[Federal Register Volume 85, Number 119 (Friday, June 19, 2020)]
[Rules and Regulations]
[Pages 37160-37248]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2020-11758]



[[Page 37159]]

Vol. 85

Friday,

No. 119

June 19, 2020

Part II





Department of Health and Human Services





-----------------------------------------------------------------------





Centers for Medicare and Medicaid Services





-----------------------------------------------------------------------





42 CFR Parts 438, 440, and 460

45 CFR Parts 86, 92, 147, et al.





Nondiscrimination in Health and Health Education Programs or 
Activities, Delegation of Authority; Final Rule

  Federal Register / Vol. 85, No. 119 / Friday, June 19, 2020 / Rules 
and Regulations  

[[Page 37160]]


-----------------------------------------------------------------------

DEPARTMENT OF HEALTH AND HUMAN SERVICES

Centers for Medicare and Medicaid Services

42 CFR Parts 438, 440, and 460

Office of the Secretary

45 CFR Parts 86, 92, 147, 155, and 156

RIN 0945-AA11


Nondiscrimination in Health and Health Education Programs or 
Activities, Delegation of Authority

AGENCY: Centers for Medicare & Medicaid Services (CMS); Office for 
Civil Rights (OCR), Office of the Secretary, Department of Health and 
Human Services (HHS).

ACTION: Final rule.

-----------------------------------------------------------------------

SUMMARY: The Department of Health and Human Services (``the 
Department'' or ``HHS'') is committed to ensuring the civil rights of 
all individuals who access or seek to access health programs or 
activities of covered entities under Section 1557 of the Patient 
Protection and Affordable Care Act (``ACA''). After considering public 
comments, in this final rule, the Department revises its Section 1557 
regulations, Title IX regulations, and specific regulations of the 
Centers for Medicare & Medicaid Services (``CMS'') as proposed, with 
minor and primarily technical corrections. This will better comply with 
the mandates of Congress, address legal concerns, relieve billions of 
dollars in undue regulatory burdens, further substantive compliance, 
reduce confusion, and clarify the scope of Section 1557 in keeping with 
pre-existing civil rights statutes and regulations prohibiting 
discrimination on the basis of race, color, national origin, sex, age, 
and disability.

DATES: This rule is effective August 18, 2020.

FOR FURTHER INFORMATION CONTACT: Luben Montoya, Supervisory Civil 
Rights Analyst, HHS Office for Civil Rights, at (800) 368-1019 or (800) 
537-7697 (TDD).

SUPPLEMENTARY INFORMATION:

Table of Contents

I. Executive Summary
    A. Purpose
    B. Summary of Major Provisions
    (1) Changes to the Section 1557 Regulation
    a. Elimination of Overbroad Provisions Related to Sex and Gender 
Identity
    b. Clarification of Scope of Covered Entities
    c. Elimination of Unnecessary or Duplicative Language on Civil 
Rights Enforcement
    d. Elimination of Unnecessary Regulatory Burdens
    e. Other Clarifications and Minor Modifications
    (2) Related and Conforming Amendments to Other Regulations
    a. Title IX
    b. CMS
    C. Summary of the Costs and Benefits of the Major Provisions
II. Background
III. Response to Public Comments on the Proposed Rule
    A. General Comments
    B. Section 1557 Regulation, Subpart A: General Requirements and 
Prohibitions
    (1) Proposed Repeal of Definitions in Sec.  92.4 of the 2016 
Rule
    (2) General Changes to 2016 Rule
    a. Purpose of Regulation, Revising Sec.  92.1 of the 2016 Rule
    b. Effective Date
    c. Severability
    d. Summary of Regulatory Changes
    (3) Scope of Application in Proposed Sec.  92.3; Repeal of Sec.  
92.208
    a. Generally
    b. Sec.  92.3(a): Covered Programs and Activities
    c. Sec.  92.3(b): Scope of the Term ``Health Program or 
Activity''
    d. Sec.  92.3(c) Health Insurance and Healthcare
    e. Summary of Regulatory Changes
    (4) Nondiscrimination Requirements in Proposed Revisions to 
Sec.  92.2, and Repeal of Sec.  92.8(d), 92.101, 92.206, 92.207, 
92.209, and Appendix B of the 2016 Rule
    a. Discrimination on the Basis of Race, Color, or National 
Origin
    i. Generally
    ii. Repeal of Notice and Taglines Provisions at Sec.  92.8(d) 
and Appendix B of the 2016 Rule
    b. Discrimination on the Basis of Disability
    c. Discrimination on the Basis of Age
    d. Discrimination on the Basis of Sex
    i. Generally
    ii. Gender Identity, Including Single-Sex Services Under Sec.  
92.206 of the 2016 Rule
    iii. Termination of Pregnancy
    iv. Sexual Orientation
    v. Scrutiny for Sex-Based Classifications (Repeal of Sec.  
92.101(b)(3)(iv) of the 2016 Rule)
    vi. Disparate Impact Under Sec.  92.101(b)(3)(iii) of the 2016 
Rule
    vii. Insurance Coverage in Sec.  92.207 of the 2016 Rule
    e. Discrimination on the Basis of Association, Repeal of Sec.  
92.209 of the 2016 Rule
    f. Multiple Protected Statuses
    g. Examples of Discriminatory Practices (Repeal of Sec.  92.207 
of the 2016 Rule)
    h. Summary of Regulatory Changes
    (5) Assurances in Proposed Sec.  92.4, and Repeal of Sec.  92.5 
of the 2016 Rule
    (6) Enforcement Mechanisms in Proposed Sec.  92.5, and Repeal of 
Sec. Sec.  92.6, 92.7, 92.8, 92.101, 92.301, 92.302, 92.303, and 
Appendices A and C of the 2016 Rule
    a. Enforcement Procedures and Underlying Regulations in Sec.  
92.5(a) (Repeal of Sec.  92.302 and Sec.  92.6(a) of the 2016 Rule)
    b. Compensatory Damages (Repeal of Sec.  92.301(b) of the 2016 
Rule)
    c. Implied Private Rights of Action (Repeal of Sec.  92.302(d) 
of the 2016 Rule)
    d. Voluntary Action (Repeal of Sec.  92.302(c) and Sec.  92.6(b) 
of the 2016 Rule)
    e. Access to Records of Compliance (Repeal of Sec.  92.303(c) of 
the 2016 Rule)
    f. Prohibitions on Intimidation and Retaliation (Repeal of Sec.  
92.303(d) of the 2016 Rule)
    g. Perpetuating Discrimination by Assistance and Utilizing 
Criteria or Methods of Administration (Repeal of Sec.  
92.101(b)(1)(ii), (b)(3)(ii), and (b)(4)(ii) of the 2016 Rule)
    h. Notices of Nondiscrimination Rights and Statement of 
Nondiscrimination Under the 2016 Rule (Repeal of Sec.  92.8 of the 
2016 Rule)
    i. Summary of Regulatory Changes
    (7) Relationship to Other Laws in Proposed Sec.  92.6, and 
Repeal of Sec.  92.2(b) and 92.3 of the 2016 Rule
    a. Conscience Laws
    b. Religious Freedom Restoration Act
    c. Title IX
    d. Other Laws and Cases
    e. Summary of Regulatory Changes
    C. Section 1557 Regulation, Subpart B: Specific Applications to 
Health Programs or Activities (Sections 92.201-92.205 of the 2016 
Rule)
    (1) Meaningful Access for Individuals With Limited English 
Proficiency (45 CFR 92.101)
    (2) Effective communication for Individuals With Disabilities 
(45 CFR 92.102)
    (3) Accessibility Standards for Buildings and Facilities (45 CFR 
92.103)
    (4) Accessibility of Information and Communication Technology 
(45 CFR 92.104)
    (5) Requirement To Make Reasonable Modifications (45 CFR 92.105)
    (6) Summary of Regulatory Changes
    D. Title IX Regulations
    (1) Nomenclature, Rules of Appearance, Effective Date 
Modifications to Rules at 45 CFR 86.31 and 86.71
    (2) Abortion Neutrality of 20 U.S.C. 1688 in 45 CFR 86.2 and 
86.18
    (3) Summary of Regulatory Changes
    E. Conforming Amendments to CMS Regulations
    (1) Generally
    (2) Delivery of Medicaid Services (42 CFR 438.3(d)(4), 
438.206(c)(2), 440.262))
    (3) General Standards for Exchanges, QHPs for Exchanges, and 
Health Plan Issuers (45 CFR 155.120(c)(ii)),156.200(e))
    (4) Guaranteed Coverage (45 CFR 147.104(e))
    (5) Enrollment in QHPs Through Exchanges By Agents or Brokers 
(45 CFR 155.220(j)(2)(i))
    (6) Enrollment in QHPs and Exchanges By QHP Issuers (45 CFR 
156.1230(b)(2))
    (7) Summary of Regulatory Changes
IV. Regulatory Impact Analysis
    A. Executive Orders 12866 and Related Executive Orders on 
Regulatory Review

[[Page 37161]]

    (1) Consideration of Regulatory Alternatives
    (2) Considerations for Cost-Effective Design
    (3) Methodology for Cost-Benefit Analysis
    (4) Cost-Benefit Analysis
    a. Overview
    b. Generally Applicable Benefits and Burdens
    i. Simplification and Flexibility
    ii. Policies and Procedures Concerning Gender Identity
    c. Baseline Assumptions
    d. Covered Entities
    i. Entities Covered by Section 1557
    (A) Entities With a Health Program or Activity, Any Part of 
Which Receives Federal Financial Assistance From the Department
    (B) Programs or Activities Administered by the Department Under 
Title I of the ACA
    (C) Entities Established Under Title I of ACA
    ii. Entities Covered by Title IX
    e. Cost Savings From Eliminating Notice and Taglines Requirement
    f. Costs Arising From Removal of Notice and Taglines Requirement
    g. Cost Savings From Changes to Language Access Plan Provisions
    h. Cost Savings Attributed to Covered Entities' Handling of 
Certain Grievances
    i. Additional Costs for Training and Familiarization
    i. Number of Covered Entities That May Train Workers
    ii. Number of Individuals Who Will Receive Training
    iii. Total Costs of Training
    j. Additional Costs for Revising Policies and Procedures
    k. Other Benefits or Costs
    (5) Impact on State, Local, and Tribal Entities under Executive 
Orders 12866, 13132, and 13175
    a. State and Local Governments
    b. Tribal Governments
    (6) Avoidance of Inconsistent, Incompatible, or Duplicative 
Regulations
    B. Executive Order 13771 on Reducing and Controlling Regulatory 
Costs
    C. Congressional Review Act
    D. Unfunded Mandates Reform Act
    E. Regulatory Flexibility Act and Executive Order 13272 on 
Proper Consideration of Small Entities in Agency Rulemaking
    F. Executive Order 12250 on Leadership and Coordination of 
Nondiscrimination Laws
    G. Paperwork Reduction Act
    (D) Delegation of Authority

I. Executive Summary

A. Purpose

    This regulation finalizes the Department's proposed rule concerning 
Nondiscrimination in Health and Health Education Programs or Activities 
issued in the Federal Register on June 14, 2019 (84 FR 27846), with 
minor and primarily technical corrections. It makes changes to the 
Department's existing regulation \1\ (``2016 Rule'') implementing 
Section 1557 of the ACA, 42 U.S.C. 18116. It makes a related amendment 
to the Department's regulations implementing Title IX of the Education 
Amendments of 1972 (``Title IX''), and it makes conforming amendments 
to nondiscrimination provisions within various CMS regulations.
---------------------------------------------------------------------------

    \1\ 81 FR 31375-473 (May 18, 2016) codified at 45 CFR part 92.
---------------------------------------------------------------------------

    Through Section 1557 of the ACA, Congress applied certain long-
standing civil rights nondiscrimination requirements to any health 
programs or activities that receive Federal financial assistance, and 
any programs or activities administered by an Executive agency under 
Title I of the ACA or by an entity established under such Title. It did 
so by cross-referencing statutes that specify prohibited grounds of 
discrimination, namely, race, color, national origin, sex, age, or 
disability, in an array of Federally funded and administered programs 
or activities. To ensure compliance, Congress dictated that ``[t]he 
enforcement mechanisms provided for and available under'' such laws 
``shall apply for purposes of violations of'' Section 1557.\2\
---------------------------------------------------------------------------

    \2\ 42 U.S.C. 18116.
---------------------------------------------------------------------------

    This final rule returns to the enforcement mechanisms provided for, 
and available under, those longstanding statutes and the Department's 
implementing regulations. It eliminates many of the provisions of the 
2016 Rule in order to better comply with the mandates of Congress, 
relieves approximately $2.9 billion in undue regulatory burdens (over 
five years), furthers substantive compliance, reduces confusion, and 
clarifies the scope of Section 1557. It empowers the Department to 
continue its robust enforcement of civil rights laws by making clear 
that the substantive protections of Title VI of the Civil Rights Act of 
1964 (``Title VI''), Title IX, the Age Discrimination Act of 1975 
(``Age Act''), and Section 504 of the Rehabilitation Act of 1973 
(``Section 504'') remain in full force and effect.\3\
---------------------------------------------------------------------------

    \3\ While Section 1557 does not incorporate nondiscrimination 
provisions by reference to 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. 42 
U.S.C. 18116(b).
---------------------------------------------------------------------------

    This final rule is needed because the Department has determined 
that portions of the 2016 Rule are duplicative or confusing, impose 
substantial unanticipated burdens, or impose burdens that outweigh 
their anticipated benefits. Additionally, two Federal district courts 
have determined that the Department exceeded its authority in 
promulgating parts of the regulation, and one has vacated and remanded 
those parts of the 2016 Rule. By substantially repealing much of the 
2016 Rule, including removing the vacated provisions from the Code of 
Federal Regulations, the Department reverts to longstanding statutory 
interpretations that conform to the plain meaning of the underlying 
civil rights statutes and the United States Government's official 
position concerning those statutes.
    The Department initially estimated the costs from the 2016 Rule at 
over $942 million across the first five years. 81 FR 31458-59. This 
figure, however, significantly underestimated actual costs, according 
to the Department's current estimates. As estimated now, the costs 
derived merely from the 2016 Rule's requirement to provide notices and 
taglines with all significant communications, after accounting for 
electronic delivery, amount to an average annual burden of $585 million 
per year, for a five-year burden of $2.9 billion. Based on the 
Department's re-examination of the burden on regulated entities, and 
after reviewing public comments, the Department has determined that the 
potential public benefits of imposing such requirements are outweighed 
by the large costs those requirements impose on regulated entities and 
other parties.

B. Summary of Major Provisions

(1) Changes to the Section 1557 Regulation
a. Elimination of Overbroad Provisions Related to Sex and Gender 
Identity
    This final rule eliminates certain provisions of the 2016 Rule that 
exceeded the scope of the authority delegated by Congress in Section 
1557. The 2016 Rule's definition of discrimination ``on the basis of 
sex'' encompassed discrimination on the basis of gender identity (``an 
individual's internal sense of gender, which may be male, female, 
neither, or a combination of male and female''). In line with that 
definition, the 2016 Rule imposed several requirements regarding 
medical treatment and coverage on the basis of gender identity. The 
same definition also encompassed discrimination on the basis of 
``termination of pregnancy'' without incorporating the explicit 
abortion-neutrality language of 20 U.S.C. 1688 (which some commenters 
referred to as the Danforth Amendment) in Title IX, and it imposed a 
high burden of proof on providers to justify offering gynecological or 
other single-sex medical services.
    All of these are essentially legislative changes that the 
Department lacked the

[[Page 37162]]

authority to make. They purported to impose additional legal 
requirements on covered entities that cannot be justified by the text 
of Title IX, and in fact are in conflict with express exemptions in 
Title IX, even though Title IX provides the only statutory basis for 
Section 1557's provision against discrimination ``on the basis of 
sex.'' For this reason, these provisions have already been vacated and 
remanded by court order. This final rule omits the vacated language 
concerning gender identity and termination of pregnancy, thereby 
bringing the provisions of the Code of Federal Regulations into 
compliance with the underlying statutes and up-to-date as to the effect 
of the court's order.
    The Department also believes that various policy considerations 
support this action. The 2016 Rule's provisions on sex discrimination 
imposed new requirements for care related to gender identity and 
termination of pregnancy that Congress has never required, and 
prevented covered entities from drawing reasonable and/or medically 
indicated distinctions on the basis of sex. As a result, those 
provisions would have imposed confusing or contradictory demands on 
providers, interfered inappropriately with their medical judgment, and 
potentially burdened their consciences. By contrast, under this final 
rule, each State may balance for itself the various sensitive 
considerations relating to medical judgment and gender identity, within 
the limits of applicable Federal statutes (which are to be read 
according to their plain meaning).
b. Clarification of Scope of Covered Entities
    In an additional effort to avoid exceeding the Department's 
statutory authority, this final rule modifies the 2016 Rule's 
definition of entities covered by Section 1557 in order to align it 
more closely with the statutory text.
c. Elimination of Unnecessary or Duplicative Language on Civil Rights 
Enforcement
    This final rule also eliminates provisions of the 2016 Rule that, 
by unnecessarily duplicating or overlapping with existing civil rights 
law and regulations, were either inconsistent or redundant with 
existing law and regulations, and so were likely to cause confusion 
about the rights of individuals and the corresponding responsibilities 
of providers. This final rule prohibits any covered entity from 
discriminating on the basis of race, color, national origin, sex, age, 
and disability, according to the meaning of these terms in the 
underlying Federal civil rights statutes that Section 1557 
incorporates, and it commits the Department to enforcing these 
prohibitions through the enforcement mechanisms already available under 
those statutes' respective implementing regulations. It eliminates the 
2016 Rule's definitions of terms and its list of examples of 
discriminatory practices, as well as its provisions related to 
discrimination on the basis of association, disparate impact on the 
basis of sex, health insurance coverage, certain employee health 
benefits programs, notification of beneficiaries' rights under civil 
rights laws, designation of responsible employees and adoption of 
grievance procedures, access granted to OCR for review of covered 
entities' records of compliance, prohibitions on intimidation and 
retaliation, enforcement procedures, private rights of action, remedial 
action, and voluntary action. In all of these matters, this final rule 
will defer to the relevant existing regulations and the relevant case 
law with respect to each of the underlying civil rights statutes, as 
applied to the health context under Section 1557. It will not create, 
as the 2016 Rule did, a new patchwork regulatory framework unique to 
Section 1557 covered entities.
d. Elimination of Unnecessary Regulatory Burdens
    This final rule modifies provisions of the 2016 Rule that imposed 
regulatory burdens on covered entities greater than what was needed in 
order to ensure compliance with civil rights law. Specifically, it 
eliminates the burdensome requirement for covered entities to send 
notices and taglines with all significant communications, clarifies 
that the provision of health insurance, as such, is not a ``health 
program or activity,'' brings requirements of meaningful access for 
persons with limited English proficiency (LEP) into conformity with 
longstanding DOJ and HHS guidance, and permits remote English-language 
interpreting services to be audio-based rather than requiring them to 
be video-based.
    The final rule retains numerous other provisions of the 2016 Rule 
that furthered the goal of civil rights compliance without imposing 
burdens unnecessary to that goal. These include the obligation for 
covered entities to submit assurances of compliance, as well as most of 
the 2016 Rule's provisions ensuring access for individuals with LEP and 
individuals with disabilities.
e. Other Clarifications and Minor Modifications
    This final rule modifies the 2016 Rule's discussion of its own 
relation to other laws, offering a clearer commitment to implement 
Section 1557 in conformity with the text of the statutes it 
incorporates, as well as with the text of numerous other applicable 
civil rights and conscience statutes. It also makes other minor 
modifications to the regulatory text.
(2) Related and Conforming Amendments to Other Regulations
a. Title IX
    Because the Department's failure to incorporate the abortion 
neutrality language at 20 U.S.C. 1688 (hereinafter ``abortion 
neutrality'') and the Title IX religious exemption formed part of the 
Franciscan court's reasoning when it vacated parts of the 2016 Rule, 
this final rule amends the Department's Title IX regulations to 
explicitly incorporate relevant statutory exemptions from Title IX, 
including abortion neutrality and the religious exemption.
b. CMS
    Ten provisions in CMS regulations, all of which cover entities that 
are also subject to Section 1557, have in recent years had language 
inserted that prohibits discrimination on the basis of sexual 
orientation and gender identity. In light of this final rule's return 
to the plain meaning of ``on the basis of sex'' in the civil rights 
statutes incorporated under Section 1557, and the overarching 
applicability of Section 1557 to these programs, the Department here 
finalizes amendments to those regulations to ensure greater consistency 
in civil-rights enforcement across the Department's different programs 
by deleting the provisions on sexual orientation and gender identity.

C. Summary of the Costs and Benefits of the Major Provisions

    This final rule is an economically significant deregulatory action. 
The Department projects that this final rule will result in 
approximately $2.9 billion in cost savings (undiscounted) over the 
first five years after finalization. The Department anticipates that 
the largest proportion of these estimated savings would result from 
repealing the 2016 Rule's provisions related to mandatory notices. The 
Department projects additional savings from eliminating the requirement 
for OCR to weigh the presence or absence of language access plans, and 
from repealing provisions that duplicate existing regulatory 
requirements regarding the

[[Page 37163]]

establishment of grievance procedures. The Department estimates that 
there will be some additional costs to covered entities regarding 
training and revision of policies and procedures.
    The Department believes that the anticipated benefits--which 
include consistency with Federal statutes, appropriate respect for the 
roles of Federal courts and Congress, and reduction or elimination of 
ineffective, unnecessary, or confusing provisions--far outweigh any 
costs or burdens that may arise from the changes.

----------------------------------------------------------------------------------------------------------------
          Provision(s)                             Savings and benefits                           Costs
----------------------------------------------------------------------------------------------------------------
Sec. 1557: Elimination of         For provisions already vacated, eliminating them       No costs are
 Overbroad Provisions Related to   brings the Code of Federal Regulations in line with    anticipated for
 Sex and Gender Identity.          current law. For other provisions, eliminating them    provisions already
                                   restores the rule of law by confining regulation       vacated, and any
                                   within the scope of the Department's legal             possible costs for
                                   authority; restores Federalism by leaving to the       related provisions are
                                   States decisions properly reserved to them; and        not calculable based
                                   removes unjustified burdens on providers' medical      on available data.
                                   judgment.
Sec. 1557: Clarification of       Correcting this provision improves the rule of law by  Costs are not
 Scope of Covered Entities.        interpreting the statute according to its plain        calculable based on
                                   meaning as closely as possible.                        available data.
Sec. 1557: Elimination of         Eliminating these provisions reduces duplication,      The Department
 Unnecessary or Duplicative        inconsistency, and possible confusion in the           estimates $275.8
 Language on Civil Rights          Department's civil rights regulations, making it       million of costs in
 Enforcement.                      easier for covered entities and individuals to know    the first year for
                                   their respective responsibilities and rights.          revision of policies
                                                                                          and procedures, along
                                                                                          with corresponding
                                                                                          retraining of
                                                                                          employees. (These
                                                                                          costs encompass the
                                                                                          next listed set of
                                                                                          provisions as well.)
Sec. 1557: Elimination of         Eliminating these provisions reduces unnecessary,      See above.
 Unnecessary Regulatory Burdens.   unjustified, or excessive burdens on health
                                   providers, as well as excessive and confusing paper
                                   notices for patients. This will make healthcare more
                                   affordable and accessible for Americans and is
                                   estimated to save $585 million per year over the
                                   first five years.
Sec. 1557: Other Clarifications   Amending these provisions improves the rule of law by  No costs are
 and Minor Modifications.          ensuring that regulations remain subject to            anticipated, and any
                                   statutory protections for conscience and other civil   possible costs are not
                                   rights, and otherwise contributes to the goals of      calculable based on
                                   the other regulatory changes listed above.             available data.
Title IX regulations, related     This amendment ensures the rule of law by clarifying   No costs are
 amendment.                        that Title IX regulations are subject to the           anticipated, and any
                                   statute's own abortion-neutrality language and         possible costs are not
                                   religious exemption.                                   calculable based on
                                                                                          available data.
CMS regulations, conforming       These amendments restore the rule of law by confining  Costs are not
 amendments.                       regulations within the scope of their legal            calculable based on
                                   authority, and ensure consistency in civil-rights      available data.
                                   enforcement across the Department's different
                                   programs.
----------------------------------------------------------------------------------------------------------------

II. Background

    On May 18, 2016, the Department finalized a regulation implementing 
Section 1557 of the ACA. The Department had received 402 comments \4\ 
in response to a related request for information in 2015, and 24,875 
comments \5\ in response to the relevant Notice of Proposed Rulemaking, 
80 FR 54172-221 (``2015 NPRM'').
---------------------------------------------------------------------------

    \4\ https://www.regulations.gov/docket?D=HHS-OCR-2013-0007. The 
comment docket identifies 162 submissions, but some submissions to 
the docket aggregated multiple comments.
    \5\ https://www.regulations.gov/docket?D=HHS-OCR-2015-0006. The 
comment docket identifies 2,188 submissions, but some submissions to 
the docket aggregated multiple comments, and ``the great majority'' 
of comments were not electronic but were submitted by mail as part 
of ``mass mail campaigns organized by civil rights/advocacy 
groups.'' 81 FR 31376.
---------------------------------------------------------------------------

    Multiple States and private plaintiffs challenged the 2016 Rule in 
Federal district courts in Texas and North Dakota on the grounds that 
it violated Federal laws, including the Administrative Procedure Act 
(``APA'') and the Religious Freedom Restoration Act (``RFRA'').\6\ On 
December 31, 2016, the U.S. District Court for the Northern District of 
Texas preliminarily enjoined, on a nationwide basis, portions of the 
2016 Rule that had interpreted Section 1557 to prohibit discrimination 
on the basis of gender identity and termination of pregnancy.\7\
---------------------------------------------------------------------------

    \6\ Complaint, Franciscan All., Inc. v. Burwell, No. 7:16-cv-
00108-O (N.D. Tex. Aug. 23, 2016); Religious Sisters of Mercy v. 
Burwell, No. 3:16-cv-386 (D.N.D. filed Nov. 7, 2016); Catholic 
Benefits Association v. Burwell, No.3:16-cv-432 (D.N.D. filed Dec. 
28, 2016).
    \7\ See Franciscan All., Inc. v. Burwell, 227 F. Supp. 3d 660, 
696 (N.D. Tex. 2016).
---------------------------------------------------------------------------

    On May 2, 2017, the Department of Justice, on behalf of HHS, filed 
a motion for voluntary remand to reassess the reasonableness, 
necessity, and efficacy of the enjoined provisions. On May 24, 2019, 
HHS issued a notice of proposed rulemaking (``the proposed rule'' or 
``the 2019 NPRM'') to amend the 2016 Rule, as well as its regulations 
effectuating Title IX,\8\ and to make conforming amendments to certain 
nondiscrimination provisions of CMS regulations \9\ covered by Section 
1557. On June 14, 2019, HHS published the proposed rule in the Federal 
Register \10\ and accepted public comment for 60 days thereafter.
---------------------------------------------------------------------------

    \8\ 20 U.S.C. 1681 et seq.; 45 CFR part 86 (Nondiscrimination on 
the Basis of Sex in Education Programs or Activities Receiving 
Federal Financial Assistance).
    \9\ 42 CFR 438.3, 438.206, 440.262, 460.98, 460.112; 45 CFR 
147.104, 155.120, 155.220, 156.200, 156.1230.
    \10\ 84 FR 27846 (June 14, 2019) (``Nondiscrimination in Health 
and Health Education Programs'').
---------------------------------------------------------------------------

    On October 15, 2019, upon motion of the plaintiffs, and adopting 
the reasoning from its preliminary injunction order, the U.S. District 
Court for the Northern District of Texas vacated and remanded the ``the 
unlawful portions'' of the 2016 Rule that had been subject to that 
order.\11\ On

[[Page 37164]]

November 21, 2019, the court clarified that ``the Court vacates only 
the portions of the Rule that Plaintiffs challenged in this 
litigation,'' namely, ``insofar as the Rule defines `On the basis of 
sex' to include gender identity and termination of pregnancy . . . The 
remainder of 45 CFR part 92 remains in effect.'' \12\
---------------------------------------------------------------------------

    \11\ Franciscan All., Inc. v. Azar, 414 F. Supp. 3d 928, 945 
(N.D. Tex. Oct. 15, 2019) (``Since the Court concludes that ``the 
Rule's conflict with its incorporated statute--Title IX--renders it 
contrary to law under the APA,'' the appropriate remedy is vacatur. 
Order 38, ECF No. 62. Accordingly, the Court VACATES and REMANDS the 
unlawful portions of the Rule for Defendants' further consideration 
in light of this opinion and the Court's December 31, 2016 Order.''; 
id. at 947 (``The Court ADOPTS its prior reasoning from the 
preliminary injunction (ECF No. 62) and now HOLDS that the Rule 
violates the APA and RFRA. Accordingly, the Court VACATES and 
REMANDS the Rule for further consideration.'').
    \12\ Order, Franciscan Alliance, No. 7:16-cv-00108-O *2 (N.D. 
Tex. filed Nov. 21, 2019).
---------------------------------------------------------------------------

    The Department herein finalizes the proposed rule without change, 
except as set forth below, after careful consideration of and responses 
to public comments.

III. Response to Public Comments on the Proposed Rule

    The Department received 198,845 comments in response to the 
proposed rule during the public comment period.\13\ Commenters included 
Members of Congress, State and local governments, State-based 
Exchanges, tribes and tribal governments, healthcare providers, health 
insurers, pharmacies, religious organizations, civil rights groups, 
non-profit organizations, and individuals, among others.
---------------------------------------------------------------------------

    \13\ See https://www.regulations.gov/docket?D=HHS-OCR-2019-0007. 
The comment docket identifies 155,966 submissions, but some 
submissions to the docket aggregated multiple comments. HHS 
estimates the disaggregated number of comments to be 198,845.
---------------------------------------------------------------------------

A. General Comments

    Comment: Several commenters, including healthcare providers, 
explained that although they support nondiscrimination in healthcare 
and equal access to healthcare for all patients, they have difficulty 
complying with the parameters of the 2016 Rule. They believe that civil 
rights protections should be balanced against the burdens they create. 
Accordingly, these commenters support the proposed regulation as it 
limits the burdens imposed on providers.
    Response: The Department agrees with these commenters' support of 
nondiscrimination in healthcare and intends to robustly enforce the 
civil rights authorities. The Department is also cognizant of unduly 
burdensome regulations. For example, the 2016 Rule did not anticipate 
some costs to covered entities that range from hundreds of millions to 
billions of dollars as a result of notice and taglines requirements. 
Therefore, this final rule seeks to alleviate certain burdens on 
covered entities while still enforcing the nondiscrimination 
requirements of Title VI, Title IX, the Age Act, and Section 504.
    Comment: Some commenters said the proposed rule would stabilize 
services for individuals with disabilities and create a more equitable 
distribution of health services.
    Response: The Department agrees. This final rule maintains 
appropriate protections for individuals with disabilities and will 
provide clarity for providers and individuals.
    Comment: Several commenters expressed concern that eliminating 
discrimination protections in Section 1557 will cause confusion about 
patients' rights and remove access to administrative remedies that were 
previously available.
    Response: The Department recommits itself in this rule to enforcing 
nondiscrimination on the basis of all categories protected by statute. 
The Department is confident that the clarity associated with 
maintaining longstanding prohibitions on discrimination under Title VI, 
Title IX, the Age Act, and Section 504, and their respective 
implementing regulations, will outweigh any initial confusion stemming 
from the change.
    Comment: Some commenters noted the extensive process involved in 
developing the 2016 Rule, which included a request for information, the 
2015 NPRM, and the 2016 Rule, with the Department considering more than 
24,875 public comments. Such commenters suggested this proposed rule 
unnecessarily reopens the 2016 Rule and ignores the reasoned process 
that the Department had previously completed. Also, a commenter asked 
why the Department did not publish a request for information before the 
proposed rule. Others stated that the proposed rule relies 
disproportionately on a single district court case, Franciscan 
Alliance,\14\ to justify a new interpretation of sex. The commenters go 
on to suggest that the Department relied exclusively on Franciscan 
Alliance to open up the entire 2016 Rule for edits while ignoring 
numerous other court cases that come to opposing conclusions regarding 
sex discrimination.\15\
---------------------------------------------------------------------------

    \14\ Franciscan Alliance, Inc. v. Burwell, 227 F. Supp. 3d 660 
(N.D. Tex. 2016).
    \15\ Commenters cited Boyden v. Conlin, 341 F. Supp. 3d 979 
(W.D. Wisc. 2018) (holding Wisconsin's use of transgender exclusions 
in its state employee health insurance plan constituted sex 
discrimination in violation of Section 1557 and Title VII); Flack v. 
Wis. Dept. of Health Servs., 328 F. Supp. 3d 931, 951 (W.D. Wis. 
2018); Prescott v. Rady Children's Hospital-San Diego, 265 F. Supp. 
3d 1090, 1098-100 (S.D. Cal. 2017) (finding Section 1557's plain 
language bars gender identity discrimination); Tovar v. Essential 
Health, 342 F. Supp. 3d 947, 957 (D. Minn. 2018) (same).
---------------------------------------------------------------------------

    Response: On December 31, 2016, the Franciscan Alliance court 
preliminarily enjoined the 2016 Rule's gender identity and termination 
of pregnancy provisions on a nationwide basis, finding them unlawful 
under the APA and RFRA. A few weeks later, a second Federal district 
court preliminarily stayed enforcement of the 2016 Rule against two 
other plaintiffs, citing the Franciscan decision.\16\ Because of the 
nationwide preliminary injunction, the Department could not enforce 
certain provisions from the 2016 Rule. In the process of reconsidering 
the 2016 Rule, and consistent with applicable Executive Orders and 
deregulatory priorities, the Department examined the rule more broadly 
and concluded that, for the reasons explained in the 2019 NPRM, the 
2016 Rule had significantly underestimated the costs and burdens it 
imposed. Because Section 1557 authorizes, but does not require, the 
creation of new implementing regulations, the Department considered it 
appropriate to repeal certain portions of the 2016 Rule and enforce 
Section 1557 using the underlying regulations the Department has used 
to enforce the relevant civil rights statutes identified in Section 
1557. The Department also considered the Executive Branch's most recent 
statements concerning the interpretation of statutory provisions that 
prohibit discrimination on the basis of sex.
---------------------------------------------------------------------------

    \16\ Religious Sisters of Mercy v. Burwell, Nos. 3:16-cv-386 & 
3:16-cv-432 (D.N.D. Order of January 23, 2017). See 84 FR 27848.
---------------------------------------------------------------------------

    The Department published its proposed rule in the Federal Register 
on June 14, 2019, opening a two-month public comment period. The 
Department received nearly 200,000 comments for its review. Through 
this public comment period, the public was given a full opportunity to 
provide the Department with information regarding the proposal. It is 
not necessary to engage in an additional solicitation of public 
comments through a request for information before the notice of 
proposed rulemaking. The Department also reviewed the 2016 Rule record 
and its public comments in considering this final rule.
    Through this rulemaking, the Department has provided a 
comprehensive rationale for this final rule. The 2019 NPRM summarized 
the Department's legal authority to change the 2016 Rule along with 
policy rationales for doing so. The quantum of evidence necessary to 
justify rescinding provisions of a rule is not greater than the 
evidence needed for issuing it in the

[[Page 37165]]

first place.\17\ Moreover, after publication of the proposed rule, the 
Court in Franciscan Alliance issued its final judgment vacating and 
remanding the unlawful portions of the 2016 Rule for the Department's 
further consideration. The Department has considered that vacatur, 
along with the legal authorities and policy rationales discussed in the 
NPRM and this preamble, and more thoroughly calculated the costs and 
effects of the notice and taglines requirements, to arrive at this 
final rule. Specific responses to comments on its various provisions, 
including on sex discrimination, are found below.
---------------------------------------------------------------------------

    \17\ See 84 FR 27850; F.C.C. v. Fox Television Stations, Inc., 
556 U.S. 502, 514-15 (2009).
---------------------------------------------------------------------------

    Comment: Some commenters expressed concern that the updated Section 
1557 regulations will have unintended consequences and costs for 
healthcare providers and individuals seeking healthcare and insurance, 
particularly pertaining to access standards for people with LEP and 
communication-based disabilities, in part because the regulatory 
drafting period was shorter than the period for the 2016 Rule.
    Response: The Department has spent several months carefully 
reviewing comments, providing responses to them in this rule, and 
finalizing the proposed rule. The Department is leaving several 
substantive provisions of the 2016 Rule unchanged or substantially 
unchanged. The changes largely consist of excisions of regulatory text 
as opposed to the addition of new text, so it is unsurprising that the 
regulatory drafting period was shorter than the period for the 2016 
Rule. In many instances where new or modified regulatory text was 
proposed, such text was based on existing guidance or regulatory text. 
The Department considers this to be an adequate process and a 
sufficient period of time to engage in such rulemaking.
    This final rule maintains vigorous protections for people with LEP 
and communication-based disabilities, as discussed in detail below, and 
the Department intends to continue robust enforcement of those 
protections.
    Comment: Several commenters indicated that the cost savings cited 
in the proposed rule are unsupported or based on insufficient data. 
Several commenters also contend that the proposed rule ignores the 
costs to individuals, especially LEP individuals, who will allegedly 
encounter additional barriers to accessing healthcare as a result of 
the proposed changes. Some commenters were concerned that the proposed 
rule would help eliminate access to a wide range of affordable 
preventive health services, including cancer screenings, contraception, 
and reproductive health services. The commenters believe this loss of 
access will largely be caused by the proposed changes to the definition 
of sex discrimination. Many commenters expressed concern that the 
proposed rule would remove civil rights protections for a number of 
vulnerable groups, including LEP individuals, LGBT individuals, 
individuals with disabilities, and women seeking reproductive 
healthcare. Such commenters state that the removal of these protections 
would, in turn, result in even greater health disparities for these 
vulnerable populations. Some commenters stated that the proposed rule 
would lead to increased discrimination in healthcare, which would lead 
people to delay or forego healthcare and would result in adverse health 
outcomes and greater overall healthcare costs to individuals. Some of 
these commenters note that based on these anticipated increased 
disparities, the proposed rule is effectively encouraging 
discrimination.
    Response: This final rule leaves in place all statutory civil 
rights protections for vulnerable groups. Cost savings are treated in 
the Regulatory Impact Analysis below, which discusses the data, 
estimates, and assumptions used to support its calculations. Potential 
health disparities or other alleged costs to individuals or vulnerable 
groups, including those due to discrimination or barriers to access, 
are discussed in the relevant sections below (e.g., potential costs to 
LEP individuals are discussed in comments on those sections of the 
regulation that deal with national-origin discrimination and/or LEP, 
while potential costs relating to the gender identity provision are 
discussed in comments on the section regarding ``discrimination on the 
basis of sex'').
    Comment: Many commenters expressed their belief that this proposed 
rule diverges from the current body of civil rights laws. These 
commenters believe that limiting protections based on gender identity, 
termination of pregnancy, and LEP, runs contrary to civil rights 
protections.
    Response: Current civil rights laws and their protections are 
discussed, respectively, in the relevant sections below (e.g., civil 
rights law on gender identity is discussed in the section on 
``discrimination on the basis of sex,'' because the 2016 Rule had 
classified gender identity discrimination as a form of sex-based 
discrimination).
    Comment: Some commenters stated that civil rights protections 
should not be eliminated because of compliance costs faced by covered 
entities, and that such balancing runs contrary to the Affordable Care 
Act and the Administrative Procedure Act. Such commenters argue that if 
the Department determines that particular protections are too costly or 
onerous, it should advance more limited protections rather than 
eliminating them entirely.
    Response: This final rule does not, and could not, repeal or 
eliminate specific protections under any of the four civil rights 
statutes referenced in Section 1557, and it does not remove the 
protections provided by the implementing regulations for those 
statutes.
    The Department has, however, chosen to reduce some excessive 
burdens that were applied to covered entities by the 2016 Rule, but 
were not required by Section 1557, where the relevant civil rights 
protections could be enforced using the underlying regulations without 
the unnecessary burdens imposed by the 2016 Rule.
    Comment: Commenters stated that the Department exceeded its 
authority by proposing this rule. Some commenters indicated that the 
Department's positions as advanced in the proposed rule are not worthy 
of deference under the framework established in Chevron, U.S.A., Inc. 
v. Nat. Res. Def. Council, Inc., 467 U.S. 837 (1984), because the 
proposed rule is contrary to clear congressional intent and is 
inconsistent with the agency's past policies concerning sex 
protections. Many of these commenters assert that the changes set forth 
in the proposed rule run contrary to the requirements of the ACA, 
pointing to 42 U.S.C. 18114 (Section 1554), which states that the 
Department shall not ``promulgate any regulation that--(1) creates any 
unreasonable barriers to the ability of individuals to obtain 
appropriate medical care; (2) impedes timely access to health care 
services. . .'' These commenters also state that the Department is 
attempting to make a legislative change through an administrative 
action. Some commenters contend that the proposed rule runs contrary to 
the general intent of the ACA, namely that all individuals should be 
provided access to healthcare.
    Response: The 2016 Rule tried to make essentially legislative 
changes through administrative action, and those changes were rightly 
held to be in violation of the APA. The Department does not exceed its 
authority by rescinding the portions of the 2016 Rule that exceeded the 
Department's authority. The Department also does not

[[Page 37166]]

violate Section 1554 of the ACA by not including the gender identity 
and termination of pregnancy provisions in this final rule, which were 
not supported by the text of the underlying civil rights laws 
incorporated in Section 1557, and in addition were vacated by court 
order.
    With respect to both Sections 1554 and 1557, the Department 
interprets the ACA by the plain meaning of its text, and as will be 
shown below, this final rule brings the Department's Section 1557 
regulations in line with a proper understanding of the ACA's text. 
Parts of the 2016 Rule exceeded the Department's authority under the 
ACA, and this final rule formally eliminates those portions from the 
Code of Federal Regulations. The Department believes this approach 
adheres more closely to the text of the statutes referenced in Section 
1557, along with the regulations that the Department has used to 
implement those statutes for decades. Other parts of the 2016 Rule are 
being modified or repealed in order to save providers from unnecessary 
burdens not required by the ACA, so that they are better able to 
achieve the statute's goal of providing healthcare access to all 
Americans. Such a reconsideration and elimination of certain regulatory 
provisions, particularly regulations that the ACA itself did not 
require to be issued, neither ``creates'' unreasonable regulatory 
barriers nor impedes timely access to healthcare. If it were otherwise, 
Section 1554 would essentially serve as a one-way ratchet, preventing 
the Department from ever reconsidering a regulation that could be 
characterized as improving access to healthcare in some sense, 
regardless of the other burdens such regulation may impose on access to 
health care. The Department's approach in this final rule is also 
consistent with the Ninth Circuit's recent interpretation of Section 
1554: ``[t]he most natural reading of Sec.  1554 is that Congress 
intended to ensure that HHS, in implementing the broad authority 
provided by the ACA, does not improperly impose regulatory burdens on 
doctors and patients.'' \18\ As explained throughout the preamble, the 
Department's rule avoids precisely such burdens by bringing the section 
1557 regulations into alignment with the longstanding requirements of 
the applicable civil rights laws and their implementing regulations 
(thereby also avoiding additional conscience burdens that the 2016 Rule 
potentially imposed) and by removing notice and taglines requirements 
that imposed unjustified burdens on the healthcare system as a whole 
(some of which would likely have been passed on to individuals).
---------------------------------------------------------------------------

    \18\ California v. Azar, No. 19-15974, 2020 WL 878528, at *18 
(9th Cir. Feb. 24, 2020 (en banc).
---------------------------------------------------------------------------

    Comment: Commenters said that Section 1557 should be construed 
broadly because throughout the ACA, Congress prohibited a variety of 
forms of discrimination, such as against pre-existing conditions and 
combating health disparities. Commenters also indicated that the ACA is 
intended to reduce the cost of healthcare discrimination against the 
poor, so the Section 1557 rule should implement cost sharing and other 
insurance requirements.
    Response: In the ACA, Congress labeled several provisions other 
than 1557 as prohibiting discrimination \19\ in healthcare, but did not 
incorporate those other provisions of the ACA into Section 1557. Those 
other provisions are different from the civil rights provisions set 
forth in Section 1557 in substance, implementation, and enforcement. 
This final rule commits the Department to robust enforcement of the 
nondiscrimination grounds applicable under Section 1557.
---------------------------------------------------------------------------

    \19\ See, e.g., ACA Section 2701 (``discriminatory premium 
rates''); Section 2716 (``discrimination based on salary''); Section 
2705 (``discrimination against individual participants and 
beneficiaries based on health status''); Section 2716 
(``discrimination in favor of highly compensated individuals'').
---------------------------------------------------------------------------

    Comment: A commenter contended that the Department provided little 
or no legal, policy, or cost-benefit analysis along with the proposed 
rule and combined too many changes into a single rule. Some commenters 
claimed the proposed rule is arbitrary, capricious, and contrary to 
law, is inconsistent with the agency's mission, and lacks reasoned 
explanations justifying the policy reversals. Other commenters stated 
that HHS failed to account for the extensive history of healthcare 
discrimination, and provided no contrary data to counter the original 
factual findings in the 2016 Rule. Furthermore, they said that 
individuals have reasonably placed their reliance upon the Federal 
government to protect their civil rights as explained in the 2016 Rule.
    Response: The Department provided ample legal, policy, and cost-
benefit analysis for the proposed rule and provides additional support 
here for the final rule.\20\ The Department proposed changes to the 
provisions of the 2016 Rule because that rule exceeded the Department's 
authority under Section 1557, adopted erroneous and inconsistent 
interpretations of civil rights law, caused confusion, imposed 
unjustified and unnecessary costs, and conflicted with applicable court 
decisions. It is unfortunate that, by administrative action, the 2016 
Rule may have unreasonably raised expectations about nondiscrimination 
protections that are not found in the underlying statutes, but this 
final rule cannot be held responsible for that. The Department gave 
extensive reasons for its changes in the 2019 NPRM, and gives further 
reasons in response to comments below. The public comment process 
provided adequate opportunity to present legal, policy, and cost-
benefit analyses, all of which were considered in finalizing this rule, 
as discussed herein.
---------------------------------------------------------------------------

    \20\ See 45 FR at 27875-88.
---------------------------------------------------------------------------

    The Department also updates and discusses the regulatory impact 
analysis based on comments and data received. While there are still 
some questions addressed by this final rule where robust data are 
unavailable, were not found by the Department, or have not been brought 
to the Department's attention, the Department is allowed to engage in 
rulemaking even where the impact of a rule change is difficult or 
impossible to quantify. The Department has diligently considered the 
relevant and significant data of which it is aware.
    There is no artificial limit on the number of changes a proposed 
rule may contain--or on the number of parts in the Code of Federal 
Regulations that can be addressed in a rulemaking. This final rule 
contains many fewer changes than the 2016 Rule did, and it 
substantially streamlines the existing 1557 regulation as opposed to 
enlarging it. Its inclusion of conforming changes to various CMS 
regulations still gives the final rule a size and scope that is well 
within the range of other significant proposed rules.
    Comment: Several commentators stated that the proposed rule's 
language that Title IX and Section 1557 must be ``exercised with 
respect for State sovereignty'' runs contrary to the Supreme Court's 
decision that Congress has the authority to prohibit discrimination in 
commercial activity.
    Response: This final rule does not, nor does the Department intend 
to, remove any protection against State action that Congress has 
provided by statute. It also does not deny States the ability to 
provide protections that exceed those required by Federal civil rights 
law. The reference to State sovereignty simply refers to the 
Department's intention to protect the States by respecting their 
sovereignty to the extent that doing so does not infringe on Federal 
law.
    Comment: One commenter noted that, after the 2016 Rule was passed, 
the

[[Page 37167]]

Department released resources and educational materials, including fact 
sheets, to explain the 2016 Rule. The commenter requested that the 
Department release similar resources and educational materials 
following the finalization of this rule.
    Response: The Department is providing the responses to comments 
contained in this preamble to clarify issues and answer questions 
concerning this final rule. Furthermore, the Department continues to be 
committed to providing resources and educational materials to explain 
civil rights requirements and to assist covered entities with 
compliance with civil rights statutes and the regulations thereunder, 
including this regulation.

