Information (RFI) soliciting input on regulations under Section 1557. 78 FR 46558. Thereafter, on September 8, 2015, the Department issued a Notice of Proposed Rulemaking (NPRM) to add a new part 92 to Title 45 of the Code of Federal Regulations and thereby impose numerous new requirements on covered entities.

80 FR 54172.

See

45 CFR 92.4 (“Covered entity means: (1) An entity that operates a health program or activity, any part of which receives Federal financial assistance; (2) An entity established under Title I of the PPACA that administers a health program or activity; and (3) The Department.”).

On May 18, 2016, the Department finalized its proposed regulations for Section 1557 in 45 CFR part 92 (the “Final Rule,” “current rule,” or the “Section 1557 Regulation”). 81 FR 31376.

As noted above, Section 1557 bars discrimination on grounds prohibited under several civil rights statutes, including on the ground of sex under Title IX of the Education Amendments of 1972. In its Section 1557 Regulation, the Department defined discrimination “on the basis of sex” to cover, among other things, discrimination on the basis of sex stereotyping, gender identity, and termination of pregnancy, but explicitly declined to include discrimination on the basis of sexual orientation. 81 FR 31390 (“OCR has decided not to resolve in this rule whether discrimination on the basis of an individual's sexual orientation status alone is a form of sex discrimination.”). As explained more fully below, the Final Rule, among other things, imposed specific requirements regarding language assistance services, multi-language “taglines,” and nondiscrimination notices.

The Final Rule was later revised on July 18, 2016, when the Department issued a technical correction deleting an incorrect toll-free telephone number to call the Department to file a civil rights complaint. 81 FR 46613 (July 18, 2016).

The Department estimated that, collectively, the Final Rule's new requirements, backed by the threat of enforcement action, would cost health care providers and other covered entities over $942.5 million in the first five years of implementation. 81 FR 31459.

The Final Rule became effective on July 18, 2016, except to the extent that the Rule required changes to health insurance or group health plan benefits or benefit design, in which case the Final Rule applied on the first day of the first plan year that began on or after January 1, 2017. 45 CFR 92.1.

On January 20, 2017, the President issued E.O. 13765 “Minimizing the Economic Burden of the Patient Protection and Affordable Care Act Pending Repeal,” that requires, among other things, “[t]o the maximum extent permitted by law, the Secretary of Health and Human Services . . . shall exercise all authority and discretion available to [ ] waive, defer, grant exemptions from, or delay the implementation of any provision or requirement of the [PPACA] that would impose a fiscal burden on any State or a cost, fee, tax, penalty, or regulatory burden on individuals, families, healthcare providers, health insurers, patients, recipients of healthcare services, purchasers of health insurance, or makers of medical devices, products, or medications.” 82 FR 8351 (Jan. 24, 2017).

B. Litigation Challenging the Section 1557 Regulation

Lawsuits challenging the regulations followed promulgation of the Final Rule. On August 23, 2016, the States of Texas, Wisconsin, Nebraska, Kentucky, and Kansas, along with three private health care providers, filed a complaint in the U.S. District Court for the Northern District of Texas challenging the Section 1557 Regulation.

See Franciscan Alliance, Inc., et al.

Burwell, et al.,

227 F. Supp. 3d 660 (N.D. Tex. 2016). The complaint stated that, “by redefining a single word used in the Affordable Care Act . . . HHS has created a massive new liability for thousands of healthcare professionals unless they cast aside their medical judgment and perform controversial and even harmful medical transition procedures.” Complaint,

Franciscan Alliance, Inc., et al.

Burwell, et al.,

No. 7:16-cv-00108-O (N.D. Tex. Aug. 23, 2016). Two other cases with similar objections were filed in the U.S. District Court for the District of North Dakota.

Religious Sisters of Mercy, et al.

Burwell, et al.,

No. 3:16-cv-386 (D.N.D. filed Nov. 7, 2016);

Catholic Benefits Association, et al.

Burwell, et al.,

No. 3:16-cv-432 (D.N.D. filed Dec. 28, 2016).

Religious Sisters of Mercy, et al.

Burwell, et al.,

No. 3:16-cv-386;

Catholic Benefits Association et al.,

Burwell, et al.,

No. 3:16-cv-432 (D.N.D. order of Jan. 23, 2017, consolidating North Dakota cases).

On December 31, 2016, the U.S. District Court in

Franciscan Alliance

issued a nationwide preliminary injunction against the Department, barring it from enforcing the Section 1557 Regulation's prohibition against discrimination on the basis of “gender identity” and “termination of pregnancy.” 227 F. Supp. 3d at 696. The district court held that the Department had adopted an erroneous interpretation of “sex” under Title IX, and that the regulation was also arbitrary and capricious for failing to incorporate Title IX's religious and abortion exemptions.

Id.

The district court concluded that the Department's interpretation was not entitled to deference under

Chevron U.S.A., Inc.

Natural Resources Defense Council, Inc.,

467 U.S. 837 (1984), because “the meaning of sex in Title IX unambiguously refers to the biological and anatomical differences between male and female students as determined at their birth.” 227 F. Supp. 3d at 687 (citations omitted).

The

Franciscan Alliance

district court also held that plaintiffs had established a likelihood of success on the merits of their claims that the Department had violated the Administrative Procedure Act (APA) and the Religious Freedom Restoration Act (RFRA).

Id.

at 693. Regarding the RFRA claim, the district court found that HHS had not demonstrated a compelling interest in enforcing the regulation against the plaintiffs.

Id.

at 696. And even if the Department had demonstrated that compelling interest, the court held that the Department failed to show that its interest could not be pursued through less restrictive means for providing access to, and coverage for, services related to gender dysphoria.

Id.

at 693. The U.S. District Court for the District of North Dakota found the

Franciscan Alliance

order to be “thorough and well-reasoned,” and on that basis temporarily stayed enforcement of Section 1557's prohibitions against discrimination on the bases of gender identity and termination of pregnancy against the named plaintiffs in that court's two consolidated cases.

Religious Sisters of Mercy, et al.

Burwell, et al.,

Nos. 3:16-cv-386 & 3:16-cv-432 (D.N.D. Order of January 23, 2017).

On July 10, 2017, the

Franciscan Alliance

court stayed proceedings to allow time for agency reconsideration, finding that the preliminary injunction order “provides sufficient guidance for HHS's review of the Rule.”

The U.S. District Court for the District of North Dakota also further stayed the proceedings in its two cases on July 10, 2017 and on August 24, 2017.

Neither the previous Administration nor the current one appealed the nationwide preliminary injunction, or the orders in

Franciscan Alliance, Religious Sisters of Mercy,

Catholic Benefits Association,

staying proceedings. On May 2, 2017, the Department of Justice (DOJ) moved the Northern District of Texas for a voluntary remand and stay to allow HHS to “reassess the reasonableness, necessity, and efficacy of the two aspects of the [Section 1557] regulation that are challenged” in litigation.

DOJ filed a similar motion with the District of North Dakota later that month.

Franciscan Alliance,

No. 7:16-cv-00108-O (filed July 10, 2017).

Religious Sisters of Mercy, et al.

North Dakota

Burwell, et al.,

No. 3:16-cv-386 (D.N.D. Order filed on July 10, 2017;

Catholic Benefits Association

Burwell,

No. 3:16-cv-432 (D.N.D. Order filed Aug. 24, 2017).

See

Defendant's Motion,

Franciscan Alliance,

No. 7:16-cv-00108-O (filed May 2, 2017).

Defendant's Motion,

Religious Sisters of Mercy,

No. 3:16-cv-386 (filed May 26, 2017).

On July 10, 2017, the

Franciscan Alliance

court stayed proceedings to allow time for agency reconsideration, finding that the court's preliminary injunction order “provides sufficient guidance for HHS's review of the Rule.”

The district court in North Dakota similarly stayed proceedings on August 24, 2017, in order to allow HHS “to reconsider the controversial rules and regulations at issue.”

Franciscan Alliance,

No. 7:16-cv-00108-O (filed July 10, 2017).

Religious Sisters of Mercy,

No. 3:16-cv-432 (order of Aug. 24, 2017).

On February 4, 2019, the plaintiffs in the

Franciscan Alliance

case filed briefs in support of their renewed motions for summary judgment. On April 5, 2019, DOJ filed a brief in response to plaintiffs' motion summary judgment on behalf of HHS,

stating that “the relevant provisions of Title IX and Section 1557 unambiguously exclude gender-identity discrimination.”

Id.

at 14. In this brief, DOJ stated the position of the U.S. Government on the meaning of “sex” under Title VII of the Civil Rights Act, Title IX of the Education Amendments of 1972, and Section 1557 of PPACA. DOJ stated, “Since the [Section 1557 Final] Rule was issued, the United States has returned to its longstanding position that the term `sex' in Title VII does not refer to gender identity, and there is no reason why Section 1557, which incorporates Title IX's analogous prohibition on `sex' discrimination, should be treated differently.”

Id.

at 6. Therefore, DOJ concluded, “the [Final] Rule's prohibitions on discrimination on the basis of gender identity and termination of pregnancy conflict with Section 1557 and thus are substantively unlawful under the APA.”

Id.

DOJ continued, “[t]he [Final] Rule also fails to incorporate Title IX's exemptions despite Section 1557's directive to the contrary, thereby prohibiting conduct the statute permits.”

Id.

See

Defendant's Memorandum in Response to Plaintiffs' Motions for Summary Judgment,

Franciscan Alliance,

No. 7:16-cv-00108-O (filed April 5, 2019).

While it reconsiders its Section 1557 Regulation through the rulemaking process, the Department continues to abide by the preliminary injunction, which remains in place.

C. Summary of the Proposed Rule

In order to better comply with the mandates of Congress, address legal concerns, relieve billions of dollars in undue regulatory burdens, further substantive compliance, reduce confusion, and clarify the scope of Section 1557, the Department proposes to make substantial revisions to the Section 1557 Regulation and to eliminate provisions that are inconsistent or redundant with pre-existing civil rights statutes and

regulations prohibiting discrimination on the basis of race, color, national origin, sex, age, and disability. In addition, to resolve confusion raised by the Section 1557 Regulation's reliance on an outdated version of the Department's Title IX regulation, the Department proposes to amend its Title IX regulation to implement statutory amendments made by Congress to Title IX in 1988.

See

Civil Rights Restoration Act of 1987, Public Law 100-259, 102 Stat. 28 (Mar. 22, 1988) (amending Title IX). These proposed changes would better align HHS's regulations to the Title IX regulations adopted by other agencies and the position of the Department of Justice, the Federal civil rights coordinating authority under Executive Order 12250.

See

Executive Order 12250 on Leadership and Coordination of Nondiscrimination Laws, 45 FR 72995 (Nov. 2, 1980).

The proposed rule would retain the obligation imposed on covered entities to submit assurances of compliance, certain provisions concerning language access for individuals with limited English proficiency (LEP), and certain provisions ensuring access for individuals with disabilities. The proposed rule would empower the Department to continue its robust enforcement of civil rights laws prohibiting discrimination on the basis of race, color, national origin, sex, age, or disability in Department-funded health programs or activities, and would make it clear that such civil rights laws remain in full force and effect.

The Department further proposes to make limited conforming amendments to ten provisions in relevant Department regulations.

D. Cost-Effective Design of the Proposed Rule

The proposed rule would be an economically significant deregulatory action. The Department projects that the proposed rule would result in approximately $3.6 billion in cost savings (undiscounted) over the first five years after finalization. The Department anticipates that the largest proportion of these estimated savings would result from repealing the Section 1557 Regulation's provisions related to mandatory notices. Specifically, the proposed rule would repeal requirements on covered entities to mail beneficiaries, enrollees, and others, notices concerning non-discrimination and the availability of language assistance services (in 15 languages) with every “significant” publication and communication larger than a postcard or brochure. The Department projects additional savings from eliminating the requirement for OCR to weigh the presence or absence of language access plans, and from repealing provisions that duplicate disability and sex discrimination regulatory requirements concerning covered entities establishing grievance procedures. The Department estimates that there will be some additional costs to covered entities regarding training and revision of policies and procedures if the proposed regulation is finalized.

The Department believes that the anticipated benefits—which include compliance with Federal law, appropriate respect for the roles of Federal courts and Congress, and reduction or elimination of ineffective, unnecessary, or confusing provisions—far outweigh any costs or burdens that may arise from the proposed changes.

II. Reasons for the Proposed Rulemaking

Section 1557 does not require any implementing regulations, but incorporates and builds on the existing civil rights framework of Title VI, Title IX, Age Act, and Section 504 by making the nondiscrimination requirements of such laws applicable to certain health programs or activities and related entities to the extent they do not already apply to such programs or activities. With this background in mind, the Department has decided to substantially revise the Section 1557 Regulation for several reasons.

The Department believes that the Final Rule exceeded its authority under Section 1557, adopted erroneous and inconsistent interpretations of civil rights law, caused confusion, and imposed unjustified and unnecessary costs. As stated in the

Franciscan Alliance

litigation, “the Rule's prohibitions of discrimination on the basis of gender identity and, without the accompanying statutory protections, termination of pregnancy are substantively unlawful under the APA.”

The existence of lawsuits and court orders blocking enforcement of significant parts of the Final Rule for over two years indicates that changes in the proposed rule may minimize litigation risk.

See

Defendant's Memorandum in Response to Plaintiffs' Motions for Summary Judgment,

Franciscan Alliance,

No. 7:16-cv-00108-O at *5 (filed April 5, 2019).

For all these reasons, the Department proposes to exercise its discretionary regulatory authority to revise the Section 1557 Regulation to implement Federal civil rights law consistent with the applicable statutes as passed by Congress. The Department believes these amendments would reduce the significant confusion and unjustified burdens caused by the Final Rule.

First, the Final Rule created inconsistencies with, and unnecessarily duplicated, the Department's long-standing existing civil rights regulations.

See

45 CFR parts 80 and 81 (Title VI), 84 and 85 (Section 504), 86 (Title IX), 90 and 91 (Age Act). Therefore, the Department proposes to repeal the provisions of the Final Rule that are confusing and redundant.

Second, the U.S. District Court for the Northern District of Texas preliminarily enjoined enforcement of parts of the Section 1557 Regulation because it found that the Department had exceeded its statutory authority.

The Department proposes this rule to address the overbroad interpretations, adopted in the current rule, of Section 1557 that were identified by the court and other Federal precedents. The Department also proposes to address the court's findings by incorporating, into the Department's implementing regulations, certain amendments to the statutes expressly identified by Congress in Section 1557.

