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This rulemaking would finalize, with appropriate changes in response to public comments, the proposed rule implementing section 1557 of the Patient Protection and Affordable Care Act (PPACA), and conforming amendments to related HHS rules.  Section 1557 prohibits discrimination on the basis of race, color, national origin, sex, age, and disability under 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 title l of the PPACA.

Statement of Need:

In its proposed rule, the Department stated that the 2016 Final Rule exceeded its authority under section, adopted erroneous and inconsistent interpretation of civil rights law, caused confusion, and imposed unjustified and unnecessary costs.

Summary of the Legal Basis:

Section 1557 of the Patient Protection and Affordable Care Act (42 U.S.C. 18116); Civil Rights Restoration Act  (Pub. L. 100259, 102 Stat. 28 (Mar. 22 1988); 42 U.S.C. 2000d et seq. (title VI of the Civil Rights Act of 1964, as amended); 29 U.S.C. 794 (section 504 of the Rehabilitation Act of 1973, as amended); 20 U.S.C. 1681 et seq. (title IX of the Education Amendments of 1972, as amended); 42 U.S.C. 6101 et seq.; (Age Discrimination Act of 1975, as amended); Lau v. Nichols, 414 U.S. 563 (1974); 5 U.S.C. 301.  42 U.S.C. 300jj-11, 300jj-14, 1302, 1395l, 1395eee(f), and 1396u4(f));  18021-18024 ,  18031-18033 ,  18041-18042 , 18044, 18051, 18054, 18061, 18063,  18071, and  18081-18083; 26  U.S.C. 36B; 31 U.S.C. 9701; 5 U.S.C. 552. 

Alternatives:

In its proposed rule, the Department considered several alternatives, including the option of not pursuing any regulatory changes, adding gender identity and sexual orientation to a definition of sex or on the basis of sex under title IX, simply repealing the section 1557 Regulation in total and not issuing a replacement regulation, retaining the provision on visual standards for video remote interpreting services for LEP individuals, and keeping the requirement for notices and taglines but limiting the frequency of required mailings to one per year to each person served by the covered entity.

Anticipated Costs and Benefits:

The Department estimated that its proposed rule, if finalized, would generate $532 million in net annualized savings at a 7% discount rate (discounted relative to year 2016, over a perpetual time horizon, in 2016 dollars).

Risks:

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. The proposed rule, if finalized, would eliminate the need for covered entities to expend labor and money on an ongoing basis to maintain internal procedures for mitigating the legal risk that persists due to unresolved litigation over the meaning of section 1557.