B. Section 1557 Regulation, Subpart A: General Requirements and 
Prohibitions

    The Department proposed changes to the Section 1557 rule at 45 CFR 
part 92 to be composed of Subpart A on general requirements and 
prohibitions, and Subpart B on specific applications related to 
disability nondiscrimination and language access.
(1) Proposed Repeal of Definitions in Sec.  92.4 of the 2016 Rule
    Comments: A commenter contended that eliminating the definitions 
section in the Section 1557 Regulation would cause confusion, 
misinterpretation, and inconsistency of terms among the regulations 
that currently reference or otherwise rely on the underlying 
definitions in the 2016 Rule.
    Response: In significant part, the definitions section of the 2016 
Rule duplicates definitions already incorporated into the Section 1557 
regulation by reference, and hence creates either inconsistency or 
redundancy. In other cases, the 2016 Rule contained definitions 
inconsistent with the text of applicable statutes; indeed, on those 
grounds, a Federal district court vacated the 2016 Rule's definition of 
``on the basis of sex'' insofar as it encompassed gender identity and 
termination of pregnancy. The Department will continue to enforce 
Section 1557 using HHS regulations for the underlying civil rights 
statutes. Many of these regulations have definition sections and 
operate based on longstanding understandings of how the laws are 
enforced.
    Comments: Some commenters argued that eliminating the phrases 
``covered entities'' and ``health program or activities'' would allow 
many plans and programs to be exempt from the Section 1557 regulation. 
Other commenters stated that the existing definitions provide clarity 
and consistency for covered entities. Another commenter stated that the 
proposed rule would limit Section 1557's application to the specific 
program or activity that receives Federal assistance, rather than a 
healthcare entity's entire operations.
    Response: See below, under ``Scope of Application in Proposed Sec.  
92.3,'' for a discussion of the entities subject to this final rule.
    Comment: Some commenters asked the Department to retain the 
definition of ``auxiliary aids and services'' concerning effective 
communication for individuals with disabilities. They also asserted 
that the Department has altered important definitions related to 
effective communication, without explanation or acknowledgement. While 
some commenters appreciated the Department's efforts to incorporate 
many of the current definitions of Title II of the Americans with 
Disabilities Act \21\ (``ADA''), some claim the Department has erred in 
tracking the language of those definitions.
---------------------------------------------------------------------------

    \21\ 42 U.S.C. 12101 et seq.
---------------------------------------------------------------------------

    Response: The Department is not required to track ADA definitions 
in its Section 1557 regulation. This final rule applies many 
definitions based on those found in the ADA or its regulations 
(including ``disability'' and ``auxiliary aids and services''), 
technical definitions and standards under the ADA, and Uniform Federal 
Accessibility Standards as promulgated; as discussed below, it also 
departs from ADA definitions in certain cases. Additionally, this final 
rule retains effective communication standards for individuals with 
disabilities under Sec.  92.102; these provisions are drawn from 
regulations promulgated by the Department of Justice implementing Title 
II of the ADA.\22\ Specific definitions and provisions related to 
individuals with disabilities are discussed below.
---------------------------------------------------------------------------

    \22\ 42 U.S.C. 12311; see also 28 CFR 35.160-164.
---------------------------------------------------------------------------

    The proposed rule apprised the public of the language the 
Department sought to finalize in the rule, gave the Department's 
reasons for changes relative to the 2016 Rule, and provided an 
opportunity to comment on the proposed language.
    Comment: Some commenters opposed the proposed removal of the 
definition for ``national origin,'' saying it would lead to confusion 
among providers and recipients as to what constitutes discrimination on 
the basis of national origin.
    Response: The term ``national origin'' is not specifically defined 
in Title VI or in HHS's implementing regulation, but the Department has 
appropriately enforced the prohibition on national origin 
discrimination under Title VI for decades in accord with relevant case 
law. In implementing this final rule, the Department intends to enforce 
vigorously the prohibition on national origin discrimination in a 
manner consistent with the current interpretation under Title VI, 
including under Lau v. Nichols, as discussed below.\23\
---------------------------------------------------------------------------

    \23\ Lau v. Nichols, 414 U.S. 563 (1974).
---------------------------------------------------------------------------

    Comment: Some commenters asserted that the removal of definitions 
weakens protections for LEP individuals and signals a lack of priority 
for enforcement by the Department.
    Response: As discussed below, meaningful access for individuals 
with LEP is a key component of the national origin protections under 
Title VI and Section 1557, and will be well protected by this final 
rule. The streamlining of this regulation through the elimination of 
largely redundant definitions will in no way impede the Department's 
strong commitment to meaningful access for LEP individuals.
    Summary of Regulatory Changes: The Department finalizes its repeal 
of Sec.  92.4 of the 2016 Rule without change. Additional comments 
concerning the definitions of sex, gender identity, and other specific 
definitions are discussed in more detail below.
(2) General Changes to 2016 Rule
a. Purpose of Regulation, Revising Sec.  92.1 of the 2016 Rule
    The Department proposed to revise the statement of the purpose of 
the regulation in Sec.  92.1 from ``implement[ation]'' of Section 1557 
to ``provid[ing] for the enforcement'' of Section 1557. 84 FR at 27861.
    Comment: A commenter said this change in language allows the 
Department to minimize its involvement in ensuring that 
nondiscrimination protections are effective.
    Response: This is the opposite of the Department's intention. This 
final rule's title and citation to statutory authority already make 
clear that it is implementing Section 1557. By changing the rule's 
language from ``implement'' to ``provide for the enforcement of,'' the 
Department simply means to emphasize, in terms accessible to a lay 
audience, that it will fully enforce Section 1557 and the underlying 
nondiscrimination laws as they fall within the jurisdiction of the 
Department, according to the text of those laws and their implementing 
regulations.

[[Page 37168]]

b. Effective Date
    The Department proposed that the effective date of the revised 
regulation be 60 days after publication of the final rule, in order to 
relieve significant regulatory burdens, particularly the taglines 
requirements.\24\ The 2016 Rule's effective date was July 18, 2016 (60 
days after publication of the final rule), with the exception of the 
provisions on health insurance and benefit design, which went into 
effect on January 1, 2017 (the first day of the first plan year 
following the effective date).\25\ The new rule does not include a 
different effective date for health insurance and benefit design.
---------------------------------------------------------------------------

    \24\ 84 FR at 27888.
    \25\ 81 FR at 31378.
---------------------------------------------------------------------------

    Comment: Commenters asked that the Department make the effective 
date several months prior to the plan open enrollment period that 
occurs between November 1 and December 15, in order for the covered 
entities to have sufficient time to incorporate the regulatory changes 
into the next plan year.
    Response: The Department has endeavored to issue this final rule 
sufficiently in advance of the plan year cycle, so that plans can 
incorporate the regulatory changes into the next plan year. Moreover, 
because this final rule generally relieves regulatory requirements 
rather than adding them, it should be easier for issuers to incorporate 
such changes into the plans they will offer for the next plan year.
    Comment: Commenters stated that it is inappropriate to finalize the 
change to the definition of sex as it relates to Section 1557 in light 
of current litigation before the Supreme Court, which may be resolved 
by the end of the court's term or before. These commenters note that 
the Supreme Court's ruling in R.G. & G.R. Harris Funeral Homes v. EEOC 
& Aimee Stephens \26\ will determine whether Title VII of the Civil 
Rights Act of 1964 extends sex discrimination protections to 
transgender status, and that the ruling may apply to the definition of 
sex under Title IX as well. Accordingly, these commenters urge the 
Department to wait until the Supreme Court decides Harris Funeral Homes 
before publishing a rule that deals with the same subject matter, or 
allow for commenters to comment again once the case has been decided.
---------------------------------------------------------------------------

    \26\ R.G. & G.R. Harris Funeral Homes, Inc. v. E.E.O.C., 139 S. 
Ct. 1599 (2019).
---------------------------------------------------------------------------

    Response: The Department acknowledges the commenters' point of view 
but respectfully disagrees. The U.S. government has taken the position 
in Harris and other relevant litigation that discrimination ``on the 
basis of sex'' in Title VII and Title IX does not encompass 
discrimination on the basis of sexual orientation or gender 
identity.\27\ The Department shares that position and is permitted to 
issue regulations on the basis of the statutory text and its best 
understanding of the law and need not delay a rule based on speculation 
as to what the Supreme Court might say about a case dealing with 
related issues. The Department also agrees with the Franciscan Alliance 
ruling, according to which the 2016 Rule's extension of sex-
discrimination protections to encompass gender identity was contrary to 
the text of Title IX and hence not entitled to Chevron deference.\28\ 
Moreover, to the extent that a Supreme Court decision is applicable in 
interpreting the meaning of a statutory term, the elimination of a 
regulatory definition of such term would not preclude application of 
the Court's construction.
---------------------------------------------------------------------------

    \27\ As noted elsewhere in this preamble, it has been the 
consistent position of the federal government that ``on the basis of 
sex'' under Section 1557 does not encompass sexual orientation, 
including the decision in the 2016 Rule not to include sexual 
orientation in the definition of that term. See 81 FR at 31390.
    \28\ Franciscan All., Inc. v. Azar, 414 F. Supp. 3d 928, 945 
(N.D. Tex. Oct. 15, 2019) (incorporating its previous ruling at 227 
F. Supp. 3d at 685-87).
---------------------------------------------------------------------------

    The Department continues to expect that a holding by the U.S. 
Supreme Court on the meaning of ``on the basis of sex'' under Title VII 
will likely have ramifications for the definition of ``on the basis of 
sex'' under Title IX.\29\ Title VII case law has often informed Title 
IX case law with respect to the meaning of discrimination ``on the 
basis of sex,'' \30\ and the reasons why ``on the basis of sex'' (or 
``because of sex,'' as used in Title VII) does not encompass sexual 
orientation or gender identity under Title VII have similar force for 
the interpretation of Title IX. At the same time, as explained below, 
the binary biological character of sex (which is ultimately grounded in 
genetics) takes on special importance in the health context. Those 
implications might not be fully addressed by future Title VII rulings 
even if courts were to deem the categories of sexual orientation or 
gender identity to be encompassed by the prohibition on sex 
discrimination in Title VII. As a result, the Department considers it 
appropriate to finalize this rule, which does not define sex, but 
relies on the plain meaning of the term under Title IX, and does so in 
the health context within which the Department applies Title IX under 
Section 1557.
---------------------------------------------------------------------------

    \29\ See 84 FR 27855.
    \30\ See, e.g., Yusuf v. Vassar Coll., 35 F.3d 709, 714 (2d Cir. 
1994).
---------------------------------------------------------------------------

    Comment: Commenters disagreed with the Department's reliance on the 
litigation and court order in Franciscan Alliance to justify revisiting 
the rule, because the injunctive order was not permanent, was allegedly 
limited to enforcement actions of HHS, and does not require new 
rulemaking, and because other litigants have intervened in the case to 
defend the 2016 Rule. Some commenters stated that although the U.S. 
District Court in Franciscan Alliance ruled against the 2016 Rule's 
definition of sex, other courts have come to conclusions that suggest 
the opposite, and HHS is not required to alter Department-wide policy 
based on the injunction in Franciscan Alliance. Others argued that the 
Department improperly relied on one legal decision that they said 
conflicts with the clear weight of case law. Another commenter stated 
it would be inappropriate to publish any new rule before a final ruling 
in Franciscan Alliance, as the case is being appealed.
    Response: Nearly three years after the preliminary injunction, and 
after the comment period on the proposed rule had concluded, the court 
in Franciscan Alliance issued a final ruling vacating the 2016 Rule 
``insofar as the Rule defines 'On the basis of sex' to include gender 
identity and termination of pregnancy,'' and remanding the Rule for 
further consideration.\31\ This final ruling is binding on the 
Department despite the appellate proceedings still pending in that 
case: The Department's Section 1557 regulation, as currently operative, 
does not contain the 2016 Rule's definition of ``on the basis of sex'' 
to encompass gender identity and termination of pregnancy. The 
Franciscan Alliance court's 2016 injunction gave the Department good 
cause to reconsider the 2016 Rule, but neither the injunction nor the 
vacatur was the Department's only reason for revising it, as the 
proposed rule made clear and as the Department's responses to comments 
in this preamble reiterate. Nothing in the appellate litigation 
prohibits the Department from finalizing this rule, which it does for 
the reasons given in this preamble. As for the weight of case law, it 
is discussed below with respect to the respective provisions of this 
final rule.
---------------------------------------------------------------------------

    \31\ Order, Franciscan Alliance, No. 7:16-cv-00108-O *2 (N.D. 
Tex. filed Nov. 21, 2019).
---------------------------------------------------------------------------

    Comment: One commenter noted that the Department's announcement of 
the proposed rule on May 24, 2019 had stated that a fact sheet 
explaining the changes in the proposed rule would be

[[Page 37169]]

provided in Spanish. However, no such fact sheet has been provided. 
Accordingly, the commenter requested that the comment period be 
extended until 60 days after the fact sheet is published in Spanish.
    Response: The proposed rule itself did not purport to offer 
information in Spanish, and the Department was not under a legal 
obligation to offer a separate fact sheet or to translate it. The 
Department's press release indicated that a fact sheet, separately 
created in connection with the press release, would be translated. That 
is not a basis for reopening the comment period on the proposed rule, 
because the proposed rule provided the public with adequate notice and 
a 60-day public comment period, which were legally sufficient.
c. Severability
    The Department proposed to repeal the provision in Sec.  92.2(c) of 
the 2016 Rule stating that if a regulatory provision in this part were 
held invalid or unenforceable on its face or as applied to a specific 
person or circumstances, the provision should be construed to the 
maximum effect permissible by law and be severable such that it would 
not affect other persons or circumstances that are dissimilar.
    Comment: Commenters asked the Department to add a severability 
provision to the final rule. Specific points recommended included 
severing repeal of the provisions related to the notices and taglines, 
and/or the changed scope of applicability, from the sex discrimination 
provisions. Commenters said that the Supreme Court case K-Mart Corp. v. 
Cartier, Inc., 108 S. Ct. 1811 (1988), would allow the Department to 
sever the changes in the taglines provision from the proposed rule and 
implement those changes even in the event that a court delays or 
suspends the proposed rule.
    Response: In part due to these comments, the Department has decided 
not to finalize the proposal to eliminate the severability provision 
from the 2016 Rule. Instead the Department will retain that 
severability provision, but has moved it to Sec.  92.3(d), because 
Sec.  92.3 is now the provision addressing the application of the rule. 
This change will be discussed again below in the discussion of Sec.  
92.3.
d. Summary of Regulatory Changes
    For the reasons described in the proposed rule, and having 
considered the comments received, the Department finalizes the proposed 
Sec.  92.1 without change, and confirms that the effective date of this 
final rule will be 60 days after its publication in the Federal 
Register.
(3) Scope of Application in Proposed Sec.  92.3; Repeal of Sec.  92.208
    The Department proposed to repeal Sec.  92.2 of the 2016 Rule, and 
instead address the scope of application of Section 1557 in a new Sec.  
92.3. 84 FR at 27862-63. The Department also proposed to repeal Sec.  
92.208 of the 2016 Rule, which had expanded the scope of the Section 
1557 statutory provision to apply to certain employee health benefits 
programs.\32\
---------------------------------------------------------------------------

    \32\ Compare 45 CFR 92.208 (employer liability for 
discrimination in employee health benefit programs in Section 1557) 
with 45 CFR 86.56 (discrimination on the basis of sex in fringe 
benefits under Title IX. The enforcement Memorandum of Understanding 
(MOU) between OPM and the Department, signed by OCR on 11 January 
2017, is moot upon publication of this final rule.
---------------------------------------------------------------------------

a. Generally
    Comment: Commenters argued the Department did not provide a 
reasoned legal, policy, or cost-benefit analysis to support the repeal 
of Sec.  92.208, which hindered their ability to provide meaningful 
comments as required by the APA. The commenters maintained that the 
Department's comparison of Sec.  92.208 to Title IX \33\ was flawed, in 
part because HHS's Title IX regulation does not apply to all bases of 
discrimination or many of the same covered entities as addressed under 
Section 1557. Some commenters noted that employees deserve protection 
from discrimination in employer-sponsored plans.
---------------------------------------------------------------------------

    \33\ 84 FR at 27869, n.148 (comparing Sec.  92.208 with 45 CFR 
86.56 (discrimination on the basis of sex in fringe benefits under 
Title IX)).
---------------------------------------------------------------------------

    Response: As seen below in the response to a similar comment on 
Sec.  92.207, Sec.  92.208 appears in the NPRM in a list of sections of 
the 2016 Rule that ``are duplicative of, inconsistent with, or may be 
confusing in relation to the Department's preexisting Title VI, Section 
504, Title IX, and the Age Act regulations.'' \34\ The Department 
repeals Sec.  92.208 for reasons similar to those given at greater 
length below in discussing Sec.  92.207: It seeks to relieve regulatory 
burden and possible confusion by enforcing the relevant 
nondiscrimination statutes through their existing regulations.
---------------------------------------------------------------------------

    \34\ 84 FR 27869.
---------------------------------------------------------------------------

    The Department is not aware of data and methods available to make 
reliable estimates of all economic impacts predicted by various 
commenters. The Department's estimates of regulatory impact are 
discussed below.
    Comment: Commenters stated that individuals protected by Section 
1557, particularly individuals with disabilities, frequently experience 
discrimination in healthcare. Commenters expressed concerns that the 
narrowed application would reduce the number of covered entities and 
would lead to more discrimination, lack of care, and adverse health 
outcomes, which they argued is contrary to the stated Congressional 
intent and purpose of the ACA to expand access to and end 
discrimination in health insurance. Several State and local government 
commenters expressed concern that the proposed rule would negatively 
affect public health in their States and increase costs to States due 
to more people seeking care through government-funded programs, such as 
Medicaid.
    Conversely, other commenters were supportive of the proposed rule's 
revised scope and agreed that the 2016 Rule was far too broad in its 
application. They concurred that narrowing the scope of application 
would help rein in the regulatory excess and burden of the 2016 rule.
    Response: The Department must follow the text of the ACA. To the 
extent that Congressional intent and purpose are relevant, they are 
best determined by looking to the plain meaning of the statutory text. 
This final rule will enforce Section 1557's discrimination requirements 
against the entities that Congress intended them to be enforced 
against. The Department's specific reasoning in interpreting Section 
1557's scope of coverage follows.
b. Sec.  92.3(a): Covered Programs and Activities
    The Department proposed in Sec.  92.3(a) that, except as otherwise 
provided in part 92, the Section 1557 rule will apply to (1) any health 
program or activity, any part of which is receiving Federal financial 
assistance (including credits, subsidies, or contracts of insurance) 
provided by the Department; (2) any program or activity administered by 
the Department under Title I of the ACA; or (3) any program or activity 
administered by any entity established under Title I of the ACA.
    Comment: Some commenters opposed removing the full definition of 
``Federal financial assistance'' from the 2016 Rule and replacing it 
with the limited text under proposed Sec.  92.3(a)(1). They stated that 
the lack of specificity could lead to ambiguity and confusion. 
Commenters further asserted that the proposed rule was inconsistent 
with the Department's recently promulgated Protecting Statutory 
Conscience Rights in Health

[[Page 37170]]

Care (``2019 Conscience Rule''),\35\ which included an expansive 
definition of ``Federal financial assistance.'' \36\
---------------------------------------------------------------------------

    \35\ Protecting Statutory Conscience Rights in Health Care; 
Delegations of Authority, 84 FR 23170-01 (2019).
    \36\ 45 CFR 88.2.
---------------------------------------------------------------------------

    Response: The Department concludes it is appropriate to have a 
definition of Federal financial assistance that mirrors Section 1557's 
statutory text to include ``credits, subsidies, or contracts of 
insurance.'' In addition, the definitions applicable under the 
preexisting civil rights statutes still apply, and the Department 
believes it is more appropriate to apply those existing definitions 
than to maintain the ones in the 2016 Rule. Section 1557 says the 
enforcement mechanisms provided for and available under the underlying 
civil rights statutes shall apply, and the Department believes 
operating under those mechanisms and the definitions that have long 
been applicable to them, along with the language the Department retains 
in this final rule, is appropriate moving forward. The 2019 Conscience 
Rule was based on different statutes.
    Comment: Some commenters opposed the proposed rule's exclusion of 
Federal financial assistance that the Department ``plays a role'' in 
providing or administering, which had been included in the 2016 Rule's 
definition of Federal financial assistance. Commenters argued that the 
statute applies to programs or activities administered by ``an 
Executive Agency'' and thus should not be limited to HHS. In 
particular, they objected to the result that qualified health plans 
(QHPs) would no longer be covered under the rule on the basis that HHS 
plays a role in administering tax credits. The commenters argued that 
this interpretation is contrary to a plain reading of the statute, 
which not only uses the broad term ``Federal financial assistance'' 
(without a modifier to limit it to assistance directly administered by 
HHS), but also expressly includes ``credits'' as part of Federal 
financial assistance. Further, some commenters noted that the 
Department took an inconsistent and broader approach in its Conscience 
Rule, wherein HHS exerts jurisdiction over statutes and funding also 
administered by the U.S. Departments of Labor and Education.
    Response: The statutory text of Section 1557 refers simply to ``any 
health program or activity, any part of which is receiving Federal 
financial assistance, including credits, subsidies, or contracts of 
insurance.'' Because the Section 1557 regulation applies only to the 
Department, the 2015 NPRM had reasonably sought to limit its scope to 
Federal financial assistance from the Department, leaving other 
Departments to enforce Section 1557 within their own sphere.\37\ In the 
2016 Rule, however, wishing to encompass tax credits administered under 
Title I, the Department expanded the rule's scope to encompass 
``Federal financial assistance that the Department plays a role in 
providing or administering.'' \38\ The Department now regards this 
expansion as overbroad. While Section 1557 still applies to any health 
program or activity receiving any Federal financial assistance, this 
final rule prescribes enforcement only by the Department and within the 
Department's jurisdiction. The Department does not consider it 
appropriate in this final rule to apply its provisions to any programs 
that the Department ``plays a role in'' administering.
---------------------------------------------------------------------------

    \37\ 80 FR 54173 (``Section 1557 applies to all health programs 
and activities, any part of which receives Federal financial 
assistance from any Federal Department. However, this proposed rule 
would apply only to health programs and activities any part of which 
receives Federal financial assistance from HHS. This narrowed 
application is consistent with HHS' enforcement authority over such 
health programs and activities, but other Federal agencies are 
encouraged to adopt the standards set forth in this proposed rule in 
their own enforcement of Section 1557.'').
    \38\ 81 FR 31467, 31384; cf. 80 FR 54216.
---------------------------------------------------------------------------

    Commenters' concerns about covering QHPs are misplaced: These plans 
remain subject to this rule because they are sold on the Exchanges 
established under Title I of the ACA (see Sec.  92.3(a)(3) of this 
final rule). This final rule only prescribes enforcement of Section 
1557 by the Department and within the Department's jurisdiction, so the 
Department believes it is appropriate for this regulation to not 
include activities funded or administered solely by other Federal 
agencies even if Section 1557 may apply in those instances.
    The 2019 Conscience Rule (as stated above) relied on different 
statutes than the Section 1557 rule, and the Department drafts its 
regulations as appropriate for the underlying statutes.
    Comment: Commenters disapproved of proposed Sec.  92.3(a)(2), which 
would limit the rule's application in the context of HHS-administered 
programs or activities to only those administered under Title I of the 
ACA. Commenters argued that this interpretation is inconsistent with 
the statutory text of Section 1557, which applies to ``any program or 
activity administered by an Executive Agency or any entity established 
under this title [sc., Title I].'' (emphasis added). Commenters argued 
the proposed Sec.  92.3(a)(2) would incorrectly apply ``under this 
title'' to modify both phrases. Furthermore, they argued that the 
Department did not provide an adequate rationale for its interpretation 
in the proposed rule.
    Response: As explained in the 2019 NPRM, the statutory text of 
Section 1557 applies to ``any program or activity'' administered by an 
Executive Agency or Title I entities, but does not include the modifier 
``health'' with respect to those programs or activities.\39\ In the 
2016 Rule, the Department limited its application by adding ``health'' 
to ``programs or activities'' because the Department recognized that 
Section 1557 was not intended to apply to every program or activity 
administered by every Executive Agency, whether or not it related to 
health.\40\ The 2016 Rule acknowledged implicitly what the Department 
now states more clearly: The grammar of the relevant sentence in the 
Section 1557 statutory text concerning limits to its scope is less 
clear than it could have been. In resolving the sentence's ambiguity, 
however, the Department no longer agrees with the 2016 Rule's decision 
to add a limiting modifier (i.e., ``health'') that Congress did not 
include in the statutory text. Instead, the Department concludes that 
Congress had already placed a limitation in the text of Section 1557 by 
applying the statute to any program or activity administered by an 
Executive Agency ``under this title'' (meaning Title I of the ACA), as 
well as to any program or activity administered by an entity 
established under such title. The Department believes that either this 
interpretation of the statutory text, or the 2016 Rule's addition of 
the modifier ``health,'' is necessary in order to make sense of the 
statutory text; this final rule offers a technical reading of the text 
that is at least as reasonable as the 2016 Rule's addition of a word 
not present in the text of the statute.
---------------------------------------------------------------------------

    \39\ 42 U.S.C. 18116(a) (applying Section 1557, in relevant 
part, to ``any program or activity that is administered by an 
Executive Agency or any entity established under this title (or 
amendments).''). See also 84 FR at 27861-62 (discussing the 
Department's statutory interpretation).
    \40\ 45 CFR 92.2 (applying the final rule, in relevant part, to 
``every health program or activity administered by the Department; 
and every health program or activity administered by a Title I 
entity'') (emphasis added).
---------------------------------------------------------------------------

    Comment: Commenters argued that the proposed interpretation to 
limit coverage to HHS Title I programs or activities would exclude a 
number of important programs and activities operated by HHS and is 
inconsistent with Section 504's application to ``any program or 
activity conducted by an

[[Page 37171]]

Executive Agency.'' \41\ They point out that HHS's Section 504 
regulation applies to ``all programs or activities'' conducted by HHS 
and all its components, including CMS, HRSA, CDC, and SAMHSA.\42\ 
Further, commenters stated that excluding non-Title I HHS-administered 
programs and activities, contrary to Section 504, will result in 
confusion and cause illogical results, whereby recipients would be 
covered by Section 1557 but the agencies administering the program 
would not be covered. For example, State Medicaid programs would be 
subject to Section 1557, but CMS, which oversees those Medicaid 
programs, would not be covered.
---------------------------------------------------------------------------

    \41\ 29 U.S.C. 794 (applying to ``any program or activity 
receiving Federal financial assistance or under any program or 
activity conducted by any Executive agency or by the United States 
Postal Service'').
    \42\ 45 CFR, part 85.
---------------------------------------------------------------------------

    Response: Section 1557 is a nondiscrimination statute under the 
ACA, which uniquely applies to healthcare, whereas Section 504 is a 
statute of general applicability. Section 1557 incorporates Section 
504's prohibited grounds of discrimination but not its scope: Section 
1557's scope differs from that of the underlying statutes. For 
instance, Section 504 does not include ``contracts of insurance'' in 
its definition of Federal financial assistance,\43\ but this final rule 
follows the text of Section 1557 by including ``contracts of 
insurance'' within Federal financial assistance.\44\ With respect to 
CMS, it is covered under this final rule to the extent that it either 
administers health programs and activities receiving Federal financial 
assistance or administers programs and activities under Title I. In 
addition, it is important to note that, as a federal agency, CMS has 
long been subject to various constitutional and statutory prohibitions 
on discrimination.
---------------------------------------------------------------------------

    \43\ 45 CFR 84.3(h).
    \44\ 42 U.S.C. 18116(a).
---------------------------------------------------------------------------

c. Sec.  92.3(b): Scope of the Term ``Health Program or Activity''
    The Department proposed in Sec.  92.3(b) to clarify that ``health 
program or activity'' encompasses all of the operations of entities 
``principally engaged in the business of providing healthcare'' that 
receive Federal financial assistance. The Department proposed to 
further clarify that for any entity not principally engaged in the 
business of providing healthcare, such entity's operations are subject 
to the Section 1557 Rule only to the extent any such operation receives 
Federal financial assistance provided by the Department.
    Comment: Commenters opposed limiting application of the rule when 
the entity is not principally engaged in the business of providing 
healthcare. Commenters argued that this would dramatically limit the 
scope of the rule and is contrary to Congressional intent and the plain 
meaning of the statute, which covers ``any health program or activity, 
any part of which is receiving Federal financial assistance. . . .'' 
Commenters stated that the entire entity receiving Federal financial 
assistance should be covered, not just the portion receiving funding. 
Commenters also argued the new framework would cause uncertainty and 
confusion for covered entities, which would have to clarify the extent 
of their own compliance, and also would make it harder for consumers to 
enforce their rights because they would have difficulty determining 
which entities and which portion of their programs or activities are 
subject to the rule. Commenters contended this uncertainty could result 
in lack of access to care, increased health disparities, and increased 
uncompensated care, all of which would increase overall healthcare 
costs.
    Some commenters stated that the rule incorrectly incorporates the 
Civil Rights Restoration Act (CRRA) \45\ into Section 1557. Commenters 
argued that the CRRA predates the ACA; nothing in the CRRA's text 
applies it to future statutes or Section 1557; Congress did not 
incorporate the CRRA into the Section 1557 statute; and Section 1557 
itself is more expansive than the laws amended by the CRRA. Therefore, 
they say, a broader definition of covered programs and activities 
should apply to include all health insurers as covered entities. Others 
argued that the proposed rule's application of the CRRA contravenes the 
approach taken by Congress in the CRRA. They stated that Congress made 
clear in the CRRA that if any part of a program or activity receives 
Federal financial assistance, the entire program or activity must 
comply with the applicable civil rights laws. Thus, the commenters 
argued that the proposed rule's limited application when entities are 
not principally engaged in the business of healthcare, to cover only 
the specific operation that receives Federal financial assistance, is 
contrary to the CRRA. Another commenter stated that incorporating the 
CRRA into Section 1557 would be subject to judicial review, to the 
extent the Department relies on Section 1557's references to 
``grounds'' and ``enforcement mechanisms'' of the underlying statutes 
to do so, because the Supreme Court held in Consolidated Rail Corp. v. 
Darrone that a statute's incorporation of another statute's enforcement 
mechanisms does not necessarily incorporate its substantive law.\46\
---------------------------------------------------------------------------

    \45\ Public Law 100-259, 102 Stat. 28 (Mar. 22, 1988).
    \46\ See Consolidated Rail Corp. v. Darrone, 465 U.S. 624, 635 
(1984) (holding that Section 504's incorporation of the ``remedies, 
procedures, and rights'' set forth in Title VI did not mean that 
Section 504 incorporated Title VI's substantive limitations on 
actionable discrimination).
---------------------------------------------------------------------------

    Conversely, other commenters were supportive of reducing regulatory 
burden by limiting application of the rule in this way. They stated 
that the 2016 Rule defined ``covered entities'' far too broadly, and 
that narrowing the scope will help rein in the regulatory excess of 
that rule. Commenters explained that healthcare entities often provide 
a variety of services and products, such as insurance coverage for 
life, disability, or short-term limited duration insurance coverage, 
and third-party administrative services, which do not receive Federal 
financial assistance. These commenters agreed that Section 1557 is 
intended to apply only to those programs receiving Federal funding and 
not to other parts of the entity's businesses or products when an 
entity is not principally engaged in the business of providing 
healthcare.
    Response: Section 1557 explicitly incorporates statutes amended by 
the CRRA, and in this final rule the Department is aligning Section 
1557's definition of ``health program or activity'' with the standard 
articulated in the CRRA in order to provide clarity and consistency. 
The CRRA clarified the scope of nondiscrimination prohibitions under 
the civil rights statutes that Section 1557 incorporates. For example, 
with respect to the health sector, it applied those prohibitions to all 
health programs or activities receiving Federal financial assistance, 
but not to all providers of health insurance: It applied ``program or 
activity'' to cover all of the operations of an entity only when that 
entity is ``principally engaged in the business of providing . . . 
health care . . . .'' \47\ This final rule clarifies that the term 
``health program or activity'' used in Section 1557 should be 
understood in light of the CRRA's limitations on the term ``program or 
activity'' as applied to statutes on which Section 1557 relies. As for 
Consolidated Rail Corp. v. Darrone, Congress specifically and 
intentionally

[[Page 37172]]

overturned that case through the passage of the CRRA.\48\
---------------------------------------------------------------------------

    \47\ See, e.g., CRRA Sec.  3(a) (adding Sec.  908(3)(A)(ii) to 
Title IX of the Education Amendments of 1972 (codified at 20 U.S.C. 
1687(3)(A)(ii)).
    \48\ See McMullen v. Wakulla Cty. Bd. of Cty. Commissioners, 650 
F. App'x 703, 705 (11th Cir. 2016), citing S. Rep. No. 100-64, at 2 
(1988), as reprinted in 1988 U.S.C.C.A.N. 3, 3-4.
---------------------------------------------------------------------------

    The 2016 Rule also articulated a standard for ``health program or 
activity'' that relied upon the ``principally engaged'' prong of the 
CRRA, which was contested neither before nor after that rule's 
publication. In the regulatory text, the 2016 Rule defined ``health 
program or activity'' to apply to all operations of an entity only when 
it is principally engaged in providing or administering health 
services, health insurance coverage, or other health coverage.\49\ The 
2016 Rule preamble clarified that if an entity is not principally 
engaged in providing health benefits, the Department would apply the 
rule to its Federally funded health programs and activities.\50\
---------------------------------------------------------------------------

    \49\ 81 FR at 31467. In the proposed rule, the Department 
disagreed with the 2016 Rule's usage of ``health services, health 
insurance coverage, or other health coverage'' as overbroad and 
inconsistent with the statutory text of the CRRA that uses the term 
``healthcare.'' See 84 FR at 27862-63. However, the Department 
agrees with the 2016 Rule's limitation based on whether the entity 
is principally engaged.
    \50\ 81 FR at 31385-86, 31430-32.
---------------------------------------------------------------------------

    The Department believes that by specifying the degree to which the 
Section 1557 regulation covers entities not principally engaged in the 
business of providing healthcare, this final rule more clearly and 
consistently applies the CRRA's limitations on ``health program or 
activity'' across the regulation. The Department agrees with commenters 
who suggest that in doing so this final rule also advances its goal of 
reducing regulatory burdens under the ACA in furtherance of Executive 
Order 13765.
    Comment: Commenters argued that limiting the application of the 
rule to only the portion of the health program or activity that 
receives Federal financial assistance for entities not principally 
engaged in the business of providing healthcare is not consistent with 
the Department's application of Title VI as set forth in HHS's 2003 LEP 
guidance. This guidance provided that Title VI applies to all parts of 
a covered entity receiving Federal financial assistance, not just the 
portion receiving Federal funds.\51\
---------------------------------------------------------------------------

    \51\ 68 FR 47311, 47313 (Aug. 8, 2003) (``Coverage extends to a 
recipient's entire program or activity, i.e., to all parts of a 
recipient's operations. This is true even if only one part of the 
recipient receives the Federal assistance.'').
---------------------------------------------------------------------------

    Response: As a policy guidance document, the Department's LEP 
guidance cannot be used to create binding standards by which the 
Department will determine compliance with existing regulatory or 
statutory requirements.\52\ Accordingly, the scope of application as 
set forth under the CRRA and this final rule would prevail over any 
conflicting text in the Department's LEP guidance.
---------------------------------------------------------------------------

    \52\ See U.S. Dept. of Justice, Memorandum of the Office of the 
Attorney General, Prohibition on Improper Guidance Documents (Nov. 
16, 2019), https://www.justice.gov/opa/press-release/file/1012271/download; U.S. Dept. of Justice, Memorandum of the Office of the 
Associate Attorney General, Limiting Use of Agency Guidance 
Documents In Affirmative Civil Enforcement Cases (Jan. 25, 2018), 
https://www.justice.gov/file/1028756/download.
---------------------------------------------------------------------------

d. Sec.  92.3(c) Health Insurance and Healthcare
    The Department proposed in Sec.  92.3(c) to state that an entity 
principally or otherwise engaged in the business of providing health 
insurance would not be considered to be principally engaged in the 
business of providing healthcare, and on that sole basis, subject to 
the Section 1557 regulation. The proposed rule sought comment on 
whether it should define ``healthcare'' in the rule according to the 
statutes cited in the proposed rule.
    Comment: Several commenters supported the distinction between 
entities principally engaged in the business of providing healthcare 
and those principally engaged in the business of providing health 
insurance. As one commenter stated, ``[p]aying for healthcare is not 
providing healthcare.'' Other commenters were opposed to this 
distinction. They argued that it is not consistent with Section 1557's 
statutory text or the proposed regulatory text at Sec.  92.3(a)(1), 
both of which specifically include ``contracts of insurance'' as an 
example of Federal financial assistance. They also stated that this 
limited application is not consistent with Congressional intent to 
expand access to healthcare and create new nondiscrimination 
protections in health insurance.
    Some commenters argued that health insurance is inextricably linked 
with the provision of healthcare. They pointed out that the statutory 
definition of ``healthcare'' relied upon in the proposed rule is 
unrelated to either the ACA, health insurance, or discrimination, and 
thus is not intended for or relevant to Section 1557 or health 
insurance.\53\ Further, they argued that the definition of ``health 
insurance coverage'' referenced in the proposed rule, 42 U.S.C. 300gg-
91, actually bolsters the argument that health insurance includes 
healthcare, as it defines ``health insurance coverage'' to include 
``benefits consisting of medical care (provided directly, through 
insurance or reimbursement, or otherwise and including items and 
services paid for as medical care)'' (emphasis added). They also 
pointed out that definitions in 42 U.S.C. 300gg-91 are most relevant to 
Section 1557 because Title I of the ACA relied upon this section for 
definitions.
---------------------------------------------------------------------------

    \53\ See 84 FR at 27862 (citing the definition of ``health 
care'' at 5 U.S.C. 5371). Commenters noted that this definition 
pertains to Federal personnel pay rates.
---------------------------------------------------------------------------

    Response: The CRRA defined ``program or activity'' in the 
underlying statutes to apply to all of an entities' operations when it 
is principally engaged in the business of providing ``healthcare.'' On 
the other hand, the 2016 Rule expansively interpreted Section 1557's 
application to ``health programs or activities'' to include all 
operations of entities that ``provide health insurance coverage or 
other health coverage,'' whether or not they provided healthcare. Prior 
to the 2016 Rule, the Department had not interpreted the CRRA's term 
``healthcare'' to cover the operations of health insurance issuers (as 
such).
    Commenters are correct that Section 1557 includes ``contracts of 
insurance'' as a type of Federal financial assistance. The Department 
agrees that health programs or activities that receive contracts of 
insurance from the Federal government are covered entities under 
Section 1557. But this does not mean that health insurers, as such, are 
health programs or activities.
    The Department pointed to 5 U.S.C. 5371, as well as to 45 CFR 
160.103, in order to support its conclusion that the plain meaning of 
``healthcare'' differs from insurance. And although 42 U.S.C. 300gg-91 
explicitly encompasses payment, ``group health plans,'' and 
``definitions relating to health insurance'' specifically, it should 
not be taken out of context: It defines ``medical care'' as ``amounts 
paid for'' certain medical services, which is an appropriate definition 
in the health insurance field but not in the healthcare field 
generally. (When a doctor provides ``medical care,'' she is not 
providing ``amounts paid for'' medical services--she is providing the 
services themselves.) Other portions of 42 U.S.C. 300gg-91 also support 
the distinction between healthcare and health insurance: It says that 
``health insurance coverage means benefits consisting of medical 
care,'' where ``medical care'' is defined as ``amounts paid for . . . 
the diagnosis, cure, mitigation, treatment, or prevention of disease, 
or amounts paid for the purpose of affecting any structure or function 
of the body,'' or

[[Page 37173]]

``amounts paid for transportation primarily for and essential to 
medical care'' in the primary sense just defined, or ``amounts paid for 
insurance covering medical care'' in either the primary sense just 
defined or the secondary sense of transportation for medical care.\54\ 
It does not say that health insurance is healthcare, and it twice 
relies on the commonsense distinction between medical care proper and 
the health insurance that covers and pays for such care. It thus 
supports the Department's view that a health insurer is principally 
engaged in the business of providing coverage for benefits consisting 
in healthcare, which is not the same as the business of providing 
healthcare. This final rule brings the 1557 regulation's scope of 
coverage closer to the plain meaning of the 1557 statute, especially as 
read in light of the CRRA's definition of ``program or activity.''
---------------------------------------------------------------------------