See Franciscan Alliance,

227 F. Supp. 3d at 696.

Third, the Department estimates that the prior rulemaking did not anticipate or account for an annual burden of approximately $147 million (low-end) to $1.34 billion dollars (high-end), as further described in the Regulatory Impact Analysis of this proposed rule. The Department does not believe those burdens are justified by need, or by the benefits obtained by the rulemaking. In total, the proposed rule would relieve the American people of approximately $3.6 billion in unjustified costs over five years, while continuing to provide for vigorous enforcement of civil rights protections in health care.

See

Executive Order 13765, 82 FR 8351 (Jan. 20, 2017) (“Minimizing the Economic Burden of the Patient Protection and Affordable Care Act Pending Repeal”).

As discussed below, the Department believes the repeal and replacement of significant portions of the Section 1557 Regulation would provide much needed finality, predictability, administrability, consistency, relief of burdens, and clarity, all of which would benefit covered entities, beneficiaries of Exchanges, and Department-funded or administered health programs or activities, the courts, and the general public.

In light of these determinations, through this proposed rule, the Department proposes to codify the longstanding application of the civil rights laws cited in Section 1557 to health programs or activities receiving Federal financial assistance or programs

or activities administered by the Department under Title I of the PPACA or by entities established under such Title, both in terms of the protections those civil rights laws provide and the enforcement mechanisms they entail. This approach faithfully implements the Congressional mandate and seeks to avoid further litigation and uncertainty regarding the implementing regulations. The Department seeks comment on all of the provisions that are retained under this proposed rule, or that this rule proposes to repeal, amend, or add, including comment on whether provisions of the current Section 1557 Regulation that the Department does not propose to retain in this proposed rule, if any, are in keeping with Congress's mandate such that the Department should consider retaining them—and whether any of such provisions should be incorporated into the Department's regulations implementing the underlying civil rights laws.

A. Section 1557 of the PPACA Does Not Prevent or Limit Reconsideration of the Current Rule

Section 1557(c) states that the Secretary “may” promulgate implementing regulations. This language contrasts with the multiple other areas of Title I of the PPACA where Congress directed that the Secretary (or Secretaries) “shall” issue regulations. 42 U.S.C. 18116(c). Section 1557 accordingly authorizes, but does not require, the Secretary to implement the statute through regulation. That approach makes sense because “Section 1557 builds on a landscape of existing civil rights laws.” 78 FR 46559 (RFI) (Aug. 1, 2013). Section 1557 vests the Department with discretion to determine whether and to what degree implementing regulations are needed, and to revisit that determination, as appropriate, at a later date.

Encino Motorcars

Navarro,

146 S.Ct. 2117, 2125 (2016) (“Agencies are free to change their existing policies as long as they provide a reasoned explanation for the change”). (

ConocoPhillips Co.

U.S. E.P.A.,

612 F.3d 822, 832 (5th Cir. 2010) (“[e]mbedded in an agency's power to make a decision is its power to reconsider that decision.”);

New England Power Generators Assn.

FERC,

879 F.3d 1192 (D.C. Cir. 2018) (“So long as any change is reasonably explained, it is not arbitrary and capricious for an agency to change its mind in light of experience, or in the face of new or additional evidence, or further analysis or other factors indicating that the agency's earlier decision should be altered or abandoned.”). Thus, an agency action to substantially repeal a prior rule, or parts thereof, is not necessarily subject to a higher standard of justification in the exercise of such discretion compared to the level of justification required under the prior rulemaking on a blank slate.

See FCC

Fox Television Stations, Inc.,

556 U.S. 502, 515 (2009) (“When an agency changes its existing position, it need not always provide a more detailed justification than what would suffice for a new policy created on a blank slate. But the agency must at least display awareness that it is changing position and show that there are good reasons for the new policy.”). The agency's use of its rulemaking discretion in revisiting its original position is not, therefore, subject to a higher standard under the APA (5 U.S.C. 706); otherwise, agencies would be limited in their ability to revisit past regulations to cure defects or provide clarifications.

B. The Final Rule Adopted Novel and Inconsistent Legal Interpretations of Long-Standing Civil Rights Law

1. The Final Rule Interpreted the Scope of Section 1557 Too Broadly

The Department has now concluded that its existing Section 1557 Regulation impermissibly extends to programs and entities not covered by the text of the statute. With respect to the receipt of Federal financial assistance, the current rule defines “health program or activity” to cover “all [ ] operations” of entities principally engaged in providing or administering “health services or health insurance coverage or other health coverage.” 45 CFR 92.4. The scope of the regulation then includes all the operations of entities that provide “health insurance coverage or other health coverage,” whether or not they provide any health care.

The Civil Rights Restoration Act of 1987 (CRRA), however, defined “program or activity” for purposes of Title VI, Section 504 of the Rehabilitation Act, the Age Act, and Title IX to cover all operations of regulated entities only when they are “

principally engaged

in the business of providing education, health care, housing, social services, or parks and recreation.” Public Law 100-259, 102 Stat. 28 (Mar. 22, 1988) (emphasis added). The “business of providing . . . health care” differs substantially from the business of providing health insurance coverage (or other health coverage) for such health care. Thus, the Final Rule goes beyond the CRRA by covering all the operations of entities that provide “health insurance coverage or other health coverage” and extends to those that are not principally engaged in the business of providing health care, and to those who provide no health care at all.

Moreover, the Department had not previously interpreted the CRRA to cover all the operations of health insurance providers under any of the antidiscrimination laws covered by the CRRA (Title VI, Title IX, the Age Act, and Section 504) until it promulgated the Section 1557 regulation—over a quarter century after the CRRA was passed—despite there being nothing in Section 1557 indicating any abrogation—or expansion—of the CRRA. Therefore, the Department is now proposing to clarify that health insurance programs administered by entities not principally engaged in providing health care will only be covered by the Rule to the extent those programs (as opposed those entities) receive Federal financial assistance from the Department.

The preamble to the Final Rule acknowledges the relevance of the CRRA, 81 FR at 31386, but does not explain how the provision of “health care” covers the provision of “health insurance, even if only part of the health program or activity receives such assistance.”

2. The Final Rule Improperly Blended Substantive Requirements and Enforcement Mechanisms of the Underlying Statutes

The PPACA states that the “enforcement mechanisms for and available under [ ] title VI, title IX, section 504, or such Age Discrimination Act shall apply,” for purposes of enforcing Section 1557. 42 U.S.C. 18116(a). Interpreting this provision in 2015, a Federal court held “Congress's express incorporation of the enforcement mechanisms from those four Federal civil rights statutes, as well as its decision to define the protected classes by reference thereto, manifests an intent to import the various

different

standards and burdens of proof into a Section 1557 claim, depending upon the protected class at issue.”

Southeastern Pennsylvania

Gilead,

102 F. Supp. 3d 688, 698-99 (E.D. Pa. 2015) (emphasis added).

see also

81 FR at 31440 (“OCR interprets Section 1557 as authorizing a private right of action for claims of disparate impact discrimination on the basis of any of the criteria enumerated in the legislation”); 81 FR 31405 (“OCR recognizes that discrimination based on health status, claims experience, medical history, or genetic information can, depending on the facts, have a disparate impact that results in discrimination on a basis prohibited by Section 1557 and will process complaints alleging such discrimination accordingly”).

But see Alexander

Sandoval,

532 U.S. 275, 282 (2001) (denying private rights of action for disparate impact theories under Title VI).

The Final Rule stated that an individual or entity may bring a civil action to challenge a violation of Section 1557 or of the regulation in Federal court. 45 CFR 92.302(d). The Department explained in the preamble to the Final Rule that private rights of action were available for Section 1557 claims against recipients of Federal financial assistance or State Exchanges for racial, national origin, sex, age, or disability discrimination.

See

81 FR at 31440 (stating that “both the proposed and the final rule specify that a private right of action is available under Section 1557” and such actions are available “on the basis of any of the criteria enumerated in the legislation”). Multiple Federal courts have held that Section 1557, or the statutes underlying it, do not permit private rights of action for disparate impact claims of discrimination on the basis of race

or sex,

and there is a split on the question with respect to disability, with one Federal appellate court holding that such private rights of action are not available and other Federal appellate courts holding that such private rights of action are available for claims of discrimination on the basis of disability.

See Southeastern Pennsylvania Transp. Authority

Gilead,

102 F. Supp. 3d 688, 698-701 (E.D. Pa. 2015) (holding that Section 1557, incorporating Title VI, does not permit a private right of action for a disparate impact claim on the basis of race);

See also

42 U.S.C. 6103 (requiring each Federal department or agency to submit Age Act enforcement reports to and obtain approval of their Age Act regulations by HHS).

Compare

42 U.S.C. 18116(a) (stating that Section 1557 applies to “any health program or activity, any part of which is receiving Federal financial assistance, including credits, subsidies, or contracts of insurance, or under any program or activity that is administered by

an Executive Agency

or any entity established under this title (or amendments)”) (emphasis added) with 45 CFR 92.1 (stating that Part 92 applies to health programs or activities administered by recipients of Federal financial assistance from the

Department,

Title I entities that administer health programs or activities, and

Department

-administered health programs or activities) (emphasis added).

Memorandum from OCR Director to Civil Rights Heads of Federal Agencies, Enforcement Responsibilities under Section 1557 of the Affordable Care Act (July 12, 2016),

https://www.hhs.gov/sites/default/files/directors-memo-july2016.pdf.

Blunt

Lower Merion Sch. Dist.,

767 F.3d 247, 272 (3d Cir. 2014) (Title VI);

Franklin

Gwinnett Cty. Pub. Sch.,

503 U.S. 60 (1992) (Title IX).

4. The Final Rule Created New Provisions Concerning Language Access Not Adequately Justified by Law or Policy

Title VI prohibits discrimination against persons on the basis of national origin under any program or activity receiving Federal financial assistance. Under governing U.S. Supreme Court case law, Title VI obligates recipients of Federal financial assistance to provide individuals with limited English proficiency (LEP) meaningful access to Federally funded programs or activities.

In 2016, the Section 1557 Final Rule added certain language access provisions that were not required by Title VI case law or the underlying Title VI regulation.

Lau

Nichols,

414 U.S. 563 (1974) (interpreting Title VI in the Department of Health Education and Welfare's Title VI regulation). The Title VI statute does not expressly mention “limited English proficiency.” 42 U.S.C. 2000d

et seq. Lau

and its progeny relied on the word “national origin” in Title VI to encompass limited English proficiency (LEP).

See

45 CFR parts 80 and 81 (the Department's Title VI regulations do not expressly reference LEP).

Lau

and subsequent case law interpreted the Title VI regulations' prohibition on recipients of Federal financial assistance “utiliz[ing] criteria or methods of administration which have the effect of subjecting individuals to discrimination” on the basis of national origin to require recipients to take reasonable steps to provide persons with limited English proficiency (LEP) meaningful access to Federally funded programs or activities. The Supreme Court has not specified what particular linguistic requirements may constitute “meaningful access” outside of the education context.

Additionally, the Final Rule introduced confusing and costly notice and tagline requirements that were not required by law, were inconsistent with tagline requirements required by other components of the Department and, as discussed further below, provided relatively minimal benefit to LEP individuals. Complicating matters further, because the Section 1557 Regulation applies only to health care programs or activities, a recipient of Federal financial assistance from the Department for health care services is subject to different notice and tagline requirements than a recipient receiving Federal financial assistance from the Department for human services alone, such as a child welfare agency.

Furthermore, the Final Rule newly required the OCR Director, in evaluating compliance, to take into account whether a recipient of Federal financial assistance has “developed and implemented an effective written language access plan that is appropriate to its particular circumstances, to be prepared to meet its obligations” under Section 1557. 45 CFR 92.201(b)(2). Before the promulgation of the Final Rule, an Executive Order directed Executive

agencies

to prepare language access plans applicable to their Federally conducted programs and activities (for example, the Veterans Administration's hospitals), but the Section 1557 provision applied to

recipients

of Federal financial assistance (for example, private hospitals accepting Medicaid). E.O. 13166, sec. 2, 65 FR 50121, 50121 (Aug. 16, 2000). The last section of the Executive Order also stated that it “does not create any right or benefit, substantive or procedural, enforceable at law.” 65 FR 50122.

5. The Final Rule's Definition of Discrimination “On the Basis of Sex” Has Been Enjoined by Federal Courts

In its Section 1557 Regulation, the Department interpreted the “sex” discrimination prohibited by Section 1557 to include discrimination on the basis of “gender identity.” 81 FR 31376, 31467 (definition of “on the basis of sex,” codified at 45 CFR 92.4). In particular, the Department took the view that one can identify as “male, female, neither, or a combination of male and female” and that this identification may differ from one's “sex assigned at birth” because, according to the regulation, gender identity ultimately relies on a subjective “internal sense.” 81 FR at 31467; 45 CFR 92.4 (definition of “gender identity”). It then reasoned that Title IX's prohibition of discrimination on the basis of sex (as incorporated by Section 1557) includes discrimination on the basis of pregnancy termination,

sex stereotyping,

and gender identity.

The preamble to the Final Rule cites the Department's Title IX regulation, which contains provisions on termination of pregnancy, but does not analyze this regulatory language in light of Title IX's statutory provisions about abortion.

See

81 FR at 31387 (citing 45 CFR 86.40(b));

but see

20 U.S.C. 1688 (“Nothing in this title shall be construed to require or prohibit any person, or public or private entity, to provide or pay for any benefit or service, including the use of facilities related to an abortion . . .”).

The Final Rule defines “sex stereotypes” as “stereotypical notions of masculinity or femininity, including expectations of how individuals represent or communicate their gender to others, such as behavior, clothing, hairstyles, activities, voice, mannerisms, or body characteristics. These stereotypes can include the expectation that individuals will consistently identify with only one gender and that they will act in conformity with the gender-related expressions stereotypically associated with that gender. Sex stereotypes also include gender expectations related to the appropriate roles of a certain sex.” 81 FR at 31468 (codified at 45 CFR 92.4).

The Final Rule defines “gender identity” as “an individual's internal sense of gender, which may be male, female, neither, or a combination of male and female, and which may be different from an individual's sex assigned at birth.” 81 FR at 31467 (codified at 45 CFR 92.4). The Final Rule notes, in the definition, that “the way an individual expresses gender identity is frequently called `gender expression,' and may or may not conform to social stereotypes associated with a particular gender.”

Id.

The definition also notes that “[a] transgender individual is an individual whose gender identity is different from the sex assigned to that person at birth.”

Id.

