Health Law Monitor

HHS Says No to Gender Identity and Sexual Orientation: Supreme Court Disagrees

June 26, 2020

On June 19, 2020, the U.S. Department of Health and Human Services (HHS) published its finalized rule¹ (Final Rule) revising certain provisions contained in Section 1557 of the Patient Protection and Affordable Care Act (ACA).² Section 1557 prohibits discrimination on the basis of race, color, national origin, sex, age or disability in certain health programs and activities.

The 2016 Rule defined sex discrimination in health programs (described in more detail below) to include discrimination on the basis of (1) gender identity (one’s internal sense of gender, which may be male, female neither or a combination of male and female); (ii) sex stereotyping and (iii) pregnancy, including termination of pregnancy, childbirth and related medical conditions.

HHS has determined that the 2016 Rule and its definition of discrimination “on the basis of sex” exceeded the scope of authority delegated by Congress in Section 1557. Moreover, HHS takes the positions that the 2016 Rule is inconsistent with the underlying framework of civil rights laws incorporated by the ACA,³ including Title IX of the Education Amendments of 1972 (Title IX), which is the statutory basis for Section 1557’s provision against discrimination “on the basis of sex”.

In the Final Rule, HHS adopted “the government’s longstanding interpretation and ordinary meaning of the term “sex” as the state of being biologically male or female, which is determined at birth. Furthermore, HHS went on to state that neither Section 1557 of the ACA nor Title IX includes prohibitions on discrimination on the basis of gender identity or sexual orientation or defined “discrimination on the basis of sex” to include such classifications. The Final Rule of Section 1557 was published in the Federal register on June 19, 2020, and has an effective date of August 18, 2020.

Key elements of the 1557 Final Rule:

Eliminates requirement that Covered Entities distribute non-discrimination notices and “taglines”, including translation notices in at least 15 languages in all significant communications to patients and customers, anticipated to save Covered Entities an estimated $2.9 billion over the next five years;
Eliminates the requirement for a Section 1557 Compliance Coordinator and written grievance procedure;
Interprets Section 1557 as applying to all operations of entities principally engaged in the business of providing health care that receive federal financial assistance, and for entities not principally engaged in the business of providing health care, Section 1557 applies to such entities’ operations only to the extent any such operations receive federal financial assistance;
Removes a single enforcement structure across different types of discrimination claims and returns to the enforcement structure for each civil rights statute identified in Section 1557 of the ACA;
Adds a provision providing that Section 1557 must be enforced in a manner consistent with other statutes including the Religious Freedom Restoration Act and federal conscience protection laws;
Maintains protections from the 2016 Rule that ensure physical access for disabled individuals to health care facilities and appropriate communication technology to assist visually impaired or hearing impaired individuals;
Maintains the 2016 Rule’s qualifications for translators and interpreters for non-English speakers and adds a “4-factor analysis” to ensure that health care companies and providers subject to the Final Rule provide meaningful access for limited English proficiency individuals; and
Maintains the requirement that Covered Entities submit to HHS an assurance of compliance with Section 1557.

Not so fast: Bostock v. Clayton County Board of Commissioners

The U.S. Supreme Court (Court) issued Bostock v. Clayton County Board of Commissioners on June 15, 2020, three days after HHS released the 1557 Final Rule. In this decision, the Court decided three consolidated cases addressing whether discrimination based on sexual orientation and gender identity is illegal under Title VII of the Civil Rights Act of 1964 (Title VII). Title VII prohibits employment discrimination on the basis of race, color, religion, “sex” or national origin. “Based on sex” was determined in the Court’s decision to encompass discrimination based on sexual orientation and gender identity. The Supreme Court’s ruling would appear to undermine HHS’ rationale that the framework of the civil rights laws does not define sex-based discrimination as anything more than discrimination based on an individual’s birth classification as male or female.

What does this mean?
Interestingly the Final Rule makes clear that it empowers HHS to continue its enforcement of civil rights laws and reiterates that the substantive protections of Title VI of the Civil rights Act of 1964 (Title VI), Title IX, the Age Discrimination Act of 1975, and Section 504 of the Rehabilitation Act of 1973 remain in full force and effect. In a footnote to its commentary, HHS states the following:

“While Section 1557 does not incorporate non-discrimination provisions by reference of Title VII, it provides that nothing in Title I of the ACA 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.”⁴

In light of this HHS recognition of Title VII and the Supreme Court decision in Bostock, it is unclear whether the effective date of the Final Rule will proceed as currently anticipated or if HHS will delay the same. Layered on top of these two conflicting positions, that of HHS and the Court, there remains an injunction against the 2016 Rule’s prohibitions against discrimination on the basis of gender identity and termination of pregnancy.⁵ Given the current environment, it is recommended that Covered Entities take a wait and see approach before revising and updating policies and procedures to comply with the Final Rule.

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¹The Final Rule was officially published in the Federal register on June 19, 2020, but released by HHS on June 12, 2020.
²The 1557 Final rule may be found at: https://www.govinfo.gov/content/pkg/FR-2020-06-19/pdf/2020-11758.pdf
³ See commentary at 85 Fed. Reg. 37161
⁴ Id.
⁵ Franciscan Alliance, Inc. et al v. Burwell, The following is posted on the HHS’ website:
On December 31, 2016, the U.S. District Court for the Northern District of Texas issued an opinion in Franciscan Alliance, Inc. et al v. Burwell, enjoining the Section 1557 regulation’s prohibitions against discrimination on the basis of gender identity and termination of pregnancy on a nationwide basis. Accordingly, HHS’ Office for Civil Rights (HHS OCR) may not enforce these two provisions of the regulation implementing these same provisions, while the injunction remains in place. Consistent with the court’s order, HHS OCR will continue to enforce important protections against discrimination on the basis of race, color, national origin, age, or disability, as well as other sex discrimination provisions that are not impacted by the court’s order.

Attorneys

Alaina N. Crislip