On May 10, 2021, the US Department of Health and Human Services (HHS) announced that the Office for Civil Rights (OCR) will interpret and enforce the provisions in Section 1557 of the Patient Protection and Affordable Care Act (ACA)i that prohibit discrimination on the basis of sex to also prohibit discrimination on the basis of sexual orientation and gender identity. Notably, the same announcement from HHS also provides that discrimination on the basis of sex under Title XI of the Education Amendments of 1972ii also includes discrimination based on gender identity and sexual orientation.
HHS’ Interpretation of Section 1557
Importantly, Section 1557 of the ACA prohibits discrimination based on race, color, national origin, sex, age, or disability in covered health programs or activities. Based on the interpretation announced by the Biden administration’s HHS, discrimination on the basis of sex will now also include discrimination based on sexual orientation and gender identity.
According to HHS, this interpretation decision was reached in light of the US Supreme Court’s landmark ruling in Bostock v. Clayton County,iii as well as subsequent court decisions. On June 15, 2020, the US Supreme Court held that Title VII of the Civil Rights Act of 1964’s prohibition on employment discrimination based on sex also includes discrimination based on sexual orientation and gender identity. The court majority in Bostock concluded that the plain meaning of Title VII’s “because of sex” necessarily included discrimination based on sexual orientation and gender identity.
Consistent with this decision and the text of Title IV, HHS will once again interpret and enforce Section 1557’s prohibition on discrimination on the basis of sex to include discrimination on the basis of sexual orientation and gender identity. Notably, HHS’ announcement provides that this interpretation will guide how OCR processes complaints and conducts investigations, but will not, by itself, determine the outcome in any particular case or set of facts. Additionally, OCR will comply with the Religious Freedom Restoration Act, as well as other legal requirements and court orders relevant to Section 1557’s provisions.
Section 1557’s Litigation Labyrinth
The regulations for interpreting and implementing Section 1557 of the ACA have a storied past and have faced a long line of challenges through litigation. First finalized on May 18, 2016, the Obama administration’s version of the Section 1557 regulations defined “on the basis of sex” to include sexual orientation and gender identity.”iv After a challenge to the regulations by a group of religiously affiliated health care providers and states, a Texas federal district court issued a final decision concluding that the regulations violated the Administrative Procedures Act and the Religious Freedom Restoration Act.v As part of its order, the court issued a nationwide preliminary injunction barring OCR from enforcing the portions of the regulations prohibiting discrimination on the basis of gender identity, as well as those based on termination of pregnancy.
The story, however, did not end there. Just days before the US Supreme Court announced its decision in Bostock, the Trump administration’s HHS issued final regulations interpreting Section 1557 and eliminating the general prohibition on discrimination based on gender identity found in the Obama administration’s rules.vi These regulations faced a barrage of litigation, including suits in the Eastern District of New York and the District of Columbia that preliminarily enjoined HHS from enforcing portions of the 2020 Final Rule that repealed the 2016 Final Rule’s provisions.vii
The saga continued with a suit filed in the District Court for the District of Columbia that led to the Biden administration’s HHS agreeing to postpone the effective date of the Trump era regulations until August 11, 2021.viii In addition to postponing the effective date, HHS advised that these policies were under review. Prior to this agreement, on January 20, 2021, President Biden issued Executive Order on Preventing and Combating Discrimination on the Basis of Gender Identity or Sexual Orientation. The executive order directs agency heads to review all regulations, guidance, policies, and rules promulgated or administered under Title VII or any other statute or regulation that prohibited discrimination on the basis of sex that are or may be inconsistent with the administration’s policy to fully enforce Title VII and other laws that prohibit discrimination on the basis of sexual orientation or gender identity.ix
This maze of litigation and regulations has led to the current position taken by HHS: that Section 1557’s bar on discrimination on the basis of sex includes discrimination on the basis of sexual orientation and gender identity.
Implications for Health Care Providers
Undoubtedly, HHS’ return to the Obama administration’s interpretation of Section 1557 is critical to ensuring that LGBTQ+ individuals have equitable access to health care as, according to HHS’ press release, “[d]iscrimination in health care impacts health outcomes. Research shows that one quarter of LGBTQ people who faced discrimination postponed or avoided receiving needed medical care for fear of further discrimination.”
We are likely to see additional litigation challenging the Biden administration’s HHS’ interpretation of Section 1157, and the impact of religious freedom laws also remain to be seen. In the meantime, health care providers who are required to comply with the ACA should ensure that they are not taking actions that would be considered discrimination on the basis of sex, including sexual orientation and gender identity. Importantly, it is critical for health care providers in New York State—including those who may not be required to comply with the ACA—to remember that sexual orientation and gender identity have long been protected classes under the New York State Human Rights Law, which bars discrimination in places of public accommodation, including most health care facilities.x
More information on the interpretation of Section 1557 can be found in HHS’ Notification of Interpretation and the corresponding press release. Additionally, please see our previous alert for more information on the US Supreme Court’s Bostock decision.
If you have any questions regarding the content of this alert, please contact Dena DeFazio, associate, at ddefazio@barclaydamon.com, or another member of the firm’s Health Care & Human Services Practice Area.
i See 42 USC § 18116(a).
ii See 20 USC § 1681 et seq.
iii See Bostock v. Clayton Cty., Ga., 140 S. Ct. 1731 (2020).
iv See Nondiscrimination in Health Programs and Activities, 81 Fed. Reg. 31,375 – 31,473 (May 18, 2016).
v See Franciscan Alliance, Inc. v. Azar, 414 F. Supp. 3d 928 (N.D. Tex. 2019).
vi See Nondiscrimination in Health and Health Education Programs or Activities, Delegation of Authority, 85 Fed. Reg. 37,160 – 37,248 (June 19, 2020).
vii See Aspapana-Johnson Walker v. Azar, Case No. 1:20-cv-02834 (E.D.N.Y. Oct. 29, 2020); Whitman-Walker Clinic v. U.S. Dep’t of Health & Hum. Servs., Case No. 1:20-cv-01630 (D.D.C. Sep. 2, 2020).
viii See Facing Foster Care in Alaska v. U.S. Dep’t of Health & Hum. Servs., Case No. 1:21-cv-308-KBJ (D.D.C. Feb. 9, 2021).
ix See Exec. Order No. 13988, 86 Fed. Reg. 7,023 (Jan. 25, 2021).
x See N.Y. Exec. Law § 292; see also Sexual Orientation Non-Discrimination Act, S.B. S.00720 (2002); Gender Expression Non-Discrimination Act, S.1047 (2019); 9 NYCRR § 455.13.