The regulation requires covered entities to treat individuals “consistent with their gender identity” except that covered entities “may not deny or limit health services that are ordinarily or exclusively available to individuals of one sex, to a transgender individual based on the fact that the individual's sex assigned at birth, gender identity, or gender otherwise recorded is different from the one to which such health services are ordinarily or exclusively available.” 45 CFR 92.206 and 92.207(b)(3).

Interpreting Section 1557, through Title IX, to prohibit gender identity

discrimination was a relatively novel legal theory when the Department adopted the Final Rule. The theory, was not, and has not been, endorsed by the Supreme Court.

See, e.g., Baker

Aetna,

228 F. Supp. 3d 764, 768-69 (N.D. Texas 2017) (noting no controlling U.S. Supreme Court legal precedent recognizing gender identity as prohibited discrimination under Section 1557).

a. Background on Title IX of the Education Amendments

Title IX prohibits discrimination on the basis of sex in educational programs or activities that receive Federal financial assistance. Specifically, the statute states that “[n]o person in the United States shall, on the basis of sex, be excluded from participation in, be denied the benefits of, or be subjected to discrimination under any education program or activity receiving Federal financial assistance. . . .” 20 U.S.C. 1681. The statute uses the word “sex” but not “sexual orientation” or “gender identity.” Although it does not contain an express definition of the term “sex,” additional provisions in Title IX use explicitly binary terms such as “men” and “women,” “father-son,” “mother-daughter,” “boys” and “girls,” “both sexes,” and “one sex” and “the other sex.”

Although Congress did not include a definition of the term “sex”, provisions in Title IX refer to “men” and “women,” “father-son,” “mother-daughter,” “boys” and “girls,” “both sexes,” and “one sex” and “the other sex 42 U.S.C. 1681(a)(2) (“both sexes”), (a)(2) (“one sex” and “other sex”), (a)(6)(B) (“Men's” and “Women's”), (a)(6)(B) (“Boy” and “Girl”); (a)(7)(A) (“Boys” and “Girls”), (a)(7)(B)(i) (“Boys” and “Girls”), (a)(8) (“father-son”, “mother-daughter”), and (a)(8) (“one sex” and “other sex”).

See also

42 U.S.C. 1681(a)(2)(6) (“fraternity” and “sorority”).

Congressional activity in this area suggests that “sex” under Title IX does not include sexual orientation or gender identity.

See Food & Drug Admin.

Brown & Williamson Tobacco Corp.,

529 U.S. 120, 122 (2000) (when “Congress several times considered and rejected bills” that would have granted the agency authority, Congress “evidenced a clear intent to preclude a meaningful policymaking role for any administrative agency”). For example, in 2016, Senator Mazie Hirono introduced the Patsy T. Mink Gender Equity in Education Act, S. 3147 (114th Cong. 2016), to “support educational entities so that such entities have the support to fully implement [T]itle IX” and to define “sex discrimination” to include “[a]ctual or perceived sex, sexual orientation, gender, or gender identity.”

See also

H.R. 5682 (114th Cong. 2016) (companion measure introduced in the House of Representatives). However, there was no action on the Senate bill after it was referred to the Senate Committee on Health, Education, Labor and Pensions. Congress has repeatedly considered bills that would add the bases of sexual orientation or gender identity to other statutes that already prohibited discrimination on the basis of sex, but has done so in only limited instances.

18 U.S.C. 249(c)(4) (the Matthew Shepard and James Byrd, Jr. Hate Crimes Prevention Act prohibits hate crimes which are based on “actual or perceived religion, national origin, gender, sexual orientation, gender identity, or disability”); 34 U.S.C. 12291(b)(13)(A) (the Violence Against Women Reauthorization Act (VAWA) prohibits discrimination on the basis of “actual or perceived . . . sex, gender identity . . . [or] sexual orientation”).

Over the past three decades, Members of Congress have repeatedly proposed to amend the Civil Rights Act to add the words “sexual orientation” and “gender identity” as prohibited bases of discrimination, but as of the date of publication of this proposed rule, such measures have never become Federal law.

Over the past three decades, the Employment Non-Discrimination Act (ENDA) has been introduced ten times in the U.S. House of Representatives, but ENDA, which would prohibit employment discrimination on the basis of sexual orientation and gender identity, has never proceeded out of committee in the House.

See

H.R. 4636 (103rd Cong. 1994); H.R. 1863 (104th Cong. 1995); H.R. 1858 (105th Cong. 1997); H.R. 2355 (106th Cong. 1999); H.R. 2692 (107th Cong. 2001); H.R. 3285 (108th Cong. 2003); H.R. 2015 (110th Cong. 2007); H.R. 2981 (111th Cong. 2009); H.R. 1397 (112th Cong. 2011); H.R. 1755 (113th Cong. 2013). The Equality Act has similarly been introduced in three successive sessions of Congress.

See

H.R. 3185 (114th Cong. 2015); S. 1828 (114th Cong. 2015); H.R. 2282 (115th Cong. 2017); S. 1006 (115th Cong. 2017); H.R. 5 (116th Cong.) (introduced Mar. 3, 2019). It did not proceed out of committee in the 114th and 115th Congresses, and it passed the House of Representatives on May 17, 2019. The Equality Act would amend the Civil Rights Act to include “gender identity” and “sexual orientation” in addition to “sex” as prohibited grounds of discrimination, and would also include a definition of the terms “sex” and “gender identity.”

b. HHS's Title IX Regulations

In 1975, the predecessor to HHS (the Department of Health, Education, and Welfare (HEW)) became the first agency to adopt Title IX implementing regulations. 40 FR 24128 (June 4, 1975). The agency received and considered more than 9,700 comments before issuing its final regulations, and Congress held six days of hearings to determine whether the regulations were consistent with the statute.

The regulations,

like Title IX itself, included no explicit definition of “sex.”

Like Title IX, however, the Title IX regulations do use explicitly binary terms such as “male and female” (§ 86.41(c)) and “one sex . . . [and] the other sex” (

passim

Subcommittee on Postsecondary Education of the House Committee on Education and Labor, Review of Regulations to Implement Title IX of Public Law 92-318 Conducted Pursuant to Sec. 431 of the General Education Provisions Act (94th Cong. June 17, 20, 23, 24, 25, 26, 1975);

see also

Title IX Common Rule, 65 FR 52857 (Sept. 29, 2000) (the HEW regulations were “the result of an extensive public comment process and congressional review”).

See

45 CFR part 86.

Consistent with the statutory language, the Title IX regulations used the same binary and biological language about sexes as found in Title IX, including “both sexes,” “the other sex,” and “boys” and “girls.”

See

45 CFR 86.2(s), 86.7, 86.17(b)(2), 86.21(c)(4), 86.31(c), 86.32(b)(2) and (c)(2), 86.33, 86.37(a)(3), 86.41(b) and (c), 86.55(a), 86.58(a) and (b), 86.60(b), and 86.61.

When HHS interpreted “on the basis of sex” under Title IX through its Section 1557 regulation, HHS did not add the definition to its Title IX regulation. Neither did HHS amend its Title IX Regulation to adjust the references to “male and female” or “one sex . . . [and] the other sex” to conform to the novel definition in the Section 1557 regulation.

Compare

81 FR 31467 (May 18, 2016) (Section 1557 Regulation)

with

70 FR 24320 (May 9, 2005) (the last time HHS's Title IX regulations were amended).

c. Need for Consistency Among Components of HHS

Since 2012, other components of the Department adopted an interpretation of sex different from the definition OCR adopted in the Section 1557 Regulation. The Department's failure to address these other definitions in the Final Rule has resulted in substantial confusion and inconsistency.

In 2014, the National Institutes of Health (NIH) announced its policy that researchers seeking NIH grant funds should explain how differences between males and females on the basis of biology are factored into research designs, analyses, and reporting in clinical research as a biological variable.

This approach, according to NIH, acknowledged that research about male and female differences may be critical to the interpretation, validation, and generalizability of research findings and may inform clinical interventions. In 2017, NIH issued guidance to grant

recipients about this policy

and continues to fund research that uses “sex” as a biological variable.

Using sex as a biological variable addresses binary male/female differences found to impact the practice of medicine by influencing proper diagnosis, prognosis, and treatment of patients.

Medical research prior to and subsequent to the Section 1557 Regulation have addressed differences between males and females as binary and biological.

Janine A. Clayton and Francis S. Collins,

Policy: NIH to balance sex in cell and animal studies,

Nature (May 14, 2014) (discussing disease-causing effects of Y-chromosome genes as different from X-chromosome genes, and intrinsic sex differences of female and male cells

in vitro

https://www.nature.com/news/policy-nih-to-balance-sex-in-cell-and-animal-studies-1.15195;

NIH,

Consideration of Sex as a Biological Variable in NIH-Funded Research,

NOT-OD-15-102 (June 9, 2015),

https://grants.nih.gov/grants/guide/notice-files/not-od-15-102.html.

NIH Guidance,

Consideration of Sex as a Biological Variable in NIH-funded Research

(2017),

https://orwh.od.nih.gov/sites/orwh/files/docs/NOT-OD-15-102_Guidance.pdf.

Suk Kyeong Lee,

Sex as an important biological variable in biomedical research,

BMB Rep. 167 (Apr. 2018),

https://www.ncbi.nlm.nih.gov/pmc/articles/PMC5933211;

Terry Lynn Cornelison,

Considering Sex as a Biomedical Variable in Biomedical Research,

Gender and the Genome (June 1, 2017),

https://journals.sagepub.com/doi/pdf/10.1089/gg.2017.0006;

Inna Belfer, J. White,

et al., Considering sex as a biological variable (SABV) in research: a primer for pain investigators,

The Journal of Pain (Mar. 2018),

https://www.jpain.org/article/S1526-5900(17)31024-6/pdf.

Janine A. Clayton,

Applying the new SABV (sex as a biological variable) policy to research and clinical care,

Physiology and Behavior (Aug 17, 2017),

https://doi.org/10.1016/j.physbeh.2017.08.012; see also

Leah R. Miller, Cheryl Marks,

et al., Considering sex as a biological variable in preclinical research,

31 Federation of American Societies for Experimental Biology Journal 29-34 (Sept. 2017) (defining “Sex” as “being XY or XX”),

https://www.ncbi.nlm.nih.gov/pmc/articles/PMC6191005.

See. e.g.,

Douglas C. Dean III, E.M. Planalp,

et al., Investigation of brain structure in the 1-month infant,

Brain Structure and Function 1-18 (Jan. 5, 2018),

https://www.ncbi.nlm.nih.gov/pubmed/29305647

(finding differences between male and female infants at the age of 1 month, “[c]onsistent with findings from studies of later childhood and adolescence, subcortical regions appear more rightward asymmetric”); Wei Yang, Nicole M. Warrington,

et al., Clinically Important Sex differences in GBM biology revealed by analysis of male and female imaging, transcriptome and survival data,

Science Translational Medicine (Jan. 21, 2019),

https://www.ncbi.nlm.nih.gov/pubmed/30602536S

(identifying sex-specific molecular subtypes of glioblastoma); Stefan Ballestri, Fabio Nascimbeni,

et al., NAFLD as a Sexual Dimorphic Disease: Role of Gender and Reproductive Status in the Development and Progression of Nonalcoholic Fatty Liver Disease and Inherent Cardiovascular Risk,

Advances in Therapy (May 19, 2017),

https://www.ncbi.nlm.nih.gov/pmc/articles/PMC5487879;

Ester Serrano-Saiz, Meital Oren-Suissa,

et al., Sexually Dimorphic Differentiation of a C. elegans Hub Neuron Is Cell Autonomously Controlled by a Conserved Transcription Factor,

27 Current Biology 199 (Jan. 5, 2017),

https://www.ncbi.nlm.nih.gov/pubmed/28065609;

Anke Samulowitz, Ida Gremyr,

et al.,

“

Brave Men” and “Emotional Women”: A Theory-Guided Literature Review on Gender Bias in Health Care and Gendered Norms towards Patients with Chronic Pain,

Pain Research and Management (Feb. 25, 2018),

https://www.ncbi.nlm.nih.gov/pubmed/29682130

(stating that “the response to opioid receptor antagonists may generate a difference between men's and women's experiences of pain”); Susan Sullivan, Anna Campbell,

et al., What's good for the goose is not good for the gander: Age and gender differences in scanning emotion faces,

72:3 Journals of Gerontology 441 (May 1, 2017),

https://www.ncbi.nlm.nih.gov/pubmed/25969472;

Ramona Stone and W. Brent Webber,

Male-Female Differences in the Prevalence of Non-Hodgkin Lymphoma,

81 Journal of Environmental Health 16 (Oct. 2018).

NIH also funded conferences of mental health professionals who developed the latest clinical manual on the diagnosis of “gender dysphoria” that defines “sex” (as distinct from “gender identity”) in biological terms.

Specifically, the Diagnostic and Statistical Manual of Mental Disorders (DSM-5) provides, “[t]his chapter employs constructs and terms as they are widely used by clinicians from various disciplines with specialization in this area. In this chapter, sex and sexual refer to the biological indicators of male and female (understood in the context of reproductive capacity), such as in sex chromosomes, gonads, sex hormones, and nonambiguous internal and external genitalia.”

NIH sponsored thirteen scientific conferences that assisted in research evaluation by hundreds of mental health specialists for the American Psychiatric Association to produce the standard classifications of mental disorders of the

Diagnostic and Statistical Manual of Mental Disorders

Handbook of Differential Diagnosis (DSM-5).

Although the Section 1557 Final Rule proposed to address insurance coverage for care related to gender dysphoria on the basis of a sex discrimination theory, neither the Notice of Proposed Rulemaking in 2015 nor the Final Rule in 2016 referenced the DSM-5's definition of the term “sex.” 81 FR 31429.

Additionally, NIH requires research grant applicants to consider sex as a biological variable “defined by characteristics encoded in DNA, such as reproductive organs and other physiological and functional characteristics.”

According to an NIH article, “[s]ex as a biological variable (SABV) is a key part of the new National Institutes of Health (NIH) initiative to enhance reproducibility through rigor and transparency. The SABV policy requires researchers to factor sex into the design, analysis, and reporting of vertebrate animal and human studies. The policy was implemented as it has become increasingly clear that male/female differences extend well beyond reproductive and hormonal issues. Implementation of the policy is also meant to address inattention to sex influences in biomedical research. Sex affects: Cell physiology, metabolism, and many other biological functions; symptoms and manifestations of disease; and responses to treatment. For example, sex has profound influences in neuroscience, from circuitry to physiology to pain perception. Extending beyond the robust efforts of NIH to ensure that women are included in clinical trials, the SABV policy also includes rigorous preclinical experimental designs that inform clinical research.”

