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Is your health care organization ready for the new anti-discrimination landscape?

A key anti-discrimination section of the Affordable Care Act (ACA) went into full effect this summer, which has the potential to significantly change the culture and operations for organizations across the health care payment and delivery system.

The portion of the law, Section 1557, prohibits discrimination on the basis of race, color, national origin, sex, age, or disability in any health program or activity that receives federal financial assistance. Section 1557 also applies to any program or activity administered by an executive agency or any entity established under Title I of the ACA or its amendments.

The US Department of Health and Human Services (HHS) finalized the rule for Section 1557 in May 2016, with the rule becoming effective on July 18. For health plans, the regulation will have an impact on benefit design for the upcoming plan year.

Far-reaching impact

A wide variety of organizations stand to be affected by Section 1557—including federal health programs, health care providers, health insurance issuers, health insurance exchanges and co-ops, and state and local government agencies. The new rule means that organizations will have to look more intently at how they serve and communicate with their customers and potential customers. Noncompliance with Section 1557 could result in enforcement actions by the US Department of Justice or a civil lawsuit, with the potential for compensatory damages, not to mention potential brand and reputation implications in the marketplace.

Behind Section 1557 lies a simple concept—yet one that could pose complex compliance challenges for organizations. The Final Rule, “Nondiscrimination in Health Programs and Activities,” seeks to advance equity and reduce health disparities by protecting some of the populations that have been most vulnerable to discrimination in the health care context. Rather than create a new set of federal anti-discrimination requirements, it incorporates prohibitions covered under a variety of existing laws and applies them under the ACA.

Section 1557 holds organizations accountable on a variety of fronts. For example, it requires auxiliary aids and services for persons with impaired sensory, manual, or speaking skills. It also prohibits discrimination on basis of gender identity, as well as explicitly prohibiting discrimination against transgender individuals or in the provision of gender transition services. It requires notice content and taglines to appear in English and the top 15 non-English languages. The section also protects individuals with limited English proficiency, who now cannot be required to provide their own interpreters. And it requires that health programs and activities delivered through electronic means be user-friendly for individuals with disabilities.

The rule also extends far beyond those requirements and protections. Denying, canceling, limiting, or refusing coverage because an enrollee belongs to a particular protected category would run afoul of the rule. Using marketing designs that discriminate on the same basis also would run counter to Section 1557.

Developing a new posture

Health care organizations will have to implement and update new capabilities that are required to develop a more anti-discriminatory program aligned with Section 1557. Here are some things to consider as you move forward in a new anti-discrimination landscape.

  • Regulatory Monitoring. Having an active regulatory monitor area to identify regulatory changes and impacts to help prepare in advance for future changes.
  • Content. Understand what content you have—from call-center phone scripts to advertising to electronic communications such as websites and blogs. Know where the content resides, how it is disseminated, and how it meets or fails to meet Section 1557 requirements. Know how you will recraft content to ensure it complies with the new rule.
  • Business processes. Understand the customer-facing transactions and interactions that occur at each point in your business processes. Will the activities within each process stand up to Section 1557 scrutiny? What new steps or pieces of information might you have to inject into your processes to help ensure compliance?
  • Business organization. Look beyond the traditional customer-facing boundaries of your enterprise. Examine all functional areas for potential issues related to Section 1557. Areas that previously might not have fallen into the realm of discrimination concerns suddenly could become more important.
  • Technology and services. What tools and third-party providers do you use to communicate with and interact with customers? Beyond your employees, who and what supports your business processes? With those partners and resources, where are the potential gaps in compliance? What new resources—interpreters? auxiliary aids? remote services—will you need?
  • Education. Compliance with Section 1557 ultimately comes down to awareness among your people as they engage with customers (directly or indirectly) and as they conduct activities that can intersect customer recruitment, service, or engagement. Building a culture that is aware of specific anti-discrimination rules as well as discrimination issues at large can help you avoid missteps.

In light of the rule, health care organizations will have to look closely at how they communicate with and serve their customers and potential customers. These organizations should consider implementing processes to support an anti-discriminatory program aligned with Section 1557.

A version of this post originally appeared on the Deloitte Center for Regulatory Strategies blog, Reg Pulse.

Author bio

Tom is a managing director in the Business Risk practice of Deloitte & Touche LLP. He has specialized experience in regulatory compliance issues for Medicare and Medicaid health plans, prescription drug plans, and pharmacy benefit managers, focusing on internal control process, specific regulatory risk areas, analysis and operational design. Tom has more than 14 years of administrative and management experience in health care, including operations, reporting, compliance and strategy.

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Karolyn brings more than 16 years of health care regulatory, compliance and operational knowledge, and provides leadership to organizations in their efforts to comply with Federal and State health care laws and regulations while transforming their business.  She has worked with some of the largest health systems in California, Arizona, and New Mexico on effectively bridging the gap between regulatory and operations by developing strategies to comply with regulations while balancing the needs of the business.

Over the past several years, Karolyn has worked extensively with providers on compliance risk assessments, mergers and acquisitions due diligence, leading Independent Review Organization (IRO) engagements, and providing investigative support related to fraud and abuse investigations.  She serves as an advisor on topics such as repayments and self-disclosures, Federal Sentencing Guidelines, Office of Inspector General’s Model Compliance Guidance, Stark law, Federal Anti-Kickback Statute, Federal False Claims Act, and other relevant industry standards.

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