    \54\ 42 U.S.C. 300gg-91(b)(1), (a)(2).
---------------------------------------------------------------------------

    Comment: Commenters were concerned that Sec.  92.3(c) would result 
in exempting many of the plans, products, and operations of most health 
insurance issuers, such as self-funded group health plans, the Federal 
Employees Health Benefits (FEHB) Program, third-party administrator 
services, or short-term limited duration insurance plans. Commenters 
feared this would allow health insurance issuers to conduct their other 
activities in a discriminatory manner. Several commenters were 
particularly concerned about excluding short-term limited duration 
insurance plans because these plans have been known to engage in 
discriminatory practices based on disability, age, and sex.
    Other commenters, in contrast, supported the proposed revisions. 
They stated the 2016 Rule was overly expansive, created an un-level 
playing field, and resulted in disincentives for issuers to participate 
in HHS-funded programs, such as offering QHPs or Medicare Advantage 
plans. This resulted in Section 1557's covering products that Congress 
explicitly excluded from the rest of the ACA, such as excepted benefits 
and short-term limited duration insurance plans. Commenters argued it 
was unlikely that Congress intended Section 1557 to regulate the same 
plans it had excluded from the ACA.
    Response: The Department agrees with commenters who stated that the 
overly broad reach of the 2016 Rule subjected many insurance products 
that were not intended to be covered by the ACA to burdensome 
regulation, inconsistent with Congressional intent.
    In the proposed rule, the Department stated that Section 1557 does 
not apply to short-term limited duration insurance as such, but only if 
it were offered by an entity for which all of the entity's activities 
are encompassed by Section 1557, or if such insurance received Federal 
financial assistance.\55\ Under this final rule, where short-term 
limited duration insurance (1) is offered by an entity that is not 
principally engaged in the business of providing healthcare, and (2) 
does not receive Federal financial assistance, the protections of 
Section 1557 would not apply to it. The Department will robustly 
enforce the nondiscrimination requirements for QHPs under Title I of 
the ACA, for Exchange plans established by the ACA, and for any other 
insurance plans that Section 1557 covers. The reasons that this final 
rule does not cover FEHB plans are discussed in the response to the 
next comment.
---------------------------------------------------------------------------

    \55\ The Department notes by way of background that, subsequent 
to publication of the proposed rule, the U.S. District Court for the 
District of Columbia granted summary judgment for the Department, 
upholding its most recent rulemaking on short-term limited duration 
insurance. See Short-Term, Limited-Duration Insurance; Final Rule, 
83 FR 38212 (August 3, 2018). The August 2018 final rule largely 
restored the long-standing definition for short-term limited 
duration insurance to the definition that was in effect from 1997 to 
2016. The Court held that the restored definition was not arbitrary 
or capricious, finding that ``Congress clearly did not intend for 
the [ACA] to apply to all species of individual health insurance.'' 
Association for Community Affiliated Plans v. U.S. Department of 
Treasury, 392 F. Supp. 3d 22, 45 (D.D.C. 2019), appeal filed July 
30, 2019.
---------------------------------------------------------------------------

    Comment: The Department received comments related to the exclusion 
of employer plans and excepted benefits as a result of Sec.  92.3(c). 
Several commenters objected to the exclusion of self-funded group 
health plans under the Employee Retirement Income Security Act of 1974 
(ERISA) and the Federal Employees Health Benefits (FEHB) Program. 
Commenters argued that FEHB plans should be covered as a contract of 
insurance with the Federal government. Some suggested that employer 
group health plans, including self-funded plans, receive substantial 
Federal financial assistance in the form of favorable income tax 
treatment and thus should be covered.
    Other commenters strongly supported excluding employer plans. 
Commenters noted that employers and group health plans are already 
subject to other Federal laws that prohibit discrimination, and that 
few employer-sponsored plans receive Federal financial assistance. They 
stated that the 2016 Rule's broad coverage exceeded statutory 
authority, encumbered the design and operation of employer group health 
plans, invited litigation regarding plan benefits, and increased the 
potential for costly new mandates, all of which were likely to increase 
healthcare costs for employers and employees alike without adding any 
additional protections against discrimination. Some commenters 
expressed support for the provision that third-party administrators of 
self-funded group health plans would no longer be subject to Section 
1557 merely because other portions of their business receive Federal 
funding.
    Some commenters requested further clarification by recommending 
that the regulatory text at proposed Sec.  92.3(c) be revised to 
specify that other types of plans should not be considered entities 
principally engaged in the business of providing healthcare, including 
self-funded or fully insured group health plans under ERISA; self-
funded or fully insured group health plans not covered under ERISA that 
are sponsored by either governmental employers (``government plans'') 
or certain religious employers (``church plans'' or ``denominational 
plans''); and benefit plans and programs excepted under the ACA.\56\
---------------------------------------------------------------------------

    \56\ See 42 U.S.C. 300gg-91(c) (defining excepted benefits).
---------------------------------------------------------------------------

    Response: The Department continues to take the position that FEHB 
plans are not covered under this rule. Even if FEHB plans were 
considered ``contracts of insurance,'' as suggested by some commenters, 
they still would not fall under the scope of this rule because the 
contract would be with the Office of Personnel Management (OPM), which 
operates the FEHB Program, not with the Department. As noted above, 
this final rule does not extend the Department's enforcement authority 
to a covered entity that is not principally engaged in the business of 
providing healthcare to the extent of its operations that do not 
receive financial assistance from the Department.
    The Department agrees that this final rule will accomplish the 
Department's goal of reducing regulatory burden. The Department 
declines to offer further examples of non-covered entities in the 
regulatory text, as the rule's existing parameters are intended to 
broadly address different entities. To the extent that employer-
sponsored group health plans do not receive Federal financial 
assistance and are not principally engaged in the business of providing 
healthcare (as set forth in the rule), they would not be covered 
entities. The same analysis would apply to employer-sponsored plans not 
covered by ERISA, such as self-insured church plans or

[[Page 37174]]

non-Federal governmental plans, as well as to excepted benefits.
    Comment: Some commenters said that the proposed rule created 
confusion about whether QHPs are subject to the rule. Others requested 
clarification on the proposed rule's application to products offered 
through the Exchange. Others requested clarification on whether stand-
alone dental plans and catastrophic plans, which are also sold through 
the Exchanges established under Title I, are covered under the rule. 
Another commenter requested confirmation that the proposed rule would 
not apply to individual or small-group market health insurance coverage 
that complies with the ACA but is sold outside of the Exchanges, 
regardless of whether the parent organization also offers on-Exchange 
QHPs. Others requested clarification as to how the rule would apply 
when one health insurance plan includes multiple types of enrollees, 
including subsidized Exchange enrollees, unsubsidized Exchange 
enrollees, and off-Exchange enrollees. The comments expressed concern 
that enrollees in the same plan deserved the same level of 
nondiscrimination protection and that the same standard should be 
applied.
    Response: Health insurance products are often complex. While the 
Department provides general responses below in an attempt to clarify 
application of the rule, OCR will always engage in an individualized 
fact-based analysis when determining the extent of its jurisdiction 
over these or any other such products.
    A QHP would be covered by the rule because it is a program or 
activity administered by an entity established under Title I (i.e., an 
Exchange), pursuant to Sec.  92.3(a)(3). A QHP could also be subject to 
Section 1557 if it were a recipient of Federal financial assistance, 
but as stated above, the premium tax credits that the Department plays 
a role in administering would no longer serve to bring an entity under 
the jurisdiction of this Section 1557 regulation.
    Stand-alone dental plans and catastrophic plans offered through the 
Exchanges would similarly be subject to Sec.  92.3(a)(3), as these 
plans are administered by an Exchange, which is an entity established 
under Title I.
    Regarding ACA-compliant plans sold off-Exchange, because a health 
insurance issuer is not principally engaged in the business of 
providing healthcare, its operations would be subject to this rule only 
for the portion that receives Federal financial assistance. The 
issuer's components (e.g., off-Exchange plans) that do not directly 
receive Federal financial assistance would not be subject to this rule.
    Where a health insurance plan includes multiple types of enrollees, 
the Department would have to review the specific circumstance, but 
generally speaking, if a QHP is subject to Section 1557, this rule 
would apply consistently for all enrollees in the plan.
    Comment: The Department received comments related to how the rule 
would apply to Medicare- and Medicaid-related products. One commenter 
asked whether the proposed limitation under Sec.  92.3(c) would mean 
that Section 1557 would no longer apply to health insurance plans 
managed through Medicare and Medicaid.
    A few commenters requested clarification on whether the proposed 
rule would apply to Employer Group Waiver Plans (EGWPs) and Medicare 
Part D Retiree Drug Subsidy (RDS) plans, or the employers that sponsor 
the plans. Commenters argued that applying the rule to these plans 
could disincentivize employers from sponsoring them and urged that the 
plans be exempt from the rule. Alternatively, one commenter requested 
that the Department exempt employer sponsors of ``800 series'' EGWPs, 
which are offered by Medicare Advantage Organizations (MAOs) or Part D 
Plan sponsors (PDP sponsors), because the employer is not the entity 
that receives funding from HHS. Finally, some commenters objected to 
excluding Medicare Part B from the rule.
    Response: To be covered by the rule, a particular entity would have 
to satisfy one of the applicability requirements set forth in Sec.  
92.3. Entities that receive Federal funding through the Department's 
Medicare Part C (Medicare Advantage), Medicare Part D, or Medicaid 
programs would be subject to Section 1557 as recipients of Federal 
financial assistance. This would include Medicare Advantage plans, 
Medicaid managed care plans, EGWPs, or RDS plans, to the extent that 
they receive Federal financial assistance.
    Pending further details, an employer that does not directly 
contract with CMS but offers an ``800 series'' EGWP through a MAO or 
PDP sponsor would not appear to be subject to this rule under this 
analysis because the employer does not receive the Federal financial 
assistance; meanwhile, the health insurance issuer offering the EGWP 
would be subject to the rule for its EGWP plan, due to receipt of 
either Medicare Part C or Part D funding.
    As for Medicare Part B, it is not Federal financial assistance.\57\ 
This remains unchanged from the 2016 Rule, which also determined that 
Medicare Part B was not Federal financial assistance under Section 
1557.
---------------------------------------------------------------------------

    \57\ 45 CFR pt. 80 App A, No. 121; https://www.hhs.gov/civil-rights/for-individuals/faqs/what-qualifies-as-Federal-financial-assistance/301/index.html. See also 81 FR at 31383, 31385; 84 FR at 
27863 (discussing the applicability of the rule to Medicare Part B 
and clarifying in footnote 100 that ``[t]he Department believes that 
the Federal financial assistance does not include Medicare Part B 
under the Social Security Act. See 2 CFR 200.40(c) (Uniform 
Administrative Requirement, Cost Principles, and Audit Requirements 
for Federal Awards); 45 CFR 75.502(h) (Uniform Administrative 
Requirement, Cost Principles, and Audit Requirements for HHS 
Awards).'').
---------------------------------------------------------------------------

    Comment: Some commenters requested that this final rule be 
accompanied by explicit applicability guidance so that employers and 
plans could be able to ascertain if the final rule impacts their 
business.
    Response: The Department seeks to provide sufficient clarity in 
this final rule. If OCR receives substantial questions about the rule's 
applicability after publication, OCR will consider issuing additional 
clarification, consistent with applicable law regarding issuance of 
sub-regulatory guidance.\58\
---------------------------------------------------------------------------

    \58\ See, e.g., Executive Order 13892 on Promoting the Rule of 
Law Through Transparency and Fairness in Civil Administrative 
Enforcement and Adjudication, 84 FR 55239 (Oct. 9, 2019); Executive 
Order 13891 on Promoting the Rule of Law Through Improved Agency 
Guidance Documents, 84 FR 55235 (Oct. 9, 2019); U.S. Dept. of 
Justice, Memorandum of the Office of the Associate Attorney General, 
Limiting Use of Agency Guidance Documents In Affirmative Civil 
Enforcement Cases (Jan. 25, 2018), https://www.justice.gov/file/1028756/download; U.S. Dept. of Justice, Memorandum of the Office of 
the Attorney General, Prohibition on Improper Guidance Documents 
(Nov. 16, 2019), https://www.justice.gov/opa/press-release/file/1012271/download.
---------------------------------------------------------------------------

e. Summary of Regulatory Changes
    For the reasons given in the proposed rule, and having considered 
comments received, the Department finalizes the proposed Sec.  92.3, 
and repeal of Sec.  92.2 of the 2016 Rule, without change, except that, 
as discussed in an earlier section of this preamble, and after 
considering comments on the issue, the Department is not finalizing the 
proposed repeal of Sec.  92.2(c) concerning severability, but is 
retaining that provision and has moved it to Sec.  92.3(d).
(4) Nondiscrimination Requirements in Proposed Revisions to Sec.  92.2, 
and Repeal of Sec.  92.8(d), 92.101, 92.206, 92.207, 92.209, and 
Appendix B of the 2016 Rule
    The Department proposed to repeal Sec.  92.8(d), 92.101, 92.206, 
92.207, and Appendix B of the 2016 Rule (which includes repealing 
notice and taglines

[[Page 37175]]

provisions), and instead address nondiscrimination requirements in a 
new Sec.  92.2. The Department proposed to repeal provisions that made 
applicable across all protected categories those particular 
requirements, prohibitions, or enforcement mechanisms that had 
previously applied only to particular circumstances.
    The Department requested comments on all aspects of the proposed 
rule. The Department also specifically requested comment on any 
unaddressed discrimination on the basis of race, color, or national 
origin as applied to State and Federally-facilitated Exchanges, with 
any detailed supporting information. And the Department requested 
comment on whether, and if so how, the proposed rule addresses clarity 
and confusion over compliance requirements and the rights of persons 
protected against discrimination on the basis of race, color, national 
origin, sex, disability, or age.
    The Department received many comments on these proposed changes. 
The Department will first discuss comments concerning each of the 
grounds in Section 1557: Race, color, national origin, disability, age, 
and sex. Then other grounds of discrimination will be discussed, 
followed by assessment of claims of discriminatory conduct when 
multiple grounds of discrimination are alleged. Comments concerning 
disability and LEP protections will be addressed below in the section 
on Subpart B of the Section 1557 rule.
a. Discrimination on the Basis of Race, Color, or National Origin
i. Generally
    Comment: The Department received support for its commitment to 
continued enforcement of race, color, and national origin protections. 
Commenters stated that these characteristics are clear and simple to 
distinguish, contrasting them with gender identity, which is fluid and 
more difficult to define.
    Response: The Department appreciates the support for its continued 
commitment to the enforcement of protections against discrimination on 
the basis of race, color, and national origin. The Department agrees 
that gender identity as a category is difficult to define. This is not, 
however, the Department's reason for not viewing gender identity as a 
protected category under Section 1557. The Department enforces 
statutory prohibitions on discrimination on the basis of race, color, 
national origin, age, disability, and sex discrimination because they 
are set forth in the text of statutes incorporated into Section 1557, 
and gender identity is not set forth as a protected category in those 
statutes.
    Comment: Commenters contended that the proposed changes, including 
repeal of Sec.  92.101 and the specific discrimination it prohibited, 
will lead to confusion among individuals and lead healthcare providers 
to discriminate based on race, color, and national origin. Commenters 
recommended that the Department retain clear, strong language 
prohibiting healthcare providers from discriminating based on race, 
color and national origin.
    Response: This final rule's Sec.  92.2 retains clear, strong 
language prohibiting discrimination on the basis of race, color, or 
national origin. Covered entities are still required to provide the 
Department with an assurance, and, pursuant to the underlying civil 
rights regulations, to post notices, that they do not so discriminate 
and are in compliance with Federal civil rights law. If the Department 
learns of confusion among covered entities or individuals as to their 
civil rights, it will consider issuing further guidance as needed.
    Comment: Some commenters contended that the proposed changes will 
negatively impact women of color, who (according to these commenters) 
disproportionately rely on the short-term health plans that this final 
rule does not cover, and are more likely to experience pregnancy-
related issues that will cause them to suffer from the rollback of 
termination of pregnancy protections.
    Response: For reasons detailed below, this final rule (a) does not 
generally apply to short-term limited duration health insurance and (b) 
only covers termination of pregnancy to the extent permitted by Title 
IX's abortion-neutrality language, as required by the relevant 
statutes. The Department will vigorously enforce the prohibitions on 
discrimination based on race or sex, including under disparate impact 
analysis with respect to race discrimination as provided for in the 
relevant Title VI regulations, but the Department remains bound by the 
limits of the statutes enacted by Congress. The Department's Office of 
Minority Health also supports outreach to diverse populations and those 
facing particularized or disproportionate health challenges.
    Comment: One commenter expressed concern that the changes in the 
proposed rule will have a negative impact on access to health 
screenings and vaccinations for patients. The commenter stated that 
removal of nondiscrimination requirements for many health insurance 
providers will leave these populations with little recourse if health 
insurance providers rescind coverage for preventative health services.
    Response: Because this final rule continues to commit the 
Department to robust enforcement of its prohibitions on discrimination 
on the basis of race, color, national origin, sex, age, and disability, 
the Department does not anticipate that it will impede any population's 
access to preventive care and vaccinations, which (under separate 
provisions of the ACA) must be covered without cost sharing for group 
health plans and health insurance issuers offering group or individual 
health insurance coverage.\59\
---------------------------------------------------------------------------

    \59\ See 42 U.S.C. 300gg-13.
---------------------------------------------------------------------------

ii. Repeal of Notice and Taglines Provisions at Sec.  92.8(d) and 
Appendix B of the 2016 Rule
    The Department proposed to repeal Sec.  92.8(d) of the 2016 Rule, 
which required a nondiscrimination notice and taglines in all 
significant communications from covered entities, and also proposed to 
repeal the sample taglines notice in Appendix B to Part 92. 84 FR at 
27857-60. The Department stated its assumption that this will 
correspondingly ease the burden of the LEP provision in CMS regulations 
at 45 CFR 155.205(c)(2)(iii)(A), which deemed compliance with the LEP 
provisions of the Section 1557 regulation to constitute compliance with 
CMS's requirements.\60\
---------------------------------------------------------------------------

    \60\ 84 CFR 27887, n. 240, and 27881.
---------------------------------------------------------------------------

    The Department specifically sought comment to identify 
``significant communications'' under the 2016 Rule sent by covered 
entities that include a notice and taglines but had not been considered 
by the analysis in the proposed rule, as well as the estimated annual 
volume of such communications. The Department also requested comment on 
which communications are significant in healthcare.
    Comments: Some commenters stated that the removal of the 2016 
Rule's notice and taglines provisions will result in LEP beneficiaries 
having less knowledge of available language assistance services and 
that they will likely rely more on family members to provide oral 
interpretation.
    Response: The regulations of the underlying statutes referred to in 
Section 1557 (Title VI, Section 504, Title IX, and the Age Act) have 
long mandated that covered entities provide

[[Page 37176]]

a notice of nondiscrimination.\61\ This final rule maintains that 
requirement. Moreover, it continues to require covered entities to 
provide taglines whenever such taglines are necessary to ensure 
meaningful access by LEP individuals to a covered program or activity. 
It removes only the unduly broad, sometimes confusing, and inefficient 
requirement that all significant communications contain taglines. This 
requirement caused significant unanticipated expenses, as discussed in 
the regulatory impact analysis (RIA) below. Moreover, as discussed 
below, Sec.  92.101 of this final rule reiterates longstanding criteria 
to help covered entities conduct an individualized assessment of their 
program and ensure meaningful access by persons with LEP, and retains 
the 2016 Rule's prohibition on covered entities' requiring an LEP 
individual to provide his or her own interpreter or relying on an 
accompanying adult to interpret or facilitate communication (except in 
limited circumstances).
---------------------------------------------------------------------------

    \61\ See Title VI (45 CFR 80.6 and Appendix to Part 80), Section 
504 (45 CFR 84.8), Title IX (45 CFR 86.9), and the Age Act (45 CFR 
91.32).
---------------------------------------------------------------------------

    Comment: Some commenters disagreed with the Department's proposal 
to make conforming amendments to the CMS requirements placed on Health 
Insurance Exchanges and Qualified Health Plan (QHP) issuers at 45 CFR 
155.205. These commenters argued that the CMS requirements do not rely 
on the 2016 Rule's taglines provisions, nor does the 2016 Rule prevent 
the implementation of additional requirements in more specific 
programs, such as Medicaid and Medicare. Others agreed with the 
Department's proposal, raising concerns about CMS's requirements at 45 
CFR 155.205, which state that Exchanges and QHP issues are only 
``deemed'' in compliance with the CMS requirements ``if they are in 
compliance with'' the 2016 Rule's taglines provisions. These commenters 
argued that if the notice and taglines provisions are removed, the CMS 
compliance provision will cross-reference a repealed rule, which would 
require QHP issuers and Exchanges to comply with CMS's taglines rule 
instead. The CMS mandate for 15 taglines for the CMS list of critical 
documents is arguably as burdensome as the 2016 Rule's taglines 
provisions; therefore, these commenters argue that any benefit in 
efficiency yielded by the repeal of the 2016 Rule's taglines provisions 
would be lost for Exchanges and QHP issuers. These commenters suggest 
amending the 2016 Rule's provisions to state that there is no specific 
taglines requirement under Section 1557 and that a covered entity's 
compliance under applicable Federal and State laws will be considered 
under Section 1557's LEP meaningful access standards.
    Response: The provision at 45 CFR 155.205(c)(2)(iii)(A) and the 
similar requirement placed on QHP issuers (see HHS Notice of Benefit 
and Payment Parameters for 2016; Final Rule, 80 FR 10750, 10788 (Feb. 
27, 2015)), have not been directly amended in this regard. 
Nevertheless, as the Department stated in the proposed rule,\62\ both 
of those requirements depend on or refer to the taglines requirements 
repealed in this final rule. As a result, covered entities are deemed 
compliant with those particular taglines requirements due to this final 
rule. Specifically, 45 CFR 155.205(c)(2)(iii)(A) sets forth taglines 
requirements and then states, ``Exchanges, and QHP issuers that are 
also subject to Sec.  92.8 of this subtitle, will be deemed in 
compliance with paragraph (c)(2)(iii)(A) of this section if they are in 
compliance with Sec.  92.8 of this subtitle.'' The Department informed 
the public of this interpretation in the proposed rule, and after 
reviewing public comments, the Department maintains the same position 
for essentially the same reason. Because this final rule repeals the 
taglines requirements of the 2016 Rule at Sec.  92.8, entities will not 
be out of compliance with those requirements, and therefore they will 
satisfy the condition of the sentence quoted above from 45 CFR 
155.205(c)(2)(iii)(A) that they not be out of compliance with taglines 
requirements in 45 CFR part 92. Although the Department did not propose 
conforming amendments to those two regulations, and therefore cannot 
finalize such amendments in this final rule, the Department will 
consider making appropriate changes to other regulations in the future.
---------------------------------------------------------------------------

    \62\ 84 FR at 27881.
---------------------------------------------------------------------------

    Comment: Commenters, including a health insurance issuer, noted 
that the 2016 Rule's preamble vaguely defined ``significant 
communications'' to include ``not only documents intended for the 
public . . . but also written notices to an individual, such as those 
pertaining to rights or benefits.'' 81 FR 31402. These commenters 
argued that because almost all written communications would be 
considered ``significant'' under this definition, most covered entities 
included a one- to two-page addition containing the nondiscrimination 
notice and taglines with most written communications. One health 
insurance issuer estimated sending the notice and taglines 
approximately 15 million times in 2018, or about five times for every 
individual served. One commenter stated that because the Department 
determined that the notice and taglines requirement in the 2016 Rule 
imposes a significant financial burden on covered entities, the 
Department is within its authority to rescind it, especially because of 
an executive order that limits the effectiveness of subregulatory 
guidance. Others requested that the Department issue further guidance 
on what constitutes ``significant'' documents and communications, 
instead of removing the 2016 Rule's notice and taglines provisions.
    Response: The Department agrees with comments that stated the 2016 
Rule's notice and taglines requirements were imprecise and overly 
burdensome. The Department declines to retain those requirements while 
merely issuing more guidance on what constitute significant 
communications. First, the requirements are not mandated by statute, 
and although the 2016 Rule is a regulation and not subregulatory 
guidance, the Department has determined that its financial burden on 
covered entities was not justified by the protections or benefits it 
provided to LEP individuals. Second, the Department believes that other 
protections as finalized in this rule (and discussed below) better 
serve the language access needs of LEP individuals and, therefore, are 
more appropriate. Repeal of the notice and taglines requirements in 
this rule does not repeal all other notice and taglines requirements 
that exist under other statutes and rules.
b. Discrimination on the Basis of Disability
    The Department is committed under this final rule to enforce 
protections against discrimination on the basis of disability, both in 
specific provisions set forth in Sec.  92.102-92.105, and as applicable 
through the underlying Section 504 regulations, which are more broadly 
applicable under Section 1557 of the ACA. Comments on these issues are 
discussed in the section below on Subpart B of the Section 1557 
regulation.
c. Discrimination on the Basis of Age
    Comment: Commenters expressed concerns that the changes in the 
proposed rule will lead to discriminatory practices in health plans. In 
the absence of explicit language prohibiting health plans from 
discriminating based on age as set forth in Sec.  92.207 of the 2016 
Rule, they alleged, health plans may unlawfully

[[Page 37177]]

deny, cancel, or limit policies, deny or limit coverage for claims, 
impose additional cost-sharing on coverage, or use discriminatory 
marketing practices or benefit designs because of age. In particular, 
some commenters believe that health insurance plans will offer 
formularies and plan options that deny treatment for older individuals 
who generally have more health complications. For example, they say, 
this practice may already be in place with some health plans that offer 
coverage for hearing aids to children and youths but deny it to older 
adults. Some commenters said the proposed rule will lead to 
discrimination against older LGBT adults, who already have high levels 
of poverty and health disparities, and will contribute to worse health 
outcomes. Some commenters also alleged the proposed rule encourages 
unlawful discrimination against LGBT youth, who are already at 
increased risk of discrimination.
    Response: This final rule retains clear language prohibiting 
discrimination on the basis of age, as defined in the Age Act and 
enforced through its implementing regulations, in any covered programs 
and activities, including health plan marketing and benefit design. 
Moreover, the ACA has specific provisions which limit the extent to 
which health plans offered under the ACA can charge higher premiums 
based on age, as well as specific provisions which require guaranteed 
issuance, address permissible cost sharing requirements, and establish 
standards for essential benefits and formularies.
    The Department remains committed to vigorous enforcement of this 
prohibition on behalf of all Americans, including LGBT adults and 
youth. The Department declines to comment on specific cases outside of 
the normal enforcement process but encourages anyone who has 
experienced unlawful discrimination, including with respect to health 
plans, to file a complaint with OCR.
    Comment: Commenters expressed concern that the proposed rule will 
lead to health plans using their benefit design to discriminate against 
individuals with chronic conditions who are more expensive to insure, 
including children and youth with serious health conditions. One 
commenter represented a 13 year old with Down syndrome who, the 
commenter said, was denied coverage by a private health insurer because 
that health insurer categorically denied coverage for individuals with 
Down syndrome.
    Response: Many serious health conditions, including Down syndrome, 
qualify as disabilities under Section 504, which Section 1557 
incorporates. The Department will enforce vigorously Section 1557's 
prohibition on discrimination on the basis of disability against all 
covered entities, including when discrimination is alleged to have 
taken place in benefit design. As finalized, the amended Sec.  147.104 
would prohibit health insurance issuers from employing ``benefit 
designs that . . . discriminate based on an individual's race, color, 
national origin, present or predicted disability, age, sex, expected 
length of life, degree of medical dependency, quality of life, or other 
health conditions.'' The ACA also establishes requirements, applicable 
to health insurance issuers offering individual and group health 
insurance, concerning guaranteed issuance and renewal.\63\ Concerns 
about whether private health insurers are covered entities are 
addressed below in the section on this rule's scope of application.
---------------------------------------------------------------------------

    \63\ See 42 U.S.C. 300gg-1, 300gg.2.
---------------------------------------------------------------------------

    Comment: Some commenters contended the proposed rule will allow 
health plans to place age restrictions on certain medications, such as 
age restrictions on contraceptives for youth.
    Response: To the extent that covered entities (including health 
plans) place restrictions based on age, OCR would assess on a case-by-
case basis whether such restrictions violate Section 1557's 
incorporation of grounds prohibited under the Age Act. The Age Act does 
not forbid certain age distinctions in Federal, State, or local 
statutes and ordinances, or an action that reasonably takes age into 
account as a factor that is necessary to the normal operation or 
achievement of a statutory objective of a program.\64\
---------------------------------------------------------------------------

    \64\ 45 CFR 90.14, 90.15.
---------------------------------------------------------------------------

d. Discrimination on the Basis of Sex
i. Generally
    Comment: Commenters offered different points of view on the 
definition of the term ``sex,'' as this relates to the definition of 
discrimination ``on the basis of sex.''
    A number of commenters stated that the Department had proposed a 
new definition of ``sex'' for the Section 1557 rule. Some objected that 
any reinterpretation of ``sex'' should be addressed by Congress or left 
to the courts, rather than administrative agencies. Others stated that 
the proposed regulations realign the Department's interpretation with 
several decades of Federal court decisions and with the logical 
interpretation based on the statute's plain meaning of sex (namely sex 
in its biological meaning), which until 2017 had been the consistent 
consensus of the Federal courts.
    Some commenters said that sex is a binary reality of male and 
female, and that Title IX and Section 1557 apply this historic 
understanding of sex. Some commenters stated that there is no evidence 
in the legislative history of either Title IX or the ACA that Congress 
intended to prohibit gender identity or sexual orientation 
discrimination in Section 1557, and that the purpose of Title IX is to 
ensure women (as biologically distinct from men) equal opportunities in 
Federally funded programs and activities.\65\ Commenters said that the 
2016 Rule exceeded the Department's authority by adopting a new, 
different, or expansive definition of prohibited sex discrimination in 
its Section 1557 regulation, although Congress declined to do so when 
presented with the opportunity and instead incorporated its meaning 
from Title IX which was passed in 1972. Some commenters noted that 
Congress has repeatedly considered adding gender identity and sexual 
orientation as protected categories in nondiscrimination laws related 
to education,\66\ or to employment,\67\ or in bills that would redefine 
discrimination ``on the basis of sex'' \68\ as the 2016 Rule attempted, 
but that Congress has chosen not to do so.\69\ Where Congress has 
chosen to prohibit ``gender identity'' discrimination in other 
statutes, it added the term ``gender identity'' as a

[[Page 37178]]

new and separate category of prohibited grounds in addition to ``sex'' 
without redefining ``sex'' itself.\70\ Other commenters said that 
reliance on legislative history is an improper method of statutory 
interpretation, and that the Supreme Court has deemed reliance on 
Congressional inaction to be inappropriate.
---------------------------------------------------------------------------

    \65\ Commenters cited 118 Cong. Rec. 5808 (1972); 44 FR at 
71423.
    \66\ See, e.g., Student Non-Discrimination Act of 2018, H.R. 
5374, 115th Congress, 2nd sess.; online at: https://www.congress.gov/115/bills/hr5374/BILLS-115hr5374ih.pdf: ``No 
student shall, on the basis of actual or perceived sexual 
orientation or gender identity . . . be excluded from participation 
in, or be denied the benefits of, or be subjected to discrimination 
under any program or activity receiving Federal financial 
assistance.''
    \67\ See, e.g., Employment Non-Discrimination Act of 2013, S. 
815, 113th Congress, 1st sess.; online at: https://www.govtrack.us/congress/bills/113/s815/text: ``It shall be an unlawful employment 
practice for an employer--(1) to fail or refuse to hire or to 
discharge any individual, or otherwise discriminate against any 
individual . . . because of such individual's actual or perceived 
sexual orientation or gender identity . . .''
    \68\ See, e.g., Equality Act, H.R. 5, 116th Congress, 1st sess.; 
online at: https://www.congress.gov/116/bills/hr5/BILLS-116hr5rfs.pdf; amends Civil Rights Act of 1964 ``by striking `sex,' 
each place it appears and inserting `sex (including sexual 
orientation and gender identity)' . . .''
    \69\ See H.R. 1652, 113th Cong. (2013); S. 439, 114th Cong. 
(2015). H.R. 3185, 114th Cong. (2015); S. 1858, 114th Cong. (2015); 
H.R. 2015, 110th Cong. (2007); H.R. 2981, 111th Cong. (2009); S. 
811, 112th Cong. (2011); See H.R. 4636, 103rd Cong. (1994).
    \70\ 18 U.S.C. 249(a)(2).
---------------------------------------------------------------------------

    One commenter cited U.S. Supreme Court cases as setting forth the 
binding legal standard of sex discrimination as a binary biological 
concept. The commenter cited Tuan Anh Nguyen v. I.N.S. as rejecting an 
approach of ``[m]echanistic classification of all our differences as 
stereotypes'' because it obscures the reality that ``physical 
differences between men and women . . . are enduring,'' 533 U.S. 53, 73 
(2001), as well as Justice Ginsburg's majority opinion in United States 
v. Virginia, which held that `` `[T]he two sexes are not fungible; a 
community made up exclusively of one [sex] is different from a 
community composed of both.' '' 518 U.S. at 533 (1996).
    Some commenters stated that changing cultural preferences should 
not be the standard for interpreting legal texts. Others analogized 
Title IX's lack of a definition of ``sex'' to the lack of a definition 
of ``race'' under the Civil Rights Act of 1964, where courts looked to 
the plain and ordinary meaning to interpret it as based on a person's 
``family, tribe, people, or nation belonging to the same stock.'' Other 
commenters cited analyses of public meanings at the time of adoption, 
concluding that when ``gender'' was used, which was rare, it was used 
in contrast to sex: Gender referred to socially constructed roles, 
while sex, according to virtually every dictionary of the time, 
referred to biological differences between men and women.\71\ Other 
commenters stated that use of the term ``gender'' (with regard to one's 
identity) as separate from ``sex'' (with regard to one's biology) is 
relatively new and is improperly interpreted today as evidence of 
support for gender-identity legal theories in prior legal precedents or 
decades-old statutes. Some commenters asserted that at the time of the 
passage of the underlying Federal civil rights statutes, ``sex'' and 
``gender'' were commonly used identically under Title VII, Title IX, 
and the Equal Protection Clause to refer to biological sex.\72\ 
However, other commenters disagreed, and stated that historical sources 
demonstrate the variability and complexity of the concept of sex to 
include ``[t]he sum of the morphological, physiological, and behavioral 
peculiarities of living beings.''
---------------------------------------------------------------------------

    \71\ Commenters cited Joanne Meyerowitz, A History of 
``Gender,'' 113 a.m. Hist. Rev. 1346, 1353 (2008); David Haig, The 
Inexorable Rise of Gender and the Decline of Sex: Social Change in 
Academic Titles, Archives of Sexual Behavior 1945-2001 (Apr. 2004); 
Sari L. Reisner, et al., ``Counting'' Transgender and Gender-
Nonconforming Adults in Health Research, Transgender Studies 
Quarterly 37 (Feb. 2015); New Oxford Am. Dictionary 721-22, 1600 (3d 
ed. 2010).
    \72\ See Glenn v. Brumby, 663 F.3d 1312, 1315 (11th Cir. 2011) 
(citing City of Cleburne v. Cleburne Living Ctr., Inc., 473 U.S. 
432, 440-41 (1985). (``In describing generally the contours of the 
Equal Protection Clause, the Supreme Court noted its application to 
this issue, referencing both gender and sex, using the terms 
interchangeably . . .'').
---------------------------------------------------------------------------

    Some commenters stated that the terms male or female apply to 
everyone. Commenters stated that the ``sex'' of an organism is a clear, 
provable, objective, identifiable, biological, and binary reality 
according to relevant textbooks, studies, and articles from various 
specialties in the scientific community, including embryology, 
genomics, psychiatry, clinical anatomy, neuropsychology, developmental 
biology, genetics, endocrinology, neuropsychiatry, radiology, 
organismic and evolutionary biology, neuropharmacology, pediatrics, and 
pathology.\73\ Healthcare providers stated that the reality of sex, as 
male or female, can be identified through advanced chromosomal testing 
such as karyotyping or simple genital identification at birth in 
roughly 99.98% of cases, leaving the remaining 0.02% as diagnoses with 
intersex or ambiguous conditions. Others stated that delineating a 
binary division on the basis of reproductive organs reflected an 
outdated paradigm and was not universally descriptive of transgender, 
transitioning, androgynous, intersex, two-spirit, or questioning 
individuals.
---------------------------------------------------------------------------

    \73\ Commenters cited texts including, e.g., T.W. Sadler, Ph.D., 
Langman's Medical Embryology (Philadelphia: Lippincott Williams & 
Wilkins, 2004), 40; William J. Larsen, Ph.D., Human Embryology (New 
York: Churchill Livingstone, 2001), 519; Keith L. Moore, Ph.D., DSc, 
and T.V.N. Persaud, M.D., Ph.D. DSc, FRCPath., The Developing Human: 
Clinically Oriented Embryology (Philadelphia: Saunders/Elsevier, 
2003), 35; Maureen L. Condic, Ph.D. and Samuel B. Condic, Ph.D., 
``Defining Organisms by Organization,'' National Catholic Bioethics 
Quarterly 5, no. 2 (Summer 2005): 336; Lawrence S. Mayer, Ph.D., and 
Paul R. McHugh, M.D., ``Sexuality and Gender Findings from the 
Biological, Psychological, and Social Sciences,'' New Atlantis 50 
(Fall 2016): 89; Scott F. Gilbert, Ph.D. Developmental Biology 
(Sunderland, Mass.: Sinauer Associates, 2016), 519-20; and William 
J. Larsen, Ph.D., Human Embryology (New York: Churchill Livingstone, 
2001), 307; Nichole Rigby, M.A. and Rob J. Kulathinal, Ph.D., 
``Genetic architecture of sexual dimorphism in humans,'' J. of 
Cellular Physiology 230, no. 10 (2015): 2305; Jonathan C.K. Wells, 
Ph.D., ``Sexual dimorphism of body composition,'' Best Practice & 
Research: Clinical Endocrinology & Metabolism 21 (2007): 415; Larry 
Cahill, Ph.D., ``His Brain, Her Brain,'' Scientific American, 
October 1, 2012; Larry Cahill, Ph.D. ``A Half-Truth Is a Whole Lie: 
On the Necessity of Investigating Sex Influences on the Brain,'' 
Endocrinology 153 (2012): 2542; Madhura Ingalhalikar, Ph.D., et al., 
``Sex differences in the structural connectome of the human brain,'' 
Proceedings of the National Academy of Sciences 111 (January 2014): 
823-28.
---------------------------------------------------------------------------

    Some commenters stated that removal of a regulatory definition of 
``sex'' leaves the regulation ambiguous, and the 2016 Rule was 
justified in clarifying by adding a definition that included gender 
identity and termination of pregnancy. Other commenters stated that the 
public widely understands the state of being either male or female, as 
determined by one's chromosomes or genetics, which leaves no ambiguity.
    Response: Because Section 1557 incorporates Title IX's prohibition 
on discrimination ``on the basis of sex,'' it presupposes that the 
executive and judicial branches can recognize the meaning of the term 
``sex.'' This final rule repeals the 2016 Rule's definition of ``on the 
basis of sex,'' but declines to replace it with a new regulatory 
definition. See 84 FR at 27857. Instead, the final rule reverts to, and 
relies upon, the plain meaning of the term in the statute.
    ``Sex'' according to its original and ordinary public meaning 
refers to the biological binary of male and female that human beings 
share with other mammals. As noted in briefs recently submitted by the 
Federal government to the Supreme Court, discrimination on the basis of 
sex means discrimination on the basis of the fact that an individual is 
biologically male or female.\74\ Several commenters reference various 
sources of legislative history: That of Title IX, of Congress's 
decision to add protections on the basis of sexual orientation and 
gender identity to other statutes alongside protections on the basis of 
sex, and of Congress's repeated refusal to add those protections in 
other cases.\75\ These sources support the plain

[[Page 37179]]

meaning of Title IX, but are not the only source of support for the 
Department's understanding of the meaning of the word ``sex.'' 
Contemporaneous dictionaries and common usage make clear that ``sex'' 
in Title IX means biological sex.\76\ Even today, the article on gender 
dysphoria in the Diagnostic and Statistical Manual of Mental Disorders, 
Fifth Edition defines ``sex'' to ``refer to the biological indicators 
of male and female (understood in the context of reproductive 
capacity), such as in sex chromosomes, gonads, sex hormones, and 
nonambiguous internal and external genitalia.'' \77\ The term 
``gender'' may sometimes be ambiguous. However, neither Title IX nor 
Section 1557 uses that term, and the ordinary public meaning of the 
term ``sex'' in Title IX is unambiguous. In order to avoid ambiguities 
associated with the term ``gender,'' the Department's regulations and 
guidance have, where relevant, distinguished sex (in its biological 
meaning) from gender, gender identity, or gender expression.\78\
---------------------------------------------------------------------------

    \74\ Bostock v. Clayton Cty. Bd. of Commissioners, 2019 WL 
4014070 at *25 (U.S. 2019) (Brief for the United States as Amicus 
Curiae Supporting Affirmance in No. 17-1618 (Bostock v. Clayton Cty. 
Bd. of Commissioners) and Reversal in No. 17-1623 (Altitude Express 
Inc. v. Zarda)); Statement of Interest for DOJ, Soule v. Conn. Ass'n 
of Schools, 3:20-cv-00201-RNC (D. Conn., filed March 27, 2020) at 4-
5 (``When Congress enacted Title IX in 1972, the `ordinary, 
contemporary, common meaning' of `sex' was biological sex. . . . 
Title IX consistently uses `sex' as a binary concept capturing only 
two categories: Male and female.'').
    \75\ Examples of bills where Congress chose not to enact 
prohibitions on discrimination on the basis of sexual orientation or 
gender identity include: The Employment Non-Discrimination Act 
(ENDA), which has been introduced ten times in the U.S. House of 
Representatives but has never proceeded out of committee: H.R. 4636 
(103rd Cong. 1994); H.R. 1863 (104th Cong. 1995); H.R. 1858 (105th 
Cong. 1997); H.R. 2355 (106th Cong. 1999); H.R. 2692 (107th Cong. 
2001); H.R. 3285 (108th Cong. 2003); H.R. 2015 (110th Cong. 2007); 
H.R. 2981 (111th Cong. 2009); H.R. 1397 (112th Cong. 2011); H.R. 
1755 (113th Cong. 2013). Similarly, the Equality Act has been 
introduced in three successive sessions of Congress; it did not 
proceed out of committee in the 114th and 115th Congresses, and it 
passed the House of Representatives on May 17, 2019. See H.R. 3185 
(114th Cong. 2015); S. 1828 (114th Cong. 2015); H.R. 2282 (115th 
Cong. 2017); S. 1006 (115th Cong. 2017); H.R. 5 (116th Cong.) 
(introduced Mar. 3, 2019).
    \76\ See New Oxford Am. Dictionary 721-22, 1600 (3d ed. 2010). 
Some Federal courts have gone farther, using the legislative history 
to show that ``Congress never considered nor intended'' for sex 
under Title VII (which is often used to interpret Title IX) to apply 
to ``anything other than the traditional concept of sex,'' and that 
coverage for a concept such as transgender status ``surely'' would 
have been mentioned in the legislative history had Congress intended 
such an ``all-encompassing interpretation.'' The Department finds 
the analysis in these Court decisions persuasive, but declines to 
rely on their reasoning. See Ulane v. Eastern Airlines Inc., 742 F. 
2d 1081, 1085 (7th Cir. 1984) (analyzing ``The total lack of 
legislative history supporting the sex amendment coupled with the 
circumstances of the amendment's adoption''); see also Voyles v. 
Ralph K. Davies Medical Center, 403 F. Supp. 456, 457 (N.D. Cal. 
1975), aff'd, 570 F.2d 354 (9th Cir. 1978) (finding a ``void'' in 
the legislative history and concluding that Congress's ``paramount, 
if not sole, purpose in banning employment practices predicated upon 
an individual's sex was to prohibit conduct which, had the victim 
been a member of the opposite sex, would not have otherwise 
occurred. Situations involving transsexuals, homosexuals or bi-
sexuals were simply not considered.'').
    \77\ American Psychiatric Ass'n, Diagnostic and Statistical 
Manual of Mental Disorders, 5th ed. (Arlington, VA: American 
Psychiatric Ass'n, 2013), 451-59.
    \78\ See 45 CFR 411.5; also 79 FR 77771, 84 FR 27854. See NIH, 
Office of Research on Women's Health, ``Sex & Gender,'' https://orwh.od.nih.gov/sex-gender (``NIH is committed to improving health 
by supporting the rigorous science that drives medical advances. 
Sex/gender influence health and disease, and considering these 
factors in research informs the development of prevention strategies 
and treatment interventions for both men and women. `Sex' refers to 
biological differences between females and males, including 
chromosomes, sex organs, and endogenous hormonal profiles. `Gender' 
refers to socially constructed and enacted roles and behaviors which 
occur in a historical and cultural context and vary across societies 
and over time. . . . With continuous interaction between sex and 
gender, health is determined by both biology and the expression of 
gender.'').
    For these reasons, in general throughout this document the 
Department prefers to use simply the term ``sex'' because the plain, 
ordinary meaning of ``sex'' is already biological, so it is 
generally redundant to use the term ``biological sex.'' Where the 
Department uses the term ``biological sex,'' or similarly 
``biological male'' or ``biological female,'' it does so merely to 
emphasize this point and for the purposes of clarity in particular 
contexts, and not to imply that there is a distinction between 
biological sex and sex under the plain meaning of the term.
---------------------------------------------------------------------------