NIH Guidance,

Consideration of Sex as a Biological Variable in NIH-funded Research

at 1 (2017),

https://orwh.od.nih.gov/sites/orwh/files/docs/NOT-OD-15-102_Guidance.pdf.

In 2014, the Department's Office of Refugee Resettlement (ORR) published an Interim Final Rule

which adopted a biologically based definition of “sex” that was distinct from gender identity, to implement section 1101(c) of the Violence Against Women Reauthorization Act of 2013.

In setting forth standards and procedures to prevent, detect, and respond to sexual abuse and sexual harassment involving unaccompanied alien children in ORR's care provider facilities, the rule defines “sex” as “a person's biological status and is typically categorized as male, female, or intersex.” 45 CFR 411.5. The definition notes that “[t]here are a number of indicators of biological sex, including sex chromosomes, gonads, internal reproductive organs, and external genitalia.”

Id.

The regulation gives a separate definition for “gender identity” as “one's sense of oneself as a male, female, or transgender.”

Id.

The rule then uses these terms differently, setting forth protections and policies concerning “sex,” distinct from those protections and policies concerning “gender” or “gender identity.”

The definitions section of the ORR regulation states “'Gender' refers to the attitudes, feelings, and behaviors that a given culture associates with a person's biological sex.” 45 CFR 411.5 In the preamble to the rule, ORR added, “This term ['gender'] is not to be confused with `sex,' as defined [elsewhere in the rule].” 79 FR at 77771.

ORR Final Rule, Standards to Prevent, Detect, and Respond to Sexual Abuse and Sexual Harassment Involving Unaccompanied Children, 79 FR 77767 (Dec. 24, 2014).

See

127 Stat. 61 (Violence Against Women's Act reauthorization).

Compare, e.g.,

45 CFR 411.14 (“Care provider facilities must not search or physically examine a UC for the sole purpose of determining the UC's sex. If the UC's sex is unknown, it may be determined during conversations with the UC, by reviewing medical records, or, if necessary, learning that information as part of a broader medical examination conducted in private by a medical practitioner.”)

with

§ 411.41(c) (“Only trained staff are permitted to talk with UCs to gather information about their sexual orientation or gender identity, prior sexual victimization, history of engaging in sexual abuse, mental health status, and mental disabilities for the purposes of the assessment required under paragraph (a) of this section.”).

In 2015, the Office of the National Coordinator for Health Information Technology (ONC) promulgated regulations

that included standards

and requirements for coding certain health data. The regulations contained data sets for “sex,” separate from those for “gender identity” and “sexual orientation.”

See

45 CFR 170.207(n) (“sex”); 170.207(o) (“sexual orientation and gender identity”). In its preamble, ONC explained that it did not adopt a separate category for “assigned birth sex” because “we already require the capturing of birth sex as described under the “sex” section above.”

Furthermore, ONC stated that questions about patients' gender identity and sexual orientation “have not yet been scientifically validated for use in health care settings” and, thus, it did not adopt them.

However, ONC added that, although not required, providers can separately code “gender identity”

and “sexual orientation”

if they opt to include such questions.

ONC Final Rule, 2015 Edition Health Information Technology (Health IT) Certification Criteria, 2015 Edition Base Electronic Health Record (EHR) Definition, and ONC Health IT Certification Program Modifications, 80 FR 62601

(Oct. 16, 2015);

see also

80 FR 76868 (Dec. 11, 2015) (making technical corrections and clarifications).

80 FR 62619. Requiring health care entities to code as male all persons who self-identify as male, regardless of biology, may lead to adverse health consequences.

See, e.g.,

Daphne Stroumsa, Elizabeth F.S. Roberts,

et al.,

“The Power and Limits of Classification—A 32 Year Old Man with Abdominal Pain,”

New England Journal of Medicine

(May 16, 2019),

https://www.ncbi.nlm.nih.gov/pubmed/31091369;

Marilynn Marchione, “Blurred Lines,”

Associated Press

(May 15, 2019),

https://apnews.com/b5e7bb73c6134d58a0df9e1cee2fb8ad

(identification of pregnant transgender person as male in medical records contributed to stillbirth of child).

80 FR at 62620.

Options under the category “gender identity” were “Male”, “Female, transgender male/Trans man/Female-to-male,” “Transgender female/Trans woman/Male-to-female,” “Genderqueer, Neither exclusively male nor female,” “Additional gender category/(or other), please specify,” or “Decline to answer.”

Options under the category “sexual orientation” were “Straight or heterosexual,” “Lesbian, gay, or homosexual,” “Bisexual,” “Something else, please describe,” or “Don't know.”

80 FR 62620.

OCR itself has adopted different interpretations of “on the basis of sex” under Section 1557. In 2012, the then-OCR Director announced in a letter

that OCR was accepting and investigating complaints of discrimination on the basis of “actual or perceived sexual orientation or gender identity” under Section 1557. Three years later, OCR changed its position and declined to include sexual orientation (unlike gender identity) as a

per se

protected class throughout the Section 1557 rulemaking process.

See

Proposed Rule, 81 FR 54176 (Aug. 15, 2015) (“Current law is mixed on whether existing Federal nondiscrimination laws prohibit discrimination on the basis of sexual orientation as a part of their prohibitions of sex discrimination”); Final Rule, 81 FR 31390 (May 18, 2016) (“OCR has decided not to resolve in this rule whether discrimination on the basis of an individual's sexual orientation status alone is a form of sex discrimination.”). It appears that OCR's letter in 2012 was the first time any HHS component departed from a binary and biological understanding of sex for purposes of sex discrimination and adopted a definition that included gender identity or sexual orientation.

See 81 FR 31387, n.57.

d. Pending Federal Litigation Over Section 1557 Regulation, Title IX, and Title VII

In addition to

Franciscan Alliance

in the U.S. District Court for the Northern District of Texas and

Sisters of Mercy

in the U.S. District Court for the District of North Dakota, other Federal courts have gender identity discrimination cases, filed under Section 1557, pending on their dockets.

See Tovar

Essentia Health,

342 F. Supp. 3d 947 (D. Minn. Sept. 20, 2018) (on remand from 8th Cir.);

Boyden

Conlin,

341 F. Supp.3d 979 (W.D. Wis. 2018) (appealed to 7th Cir., No. 3:18-3408 and No. 18-3485, on Nov. 9, 2018);

Flack

Wisconsin Department of Health Services,

328 F. Supp.3d 931 (W.D. Wis. 2018) (pending motion for class certification);

Smith

Highland Hospital of Rochester,

No. 17-CV-6781-CJS (W.D.N.Y. filed Oct 2, 2018) (appealed to 2d Circuit on Nov. 6, 2018);

Prescott

Rady Children's Hospital-San Diego,

265 F.Supp.3d 1090 (S.D. Cal. Sept. 27, 2017) (protective order granted on Nov. 6, 2018);

Edmo

Idaho Dept. of Correction,

No. 1:17-cv-00151, 2018 WL 2745898 (D. Id. filed Oct. 9, 2018) (motion to stay pending February 13, 2019);

Enstad

Peacehealth,

No. 2:17-cv-01496-RSM (W.D. Wash. filed Oct. 5, 2017) (granted stay of litigation on Sept. 24, 2018);

Robinson

Dignity Health,

No. 16-CV-3035 YGR, 2016 WL 7102832 (N.D. Cal. filed Dec. 6, 2016) (on remand from U.S. Supreme Court).

Some Federal courts have declined to recognize gender identity discrimination claims under Title IX, and instead deferred to U.S. Supreme Court to settle the legal question.

See, e.g.,

Evancho

Pine-Richland School District,

237 F. Supp.3d 267, 299 (W.D. Pa. February 27, 2017) (“what makes the current legal landscape even more unsettled is that the Supreme Court is currently poised to grapple with these very issues”). While four appellate courts have addressed the issue,

a large volume of district court opinions have been inconsistent on the issue.

See Texas

United States,

201 F. Supp. 3d 810 (N.D. Tex. 2016) (holding that Title IX does not prohibit discrimination based on gender identity or transgender status);

Johnston

Univ. of Pittsburgh,

97 F. Supp. 3d 657 (W.D. Pa. 2015);

but see Adams

School Board of St. Johns County,

318 F. Supp. 3d 1293 (M.D. Fla. 2018) (recognizing gender identity discrimination claim under Title IX);

A.H.

Minersville Area School District,

290 F. Supp. 3d 321 (M.D. Pa. 2017). Appellate courts have also been split over the legal question whether discrimination on the basis of gender identity is prohibited by Title VII.

Compare Etsitty

Utah Transit Auth.,

502 F.3d 1215, 1220-1221 (10th Cir. 2007)

with Mitchell

Kallas,

No. 15-cv-108 (7th Cir. 2018). On April 22, 2019, the U.S. Supreme Court granted three petitions for writs of certiorari, raising the question whether Title VII's prohibition on discrimination on the basis of sex also bars discrimination on the basis of gender identity or sexual orientation.

Because Title IX adopts the substantive and legal standards of Title VII,

a holding by the U.S. Supreme Court on the definition of “sex” under Title VII will likely have ramifications for the definition of “sex” under Title IX, and for the cases raising sexual orientation or gender identity claims under Section 1557 and Title IX which are still pending in district courts.

See, e.g.,

Doe ex rel. Doe

Boyertown Area Sch. Dist.,

893 F.3d 179 (3d Cir.), slip op. 23-31,

vacated on reh'g,

897 F.3d 515 (3d Cir.),

and superseded by

897 F.3d 518 (3d Cir. 2018);

Whitaker ex rel. Whitaker

Kenosha Unified Sch. Dist. No. 1 Bd. of Educ.,

858 F.3d 1034, 1046-54 (7th Cir. 2017),

cert. dismissed,

138 S. Ct. 1260 (2018);

G.G. ex rel. Grimm

Gloucester Cnty. Sch. Bd.,

822 F.3d 709, 720-723 (4th Cir. 2016),

vacated and remanded,

137 S. Ct. 1239 (2017);

Dodds

U.S. Dept. of Education,

845 F.3d 217 (6th Cir. 2016). Portions of two of these opinions have been vacated.

See Gloucester Cnty. Sch. Bd.

G.G. ex rel. Grimm,

137 S. Ct. 1239 (2017) (vacating court of appeals' decision in light of agency guidance);

Doe ex rel. Doe

Boyertown Area Sch. Dist.,

897 F.3d 518, 533-36 (3d Cir. 2018) (superseding opinion omitting portion of original opinion discussed in the petition, which was vacated on rehearing);

cf. Doe,

893 F.3d 179, slip op. 23-31 (vacated opinion).

Bostock

Clayton County,

723 Fed. Appx. 964 (11th Cir. 2018),

cert granted,

No. 17-1618 (U.S. Apr. 22, 2019);

Altitude Express, Inc.

Zarda,

883 F.3d 100 (2d Cir. 2018),

cert granted,

No. 17-1623 (U.S. Apr. 22, 2019);

Equal Employment Opportunity Commission

R.G. & G.R. Harris Funeral Homes, Inc.,

884 F.3d 560 (6th Cir. 2018),

cert granted,

No. 18-107 (U.S. Apr. 22, 2019),

https://www.supremecourt.gov/orders/courtorders/042219zor_9olb.pdf.

See

DOJ, Title IX Legal Manual (August 6, 2015),

https://www.justice.gov/crt/title-ix.

Compare Etsitty

Utah Transit Auth.,

502 F.3d 1215 (10th Cir. Sept. 20, 2007) (Title IX does not prohibit gender identity discrimination);

and Texas

United States,

201 F. Supp. 3d 810 (N.D.

Tex. Aug. 21, 2016)

with Doe ex rel. Doe

Boyertown Area Sch. Dist.,

893 F.3d 179 (3d Cir.), slip op. 23-31,

vacated on reh'g,

897 F.3d 515 (3d Cir.),

and superseded by

897 F.3d 518 (3d Cir. 2018);

Whitaker ex rel. Whitaker

Kenosha Unified Sch. Dist. No. 1 Bd. of Educ.,

858 F.3d 1034, 1046-1054 (7th Cir. 2017) (interpreting Title IX and Equal Protection Clause),

cert. dismissed,

138 S. Ct. 1260 (2018);

and G.G. ex rel. Grimm

Gloucester Cnty. Sch. Bd.,

822 F.3d 709, 720-723 (4th Cir. 2016),

vacated and remanded,

137 S. Ct. 1239 (2017).

e. HHS's Inconsistency With Other Federal Agencies

From 1972 to the present, no Title IX regulation from any agency explicitly defined “sex” to include “gender identity.” All of the Title IX regulations of all agencies which adopted such regulations—including, as noted above, HHS's Title IX regulations—use the term in a binary and biological sense, and include phrases such as “male and female,” and “one sex” and “the other sex.”

Currently, HHS is the only Federal agency with a regulation defining “sex” under Title IX (in its Section 1447 Regulation) as inclusive of gender identity. However, starting in 2012, two other agencies—the Department of Justice (DOJ), and the Department Education (ED)—took enforcement actions, issued guidance, or took litigating positions that discrimination on the basis of sex under certain anti-discrimination statutes included “gender identity.”

See

ED, Office for Civil Rights, Questions and Answers in Title IX and Single Sex Elementary and Secondary Classes and Extracurricular Activities (2014);

ED and DOJ joint Dear Colleague Letter on Transgender Students (May 13, 2016) (Title IX guidance); Complaint,

United States

McCrory,

No. 5:16-cv-238-BO (M.D.N.C. filed May 9, 2016) (DOJ Title IX lawsuit challenging a North Carolina law concerning transgender access to intimate facilities at State university). The Department proposed (and then finalized) its definition to be consistent with the policy positions, sub-regulatory guidance, and enforcement actions of ED and DOJ.

See, e.g.,

Department of Education Title IX regulation at 34 CFR 106.2(s), 106.7, 106.17(b)(2), 106.21(c)(4), 106.31(c), 106.32(b)(2) and (c)(2), 106.33, 106.37(a)(3), 106.41(b) and (c), 106.55(a), 106.58(a) and (b), 106.60(b), and 106.61; Department of Justice Title IX regulation at 28 CFR 54.105, 54.130, 54.230(b)(2), 54.235(b)(3), 54.300(c)(4), 54.400(c), 54.405(b)(2) and (c)(2), 54.410, 54.430(a)(3), 54.450(b) and (c)(2), 54.520(a), 54.535(a) and (b), 54.545(b), and 54.550.

See also

DOJ Coordination and Compliance Division, Title IX Regulations by Agency,

https://www.justice.gov/crt/fcs/Agency_Regulations#2.

http://www2.ed.gov/about/offices/list/ocr/docs/faqs-title-ix-single-ex201412.pdf.

