July 21, 2024— Compliance under Section 1557 of the Affordable Care Act
By: Barry A. Posner and Brianna Ruiz1
The Department Health and Human Services Office (“HHS”) Office of Civil Rights (“OCR”) and the Centers for Medicare and Medicaid Services (“CMS”) have at long last issued its final rules (the “Current Rule”) on Section 1557 of the Patient Protection and Affordable Care Act (“ACA”), which took effect July 5, 2024.2
Who is subject to Section 1557 regulations?
Section 1557 prohibits Covered Entities from discriminating on the basis of race, color, national origin, sex3 , age, or disability in any “health program or activity” they provide or administer. “Covered Entities” include all entities:
- that receive Federal financial assistance, whether directly or indirectly, from the HHS;
- administered by HHS; or
- administered by an entity established under title 1 of the ACA. 42 U.S.C 18116.
These include pharmacies, medical practices, medical and health clinics, hospitals, local health agencies, health insurance issuers, physician practices, nursing facilities, communitybased health care providers, residential or community-based treatment facilities, or other similar entities or combination thereof. However, an entity principally or otherwise engaged in the business of providing health insurance is not, simply by virtue of such provision, considered “principally engaged in the business of providing healthcare”. 45 C.F.R. § 92.2.
A health program or activity encompasses all of the operations principally engaged in the provision of health projects, enterprises, or undertakings to provide or administer 1) healthrelated services, 2) assistance to persons in obtaining health-related services, 3) clinical, pharmaceutical, or medical care, 4) health education for health care professionals, or 5) engage in health or clinical research. Health programs or activity also includes all of the operations of a State Medicaid program, Children’s Health Insurance Program, and Basic Health Program. 45 C.F.R. § 92.4.
Does your Covered Entity have fifteen or more employees?
If you are a Covered Entity that employs fifteen (15) or more people, Section 1557 requires that your organization:
- designate at least one employee to coordinate the entity’s compliance with its responsibilities under Section 1557 (the “Coordinator”) before November 2, 2024; and
- implement written grievance procedures that provide for a prompt and equitable resolution of any alleged action that would be prohibited under section 1557. 45 C.F.R. § 92.7; and
- retain records related to grievances filed for no less than three (3) calendar years from the date the entity resolves the grievance. The identity of a complainant must remain confidential.
Requirements and Procedures
Covered Entities are required to implement written policies and procedures designed to comply with the Current Rule which, at minimum, must include an effective date and a statement to the effect that it does not discriminate on the basis of race, color, national origin, sex, age, or disability or limited English proficiency. It must also provide 1) language assistance services and auxiliary aid and services free of charge, 2) reasonable accommodation for individuals with disabilities, and 3) the contact information for the Section 1557 Coordinator. Qualifying Covered Entities must also train all relevant employees on the policies and procedures necessary for employees to conduct their functions consistent with the requirements of Section 1557, with each employee certifying completion of the training and retain each certification for at three (3) calendar years.
Each qualifying Covered Entity must also post a notice of nondiscrimination that includes information about the reasonable accommodations available for individuals with special needs, disabilities, language assistance services, auxiliary aids and services, and the contact information for the 1557 Coordinator. The notice must also detail the entity’s grievance procedure, how to file a complaint with OCR, and how to access the entity’s website. In addition, the notice must be available in English and at least the fifteen languages most spoken by individuals with limited English proficiency in the State or States in which the Covered Entity operates. 4872-5294-2802, v. 1
Finally, the rule requires that Covered Entities applying for federal assistance and health insurers seeking certification to participate in an Obamacare Exchange to submit an assurance that the health program or activity will be operated in compliance with Section 1557. 45 C.F.R. § 92.5.
How will OCR enforce Section 1557?
The Director of OCR has been delegated the authority to enforce Section 1557, which includes the authority to oversee complaints, initiate and conduct compliance reviews, conduct investigations, supervise, and coordinate compliance within the Department. As you probably know, OCR also has authority over HIPAA and its enforcement.
FURTHER HELP
We understand that these additional requirements may be financially and practically difficult to implement. Covered Entities are advised to comply with the regulation to avoid governmental action and other problems down the road. KTAP stands ready to help you with your notifications, forms, procedures and training. For further assistance, do not hesitate to call any member of our team:
Barry A. Posner, Esq. at bposner@kudmanlaw.com, (212) 868-0174. Mr. Posner chairs the corporate and healthcare departments at KTAP.
Tama B. Kudman, Esq. at tkudman@kudmanlaw.com, (561) 249-6300. Ms. Kudman chairs the healthcare fraud and governmental investigation department at KTAP.
About Kudman Trachten Aloe Posner LLP
Kudman Trachten Aloe Posner LLP is a full-service commercial firm that focuses on commercial transactions, buy-and sell-side mergers and acquisitions, complex commercial litigation, including bankruptcy and creditors’ rights, healthcare and reimbursement, corporate finance and day to day corporate work, including tax, intellectual property and real estate, white collar criminal and civil fraud defense and internal investigations, and employment law. See https://www.kudmanlaw.com for more information.
- Special thanks to Ms. Brianna Ruiz, a summer associate with KTAP in the preparation of this article. Ms. Ruiz is not currently admitted to practice law. ↩︎
- The Section 1557 regulations have had a long and storied history. OCR initially attempted to finalize these regulations on May 18, 2016; HHS subsequently proposed in 2019 to rescind and replace substantial portions of the 2016 rule. OCR released new final rules in June 2020, that remained in effect until Current Rule became effective. ↩︎
- Discrimination on the basis of sex includes, but is not limited to, discrimination on the basis of: (i) sex characteristics, including intersex traits; (ii) pregnancy or related conditions; (iii) sexual orientation; (iv) gender identity; and (v) sex stereotypes. ↩︎