    Some commenters challenge the Department's approach by pointing to 
medical conditions that they refer to as ``intersex.'' The term refers 
to rare medical conditions that the medical literature, since 2006, has 
preferred to call ``disorders of sexual development'' (DSD).\79\ DSD 
are estimated to be present in 0.0167%-0.022% of the population. More 
importantly, DSD are ``congenital conditions in which development of 
chromosomal, gonadal, or anatomic sex is atypical.'' \80\ This medical 
definition refers to, and presupposes, the ordinary biological and 
binary meaning of ``sex,'' just as the definition of any medical 
disorder presupposes an understanding of healthy baseline 
functionality.
---------------------------------------------------------------------------

    \79\ R.L.P. Romao, J.L. Pippi Salle, and D.K. Wherett, ``Update 
on the Management of Disorders of Sex Development,'' Pediatric 
Clinics of North America 59 (2012), 853-69; I.A. Hughes, ``Disorders 
of Sex Development: A New Definition and Classification,'' Best 
Practice & Research Clinical Endocrinology & Metabolism 22:1 (2008), 
119-34.
    \80\ A. Rawal and P. Austin, ``Concepts and Updates in the 
Evaluation and Diagnosis of Common Disorders of Sexual 
Development,'' Current Urology Reports 16:83 (2015), 1-9; I. Hughes 
et al., ``Consequences of the ESPE/LWPES guidelines for diagnosis 
and treatment of disorders of sex development,'' Best Practice & 
Research Clinical Endocrinology & Metabolism 21:3 (2007), 351-65; 
P.A. Lee et al., ``Consensus Statement on Management of Intersex 
Disorders,'' Pediatrics 118:2 (2006), e488-500.
---------------------------------------------------------------------------

    Title IX,\81\ along with its implementing regulations,\82\ 
consistently understands ``sex'' to refer to the biological binary 
categories of male and female only.\83\ The Department of Justice has 
recently noted that ``[i]f the term `sex' in Title IX included `gender 
identity'--which, according to the American Psychiatric Association, 
may include `an individual's identification as . . . some category 
other than male or female,' Diagnostic and Statistical Manual of Mental 
Disorders Fifth Edition 451 (2013) (emphasis added)--then multiple 
Title IX provisions would make little sense.'' \84\ Many comments on 
the 2019 NPRM assume that Section 1557's protection against 
discrimination ``on the basis of sex'' covers women's health issues 
including pregnancy, uterine cancer, and prenatal and postpartum

[[Page 37180]]

services. That assumption is correct: These issues are protected under 
Section 1557 because of the ordinary and biological meaning of ``sex.''
---------------------------------------------------------------------------

    \81\ See 42 U.S.C. 1681(a)(2)(``both sexes''), (a)(2) (``one 
sex'' and ``other sex''), (a)(6)(B) (``Men's'' and ``Women's''), 
(a)(6)(B) (``Boy'' and ``Girl''); (a)(7)(A) (``Boys'' and 
``Girls''), (a)(7)(B)(i) (``Boys'' and ``Girls''), (a)(8) (``father-
son'' ``mother-daughter''), and (a)(8) (``one sex'' and ``other 
sex''). See also 42 U.S.C. 1681(a)(2)(6)(``fraternity'' and 
``sorority'').
    \82\ See language such as ``male and female,'' ``both sexes,'' 
``each sex,'' ``one sex . . . the other sex,'' and ``boys'' and 
``girls,'' at 45 CFR 86.2(s), 86.7, 86.17(b)(2), 86.21(c)(4), 
86.31(c), 86.32(b)(2) and (c)(2), 86.33, 86.37(a)(3), 86.41(b) and 
(c), 86.55(a), 86.58(a) and (b), 86.60(b), and 86.61. See similarly 
Department of Education Title IX regulation at 34 CFR 106.2(s), 
106.7, 106.17(b)(2), 106.21(c)(4), 106.31(c), 106.32(b)(2) and 
(c)(2), 106.33, 106.37(a)(3), 106.41(b) and (c), 106.55(a), 
106.58(a) and (b), 106.60(b), and 106.61; Department of Justice 
Title IX regulation at 28 CFR 54.105, 54.130, 54.230(b)(2), 
54.235(b)(3), 54.300(c)(4), 54.400(c), 54.405(b)(2) and (c)(2), 
54.410, 54.430(a)(3), 54.450(b) and (c)(2), 54.520(a), 54.535(a) and 
(b), 54.545(b), and 54.550. See also DOJ Coordination and Compliance 
Division, Title IX Regulations by Agency, https://www.justice.gov/crt/fcs/Agency_Regulations#2.
    \83\ Federal courts have also made this observation. See, e.g., 
Doe v. Boyertown Area Sch. Dist., 897 F.3d 518, 522 (3d Cir. 2018) 
(```Sex' is defined as `the anatomical and physiological processes 
that lead to or denote male or female.' Typically, sex is determined 
at birth based on the appearance of external genitalia.''); Hively 
v. Ivy Tech Cmty. Coll., 853 F.3d 339, 362 (7th Cir. 2017) (``[i]n 
common, ordinary usage in 1964--and now, for that matter--the word 
`sex' means biologically male or female.'') (Sykes, J., dissenting) 
(emphasis in original); cf. id. at 357 (``we, who are judges rather 
than members of Congress, are imposing on a half-century-old statute 
a meaning of `sex discrimination' [to include sexual orientation] 
that the Congress that enacted it would not have accepted.'') 
(Posner, J., concurring); G.G. ex rel Grimm v. Gloucester Cnty. Sch. 
Bd., 822 F.3d 709, 736 (4th Cir. 2016) (``Title IX was enacted in 
1972 and the regulations were promulgated in 1975 and readopted in 
1980, and during that time period, virtually every dictionary 
definition of `sex' referred to the physiological distinctions 
between males and females, particularly with respect to their 
reproductive functions.'') (Niemeyer, J., dissenting); Statement of 
Interest for DOJ, Soule v. Connecticut Association of Schools, 3:20-
cv-00201-RNC (D. Conn., filed March 27, 2020) at 5 (``Other 
provisions of Title IX employ ``sex'' as a binary term, and thus 
provide further confirmation that the prohibition on ``sex'' 
discrimination does not extend to discrimination on the basis of 
transgender status or gender identity.''); Franciscan All., Inc. v. 
Burwell, 227 F. Supp. 3d 660, 687 (N.D. Tex. 2016) (``the meaning of 
sex unambiguously refers to the biological and anatomical 
differences between male and female students as determined at their 
birth,'' quoting Texas v. United States, 201 F. Supp. 3d 810, 833 
(N.D. Tex. 2016)); Johnston v. Univ. of Pittsburgh of Commw. Sys. of 
Higher Educ, 97 F. Supp. 3d 657, 676 (W.D. Pa. 2015) (``[o]n a plain 
reading of the statute, the term `on the basis of sex' in Title IX 
means nothing more than male and female, under the traditional 
binary conception of sex consistent with one's birth or biological 
sex'').
    \84\ Statement of Interest for DOJ, Soule v. Conn. Ass'n of 
Schools, 3:20-cv-00201-RNC (D. Conn., filed March 27, 2020) at 5.
---------------------------------------------------------------------------

    Prior to the ACA, OCR itself had always applied Title IX in its 
enforcement actions using the biological binary meaning of sex.\85\ 
Recently, OCR has resolved a number of Section 1557/Title IX cases of 
discrimination against women in healthcare programs and activities 
funded by the Department, again relying on a biological understanding 
of sex.\86\ The 2016 Rule itself presupposed the biological meaning of 
sex when it permitted ``sex-specific'' health programs that are 
``restricted to members of one sex,'' when it incorporated 
``termination of pregnancy'' into discrimination on the basis of sex, 
and when it referred repeatedly to ``sex assigned at birth.'' \87\
---------------------------------------------------------------------------

    \85\ In the 2015 NPRM, the earliest record of the Department's 
new understanding of sex discrimination cited was an OCR letter 
dated 12 July 2012. 80 FR 54176.
    \86\ U.S. Department of Health and Human Services, ``HHS Office 
for Civil Rights Enters Into Agreement with Oklahoma Nursing Home to 
Protect Patients with HIV/AIDS from Discrimination'' (2018), https://www.hhs.gov/about/news/2017/09/08/hhs-office-for-civil-rights-enters-into-agreement-with-oklahoma-nursing-home.html; ``OCR works 
with DOJ to ensure Federally funded medical center provides 
communication services for deaf and hard of hearing patients'' 
(2018), https://www.hhs.gov/about/news/2017/12/20/ocr-works-with-doj-to-ensure-Federally-funded-medical-center-provides-communication-services-for-deaf-and-hard-of-hearing-patients.html; 
``HHS OCR Secures Agreement with MSU to Resolve Investigation into 
Sexual Abuse by Larry Nassar'' (2019), https://www.hhs.gov/about/news/2019/08/12/hhs-ocr-secures-agreement-msu-resolve-investigation-sexual-abuse-larry-nassar.html (requiring chaperone policies where 
patients can request a chaperone of the same sex, meaning biological 
sex, during sensitive physical examinations).
    \87\ See 81 FR 31384, 31387, 31406, 31408-09, 31428, 31429, 
31435, 31436, 31467, 31470, 31471, 31472.
---------------------------------------------------------------------------

    Supreme Court case law on Title IX has consistently presupposed the 
biological and binary meaning of ``sex.'' \88\ Even when some lower 
courts have recently extended Title VII or Title IX protections ``on 
the basis of sex'' to encompass gender identity, they have done so only 
by presupposing the ordinary public meaning of ``sex'' as a biological 
binary reality. In Whitaker v. Kenosha Unified Sch. Dist., for example, 
the Seventh Circuit stated: ``Here, the School District's policy cannot 
be stated without referencing sex, as the School District decides which 
bathroom a student may use based upon the sex listed on the student's 
birth certificate. This policy is inherently based upon a 
sex[hyphen]classification and heightened review applies.'' \89\ 
Likewise, in Harris Funeral Homes, the Sixth Circuit stated: ``Here, we 
ask whether Stephens would have been fired if Stephens had been a woman 
who sought to comply with the women's dress code. The answer quite 
obviously is no. This, in and of itself, confirms that Stephens's sex 
impermissibly affected Rost's decision to fire Stephens.'' \90\ In 
other words, Stephens ``quite obviously'' is not ``a woman'' because 
``Stephens's sex'' is male.\91\
---------------------------------------------------------------------------

    \88\ See, e.g., Nat'l Collegiate Athletic Ass'n v. Smith, 525 
U.S. 459, 464 (1999) (Title IX claim based on allegation ``that the 
NCAA discriminates on the basis of sex by granting more waivers from 
eligibility restrictions to male than female postgraduate student-
athletes''); Cannon v. Univ. of Chicago, 441 U.S. 677, 680 (1979) 
(Title IX claim based on allegation that plaintiff's ``applications 
for admission to medical school were denied . . . because she is a 
woman'').
    \89\ 858 F.3d 1034, 1051 (7th Cir. 2017).
    \90\ Equal Emp't Opportunity Comm'n v. R.G. & G.R. Harris 
Funeral Homes, 884 F.3d 560 (6th Cir. 2018), 575. See also certain 
passages during oral argument on appeal at the U.S. Supreme Court, 
e.g.: ``here, Ms. Stephens, was being treated differently because of 
her sex. . . .Yes, if she had not been a--if she had not been 
assigned at birth the sex that she was assigned at birth, she would 
have been treated differently'' (Kagan, J., Transcript of Oral 
Argument at 41, R.G. & G.R. Harris Funeral Homes, Inc. v. E.E.O.C., 
139 S. Ct. 1599 (2019) (No. 18-107), https://www.supremecourt.gov/oral_arguments/argument_transcripts/2019/18-107_4gcj.pdf); See also 
Mr. Cole, counsel for respondents at oral argument, Id. at 4-5: 
``None of [our] arguments ask this Court to redefine or, in Judge 
Posner's words, update sex. They assume, arguendo, that sex means at 
a minimum sex assigned at birth based on visible anatomy or 
biological sex.'' Id. at 28: ``[O]ur argument rests on text meaning, 
at a minimum, sex assigned at birth or biological sex, and everybody 
agrees-- . . . [we are] asking you to interpret the statute as it is 
written and as everybody agrees it applies to sex assigned at 
birth.''
    \91\ Harris 884 F.3d at 575. It is true that the Harris court 
referred to Stephens with female pronouns throughout the rest of its 
ruling, but it appeared to do so based on its concept of gender 
identity, not of sex. Had the Harris court employed female pronouns 
in the quoted passage, it would have visibly undermined the basis of 
its Title IX analysis.
---------------------------------------------------------------------------

    The Department does not deny that some courts have caused confusion 
as to the meaning of sex in civil rights law. Conflicting views in the 
lower courts, however, do not preclude the Department, consistent with 
the position of the U.S. government, as set forth in briefs filed in 
the Supreme Court, from returning to its decades-long practice of 
conforming to the original and ordinary public meaning of ``sex'' in 
Title IX, a meaning that continues to be presupposed even in the same 
rulings that have caused this confusion.
    Some lower courts have recently held that discrimination ``on the 
basis of sex'' encompasses gender identity or sexual orientation even 
when ``sex'' is understood in its ordinary, biological, and binary 
sense. These views will be addressed below in the relevant subsections.
    Comment: Some commenters argued that the proposed rule would be 
inconsistent with the purposes of the ACA; that the weight of law 
recognizes sexual orientation and gender identity as forms of sex 
discrimination; and that the proposed rule would undermine Congress's 
intent to expand access to healthcare and healthcare coverage. 
Commenters emphasized that it is unacceptable for a healthcare facility 
to deny medical care to a patient based on the patient's sexual 
orientation or transgender status.
    Response: The Department does not condone the unjustified denial of 
needed medical care to anyone, and believes that everyone, regardless 
of gender identity or sexual orientation, should be treated with 
dignity and respect. The Department must interpret Congress's purpose 
in passing the ACA by reading that statute's plain text. The ACA sought 
to expand access to healthcare and healthcare coverage through some 
means but not others: in particular, Congress saw fit to incorporate 
into the ACA certain nondiscrimination protections, and not others. For 
example, in the unlikely event that a healthcare provider were to deny 
services to someone based solely on his or her political affiliation, 
the Department would not be able to address such denial of care under 
Section 1557. Under this final rule, OCR is committed to no less than 
full enforcement of the prohibitions on discrimination that Congress 
included in Section 1557, without exceeding the statutory text. Unlike 
other bases of discrimination, the categories of gender identity and 
sexual orientation (as well as political affiliation) are not set forth 
in those statutes.\92\
---------------------------------------------------------------------------

    \92\ The Department responds below to comments with respect to 
sexual orientation and gender identity specifically.
---------------------------------------------------------------------------

    Comment: Some insurers stated that they already took steps to come 
into compliance with prohibitions related to gender identity and 
termination of pregnancy in their plans under the 2016 Rule, and that 
they will incur burdens to change their plans. Other commenters stated 
that the 2016 Rule created burdens that, if unrelieved, would encumber 
their day-to-day affairs and limit their ability to provide healthcare 
services for their patients or healthcare coverage for their employees.
    Response: As discussed in the Regulatory Impact Analysis below, 
this rule removes certain requirements, without requiring providers to 
incur new burdens related to those requirements. Whether or not the 
Department revises the regulation, the past expenditures incurred by 
insurers and other commenters to come into

[[Page 37181]]

compliance with the 2016 Rule are ``sunk costs'' that cannot be 
recovered. With the finalization of this rule, insurers have the 
option--as they have had since December 31, 2016--of providing such 
coverage or not. Presumably some insurers will maintain coverage 
consistent with the 2016 Rule's requirements and some will not. The 
final rule also does not alter the status quo, and thus does not impose 
burdens in this regard, because, independent of the finalization of 
this rule, the 2016 Rule's provisions on gender identity and 
termination of pregnancy have been vacated by a final order and 
decision of a federal court.
    Comment: Commenters expressed concern that the proposed rule would 
result in lack of information about gender transition-related services 
or termination of pregnancy, leaving patients without information about 
different surgical procedures and prescription options, and in danger 
of harm. Some argued that women, members of the LGBT community, people 
with disabilities, people with LEP, and racial minorities need 
additional specific protections because they will face greater burdens 
accessing healthcare due to ``intersectionality'' theories. Others, 
however, said it was not appropriate or reflective of current civil 
rights law to analogize sexual orientation or gender identity to race 
or other protected categories.
    Some commenters argued that the 2016 Rule had decreased LGBT 
patients' fears of discrimination, that the proposed rule will lead to 
discrimination against them (including by States, providers, 
marketplaces, agents, and brokers), and that this will increase their 
health disparities, mainly via poorer quality of care, lack of access 
to willing providers especially in rural areas, postponed care 
including preventive care, increased healthcare and insurance costs, 
and impediments to HIV patients' access to medication. Commenters said 
the rule would undermine the President's goal of eradicating HIV. 
Commenters relied on national and statewide reports and studies 
highlighting harm faced by LGBT people due to inadequate healthcare, 
including an increase in substance abuse; worsening psychiatric 
disorders; untreated depression leading to suicide; and higher rates of 
AIDS, HIV and other STIs, cancer, and behavioral health issues. These 
commenters also argued the proposed rule would permit LGBT people to 
suffer discrimination and hence stigmatic injury, which could also 
deter them from disclosing their LGBT status to their physicians and 
seeking proper care. Commenters alleged high rates of mental conditions 
(e.g., depression),\93\ behavioral conditions (e.g., substance use 
disorder),\94\ developmental conditions (e.g., autism, learning 
disabilities), and physical conditions (e.g., HIV, heart disease) among 
the LGBT population. Commenters also expressed concerns about lack of 
communication and consent between providers and patients, and alleged 
that the risk of discrimination is heightened in vulnerable 
populations, including persons with developmental disabilities, persons 
with LEP, elderly patients with diminished capacity, and those who rely 
on surrogates or guardians for making medical decisions on their 
behalf. Others stated that OCR does not have authority to protect all 
forms of discrimination that may negatively impact people, but that it 
must act within its statutory authority.
---------------------------------------------------------------------------

    \93\ Commenters cited Remafedi G, French S, Story M, et al., The 
Relationship Between Suicide Risk and Sexual Orientation: Results of 
a Population-Based Study. Am J Public Health. 1998;88(1):57-60; 
McLaughlin KA, Hatzenbuehler ML, Keyes KM. Responses to 
Discrimination and Psychiatric Disorders Among Black, Hispanic, 
Female, and Lesbian, Gay, and Bisexual Individuals. Am J Public 
Health. 2010;100(8):1477-84.
    \94\ Commenters cited Banez GE, Purcell DW, Stall R, et al., 
Sexual Risk, Substance Use, and Psychological Distress in HIV 
Positive Gay and Bisexual Men Who Also Inject Drugs. AIDS. 2005;19 
(suppl. 1):49-55.
---------------------------------------------------------------------------

    Response: The Department is concerned with the health of all 
Americans. It acts to the fullest extent of its statutory authority in 
its efforts to improve the health and wellbeing of all. Under its civil 
rights authority, it enforces Federal laws requiring nondiscrimination 
on specified grounds, which in the case of Section 1557 are race, 
color, national origin, sex, age, and disability. When OCR receives a 
claim alleging multiple grounds of prohibited discrimination, the 
Department analyzes the elements of each claim according to the statute 
applicable to that ground.
    Consistent with the text of the ACA and, in this case, the 
underlying civil rights statutes incorporated into the ACA, the 
Department seeks, wherever possible, to remove barriers to healthcare. 
Those barriers include regulations that impede providers' ability to 
offer healthcare by interfering with their conscientious medical 
judgments or imposing unnecessary cost burdens on them. By removing 
such provisions from the 2016 Rule, the Department hopes to increase 
the availability of healthcare to all populations.
    As a matter of policy, the Department recognizes and works to 
address barriers to treatment caused by stigma about depression, 
anxiety, substance use disorder, and other comorbid mental and 
behavioral health conditions.\95\ With regard to HIV, this final rule 
does not alter or affect the longstanding Federal protections against 
discrimination for individuals with HIV: Section 504, and hence also 
this final rule, prohibits discrimination on the basis that an 
individual has HIV.\96\ OCR continues to pursue major enforcement 
actions under its authorities \97\ and to provide the public guidance 
\98\ to protect the rights of persons with HIV or AIDS. HHS remains 
committed to ensuring that those living with HIV or AIDS receive full 
protection under the law, in accordance with full implementation of the 
President's National HIV/AIDS Strategy.\99\
---------------------------------------------------------------------------

    \95\ See, e.g., Pain Management Task Force, ``Pain Management 
Best Practices, Fact Sheet on Stigma'' (Aug. 13, 2019), https://www.hhs.gov/sites/default/files/pmtf-fact-sheet-stigma_508-2019-08-13.pdf (``Compassionate, empathetic care centered on a patient-
clinician relationship is necessary to counter the suffering of 
patients . . . . Patients with painful conditions and comorbidities, 
such as anxiety, depression or substance use disorder (SUD) face 
additional barriers to treatment because of stigma.'').
    \96\ See 29 U.S.C. 705(20) (incorporating ADA definition of 
disability into Section 504); 42 U.S.C. 12102(1)-(3); 28 CFR 
35.108(d)(2)(iii)(J).
    \97\ See, e.g., ``HHS Office for Civil Rights Secures Corrective 
Action and Ensures Florida Orthopedic Practice Protects Patients 
with HIV from Discrimination'' (Oct. 30, 2019), https://www.hhs.gov/about/news/2019/10/30/hhs-ocr-secures-corrective-action-and-ensures-fl-orthopedic-practice-protects-patients-with-hiv-from-discrimination.html; ``HHS Office for Civil Rights Enters Into 
Agreement with Oklahoma Nursing Home to Protect Patients with HIV/
AIDS from Discrimination'' (Sept. 8, 2017), https://www.hhs.gov/about/news/2017/09/08/hhs-office-for-civil-rights-enters-into-agreement-with-oklahoma-nursing-home.html.
    \98\ See OCR, ``Know the Rights That Protect Individuals with 
HIV and AIDS,'' https://www.hhs.gov/sites/default/files/ocr/civilrights/resources/factsheets/hivaids.pdf; OCR, ``Protecting the 
Civil Rights and Health Information Privacy Rights of People Living 
with HIV/AIDS,'' https://www.hhs.gov/civil-rights/for-individuals/special-topics/hiv/index.html.
    \99\ See ``Ending the HIV Epidemic: A Plan for America,'' 
https://www.hiv.gov/Federal-response/ending-the-hiv-epidemic/overview.
---------------------------------------------------------------------------

    Regarding commenters' worries about informed consent, this final 
rule does not repeal any informed consent requirements. Besides many 
relevant State laws,\100\ CMS regulations also

[[Page 37182]]

require, as a condition of participation in Medicare, that patients (or 
their legal surrogate) have the right to make informed decisions, the 
right to surgical informed consent policies,\101\ and the right to 
properly executed informed consent forms.\102\ Most States' malpractice 
laws address negligent failure to communicate risks and benefits of 
medical treatment options. Basic elements of informed consent with 
respect to participation in a clinical trial, for example, include: (1) 
Providing information needed to make an informed decision; (2) 
facilitating the understanding of what has been disclosed; and (3) 
promoting the voluntariness of the decision about whether or not to 
participate.\103\
---------------------------------------------------------------------------

    \100\ See, e.g., Alaska Stat. Sec.  09.55.556(a); Ark. Code Ann. 
Sec.  16-114-206; Del. Code Ann. tit. 18, Sec.  6852; Ga. Code Ann. 
Sec.  31-9-6.1; Haw. Rev. Stat. Sec.  671-3; Idaho Code Ann. Sec.  
39-4304; Ind. Code Sec.  16-36-1.5-7; Ky. Rev. Stat. Ann. Sec.  
304.40-320; La. Rev. Stat. Ann. Sec.  40:1299.40; Me. Rev. Stat. 
Ann. tit. 24 Sec.  2905; Neb. Rev. Stat. Sec.  44-2816; Nev. Rev. 
Stat. Sec.  449.710; N.Y. Pub. Health Law Sec.  2805-d; N.C. Gen. 
Stat. Sec.  90-21.13; Or. Rev. Stat. Sec.  677.097; 40 Pa. Cons. 
Stat. Sec.  1303.504; Tenn. Code Ann. Sec.  29-26-118; Tex. Rev. 
Civ. Stat. Ann. art. 4590i, Sec.  6.02; Utah Code Ann. Sec.  78-14-
5; Vt. Stat. Ann. tit. 12, Sec.  1909; Wash. Rev. Code Ann. Sec.  
7.70.050; Wis. Stat. Ann. Sec.  448.30.
    \101\ 42 CFR 482.51(b)(2).
    \102\ 42 CFR 482.24(c)(4)(B)(v).
    \103\ 45 CFR 46.116-117 (HHS Office of Human Research Subject 
regulations).
---------------------------------------------------------------------------

    The Department knows of no data showing that the proper enforcement 
of Federal nondiscrimination law according to statutory text will 
disproportionately burden individuals on the basis of sexual 
orientation and/or gender identity. Because the 2016 Rule explicitly 
declined to make sexual orientation a protected category, and because 
the Rule's gender identity provision has been legally inoperative since 
December 31, 2016, to the extent that LGBT individuals suffer future 
harms, it cannot be attributed to the Department's finalizing this 
rule, as opposed to other causes.
    Comment: Commenters raised concerns that, without the 2016 Rule's 
provisions, certain insurers, such as those offering short-term limited 
duration insurance plans, would not offer coverage for conditions that 
affect only women, such as uterine cancer. Some commenters stated that 
the underlying Title IX regulatory provisions are insufficient by 
themselves to address access to insurance coverage of procedures 
provided to a single sex in healthcare. Some commenters stated that, 
without the 2016 Rule, women would not be able to afford insurance for 
medical and hospital care.
    Response: The Department is strongly committed to promoting women's 
health. The Department enforces or implements ACA provisions that 
protect patient access to obstetrical and gynecological care.\104\ The 
Department also enforces other provisions, both within and outside the 
ACA, that, for example, provide for maternity and newborn care as 
essential health benefits,\105\ require coverage of women's preventive 
health services,\106\ establish (as a matter of statute) the HHS Office 
of Women's Health and the Pregnancy Assistance Fund,\107\ and promote 
young women's breast health awareness.\108\
---------------------------------------------------------------------------

    \104\ See, e.g., 42 U.S.C. 300gg-19a(d).
    \105\ 42 U.S.C. 18022(b)(1)(D).
    \106\ 42 U.S.C. 300gg-13.
    \107\ 42 U.S.C. 237a; 42 U.S.C. 18202.
    \108\ 42 U.S.C. 280m.
---------------------------------------------------------------------------

    The Department's commitment to women's health also includes 
vigorous enforcement of Section 1557's prohibition on sex-based 
discrimination. Under HHS's Title IX regulations, which OCR will use 
for enforcing Section 1557, covered entities must provide medical 
insurance benefits, services, policies, and plans without 
discrimination on the basis of sex. This does not preclude a covered 
entity's providing a covered benefit or service that is used uniquely 
by individuals of one sex or the other, such as uterine cancer 
treatments. However, any plan that includes full-coverage health 
insurance or services must encompass gynecological care.\109\ As 
discussed in the relevant section below, the Department is bound by 
applicable law in determining the extent to which Section 1557 covers 
short-term limited duration insurance.
---------------------------------------------------------------------------

    \109\ See, e.g., 45 CFR 86.39.
---------------------------------------------------------------------------

    Comment: Some commenters said that the Department was wrong to 
claim in the 2019 NPRM that State and local entities are better 
equipped to address issues of gender dysphoria or sexual orientation, 
because they say that fifty percent of the LGBT population lives in 
States without laws prohibiting insurance companies from discriminating 
based on LGBT status. Others said that, because States like New York 
explicitly protect persons who identify as LGBT, the new rule will 
cause confusion for providers and patients about people's rights under 
Federal and State law. Some commenters suggested that including gender 
identity and sexual orientation in the Final Rule would reduce 
ambiguity in its interpretation and implementation.
    Response: States and localities do indeed manifest a range of 
different views on what specific protections should be accorded to the 
categories of sexual orientation and gender identity in civil rights 
law, including healthcare civil rights law. That is precisely why, 
under our Constitutional Federal system, it is appropriate not to 
preempt States' diverse views on these topics without a clear mandate 
from Congress to do so. This final rule complies with the federalism-
related portions of Executive Orders 12866 and 13132 by avoiding undue 
interference with State, local, or tribal governments in the exercise 
of their governmental functions. It leaves them free to balance the 
multiple competing considerations involved in the contentious and 
fraught set of questions surrounding gender dysphoria and gender 
identity, and to adopt protections on the basis of sexual orientation 
or gender identity to the extent that they see fit (so long as they 
comply with Federal law).\110\
---------------------------------------------------------------------------

    \110\ Ambiguity in the 2016 Rule's provisions regarding gender 
identity is addressed below. The Department further notes that 
sexual orientation was explicitly rejected as a protected category 
under the 2016 Rule. 81 FR 31390 (``OCR has decided not to resolve 
in this rule whether discrimination on the basis of an individual's 
sexual orientation status alone is a form of sex discrimination.'').
---------------------------------------------------------------------------

    The Department notes, furthermore, that under the guaranteed 
issuance and renewal provisions of the ACA, health insurance issuers 
that offer health insurance coverage in the individual or group market 
in a state must accept every employer and every individual in that 
state that applies for such coverage, and must renew or continue in 
force such coverage at the option of the plan sponsor or the 
individual. See 42 U.S.C. 300gg-1 (guaranteed issuance), 300gg-2 
(guaranteed renewability). Federal law similarly limits the bases on 
which a health insurance issuer can vary premium rates in the 
individual or small group market; such bases are limited to type of 
coverage (individual or family), rating area, age, and tobacco use. 42 
U.S.C. 300gg. Thus, commenters' concern that LGBT individuals could be 
denied coverage if the Section 1557 rule does not include gender 
identity (or sexual orientation) is misplaced.
    Comment: One commenter expressed concern that the proposed rule 
will have an effect beyond the United States by showing the 
international community that the United States Federal government does 
not recognize protections for individuals based on gender identity or 
sexual orientation in healthcare.
    Response: The Department is not primarily responsible for the 
United States' foreign relations. Moreover, the Department has an 
obligation to implement the statutes according to the plain language of 
the text passed by Congress (unless unconstitutional), regardless of 
international implications.
    Comment: Some commenters requested that the Department retain all 
guidance it had issued under the 2016 Rule. Other commenters stated 
that components of HHS continue to offer

[[Page 37183]]

inconsistent guidance about the legal interpretation of the 2016 Rule.
    Response: The Department stated in the preamble to the proposed 
rule that guidance under the 2016 Rule that conflicted with the 
proposed rule was suspended until further notice.\111\ All such 
guidance is hereby withdrawn, effective upon publication of this final 
rule, and is in the process of being removed from the Department's 
website. Pursuant to Executive Order 13891, the Administration is also 
undertaking efforts to comprehensively review guidance documents ``to 
ensure that Americans are subject to only those binding rules imposed 
through duly enacted statutes or through regulations lawfully 
promulgated under them, and that Americans have fair notice of their 
obligations,'' \112\ which also requires removal of inconsistent 
guidance from departmental websites.
---------------------------------------------------------------------------

    \111\ 84 FR 27872 (``Upon publication of this notice of proposed 
rulemaking, the Department will, as a matter of enforcement 
discretion, suspend all subregulatory guidance issued before this 
proposed rule that interprets or implements Section 1557 (including 
FAQs, letters, and the preamble to [the 2016 Rule]) that is 
inconsistent with any provision in this proposed rule (including the 
preamble) or with the requirements of the underlying civil rights 
statutes cross-referenced by Section 1557 or their implementing 
regulations.'').
    \112\ ``Promoting the Rule of Law Through Improved Agency 
Guidance Documents,'' Exec. Order No. 13891, 84 FR 55235 (Oct. 9, 
2019).
---------------------------------------------------------------------------

ii. Gender Identity, Including Single-Sex Services Under Sec.  92.206 
of the 2016 Rule
    The Department proposed to repeal the 2016 Rule's definition of 
``on the basis of sex'' to encompass gender identity, which the 2016 
Rule defined as ``an individual's internal sense of gender, which may 
be male, female, neither, or a combination of male and female, and 
which may be different from an individual's sex assigned at birth.'' 
\113\ The Department also proposed to repeal Sec.  92.206 of the 2016 
Rule, which has three elements. First, the section required covered 
entities not to discriminate ``on the basis of sex'' (as defined in 
Sec.  92.4 of the 2016 Rule) in providing access to health programs and 
activities. Second, it required them to ``treat individuals consistent 
with their gender identity.'' Third, it prohibited covered entities 
from ``deny[ing] or limit[ing] health services that are ordinarily or 
exclusively available to individuals of one sex, to a transgender 
individual based on the fact that the individual's sex assigned at 
birth, gender identity, or gender otherwise recorded is different from 
the one to which such health services are ordinarily or exclusively 
available.'' \114\
---------------------------------------------------------------------------

    \113\ 81 FR 31387-88, 31467.
    \114\ 81 FR 31471.
---------------------------------------------------------------------------

    Comment: Commenters offered varying views on the state of gender-
identity nondiscrimination protections under current Federal law. Some 
commenters alleged that it is settled law that Section 1557 prohibits 
gender identity discrimination. Others stated that, in other Federal 
court decisions on Title VII and Title IX, the text of the Title IX 
statute and regulation are held to be ``at least susceptible to'' the 
interpretation that it prohibits anti-transgender bias.\115\
---------------------------------------------------------------------------

    \115\ See G.G. ex rel. Grimm v. Gloucester Cty. Sch. Bd., 822 
F.3d 709 (4th Cir. 2016), recalling mandate & issuing stay, 136 S. 
Ct. 2442 (2016).
---------------------------------------------------------------------------

    Other commenters disagreed, stating that the courts are not 
unanimous on the question and pointed to legal precedent saying that 
gender identity is not encompassed by sex discrimination under Federal 
civil rights statutes. Commenters stated that the 2016 Rule had 
departed from existing civil rights law by creating new prohibited 
conduct unsupported by the text of the statutes. Commenters stated that 
Title IX has been interpreted by the courts for decades to apply to 
biological women.\116\ Other commenters stated that the fact that the 
Supreme Court has agreed to consider the legality of the general theory 
proposed in the 2016 Rule demonstrates it is a novel and contested 
legal issue.\117\ Other commenters stated Congress clearly intended 
``sex discrimination'' to be defined with reference to biological 
classification as male or female, and that is the only understanding 
that is reasonably supported by the text, history, or structure of the 
relevant law. Some criticized the 2016 Rule's reliance on the EEOC's 
opinion in Macy v. Holder, 2012 EEOPUB LEXIS 1181, 112 FEOR (LRP) 257 
(2012) (Title VII).
---------------------------------------------------------------------------

    \116\ See, e.g., N. Haven Bd. of Ed. v. Bell, 456 U.S. 512, 517-
20, (1982); Cannon v. Univ. of Chi., 441 U.S. 677, 680 (1979).
    \117\ Order, R.G. & G.R. Harris Funeral Homes v. EEOC, No. 18-
107 (U.S. Apr. 22, 2019) (granting certiorari).
---------------------------------------------------------------------------

    Response: The Department disagrees with commenters who contend that 
Section 1557 or Title IX encompass gender identity discrimination 
within their prohibition on sex discrimination. Some of the cases 
referenced by such commenters were decided under the Equal Protection 
Clause of the Constitution,\118\ under which courts have applied 
intermediate levels of scrutiny, permitting governments to adopt 
``discriminatory means'' on the basis of sex only insofar as those 
means are substantially related to the achievement of important 
governmental objectives and are not ``used to create or perpetuate the 
legal, social, and economic inferiority of women.'' \119\ The 
Department does not agree that the Equal Protection cases cited by 
these commenters require Title IX to include a prohibition on gender 
identity discrimination. Unlike the Equal Protection Clause, Title VII 
and Title IX broadly forbid covered entities from discriminating on the 
basis of sex, with limited exemptions expressly provided in statute. 
Title VII exempts covered entities from the prohibition on sex 
discrimination where sex is a ``bona fide occupational qualification.'' 
\120\ Title IX exempts covered entities from the prohibition on sex 
discrimination for admissions to historically single-sex colleges, 
school father-son and mother-daughter activities (so long as reasonably 
comparable activities are provided for students of both sexes), beauty 
pageants, certain boys' or girls' conferences, single-sex voluntary 
youth service organizations, fraternities and sororities, and military 
training programs.\121\
---------------------------------------------------------------------------

    \118\ See Glenn v. Brumby, 663 F.3d 1312 (11th Cir. 2011).
    \119\ United States v. Virginia, 518 U.S. 515, 516 (1996).
    \120\ 42 U.S.C. 2000e-2(e)(1).
    \121\ 20 U.S.C. 1681.
---------------------------------------------------------------------------

    The text of Title IX also demonstrates that it is not susceptible 
to an interpretation under which it would prohibit gender identity 
discrimination. The statute permits covered entities to maintain 
``separate living facilities for the different sexes,'' and it 
expressly presents this, not as an exemption from the nondiscrimination 
requirements, but as an ``interpretation'' of them: Separate-sex living 
facilities are not, as such, discriminatory.\122\ The Department's 
Title IX regulations likewise permit separate-sex housing, intimate 
facilities, physical education and human sexuality courses, and contact 
sports.\123\ The statute presents these distinctions as being fully 
compatible with its nondiscrimination requirement. Nondiscrimination 
requires that separate-sex facilities and programs be (where relevant) 
comparable to one another, but the existence of separate-sex facilities 
and programs is not, as such, discriminatory under Title IX. 
Consequently, the Department does not believe an interpretation of 
Title IX that would prohibit gender identity discrimination is 
compatible with the statute's overall approach towards what

[[Page 37184]]

does and does not constitute sex discrimination.
---------------------------------------------------------------------------

    \122\ 20 U.S.C. 1686.
    \123\ 45 CFR 86.32-34, Sec.  86.41.
---------------------------------------------------------------------------

    Case law under both Title VII and Title IX has likewise recognized 
that these statutes do not forbid reasonable and relevant distinctions 
between the sexes.\124\ As the United States Solicitor General recently 
put it, ``Many commonplace practices that distinguish between the sexes 
do not violate [Title VII] because they account for real physiological 
differences between the sexes without treating either sex less 
favorably.'' \125\ No express statutory carve-out is required in order 
for employers under Title VII to be permitted to impose a sex-specific 
dress code that burdens men and women equally, nor in order for 
educational institutions under Title IX to be permitted to require men 
and women to shower separately from each other. And as compared to the 
fields of employment and of education, the field of healthcare 
necessarily may contain many more ``commonplace practices that 
distinguish between the sexes . . . [by] account[ing] for real 
physiological differences between the sexes without treating either sex 
less favorably.'' As discussed in greater detail later in the 
subsection of this preamble on gender identity, reasonable distinctions 
between the sexes may be called for in numerous areas within the 
Department's expertise, including shared hospital rooms,\126\ sex-
specific protections for patients' modesty,\127\ specialized medical 
practices related to gynecology,\128\ and medical treatments or 
recommendations relying on sex-based generalizations,\129\ and other 
research situations.\130\ The biological differences between men and 
women are not irrelevant to employment law and education, and they are 
in many ways even more relevant in the health setting.
---------------------------------------------------------------------------

    \124\ See Wittmer v. Phillips 66 Co., 915 F.3d 328, 334 (5th 
Cir. 2019) (Ho, J., concurring); Jespersen v. Harrah's Operating 
Co., 444 F.3d 1104, 1109-10 (9th Cir. 2006) (en banc) (collecting 
cases).
    \125\ Brief for EEOC, R.G. & G.R. Harris Funeral Homes v. EEOC, 
No. 18-107 (U.S. filed Aug. 16, 2019), at 36.
    \126\ See Cypress v. Newport News General and Nonsectarian 
Hospital Association, 375 F.2d 648, 658 (4th Cir. 1967) (``Our 
holding is simply that race cannot be a factor in the admission, 
assignment, classification, or treatment of patients in an 
institution like this, which is state-supported and receives federal 
funds. Room assignments may be made with due regard to sex, age, 
type of illness, or other relevant factors, but racial distinctions 
are impermissible, since the law forbids the treatment of 
individuals differently or separately because of their race, color, 
or national origin.''); cf. similar statutory requirements at 10 
U.S.C. 4319 (Army), 10 U.S.C. 6931 (Navy), and 10 U.S.C. * 9319 (Air 
Force) (requiring separation of sleeping and latrine areas for 
``male'' and ``female'' recruits); 10 U.S.C. 4320 (Army), 10 U.S.C. 
6932 (Navy), and 10 U.S.C. 9320 (Air Force) (limiting after-hours 
access by drill sergeants and training personnel to persons of the 
``same sex as the recruits'').
    \127\ See, e.g., OCR Voluntary Resolution Agreement with 
Michigan State University, https://cms-drupal-hhs-prod.cloud.hhs.gov/sites/default/files/vra-between-msu-and-ocr.pdf, 
at IV.D.1.d.iii, IV.D.1.d.v.
    \128\ See, e.g., Women's Preventive Services Guidelines, Health 
Resources and Services Administration, Dec. 17, 2019 (HRSA) https://www.hrsa.gov/womens-guidelines-2019.
    \129\ See the Department's Office of Women's Health, https://www.womenshealth.gov/.
    \130\ See NIH Guidance, Consideration of Sex as a Biological 
Variable in NIH-funded Research (2017), https://orwh.od.nih.gov/sites/orwh/files/docs/NOT-OD-15-102_Guidance.pdf; NIH, Office of 
Research on Women's Health, ``Sex & Gender,'' https://orwh.od.nih.gov/.
---------------------------------------------------------------------------

    In general, a covered entity is permitted to make distinctions on 
the basis of sex that are ``not marked by misconception and prejudice, 
nor . . . show disrespect for either class.'' \131\ In many cases, 
removing or weakening such reasonable sex-based distinctions could 
undermine the equality of the sexes by disproportionately harming 
women.\132\ As discussed further below, case law is still developing as 
to whether covered entities' refusal to draw these distinctions could 
in some cases violate personal privacy interests and so create a 
hostile environment under Title IX.\133\ ``[N]eutral terms can mask 
discrimination that is unlawful,'' while ``gender specific terms can 
mark a permissible distinction.'' \134\ Where the ``[p]hysical 
differences between men and women'' are relevant, sex-neutral policies 
will in some cases ``undoubtedly require alterations'' to make them 
sex-specific, in order ``to afford members of each sex privacy from the 
other sex in living arrangements.'' \135\
---------------------------------------------------------------------------