See

81 FR at 31388-31389.

The earlier interpretations have now been taken under review, dismissed, preliminarily enjoined, or revoked outright.

See Franciscan Alliance, Inc., et al.

Burwell, et al.,

227 F. Supp. 3d 660, 696 (N.D. Tex. 2016) (nationwide preliminary injunction against the Section 1557 regulation);

Texas, et al.

United States, et al.,

201 F. Supp. 3d 810, 836 (N.D. Tex. 2016) (preliminarily enjoining ED's Title IX interpretation); Dear Colleague Letter (Feb. 22, 2017) (ED and DOJ's withdrawal of the May 13, 2016 Dear Colleague Letter); Stipulated Joint Notice of Dismissal,

United States

State of North Carolina,

No. 1:16-cv-425 (M.D.N.C. May 4, 2017) (dismissing, with prejudice, the DOJ lawsuit challenging the North Carolina law).

As noted above, in

Franciscan Alliance,

DOJ submitted a brief on behalf of HHS, in response to plaintiffs' motions for summary judgment, on April 5, 2019. The brief stated that Section 1557's prohibition on sex discrimination “unambiguously excludes discrimination on the basis of gender identity.”

See

Defendant's Memorandum in Response to Plaintiffs' Motions for Summary Judgment,

Franciscan Alliance,

No. 7:16-cv-00108-O, p. 11 (N.D. Tex, filed April 5, 2019).

The Department proposes to repeal the novel definition of “sex” in the Section 1557 regulation in order to make the Department's regulations implementing Title IX through the Section 1557 Regulation more consistent with the Title IX regulations of other Federal agencies. The Department further believes this proposed rule avoids different interpretations of the same statute by multiple agencies, and promotes consistent expectations and enforcement.

f. Need for Consistency With the Department of Justice on Implementation and Enforcement of Nondiscrimination Laws

In 1980, the President delegated to the Attorney General the responsibility to lead the coordination of consistent and effective implementation of cross-cutting nondiscrimination laws, including Title VI, Title IX, and Section 504.

The Department, along with each other Executive Agency, is required to cooperate with DOJ and issue its implementing regulations consistent with the requirements prescribed by the Attorney General, unless prohibited by law.

Executive Order 12250, Leadership and Coordination of Nondiscrimination Laws, Secs. 1-201(a) through (c), 45 FR 72995 (Nov. 2, 1980).

Executive Order 12250 at Secs. 1-401 through 1-402.

In court briefs and otherwise on behalf of the United States, DOJ has stated that the ordinary meaning of the word “sex” for purposes of Federal nondiscrimination laws does not encompass sexual orientation or gender identity. On April 5, 2019, DOJ filed a brief on behalf of HHS in the

Franciscan Alliance

case stating that “the relevant provisions of Title IX and Section 1557 unambiguously exclude gender-identity discrimination.”

Similarly, in a July 26, 2017 a

micus curiae

brief in a Second Circuit case regarding the prohibition of sex discrimination in employment under Title VII of the Civil Rights Act of 1964, DOJ stated, “ `[i]n common, ordinary usage in 1964—and now, for that matter—the word `sex' means biologically

male

female.

' ”

See

Defendant's Memorandum in Response to Plaintiffs' Motions for Summary Judgment,

Franciscan Alliance,

No. 7:16-cv-00108-O, p. 14 (N.D. Tex, filed April 5, 2019).

See also

DOJ Brief for the United States as

Amicus Curiae,

p. 4, in

Zarda

Altitude Express, Inc.,

883 F.3d 100 (2d Cir. July 26, 2017) (quoting dissent in

Hively

Ivy Tech Community College,

853 F.3d 339, 362 (7th Cir. 2017)); DOJ Brief in Support of Defendants' Motion to Dismiss at 2-6,

U.S. Pastor Council

EEOC,

No. 4:18-cv-00824-O (N.D. Tex. Dec. 17, 2018).

Consistent with this position, a few months later, the Attorney General issued a memorandum stating that “ ‘sex' is ordinarily defined to mean biologically male or female” and that “Congress has confirmed this ordinary meaning by expressly prohibiting, in several other statutes, `gender identity' discrimination, which Congress lists in addition to, rather than within, prohibitions on discrimination on the basis of ‘sex' or ‘gender.' ”

The memorandum concluded, “Title VII's prohibition on sex discrimination encompasses discrimination between men and women but does not encompass discrimination based on gender identity

per se,

including transgender status. Therefore, as of the date of this memorandum . . . the Department of Justice will take that position in all pending and future matters . . . .”

Memorandum of the Attorney General (Oct. 4, 2017),

https://www.justice.gov/ag/page/file/1006981/download.

DOJ also took that position on October 24, 2018, when it submitted a brief to the U.S. Supreme Court in another Title VII case in which a petition for a writ of certiorari was filed. DOJ argued that “Title VII does not define the term `sex,' so the term should `be interpreted as taking [its] ordinary, contemporary, common meaning.' When Title VII was enacted in 1964, `sex' meant biological sex; it `refer[red] to [the] physiological distinction[ ]' between `male and female.' Title VII thus does not apply to discrimination against an individual

based on his or her gender identity. Notably, Congress has specifically prohibited discrimination based on `gender identity' in other statutes, as a separate protected category in addition to `sex' or `gender.' It has not included similar language in Title VII as originally enacted in 1964 or in any amendment in the 54 years since.”

DOJ, Brief for the Federal Respondent in Opposition to Petition for Writ of Certiorari in

R.G. & G.R. Harris Funeral Homes, Inc.

Equal Employment Opportunity Commission, et al.,

No. 18-107, 16-18 (Oct. 2018) (citations omitted).

Nevertheless, because the Section 1557 Regulation's gender identity provisions remain, public confusion persists. To ensure that its civil rights regulations are consistent with the views of the Department of Justice, other Federal agencies, and internally, the Department proposes to repeal the definition of “on the basis of sex” that had been adopted in its Section 1557 Final Rule. Because of the likelihood that the Supreme Court will be addressing the issue in the near future,

the Department declines, at this time, to propose its own, definition of “sex” for purposes of discrimination on the basis of sex in the regulation.

See Bostock

Clayton County,

723 Fed. Appx. 964 (11th Cir. 2018),

cert granted,

No. 17-1618 (U.S. Apr. 22, 2019);

Altitude Express, Inc.

Zarda,

883 F.3d 100 (2d Cir. 2018),

cert granted,

No. 17-1623 (U.S. Apr. 22, 2019);

Equal Employment Opportunity Commission

R.G. & G.R. Harris Funeral Homes, Inc.,

884 F.3d 560 (6th Cir. 2018),

cert granted,

No. 18-107 (U.S. Apr. 22, 2019),

https://www.supremecourt.gov/orders/courtorders/042219zor_9olb.pdf.

g. Sensitive Balancing of Competing Interests at the Local Level

The adoption of a definition of “sex” in the Section 1557 Regulation may stifle the ability of States, local governments, and covered entities to set their own policies and balance multiple competing interests on questions related to gender dysphoria. Because Title IX and Section 1557 get their constitutional authority from the Spending Clause, according to the Supreme Court, it is appropriate that it be exercised with respect for State sovereignty:

[L]egislation enacted pursuant to the spending power is much in the nature of a contract: In return for federal funds, the States agree to comply with federally imposed conditions. The legitimacy of Congress' power to legislate under the spending power thus rests on whether the State voluntarily and knowingly accepts the terms of the “contract.”

See Steward Machine Co.

Davis,

301 U. S. 548, 585-598 (1937);

Harris

McRae,

448 U. S. 297 (1980). There can, of course, be no knowing acceptance if a State is unaware of the conditions or is unable to ascertain what is expected of it. Accordingly, if Congress intends to impose a condition on the grant of federal moneys, it must do so unambiguously.

Cf. Employees

Department of Public Health and Welfare,

411 U. S. 279, 285 (1973);

Edelman

Jordan,

415 U. S. 651 (1974). By insisting that Congress speak with a clear voice, we enable the States to exercise their choice knowingly, cognizant of the consequences of their participation.

Pennhurst State School and Hospital

Halderman,

451 U.S. 1, 17 (1981);

see also National Federation of Independent Business

Sebelius,

567 U.S. 519, 588 (2012) (“Congress has no authority to order the States to regulate according to its instructions. Congress may offer the States grants and require the States to comply with accompanying conditions, but the States must have a genuine choice whether to accept the offer”) (opinion of Roberts, C.J., joined by Breyer and Kagan, JJ.). The Department's broad reinterpretation of “sex” under Title IX affected States' ability to accept these restrictions knowingly as they came long after states became heavily reliant on the continued receipt of Federal funds subject to Title IX requirements.

This proposed rule would significantly restore the ability of States to establish policies in this area, based on their weighing the competing interests at stake. This proposed rule is not intended to remove any protection that Congress has provided by statute, including Title IX, or to deny States the ability to provide protections that exceed those required by Title IX. Rather, the proposed rule would ensure that the Department's Title IX and corresponding Section 1557 regulations follow the will of Congress with respect to the States by not expanding Title IX's definition of “sex” beyond the statutory bounds.

C. The Costs of the Final Rule Were Unnecessary and Unjustified

The Department has determined that the Section 1557 Regulation imposed substantially larger regulatory burdens than predicted, a result inconsistent with the policies of this Administration. In his first day in office, President Donald Trump issued Executive Order 13765, identifying it as Administration policy to “minimize the unwarranted economic and regulatory burdens of the [Patient Protection and Affordable Care] Act, and prepare to afford the States more flexibility and control to create a more free and open healthcare market.” This Executive Order states that “the Secretary of Health and Human Services (Secretary) and the heads of all other executive departments and agencies (agencies) with authorities and responsibilities under the [PPACA] shall exercise all authority and discretion available to them to waive, defer, grant exemptions from, or delay the implementation of any provision or requirement of the [PPACA] that would impose a fiscal burden on any State or a cost, fee, tax, penalty, or regulatory burden on individuals, families, healthcare providers, health insurers, patients, recipients of healthcare services, [or] purchasers of health insurance.” President Trump has also issued two further Executive Orders directing executive agencies to relieve the regulatory burden and reduce regulatory costs across the Federal government.

Executive Order 13771 on Reducing Regulation and Controlling Costs (Jan. 30, 2017); Executive Order 13777 on Enforcing the Regulatory Reform Agenda (Feb. 24, 2017);

see also

Executive Order 13563 on Improving Regulation and Regulatory Review, 76 FR 3821 (Jan. 21, 2011).

1. The Section 1557 Regulation Imposed Substantially Higher Regulatory Costs Than Predicted

The Department has concluded, based on its independent assessment of the evidence, that the costs and burdens imposed by the Section 1557 Regulation are substantially larger than originally anticipated. The Final Rule requires covered entities to post and disseminate to beneficiaries, enrollees, and the public, detailed notices of nondiscrimination that include information on how individuals with disabilities may receive auxiliary aids and services and how LEP individuals may receive translated documents or oral interpretation. 45 CFR 92.7. The Department estimated that this notice requirement would impose approximately $3.6 million of costs in the first year of compliance and zero for the following four years. In calculating this cost, the Department counted the employee time required to initially download, print, and post notices in public areas, but did not count the recurring costs of paper, ink/toner, and additional postage for the required initial or subsequent mailings of these notices. 81 FR 31453, 31458.

The Final Rule additionally requires covered entities to provide to beneficiaries, enrollees, and others, “taglines” describing the availability of free language assistance services. The Final Rule requires these taglines be written in “at least the top 15 languages” spoken by LEP individuals in the relevant State or States. 45 CFR 92.8(d)(1). The Department estimated that the taglines requirement would cost the same as the notice of nondiscrimination requirement, namely, $3.6 million in the first year and zero over the following four years. 81 FR

31453, 31458. Again, as with notices, the Department counted the employee time required to initially download, print, and post taglines, but did not count the recurring costs of paper, ink/toner, and additional postage for the required initial or subsequent mailings of taglines. 81 FR 31453.

The Department did not fully appreciate the volume of mail inserts the combined notice and tagline provisions would require. The Final Rule requires notices of nondiscrimination and taglines be appended to all “significant” publications and communications (bigger than a postcard or brochure) sent by covered entities to beneficiaries, enrollees, applicants, or members of the public. 45 CFR 92.8(f)(1). The Final Rule's preamble explained that “significant communications” include “not only documents intended for the public . . . but also written notices to an individual, such as those pertaining to rights or benefits.” 81 FR 31402. Many health insurance issuers reasonably interpreted the Section 1557 Regulation as requiring that they provide the notice and taglines to their subscribers in nearly every written communication, including every time the issuer processes a claim and, as a consequence, issues a beneficiary an Explanation of Benefits.

Many of these matters were discussed in DOJ's 2002 and HHS's 2003 LEP guidance documents. The LEP guidance documents flagged concerns about “unrealistic” interpretations of translating written materials into languages when recipients serve communities in large cities or across the country and serve LEP persons who speak dozens and sometimes over 100 different languages. 67 FR 41455, 41463 (June 18, 2002) (DOJ guidance); 68 FR 47311, 47319 (Aug. 8, 2003) (HHS guidance). Furthermore, with the recognition that there could be large numbers of documents in need of translation into dozens of languages, the LEP guidance documents advised that recipients could start with several of the more frequently encountered languages and set benchmarks for continued translations into the remaining languages over time. 67 at 41463 (DOJ); 68 FR at 47319 (HHS). By contrast, the Section 1557 Regulation set an effective date of July 18, 2016—only 60 days after promulgation of the final rule. The Section 1557 Regulation used the vague term “significant” to identify documents to which providers must append translated tagline notices.

See

45 CFR 92.8(g). However, the Department's long-standing LEP guidance discussed translation of “vital” documents, with the acknowledgement that “[c]lassifying a document as vital or non-vital is sometimes difficult” because the health care context is so fact-specific, depending on “the importance of the program, information, encounter, or service involved, and the consequence to the LEP person if the information in question is not provided accurately or in a timely manner.” 68 FR at 47318 (HHS guidance).

In practice, the notices and taglines requirement results in the inclusion of one to two sheets of paper (which may be double-sided) per each significant communication mailed by a covered entity.

Data collected from covered entities, and the Department's independent analysis, illustrate the financial impact of the notice and tagline requirements. One covered health insurance issuer, which sends over 42 million Explanations of Benefits for one of its health plans to enrollees each year, states that it was required to add 2-5 pages of disclosure content to each letter or document, and estimates the incremental cost of printing, paper, and postage alone to be approximately $8 million per year.