    \131\ See Tuan Anh Nguyen v. INS, 533 U.S. 73.
    \132\ See Brief for EEOC, Harris Funeral Homes, at 37-38 (citing 
cases).
    \133\ See, e.g., Doe v. Luzerne Cty., 660 F.3d 169, 176-77 (3d 
Cir. 2011) (recognizing that an individual has ``a constitutionally 
protected privacy interest in his or her partially clothed body'' 
and that this ``reasonable expectation of privacy'' exists 
``particularly while in the presence of members of the opposite 
sex''); Brannum v. Overton Cty. Sch. Bd., 516 F.3d 489, 494 (6th 
Cir. 2008) (``the constitutional right to privacy . . . includes the 
right to shield one's body from exposure to viewing by the opposite 
sex''); Fortner v. Thomas, 983 F.2d 1024, 1030 (11th Cir. 1993) 
(``[M]ost people have a special sense of privacy in their genitals, 
and involuntary exposure of them in the presence of people of the 
other sex may be especially demeaning or humiliating.''). But see 
Parents for Privacy v. Barr, No. 18-35708, (9th Cir. Feb. 12, 2020) 
(no title IX or constitutional privacy violation for school policy 
allowing student to use bathroom and locker rooms consistent with 
their gender identity).
    \134\ Tuan Anh Nguyen v. INS, 533 U.S. 64.
    \135\ United States v. Virginia, 518 U.S. 515, 550 n.19 (1996) 
(emphasis added) (brackets and citation omitted).
---------------------------------------------------------------------------

    Comment: Commenters stated that Price Waterhouse v. Hopkins, 490 
U.S. 228 (1989), and Oncale v. Sundowner Offshore Oil Services, Inc., 
523 U.S. 75 (1998), fully support or even require the 2016 Rule's 
gender identity provisions or their equivalent. Commenters asked the 
Department to address specific court cases that they stated were 
contrary to the Department's view, such as Doe v. Boyertown Area Sch. 
Dist., 897 F.3d 518 (3d Cir. 2018), Whitaker v. Kenosha Unified Sch. 
Dist. No. 1 Bd. of Educ., 858 F.3d 1034 (7th Cir. 2017), and Glenn v. 
Brumby, 663 F.3d 1312 (11th Cir. 2011).
    Response: For most of the history of Title IX case law, the 
``commonplace practices that . . . account for real physiological 
differences between the sexes without treating either sex less 
favorably'' \136\ were uncontroversial and not considered 
discriminatory. In the past five years, two circuit courts have begun 
to question this long-standing precedent in proceedings arising from 
motions for preliminary injunctions, although no circuit court has yet 
done so in a final ruling.\137\
---------------------------------------------------------------------------

    \136\ Brief for EEOC, Harris Funeral Homes, at 36.
    \137\ Whitaker v. Kenosha Unified Sch. Dist., 858 F.3d 1034, 
1039 (7th Cir. 2017); Dodds v. United States Dep't of Educ., 845 
F.3d 217 (6th Cir. 2016). The ruling in a third related case, G.G. 
v. Gloucester Co. Sch. Bd., 822 F.3d 709 (4th Cir. 2016), was based 
on Auer deference to Department of Education subregulatory guidance 
and has since been vacated after that guidance was withdrawn.
---------------------------------------------------------------------------

    These courts (and some district courts) draw on the Supreme Court's 
reasoning in Price Waterhouse in order to assert that otherwise 
permissible distinctions on the basis of sex must be applied (if at 
all) on the basis of an individual's subjective gender identity. But 
the novel legal theory advanced by these courts represents a serious 
misreading of Price Waterhouse and of Title IX, a reading that has been 
disputed by the decisions of other courts, including Franciscan 
Alliance.
    Price Waterhouse is a Title VII case and establishes that, `` `[i]n 
forbidding employers to discriminate against individuals because of 
their sex, Congress intended to strike at the entire spectrum of 
disparate treatment of men and women resulting from sex stereotypes.' 
'' \138\
---------------------------------------------------------------------------

    \138\ Price Waterhouse v. Hopkins, 490 U.S. 228, 251 (1989), 
quoting Los Angeles Dept. of Water & Power v. Manhart, 435 U. S. 
702, 707, n. 13 (1978).
---------------------------------------------------------------------------

    When courts have read Price Waterhouse as determining that ``on the 
basis of sex'' encompasses gender identity, they have done so on the 
ground that discrimination on the basis of gender identity is, as such, 
a form of sex stereotyping. But Price Waterhouse should be read in 
light of the Supreme Court definition of a ``stereotype'' about sex 
``as a frame of mind resulting from

[[Page 37185]]

irrational or uncritical analysis.'' \139\ Wherever ``stereotyping 
play[s] a motivating role in an employment decision,'' according to 
Price Waterhouse, the employer has demonstrated an ``impermissible 
motive,'' for stereotypes should not even ``play a part in the 
decisionmaking process.'' \140\
---------------------------------------------------------------------------

    \139\ Tuan Anh Nguyen v. I.N.S., 533 U.S. 53, 68 (2001).
    \140\ Price Waterhouse, 490 U.S. 252-53, 254-55. The Civil 
Rights Act of 1991 amends the Price Waterhouse standard to say that 
``an unlawful employment practice is established when the 
complaining party demonstrates that . . . sex . . . was a motivating 
factor for any employment practice, even though other factors also 
motivated the practice,'' but the employer may rebut this claim if 
he or she ``demonstrates that [the employer] would have taken the 
same action in the absence of the impermissible motivating factor.'' 
42 U.S.C. 2000e-2(m), Sec.  2000e-5(g)(2)(B).
---------------------------------------------------------------------------

    The Department believes that, unlike stereotypes, reasonable 
distinctions on the basis of sex, as the biological binary of male and 
female, may, and often must, ``play a part in the decisionmaking 
process''--especially in the field of health services. A covered entity 
such as a healthcare provider is not impermissibly stereotyping 
biological males (notwithstanding their internal sense of gender) on 
the basis of sex if it uses pronouns such as ``him''; limits access to 
lactation rooms and gynecological practices to female users and 
patients; or lists a male's sex as ``male'' on medical forms. 
Similarly, a covered health care entity is not impermissibly 
stereotyping biological females (notwithstanding their internal sense 
of gender) on the basis of sex if it uses pronouns such as ``her''; 
warns females that heart-attack symptoms are likely to be quite 
different than those a man may experience; advises women that certain 
medications tend to affect women differently than men; or lists a 
female's sex as ``female'' on medical forms. Finally, it is not 
stereotyping for covered entities to have bathrooms or changing rooms 
designated by reference to sex, or to group patients in shared hospital 
rooms by sex.\141\ Such practices and actions are not rooted in 
stereotypes, but in real biological or physiological differences 
between the sexes. Moreover, none of these examples disadvantages one 
sex over another, and in fact the failure to take sex into account may 
in some cases have a disadvantageous effect.
---------------------------------------------------------------------------

    \141\ See 29 CFR 1910.141(c) (OSHA regulation requiring ``toilet 
rooms separate for each sex'').
---------------------------------------------------------------------------

    As the Supreme Court has noted, ``to fail to acknowledge even our 
most basic biological differences . . . risks making the guarantee of 
equal protection superficial, and so disserving it. Mechanistic 
classification of all our differences as stereotypes would operate to 
obscure those misconceptions and prejudices that are real.'' \142\ 
``[T]here is nothing irrational or improper in the recognition'' of the 
social and other consequences of real physiological differences between 
the sexes; ``[t]his is not a stereotype.'' \143\ Reasonable 
distinctions ``may be based on real differences between the sexes . . . 
so long as the distinctions are not based on stereotyped or generalized 
perceptions of differences.'' \144\ ``Prohibition of harassment on the 
basis of sex requires neither asexuality nor androgyny.'' \145\
---------------------------------------------------------------------------

    \142\ Tuan Anh Nguyen, 533 U.S. at 73. In Sessions v. Morales-
Santana, 137 S. Ct. 1678 (2017), the Supreme Court struck down, on 
intermediate-scrutiny grounds, a statute that granted U.S. 
citizenship to children born abroad of unwed parents if the child's 
mother had been a U.S. citizen for one year before the birth, but 
required five years in the case of a U.S. citizen father. However, 
the Court did not reject the Nguyen analysis recognizing that sex 
distinctions are real, and that not all such distinctions are based 
on unlawful stereotypes.
    \143\ Id. at 68.
    \144\ Faulkner v. Jones, 10 F.3d 226, 232 (4th Cir. 1993).
    \145\ Oncale v. Sundowner Offshore Oil Services, Inc., 523 U.S. 
75, 81 (1998).
---------------------------------------------------------------------------

    Justice Ginsburg's majority opinion in U.S. v. Virginia sharply 
distinguished sex from other protected classes in this regard: 
``Supposed `inherent differences' are no longer accepted as a ground 
for race or national origin classifications. Physical differences 
between men and women, however, are enduring: `[T]he two sexes are not 
fungible; a community made up exclusively of one [sex] is different 
from a community composed of both.' . . . `Inherent differences' 
between men and women, we have come to appreciate, remain cause for 
celebration.'' \146\ This recognition of physical (i.e., biological) 
differences between men and women is not stereotyping and in some cases 
will ``undoubtedly require alterations'' to accommodated sex-specific 
differences.\147\
---------------------------------------------------------------------------

    \146\ United States v. Virginia, 518 U.S. 515, 533 (1996) 
(internal citations omitted).
    \147\ Id. at 550 n.19.
---------------------------------------------------------------------------

    The lower court decisions referenced by commenters held that a 
covered entity which required transgender individuals to abide by 
otherwise permissible distinctions on the basis of sex, such as 
separate-sex bathrooms, would be impermissibly ``imposing its 
stereotypical notions of how sexual organs and gender identity ought to 
align.'' \148\ A few lower courts have relied on these holdings in 
interpreting Section 1557 to require covered entities to override these 
reasonable distinctions based on sex, in deference to an individual's 
gender identity.\149\ The notion that such distinctions on the basis of 
sex amount, as such, to impermissible stereotyping, would be lethal to 
countless reasonable and fully permissible healthcare practices, some 
of which have been identified above. No court has gone so far: These 
lower courts have questioned such distinctions only insofar as these 
distinctions come into conflict with an individual's stated gender 
identity. But Price Waterhouse offers no basis for this regime of 
individualized exceptions to otherwise reasonable distinctions. If it 
is impermissible stereotyping of a female employee to demand that she 
not ``behave aggressively,'' then Price Waterhouse (to the extent that 
it applies) requires companies to stop holding all female employees to 
such a stereotyped standard--not merely to grant exceptions for the 
occasional female employee who objects to that standard.\150\ 
Similarly, if it is impermissible stereotyping to assume that ``sexual 
organs . . . ought to align'' with the sex listed on one's hospital 
bracelet, then Price Waterhouse (to the extent that it applies) would 
invalidate the existence of all sex markers on hospital bracelets, not 
merely of those to which a transgender individual has objected. Where a 
covered entity has not stereotyped but has only drawn a reasonable 
distinction, Price Waterhouse is irrelevant.
---------------------------------------------------------------------------

    \148\ Equal Employment Opportunity Comm'n v. R.G. &. G.R. Harris 
Funeral Homes, Inc., 884 F.3d 560, 576 (6th Cir. 2018). See also 
Whitaker v. Kenosha Unified Sch. Dist., 858 F.3d 1034, 1051 (7th 
Cir. 2017) (``the School District treats transgender students like 
Ash, who fail to conform to the sex[hyphen]based stereotypes 
associated with their assigned sex at birth, differently. These 
students are disciplined under the School District's bathroom policy 
if they choose to use a bathroom that conforms to their gender 
identity.''); Glenn v. Brumby, 663 F.3d 1312, 1316 (11th Cir. 2011) 
(``A person is defined as transgender precisely because of the 
perception that his or her behavior transgresses gender 
stereotypes.'').
    \149\ See Rumble v. Fairview Health Servs., No. 14-cv-037 (SRN/
FLN), 2017 WL 401940 (D. Minn. Jan. 30, 2017); Prescott v. Rady 
Children's Hospital-San Diego, 265 F. Supp. 3d 1090, 1098-100 (S.D. 
Cal. 2017)
    \150\ See Price Waterhouse, 490 U.S. at 235, 250-51.
---------------------------------------------------------------------------

    Distinctions based on real differences between men and women do not 
turn into discrimination merely because an individual objects to those 
distinctions. Title IX does not require covered entities to eliminate 
reasonable distinctions on the basis of sex whenever an individual 
identifies with the other sex, or with no sex at all, or with some 
combination of the two sexes

[[Page 37186]]

(as under the 2016 Rule).\151\ Rather, Title IX prohibits subjecting a 
person to less favorable treatment because of his or her sex. Thus, if 
a person claims to have been discriminated against on the basis of his 
or her sex, that claim is neither weakened nor strengthened by any 
allegations about his or her ``internal sense of gender.'' Numerous 
lower courts have held that, like any other man or woman, a transgender 
individual may sue under Title VII if he or she is harassed, assaulted, 
terminated, or otherwise discriminated against because of his or her 
sex.\152\ Under Title IX, as under Title VII, ``[t]ranssexuals are not 
genderless, they are either male or female and are thus protected under 
Title VII to the extent that they are discriminated against on the 
basis of sex.'' \153\ The Department will vigorously enforce Section 
1557's prohibition on sex-based discrimination, but that prohibition 
cannot be construed as a prohibition on reasonable sex-based 
distinctions in the health field.
---------------------------------------------------------------------------

    \151\ See Johnston v. Univ. of Pittsburgh of the Commonwealth 
Sys. of Higher Educ., 97 F. Supp. 3d 657 (W.D. Pa. 2015).
    \152\ Barnes v. City of Cincinnati, 401 F.3d 729 (6th Cir. 
2005); Smith v. City of Salem, 378 F.3d 566 (6th Cir. 2004). These 
cases have been cited, by the 2016 Rule and in some recent court 
cases, in support of the view that sex discrimination encompasses 
discrimination on the basis of gender identity. This is a serious 
misreading pointed out at Johnston v. Univ. of Pittsburgh of Com. 
Sys. of Higher Educ., 97 F. Supp. 3d 657, 675n17 (W.D. Pa. 2015) 
(``In Smith v. City of Salem, . . . the court did not conclude that 
``transgender'' is a protected class under Title VII, but only that 
a male or female who is also transgender can assert a sex 
stereotyping claim under Title VII for adverse employment actions 
that result from the individual's conformity to their gender 
identity rather than their biological or birth sex. Indeed, the same 
year that the 6th Circuit issued its opinion in Smith, it affirmed, 
in an unpublished opinion, a district court decision holding that 
``Title VII does not prohibit discrimination based on an 
individual's status as a transsexual,'' in an employment 
discrimination case involving a transgender women's use of a men's 
restroom. Johnson v. Fresh Mark, Inc., 98 Fed. App'x. 461, 462 (6th 
Cir.2004).'').
    \153\ Tronetti v. TLC HealthNet Lakeshore Hosp., No. 03-CV-
0375E(SC), 2003 WL 22757935, at *4 (W.D.N.Y. Sept. 26, 2003). See 
Rosa v. Park West Bank Trust Co., 214 F.3d 213, 215-16 (1st Cir. 
2000) (discrimination against a cross-dressing man is sex-based 
discrimination if the entity would have treated a ``similarly 
situated'' woman differently, i.e., if it treats ``a woman who 
dresses like a man differently than a man who dresses like a 
woman'').
---------------------------------------------------------------------------

    Comment: Commenters offered a variety of views on the role that a 
patient's sex and/or gender identity ought to play in medical decision-
making.
    Many commenters spoke of the importance of sex-reassignment 
surgeries and cited studies that they said show the value of these 
surgeries in alleviating gender dysphoria. Others cited different 
studies that they said show the opposite. Some clinicians expressed 
concerns about consent and medical appropriateness of pre-pubertal sex 
reassignment with lifelong physical and mental implications (including 
permanent sterility) when children and adolescents lack the requisite 
social, emotional, and intellectual maturity, or life experiences 
necessary for true consent. Commenters also were concerned about 
coercive, peer, adult, and ideological pressures on children and 
adolescents to seek cross-sex hormonal treatment, sex reassignment 
surgery, or other similar services. Some commenters, including parties 
to lawsuits against the Department on the ground that the 2016 Rule 
would require gender transition treatments and therapies for children, 
criticized the 2016 Rule for containing no age limitation. Commenters 
stated that the ``gender-affirming'' model is the most controversial 
form of counseling and, as such, is not used by the Dutch national 
transgender clinic, which they said is considered the international 
flagship of gender dysphoria treatment.
    Some commenters noted that violations of the 2016 Rule are 
enforceable by termination of Federal financial assistance and that 
violations of State law with respect to healthcare may involve civil 
penalties for negligence or malpractice, etc. In light of this, they 
stated that the 2016 Rule placed providers in an impossible position, 
where compliance with one law means noncompliance with another, and 
either choice results in a steep penalty.
    Other commenters said that the 2016 Rule's definition of ``on the 
basis of sex'' could prohibit the way OB/GYN practices specialize in 
treating females, and raised the concern that specializing in the 
treatment of female patients could be deemed prohibited discrimination 
against biological males who identify as women. Commenters stated that 
because these services are focused on and tailored to females as a 
single biological sex, they are able to provide a higher quality of 
care to those patients. They noted that it has long been a permissible 
sex-based distinction for OB/GYN doctors to not treat any biological 
males, and this distinction is recognized under HHS Title IX 
regulations. Such commenters found the 2016 Rule overbroad and 
inconsistent with day-to-day affairs in how they practice medicine. But 
other commenters stated that OB/GYNs are not affected by the 
transgender requirements under the 2016 Rule and that pre-existing OB/
GYN practices are justified by reasonable scientific justifications.
    Certain providers advocated for removal of the requirement to 
``treat individuals consistent with their gender identity,'' as this 
provision would violate the conscience rights of healthcare providers, 
and the ethical and foundational convictions that underlie the entire 
way they practice medicine. Other commenters said that repeal of this 
provision leaves no clarity about whether such providers will actually 
provide treatment for transgender patients, and expressed the concern 
that affirming treatment consistent with gender identity is necessary 
for high-value transgender healthcare, as is required for all people in 
the practice of medicine.
    Some commenters noted their concern that the 2016 Rule requires 
doctors to remove healthy reproductive tissue in sex-reassignment 
surgeries, even if it may be contrary to the patient's medical 
interest. For example, if a surgeon performs mastectomies as part of a 
medically necessary treatment for breast cancer, under the 2016 Rule, 
he or she could also have been required to perform mastectomies for 
sex-reassignment purposes when recommended by a psychologist, even if 
the surgeon believes such treatments are not medically indicated in his 
or her own professional judgment. Similarly, commentators argued that 
some doctors might be forced to perform hysterectomies not only against 
their medical judgment but also outside of their expertise. Other 
commenters contended that certain procedures are not meaningfully 
different when performed on a transgender versus non-transgender 
patient, because the mechanics of the procedures are substantially 
similar. Although genital reassignment surgery is considered a ``gender 
transition service,'' clinicians commented that somewhat similar 
procedures are used for genital reconstruction to repair damaged, 
diseased, or disfigured genital tissue, or in the treatment of 
disorders of sexual development.
    Commenters also stated that the 2016 Rule would force them to 
provide services damaging to the health of patients, in conflict with 
their mission as a healthcare provider, instead of using these medical 
resources to help patients.\154\
---------------------------------------------------------------------------

    \154\ Commenters cited specific examples of coercion. See Minton 
v. Dignity Health, 2017 WL 7733922 (Cal. Super. Ct. Nov. 2017); 
Robinson v. Dignity Health, No. 16-cv-3035 YGR, 2016 WL 7102832 
(N.D. Cal. Dec. 6, 2016) (on remand from U.S. Supreme Court).
---------------------------------------------------------------------------

    Commenters stated that HHS does not have a compelling interest in 
requiring the medical provision of, or insurance

[[Page 37187]]

for, gender transition services or procedures. Other commenters stated 
that access to such services for transgender patients constitutes a 
compelling interest. Some commenters challenged the idea that an 
individual born as one biological sex can in actuality be transformed 
into a person of the other sex, with or without surgeries or hormone 
treatments.
    Response: The Department recognizes that certain single-sex medical 
procedures, treatments, or specializations are rooted in the binary and 
biological meaning of sex for valid scientific and medical reasons. The 
Department believes the 2016 Rule caused significant confusion and cast 
doubt as to whether such longstanding specialized practices remained 
lawful, as indicated, for example, by the fact that commenters had 
diverging views on how the 2016 Rule impacted OB/GYN practices. The 
Department declines to interfere in these practices, and repeals a 
mandate that was, at least, ambiguous and confusing.
    The Department appreciates the many comments received on the issue 
of gender identity, gender dysphoria, and the appropriate care for 
individuals with gender dysphoria. The Department believes providers 
should be generally free to use their best medical judgment, consistent 
with their understanding of medical ethics, in providing healthcare to 
Americans. The wide variation in these comments confirms that the 
medical community is divided on many issues related to gender identity, 
including the value of various ``gender-affirming'' treatments for 
gender dysphoria (especially for minors), the relative importance of 
care based on the patient's sex, and the compatibility of gynecological 
practice with a requirement of nondiscrimination on the basis of gender 
identity.\155\
---------------------------------------------------------------------------

    \155\ Comments referring specifically to providers' 
conscientious objections to certain forms of treatment are addressed 
below in the section on ``relation to other laws.''
---------------------------------------------------------------------------

    The Department is also reluctant to pretermit ongoing medical 
debate and study about the medical necessity of gender transition 
treatments. The 2016 Rule assumed that, if a covered entity offers a 
``categorical coverage exclusion or limitation for all health services 
related to gender transition,'' then that entity must be relying on 
medical judgments that are ``outdated and not based on current 
standards of care.'' \156\ But based on its review of the most recent 
evidence, the Department concludes that this was an erroneous 
assertion, and that there is, at a minimum, a lack of scientific and 
medical consensus to support this assertion, as the comments noted 
above demonstrate. This lack of scientific and medical consensus--and 
the lack of high-quality scientific evidence supporting such 
treatments--is borne out by other evidence. For example, on August 30, 
2016, CMS declined to issue a National Coverage Determination (NCD) on 
sex-reassignment surgery for Medicare beneficiaries with gender 
dysphoria ``because the clinical evidence is inconclusive.'' \157\ CMS 
determined, ``[b]ased on an extensive assessment of the clinical 
evidence,'' that ``there is not enough high quality evidence to 
determine whether gender reassignment surgery improves health outcomes 
for Medicare beneficiaries with gender dysphoria and whether patients 
most likely to benefit from these types of surgical intervention can be 
identified prospectively.'' \158\ Similarly, in a 2018 Department of 
Defense (DOD) report on the diagnosis of gender dysphoria, which 
included input from both transgender individuals and medical 
professionals with experience in the care and treatment of individuals 
with gender dysphoria, DOD found that there is ``considerable 
scientific uncertainty and overall lack of high quality scientific 
evidence demonstrating the extent to which transition-related 
treatments, such as cross-sex hormone therapy and sex reassignment 
surgery--interventions which are unique in psychiatry and medicine--
remedy the multifaceted mental health problems associated with gender 
dysphoria.'' \159\ Other research has found that children who socially 
transition in childhood faced dramatically increased likelihood of 
persistence of gender dysphoria into adolescence and adulthood.\160\ 
The Department does not believe that the nondiscrimination requirements 
in Title IX, incorporated by reference into Section 1557, foreclose 
medical study or debate on these issues. And to the extent that a 
medical consensus develops on these issues, it is not clear that 
regulations of the sort encompassed in the 2016 Rule would be necessary 
to encourage medical professionals to follow such consensus.
---------------------------------------------------------------------------

    \156\ Cf. 81 FR 31472, 31429.
    \157\ CMS, ``Decision Memo for Gender Dysphoria and Gender 
Reassignment Surgery'' (CAG-00446N) (Aug. 30, 2016) https://www.cms.gov/medicare-coverage-database/details/nca-decision-memo.aspx?NCAId=282.
    \158\ Id.
    \159\ Department of Defense, ``Report and Recommendations on 
Military Service by Transgender Persons'' (Feb. 22, 2018), 5.
    \160\ Thomas D. Steensma, Ph.D., Jenifer K. McGuire, Ph.D. 
M.P.H., et al. ``Factors Associated with Desistance and Persistence 
of Childhood Gender Dysphoria: A Quantitative Follow-Up Study,'' 
52(6) Journal of the American Academy of Child & Adolescent 
Psychiatry 582-90 (2013).
---------------------------------------------------------------------------

    The Department believes that its approach in the 2016 Rule 
inappropriately interfered with the ethical and medical judgment of 
health professionals. The preamble to the 2016 Rule stated that, under 
that Rule, ``a provider specializing in gynecological services that 
previously declined to provide a medically necessary hysterectomy for a 
transgender man would have to revise its policy to provide the 
procedure for transgender individuals in the same manner it provides 
the procedure for other individuals.'' \161\ This statement raised the 
prospect of forcing a provider to perform irreversible, sterilizing, 
and endocrine-disrupting procedures on what may be, in the provider's 
view, non-diseased and properly functioning organs--including in 
children and youth.\162\ A medical provider may rightly judge a 
hysterectomy due to the presence of malignant tumors to be different in 
kind from the removal of properly functioning and healthy reproductive 
tissue for psychological reasons, even if the instruments used are 
identical. For example, OB/GYNs competent and willing to perform 
dilation and curettage procedures to aid with recovery from a 
miscarriage should not, and legally cannot,\163\ be forced to perform 
dilation and curettage procedures for abortions, because the 
regulatory, ethical, and medical frameworks that apply to abortions are 
radically different from those that apply to recovery from 
miscarriages. Moreover, commenters who offer transition services made 
clear that these often involve specialized cross-sex hormonal 
treatments before and after any sex-reassignment surgeries, and require 
coordination of care with urologists, psychiatrists, and a variety of 
other healthcare professionals in different specialized fields. A 
provider who routinely provides, for example, hysterectomies to address 
uterine cancer should be able reasonably to choose not to be involved 
in what may be the much more medically complicated set of procedures 
involved in sex reassignment.
---------------------------------------------------------------------------

    \161\ 81 FR 31455.
    \162\ In this regard, the Department distinguishes between the 
situation created by the requirements of 2016 Rule and the in-
program requirements applied within federally funded grant programs 
where, for example, ``the general rule that the Government may 
choose not to subsidize speech applies with full force,'' even if 
the speech concerns what is allegedly required by medical ethics. 
See, e.g., Rust v. Sullivan, 500 U.S. 173, 200 (1991).
    \163\ See Church Amendments, 42 U.S.C. 300a-7.

---------------------------------------------------------------------------

[[Page 37188]]

    Upon reconsidering this issue, the Department now believes that the 
2016 Rule did not offer a sufficient analysis to justify the serious 
effect of requiring providers to perform certain procedures or provide 
certain treatments contrary to their medical judgment. The Department 
does not and need not take a definitive view on any of the medical 
questions raised in these comments about treatments for gender 
dysphoria. The question is whether Title IX and Section 1557 require 
healthcare professionals, as a matter of nondiscrimination, to perform 
such procedures or provide such treatments. The answer is that they do 
not. This final rule does not presume to dictate to medical providers 
the degree to which sex matters in medical decision making, nor does it 
impose the 2016 Rule's vague and overbroad mandate that they ``treat 
individuals consistent with their gender identity.''
    Nothing in this final rule prohibits a healthcare provider from 
offering or performing sex-reassignment treatments and surgeries, or an 
insurer from covering such treatments and procedures, either as a 
general matter or on a case-by-case basis. The large number of comments 
received from healthcare providers who perform such treatments and 
procedures suggests that there is no shortage of providers willing to 
do so, even without the 2016 Rule's provisions on gender identity 
(which had been enjoined for over two years by the time of the comment 
period).
    Finally, the Franciscan Alliance court held that HHS had not 
demonstrated a compelling interest in requiring providers with 
sincerely held religious objections to gender transition services, 
notwithstanding their objections, to provide these services. The 
Department sees no compelling interest in forcing the provision, or 
coverage, of these medically controversial services by covered 
entities, much less in doing so without a statutory basis.
    Comment: Some commenters stated that revising the rule to eliminate 
the court-vacated provisions on gender identity, in conjunction with 
other Federal actions related to gender transition-related services, is 
evidence of animus to transgender individuals, and that the free 
exercise of religion or conscience claims raised by medical 
professionals and insurers are merely ``pretext'' for invidious 
discrimination. Others contended that the proposed rule recognizes the 
human dignity of all because certain surgical procedures and 
medications related to gender identity and abortion do not actually 
serve the health or wellbeing of patients but violate their dignity and 
physical and psychological integrity, especially of children and women 
in crisis pregnancies, and that these providers act out of sincere 
beliefs both as to medical judgment and religious belief in pursuing 
the best interests of patients regardless of their background or stated 
identities.
    Response: The Department respects the dignity of all individuals. 
It seeks to further the health and well-being of all, but it can do so 
only by implementing the laws as adopted by Congress.
    Moreover, the Department notes that commenters have provided a 
number of bases for objections to being forced to provide or cover 
certain treatments or surgeries contrary to their sincere medical, 
economic, religious, scientific, ethical, or conscience-based reasons. 
To presume that religious beliefs on these issues are rooted in 
bigotry, animosity, or insincerity would risk unlawfully stereotyping 
people of faith. See Masterpiece Cakeshop v. Colorado Civil Rights 
Comm'n, 138 S. Ct. 1719, 1729 (2018) (``To describe a man's faith as 
`one of the most despicable pieces of rhetoric that people can use' is 
to disparage his religion in at least two distinct ways: By describing 
it as despicable, and also by characterizing it as merely rhetorical--
something insubstantial and even insincere.'').\164\
---------------------------------------------------------------------------

    \164\ Religious exemptions will be addressed further in the 
section discussing the final rule's relation to other laws.
---------------------------------------------------------------------------

    Comment: Commenters expressed various views on whether transgender 
patients should be treated in accord with their expressed gender 
identity and/or in accord with their sex.
    Some commenters stated that transgender designations conceal real 
biological sex differences that are relevant to medical risk factors, 
recognition of which is important for effective diagnosis, treatment, 
and disease prevention--including effective treatment for patients who 
identify as transgender. Some added that biological sex differences 
remain present in numerous bodily systems even after a patient has 
undergone hormonal and/or surgical transition therapies, and that 
physicians must be permitted to take these differences into account. 
Healthcare providers commented that critical decisions are made in the 
practice of medicine on the basis of objective biological information 
concerning a person's sex as being male or female because, among other 
reasons, medications and treatments affect males and females 
differently, and only females can become pregnant, regardless of stated 
gender identity. These commenters were concerned that by requiring 
providers to treat patients consistent with gender identity instead of 
biological sex, the patients' health is endangered, with both short- 
and long-term consequences.\165\
---------------------------------------------------------------------------

    \165\ Commenters cited texts including William J. Malone, MD, 
Gender Dysphoria Resource for Providers (3rd Edition); and Michael 
Laidlaw, MD, ``The Gender Identity Phantom,'' International 
Discussion Space for Clinicians and Researchers (Oct. 24, 2018) 
http://gdworkinggroup.org/2018/10/24/the-gender-identity-phantom.
---------------------------------------------------------------------------

    Other commenters stated that the Department has not provided 
sufficient explanation or justification for removing Sec.  92.206 of 
the 2016 Rule with respect to ensuring equal access to healthcare 
services without respect to sex, including prohibitions on 
discriminatory denials of services typically associated with one sex to 
persons who identify as transgender. The commenters stated that the 
Department ignored the text of Sec.  92.206 when it asserted in the 
proposed rule that the 2016 Rule would ``require[e] healthcare entities 
to code as male all persons who self-identify as male, regardless of 
biology, [which] may lead to adverse health consequences.'' \166\ 
Commenters said Sec.  92.206 properly prohibits, among other things, 
the arbitrary denial of care based not on clinical considerations but 
solely on the patient's ``sex as assigned at birth'' or as recorded in 
medical or insurance records. Others said that while the biological 
definition of ``sex'' may be appropriate for scientific contexts such 
as National Institutes of Health (``NIH'') studies, the Department's 
nondiscrimination provisions should define the term more broadly.
---------------------------------------------------------------------------

    \166\ See 84 FR 27885, n. 55.
---------------------------------------------------------------------------

    Some commenters commented on a case of a transgender patient with 
abdominal pains who, as a result of being treated according to a male 
gender identity, was not diagnosed as being pregnant as part of the 
triage process and had a stillborn child. Some commenters viewed this 
set of facts as evidence against the 2016 Rule while others claimed it 
was evidence for the 2016 Rule.
    Response: The Department has long recognized that the practice of 
medicine and biomedical research routinely involves decisions and 
diagnoses that legitimately make distinctions based on sex, including 
decisions made at triage; research studies (including clinical trials); 
questions of medical history; and requests for a medical consultation. 
As discussed at length in the NPRM, substantial scientific literature 
published after the 2016 Rule indicates that sex-specific practices in 
medicine and research exist because biological

[[Page 37189]]

(and, derivatively, genetic) differences between males and females are 
real and matter to health outcomes and research.\167\ For example, NIH 
requires research grant applicants to consider sex as a biological 
variable ``defined by characteristics encoded in DNA, such as 
reproductive organs and other physiological and functional 
characteristics.'' \168\ According to an NIH article,
---------------------------------------------------------------------------

    \167\ See, e.g., NIH Research Matters, Gene Linked to Sex 
Differences in Autism (Apr. 14, 2020), https://www.nih.gov/news-events/nih-research-matters/gene-linked-sex-differences-autism; Wei 
Yang, Nicole M. Warrington, et al., Clinically Important Sex 
differences in GBM biology revealed by analysis of male and female 
imaging, transcriptome and survival data, Science Translational 
Medicine (Jan. 21, 2019), https://www.ncbi.nlm.nih.gov/pubmed/30602536S (identifying sex-specific molecular subtypes of 
glioblastoma); Ramona Stone and W. Brent Weber, Male-Female 
Differences in the Prevalence of Non-Hodgkin Lymphoma, 81 Journal of 
Environmental Health 16 (Oct. 2018); https://www.ncbi.nlm.nih.gov/pubmed/28065609; Anke Samulowitz, Ida Gremyr, et al., ``Brave Men'' 
and ``Emotional Women'': A Theory-Guided Literature Review on Gender 
Bias in Health Care and Gendered Norms towards Patients with Chronic 
Pain, Pain Research and Management (Feb. 25, 2018), https://www.ncbi.nlm.nih.gov/pubmed/29682130 (stating that ``the response to 
opioid receptor antagonists may generate a difference between men's 
and women's experiences of pain''); Douglas C. Dean III, E.M. 
Planalp, et al., Investigation of brain structure in the 1-month 
infant, Brain Structure and Function 1-18 (Jan. 5, 2018), https://www.ncbi.nlm.nih.gov/pubmed/29305647 (finding differences between 
male and female infants at the age of 1 month); Stefan Ballestri, 
Fabio Nascimbeni, et al., NAFLD as a Sexual Dimorphic Disease: Role 
of Gender and Reproductive Status in the Development and Progression 
of Nonalcoholic Fatty Liver Disease and Inherent Cardiovascular 
Risk, Advances in Therapy (May 19, 2017), https://www.ncbi.nlm.nih.gov/pmc/articles/PMC5487879; Susan Sullivan, Anna 
Campbell, et al., What's good for the goose is not good for the 
gander: Age and gender differences in scanning emotion faces, 72:3 
Journals of Gerontology 441 (May 1, 2017), https://www.ncbi.nlm.nih.gov/pubmed/25969472; Ester Serrano-Saiz, Meital 
Oren-Suissa, et al., Sexually Dimorphic Differentiation of a C. 
Elegans Hub Neuron Is Cell Autonomously Controlled by a Conserved 
Transcription Factor, 27 Current Biology 199 (Jan. 5, 2017).
    \168\ NIH Guidance, Consideration of Sex as a Biological 
Variable in NIH-funded Research at 1 (2017), https://orwh.od.nih.gov/sites/orwh/files/docs/NOT-OD-15-102_Guidance.pdf.

[s]ex as a biological variable (SABV) is a key part of the new 
National Institutes of Health (NIH) initiative to enhance 
reproducibility through rigor and transparency. The SABV policy 
requires researchers to factor sex into the design, analysis, and 
reporting of vertebrate animal and human studies. The policy was 
implemented as it has become increasingly clear that male/female 
differences extend well beyond reproductive and hormonal issues. 
Implementation of the policy is also meant to address inattention to 
sex influences in biomedical research. Sex affects: Cell physiology, 
metabolism, and many other biological functions; symptoms and 
manifestations of disease; and responses to treatment. For example, 
sex has profound influences in neuroscience, from circuitry to 
physiology to pain perception.\169\
---------------------------------------------------------------------------

    \169\ Janine Austin Clayton (Office of Research on Women's 
Health, NIH), ``Applying the new SABV (sex as a biological variable) 
policy to research and clinical care.'' Physiology & Behavior 187 
(2018), 2.

Yet the 2016 Rule required covered entities to ``treat individuals 
consistent with their gender identity'' in virtually every respect. The 
2016 Rule's definition of gender identity does not turn on any 
biological or external indicia of sex, and explicitly disavows any such 
reliance.\170\ Under the 2016 Rule, one can identify as ``male, female, 
neither, or a combination of male and female.'' A person's gender 
identity under the 2016 Rule is determined ultimately by what a person 
says his or her gender identity is, and a covered entity is bound to 
treat all individuals ``consistent with their gender identity'' the 
moment it becomes aware of such a declaration (which must be allowed to 
change under the 2016 Rule). No other Federal statute, agency rule, or 
guidance has ever gone so far on this question.\171\
---------------------------------------------------------------------------

    \170\ 81 FR 31467 (``Gender identity means an individual's 
internal sense of gender'' whose expression ``may or may not conform 
to social stereotypes associated with a particular gender''); 81 FR 
31468 (``[sex] stereotypes can include the expectation that 
individuals will consistently identify with only one gender and that 
they will act in conformity with the gender-related expressions 
stereotypically associated with that gender.'') (emphasis added).
    \171\ Cf. 18 U.S.C. 249 (Shepard-Byrd Hate Crimes Act) (defining 
gender identity as ``actual or perceived gender-related 
characteristics'').
---------------------------------------------------------------------------

    In this regard, the 2016 Rule risked masking clinically relevant, 
and sometimes vitally important, information by requiring providers and 
insurers to switch from a scientifically valid and biologically based 
system of tracking sex to one based on subjective self-identification 
according to gender identity. By eliminating the transgender provisions 
and definitions from the 2016 Rule, this final rule clarifies that sex, 
according to the Title IX's plain meaning, may be taken into account in 
the provision of healthcare, insurance (including insurance coverage), 
and health research, as was the practice before the 2016 Rule.
    Section 92.206 of the 2016 Rule required covered entities to 
``treat individuals consistent with their gender identity'' in every 
respect save one. Namely, ``a covered entity may not deny or limit 
health services that are ordinarily or exclusively available to 
individuals of one sex, to a transgender individual based on the fact 
that the individual's sex assigned at birth, gender identity, or gender 
otherwise recorded is different from the one to which such health 
services are ordinarily or exclusively available.'' This confusingly 
worded exception is premised on the fact that entities may provide 
specific services to ``one sex'' based on biology, yet must grant 
transgender individuals access to such single-sex services regardless 
of how they identify and regardless of their sex (``sex assigned at 
birth''). The 2016 Rule's mandate cannot answer, for example, how a 
provider is to determine whether or when a transgender individual is 
entitled by law to be referred to a women's mental health support 
group, a men's mental health support group, either group, or both at 
the same time.
    Some providers choose to code and track patients according to their 
biology for some purposes and according to their gender identity for 
other purposes. Under the 2016 Rule, however, if a transgender patient 
self-identifies as male in the medical intake process, yet an examining 
doctor has reason to believe the patient is biologically female, the 
doctor could reasonably assume that he or she is prohibited from 
changing the person's chart to reflect female sex, because that would 
not be treating the person ``consistent with'' her stated gender 
identity.
    In the 2019 NPRM, the Department cited a 2019 case from a medical 
journal article that concluded that a nurse had applied longstanding 
standards when triaging what the article called a ``man with abdominal 
pain,'' who identified as male and had been classified as such, but who 
was in fact a pregnant woman.\172\ Because indications of pregnancy 
were not manifest, and because the patient was treated according to 
stated gender identity, her pregnancy was not diagnosed early, and the 
child was stillborn.
---------------------------------------------------------------------------

    \172\ See 84 FR 27855, n. 55, citing Daphne Stroumsa, Elizabeth 
F.S. Roberts, et al., ''The Power and Limits of Classification--A 32 
Year Old Man with Abdominal Pain,'' New England Journal of Medicine 
(May 16, 2019), https://www.ncbi.nlm.nih.gov/pubmed/31091369 (a 
patient with an electronic medical record classification as male did 
not receive care to treat ``labor, placental abruption, or 
preeclampsia--urgent conditions presenting a potential emergency'').
---------------------------------------------------------------------------

    This provider was treating the patient according to her stated 
gender identity (male), just as the 2016 Rule demanded. Indeed, the 
provider risked liability under the 2016 Rule for not taking that step. 
The provider did not act unreasonably when, consistent with 
longstanding medical practice, it did not have a policy of asking every 
man with abdominal pain whether he is pregnant.
    Unlike the many strained hypothetical objections offered in 
opposition to the proposed rule, this case is not based on speculation. 
Rather,

[[Page 37190]]

it involved the actual death of an unborn child and attendant trauma 
and anguish for those involved, all potentially because of a 
misdiagnosis resulting from a reliance on stated gender identity as 
opposed to sex. Given that life-and-death decisions are frequently made 
in healthcare settings and often in urgent circumstances, this story 
serves as an example of the consequences that could result from the 
confusion caused by the 2016 Rule and its mandate to treat individuals 
``consistent with'' stated gender identity.
    Comment: Commenters stated that it is clear that characteristics 
traditionally protected under antidiscrimination law are those 
inherent, immutable, and readily identifiable. They stated that a 
binary and biological definition of sex enables consistency and clarity 
about who is a member of the protected category, what the prohibited 
conduct is, how covered entities must comply both by inaction and 
action, and when government enforces a right against discrimination. 
Commenters stated that changing the definition of the protected 
category to an identity that is changeable and fluid results in a legal 
standard that is impractical if not impossible to apply to particular 
circumstances. Commenters found that those courts that recognize gender 
identity discrimination apply the prohibitions inconsistently.
    Healthcare providers submitted comments stating that ``gender 
identity'' is a subjective psychological concept that cannot be 
anatomically located within the brain, and that no MRI or CT scan, 
autopsy, genetic testing, blood test, or pathology report can localize 
an ``internal sense'' and verify whether the gender identity of a 
patient is actually male, female, neither, or a combination of male or 
female.
    Commenters stated that they did not understand the categories in 
the 2016 Rule's definition of gender identity which are not obviously 
limited in the number of possible permutations nor anchored in biology. 
Commenters were concerned that Title IX's prohibitions against 
disparate treatment of biological women as different from biological 
males may no longer be prohibited or even enforceable. When a protected 
category that was binary now becomes a subjective spectrum, commenters 
did not know what the substantive standard was to establish a facial 
violation, or how to apply it to particular facts. Some commenters 
stated that it contradicts Title IX to treat sex as a non-binary 
concept when the statute explicitly protects persons of either ``one 
sex'' or ``the other sex.'' Commenters stated the 2016 Rule retained 
the words male or female--two categories which have long formed the 
biological and binary concept of sex--but eliminated their substantive 
content. The breadth of the definition of gender identity included both 
exterior (``expression'') and interior (``internal'' sense) 
characteristics; mental (``identity'') and physical (``body 
characteristics''); variable over time (at birth vs. after birth), 
feminine or masculine (binary), both (``some combination''), and 
androgyny (``neither''). Commenters stated that they did not have 
clarity as to how to assess claims of ``either/or'' disparate treatment 
as well as ``both/and.'' Commenters also noted the text also included 
an expansive catchall provision stating that the definition of gender 
identity ``is not limited to'' what was in that enumerated list.
    Response: The Department agrees that gender identity is difficult 
to define, in some cases difficult to categorize, and frequently very 
difficult to determine with objective certainty. For these and reasons 
stated elsewhere, the 2016 Rule's provisions on gender identity were 
confusing facially and in application. This final rule eliminates that 
confusion by returning to the plain meaning of the underlying statutes, 
relying as it does on the plain meaning of ``sex'' as biologically 
binary.
    Comment: The Department received comments stating that the proposed 
rule would harm the privacy interests of children with gender dysphoria 
who seek to use restrooms according to gender identity and would 
otherwise encourage bullying. Commenters also alleged that in Federal 
court cases concerning gender identity unrelated to health services, 
courts have rejected arguments about competing privacy concerns of non-
transgender individuals with respect to bathroom access for transgender 
individuals.
    Response: These comments show that, although the preamble to the 
2016 Rule had stated that it was not intended to overrule ``existing 
Federal, State and local laws, rules or regulations'' such as Title IX 
or its regulations, under which ``certain types of sex-specific 
facilities such as restrooms may be permitted'' such as bathrooms or 
intimate facilities,\173\ even the 2016 Rule's supporters can 
reasonably interpret its provisions as doing precisely that.
---------------------------------------------------------------------------

    \173\ 81 FR 31409.
---------------------------------------------------------------------------

    The Department acknowledges that there is new and developing case 
law on the intersection of privacy concerns of non-transgender 
individuals and bathroom access for transgender individuals.\174\ As 
commenters pointed out, there have been recent Title IX complaints 
regarding access to intimate facilities and associated case law. One 
complaint alleged a sexual assault by a male who identifies as female 
and had been granted access to a single-sex (female) facility based on 
stated gender identity.\175\ Another incident involved dueling 
discrimination and privacy complaints concerning the use of communal 
shower facilities. After filing a complaint, a male who identifies as 
female was granted an exception to live as a female. A group of females 
filed complaints that their privacy rights were violated.\176\ At least 
one Title IX complaint similar to these was denied by a court because 
of the specific facts of the case.\177\ But the case law on such 
complaints is very new and still developing.
---------------------------------------------------------------------------

    \174\ See, e.g., Soule v. Conn. Ass'n of Schools, No. 3:20-cv-
00201 (D. Conn. filed Feb. 12, 2020).
    \175\ Moriah Balingit, ``After Alleged Sexual Assault, Officials 
Open Investigation of Transgender Bathroom Policy,'' The Washington 
Post (Oct. 9, 2018), https://www.washingtonpost.com/local/education/after-alleged-sexual-assault-officials-open-investigation-of-transgender-bathroom-policy/2018/10/09/431e7024-c7fd-11e8-9b1c-a90f1daae309_story.html.
    \176\ See Department of Defense, ``Report and Recommendations,'' 
37.
    \177\ See Doe v. Boyertown Area Sch. Dist., 897 F.3d 518, 531-33 
(3d Cir. 2018).
---------------------------------------------------------------------------

    The Department notes that, regardless of whether Title IX requires 
covered entities to maintain sex-specific bathrooms, the Title IX 
regulations continue to permit policies that regulate intimate 
facilities based on sex. These regulations are consistent both with the 
ordinary, biological understanding of the word ``sex'' as reflected 
throughout the text of Title IX and the ordinary understanding of 
discrimination. Indeed, as the U.S. government has noted, the 
provisions in Title IX stating that nothing in that statute prohibits 
educational institutions from ``maintaining separate living facilities 
for the different sexes'' ``could not sensibly function if `the term 
`sex' includes `gender identity,' which, unlike `sex,' may not be 
limited to two categories.'' \178\ Moreover, it has long been 
understood that, although ``separate bathrooms are obviously not blind 
to sex, they do not discriminate because of sex . . . so long as they 
do not treat men or women disadvantageously compared to the opposite 
sex.'' \179\ In light of experience, including experience since the 
2016 Rule was promulgated, the Department concludes that this final 
rule, by

[[Page 37191]]

removing the possibility that the Section 1557 regulations could be 
read as overruling Title IX's regulatory permission to maintain certain 
sex-segregated facilities (a permission consonant with Title IX's 
prohibition on sex discrimination, as explained above), will better 
permit covered entities to balance relevant privacy interests. The 
Department declines to retain a provision that could reasonably be read 
to prohibit covered entities from recognizing the difference between 
men and women or acting to protect men's and women's privacy interests 
in HHS-funded health programs or activities.\180\
---------------------------------------------------------------------------

    \178\ Statement of Interest for DOJ, Soule v. Conn. Ass'n of 
Schools, 3:20-cv-00201-RNC (D. Conn., filed March 27, 2020) at 5.
    \179\ Brief for EEOC, Harris Funeral Homes, at 36.
    \180\ See OCR Voluntary Resolution Agreement with The Brooklyn 
Hospital Center (requiring assignment of persons to shared patient 
rooms according to gender identity) (2015), sub-regulatory guidance 
contained therein since abrogated, as discussed above, https://www.hhs.gov/sites/default/files/ocr/civilrights/activities/agreements/TBHC/vra.pdf.
---------------------------------------------------------------------------

    Comment: Some commenters challenged the requirement under the 2016 
Rule that medical professionals must use a patient's preferred pronouns 
based entirely on self-identification, regardless of biological sex or 
the presence or absence of surgery or the use of masculinizing or 
feminizing hormone treatments. Some commenters disagreed with any 
requirement that forces providers to treat patients in a manner other 
than according to their biological sex, including through coerced use 
of pronouns. Others stated that social transition treatment required 
providers to use the preferred pronouns or preferred names of patients, 
and to identify patients according to their preferred sex effectively 
at all times.
    Response: The 2016 Rule preamble held out a provider's ``persistent 
and intentional refusal to use a transgender individual's preferred 
name and pronoun and insistence on using those corresponding to the 
individual's sex assigned at birth'' as a potential example of hostile-
environment sex discrimination under Section 1557.\181\ At least one 
district court has held similarly that when a provider allegedly 
``continuously referred to'' a transgender patient ``with female 
pronouns'' in accordance with her sex, this could be sufficient grounds 
for a sex discrimination claim under Section 1557 in light of the Price 
Waterhouse ``stereotyping'' theory discussed above.\182\ This view, 
again, rested on a misreading of Title IX.
---------------------------------------------------------------------------

    \181\ 81 FR 31406.
    \182\ See Prescott v. Rady Children's Hospital-San Diego, 265 F. 
Supp. 3d 1090, 1098-100 (S.D. Cal. 2017) (``As other courts have 
recognized, `[b]y definition, a transgender individual does not 
conform to the sex-based stereotypes of the sex that he or she was 
assigned at birth. '. . . The Complaint alleges that the RCHSD staff 
discriminated against Kyler by continuously referring to him with 
female pronouns, despite knowing that he was a transgender boy and 
that it would cause him severe distress. . . . Accordingly, Ms. 
Prescott's claim on behalf of Kyler survives under [Section 1557 of] 
the ACA.'').
---------------------------------------------------------------------------

    Pronouns are not stereotypes. Pronouns reflect the most elementary 
sex-based classification in the English language. They are routinely 
used in scientific contexts to refer to humans as well as any other 
animals that are either male or female. They identify an individual's 
sex, which is an essential element of determining sex-based 
discrimination under Title IX. This final rule does not interfere with 
the medical judgment of any covered entity in treating gender 
dysphoria, but Title IX cannot be used to require covered entities to 
ignore or override the underlying distinctions of sex that Title IX 
itself is premised upon.
    The Department thus does not believe that Title IX requires 
participants in covered entities to use a pronoun other than the one 
consistent with an individual's sex and does not believe it otherwise 
appropriate to dictate pronoun use or force covered entities to 
recognize a conception of sex or gender identity with which they 
disagree for medical, scientific, religious, and/or philosophical 
reasons. This final rule does not prevent covered entities from 
maintaining or adopting pronoun policies, or endorsing a variety of 
theories of gender identity, to the extent otherwise allowed by 
statutory and constitutional law. This rule also does not prevent State 
and local jurisdictions from imposing such policies to the extent 
allowed by statutory and constitutional law.
    Comment: A commenter contended that the Department exceeded its 
authority by proposing to roll back protections for transgender 
individuals, noting that a 2012 letter from OCR stated that Section 
1557 protections included gender identity.\183\
---------------------------------------------------------------------------

    \183\ See Letter from Leon Rodriguez, Director, U.S. Dep't of 
Health & Human Servs., Office for Civil Rights, to Maya Rupert, 
Federal Policy Director, National Center for Lesbian Rights (Jul. 
12, 2012), available at https://perma.cc/RB8V-ACZU.
---------------------------------------------------------------------------

    Response: Consistent with the position taken by the Executive 
Branch on Title IX since 2017, the Department has concluded that the 
position stated in the 2012 OCR letter reflected an incorrect 
understanding of Title IX, as incorporated into Section 1557. The 
Department indefinitely suspended the sub-regulatory guidance contained 
in the 2012 letter in light of the proposed changes to the rule. 84 FR 
27872 n.175. Having considered the matters raised fully, the Department 
disavows the views expressed in the 2012 letter that concern the 
coverage of gender identity and sex discrimination under Section 1557. 
Similarly, the Department disavows the views expressed in a voluntary 
resolution agreement entered into with The Brooklyn Hospital Center in 
2015 resolving allegations of gender identity discrimination under 
Section 1557.\184\ To the extent that those views were integrated or 
incorporated into the 2016 Rule with respect to gender identity, they 
are rescinded in this final rule.
---------------------------------------------------------------------------

    \184\ See OCR Voluntary Resolution Agreement with The Brooklyn 
Hospital Center.
---------------------------------------------------------------------------

    Comment: Many commenters asserted that the proposed rule removes 
legal protections for transgender individuals and would allow or 
encourage providers to deny basic healthcare to individuals who 
identify as transgender. Commenters pointed to what they said were 
instances of discrimination on the basis of the identity of the patient 
as a transgender individual, where providers allegedly used excessive 
precautions, avoided touching the patient, engaged in unnecessary 
physical roughness in pelvic examinations, made insensitive jokes, 
intentionally concealed information about options for different 
treatments, asked unnecessarily personal questions, referred to 
transgender patients by pronouns and terms of address based on their 
biological sex rather than their gender identity, and/or disclosed a 
patient's medical history without authorization. Others cited 15 closed 
cases handled by OCR of alleged discrimination against transgender 
individuals in which providers had refused sex-specific care or 
coverage on the basis of discrepancies between the individual's sex and 
stated gender identity.
    Response: The Department believes that all people should be treated 
with dignity and respect, regardless of their characteristics including 
their gender identity, and they should be given every protection 
afforded by the Constitution and the laws passed by Congress. The 
Department is committed to fully and vigorously enforcing all of the 
nondiscrimination statutes entrusted to it by Congress. For reasons 
explained above, the term ``on the basis of . . . sex'' in Section 1557 
does not encompass discrimination on the basis of gender identity. 
Unprofessional conduct such as inappropriate jokes or questions, 
excessive precautions, or concealment of treatment options, may be 
covered under State medical malpractice, tort, or battery laws.
    Commenters' concern about denial of basic healthcare to transgender

[[Page 37192]]

individuals appears to be based largely on unsubstantiated hypothetical 
scenarios. Although some rare instances have been reported, they are 
not recent, and the Department is unaware of a significant number of 
cases where a transgender individual who has accurately identified his 
or her (biological) sex to a provider has nonetheless been denied 
relevant, non-transition-related healthcare on the basis of his or her 
gender identity. The Department is not aware of any providers claiming 
that they see a need for or wish to make broad, identity-based denials 
of care. To the contrary, many providers who specifically object to the 
2016 Rule's mandates with respect to sex-reassignment treatments and/or 
elective abortion procedures explicitly affirmed in comments their 
commitment to treat all patients without regard to self-identification, 
inclusive of gender identity or sexual orientation. In the anecdotes of 
discrimination reported by commenters, what is often being alleged is 
poor care or insensitive treatment rather than outright denial of care, 
and is often lacking documentation. This lack of substantial evidence 
supports the Department's understanding, in contrast to the allegations 
of some commenters, that denial of basic healthcare on the basis of 
gender identity is not a widespread problem in the U.S. Moreover, to 
the extent that the 2016 Rule provided against denial of basic 
healthcare on the basis of gender identity, those provisions of the 
rule have been preliminarily enjoined since December 2016 and have 
since been vacated; any future mistreatment hypothesized by commenters 
would not, then, be the result of this final rule.
    Additionally, several of the behaviors alleged by commenters would 
be unlawful even if Title IX and Section 1557 had never been enacted. 
Unnecessary roughness in a pelvic examination, or any other medical 
procedure or examination without a medical basis or appropriate 
informed consent, may be a case of battery or malpractice, which should 
be reported to local law enforcement and/or licensing authorities. If 
such conduct willfully causes bodily injury because of gender identity, 
and is in or affecting interstate commerce, then it could be a Federal 
hate crime.\185\ When OCR becomes aware of any crimes that may violate 
Federal law, it may be required to make a referral to the Department of 
Justice.\186\ The Emergency Medical Treatment and Labor Act (EMTALA) 
also requires stabilization in certain emergency medical situations.
---------------------------------------------------------------------------

    \185\ 18 U.S.C. 249(c)(4) (prohibiting hate crimes that are 
based on ``actual or perceived religion, national origin, gender, 
sexual orientation, gender identity, or disability'').
    \186\ See 34 U.S.C. 41303 (``All departments and agencies within 
the Federal government . . . shall report details about crime within 
their respective jurisdiction to the Attorney General''); 28 U.S.C. 
535(b) (``any information, allegation, or complaint received in a 
department or agency of the executive branch of government relating 
to violations of title 28 involving Government officers and 
employees shall be expeditiously reported to the Attorney General by 
the head of the department or agency'').
---------------------------------------------------------------------------

    OCR also continues to enforce Federal health information privacy 
laws to ensure the confidentiality of all individuals' protected 
medical information, including information concerning gender dysphoria 
diagnosis or treatment, sexual orientation, or HIV status.\187\
---------------------------------------------------------------------------

    \187\ See U.S. Department of Health and Human Services, 
``Careless handling of HIV information jeopardizes patient's 
privacy, costs entity $387k'' (May 23, 2017), available at https://www.hhs.gov/about/news/2017/05/23/careless-handling-hiv-information-costs-entity.html (OCR enforcement under HIPAA); see also U.S. 
Department of Health and Human Services, ``HHS Office for Civil 
Rights Secures Corrective Action and Ensures Florida Orthopedic 
Practice Protects Patients with HIV from Discrimination'' (Oct. 30, 
2019), https://www.hhs.gov/about/news/2019/10/30/hhs-ocr-secures-corrective-action-and-ensures-fl-orthopedic-practice-protects-patients-with-hiv-from-discrimination.html (OCR enforcement under 
Section 504 and Section 1557).
---------------------------------------------------------------------------

    The Department, through its Offices of Minority Health, supports 
outreach to diverse populations and those facing particularized or 
disproportionate health challenges.
    Comment: Commenters alleged that removing the definitions of 
``gender identity'' and ``on the basis of sex'' (which includes gender 
identity) from the rule would ``erase'' transgender individuals from 
the Code of Federal Regulations.
    Response: The Department denies that removal of definitional terms 
in one regulation has the wide-ranging impact that commenters allege. 
Under this final rule, transgender individuals remain protected by the 
same civil rights laws as any other individual, and the Department will 
vigorously enforce their statutory and regulatory civil rights. This 
final rule also does not and cannot erase explicit statutory 
protections for individuals on the basis of gender identity, such as in 
hate crimes laws that bar violence committed on the basis of an 
individual's gender identity.\188\
---------------------------------------------------------------------------

    \188\ See 18 U.S.C. 249(c)(4) (prohibiting hate crimes that are 
based on ``actual or perceived religion, national origin, gender, 
sexual orientation, gender identity, or disability'').
---------------------------------------------------------------------------

iii. Termination of Pregnancy
    Comment: Commenters reacted to the proposed rule's elimination of 
the 2016 Rule's language that had encompassed ``termination of 
pregnancy'' within the definition of ``on the basis of sex.'' 
Commenters stated that the Department's declining to take a position 
about the full scope of the meaning of ``termination of pregnancy'' in 
the 2019 NPRM was confusing, and that the point merited clarification. 
Some providers objected to the inclusion of ``termination of 
pregnancy'' under the 2016 Rule to the extent that it referred to 
elective abortions. Other providers interpreted ``termination of 
pregnancy'' to mean both elective abortion and natural termination of 
pregnancies. Others stated that all forms of termination of pregnancy 
should be encompassed in the prohibition on discrimination on the basis 
of sex.
    Some commenters stated that removing the 2016 Rule's definition of 
``on the basis of sex'' will allow discrimination against women based 
upon their abortion history. Commenters also identified a variety of 
other women's healthcare services related to pregnancy that may be 
implicated, including prenatal and postpartum services, tubal 
ligations, and birth control (both as a contraceptive and when used to 
treat other medical conditions). They also referred to infertility 
treatments including in vitro fertilization, and pointed to Benitez v. 
North Coast Women's Care Medical Group, Inc.\189\ as a real-world 
example of discrimination in this regard. Commenters said that the 
proposed rule would or could permit discrimination against women 
through denial or restriction of access to treatments such as these, as 
well as treatments prior to, during, or after a miscarriage.
---------------------------------------------------------------------------

    \189\ Benitez v. N. Coast Women's Care Med. Grp., Inc., 106 Cal. 
App. 4th 978 (Mar. 4, 2003).
---------------------------------------------------------------------------

    Response: Under this final rule, the Department will interpret 
Section 1557's prohibition on sex-based discrimination consistent with 
Title IX and its implementing regulations. This final rule ensures that 
the Department's Section 1557 regulations are implemented consistent 
with the abortion neutrality and statutory exemptions in Title IX. The 
regulations are subject to the text of the Title IX statute, so they 
cannot be ``construed to require or prohibit any person, or public or 
private entity, to provide or pay for any benefit or service, including 
the use of facilities, related to an abortion.'' 20 U.S.C. 1688. As 
explained below, this final rule also incorporates that statutory text 
explicitly into the Title IX regulations for the sake of clarity, to 
ensure those regulations are

[[Page 37193]]

implemented consistent with the statute.
    The Franciscan Alliance court vacated the ``termination of 
pregnancy'' language in the 2016 Rule because it failed to incorporate 
the abortion-neutrality language from the Title IX statute.\190\ The 
Court held that ``Congress intended to incorporate the entire statutory 
structure, including the abortion and religious exemptions,'' \191\ and 
concluded that by failing to include these exemptions, the Department 
unlawfully ``expanded the `ground prohibited under' Title IX that 
Section 1557 explicitly incorporated.'' \192\
---------------------------------------------------------------------------

    \190\ Franciscan Alliance, 227 F. Supp. 3d 660, 690-91 (N.D. 
Tex. 2016) (``Title IX prohibits discrimination on the basis of sex, 
but . . . . categorically exempts any application that would require 
a covered entity to provide abortion or abortion-related services. 
20 U.S.C. 1688. . . . Failure to incorporate Title IX's religious 
and abortion exemptions nullifies Congress's specific direction to 
prohibit only the ground proscribed by Title IX. That is not 
permitted.''); Franciscan Alliance, 414 F. Supp. 3d 928, 945, 947 
(N.D. Tex. 2019) (adopting reasoning from preliminary injunction and 
vacating the portions of the rule it deemed unlawful).
    \191\ Franciscan Alliance, 227 F. Supp. 3d at 690-91.
    \192\ Id. (citing Corley v. U.S., 556 U.S. 303, 314 (2009)).
---------------------------------------------------------------------------

    The Department is committed to enforcing vigorously the prohibition 
on discrimination on the basis of sex, through its implementing 
regulations (which include provisions on termination of pregnancy), as 
interpreted consistent with the text of Title IX. OCR will fully 
enforce its statutory authorities concerning any discriminatory denial 
of access to women's health services, including those related to 
pregnancy. The Department, however, declines to speculate on particular 
hypotheticals related to termination of pregnancy, and will proceed 
based on the specific facts and circumstances of each case that may 
arise.
    Comment: Some commenters stated that without the 2016 Rule, there 
would be serious and/or life-threatening results because hospitals 
would not provide abortion care on the basis of religious beliefs, 
referencing ACLU v. Trinity Health Corporation, 178 F. Supp. 3d 614 
(E.D. Mich. 2016), and Means v. U.S. Conference of Catholic Bishops, 
No. 1:15-CV-353, 2015 WL 3970046 (W.D. Mich. 2015). Some alleged that 
the proposed rule does not comply with constitutional law regarding 
abortion or the applicable standard of scrutiny for sex discrimination 
and imposes undue burdens on women. Some stated that the proposed rule 
would hurt women's health by denying or encouraging denial of access to 
abortion.
    Others submitted evidence challenging the idea that the termination 
of pregnancy provision, if retained (and not enjoined by a court), 
would materially increase abortion access for the average person. 
Specifically, they state that the overwhelming majority of abortions in 
America are performed at high-volume abortion clinics, and that there 
is no reason to suspect that retaining the 2016 Rule would lead to a 
significant increase in hospitals or other institutions willing to 
perform abortions when compared to abortion providers as a whole. 
According to commenters, this is in part because many hospitals and 
medical institutions that do not have a formal position objecting to 
abortion are free to engage in them now yet do not perform them or do 
so only to a limited extent.\193\ Additionally, commenters said that 
the relative dearth of doctors willing to perform abortions at 
institutions appears largely to be a result of independent physician 
choices, not of the policies of institutions that object to abortions.
---------------------------------------------------------------------------

    \193\ As one commenter wrote, ``A 2018 study in the journal 
Contraception found that only 7% of obstetrician-gynecologists in 
private practice had performed an abortion in 2013 or 2014. An older 
study published in 2011 in Obstetrics and Gynecology found that 97% 
of practicing obstetrician-gynecologists encountered patients 
seeking an abortion, though only 14% performed them. Finally, a 2014 
study published in Perspectives on Sexual and Reproductive Health 
found that just 5% of abortions take place in hospitals or 
physicians' offices, demonstrating that the vast majority of 
abortions are not performed by healthcare providers at hospitals or 
physicians' offices.''
---------------------------------------------------------------------------

    Some commenters were concerned that the 2016 Rule's provisions on 
termination of pregnancy devalue human life, both with respect to 
unborn children who lose their lives, and with respect to mothers, as 
many abortions are dangerous and lead to life-threatening complications 
for women. Other commenters stated that HHS has a compelling interest 
in defending the sanctity of innocent human life at all stages. Some 
institutional providers who object to abortion stated that they can and 
do treat women who have had miscarriages, even using techniques that 
are commonly used in abortion (such as dilation and curettage), so long 
as the procedure itself is not intended to and does not result in the 
taking of a human life.
    Response: The Department appreciates all comments related to the 
highly controversial matter of abortion. The strong views that 
Americans hold on various sides of this question are an important 
policy reason supporting the Congressionally-enacted abortion-
neutrality language in Federal statutes such as Title IX. Because 
Section 1557 expressly incorporated Title IX--therefore including the 
abortion-neutrality provision--the Department likewise incorporates 
that provision for purposes of the covered entities under Section 1557. 
This final rule also does not add any abortion-related conscience 
protections beyond those that Congress has set down in statute. Those 
statutes have not been held to be unconstitutional. The Department will 
vigorously enforce these and all other Federal civil rights statutes 
under its jurisdiction.
    This final rule also does not abrogate other longstanding Federal 
laws that may apply to situations related to pregnancy, including 
EMTALA and the Pregnancy Nondiscrimination Act. The Department will 
read all applicable laws and exemptions harmoniously.\194\ In addition, 
the termination of pregnancy provisions of the 2016 Rule have been 
enjoined since December 2016 and are now vacated. Finally, this rule 
does not change the legal ability of providers to offer abortions. The 
Department therefore disagrees with commenters who predict that the 
finalization of this rule will significantly reduce abortion access or 
cause resulting health consequences.
---------------------------------------------------------------------------

    \194\ See 42 U.S.C. 13955dd(c)(1)(ii) (EMTALA); Public Law 95-
555, 92 Stat. 2076 (Oct. 31, 1978) (Pregnancy Nondiscrimination 
Act).
---------------------------------------------------------------------------

iv. Sexual Orientation
    Comment: Some commenters stated that the 2016 Rule's Sec.  92.209 
should be removed because Title VII and Title IX do not include sexual 
orientation in their prohibition of sex discrimination. They used as an 
example the fact that the previous Administration treated sex, sexual 
orientation, and gender identity as different concepts in an executive 
order that prohibited discrimination on the basis of sex, sexual 
orientation, and gender identity in Federal hiring, contracting, and 
employment.\195\ They added that Congress has rejected the sexual 
orientation and gender identity provisions in the Employment Non-
Discrimination Act, the Equality Act, and the Student Non-
Discrimination Act.
---------------------------------------------------------------------------

    \195\ Exec. Order No. 13672, 79 FR 42971-72 (July 21, 2014), 
https://www.govinfo.gov/content/pkg/FR-2014-07-23/pdf/2014-17522.pdf.
---------------------------------------------------------------------------

    Others said that sexual orientation is a foundational trait of an 
individual and that cannot be separated and/or isolated from his or her 
being and that the proposed rule would enable discrimination based on 
sexual orientation. Other commenters cite a general fear of 
discrimination; abuse or neglect related to sexual orientation; a

[[Page 37194]]

lack of inclusive services; social isolation; a sense of invisibility; 
lack of educated providers; and distrust of the healthcare system. They 
argue that these burdens lead to inadequate care, including preventive 
care, and require a Federal response. In support of these claims, 
commenters cited a survey stating that 8% of lesbian, gay, and bisexual 
respondents allege they have been refused care from a healthcare 
provider due to their sexual orientation.\196\ Other commenters, 
however, cited a survey showing that 97% of responding faith-based 
medical professionals attest that they ``care for all patients in need, 
regardless of sexual orientation, gender identification, or family 
makeup, with sensitivity and compassion, even when [they] cannot 
validate their choices.'' \197\ Thus, some commenters argue, the issue 
is not one of refusing to care for certain patients based on identity, 
but instead a matter of declining to participate in a discrete set of 
morally controversial procedures and treatments that are available 
elsewhere.
---------------------------------------------------------------------------

    \196\ See Shabab Ahmed Mirza and Caitlin Rooney, Discrimination 
Prevents LGBTQ People from Accessing Health Care, Center for 
American Progress (January 18, 2018), https://www.americanprogress.org/issues/lgbt/news/2018/01/18/445130/discrimination-prevents-lgbtq-people-accessing-health-care/.
    \197\ See Freedom2Care, ``Conscience in healthcare: 2019,'' 
https://www.freedom2care.org/polling.
---------------------------------------------------------------------------

    Others said that discrimination because of an individual's sexual 
orientation is plainly a species of sex stereotyping that is 
impermissible under Section 1557's sex discrimination prohibition and 
cite Baldwin v. Foxx, an EEOC decision,\198\ in support of the idea 
that the final rule should cover sexual orientation.
---------------------------------------------------------------------------

    \198\ Baldwin v. Foxx, EEOC Appeal No. 0120133080, 2015 WL 
4397641 (July 15, 2015).
---------------------------------------------------------------------------

    Response: OCR may only enforce laws that Congress has enacted and 
the regulations that were promulgated pursuant to that statutory 
authority. The plain meaning of ``sex'' under Title IX encompasses 
neither sexual orientation nor gender identity. Concerning commenters' 
discussion of Congress's failure to add sexual orientation and gender 
identity to contexts encompassed by Title IX or Title VII, the 
Department is guided primarily by its understanding of the plain 
meaning of the statute.\199\ This final rule does not change the status 
quo with respect to sexual orientation, because, as the Department 
stated in the 2019 NPRM preamble, sexual orientation was not explicitly 
included in the 2016 Rule text,\200\ and the Department has concluded 
that it is a category separate from sex and does not fall within the 
ambit of discrimination ``on the basis of sex.''
---------------------------------------------------------------------------

    \199\ The Department agrees that Congressional inaction on this 
issue is supportive of the conclusion that Title IX does not 
encompass sexual orientation or gender identity, although it does 
not rely on this Congressional inaction in interpreting Title IX.
    \200\ 81 FR 31390 (``OCR has decided not to resolve in this rule 
whether discrimination on the basis of an individual's sexual 
orientation status alone is a form of sex discrimination.'').
---------------------------------------------------------------------------

    The U.S. Attorney General and Solicitor General have persuasively 
argued that Price Waterhouse does not elevate sexual orientation to a 
protected category using a sex stereotyping theory under Title VII, 
just as it fails to make gender identity a protected category under 
Title IX.\201\ Much as the reasonable distinctions on the basis of sex 
discussed above (in the subsection on gender identity) are not 
illegitimate sex stereotypes, so too, distinctions on the basis of 
sexual orientation do not as such constitute sex stereotyping. As an 
initial matter, distinctions on the basis of sexual orientation may be 
sex-neutral and apply equally to both sexes, which would mean that they 
do not burden anyone on the basis of sex. The Eleventh Circuit has 
recently rejected the application of Price Waterhouse to expand ``sex'' 
to include ``sexual orientation,'' citing an abundance of case law in 
support.\202\ Additionally, as the Solicitor General has argued, 
distinctions made on the basis of sexual orientation are not 
necessarily based on stereotypes, as they may instead be based on 
``moral or religious beliefs about sexual, marital, and familial 
relationships.'' \203\ ``There is nothing irrational or improper'' in 
such beliefs.\204\
---------------------------------------------------------------------------

    \201\ See Bostock v. Clayton Cty. Bd. of Commissioners, 2019 WL 
4014070 at *26 (U.S. 2019) (Brief for the United States as Amicus 
Curiae Supporting Affirmance in No. 17-1618 (Bostock v. Clayton Cty. 
Bd. of Commissioners) and Reversal in No. 17-1623 (Altitude Express 
Inc. v. Zarda)) (``Title VII prohibits disparate treatment of men 
and women regardless of sexual orientation. Gay, lesbian, and 
bisexual employees, no less than straight employees, may invoke 
Price Waterhouse if they are subjected to gender-based stereotypes; 
a gay man who is fired for being too effeminate has just as strong a 
claim as a straight man who is fired for that reason.''). See also 
Etsitty v. Utah Transit Authority, 502 F.3d 1215, 1224-25 (10th Cir. 
2007) (explaining that the legal issue ``is whether members of one 
sex are exposed to disadvantageous terms or conditions of employment 
to which members of the other sex are not exposed'').
    \202\ Evans v. Georgia Reg'l Hosp., 850 F.3d 1248, 1256-57 (11th 
Cir. 2017) (``Price Waterhouse and Oncale are neither clearly on 
point nor contrary to Blum [v. Gulf Oil Corp., 597 F.2d 936 (5th 
Cir. 1979) (``Discharge for homosexuality is not prohibited by Title 
VII. . . .'')]. These Supreme Court decisions do not squarely 
address whether sexual orientation discrimination is prohibited by 
Title VII.'') Id. at 1256-57 (``Finally, even though they disagree 
with the decisions, [the plaintiffs] acknowledge that other circuits 
have held that sexual orientation discrimination is not actionable 
under Title VII. See, e.g., Higgins v. New Balance Athletic Shoe, 
Inc., 194 F.3d 252, 259 (1st Cir. 1999) (``Title VII does not 
proscribe harassment simply because of sexual orientation.''); 
Simonton v. Runyon, 232 F.3d 33, 36 (2d Cir. 2000) (``Simonton has 
alleged that he was discriminated against not because he was a man, 
but because of his sexual orientation. Such a claim remains non-
cognizable under Title VII.''); Bibby v. Phila. Coca Cola Bottling 
Co., 260 F.3d 257, 261 (3d Cir. 2001) (``Title VII does not prohibit 
discrimination based on sexual orientation.''); Wrightson v. Pizza 
Hut of Am., 99 F.3d 138, 143 (4th Cir. 1996), abrogated on other 
grounds by Oncale v. Sundowner Offshore Servs., 523 U.S. 75, 118 S. 
Ct. 998, 140 L.Ed.2d 201 (1998) (``Title VII does not afford a cause 
of action for discrimination based upon sexual orientation. . . 
.''); Vickers v. Fairfield Med. Ctr., 453 F.3d 757, 762 (6th Cir. 
2006) (``[S]exual orientation is not a prohibited basis for 
discriminatory acts under Title VII.''); Hamner v. St. Vincent Hosp. 
& Health Care Ctr., Inc., 224 F.3d 701, 704 (7th Cir. 2000) 
(``[H]arassment based solely upon a person's sexual preference or 
orientation (and not on one's sex) is not an unlawful employment 
practice under Title VII.''); Williamson v. A.G. Edwards & Sons, 
Inc., 876 F.2d 69, 70 (8th Cir. 1989) (``Title VII does not prohibit 
discrimination against homosexuals.''); Rene v. MGM Grand Hotel, 
Inc., 305 F.3d 1061, 1063-64 (9th Cir. 2002) (``[A]n employee's 
sexual orientation is irrelevant for purposes of Title VII. It 
neither provides nor precludes a cause of action for sexual 
harassment. That the harasser is, or may be, motivated by hostility 
based on sexual orientation is similarly irrelevant, and neither 
provides nor precludes a cause of action.''); Medina v. Income 
Support Div., 413 F.3d 1131, 1135 (10th Cir. 2005) (``Title VII's 
protections, however, do not extend to harassment due to a person's 
sexuality. . . . Congress has repeatedly rejected legislation that 
would have extended Title VII to cover sexual orientation.'') 
(internal quotations omitted). Evans and the EEOC question these 
decisions, in part, because of Price Waterhouse and Oncale. Whether 
those Supreme Court cases impact other circuit's decisions, many of 
which were decided after Price Waterhouse and Oncale, does not 
change our analysis that Blum is binding precedent that has not been 
overruled by a clearly contrary opinion of the Supreme Court or of 
this Court sitting en banc.'').
    \203\ Bostock v. Clayton Cty. Bd. of Commissioners, 2019 WL 
4014070 at *25 (U.S. 2019) (Brief for the United States as Amicus 
Curiae Supporting Affirmance in No. 17-1618 (Bostock v. Clayton Cty. 
Bd. of Commissioners) and Reversal in No. 17-1623 (Altitude Express 
Inc. v. Zarda)).
    \204\ See Tuan Anh Nguyen v. INS, 533 U.S. 68. See also 
Obergefell v. Hodges, 135 S. Ct. 2585, 2602 (2015) (referring to 
opinions that are ``based on decent and honorable religious or 
philosophical premises'' and are therefore not ``disparaged here''); 
See Masterpiece Cakeshop v. Colorado Civil Rights Comm'n, 138 S. Ct. 
1719, 1729 (2018) (``To describe a man's faith as `one of the most 
despicable pieces of rhetoric that people can use' is to disparage 
his religion in at least two distinct ways: by describing it as 
despicable, and also by characterizing it as merely rhetorical--
something insubstantial and even insincere.'').
---------------------------------------------------------------------------

    The Department notes that in Baldwin v. Foxx, the EEOC reversed its 
long-held position that sexual orientation discrimination was not 
protected under Title VII.\205\ The United States government has since 
rejected the

[[Page 37195]]

EEOC's novel position.\206\ Given Congress's decision not to extend 
civil rights protections on the basis of sexual orientation in the 
field of health and human services, the Department believes that State 
and local governments are best equipped to balance the multiple 
competing considerations involved in what remain a contentious and 
fraught set of questions.
---------------------------------------------------------------------------

    \205\ See e.g., Angle v. Veneman, EEOC Decision No. 01A32644, 
2004 WL 764265, at *2 (Apr. 5, 2004) (recognizing that the EEOC had 
``consistently held that discrimination based on sexual orientation 
is not actionable under Title VII''), Marucci v. Caldera, EEOC 
Decision No. 01982644, 2000 WL 1637387, at *2-*3 (Oct. 27, 2000).
    \206\ See Brief for United States, Bostock v. Clayton Cty. Bd. 
of Commissioners, No. 17-1618 (U.S. filed Aug. 23, 2019).
---------------------------------------------------------------------------

v. Scrutiny for Sex-Based Classifications (Repeal of Sec.  
92.101(b)(3)(iv) of the 2016 Rule)
    The Department proposed to repeal 92.101(b)(3)(iv) of the 2016 
Rule, which forbids covered entities from operating a health program or 
activity restricted to members of one sex unless they can ``demonstrate 
an exceedingly persuasive justification, that is, that the sex-specific 
health program or activity is substantially related to the achievement 
of an important health-related or scientific objective.'' \207\
---------------------------------------------------------------------------

    \207\ 81 FR 31470.
---------------------------------------------------------------------------

    Comment: Commenters stated that the 2016 Rule's provisions would 
pose an unjustified burden on, and lead to excessive scrutiny of, 
entities operating single-sex facilities in healthcare, as well as 
entities or persons who would claim religious or abortion exemptions 
under Title IX.
    Response: The Department agrees that the 2016 Rule placed an 
unjustified burden on sex-specific health programs and activities 
conducted by private entities. The ``exceedingly persuasive 
justification'' legal standard under Equal Protection jurisprudence 
sets a limit to governmental actions that discriminate on the basis of 
sex, such as the military draft.\208\ This standard is foreign to Title 
IX jurisprudence.\209\ The 2016 Rule cited no case law in support of 
its decision to import a significantly modified version of this 
standard from constitutional law into its interpretation of ``on the 
basis of sex'' as defined by Title IX.\210\ The express statutory 
exemptions to Title IX's nondiscrimination provisions, such as for 
fraternities and sororities, do not require individual covered entities 
to provide an ``exceedingly persuasive justification'' before being 
able to benefit from the exemption. Title IX also does not require 
religious entities to provide such a justification to qualify for the 
religious exemption from Title IX nondiscrimination provisions. To 
require such a justification in the enforcement of Section 1557 would 
be to impose a significant burden on private entities that the 
statutory text does not contemplate. Government actors are routinely 
subjected to levels of judicial scrutiny that private parties (even 
private parties receiving Federal funds) are not, such as where 
constitutional provisions restrict government action, or where statutes 
allow civil rights actions against State actors. See, e.g., 1st Am., 
U.S. Const.; 42 U.S.C. 1983; 42 U.S.C. 2000bb, et seq. It would be 
inappropriate to constrain medical professionals' best judgment by 
requiring them to meet the governmental burden of proof every time they 
seek to draw a reasonable distinction on the basis of sex in providing 
healthcare or separate programs or activities for the two sexes.\211\ 
As stated above, such distinctions are not inherently discriminatory: 
It is not discriminating against men to exclude them from, for example, 
gynecological services, because men are not similarly situated to women 
for purposes of such services. Providers accordingly should not be 
required to present an ``exceedingly persuasive justification'' for 
providing gynecological services only to women. OCR will, however, 
evaluate, and respond appropriately to, any allegations that a covered 
entity's sex-specific health programs or activities have in fact 
discriminated unlawfully on the basis of sex, including sexual 
harassment.\212\
---------------------------------------------------------------------------

    \208\ See Rostker v. Goldberg, 453 U.S. 57, 69-70 (1981).
    \209\ See, e.g., the clear distinction at Whitaker v. Kenosha 
Unified Sch. Dist., 858 F.3d 1034, 1046-50 (7th Cir. 2017) (``Title 
IX Claim''), and 1050-54 (``Equal Protection Claim,'' encompassing 
the ``exceedingly persuasive justification'' test).
    \210\ Cf. 81 FR 31408-09.
    \211\ See 2016 Rule, 81 FR 31409 (``In all cases, . . . OCR will 
expect a covered entity to supply objective evidence, and empirical 
data if available, to justify the need to restrict participation in 
the program to only one sex.'').
    \212\ See U.S. Department of Health and Human Services, ``HHS 
OCR Secures Agreement with MSU to Resolve Investigation into Sexual 
Abuse by Larry Nassar'' (2019), https://www.hhs.gov/about/news/2019/08/12/hhs-ocr-secures-agreement-msu-resolve-investigation-sexual-abuse-larry-nassar.html.
---------------------------------------------------------------------------

vi. Disparate Impact Under Sec.  92.101(b)(3)(iii) of the 2016 Rule
    The Department proposed to repeal 92.101(b)(iii) of the 2016 Rule, 
which prohibited selection of sites or facilities that have an effect 
of discriminating on the basis of sex.\213\
---------------------------------------------------------------------------

    \213\ 81 FR 31470.
---------------------------------------------------------------------------

    Comment: Some commenters opposed repealing language that affirmed a 
disparate impact theory under grounds of nondiscrimination encompassed 
by Section 1557, contending that the civil rights statutes cited in 
Section 1557 authorize disparate impact claims.
    One commenter asserted that the very existence of Section 1557 
indicates that the ACA intends to extend protections against disparate 
impact discrimination to private rights of action: Title VI already 
applied in the context of healthcare programs and activities, so 
Section 1557 would have been meaningless if it did not also allow for 
private rights of action for disparate impact discrimination. The same 
commenter also took issue with the proposed rule's elimination of 
monetary damages for disparate impact claims.
    Response: Case law has indicated that certain civil rights statutes 
incorporated by Section 1557 do authorize disparate impact claims: 
Namely, claims with respect to discrimination on the basis of race, 
color, national origin, and disability.\214\ Title IX, however, 
authorizes no such claims regarding discrimination on the basis of sex. 
Similarly, provisions relating to site or facility selection based on 
race, color, national origin, or disability are found in HHS's Title VI 
and Section 504 regulations, but are not found in HHS's Title IX 
regulations.\215\ Insofar as the 2016 Rule added new grounds of 
prohibited discrimination not found in the statute, the Department 
believes it is necessary to revert to the underlying statutes and their 
implementing regulations. As a result, to the extent any of the 
underlying statutes authorize disparate impact claims, this final rule 
will recognize such claims by virtue of its reliance on the governing 
statutes, regulations, guidance and case law applicable to such claims, 
without needing to delineate the availability or lack of availability 
of all possible claims in this final rule. In reviewing all complaints 
that raise a disparate impact claim, the Department will consider the 
circumstances of each complaint and will independently apply each 
statute and underlying regulation, according to its text and any 
applicable court precedents, to the health context under Section 
1557.\216\
---------------------------------------------------------------------------

    \214\ See 45 CFR 84.4(b)(4) (Title VI); 80.3(b)(2) (Section 
504).
    \215\ See 45 CFR 80.3(b)(3) (Title VI); 84.4(b)(5) (Section 
504).
    \216\ The Department responds to comments on private rights of 
action and damages below in the section on the enforcement 
mechanisms of the 2016 Rule.
---------------------------------------------------------------------------

    Comment: Some commenters stated that that the proposed rule's 
removal of protections against disparate impact discrimination, 
especially concerning race, color, and national origin, will lead to 
more instances of discrimination and fewer means of recourse.