That covered health insurance issuer also reported that another of its health plans, which communicates with enrollees 50 to 90 times per year, estimated that it is spending approximately $14 million annually on printing and postage for notice and tagline requirements.

A third plan reported that its costs for taglines were $802,000 for the last quarter of 2016 and were projected to be $2.4 million in 2017.

Another large plan estimates it will spend $4-5 million per year to comply with these requirements.

Source: Aetna health plan representatives (April 13, 2017).

Source: Aetna health plan representatives (May 1, 2017).

Source: Aetna (April 10, 2017).

Source: UnitedHealth Group (April 10, 2017).

A pharmacy benefit managers (PBM) trade association has reported similar effects of the Section 1557 Regulation. It estimates that PBMs process over three billion prescriptions per year, with each prescription requiring multiple “significant” communications be sent to beneficiaries (such as explanations of benefits, refill reminders, drug safety information, and other notices), many of which are sent by mail. The trade association estimates that this amounts to between 1 and 4.8 billion notices and taglines mailed per year at approximately $0.50 to $1 in additional printing and postage costs per communication. Thus, according to the trade association, these requirements have cost PBMs from $500 million to nearly $5 billion per year.

The high costs that health insurance issuers, health plans, and the members of a PBM trade association have reported about the costs resulting from the notice and tagline provisions of the Final Rule prompted the Department to reevaluate the requirement and its associated benefits and burdens.

Source: Pharmaceutical Care Management Association (May 2, 2017).

As discussed further in the Regulatory Impact Analysis of this proposed rule, and based on the Department's independent analysis, the Department concludes that its original assessment of $7.2 million in one-time notice and tagline-related costs underestimated the actual costs associated with including nondiscrimination notices and taglines in significant communications and publications.

The Department now estimates that the burden from the notice and taglines requirement ranges from $147 million (low-end) to $1.34 billion dollars (high-end) in annual costs before accounting for electronic delivery, as described below. These estimates are a function of multiplying the low and high per-unit cost of including a nondiscrimination notice and tagline insert ($0.035/per unit to $0.32/per unit) by the volume of significant communications and publications to which covered entities are required to attach the notice and taglines. The Regulatory Impact Analysis explains the calculations underlying these estimates in detail. The Department uses an average of the low- and high-end estimates, and adjusts for electronic delivery, to arrive at an average savings of $0.632 billion per year which totals approximately $3.16 billion over five years. The Regulatory Impact Analysis explains the assumptions, rationale, and calculations for this weighted average.

2. The Section 1557 Regulation's Burdens Are Not Justified by Need

The Department does not believe that the regulatory burdens of the Section 1557 Regulation, either as originally anticipated or as now more correctly estimated, are justified. The Department stated in the Final Rule that, apart from burdens related to the Final Rule's definition of discrimination “on the basis of sex” and provisions concerning language access plans,

“we do not

anticipate that covered entities will undertake new actions or bear any additional costs in response to the issuance of the regulation” because the Final Rule applies “pre-existing requirements” that have applied to regulated entities “for years.” 81 FR 31446. Indeed, the Department noted in the preamble to the Final Rule that, following the passage of Section 1557 in 2010, the Department's Office for Civil Rights (OCR) complaint workload had increased only “slightly.” 81 FR 31458.

Language access plans are meant to assist covered entities in fulfilling their obligations to provide LEP individuals meaningful access to services provided by the covered entity. Although the Final Rule did not require covered entities to

develop a language access plan, the Rule stated that the development and implementation of a language access plan is a factor the Director “shall” take into account when evaluating whether an entity is in compliance with Section 1557. 45 CFR 92.201(b)(2). The Department anticipated that 50% of covered entities would develop and implement a language access plan following issuance of the Final Rule. 81 FR 31454.

These facts call into question the need for both the $942 million in costs to the public over five years that the Department originally anticipated, 81 FR 31459, and the additional approximately $3.2 billion in notice and tagline compliance costs of which the Department is now aware.

Several factors suggest that the extraordinary burdens imposed by the notice and tagline requirements in particular are not justified by need. First, those requirements are difficult for covered entities to implement because of other differing and overlapping requirements already imposed by the Federal government (with respect to Federal health care programs such as Medicare), and by many States (with respect to State-regulated health insurance), concerning language access.

E.g.,

42 U.S.C. 300gg-15(b)(2) and 300gg-19(a)(1)(B) (requiring standards for ensuring that the Summaries of Benefits and Coverage and certain notices are provided in a culturally and linguistically appropriate manner); 42 U.S.C. 1396d(p)(5)(A) (requiring HHS to distribute to States an application form for Medicare cost-sharing in English and 10 non-English languages); 26 CFR 1.501(r)-4(a)(1), (b)(5)(ii) (requiring a hospital organization to translate certain documents, among other requirements, to qualify for a tax-exempt status with respect to a hospital facility); 42 CFR 422.2262(a)(1)-(2) and 422.2264(e) (setting forth Medicare Advantage marketing requirements, which include requiring Medicare Advantage organizations to translate marketing materials into non-English languages spoken by 5% or more of individuals in a plan service area), § 423.2262(a)(1)-(2) and § 423.2264(e) (setting forth Medicare Part D marketing requirements, which include requiring Part D plan sponsors to translate marketing materials into non-English languages spoken by 5% or more of individuals in a plan service area); 45 CFR 155.205(c)(2)(iii)(A) (Marketplaces must post taglines on their websites and include taglines in documents “critical for obtaining health insurance coverage or access to health care services through a QHP”); 45 CFR 147.136(e)(2)(iii) and (e)(3), and 147.200(a)(5) (requiring taglines in languages in which 10% of individuals with limited English proficiency (LEP) county-wide are exclusively literate on internal claims and appeals notices and on an issuer's Summary of Benefits and Coverage); 42 CFR 435.905(b)(3) (requiring individuals to be “informed of the availability of language services . . . and how to access . . . [them] through providing taglines in non-English languages indicating the availability of language services”); 42 CFR 457.340(a) (applying certain Medicaid requirements, including § 435.905(b)(3), which requires individuals to be “informed of the availability of language services . . . and how to access . . . [them] through providing taglines in non-English languages indicating the availability of language services”); 210 Illinois Cons. Stat. 87/1 (Illinois Language Assistance Act).

Second, the Department has heard from multiple stakeholders that the repetitive nature of the notices and taglines in communications and publications dilutes the message contained in significant communications to the point that some recipients may be disregarding the information entirely.

Sources: Aetna, “Member Reactions to 1557 Taglines” (Apr. 2017); American Health Insurance Plans and Blue Cross Blue Shield Association (May 5, 2017); Pharmaceutical Care Management Association (May 2, 2017).

Third, the Department has learned that many beneficiaries of Federal and other health programs do not want to receive extra pages of information they have seen many times before out of environmental concerns or annoyance.

Aetna, one of the largest health insurance issuers in the United States, surveyed 322 enrollees by showing them a sample document with 4 pages of taglines; 75% of the enrollees reacted negatively (referring to the taglines as “wasteful,” “confusing,” “unintelligible,” “incomprehensible,” “inefficient,” among others), 50% said they would be less likely to carefully read documents from their insurer if they had taglines, and about one third said they would be less likely to open mail from an insurer if taglines were included in each document.

Sources: Aetna (May 1, 2017); Pharmaceutical Care Management Association (Mar. 27, 2017); American Health Insurance Plans and Blue Cross Blue Shield Association (May 5, 2017).

Source: Aetna, “Member Reactions to 1557 Taglines” (Apr. 2017).

Fourth, the Department has received little evidence of more beneficiaries seeking language assistance as a result of the requirements that caused these increased burdens. Health plans report, anecdotally, that there has been no increase in the number of calls to their language lines requesting oral interpretation or written translation services since the notice and tagline requirements became effective in October 2016.

One plan reported lower numbers after the tagline requirement—it received 98,800 calls during the period between January and March 2016, but only 91,800 during the same time period in 2017.

Since the Final Rule, some pharmacy benefit managers report having received a handful of calls to their anti-discrimination grievance line, some have noticed an increase in their translation line call volume, some have noticed no change in call volume, and others have seen a decrease, but they report that, as a group, they have received significantly more complaints about providing too many notices, as compared to requests for translation assistance.

Sources: Pharmaceutical Care Management Association (Mar. 27, 2017); American Health Insurance Plans and Blue Cross Blue Shield Association (May 5, 2017).

Source: Aetna (May 1, 2017).

Source: Pharmaceutical Care Management Association (Mar. 27, 2017).

Fifth, the Department has found little evidence showing that repeatedly mailing all beneficiaries taglines with 15 or more languages is an efficient use of covered entities' resources when the overwhelming majority of beneficiaries speak English (with Spanish being a distant second). According to Census statistics, as of 2015, over three-quarters (79%) of the U.S. population over age 18 speaks only English at home, followed by Spanish (12.5%).

Additionally, of persons selecting a language preference when registering for coverage on the

HealthCare.gov

platform for 2017, 89.93% selected English, followed by 8.36% who selected Spanish.

This data suggests that, for the large majority of people who receive them, the required language tagline mailings provide little to no benefit (and potentially impose burdens) because they are already proficient English speakers with little need for, and no entitlement under the law to, translation services.

U.S. Census Bureau, American FactFinder, “B16007: Age by Language Spoken at Home for the Population 5 Years and Over,” 2011-2015 American Community Survey (2017),

https://factfinder.census.gov/bkmk/table/1.0/en/ACS/16_5YR/S1601/0100000US.

CMS, “Race, Ethnicity, and Language Preference in the Health Insurance Marketplaces 2017 Open Enrollment Period,” (April 2017),

https://www.cms.gov/About-CMS/Agency-Information/OMH/Downloads/Data-Highlight-Race-Ethnicity-and-Language-Preference-Marketplace.pdf.

California and New York were not included in the analysis as they do not use the HealthCare.gov platform.

Sixth, confusion over the notices has resulted in an increased volume of mistaken inquiries on the Department's public phone line.

OCR's toll-free

phone number, available to file civil rights complaints, is listed at the bottom of the Notice of Nondiscrimination.

See

Appendix A to Part 92 (Sample Notice Informing Individuals About Nondiscrimination and Accessibility Requirements and Sample Nondiscrimination Statement: Discrimination Is Against the Law). However, recipients of the notices often misunderstand it to be the phone number to call when they have questions to ask their health insurance issuer or health care provider. The majority of phone calls to the OCR complaint line do not concern civil rights matters at all. This experience indicates that many members of the public do not fully read the non-discrimination notice or are confused because it is attached to other information sent to them by their providers or issuers. The result has been a significant waste of OCR resources with respect to its complaint line and a commensurate waste of time for callers.

Between November 26, 2018 and April 2, 2019, OCR's Call Center received 983 calls on the complaint line from individuals who actually wanted to speak to their insurance company, not OCR, in order to raise billing questions, report a change of address, request a replacement insurance

card, seek a reimbursement check, or make a payment.

The Department's proposal to substantially replace the Section 1557 Regulation with the existing framework for protection of civil rights laws, while expressly addressing language access issues in this proposed rule, will better strike the balance between the government's interest in ensuring meaningful access to covered healthcare programs for LEP individuals and the burdens imposed on regulated entities in support of that interest.

III. Nondiscrimination in Health Programs or Activities

This proposed rule would substantially replace the Section 1557 Regulation. The provisions proposed for retention, revision, and repeal are as follows:

A. Provisions of the Proposed Section 1557 Rule at 45 CFR Part 92

The proposed rule would more faithfully fulfill the Department's congressional mandate. In Section 1557 of the PPACA, Congress applied long-standing nondiscrimination requirements to any health programs or activities that receive Federal financial assistance, or programs or activities administered by an Executive agency under Title I of the PPACA or any entity established under such Title I. It did so by cross-referencing the categories of protected classifications listed in those longstanding civil rights laws, namely, discrimination on the basis of race, color, national origin, sex, age, or disability. To ensure compliance, Congress dictated that “[t]he enforcement mechanisms provided for and available under” such laws “shall apply for purposes of violations of” Section 1557. The Department now proposes to fulfill this Congressional mandate by applying the enforcement mechanisms already provided for, and available under, existing statutes and their implementing regulations, including the rights and remedies under such laws.

Based on its review, and the preliminary injunction issued by the court in

Franciscan Alliance

that held parts of the Final Rule exceeded the Department's authority under the PPACA, the Department has determined that (in addition to exceeding its statutory authority) parts of the regulation are duplicative, unduly burdensome, and confusing to the regulated community. This proposed rule, accordingly, would substantially replace 45 CFR part 92 with provisions in keeping with the plain language of Section 1557, while continuing to codify certain provisions regarding covered entities' obligations with respect to language and disability access. This will ensure better compliance with the mandates of Congress, avoid further litigation, relieve regulatory burdens, reduce confusion, reduce uncertainty about the scope of Section 1557, promote substantive compliance, and improve the consistency of regulatory requirements between entities required to comply with the civil rights laws as a result of Section 1557 and those directly subject to only to the underlying civil rights laws.

The proposed rule would be divided into two subparts: Subpart A on General Provisions (consistent with the current regulation), and Subpart B on Specific Applications to Health Programs or Activities. The Department proposes to replace §§ 92.1 through 92.3, 92.5, 92.6, and 92.101 of the current rule with provisions addressing Section 1557's purpose, nondiscrimination requirements, scope of application, enforcement mechanisms, relationship to other laws, and meaningful access for LEP individuals.

The Department's proposal does not change the provision to submit assurances of compliance with Section 1557 at § 92.5, designated as § 92.4. In addition, the Department would retain, but redesignate (to adjust to the proposed restructuring in the rule) the provisions on voluntary acceptance of language assistance services (§ 92.201(g)), effective communication for individuals with disabilities (§ 92.202), accessibility of buildings and facilities (§ 92.203), accessibility of information and communication technology (§ 92.204), and the requirement to make reasonable modifications (§ 92.205).

Although the proposed rule would eliminate the definitions section in the Section 1557 Regulation, the Department proposes to retain many key definitions explicitly in other sections or through incorporation by reference to relevant statutes or regulations. For example, as discussed below, proposed § 92.3 (Scope of application) will define the scope of “health program or activity.” Proposed § 92.3 also effectively defines “covered entities” similar to the Final Rule by clarifying that the rule applies to: (1) Every health program or activity, any part of which is receiving Federal financial assistance (including credits, subsidies, or contracts of insurance) provided or made available by the Department; (2) any program or activity administered by the Department under Title I of the PPACA; or (3) any program or activity administered by any entity established under such Title. Furthermore, consistent with the text of Section 1557, proposed §§ 92.2 and 92.3 provide that “Federal financial assistance” includes credits, subsidies, or contracts of insurance.

The proposed rule uses the same characteristics as are included in the definitions of “qualified interpreter” for an LEP individual and of “qualified translator” in describing the requirements that an interpreter and translator, respectively, should meet (but omits the word “qualified” which is implied by the context).

See

proposed § 92.101(b)(3)(i) and (ii). The proposed rule also retains nearly verbatim, as requirements with respect to the provision of language access services, the characteristics used to define “language assistance services.”

See

proposed § 92.101(b)(2).

Additionally, the proposed rule retains most of the disability-rights related definitions from the current rule either explicitly, such as the definitions of “disability” and “information and communication technology;” by using the definition to describing the requirements or characteristics of the entity, such as when describing a “qualified interpreter” for an individual with a disability; or by referencing underlying regulations or statutes, such as for technical accessibility standards and definitions.

In other cases, some terms are clear enough to obviate the need for further definition given the context of the proposed rule including terms such as “age,” “individual with limited English

proficiency,” “qualified bilingual/multilingual staff,” or “individual with a disability.” In these examples, OCR will continue to interpret the phrases naturally and consistent with the Final Rule.

The Department will also continue to abide by terms defined in the definitions sections of the implementing regulations for the underlying statutes. In fact, the Department believes it is generally more appropriate to rely on individual definitions applicable to individual statutes incorporated into Section 1557 as opposed to picking one standard (or creating a new one) and making it applicable in all cases, as under the Final Rule.

The Department asks for comment on whether other definitions should be included in the regulatory text.

Redesignation Table

Old section

New section

92.201(g)

92.101(c)

92.202

92.102

92.203

92.103

92.204

92.104

92.205

92.105

The remaining provisions of Section 1557 would be repealed. A description of each proposed provision of the Section 1557 Regulation follows:

Proposed “Subpart A—General Provisions”

Proposed “45 CFR 92.1 Purpose.”

This proposed section describes the purpose of the proposed regulation as providing for the enforcement of Section 1557, which prohibits discrimination under any health program or activity receiving Federal financial assistance, or under any program or activity administered by an Executive agency under Title I of the PPACA or by any entity established under such Title, on the grounds of race, color, national origin, sex, age, or disability. The proposed section would provide that the Department's Office for Civil Rights (OCR) enforces these prohibitions using the mechanisms set forth in the Department's Title VI, Title IX, Age Act, and Section 504 regulations. The proposed section would replace the current § 92.1 in its entirety.

Proposed “45 CFR 92.2 Nondiscrimination requirements.”

This proposed section describes the core substantive requirements of compliance with Section 1557 under the proposed regulation. Namely, the Department proposes to provide that, except as otherwise provided by Title I of the PPACA, an individual shall not 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 (including credits, subsidies, or contracts of insurance) provided by the Department, or under any program or activity administered by the Department under such Title, or under any program or activity administered by any entity established under such Title, on any grounds prohibited under the following statutes:

(1) Title VI of the Civil Rights Act of 1964 (42 U.S.C. 2000d

et seq.

) (race, color, national origin);

(2) Title IX of the Education Amendments of 1972 (20 U.S.C. 1681

et seq.

) (sex);

(3) The Age Discrimination Act of 1975 (42 U.S.C. 6101

et seq.

) (age); or

(4) Section 504 of the Rehabilitation Act of 1973 (29 U.S.C. 794) (disability).

The cross-reference to existing civil rights statutes does not change the prohibited grounds of discrimination, but applies them, to the extent they did not already apply, to the health care context. Thus, for example, the cross-referencing of Title IX (which prohibits sex discrimination in education programs or activities) in Section 1557 and in the proposed regulation means that sex discrimination, as defined by Title IX, is prohibited in health programs or activities to which this proposed part applies, not merely health programs or activities related to education. This proposed section would replace current § 92.2 in its entirety.

In keeping with the text of Section 1557, proposed § 92.2 would apply to health programs or activities receiving Federal financial assistance, “including credits, subsidies, or contracts of insurance.”

Although Section 1557 prohibits discrimination by any program “administered by an Executive Agency,” the Final Rule itself acknowledged the difficulty of the Department enforcing the rule with respect to programs administered by other agencies.

Many other agencies have their own rules implementing the underlying statutes incorporated in section 1557.

See, e.g.,

65 FR 52857 (Title IX common rule for 21 Federal agencies). HHS, therefore, proposes to continue the general limitation on the rule's scope found in the Final Rule, specifically, that the proposed rule not assert or encompass enforcement jurisdiction over entities receiving Federal financial assistance administered by another agency under Section 1557.

The current regulation, however, departed from this general principle by defining Federal financial assistance to include assistance that HHS “does not have primary responsibility for administering,” but merely “plays a role” in providing or administering. 81 FR 31384; 45 CFR 92.4. This gloss goes beyond the text of Section 1557, which, in relevant part, only covers certain programs or activities “administered” by the Department, not any program in which the Department “plays a role in administering.” In keeping with the text of Section 1557, the proposed regulation would not retain the “plays a role” language. As a result, the proposed rule would no longer cover issuers of Exchange plans solely on the basis that HHS plays a role in administering tax credits, also administered by the Internal Revenue Service.

Exchange plans, however, may still be subject to antidiscrimination enforcement by the Department under Section 1557 on other grounds, or under other antidiscrimination authorities. For example, qualified health plans (QHPs) sold on the Exchanges established under Title I of the PPACA are subject to Section 1557, and the issuers of QHPs are subject to regulation by the Department's Center for Consumer Information and Insurance Oversight, of the Centers for Medicare & Medicaid Services.

In the preamble to the Final Rule, the Department acknowledged its limited ability to regulate programs covered by other agencies. 81 FR 31379 (“Drafting a rule applicable to health programs and activities assisted by other Departments would pose numerous challenges”). Additionally, the Department has not applied the Final Rule to the risk adjustments program (Section 1343 of the PPACA), and does not propose to do so in this proposed rule.

See also

45 CFR 153.310 (risk adjustment administration).

The Department seeks specific comment on the proposed elimination of the “plays a role” language.

The Final Rule applies to “every health program or activity administered by the Department; and every health program or activity administered by a Title I entity.” 45 CFR 92.2. But Section 1557, with respect to the administration of programs by the Department and PPACA's Title I entities, does not include the term “health.” Rather Section 1557 applies to “any program or activity” administered by the Department or any entity established under Title I of the PPACA.

The Department added the health limitation to the current rule because it did not believe Section 1557 was intended to apply to every program or activity administered by every Executive agency whether or not it had any relation to health. Accordingly, the preamble to the Final Rule stated it covered health programs administered by CMS, HRSA, CDC, Indian Health Service (IHS), and SAMHSA (for example, IHS tribal hospitals and clinics operated by the Department and the National Health Service Corps) but not any human services programs administered by the Department. 81 FR 31446. The Department continues to believe that Congress did not provide such expansive coverage, but believes that Section 1557 itself already provides a meaningful limitation without resort to inserting the word “health” when Congress did not do so, Section 1557 specifies that it applies to any program or activity administered by the Department (or other Executive Agency) “under this title,” meaning Title I of the PPACA. To be consistent with the text as passed by Congress, the proposed § 92.2 would apply to any program or activity administered by the Department under Title I of the PPACA and any program or activity administered by any entity established under such Title. Entities established under Title I of the PPACA include the health insurance exchanges established pursuant to the PPACA. Such exchanges currently include the 12 State Exchanges, 5 State Exchanges on the Federal platform, and 34 Federally-facilitated Exchanges. Title I additionally establishes, among other things, State advisory councils concerning community health insurance (section 1323).

The Department seeks public comment on the impact of this language, including on mechanisms for identifying affordable health insurance coverage options (Sec. 1103), the wellness program demonstration project (Sec. 1201, adding Public Health Service (PHS) Act Section 2705(l)), and the provision of community health insurance options (Sec. 1323).

Proposed “45 CFR 92.3 Scope of application.”

This proposed section would clarify that the scope of application of the proposed rule would be consistent with the Civil Rights Restoration Act (CRRA), which defined the scope of the underlying civil rights laws based on whether or not an entity receiving Federal financial assistance is or is not principally engaged in the business of providing health care.

Proposed § 92.3 clarifies the scope of entities covered by the rule by specifying that the rule applies to: (1) Any health program or activity, any part of which is receiving Federal financial assistance (including credits, subsidies, or contracts of insurance) provided by the Department; (2) any program or activity administered by the Department under Title I of the PPACA; or (3) any program or activity administered by any entity established under such Title. Furthermore, as provided in Section 1557 of the PPACA

and in proposed § 92.2, the Department interprets “Federal financial assistance” in the proposed rule to apply to credits, subsidies, or contracts of insurance.

42 U.S.C. 18116(a) (Section 1557 applies to recipients of Federal financial assistance for contracts of insurance).

With respect to entities receiving Federal financial assistance, the current regulation defines the operation of a “health program or activity” to cover “all [ ] operations” of such entities when they are principally engaged in providing or administering “health services or health insurance coverage or other health coverage.” 45 CFR 92.4. The CRRA, however, defined “program or activity” under Title VI, the Rehabilitation Act, the Age Act, and Title IX to cover all the operations of entities only when they are “principally engaged in the business of providing education,

health care,

housing, social services, or parks and recreation.” Public Law 100-259, 102 Stat. 28 (Mar. 22, 1988) (emphasis added).

“Health insurance” is distinct from “health care.”

Compare

5 U.S.C. 5371 (“`health care'” means direct patient-care services or services incident to direct patient-care services”)

with

42 U.S.C. 300gg-91 (“The term `health insurance coverage' means benefits consisting of medical care (provided directly, through insurance or reimbursement, or otherwise and including items and services paid for as medical care) under any hospital or medical service policy or certificate, hospital or medical service plan contract, or health maintenance organization contract offered by a health insurance issuer.”).

The Final Rule, however, went beyond the CRRA by covering all the operations of entities that are principally engaged in providing “health insurance coverage or other health coverage,” even if they are not principally engaged in the business of providing “health care,” despite there being nothing in Section 1557 indicating any abrogation—or extension—of the CRRA.

See also

45 CFR 160.103 (HIPAA administrative simplification) (“

Health care

means care, services, or supplies related to the health of an individual.

Health care

includes, but is not limited to, the following: (1) Preventive, diagnostic, therapeutic, rehabilitative, maintenance, or palliative care, and counseling, service, assessment, or procedure with respect to the physical or mental condition, or functional status, of an individual or that affects the structure or function of the body; and (2) Sale or dispensing of a drug, device, equipment, or other item in accordance with a prescription.”).

Therefore, to provide further clarity on these issues and return to the CRRA's statutory text, proposed § 92.3 would explicitly incorporate the CRRA standard. The Department also believes this approach is an appropriate interpretation of the phrase “health program or activity.” If an entity is principally engaged in the business of health care, the Department proposes to interpret Section 1557 so that all operations of that entity would be deemed part of any “program or activity” it engages in, any part of which receives Federal financial assistance. If, on the other hand, an entity is not principally engaged in the business of health care, the Department proposes to interpret Section 1557 so that only the operation for which it receives Federal financial assistance is part of the “program or activity.”

Specifically, the proposed section would set forth the general applicability standard from Section 1557: That it applies to any health program or activity, any part of which is receiving Federal financial assistance administered by the Department, including credits, subsidies, or contracts of insurance, or under any program or activity that is administered by the Department or any entity established under Title I of the PPACA.

Further, the Department proposes that § 92.3 provide that the regulation would cover all of the operations of any entity that receives Federal financial assistance from the Department and that is principally engaged in the business of providing health care, as part of a “health program or activity.” For any entity not principally engaged in the business of providing health care, “health program or activity” under the proposed regulation would apply to such entity's operations only to the extent any such operations receive Federal financial assistance.

Finally, the proposed section would clarify that, for purposes of the rule, an entity principally or otherwise engaged in the business of providing health insurance shall not, by virtue of such

provision, be considered to be principally engaged in the business of providing health care.

The proposed regulation would not apply to entities that do not receive Federal financial assistance from the Department. Likewise, as discussed above concerning the CRRA, the Department proposes that where entities receive Federal financial assistance but are not principally engaged in the business of providing health care, the regulation would not apply to the components or activities of those entities that do not receive Federal financial assistance. If an entity, such as a health insurance issuer, receives Federal financial assistance from the Department to further a health program or activity but is not principally engaged in the business of providing health care, the proposed regulation would apply to the entity's specific operations which receive Federal financial assistance from the Department, but it would not apply to the entity's entire operations.

Thus, for example, the proposed rule would generally not apply to short term limited duration insurance (STLDI) because, as the Department understands it, providers of STLDI are either (1) not principally engaged in the business of health care, or (2) not receiving Federal financial assistance with respect to STLDI plans specifically.

Compare with Grove City College

Bell,

465 U.S. 555 (1984) (holding that receipt of Federal financial aid does not automatically trigger institution-wide coverage under Title IX)

abrogated in part by

the CRRA.

The Public Health Service Act expressly excludes STLDI from its definition of “individual health coverage,” and the PPACA does not deem short term limited duration insurance to be qualifying coverage under the PPACA's minimum essential coverage requirements. 42 U.S.C. 300gg-91(b)(5); 26 U.S.C. 5000A;

see also

83 FR 38212 (Aug. 3, 2018) (rule clarifying definition of short-term, limited-duration insurance to Departments of Treasury, Labor, and Health and Human Services regulations at 26 CFR 54.9801-2, 29 CFR 2590.701-2, and 45 CFR 144.103).

Under the proposed section, examples of entities principally engaged in the business of providing health care would include hospitals, nursing facilities, hospices, community health centers, and physical therapists. Examples of recipients of Federal financial assistance from the Department for health programs or activities would include laboratories, medical schools, and nursing schools. Examples of recipients of Department assistance for contracts of insurance would include Medicare Part C (Medicare Advantage).

The proposed rule would not apply to Medicare Part B (except to the extent participation in a health care program is required for engaging in other operations),

100

or self-funded group health plans under the Employee Retirement Income Security Act of 1974 (ERISA), Federal Employees Health Benefits (FEHB) Program, or STLDI plans because (or to the extent) such programs do not receive Federal financial assistance from HHS and/or the entities operating them are not principally engaged in the business of providing health care as discussed above.

100

The Department believes that the Federal financial assistance does not include Medicare Part B under the Social Security Act.

See

2 CFR 200.40(c) (Uniform Administrative Requirement, Cost Principles, and Audit Requirements for Federal Awards); 45 CFR 75.502(h) (Uniform Administrative Requirement, Cost Principles, and Audit Requirements for HHS Awards).