[[Page 37196]]

Commenters cited data about health disparities in LGBT and female 
populations that they asserted were caused by discrimination on the 
basis of gender identity or termination of pregnancy, and stated that 
disparate impact analysis under the 2016 Rule is the appropriate way to 
address such discrimination. Another commenter questioned the 
persuasiveness of assessing the relative proportion of health 
disparities between racial, transgender, and/or female populations and 
other populations. The commenter stated that the available data did not 
provide conclusive evidence that the health disparities were caused by 
discriminatory conduct against LGBT persons and individuals seeking 
abortions, because correlations are not definite evidence of causation. 
The commenter contended that the proposed rule's approach causes 
ambiguity by blurring the distinctions between the two.
    Response: As an initial matter, the Department wishes to reiterate 
that it will enforce Section 1557 in light of its regulations that 
already protect against disparate impact on the basis of race, color, 
or national origin. With respect to concerns regarding disparate impact 
on LGBT and abortion-seeking populations, the Department notes that 
this final rule conforms the Section 1557 Rule to HHS's Title IX 
regulations, under which the disparate impact standard does not apply. 
This conformity provides a clearer standard for covered entities, which 
are no longer required to have legally sufficient knowledge of the 
causes of statistically disproportionate health disparities on the 
basis of sex or gender identity.
vii. Insurance Coverage in Sec.  92.207 of the 2016 Rule
    The 2016 Rule prohibited insurers from ``hav[ing] or implement[ing] 
a categorical coverage exclusion or limitation for all health services 
related to gender transition.'' \217\ Its preamble explained that this 
encompasses a ``range of transition-related services'' to treat gender 
dysphoria that are ``not limited to surgical treatments and may 
include, but [are] not limited to, services such as hormone therapy and 
psychotherapy, which may occur over the lifetime of the individual,'' 
and that may be required even if not ``strictly identified as medically 
necessary or appropriate'' insofar as the entity covers other types of 
similarly ``elective'' procedures.\218\
---------------------------------------------------------------------------

    \217\ 81 FR 31472, 31435-36.
    \218\ Id.
---------------------------------------------------------------------------

    Comment: Commenters indicated support for the 2016 Rule's insurance 
coverage requirements, claiming that the Rule has led to increased 
access to gender transition services for transgender patients, and that 
these services will be lost if the proposed rule is finalized. In 
comments, clinicians provided information about the specific 
procedures, services, or treatments they perform or offer with respect 
to gender identity. Among those who offer medical interventions under 
the category of ``gender transition,'' there was a consensus that such 
interventions included genital sex reassignment surgeries, cross-sex 
hormonal treatment, counseling, and often psychological or psychiatric 
support. Some clinicians stated that only patients with longstanding 
identification as the opposite sex and distress with their biological 
sex sought these services. Beyond these, some (but not all) clinicians 
indicated that gender transition procedures could also include surgery 
for feminization or masculinization of the entire body, which could 
include reduction, augmentation, removal, or transplant of tissue, 
skin, hair, or body fat, as well as ``social transition'' services such 
as voice training.\219\
---------------------------------------------------------------------------

    \219\ Examples of procedures identified were rhinoplasty, 
blepharoplasty, septoplasty, rhytidoplasty, abdominoplasty, 
electrolysis, liposuction, jawline modifications, scalp advancement, 
cheek and chin contouring, fat transfer, pectoral implants, forehead 
or brow lifts, or breast, buttocks, breast, waist, or lip 
augmentation/reduction. See Whitman-Walker Health; Philadelphia 
Transgender Center. HHS-OCR-2019-0007-138335 (Whitman-Walker 
Health). http://www.thetransgendercenter.com/index.php/femaletomale1/ftm-price-list.html; http://www.thetransgendercenter.com/index.php/maletofemale1/mtf-price-list.html.
---------------------------------------------------------------------------

    Some commenters regard transition services (which they said may 
include counseling, hormone therapy, and/or a variety of possible 
surgical treatments) as the governing standard of care. They directed 
the Department to studies on the matter including those cited in the 
2016 Rule preamble, and cited what they said is a consensus of major 
American medical associations \220\ about sex-reassignment surgery, 
cross-sex hormones, and affirmation counseling. Commenters urged the 
Department to follow the 2016 Rule in relying on the standards 
promulgated by the World Professional Association for Transgender 
Health (WPATH).\221\
---------------------------------------------------------------------------

    \220\ Commenters cited Jason Rafferty, ``Ensuring Comprehensive 
Care and Support for Transgender and Gender-Diverse Children and 
Adolescents,'' 142 Pediatrics no. 4 (Oct. 2018) (American Academy of 
Pediatrics policy statement), and noted that the American Medical 
Association, the American College of Physicians, the American 
Psychological Association, the American Psychiatric Association, the 
American Academy of Family Physicians, the Endocrine Society the 
American College of Obstetricians and Gynecologists, and the 
American Academy of Pediatrics, among others, support transition-
related treatments.
    \221\ See 81 FR 31429.
---------------------------------------------------------------------------

    Commenters stated that, under the WPATH standards and other 
protocols, treatment for gender dysphoria may require transition-
related care.\222\ Commenters asserted specific benefits from 
transition-related care in treating gender dysphoria.\223\ For example, 
commenters said that access to transition services leads to decreased 
health disparities, such as lower levels of depression and suicide 
attempts.\224\
---------------------------------------------------------------------------

    \222\ Commenters cited, for example, Wylie C. Hembree et al., 
Endocrine Treatment of Gender-Dysphoric/Gender-Incongruent Persons: 
An Endocrine Society Clinical Practice Guideline, 102 The Journal of 
Clinical Endocrinology & Metabolism 3869 (2017); Am. Medical Ass'n, 
AMA Policies on GLBT Issues, Patient-Centered Policy H-185.950, 
Removing Financial Barriers to Care for Transgender Patients (2008), 
http://www.imatyfa.org/assets/ama122.pdf; and Am. Psychiatric Ass'n, 
Position Statement on Discrimination Against Transgender and Gender 
Variant Individuals (2012); http://www.dhcs.ca.gov/services/MH/Documents/2013_04_AC_06d_APA_ps2012_Transgen_Disc.pdf (citing WPATH 
Standards); Am. Psychological Ass'n, Policy on Transgender, Gender 
Identity & Gender Expression Non-Discrimination (2008), http://www.apa.org/about/policy/transgender.aspx.
    \223\ Commenters cited, for example, Ashli A. Owen-Smith, et 
al., Association Between Gender Confirmation Treatments and 
Perceived Gender Congruence, Body Image Satisfaction, and Mental 
Health in a Cohort of Transgender Individuals. J Sexual Medicine 
(Jan. 17, 2018); Gemma L. Witcomb et al., Levels of Depression in 
Transgender People and its Predictors: Results of a Large Matched 
Control Study with Transgender People Accessing Clinical Services, 
J. Affective Disorders (Feb. 2018); and Cecilia Dhejne et al., 
Mental Health and Gender Dysphoria: A Review of the Literature, 28 
Int'l Rev. Psychiatry 44 (2016).
    \224\ Commenters cited, for example, Lily Durwood, Katie A. 
McLaughlin, & Kristina R. Olson, Mental Health and Self-Worth in 
Socially Transitioned Transgender Youth, 56 J. Am. Acad. Child 
Adoles. Pyschiatry 116 (2017); Kristina R. Olson et al., Mental 
Health of Transgender Children Who Are Supported in Their 
Identities, 137 Pediatrics (2016); and Stephen T. Russel et al., 
Chosen Name Use Is Linked to Reduced Depressive Symptoms, Suicidal 
Ideation, and Suicidal Behaviors Among Transgender Youth, 64 J. 
Adolescent Health 503 (2018), https://www.jahonline.org/article/S1054-139X(18)30085-5/fulltext.
---------------------------------------------------------------------------

    With respect to adolescents, some commenters promoted approaches 
that affirm or encourage gender identity variation, including sex 
reassignment, citing data that they said showed it resulted in fewer 
mental health concerns.\225\ Some medical professionals also stated in 
comments that hormone blockers are a safe and reversible way to delay 
puberty, noting

[[Page 37197]]

they have been used historically for children experiencing precocious 
puberty, or puberty at a younger age.
---------------------------------------------------------------------------

    \225\ Commenters cited Hill DB, Menvielle E, Sica KM, Johnson A. 
An affirmative intervention for families with gender variant 
children: parental ratings of child mental health and gender. J Sex 
Marital Ther. 36(1):6-23 (2010).
---------------------------------------------------------------------------

    Other commenters disagreed as to whether sex reassignment 
treatments or surgeries, or gender-affirming therapies, are the proper 
care for gender dysphoria, or even whether they are ever medically 
indicated. Instead of surgery, hormones, or cross-sex affirmation 
counseling, some healthcare providers recommended watchful waiting, 
talk therapy that affirms a person's biological sex, or psychological 
or psychiatric treatment of comorbid conditions, as distinct from 
permanent surgical or hormonal interventions.\226\ These providers 
explained that patients with gender dysphoria can work with a 
psychiatrist or counselor to better understand their feelings and 
emotions, and how the incongruence between their psychological identity 
and biological sex causes them distress. Some clinicians stated that 
reinforcing a patient's perception that there is something wrong with 
their body is damaging both to mental and physical health of 
transgender patients.
---------------------------------------------------------------------------

    \226\ Commenters cited sources including Monique Robles, 
``Observations in a Gender Diversity Clinic,'' 44 Ethics & Medics 2 
(Feb. 2019); and Devita Singh, Ph.D., ``A Follow-up Study of Boys 
with Gender Identity Disorder,'' Department of Human Development and 
Applied Psychology, Ontario Institute for Studies in Education, 
University of Toronto (2012).
---------------------------------------------------------------------------

    Some medical professionals discussed the long-term and irreversible 
physical effects of cross-sex hormones and puberty blockers, pointing 
to permanent deepening of voice, clitoromegaly, jaw enlargement, 
permanent sterility, and sexual dysfunction.\227\ Doctors also 
commented that clinical data have not shown that such hormonal 
treatments improve the long-term psychological functioning of gender 
dysphoric persons. Clinicians stated that certain hormone treatments 
given to persons with gender dysphoria result in glucose and lipid 
metabolism disorders and cardiovascular conditions. Some clinicians 
were critical of the research supporting transition services, stating 
that it does not adequately assess such long-term health consequences 
and ignores a particularly vulnerable population of patients, namely 
the growing population of transitioned individuals who wish to 
transition back but are being ignored or impeded from receiving 
services affirming their biology.\228\ They cited research indicating 
that patients did not need surgical or hormonal transition services 
when less drastic interventions would have been effective.\229\ 
Clinicians stated that transition services were burdensome on these 
patients on several levels--financially, physically, and 
psychologically. Commenters concluded that repeal of the 2016 Rule 
would relieve the burden on these transgender individuals by letting 
providers decide, based on their assessment of individuals, what 
surgeries or treatments are appropriate according to their medical 
judgment and without coercive regulatory pressure.
---------------------------------------------------------------------------

    \227\ Commenters cited sources including Talal Alzahrani, M.D., 
et al., ``Cardiovascular Disease Risk Factors and Myocardial 
Infarction in the Transgender Population,'' Circulation: 
Cardiovascular Quality and Outcomes 12:4 (Apr. 2019), https://www.ncbi.nlm.nih.gov/pubmed/30950651; and Darios Getahun, M.D., et 
al., Cross-sex Hormones and Acute Cardiovascular Events in 
Transgender Persons, Annals of Internal Medicine (July 10, 2018), 
https://www.ncbi.nlm.nih.gov/pubmed/29987313.
    \228\ Commenters cited, for example, Miroslav L. Djordjevic et 
al., Reversal Surgery in Regretful Male-to-Female Transsexuals After 
Sex Reassignment Surgery, 13 J. of Sexual Med., 1000, 1006 (2016).
    \229\ Commenters cited, for example, Joe Shute, ``Sex change 
regret: Gender reversal surgery is on the rise, so why aren't we 
talking about it?'' The Telegraph (Oct. 1, 2017), https://www.telegraph.co.uk/health-fitness/body/gender-reversal-surgery-rise-arent-talking.
---------------------------------------------------------------------------

    Some medical providers raised concerns that prescription of sex-
reassignment procedures and treatments had risked the health of young 
patients under their care due to lack of capacity at young ages to 
fully consent to treatments, difficulties with proper diagnosis during 
changes undergone in adolescence, and the negative impacts on bone mass 
and growth, emotional development, and sexual function.\230\ Some 
clinicians stated that gender dysphoria is not an immutable mental 
health condition and, as such, the appropriate treatment is not 
physical and permanent. Some clinicians stated that current care for 
gender dysphoria includes accommodation counseling, the ``wait and 
see'' approach, and (where indicated) detransition therapy, because 
dysphoria, particularly in children, has a high rates of resolving 
without other interventions. They said that in their medical judgment, 
sex reassignment, cross-sex hormones, and affirming counseling are new 
and controversial treatments with known permanent and negative health 
consequences. Some medical clinicians criticized the WPATH standards 
\231\ for coming to policy conclusions without adequate clinical 
evidence and recommending treatments that are still experimental.\232\ 
Other commenters criticized the 2016 Rule for relying on the policy 
recommendations of an international advocacy group to

[[Page 37198]]

interpret U.S. nondiscrimination laws and develop policy in the 
American healthcare sector. Other commenters disputed the conclusions 
of medical professional associations referenced above, stating that 
they had mischaracterized the medical data, and that life-altering 
transition interventions are not medically necessary, effective, or 
safe.\233\
---------------------------------------------------------------------------

    \230\ Commenters cited, for example, Lieke Josephina Jeanne 
Johanna Vrouenraets, M.Sc., et al., ``Early Medical Treatment of 
Children and Adolescents With Gender Dysphoria: An Empirical Ethical 
Study,'' Journal of Adolescent Health (Jan. 12, 2015), https://www.ncbi.nlm.nih.gov/pubmed/26119518; and Guido Giovanardi, ``Buying 
time or arresting development? The dilemma of administering hormone 
blockers in trans children and adolescents,'' Porto Biomedical 
Journal (2017).
    \231\ See Standards of Care for the Health of Transsexual, 
Transgender, and Gender Nonconforming People 16 (7th ed. 2011), 
https://www.wpath.org/publications/soc.
    \232\ Clinicians stated that the WPATH Standards ignored 
research evidence in support of a ``wait and see'' approach that 
gender dysphoria during childhood has a desistance rate, without 
drastic surgical or medical intervention for sex-reassignment or 
affirmation for social transition. They cited studies including 
Singh, D., ``A Follow Up Study of Boys with Gender Identity 
Disorder,'' doctoral dissertation submitted at University of Toronto 
(2012); Drummond, K. D., Bradley, S. J., Badali-Peterson, M., & 
Zucker, K. J., ``A follow-up study of girls with gender identity 
disorder,'' Developmental Psychology 44:1 (2008), 34-45; Wallien, M. 
S. C., & Cohen-Kettenis, P. T., ``Prediction of adult GID: A follow-
up study of gender-dysphoric children,'' paper presented at the 
meeting of the World Professional Association of Transgender Health, 
Chicago, IL (2007); and Smith, Y.L., Van Goozen, S.H., & Cohen-
Kettenis, P. T., ``Adolescents with gender identity disorder who 
were accepted or rejected for sex reassignment surgery: A 
prospective follow-up,'' Journal of the American Academy of Child & 
Adolescent Psychiatry, 40:4 (2001), 472-81.
    \233\ See Michelle Cretella, ``Gender Dysphoria in Children'' 
(November 2018) (American College of Pediatricians policy 
statement); see also James Cantor, ``American Academy of Pediatrics 
Policy and Trans- Kids: Fact-Checking,'' Sexology (Oct. 2018).
---------------------------------------------------------------------------

    Several commenters who expressed objections to the 2016 Rule 
clarified that they do not exclude patients from access to healthcare 
on the basis of the patient's gender identity, but rather objected to 
the rule requiring that they provide treatment that would be 
detrimental to the health and well-being of their patients. Part of 
their medical profession involves recommendations on which treatments 
will appropriately treat medical conditions to improve the health of 
their patients, and the choice not to provide transition surgery or 
abortion is part of those judgments. Some providers indicated that the 
options for treatment they recommend for patients with gender dysphoria 
are therapeutic and accommodative counseling to improve long-term 
health outcomes, particularly of young patients.
    Other commenters said the Department should rely on the recent 
reviews of the clinical data on sex-reassignment surgery and cross-sex 
hormonal treatment by science and healthcare professionals at HHS and 
DOD.
    Response: These comments further reinforce the Department's 
conclusion, discussed above in the section on gender identity, that 
there is no medical consensus to support one or another form of 
treatment for gender dysphoria. In the Department's current view, the 
2016 Rule did not give sufficient evidence to justify, as a matter of 
policy, its prohibition on blanket exclusions of coverage for sex-
reassignment procedures. The Department shares commenters' judgment 
that the 2016 Rule relied excessively on the conclusions of an advocacy 
group (WPATH) rather than on independent scientific fact-finding--such 
as the fact-finding that CMS undertook in deciding to not issue a 
National Coverage Determination with respect to sex-reassignment 
surgeries (as discussed above) due to insufficient proof of medical 
necessity. In addition, commenters identify a lack of clarity in the 
2016 Rule's mandate, because of the lack of medical consensus as to 
what is even encompassed within ``gender transition procedures'' (e.g., 
whether they include facial reconstruction or hair transplants). All 
these are further reasons why, as a matter of policy, Federal civil 
rights law should not be used to override providers' medical judgments 
regarding treatments for gender dysphoria. But as stated above, even if 
it were appropriate policy, such an end could not be achieved through 
application of Section 1557 and Title IX. There is no statutory 
authority to require the provision or coverage of such procedures under 
Title IX protections from discrimination on the basis of sex.
    Comment: Some commenters state that the provisions in Sec.  
92.207(b)(3) through (5) of the 2016 Rule were confusing, overbroad, 
unclear, and inconsistent. Commenters stated that specificity in this 
area is necessary for efficient and transparent operation of the health 
insurance coverage to work for all involved. Commenters expressed 
concerns that the 2016 Rule did not address whether insurers are 
required to pay for all such surgeries, including without prior 
approval; approve them absent some standard of medical necessity; or 
approve them even over concerns of later malpractice lawsuits by the 
patient. A commenter reiterated his comments on the 2015 NPRM that the 
2016 Rule's requirements related to gender transition were confusing 
for covered entities. The commenter said the regulatory requirement did 
not address which healthcare providers must provide these surgeries: 
e.g., plastic surgeons, thoracic surgeons, general surgeons, or 
physicians whether or not they ordinarily perform major surgery. Others 
stated that although the 2016 Rule preamble characterized the 
categorical exclusion provision as a ``limited'' exception, the 
provisions on gender transition-related services were very broad and 
could include facial feminization or masculinization surgeries. Some 
commenters interpreted ``gender dysphoria'' as only affecting 
transgender individuals who seek sex re-assignment services, but other 
commenters cited clinical data indicating that men who had genital 
combat injuries and women who had removal of cancerous tissue in 
breasts and have received the diagnosis may also experience body 
dysmorphia.\234\
---------------------------------------------------------------------------

    \234\ Commenters cited M. Jocelyn Elders, et al., ``Medical 
Aspects of Transgender Military Service,'' Armed Forces and Society 
41(2) (Mar. 2014): 199-220.
---------------------------------------------------------------------------

    Other commenters stated that surgical sex reassignment (which may 
also include cross-sex hormonal treatment) may cost up to $22,025 on 
average for those covered by insurers. Still others said that the 
definition of ``gender dysphoria'' itself has changed rapidly and 
unpredictably over the years, leading to confusion, and point to its 
shifting conception as an experience of distress or a personal 
characteristic, to different and changing terms used for diagnosis of 
gender dysphoria in the DSM, and to the varied use of both clinical 
medical terms and sociological identity terms concerning the topic. The 
American Psychiatric Association justified the abandonment of the term 
``gender identity disorder'' and its replacement with ``gender 
dysphoria'' in the Diagnostic and Statistical Manual of Mental 
Disorders to reduce stigmatization of the particular mental condition, 
but commenters noted that the DSM-5 made no changes to remove the 
classification of ``disorder'' for suicidal ideation, other body 
dysmorphias, or substance use disorder, which mental health advocates 
commented are also stigmatizing and may be comorbid with gender 
dysphoria.
    Response: The Department agrees that the 2016 Rule made confusing 
and overbroad demands on covered entities, including insurance 
providers, and left unclear to what extent it was requiring providers 
to provide, or health insurance issuers to cover, treatments such as 
facial feminization, Adam's apple reduction, and hair transplants as 
part of ``health services related to gender transition.'' This final 
rule seeks to handle issues involving the exercise of legitimate 
medical judgment (including determinations relating to medical 
necessity and coverage decisions) with greater care, and to provide 
covered entities with greater clarity regarding their regulatory 
obligations.
    Comment: Some commenters who identified as transgender patients 
opposed the proposed rule on the grounds that they had budgeted and 
planned with the expectation that there would be a limited or no cost 
for transition services due to the 2016 Rule, but they were surprised 
when they had an out-of-pocket cost not covered by their selected 
insurance company or plan. A much higher cost for these services 
resulted in the inability to receive or delay in receiving such 
services. They described surprise billing at multiple steps of the 
process, from reviewing health insurance coverage plans to waiting for 
reimbursements. These commenters stated that they anticipated and 
relied on OCR's 2016

[[Page 37199]]

Rule as guaranteeing them insurance coverage because it is provided to 
other patients, and that this was their understanding of the Affordable 
Care Act and their civil rights protections. Other commenters contended 
that the 2016 Rule had caused the reduction of blanket exclusions for 
gender transition in health insurance coverage over the past three 
years.\235\ Others stated that short-term limited duration insurance 
plans do not provide coverage of gender transition-related services, 
and therefore if transgender individuals are covered by such plans, 
they would not be able afford medically necessary services.
---------------------------------------------------------------------------

    \235\ Commenters cited sources including, e.g., Out2Enroll, 
Summary of Findings: 2019 Marketplace Plan Compliance with Section 
1557 (finding that 18.5% of insurers in 2017, 28% of insurers in 
2018, and 94% of the insurers did not include blanket exclusions in 
their plans).
---------------------------------------------------------------------------

    Response: With respect to coverage for gender transition services, 
the Department notes that this final rule makes no changes to what has 
been the status quo since December 2016, when the Department was 
enjoined from enforcement of the gender identity provisions of the 2016 
Rule; such provisions have now been vacated by a court. Any recent 
decrease in blanket exclusions for sex-reassignment coverage is 
therefore more likely to be attributable to health insurance issuer or 
plan sponsor choice. State-level legal requirements concerning gender 
identity coverage have also come into effect in recent years, such as 
State statutes, regulations, guidance,\236\ and court orders \237\--
this final rule does not affect those changes in any way. But to the 
extent that provisions in the 2016 Rule did pressure any insurers to 
cover services on the basis of gender identity that they previously had 
not covered, such provisions did so without statutory authority, which 
is why they were preliminarily enjoined and vacated.
---------------------------------------------------------------------------

    \236\ See, e.g., Calif. Health and Safety Code 1365.5; Colo. 
Insurance Bulletin No. B-3.49; Conn. Insurance Bulletin IC-34; 79 
Del. Laws Ch. 47; DC Code 31-2231.11; Haw. Rev. Stat. 431:10A-118.3, 
432:1-607.3, 432D-26.3; 50 Ill. Adm. Code 2603.35; Mass. Insurance 
Bulletin 2014-03; Nev. Rev. Stat. 651.070; Nev. Admin. Code 
686A.140(7); 11 New York Codes Rules and Regulations 52.16; New York 
Insurance Code 2607, 3243, 4330; Ore. Rev. Stat. 746.015; Ore. 
Admin. Rules 836-080-0055; 46 Pa. Bulletin 2251; Rhode Island Health 
Insurance Bulletin 2015-3; 8 Va. Stat. Ann. 4724; Vt. Insurance 
Bulletin 174; Wash. Rev. Code 48.30.300.
    \237\ See, e.g., Outfront v. Piper, No. 62-cv-15-7501 (Minn. D. 
Ct. Nov. 14, 2016) (interpreting the state Constitution as applied 
to MinnesotaCare); Good v. Iowa Dept. of Human Services, No. 18-1158 
(Iowa S. Ct. Mar. 8, 2019) (interpreting the Iowa Civil Rights Act 
as applied medical assistance).
---------------------------------------------------------------------------

    As a policy matter, the Department recognizes that surprise billing 
is a serious problem, but that topic is not a subject of this 
rulemaking. As for short-term limited duration insurance, for reasons 
discussed below, it is generally not regulated under this final rule 
and so is generally not affected by the rule's nondiscrimination 
requirements in any case.
e. Discrimination on the Basis of Association, Repeal of Sec.  92.209 
of the 2016 Rule
    The Department proposed to repeal Sec.  92.209 of the 2016 Rule, 
which included a prohibition on discrimination against an individual or 
entity on the basis of being known to or believed to have a 
relationship or association.
    Comment: Commenters opposed the repeal of prohibitions against 
discrimination based on association with a protected category. These 
commenters contended that removing such protections would cause 
confusion, both for covered entities who will be unsure of their 
responsibilities and for individuals who will be unsure of their 
rights, especially in light of other Federal nondiscrimination laws 
that the Department enforces. For example, the Department enforces 
Title II of the ADA and its implementing regulation, which prohibits 
discrimination against an individual based on his or her association 
with another individual with a disability, as do Titles I and III of 
the ADA.\238\ Commenters said that this also shows that it would defy 
Congressional intent, and cause inconsistency among different 
regulations that covered entities are subject to, if the Department 
were to withdraw associational discrimination protections from patients 
seeking healthcare. Commenters also expressed concern that the proposed 
rule would make it more difficult for those experiencing discrimination 
by association to enforce their rights. Other commenters stated that 
the lack of reference to associational discrimination in the proposed 
rule is inconsistent with existing case law that validates prohibitions 
on associational discrimination, particularly in employment 
discrimination cases brought under Title VII pertaining to race, sex, 
and religion. Others argued that it is incorrect to assume that by 
referencing the grounds protected under previous civil rights laws, 
Section 1557 automatically incorporates the limitations found in those 
laws.
---------------------------------------------------------------------------

    \238\ 28 CFR 35.130(g) (Title II); 42 U.S.C. 12112(b)(4) (Title 
I); 42 U.S.C. 12182(b)(1)(E) (Title III).
---------------------------------------------------------------------------

    Some commenters contended that specific protected populations are 
more susceptible to associational discrimination. In particular, 
commenters stated that deaf and hard-of-hearing patients frequently use 
hearing companions, especially in hospital settings, and may be subject 
to associational discrimination. Commenters also identified potential 
instances of associational discrimination, including an entity's 
refusing to provide medical services to a white individual due to 
association with an African American individual, refusing to provide 
medical services to a child because his parents speak a different 
language, or refusing to provide services to an individual because her 
family members have a specific disability.
    Response: This final rule neither abrogates nor withdraws any 
protections available under the incorporated civil rights statutes or 
their implementing regulations. It simply declines to use the Section 
1557 regulation to identify protections beyond those specifically 
identified in the text of the relevant statutes and regulations. 
Protections against discrimination on the basis of association will be 
available under this final rule to the extent that they are available 
under those statutes and regulations. As stated above, the Department 
regards this as the best way to decrease confusion. As the Franciscan 
Alliance court noted, the executive branch is obligated to implement 
Section 1557, with the civil rights statutes it incorporates, by 
``giving the statutory text its plain and ordinary meaning, construing 
the statute as a whole, and giving effect to every word of the 
statute.'' \239\ Courts have held that Section 1557 incorporates the 
limitations of the civil rights statutes referenced in Section 
1557.\240\
---------------------------------------------------------------------------

    \239\ Franciscan Alliance, Inc. v. Burwell, 227 F. Supp. 3d 660, 
690 (N.D. Tex. 2016).
    \240\ See, e.g., Condry v. UnitedHealth Group, 2018 WL 3203046 
(N.D. Cal. Jun 27, 2018) (``disparate impact claims on the basis of 
sex are not cognizable under section 1557'').
---------------------------------------------------------------------------

    Some instances discussed by commenters would appear to constitute 
discrimination against a person under the underlying civil rights 
statutes even without the 2016 Rule's prohibition on associational 
discrimination. For example, if a covered entity refused to provide 
meaningful access for LEP parents who are legally entitled to make 
medical decisions on behalf of their child, it could constitute 
discrimination on the basis of national origin.
f. Multiple Protected Statuses
    The Department received many comments about individuals who may 
have protected status or face discrimination on multiple grounds.

[[Page 37200]]

    Comment: One commenter stated that because the 2016 Rule covers 
discrimination based on multiple protected statuses, the proposed rule 
would create a confusing mix of legal standards and available remedies 
and therefore could limit claims of intentional discrimination, while 
the 2016 Rule makes it easier for members of the public to file 
complaints of intersectional discrimination in one place.
    Response: OCR has long accepted complaints alleging discrimination 
based on more than one protected status. OCR has handled those 
complaints, and will continue to handle them, under the implementing 
regulations of each of its applicable civil rights laws. Nothing in 
this final rule changes that. OCR's complaint form provides the public 
with the option to select multiple forms of prohibited discriminatory 
practices, such as both race and disability. OCR continues to encourage 
the public to file complaints about potentially unlawful 
discrimination, whether on one prohibited basis or on multiple 
prohibited bases.
    Comment: Commenters stated that the proposed rule would compound 
discrimination faced by individuals with multiple protected 
characteristics, such as people of color who are also LEP or disabled. 
Some commenters said that African Americans are more likely to live 
with disabilities and chronic conditions, and thus would be 
disproportionately affected by relaxing discrimination restrictions for 
health insurance plans.
    Response: The Department commits itself, in this final rule, to 
fully enforce Section 1557 according to its text and the text of the 
underlying statutes, as well as under the Department's implementing 
regulations for those statutes, as applied to the health context. 
Although the Department is proposing to repeal the nondiscrimination 
provision of the 2016 Rule at Sec.  92.101, this final rule replaces it 
with a general provisions section at Sec.  92.2. The new section will 
maintain the nondiscrimination requirements required by Title VI, Title 
IX, the Age Act, and Section 504. As such, individuals with multiple 
protected characteristics, such as race and disability, would be 
protected under the Department's enforcement of Section 1557 to the 
extent those statutes and regulations apply. Those statutes and 
regulations explain which characteristics are protected.
    With respect to LEP and disability, this final rule additionally 
contains specific sections clarifying those protections. The underlying 
regulations and guidance for enforcing these statutes establish 
standards that are well-known by covered entities. The Department will 
continue to robustly enforce these statutes, and believes this final 
rule provides appropriate language to ensure that enforcement occurs.
    Comment: Commenters contend that African American, Asian American 
and Pacific Islander, and Native American women are more likely to die 
from pregnancy-related complications and will be disproportionately 
affected by changes to the interpretation of sex discrimination in the 
proposed rule. Others contend that LGBT people of color will be harmed 
by the proposed regulation; they also state that LGBT people of 
specific national origins, including Native American and Middle 
Eastern, experience high rates of negative experiences in healthcare 
settings related to gender identity. Commenters alleged the proposed 
rule would disproportionately harm Native American women, women of 
color, and transgender individuals who are minorities.
    Response: As discussed above, the 2016 Rule's definition of ``on 
the basis of sex'' is not included in this final rule because it 
exceeded the Department's statutory authority. In addition, with 
respect to gender identity and termination of pregnancy, the court's 
longstanding preliminary injunction and eventual vacatur of that 
language means that the results some commenters fear from removing such 
language would not be the result of this final rule. The Department is 
not aware of data supporting commenters' assertion that this change 
will have a disparate impact on the basis of race or national origin, 
although even if it did, that disparate impact would be attributable to 
the statutes rather than to this final rule. To the extent that the 
Department learns that individuals suffer barriers to healthcare on the 
basis of race, national origin, or any other protected characteristic, 
it will work to address those barriers within the limits of its 
statutory authority.
g. Examples of Discriminatory Practices (Repeal of Sec.  92.207 of the 
2016 Rule)
    The Department proposed to repeal Sec.  92.207 of the 2016 Rule, 
which stipulated that covered entities must not discriminate on the 
prohibited bases in providing or administering health-related insurance 
or other health-related coverage, and listed examples of such 
prohibited discrimination. Comments pertaining to Sec.  92.207(b)(3)-
(5) related to gender identity are discussed above in the section on 
discrimination on the basis of sex.
    Comment: Commenters opposed repealing the explicit provisions of 
Sec.  92.207 that prohibit covered entities from discriminating in 
health insurance or other health coverage. Commenters argued that the 
proposed rule did not provide any reasoned legal or policy basis for 
the repeal, which precluded the opportunity to provide public comment 
on the Department's justifications and so violated the APA. While the 
proposed rule discussed repealing provisions that may be duplicative, 
inconsistent, or confusing, commenters argued that the Department did 
not explain under which of these grounds it was repealing Sec.  92.207, 
and that the proposed rule's supporting footnote \241\ listed 
comparator regulatory citations that did not duplicate or contradict 
the provisions of Sec.  92.207.
---------------------------------------------------------------------------

    \241\ 84 FR at 27869 n.147 (comparing 45 CFR 92.207 with ``45 
CFR 80.5 (health benefits under Title VI), 84.43 (health insurance 
under Section 504), 84.52 (health benefits under Section 504), 84.33 
(rule of construction of Section 504 vis-[agrave]-vis validly 
obligated payments from health insurer); 86.39 (health insurance 
benefits and services under Title IX).'').
---------------------------------------------------------------------------

    Commenters also expressed concern that repealing this section would 
allow health insurance issuers to discriminate, particularly with 
regard to benefit design, and could make it harder for people who 
experience discrimination to enforce their rights through 
administrative and judicial complaints. Commenters asserted that, prior 
to the ACA, health insurance issuers avoided covering costly 
individuals by employing the discriminatory practices prohibited by 
Sec.  92.207, and that repealing these explicit prohibitions would 
allow health insurance issuers to again discriminate in a variety of 
ways, including by excluding or denying benefits, applying age limits, 
increasing costs for sicker enrollees, imposing utilization management 
limitations, and designing discriminatory prescription drug 
formularies. Commenters also argued that the ACA was intended to 
increase administrative oversight of private health insurance plans and 
to prevent discrimination in health insurance, particularly in light of 
the underlying civil rights laws' historically limited application to 
private health insurance and benefit design prior to the ACA.
    Several commenters argued that the removal of specific 
nondiscrimination provisions under Sec.  92.207 would make the 
regulation vague, eliminate guidance for covered entities, and create 
confusion about what is prohibited conduct, thereby increasing legal

[[Page 37201]]

uncertainty and risk. This argument was reiterated by some State 
government regulators, who said that the specificity in the law 
provides clarity for both covered entities and the State, with State 
regulators often relying upon the standards in the 2016 Rule to ensure 
nondiscrimination in health insurance. Other commenters said that the 
repeal of Sec.  92.207, compounded with the repeal of language access 
and taglines requirements, would open the door to discrimination based 
on national origin by healthcare providers.
    Response: The number, breadth, and depth of comments received and 
discussed in this preamble indicate that the public was given an 
adequate opportunity to provide comment on the Department's 
justifications for this final rule.
    Commenters are correct to note that the ACA has significantly 
expanded the applicability of Federal civil rights laws to private 
health insurance plans. That is why, under this final rule, all health 
insurance programs that remain covered by Section 1557 remain 
prohibited from discriminating on the grounds specified by the statute. 
This final rule has a section on scope at Sec.  92.3, and the 
Department does not believe the rule needs an additional or separate 
section on health insurance in order to make this clear. OCR will 
examine carefully any allegations of discrimination by health insurance 
issuers, including through benefit design, and will vigorously enforce 
Section 1557's prohibitions. The Department also notes that certain 
health insurance issuers remain subject to similar nondiscrimination 
requirements under statutory provisions implemented and the regulations 
issued by CMS's Center for Consumer Information and Insurance Oversight 
(CCIIO). Commenters' specific concerns about national origin 
discrimination are addressed above and below in the relevant sections.
    The 2019 NPRM listed Sec.  92.207 among passages of the 2016 Rule 
that ``are duplicative of, inconsistent with, or may be confusing in 
relation to the Department's preexisting Title VI, Section 504, Title 
IX, and the Age Act regulations.'' \242\ As the footnote referenced by 
commenters shows, the Department specifically pointed there to 
preexisting HHS regulations under those statutes regarding health 
benefits and health insurance.\243\ The substantive overlap between 
these regulations and Sec.  92.207 is sufficient to show that the 
latter either duplicates them, or is inconsistent with them, or may be 
confusing as to whether it is duplicating them or contradicting them. 
Because Section 1557 does not require a regulation, the Department 
prefers to enforce the relevant statutes, to the extent possible, 
through their existing regulations. The changes in the 1557 regulation 
made by this final rule advance the Administration's goal of reducing 
the regulatory burden of the ACA and of administrative action in 
general.\244\
---------------------------------------------------------------------------

    \242\ 84 FR 27869.
    \243\ See 84 FR at 27869 n.147.
    \244\ Executive Order 13765 on Minimizing the Economic Burden of 
the Patient Protection and Affordable Care Act Pending Repeal, 82 FR 
8351 (Jan. 20, 2017); Executive Order 13771 on Reducing Regulation 
and Controlling Costs (Jan. 30, 2017); Executive Order 13777 on 
Enforcing the Regulatory Reform Agenda (Feb. 24, 2017); Executive 
Order 12866 on Regulatory Planning and Review, 58 FR 190 (Oct. 4, 
1993), at Sec.  1(b)(10).
---------------------------------------------------------------------------

    The 2016 Rule's list of examples of prohibited conduct by insurers 
at Sec.  92.207(b) was followed by a catchall provision at Sec.  
92.207(c) stipulating that the enumeration of those specific forms of 
discrimination was no limitation on the general prohibition on 
insurers' discriminating on the prohibited grounds. That catchall 
provision made Sec.  92.207 no less vague, and gave it no less 
potential to cause confusion, than this final rule's general 
prohibition on discrimination by covered entities. The Department 
declines in this preamble to give guidance of this kind to State 
regulators, who must each work within their own State's regulatory 
framework for health insurance. The Department notes that State 
regulators may also rely upon regulations issued by CCIIO, as 
applicable.
h. Summary of Regulatory Changes
    For the reasons discussed herein, and considering the comments 
received, the Department finalizes its proposed new Sec.  92.2 without 
change, its repeal of Sec.  92.4 without change, its repeal of the 
notice requirement in Sec.  92.8(d) and Appendix B without change, and 
its repeal of Sec.  92.101, 92.206-92.207, and 92.209 without change.
(5) Assurances in Proposed Sec.  92.4, and Repeal of Sec.  92.5 of the 
2016 Rule
    The Department proposed that the 2016 Rule's provision at Sec.  
92.3 requiring an assurance of compliance with Section 1557 be retained 
and redesignated Sec.  92.4. 84 FR at 27863. Here, as throughout the 
proposed rule, the Department also updated the 2016 Rule's term 
``State-based Marketplace\SM\'' to read ``State Exchange,'' in 
conformity with current CMS regulations. 84 FR at 27871.
    Comment: Comments contended it is unclear whether submitting 
assurances required under this provision at Sec.  92.4 would also 
fulfill the assurance requirements of Section 504 at 45 CFR 84.5.
    Response: As under the 2016 Rule, the application package for all 
HHS grant-making agencies continues to include a requirement that the 
applying entity submit a signed assurance form (Form 690), which 
specifically references Section 1557 along with Title VI, Title IX, 
Section 504, and the Age Act. That form is available at https://www.hhs.gov/sites/default/files/forms/hhs-690.pdf. All recipients of 
Federal financial assistance from HHS are required to submit the 
consolidated form that satisfies the assurance requirements for both 
Section 1557 and these four other civil rights statutes.
    The Department requested comment on whether this proposal struck 
the proper balance by retaining the assurance provisions from the 2016 
Rule, and whether the benefits of these provisions exceed the burdens 
imposed by them.
    Comment: Some commenters expressed their support for maintaining 
the current assurance of compliance requirement, noting that an 
assurance of compliance is an important step towards ensuring that 
covered entities know their obligations under Section 1557 and remain 
compliant. Additionally, questions were raised regarding which entity 
would be responsible for oversight, enforcement, and corrective action 
should a covered entity violate Section 1557 despite assuring its 
compliance.
    Response: OCR is responsible for enforcing Section 1557 and will 
provide oversight, enforcement, and corrective action should a covered 
entity violate its obligations under Section 1557. The Department 
agrees that assurances of compliance provide valuable services by 
alerting covered entities of their obligations, and will retain these 
provisions under Sec.  92.4 of this final rule.
    Summary of Regulatory Changes: For the reasons given in the 
proposed rule, and having considered comments received, the Department 
finalizes its proposed Sec.  92.4, and repeal of Sec.  92.5 of the 2016 
Rule, without change.
(6) Enforcement Mechanisms in Proposed Sec.  92.5, and Repeal of 
Sec. Sec.  92.6, 92.7, 92.8, 92.101, 92.301, 92.302, 92.303, and 
Appendices A and C of the 2016 Rule
    The Department proposed provisions on enforcement of Section 1557 
at the new Sec.  92.5, 84 FR at 27863, and proposed to repeal 
Sec. Sec.  92.6, 92.7, 92.8, 92.101, 92.301, 92.302, 92.303, and

[[Page 37202]]

Appendices A and C of the 2016 Rule, which also provided for 
enforcement mechanisms and notices.
a. Enforcement Procedures and Underlying Regulations in Sec.  92.5(a) 
(Repeal of Sec.  92.302 and Sec.  92.6(a) of the 2016 Rule)
    Proposed Sec.  92.5(a) applies the enforcement mechanisms provided 
for, and available under, Title VI of the Civil Rights Act of 1964, 
Title IX of the Education Amendments of 1972, the Age Discrimination 
Act of 1975, or Section 504 of the Rehabilitation Act of 1973, with 
their respective implementing regulations, to Section 1557.
    Comment: Various commenters expressed opposition to the 
Department's proposal to replace Sec.  92.301 with Sec.  92.5, and 
requested that the Department retain Sec.  92.301. Others expressed the 
view that by adopting Sec.  92.5, the Department would be incorrectly 
limiting the remedies available under Section 1557. Several commenters 
asserted that enforcement would be more difficult under the proposed 
rule because, they said, it creates a patchwork of legal standards--
unlike the 2016 Rule, which used a single standard that permitted 
disparate impact claims. They said this would create confusion, hamper 
enforcement, and dilute the protections provided to individuals.
    Response: This final rule properly limits the remedies available 
under Section 1557. The text of the 2016 Rule, at Sec.  92.301(a), 
stated that the enforcement mechanisms available and provided for under 
Title VI, Title IX, Section 504 and the Age Act shall apply for the 
purposes of Section 1557.\245\ But upon reconsideration of these 
issues, the Department concludes the 2016 Rule applied these mechanisms 
in a confusing and inconsistent manner. For certain covered entities, 
it applied Title VI mechanisms, not only to grounds of discrimination 
prohibited under Title VI, but also to those prohibited under Title IX 
and Section 504, while leaving Age Act mechanisms in place for the 
grounds of discrimination it prohibits; for other covered entities, it 
applied Section 504 mechanisms, not only to grounds of discrimination 
prohibited under Section 504, but also to those prohibited under Title 
VI, Title IX, and the Age Act.\246\ The 2016 Rule's regulatory 
structure blended new standards and preexisting standards from 
underlying civil rights regulations, and imposed those standards 
alongside the underlying regulations, which were left in place. In 
contrast, this final rule adopts the enforcement mechanisms for these 
four statutes and their implementing regulations respectively, each for 
its own statute. The Department believes this minimizes the patchwork 
effect of the 2016 Rule by using a familiar regulatory regime under 
those four statutes. The Department also believes this approach is what 
the statutory text contemplates. Moreover, because OCR has significant 
experience enforcing civil rights claims using these civil rights 
statutes' regulations, the Department expects this change to improve 
enforcement of Section 1557 and, by removing possible confusion, to 
make it easier for both individuals and covered entities to know their 
rights and responsibilities.
---------------------------------------------------------------------------

    \245\ 81 FR 31472.
    \246\ Id.
---------------------------------------------------------------------------

    Comment: One commenter said that the Department's proposal to 
remove the 2016 Rule's single standard for enforcing claims is 
inconsistent with the Minnesota District Court's finding in Rumble v. 
Fairview Health Services that ``Congress intended to create a new, 
health-specific, anti-discrimination cause of action that is subject to 
a singular standard, regardless of a plaintiff's protected class 
status.'' \247\
---------------------------------------------------------------------------

    \247\ 2015 WL 1197415, at *11 (D. Minn. Mar. 16, 2015).
---------------------------------------------------------------------------

    Response: The Department disagrees with this commenter's suggestion 
that it is inappropriate to finalize the proposed rule's repeal of 
provisions containing certain enforcement mechanisms. The Minnesota 
District Court found the language of the Section 1557 statute to be 
``ambiguous, insofar as each of the four statutes utilize[s] different 
standards for determining liability, causation, and a plaintiff's 
burden of proof,'' \248\ and concluded that the Department's 
interpretation of Section 1557 was permissible. However, the Minnesota 
District Court view is the minority view and has subsequently been 
rejected by multiple other court rulings that postdate the 2016 
Rule.\249\ The Department agrees with these latter courts' reasoning. 
To the extent that the statutory language could be ambiguous, as the 
Minnesota district court concluded, the Department believes that its 
new interpretation is a better and reasonable interpretation of the 
statute, and is at least an equally permissible statutory 
interpretation, and therefore is entitled to Chevron deference, Chevron 
U.S.A., Inc. v. NRDC, 467 U.S. 837 (1984). That the Department's 
interpretation represents a break with a previous interpretation does 
not preclude the Department from reinterpreting the statute and 
receiving Chevron deference for its new interpretation, see, e.g., Rust 
v. Sullivan, 500 U.S. 173, 186-87 (1991). Here, the Department believes 
that this final rule's approach is the one best suited to reducing 
confusion and robustly enforcing Section 1557's nondiscrimination 
provisions.
---------------------------------------------------------------------------