The Department seeks public comment on issues related to the scope of coverage under the proposed rule, including whether it should define “health care” in the rule according to the statutes cited above defining the term, whether it should define “recipient” according to the current rule or by incorporation by reference to definitions in the underlying statutes, and whether such a definition of recipient should include subrecipients.

Proposed “45 CFR 92.4 Assurances.”

The Department contemplates retaining current § 92.5, requiring covered entities to submit an assurance of compliance with Section 1557 to the Department without change, but proposes to redesignate it as § 92.4. Paragraph (a) requires applicants for the Department's Federal financial assistance for health programs or activities, health insurance issuers seeking certification to participate in an Exchange, and States seeking approval to operate State Exchanges to submit assurances that the health program or activity will comply with Section 1557 and its regulation. Paragraph (b) clarifies that assurances of compliance with Section 1557 apply to the period during which Federal financial assistance is extended, or the applicable property is used, owned or possessed. Paragraph (c) requires that assurances with Section 1557 must be contained in covenants running with applicable property, interest, and land transfers from the Department. The source of these provisions is the Department's Section 504 regulations, and while Section 504 regulations have more detail, they do not have major substantive requirements that differ from their Title IX, Title VI, or Age Act regulations.

101

Compare

45 CFR 84.5 (Section 504)

with

45 CFR 86.4 (Title IX), 80.4(a) (Title VI), 91.33 (Age Act).

The Department proposes to retain the assurance provisions and identify “Section 1557” on a consolidated assurance form with Title VI, Title IX, Section 504, and the Age Act to include major applicable civil rights laws and require all applicable covered entities to submit the assurance. The Department believes keeping Section 1557 on a consolidated form ensures that the insurance industry and States are aware that these Federal civil rights laws currently apply to them.

The Department seeks comment on whether it is appropriate to retain the requirement to submit an assurance of compliance with Section 1557 to the Department, or whether it unnecessarily duplicates requirements in the underlying regulations to provide such assurances of compliance to the Department.

Proposed “45 CFR 92.5 Enforcement mechanisms.”

This proposed section would ensure that even under the proposed rule's repeal of certain provisions of the Section 1557 Regulation, the enforcement mechanisms provided for, and available under, 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, and the Department's implementing regulations, shall apply for purposes of enforcement of Section 1557. Other than as proposed in the conforming amendments discussed in Part IV, the proposed rule would not repeal or otherwise amend the regulations implementing and enforcing Title VI at 45 CFR parts 80 and 81, Title IX at 45 CFR part 86, Section 504 at 45 CFR parts 84 and 85, and the Age Act at 45 CFR parts 90 and 91.

The proposed § 92.5 also designates the Director of the Department's Office for Civil Rights to receive complaints, conduct compliance reviews, and otherwise investigate and take enforcement actions with respect to allegations of discrimination in violation of Section 1557 under this part.

102

The Office of Personnel Management (OPM) handles of claims alleging discrimination in the Federal Employees Health Benefits (FEHB) Program. OPM is charged by Federal statute with offering FEHB plans as a fringe benefit of Federal employment and, in that role, approves benefit designs and premium rates, sets rules generally applicable to FEHB carriers, adjudicates and orders payment of disputed health claims, and adjusts policies as necessary to ensure compliance with nondiscrimination standards.

Proposed “45 CFR 92.6 Relationship to other laws.”

The Department proposes § 92.6, to define the relationship of the regulation to other laws with more specificity than the current sections titled “Application” (§ 92.2) and “Relationship to other laws” (§ 92.3). The Department proposes to combine the substance of these two sections into a new § 92.6. It would set forth the text of Section 1557(b) nearly verbatim, and state that nothing in the proposed regulation shall be construed to invalidate or limit the rights, remedies, procedures, or legal standards available to individuals aggrieved under Title VI of the Civil Rights Act of 1964, Title VII 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, or to displace additional protections under State antidiscrimination laws.

The proposed section would also specify that the proposed regulation not be applied in a manner that conflicts with or supersedes exemptions, rights, or protections contained in several civil rights statutes, including those just mentioned, the Architectural Barriers Act of 1968,

103

the Americans with Disabilities Act of 1990 (as amended by the Americans with Disabilities Act Amendments Act of 2008),

104

Section 508 of the Rehabilitation Act of 1973,

105

and statutes protecting conscience and religious freedom.

103

42 U.S.C. 4151

et seq.

104

42 U.S.C. 12181

et seq.

105

29 U.S.C. 794d.

Although the Section 1557 Regulation incorporated exemptions to Title VI, Section 504, and the Age Act,

106

it did not incorporate abortion,

107

religious,

108

and other

109

exemptions contained in Title IX. The Final Rule considered the question of explicitly incorporating the Title IX religious exemption in the Section 1557 Regulation, but declined, instead providing that, “[i]nsofar as the application of any requirement under this part would violate applicable Federal statutory protections for religious freedom and conscience, such application shall not be required.”

106

See 45 CFR 92.101(c) (The exceptions applicable to Title VI apply to discrimination on the basis of race, color, or national origin under this part. The exceptions applicable to Section 504 apply to discrimination on the basis of disability under this part. The exceptions applicable to the Age Act apply to discrimination on the basis of age under this part. These provisions are found at §§ 80.3(d), 84.4(c), 85.21(c), 91.12, 91.15, and 91.17-.18 of this Subchapter.”)

107

“Nothing in this title shall be construed to require or prohibit any person, or public or private entity, to provide or pay for any benefit or service, including the use of facilities related to an abortion . . . .” Public Law 100-259, 102 Stat. 28 (Mar. 22, 1988) (codified at 20 U.S.C. 1688).

108

20 U.S.C. 1681(a)(3) (providing that the prohibition of discrimination on the basis of sex “shall not apply to an educational institution which is controlled by a religious organization if the application of this subsection would not be consistent with the religious tenets of such organization”);

see also

45 CFR 86.12 (Title IX exemption for educational organizations controlled by religious organizations).

81 FR 31435 (HHS declines to include a religious exemption in Section 1557).

109

20 U.S.C. 1681(a)(6)(B) (Title IX exemption for voluntary youth service organizations); 1686 (separate living facilities); 45 CFR 86.33 (exemption for separate toilet, locker room, and shower facilities).

The

Franciscan Alliance

court stated that the Department's failure to incorporate statutory exemptions “nullifies Congress's specific direction to prohibit only the ground proscribed by Title IX.”

Franciscan Alliance,

227 F. Supp. 3d at 690-691 (citations omitted). The

Franciscan Alliance

court held that there was a likelihood that plaintiffs would prevail on the claim that “[t]he Rule's failure to include Title IX's religious exemptions renders the Rule contrary to law.”

110

227 F. Supp. 3d at 690-91.

In its April 5, 2019, brief in

Franciscan Alliance,

DOJ, on behalf of HHS, stated that the prohibition on sex discrimination under Section 1557 “unambiguously includes Title IX's exemptions, including those addressing religion and abortion.”

111

This statement represents the Department's own further consideration of this issue, guided by DOJ's pronouncements on Title VII and Title IX. The Department believes that its enforcement of Title IX, and its enforcement of Section 1557 (to the extent it incorporates Title IX), must be constrained by the statutory contours of Title IX, which include explicit abortion and religious exemptions and which should be set forth more clearly than in the Final Rule.

112

111

See

Defendant's Memorandum in Response to Plaintiffs' Motions for Summary Judgment,

Franciscan Alliance,

No. 7:16-cv-00108-O, p. 11 (N.D. Tex, filed April 5, 2019).

112

As discussed further below, HHS also proposes to amend its underlying Title IX regulation to include the statutory abortion and religious exemptions explicitly.

In the Department's view, Section 1557 did not override any statutes protecting conscience or civil rights, and the exemptions thereto, and it is appropriate to specify that the Section 1557 Regulation will not be implemented in violation of those laws. Indeed, Section 1303 of the PPACA states that nothing in the PPACA shall be construed to require qualified health plans to cover abortions as an essential health benefit (42 U.S.C. 18023(b)(1)(A)(i)) and “[n]othing in this Act shall be construed to have any effect on Federal laws regarding—(i) conscience protection; (ii) willingness or refusal to provide abortion; and (iii) discrimination on the basis of the willingness or refusal to provide, pay for, cover, or refer for abortion or provide or participate in training to provide abortion” (42 U.S.C. 18023(c)(2)(A)). With respect to Section 1303 of the PPACA, this language is contained in a provision labeled “NO EFFECT ON FEDERAL LAWS REGARDING ABORTION” and is in a section that dealing with “special rules” about abortion. However, the language (“conscience protections”) is not limited to abortion.

In light of the PPACA's text and structure and the experience of the

Franciscan Alliance

litigation, the proposed section would incorporate by reference statutory exemptions and protections concerning religious and abortion exemptions with greater clarity than the Final Rule's § 92.2(b)(2) which currently states that, “[i]nsofar as the application of any requirement under this part would violate applicable Federal statutory protections for religious freedom and conscience, such application shall not be required.”

This current provision would be amended and replaced by the proposed § 92.6 which provides that, “[i]nsofar as the application of any requirement under this part would violate, depart from, or contradict definitions, exemptions, affirmative rights, or protections provided by any of the[se] statutes [ ] . . . or any related, successor, or similar Federal laws or regulations, such application shall not be imposed or required.”

Additionally proposed § 92.6 would explicitly identify and incorporate protections from specific religious freedom, conscience, and nondiscrimination statutes—42 U.S.C. 18113 (Section 1553 of the Patient Protection and Affordable Care Act); 42 U.S.C. 2000bb

et seq.

(the Religious Freedom Restoration Act, which applies to “all Federal law . . . unless such law explicitly excludes such application”); 42 U.S.C. 238n (the Coats-Snowe Amendment); 42 U.S.C. 300a-7 (the Church Amendments); the Weldon Amendment (

e.g.,

Consolidated Appropriations Act of 2019, Pub. L. 115-245, Div. B, sec. 506(d) (Sept. 28, 2018)); and related conscience provisions in appropriations law (

e.g.,

Consolidated Appropriations Act of 2019, Pub. L. 115-245, Div. B. sec. 506) (Sept. 28, 2018)).

Proposed “Subpart B—Specific Applications”

Proposed “45 CFR 92.101 Meaningful access for individuals with limited English proficiency”

The Department proposes to redesignate § 92.201, on providing meaningful access for individuals with limited English proficiency (LEP), as § 92.101 and, as so redesignated, to amend the provision to more closely align with the Department's 2003 LEP guidance.

In proposed paragraph (a), the Department sets forth the governing standard for the provision of meaningful access to programs and activities receiving Federal financial assistance based on the U.S. Supreme Court decision of

Lau

Nichols,

414 U.S. 563 (1974), which interprets Title VI's prohibition of discrimination on the basis of “national origin” in the context of LEP individuals. Subsection (a) also incorporates language from the Department of Justice's and HHS's LEP guidance documents.

See

67 FR 41455 (June 18, 2002) (DOJ Guidance to Federal Financial Assistance Recipients Regarding Title VI Prohibition Against National Origin Discrimination Affecting Limited English Proficient Persons); 68 FR 47311 (Aug. 8, 2003) (HHS Guidance to Federal Financial Assistance Recipients Regarding Title VI Prohibition Against National Origin Discrimination Affecting Limited English Proficient Persons).

Proposed paragraph (a) would adopt the standard from DOJ's and HHS's LEP guidance by specifying that any entity operating or administering a health program or activity subject to this rule shall take reasonable steps to ensure meaningful access to such programs or activities by limited English proficient individuals. Because Section 1557 applies to a broader scope of entities than only recipients of federal financial assistance, the Department proposes to use “entity” rather than “recipient” which retains the nomenclature used in the current rule with respect to LEP access.

Adopting this language would apply the same standard to both health and human services within the Department, and conform to the other Federal agencies who follow DOJ's LEP guidance, consistent with its civil rights coordinating authority. This standard is also consistent with Department's LEP guidance.

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This provision is proposed to replace the current rule's provision which requires that reasonable steps to provide meaningful access be provided to each LEP individual eligible to be served or likely to be encountered.

114

113

68 FR 47312 (Aug. 8, 2003) (HHS LEP guidance) (stating that “Title VI and its implementing regulations require that recipients take reasonable steps to ensure meaningful access by LEP persons.”

See also

67 FR 41455 (June 18, 2002) (DOJ LEP Guidance); Executive Order 13166 on Improving Access to Services for Persons with Limited English Proficiency, 65 FR 50121 (Aug. 16, 2000) (directing all Federal agencies to develop LEP guidance consistent with DOJ's LEP guidance).

114

45 CFR 92.201(a).

But see

68 FR 47312, 47314 (Aug. 8, 2003) (HHS LEP guidance) (stating that recipients may conclude that “in certain circumstances” recipient-provided language services are not necessary).

Proposed paragraph (b) would likewise adopt the four factors from the Department's existing LEP guidance to assist entities in determining the extent of a covered entity's obligation to provide language assistance services. The Department proposes to clarify that the starting point for OCR's exercise of its enforcement discretion would be an individualized case-by-case assessment that balances the following four factors: (1) The number or proportion of LEP individuals eligible to be served or likely to be encountered in the eligible service population; (2) the frequency with which LEP individuals come in contact with the entity's health program, activity, or service; (3) the nature and importance of the entity's health program, activity, or service; and (4) the resources available to the entity and costs. 68 FR at 47314-15 (HHS guidance);

accord

67 FR at 41459-60 (factors from DOJ's 2002 LEP guidance).

115

By using the factors as written in the Department's LEP Guidance, the proposed rule would use the same factors in health care that already apply to all of the Department's programs, including human services.

115

The Department notes that, in both its LEP guidance and in the Department of Justice's LEP guidance, language in factor (1) also refers to LEP persons rather than individuals, refers to the number of those persons served or encountered rather than those eligible to be served or likely to be encountered, and refers to those served or encountered by the program or grantee rather than in the eligible service population. . Likewise, language in factor (3) refers to the nature and importance of the program, activity, or service provided by the program to people's lives. The Department believes that these variations in descriptions of the factors have the same meaning, but asks for comment on which formulation of these factors it should use for purposes of this rulemaking.

Although the current Section 1557 Regulation states that it applies to individuals “eligible to be served or likely to be encountered,”

116

it did not explicitly address factors such as the number or proportion of LEP individuals, the frequency of contact, the resources available, or the costs identified in the Department's LEP guidance.

117

Additionally the Final Rule newly required the OCR Director to take into account whether a covered entity had developed and

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