    \248\ Id. at *10.
    \249\ See Briscoe v. Health Care Svc. Corp., 281 F. Supp. 3d 
725, 738 (N.D. Ill. 2017) (``Taken together, the first two sentences 
of Sec.  1557 unambiguously demonstrate Congress's intent `to import 
the various different standards and burdens of proof into a Section 
1557 claim, depending upon the protected class at issue.'''), 
quoting Southeastern Pennsylvania Transp. Auth. v. Gilead Sciences 
Inc., 698-99 (E.D. Pa. 2015); York v. Wellmark, Inc., 2017 WL 
11261026, at *18 (S.D. Iowa Sept. 6, 2017) (``Congress clearly 
intended to incorporate the statutes' specific enforcement 
mechanisms rather than create a general catch-all standard 
applicable to all discrimination claims.''). See also Galuten on 
Behalf of Estate of Galuten v. Williamson Med. Ctr., 2019 WL 
1546940, at *5. (M.D. Tenn. Apr. 9, 2019) (same); E.S. by and 
through R.S. v. Regence BlueShield, 2018 WL 4566053, at *4 (W.D. 
Wash. Sept. 24, 2018); Doe v. BlueCross BlueShield of Tennessee, 
Inc., 2018 WL 3625012, at *6 (W.D. Tenn. July 30, 2018).
---------------------------------------------------------------------------

b. Compensatory Damages (Repeal of Sec.  92.301(b) of the 2016 Rule)
    The Department proposed to repeal Sec.  92.301(b) of the 2016 Rule, 
which provided for compensatory damages for any and all claims under 
Section 1557.
    Comment: Some commenters opposed the changes to the enforcement 
mechanisms under the proposed rule and asserted that Section 1557 makes 
available to all individuals any of the enforcement mechanisms 
available under any of the four civil rights statutes, including but 
not limited to compensatory damages.
    Response: Although the 2016 Rule stated that compensatory damages 
are available in appropriate administrative and judicial actions under 
the Section 1557 regulation, the Department has concluded that its 
enforcement of Section 1557 should conform to the Department of 
Justice's Title VI Manual. 84 FR at 27851. The manual states that, 
under applicable Federal case law, compensatory damages are generally 
unavailable for claims based solely on a Federal agency's disparate 
impact regulations.\250\ Consequently, the Department considers it most 
appropriate to finalize this rule by eliminating Sec.  92.301(b) and 
reverting to enforcement under the regulations applicable to Title VI, 
Title IX, the Age Act, or Section 504. To the extent compensatory 
damages are, or are not,

[[Page 37203]]

available under those regulations, the regulations will provide for 
enforcement of Section 1557 in applicable circumstances in the same 
way.
---------------------------------------------------------------------------

    \250\ See DOJ Title VI Manual, https://www.justice.gov/crt/fcs/T6Manual9 (citing Alexander v. Sandoval, 532 U.S. 275, 282-83 
(2001), Barnes v. Gorman, 536 U.S. 181, 187 (2002), and Gebser v. 
Lago Vista Indep. Sch., 524 U.S. 274, 87 (1998)).
---------------------------------------------------------------------------

    This approach is consistent with both the best interpretation of 
the text and the court decisions (cited above) indicating that Section 
1557 does not impose a single standard but instead incorporates the 
distinct enforcement mechanisms of each of the four civil rights 
statutes described in Section 1557.\251\
---------------------------------------------------------------------------

    \251\ See Galuten, 2019 WL 1546940, at *5 n.8 (because ``the Age 
Discrimination Act would not authorize [ ] compensatory damages,'' 
``it appears that a Federal court with jurisdiction would be 
constrained to dismiss Plaintiff's claims for compensatory . . . 
damages under the ACA'').
---------------------------------------------------------------------------

c. Implied Private Rights of Action (Repeal of Sec.  92.302(d) of the 
2016 Rule)
    The Department proposed to repeal Sec.  92.302(d) of the 2016 Rule, 
which stated that an individual or entity may bring a civil action in a 
United States District Court to challenge a violation of Section 1557 
or the 2016 Rule.
    Comment: Some commenters opposed repeal of this language. Several 
commenters argued that the existence of a private right of action is 
clear from the statutory language in Section 1557, which they say 
explicitly references and incorporates the enforcement mechanisms of 
the four civil rights laws listed, including a private right of action. 
They cited cases that allow for Section 1557 to include enforcement 
mechanisms separate from the mechanisms in underlying statutes.\252\ 
Commenters said that the creation of a private right of action within 
Section 1557 is consistent with Congress's intent that civil rights 
laws be broadly interpreted to effectuate the remedial purposes of 
those laws, and that removing Section 1557's private right of action is 
inconsistent with precedent of the United States Supreme Court, which 
has upheld private rights of action under the preexisting civil rights 
laws.
---------------------------------------------------------------------------

    \252\ Commenters cited Edmo v. Idaho Dep't of Corr., No. 1:17-
cv-00151-BLW, 2018 WL 2745898, at *9 (D. Idaho June 7, 2018) 
(``[C]ross-referencing the statutes and the express incorporation of 
the enforcement mechanisms from those statutes is probative of 
Congressional intent to provide both a private right and a private 
remedy for violations of Section 1557.''); Esparza v. Univ. Med. 
Ctr. Mgmt. Corp., No. 17-4803, 2017 WL 4791185, at *5 (E.D. La. Oct. 
24, 2017) (concluding it was ``abundantly clear to the Court that 
Congress intended to create a private right of action to enforce 
Sec.  1557''); Doe One v. CVS Pharmacy, Inc., 348 F. Supp. 3d 967, 
982 (N.D. Cal. 2018) (finding plaintiffs had not sufficiently 
alleged disparate impact); see also Cannon v. Univ. of Chi., 441 
U.S. 677, 703 (1979) (recognizing that Congress intended to create 
Title IX remedies comparable to those available under Title VI, 
including a private cause of action for victims of the prohibited 
discrimination, and finding that age and advanced degrees criteria 
had a disparate impact on women); Rumble v. Fairview Health Servs., 
2015 WL 1197415.
---------------------------------------------------------------------------

    Response: Upon reconsideration of this issue, the Department no 
longer intends to take a position in its regulations on the issue of 
whether Section 1557 provides a private right of action. To the extent 
that Section 1557 permits private rights of action, plaintiffs can 
assert claims under Section 1557 itself rather than under the 
Department's Section 1557 regulation.
    Comment: Commenters requested that the Department adopt a 
regulatory framework for Section 1557 where there is a requirement for 
exhaustion of administrative remedies before a party can bring a 
private right of action.
    Response: Because the Department is eliminating the language 
specifying a right to sue, the Department does not consider it 
necessary to establish a framework and a requirement for exhaustion of 
administrative remedies before filing suit in court.
d. Voluntary Action (Repeal of Sec.  92.302(c) and Sec.  92.6(b) of the 
2016 Rule)
    The Department proposed to repeal Sec.  92.302(c) of the 2016 Rule, 
as well as Sec.  92.6(b), which set forth provisions concerning 
voluntary cooperation with requests for information, and voluntary 
action beyond the requirements of Section 1557. These provisions have 
parallels in the regulations implementing Title VI, Section 504, Title 
IX, and the Age Act,\253\ which the Department will use to enforce 
Section 1557.
---------------------------------------------------------------------------

    \253\ See 45 CFR 80.7(d), Sec.  80.8(c)(1) (Title VI); Sec.  
84.6(b) (Section 504); proposed Sec.  86.71 (Title IX incorporating 
45 CFR 80.7(d)); Sec.  90.49(c) (Age).
---------------------------------------------------------------------------

    The Department did not receive comments specific to these sections.
e. Access to Records of Compliance (Repeal of Sec.  92.303(c) of the 
2016 Rule)
    The Department proposed to repeal Sec.  92.303(c) of the 2016 Rule, 
which set forth the Department's obligations to permit access by OCR to 
review records and sources of information, and to otherwise comply with 
OCR investigations under the 2016 Rule.
    Comment: Commenters expressed concern that the proposed rule 
undermines the Department's enforcement authority concerning compliance 
with Section 1557 by programs and activities administered by the 
Department.
    Response: The regulations implementing Section 1557's four 
underlying statutes already contain provisions addressing access to 
review of covered entities' records of compliance.\254\ The language in 
the 2016 Rule to this effect was unnecessary, as OCR has the tools to 
review records and sources of information under existing regulations.
---------------------------------------------------------------------------

    \254\ See 45 CFR 90.45, Sec.  91.31 (Age Act) and Sec.  80.6(c) 
(Title VI); 45 CFR 84.61 (Section 504 incorporating 45 CFR 80.6(c)); 
Sec.  86.71, as finalized here (Title IX incorporating 45 CFR 
80.6(c)).
---------------------------------------------------------------------------

f. Prohibitions on Intimidation and Retaliation (Repeal of Sec.  
92.303(d) of the 2016 Rule)
    The Department proposed to repeal Sec.  92.303(d) of the 2016 Rule, 
which concerns intimidation and retaliation provisions that pertain to 
the Department.
    Comment: Several commenters contended that under the proposed rule, 
those bringing Section 1557 claims would no longer be explicitly 
protected from retaliation and discrimination.
    Response: The regulations implementing Section 1557's four 
underlying statutes already contain provisions against intimidation and 
retaliation as appropriate.\255\ The language in the 2016 Rule to this 
effect was unnecessary. Moreover, OCR ensures the confidentiality of 
complainants under all the statutes it enforces, to the extent 
permitted by law and consistent with OCR's investigative needs. In some 
cases, the Freedom of Information Act, the APA, or other laws may 
require disclosure of certain information provided by complainants.
---------------------------------------------------------------------------

    \255\ See 45 CFR 80.7(e) (Title VI); Sec.  91.45 (Age Act); 45 
CFR 84.61 (Section 504 incorporating 45 CFR 80.7(e)); Sec.  86.71, 
as finalized here (Title IX incorporating 45 CFR 80.7(e)).
---------------------------------------------------------------------------

g. Perpetuating Discrimination by Assistance and Utilizing Criteria or 
Methods of Administration (Repeal of Sec.  92.101(b)(1)(ii), 
(b)(3)(ii), and (b)(4)(ii) of the 2016 Rule)
    The Department proposed to repeal Sec.  92.101(b)(1)(ii) and Sec.  
92.101(b)(4)(ii), which prohibited significant assistance to any 
agency, organization, or person that discriminates on the basis of 
race, color, national origin, or age. The Department also proposed to 
repeal Sec.  92.101(b)(3)(ii), which prohibited utilization of criteria 
or methods of administration that have the effect of subjecting 
individuals to discrimination on the basis of sex.
    Comment: One commenter objected to repealing the prohibition on the 
utilization of criteria or methods of administration that have the 
effect of subjecting individuals to discrimination on the basis of sex. 
Arguing that Section 1557 is its own authority, the commenter stated 
that it is irrelevant that the Title IX regulations do not

[[Page 37204]]

contain a disparate impact provision. Some commenters also contended 
that removing the ``significant assistance'' provision would undermine 
enforcement.
    Response: The prohibition on perpetuating discrimination by 
providing significant assistance to any agency, organization, or person 
that discriminates is identified only in the Title IX and Section 504 
regulations, as applied to sex and disability discrimination claims; 
\256\ the 2016 Rule applied it also to claims on the basis of race, 
color, national origin, or age. Similarly, as discussed above in the 
section on discrimination on the basis of sex, there is no disparate 
impact language in the Department's Title IX regulations, but the 2016 
Rule made such language applicable to sex discrimination claims brought 
under Section 1557. For the reasons given earlier in this section, the 
Department considers it appropriate to rely on the enforcement 
mechanisms appropriate to each underlying civil rights statute, rather 
than to create a new and confusing civil rights regulatory framework 
specific to the enforcement of Section 1557.
---------------------------------------------------------------------------

    \256\ See 45 CFR 84.4(b)(1)(v) (Section 504); Sec.  86.31(b)(6), 
as finalized here (Title IX).
---------------------------------------------------------------------------

h. Notices of Nondiscrimination Rights and Statement of 
Nondiscrimination Under the 2016 Rule (Repeal of Sec.  92.8 of the 2016 
Rule)
    The Department proposed to repeal Sec.  92.8 of the 2016 Rule, 
which required a notice informing individuals about nondiscrimination 
and accessibility requirements, such as the sample notice and 
nondiscrimination statement at Appendix A to Part 92.
    Comment: Some commenters contended that HHS did not consider how 
the removal of the 2016 Rule's notice provisions may result in 
decreased access to, and utilization of, healthcare by people with 
disabilities, people with LEP, older adults, people who are LGBT, and 
other vulnerable populations. These commenters argued that with the 
notice provision's removal, these protected populations will be limited 
in knowing their rights under Federal civil rights laws, and in knowing 
how to file complaints with OCR if faced with discrimination in a 
healthcare setting. Others stated that the Department did not provide 
an evidentiary basis for what it deemed would be a ``negligible'' 
impact on people with LEP or ``additional societal costs'' as a result 
of removing the notice provisions. Commenters proposed that instead of 
eliminating the notice provision, the Department should consider 
requiring covered entities to provide notice on an annual basis, when 
updated, and upon request, in order to harmonize with the Health 
Insurance Portability and Accountability Act (HIPAA)'s annual notice 
requirements. Other commenters similarly proposed that the Department 
should consider specifying a number of times that a covered entity 
should send notice to individuals over the course of a year.
    Response: The regulations implementing Section 1557's four 
underlying statutes already contain notice provisions.\257\ The 
language in the 2016 Rule to this effect was unnecessary.
---------------------------------------------------------------------------

    \257\ See 45 CFR 80.6 and Appendix to Part 80 (Title VI), Sec.  
84.8 (Section 504), Sec.  86.9 (Title IX) and Sec.  91.32 (Age Act).
---------------------------------------------------------------------------

    Individuals belonging to any protected category under Section 1557, 
including those with disabilities or LEP, remain covered under existing 
standards regarding notice. The Department is unaware of data 
suggesting that those regulations have been or are inadequate to their 
purpose of making individuals aware of their civil rights. To the 
extent that it discovered such data, it would consider revising each 
regulation as appropriate.
    Each of the relevant underlying regulations has its own unique 
standards on providing notice, tailored to the purposes of each civil 
rights statute.\258\ Compressing these into a single standard under the 
2016 Rule has led to an unjustifiable burden and understandable 
confusion. The Department's estimates of regulatory burden are 
discussed in the RIA.
---------------------------------------------------------------------------

    \258\ Title VI, 45 CFR 80.6(d), and the Age Act, 45 CFR 91.32, 
contain general requirements to provide notice. Section 504 requires 
more: A covered entity must ``take appropriate initial and 
continuing steps to notify [individuals] that it does not 
discriminate on the basis of [disability]'' and include this 
information in its ``recruitment materials and publications.'' 45 
CFR 84.8. Title IX goes even further: A covered entity must 
``prominently'' display its notice of nondiscrimination in ``each 
announcement, bulletin, catalog, or application form which it makes 
available to any [covered person], or which is otherwise used in 
connection with the recruitment of students or employees'' and not 
``distribute a publication . . . which suggests, by text or 
illustration, that such [covered entity] treats applicants, 
students, or employees differently on the basis of sex except as 
such treatment is permitted by [Title IX].'' 45 CFR 86.9.
---------------------------------------------------------------------------

    Comment: Some commenters stated the Department should clarify when 
the notice and taglines requirements will no longer be effective with 
respect to timeframes such as open enrollment for Exchanges, employer-
sponsored plans, and Medicare. Most of these communications are subject 
to the current notice and taglines requirements under the 2016 Rule. 
Commenters sought clarification from the Department as to whether OCR 
will enforce the notice and taglines requirement against any covered 
entity from the date of the proposed rule (June 14, 2019).
    Response: The changes made in this final rule will be effective 60 
days from the publication of this final rule in the Federal Register. 
The 2016 Rule is in effect until that time, except as enjoined or 
vacated by courts.
    Comment: Several commenters requested that the Department retain 
parts of Sec.  92.8 of the 2016 Rule that require the designation of a 
responsible employee and grievance procedures, and the text of sample 
grievance procedures in Appendix C to Part 92. They said that retaining 
these provisions would increase access to healthcare and retain uniform 
responsible employee and grievance procedures.
    Response: The Department believes it is appropriate to rely on the 
regulatory framework that has already been set forth for Section 1557's 
four underlying statutes. To the extent that those implementing 
regulations have responsible employee and grievance procedures, they 
are sufficient for enforcement of Section 1557.
i. Summary of Regulatory Changes
    For the reasons described in the proposed rule and considering the 
comments received, the Department finalizes Sec.  92.5, and the 
proposed repeal of Sec. Sec.  92.6, 92.7, 92.8, 92.101, 92.301, 92.302, 
92.303, and Appendices A and C of the 2016 Rule, without change.
(7) Relationship to Other Laws in Proposed Sec.  92.6, and Repeal of 
Sec.  92.2(b) and 92.3 of the 2016 Rule
    The Department proposed to repeal Sec. Sec.  92.2(b) and 92.3 of 
the 2016 Rule, which addressed the application and relationship of 
Section 1557 and the 2016 Rule to other laws. The Department proposed 
instead a new Sec.  92.6. The new Sec.  92.6(a) states that nothing in 
the 1557 regulations shall be construed to invalidate or limit the 
rights, remedies, procedures, or legal standards applicable under Title 
VI, Title VII, Title IX, the Age Act, or Section 504, or to supersede 
State laws that provide additional protections against discrimination 
on any basis described in Sec.  92.2. The new Sec.  92.6(b) states that 
insofar as the application of any requirement under the Section 1557 
regulations would violate, depart from, or contradict definitions, 
exemptions, affirmative rights, or protections provided by any of the 
statutes cited in paragraph (a) of this section or provided

[[Page 37205]]

by the Architectural Barriers Act of 1968 (42 U.S.C. 4151 et seq.); the 
Americans with Disabilities Act of 1990, as amended by the Americans 
with Disabilities Act Amendments Act of 2008 (42 U.S.C. 12181 et seq.); 
Section 508 of the Rehabilitation Act of 1973, as amended (29 U.S.C. 
794d); the Coats-Snowe Amendment (42 U.S.C. 238n); the Church 
Amendments (42 U.S.C. 300a-7); the Religious Freedom Restoration Act 
(42 U.S.C. 2000bb et seq.); Section 1553 of the Patient Protection and 
Affordable Care Act (42 U.S.C. 18113); Section 1303 of the Patient 
Protection and Affordable Care Act (42 U.S.C. 18023); the Weldon 
Amendment (Consolidated Appropriations Act, 2019, Pub. L. 115-245, Div. 
B sec. 209 and sec. 506(d) (Sept. 28, 2018)); or any related, 
successor, or similar Federal laws or regulations, such application 
shall not be imposed or required.
a. Conscience Laws
    Comment: Some commenters supported revising the Section 1557 Rule 
to explicitly identify the Federal public consensus that conscience 
statutes reflect, in order to ensure appropriate protection for all 
civil rights. Some noted that the Coats-Snowe and Church Amendments 
were passed by Congress and signed into law on a bipartisan basis, 
reflecting explicit protections from discrimination on the Federal, 
State, or local level if healthcare providers or hospitals seek to be 
exempted from participation in the performance or training for 
abortions.
    Some commenters supported including references to conscience and 
religious freedom laws in Sec.  92.6(b), stating that protecting the 
conscience rights of healthcare providers also protects patients by 
protecting trust between patients and providers, and allowing providers 
who entered healthcare on the basis of moral convictions to serve those 
who are ill consistent with that ethic. They also stated that providers 
must exercise professional judgment as to what constitutes the best 
interest of the patient. Commenters stated that respect for the 
autonomy of the patient should not be misconstrued to create coercive 
obligations on providers overriding the best interest of the patient. 
Some stated that the 2016 Rule resulted in a ``Hobson's choice'' of 
options for certain providers, who were required under the rule to 
either violate their ethical pledges to Do No Harm or their 
longstanding oaths as physicians, or comply with the 2016 Rule and be 
forced to perform abortions. Some commenters also suggested that if 
those providers complied with laws like Title VII and conscience laws 
that require religious accommodation, they could risk noncompliance 
with the 2016 Rule, or vice versa. Some of those commenters contended 
that coercing providers to compromise their moral integrity negatively 
impacts both provider and patient, and ultimately hurts the provider's 
ability to provide patient care. If facing the threat of coercion, such 
commenters said, providers will continually face escalating moral 
dilemmas in the practice of their job, resulting in stress and burnout 
in a time when physician shortages are already increasing.
    Other commenters opposed the language in Sec.  92.6(b), saying that 
the proposed rule construes the Federal conscience protections more 
broadly than existing law allows. They contended conscience protections 
and religious liberty are meant for individuals, not entities, and that 
healthcare systems and entities cannot have the right of conscience, 
because the notion of conscience is limited to individuals. Some 
commenters also recommended that instead of removing gender identity 
and termination of pregnancy language and having the language in Sec.  
92.6(b) concerning conscience and religious freedom statutes, the 
Department should merely insert a narrow religious exemption, for they 
asserted that preventing discrimination on the basis of gender identity 
or termination of pregnancy is more critical than religious freedom 
rights, which should be more heavily scrutinized for pretextual 
discrimination. Other commenters stated that conscience and religious 
protections under the current statutes are sufficient and incorporating 
conscience or religious exemptions is unnecessary. Some opposed 
referring to the Coats-Snowe Amendment in Sec.  92.6(b), saying that it 
would allow healthcare providers to decline to make medical care 
available to any patient based on personal beliefs. Some added that the 
Department does not have the authority to interpret statutes such as 
the Coats-Snowe Amendment to limit or supersede Section 1557, which 
should be seen as controlling law. One commenter stated that Federal 
conscience statutes are not applicable to the ACA because they are not 
mentioned in the ACA.
    Response: Section 1557 and the ACA did not repeal any Federal 
conscience law. Indeed, ACA Sec.  1303 specifically provides that 
``[n]othing in [the ACA] shall be construed to have any effect on 
Federal laws regarding--(i) conscience protection; (ii) willingness or 
refusal to provide abortion; and (iii) discrimination on the basis of 
the willingness or refusal to provide, pay for, cover, or refer for 
abortion or to provide or participate in training to provide 
abortion.'' 42 U.S.C. 8023(c)(2). At the time of its passage, the 
President stated that ``[u]nder the [ACA], longstanding Federal laws to 
protect conscience (such as the Church Amendment, 42 U.S.C. 300a-7, and 
the Weldon Amendment, section 508(d)(1) of Pub. L. 111-8) remain intact 
and new protections prohibit discrimination against healthcare 
facilities and healthcare providers because of an unwillingness to 
provide, pay for, provide coverage of, or refer for abortions.'' \259\ 
New law is to be interpreted consistently with existing law wherever 
possible, and the Department sees no conflict between Section 1557 and 
preexisting Federal conscience statutes.
---------------------------------------------------------------------------

    \259\ Executive Order 13535, ``Patient Protection and Affordable 
Care Act's Consistency with Longstanding Restrictions on the Use of 
Federal Funds for Abortion'' (March 24, 2010).
---------------------------------------------------------------------------

    This final rule emphasizes that the Section 1557 regulation will be 
implemented consistent with various statutes enacted by Congress, 
including conscience and religious freedom statutes. This should not be 
a controversial statement, nor should it even be necessary to add, as 
the Department is always obligated to comply with relevant Federal 
statutes. But the fact that so many commenters found this provision 
objectionable is itself a reminder of why such a provision is needed. 
The fact that the 2016 Rule was the subject of litigation and 
injunctive relief, in part because of plaintiffs' claim that the 2016 
Rule did not clearly state that it would be enforced consistent with 
conscience and religious freedom statutes, is also a reason the 
Department believes it is appropriate to make the issue clearer in this 
final rule. This final rule does not purport to construe the statutes 
referenced in this section, so it cannot be construing them too broadly 
(or too narrowly). It would be inappropriate to replace Sec.  92.6(b)'s 
language with a religious exemption, whether narrow or broad, because 
Sec.  92.6(b) neither adds to nor takes away from the conscience and 
religious freedom statutory language that Congress has enacted.
    Commenters who discuss the gender identity and termination of 
pregnancy provisions of the 2016 Rule in this context are confusing two 
different issues. As stated above, this final rule eliminates the 2016 
Rule's provisions related to gender identity for numerous

[[Page 37206]]

legal and policy reasons that have nothing to do with conscience 
protection, and it eliminates the 2016 Rule's provisions on termination 
of pregnancy because they failed to incorporate Title IX's abortion-
neutrality language (which goes much farther than any mere protection 
for individual conscientious objectors). In neither case could the 
Department's concerns have been adequately addressed by permitting 
individuals to claim a conscientious exemption from those objectionable 
provisions.
    Comment: Many providers with conscientious or religious concerns 
stated that their medical judgment is based upon a review of the 
clinical evidence, and that medical ethics requires that they act in 
accordance with their best medical judgment. For example, some 
commenters contended that they have practices, such as in the 
obstetrics and gynecology field, which are specialized to the 
biological sex of females based on a binary distinction between males 
and females. Others had objections because of their moral and religious 
convictions concerning specific procedures that they sincerely 
believed, both in their medical judgment and ethically, would endanger 
the health and wellbeing of a person.
    Response: By respecting medical professionals' judgment, the 
Department protects their right and responsibility to follow medical 
ethics in treating patients to the best of their ability. In their 
objections to abortion, sex-reassignment procedures, or other 
treatments covered by the 2016 Rule, some providers assert that not 
only their medical judgment but also their conscientious or religious 
beliefs would be burdened by such procedures. The Department believes 
that the best way to avoid such burdens on conscience is, instead of 
requiring individual objectors to assert claims under RFRA or other 
applicable laws, to avoid regulatory requirements that would have 
forced them to provide such procedures in the first place, as well as 
to ensure that remaining requirements are interpreted consonant with 
the applicable Federal conscience statutes.\260\ This will protect both 
providers' medical judgment and their consciences, thus helping to 
ensure that patients receive the high-quality and conscientious care 
that they deserve.
---------------------------------------------------------------------------

    \260\ See California v. Azar, at *24 (``HHS acted well within 
its authority in deciding how best to avoid conflict with the 
Federal conscience laws.'').
---------------------------------------------------------------------------

    Comment: Some commenters argued that religious or conscience 
exemptions were used as a pretext to conceal animus against LGBT 
individuals. Commenters expressed concerns that the proposed rule would 
improperly prioritize conscience and religious freedom rights over LGBT 
rights or civil rights in general. However, others, such as hospital 
associations that expressed support for care regardless of gender 
identity and sexual orientation, explained that they also support 
appropriate protections for the reasonable accommodation of a nurse or 
other provider who may assert a sincere conscientious objection to 
participating in a particular medical procedure. Other providers stated 
that the exemption they seek is from providing certain treatments, not 
from treating certain patients. Some submitted their hospital 
nondiscrimination policies, contending those policies do not include 
blanket denial of healthcare treatment for LGBT individuals, and in 
many cases expressly prohibit discrimination on the basis of gender 
identity or sexual orientation, but that they nonetheless seek limited 
exemptions on the basis of sincerely held religious and moral 
convictions. Some individual, institutional, and religious groups 
affiliated with healthcare providers also provided comments stating 
that both in policy and in practice, they have never refused to care 
for a patient on the grounds of their identity as an LGBT individual. 
They stated that they object to being required to perform services that 
violate sound medical judgment, ethical convictions, or religious 
beliefs about the dignity of human beings. Commenters also submitted 
surveys finding healthcare professionals experienced pressure, coercion 
or punishment for not participating in training, performing a 
procedure, or writing a prescription when they had medical or 
scientific objections.
    Response: The Department recognizes that members of the public hold 
different opinions concerning conscience and religious freedom laws and 
their interplay with various health contexts, including with respect to 
LGBT concerns. This final rule does not, however, create any new 
conscience or religious freedom exemptions beyond what Congress has 
already enacted.
    Comment: Some commenters contend that women of color are more 
likely to rely on religious hospitals to receive care, and thus women 
of color will be more likely to be affected by religious exemptions 
that allow religious hospitals to deny certain reproductive care. 
Others opposed inclusion of references to conscience and religious 
freedom laws, stating that the danger of losing Federal funds is the 
only incentive for covered entities to offer more abortion, 
contraception, sterilization, gender identity affirming, or sex 
reassignment services. Other commenters stated that conscience laws 
were intended to protect health professionals from precisely that form 
of government coercion.
    Some commenters stated that the proposed rule, in particular 
concerning the Church Amendments, 42 U.S.C. 300a-7, is inconsistent 
with EMTALA, because the conscience exemptions would deny emergency and 
stabilizing care, including with respect to abortion or sterilization. 
Other commenters stated that the rule is consistent with EMTALA, 
because EMTALA requires protection of the ``unborn child.''
    Response: The Department is not aware of any instance to date where 
a facility required to provide emergency care under EMTALA was unable 
to do so because of objections protected by the Church Amendments. This 
final rule does not adopt any stance on how hypothetical conflicts 
between the Church Amendments and EMTALA ought to be resolved. The 
Department intends to read every law passed by Congress in harmony to 
the fullest extent possible, so that all laws are given their fullest 
possible effect. Commenters' other policy concerns about the possible 
healthcare effects of the conscience laws are among the many 
complicated factors that Congress had to balance in the texts of the 
separate statutes, and it is not the Department's job to overturn the 
results of that legislative process.
    Comment: One commenter compared the proposed rule with the 2019 
Conscience Rule and alleged that the Department's recent actions of 
decreasing protections for patients and increasing protections for 
providers run contrary to actual public sentiment. The commenter 
alleged that between 2008 and January 2018, the Department received 
fewer than 50 complaints regarding violations of Federal religious or 
conscience statutes while receiving 30,000 complaints of other civil 
rights discrimination in 2017 alone. Other commenters stated that the 
2019 Conscience Rule violates EMTALA, and results in the denial of 
transition-related surgeries or abortion services in emergencies, 
because conscience statutes allow exemptions from performance of 
sterilizations or abortions. Commenters also recommended that the 
Department delay finalizing the proposed rule pending the outcome of 
litigation challenging the 2019 Conscience Rule, in order to provide 
clarity and finality, and to reduce litigation risk as regards the 
construction of Section 1557 with conscience statutes.

[[Page 37207]]

    Response: This final rule is separate from the 2019 Conscience 
Rule. It does not implement that rule, and it does not implement the 
statutes implemented by that rule. Several courts have vacated the 2019 
Conscience Rule before its effective date, but none of those courts 
issued any order against the conscience statutes themselves,\261\ which 
the Conscience Rule sought to implement and which this final rule 
references. Because this final rule does not refer to or rely on the 
2019 Conscience Rule, there is no reason to delay finalization of this 
rule pending further litigation over the 2019 Conscience Rule.
---------------------------------------------------------------------------

    \261\ See New York v. United States Dep't of Health & Human 
Servs., 414 F. Supp. 3d 475 (S.D.N.Y. 2019); City & Cty. of San 
Francisco v. Azar, 411 F. Supp. 3d 1001 (N.D. Cal. 2019); Washington 
v. Azar, No. 2:19-CV-00183-SAB, 2019 WL 6219541 (E.D. Wash. Nov. 21, 
2019).
---------------------------------------------------------------------------

b. Religious Freedom Restoration Act
    Comment: Some commenters said that the proposed rule's inclusion of 
the Religious Freedom Restoration Act (``RFRA'') in Sec.  92.6(b) was 
unclear and confusing. Others said that it should be excluded because 
it would allow providers to deny needed healthcare. Other commenters 
supported inclusion of RFRA, agreeing that it is an important 
protection for religious conscience from government-imposed burdens. 
Commenters also pointed out that the Federal government has clearly 
articulated its commitment to RFRA and religious freedom laws under a 
recent executive order \262\ and the subsequent Attorney General 
Memorandum \263\ to executive departments and agencies that ``Congress 
has taken special care with respect to programs touching on abortion, 
sterilization, and other procedures that may raise religious conscience 
protections.'' \264\ One commenter supported the Department's explicit 
acknowledgment that Section 1557 is subject to RFRA, stating that 
religious organizations have had to repeatedly go to court to vindicate 
their conscience rights against the Department's enforcement of the 
2016 Rule. Others said that referring to RFRA accurately reflects 
statutory text and Congressional intent, and would correct a legal 
misinterpretation of Section 1557 that has been recognized as such by 
the Franciscan Alliance court.
---------------------------------------------------------------------------

    \262\ Executive Order 13798 on Promoting Free Speech and 
Religious Liberty, 82 FR 21675 (May 4, 2017).
    \263\ Memorandum of the Attorney General (Oct. 6, 2017), https://www.justice.gov/opa/press-release/file/1001891/download.
    \264\ Id.
---------------------------------------------------------------------------

    Response: Congress explicitly stated that RFRA applies to ``all 
Federal law, and the implementation of that law, whether statutory or 
otherwise, and whether adopted before or after November 16, 1993 . . . 
unless such law explicitly excludes such application by reference to 
this chapter.'' \265\ Section 1557 does not explicitly exclude such 
application, so the Department is bound to enforce Section 1557 in 
compliance with RFRA. The Department agrees with the court in 
Franciscan Alliance that particular provisions in the 2016 Rule 
violated RFRA as applied to private plaintiffs.\266\ In order to ensure 
that Section 1557 regulations are now interpreted consistently with, 
and implemented in compliance with, RFRA, the Department considers it 
appropriate to specify this explicitly.
---------------------------------------------------------------------------

    \265\ 42 U.S.C. 2000bb-3.
    \266\ Franciscan Alliance, 2019 WL 5157100 at *9 (``[T]he Court 
holds that the Rule, which expressly prohibits religious exemptions, 
substantially burdens Private Plaintiffs' religious exercise in 
violation of RFRA.'')
---------------------------------------------------------------------------

    Comment: Some commenters stated that the text of the Section 1557 
statute does not contain a religious exemption, and therefore asked the 
Department not to include a religious exemption, either explicitly or 
by reference in Sec.  92.6(b). Other commenters stated that exemptions 
on religious bases should be blanket exemptions, not case-by-case 
exemptions as outlined in RFRA.
    Response: This final rule does not craft a religious exemption to 
Section 1557. Congress has already created various religious and 
conscience protections in healthcare by enacting several statutes, 
including RFRA, healthcare conscience statutes, and the religious 
organization exception in Title IX. This final rule simply states that 
the Section 1557 regulation will be implemented consistent with those 
statutes.
c. Title IX
    Comment: Some commenters opposed including reference to the Title 
IX statutory religious exemption in Sec.  92.6(b). They said that 
Section 1557 does not require or authorize Title IX religious or 
abortion exemptions, because these are limited to educational 
institutions, and are improper in the healthcare context. Others 
expressed concern that Section 1557 and Title IX would be subject to 
exemptions that HHS does not apply to its rules enforcing Title VI.
    Other commenters stated that it is unnecessary and unwise to change 
the standard for the religious exemption under Title IX, and pointed to 
the legislative history of Title IX, where the Conference Committee 
rejected an amendment proposed by Senator Hatch to loosen the standard 
for the religious exemption. Commenters stated that Sec.  92.101(c) of 
the 2016 Rule took an inconsistent analysis by failing to incorporate 
Title IX's religious and abortion exemptions, despite incorporating 
exemptions from the other three Federal civil rights laws referenced in 
Section 1557.
    Still other commenters stated that the Title IX exemption should 
not apply broadly to large religious institutional healthcare 
facilities, or that conscience protections and religious liberty cannot 
apply to institutions like hospitals or healthcare systems because they 
cannot have the right of conscience: They suggested that conscience is 
limited to individuals and that an institution is not a person. Other 
commenters disagreed and pointed to legislative history to recognize 
that the protections under Title IX's religious exemption are not just 
for individuals but for institutions.
    Response: The text of Title IX applies its religious exemption to 
institutions, so there should be no question that religious exemptions 
can apply to institutions as well as individuals.\267\ As discussed 
above regarding termination of pregnancy, the Franciscan Alliance court 
vacated portions of the 2016 Rule for failing to incorporate Title IX's 
exemption for religious institutions. More generally, the Supreme Court 
in Burwell v. Hobby Lobby held that RFRA can apply to for-profit 
corporations. 573 U.S. 682 (2014). And that holding parallels other 
Supreme Court precedent making clear that organizations may engage in 
exercises of religion protected by the First Amendment. See, e.g., 
Masterpiece Cakeshop, Ltd. v. Colo. Civil Rights Comm'n, 138 S. Ct. 
1719, 1732 (2018); Hosanna-Tabor Evangelical Lutheran Church & Sch. v. 
EEOC, 565 U.S. 171, 199 (2012); Church of the Lukumi Babalu Aye, Inc. 
v. City of Hialeah, 508 U.S. 520, 525-26, 547 (1993).
---------------------------------------------------------------------------

    \267\ See 20 U.S.C. 1681(a)(3) (``this section shall not apply 
to an educational institution which is controlled by a religious 
organization if the application of this subsection would not be 
consistent with the religious tenets of such organization''); 20 
U.S.C. 1687(4) (excluding ``any operation of an entity which is 
controlled by a religious organization if the application of section 
1681 of this title to such operation would not be consistent with 
the religious tenets of such organization'').
---------------------------------------------------------------------------

    Under the Civil Rights Restoration Act amendments to Title IX, the 
Title IX religious exemption is no longer limited to educational 
institutions controlled by religious organizations: Any educational 
operation of an entity may be exempt from Title IX due to control by a 
religious organization.\268\ Section 1557

[[Page 37208]]

incorporates the statutory scope of Title IX, so it is appropriate for 
this rule to incorporate the Title IX statutory language concerning 
religious institutions and abortion neutrality. Although much of Title 
VI case law can be applied to Title IX situations, the parallel is not 
perfect because Title IX contains several important statutory 
exemptions that are absent from Title VI. These are mentioned above in 
the section on discrimination on the basis of sex.\269\
---------------------------------------------------------------------------

    \268\ Id.
    \269\ 20 U.S.C. 1681(a)(6)(B); 34 CFR 106 et seq.
---------------------------------------------------------------------------

    Comment: Commenters stated that adding the Title IX exemption for 
religious entities violates the Establishment Clause, because it would 
force third parties to subsidize or bear the costs of religious 
exercise, citing Cutter v. Wilkson, 544 U.S. 709 (2005), Lee v. 
Weisman, 505 U.S. 577 (1992), and Estate of Thornton v. Caldor, Inc. 
472 U.S. 703 (1985). Commenters indicated that religious exemptions 
must take an adequate account of the burdens a requested accommodation 
may impose on nonbeneficiaries. Commenters similarly suggested that the 
rule's requirement that the Section 1557 rule be implemented consistent 
with RFRA would violate the Establishment Clause and should be limited 
to instances where no third party is harmed by application of RFRA.
    Response: Neither RFRA (as applied to Federal government actions), 
nor Title IX's statutory exemptions, have ever been held 
unconstitutional by the Supreme Court. The Court has upheld Title VII's 
statutory exemption for religious organizations,\270\ and has denied 
that statutory exemptions of this type violate the Establishment 
Clause.\271\ The Department will comply with all relevant court 
rulings.
---------------------------------------------------------------------------

    \270\ Corporation of the Presiding Bishop of the Church of Jesus 
Christ of Latter-Day Saints v. Amos, 483 U.S. 327, 338-40 (1987); 
see also Walz v. Tax Commn. of City of New York, 397 U.S. 664 (1970) 
(upholding the constitutionality of a state's statutory property tax 
exemption for religious organizations); Id. at 675 (``The grant of a 
tax exemption is not sponsorship since the government does not 
transfer part of its revenue to churches but simply abstains from 
demanding that the church support the state. No one has ever 
suggested that tax exemption has converted libraries, art galleries, 
or hospitals into arms of the state or put employees `on the public 
payroll.' There is no genuine nexus between tax exemption and 
establishment of religion.'').
    \271\ Corporation of the Presiding Bishop of the Church of Jesus 
Christ of Latter-Day Saints v. Amos, at 336-37 (``We agree with the 
District Court that this purpose does not violate the Establishment 
Clause. . . . A law is not unconstitutional simply because it allows 
churches to advance religion, which is their very purpose.''); Id. 
at 339 (``It cannot be seriously contended that [Title VII's 
statutory exemption] impermissibly entangles church and state; the 
statute effectuates a more complete separation of the two and avoids 
the kind of intrusive inquiry into religious belief that the 
District Court engaged in in this case.'').
---------------------------------------------------------------------------

d. Other Laws and Cases
    Comment: The Department received comments supporting the express 
mention of Section 1303 of the ACA \272\ in proposed Sec.  92.6. These 
commenters contended that this helps clarify the prohibition on 
mandating QHPs to provide abortions, and that it could not have been 
Congress's intent to mandate abortion coverage in Section 1557. Section 
1303 expressly leaves it up to issuers of health plans to decide not to 
cover abortion. Other comments stated that Section 1303 should not be 
expressly mentioned in this rule and that termination of pregnancy 
should remain as a prohibited basis of discrimination under the Section 
1557 rule, notwithstanding Section 1303.
---------------------------------------------------------------------------

    \272\ 42 U.S.C. 18023.
---------------------------------------------------------------------------

    Response: In Section 1303, Congress specified that nothing in the 
ACA (therefore including Section 1557) ``shall be construed to have any 
effect on Federal laws regarding (i) conscience protection; (ii) 
willingness or refusal to provide abortion; and (iii) discrimination on 
the basis of willingness or refusal to provide, pay for, cover, or 
refer for abortion or to provide or participate in training to provide 
abortion'' (emphasis added). The Department considers it appropriate to 
finalize Sec.  92.6 to indicate that the Section 1557 regulation will 
be implemented consistent with Section 1303, as that provision is 
relevant to the interpretation of the Federal laws that Section 1557 
incorporates by reference.
    Comment: The Department received comments from State public 
officials raising concerns about the 2016 Rule's constitutionality. 
State public officials contended that the 2016 Rule violated the 
Spending Clause because the Federal government did not provide adequate 
notice by clear statement and opportunity to agree to the Section 1557 
Rule's new conditions on receipt of Federal financial assistance. 
States also raised objections under the Eleventh Amendment to the 
Department-initiated Section 1557 enforcement actions. States 
identified their obligation to protect the First Amendment rights to 
free exercise of religion of their citizenry. However, these State 
commenters noted that the proposed rule's removal of the definition of 
``on the basis of sex,'' and the addition of the religious and abortion 
exemptions, would address these concerns.
    Other commenters stated that when the Department said in the 2019 
NPRM that State and local entities are better suited than the Federal 
government to address gender identity discrimination, this was contrary 
to constitutional law principles and undermined the right to be free 
from discrimination.
    Response: The Department is not aware of any Supreme Court 
precedent that would call into question the constitutionality of its 
reasoning about federalism as laid out in the 2019 NPRM.\273\ The 
Department believes that this final rule resolves the concerns States 
had about the 2016 Rule's constitutionality.
---------------------------------------------------------------------------

    \273\ See 84 at 27857 (2019 NPRM discussion of ``Sensitive 
Balancing of Competing Interests at the Local Level'' at Part g).
---------------------------------------------------------------------------

    Comment: Some comments from State public officials stated that the 
2016 Rule conflicted with State laws on religious accommodations and 
independent medical judgment of healthcare providers. A different group 
of State public officials submitted a separate joint comment stating 
that their States' civil rights legislation and/or regulations 
prohibited discrimination on the basis of gender identity or sexual 
orientation, and that the proposed rule would remove the consistency of 
their laws with the 2016 Rule. They argued that State insurance 
agencies acted first to promulgate regulations after passage of Section 
1557 in 2010, assuming that Section 1557 prohibited gender identity 
discrimination. Some States also said that the proposed rule's 
incorporation of Federal conscience statutes would result in conflict 
with State laws, or with other Department rules requiring covered 
entities to provide care to all (e.g., vaccination care).
    Some States said that as employers they had difficulty resolving 
religious accommodation laws with Section 1557. Others stated they had 
no difficulties resolving consumer complaints of discrimination on the 
basis of gender identity.
    Response: The Department agrees that States have a public interest 
in enforcement of their statutes, including conscience and religious 
freedom statutes. This final rule respects Federalism: It neither 
interferes with State laws on conscience protections and medical 
judgment, nor does it interfere with State laws that provide additional 
protections (so long as these do not violate other Federal statutes). 
The rule also explicitly provides that Section 1557 will not be taken 
to supersede State laws that provide additional protections against 
discrimination on the enumerated grounds. The Department is not aware 
of actual, as opposed to hypothetical, conflicts between the statutes 
incorporated here and other laws or

[[Page 37209]]

regulations that the Department enforces.
    Comment: A commenter supported including the reference to Section 
1553 of the ACA in Sec.  92.6 in order to protect nurses who have 
objections to participating in assisted suicide, promote trust in the 
nurse-patient relationship, and keep the profession open to candidates 
who want to serve as nurses but object to participation in assisted 
suicide.
    Commenters supported the proposal's specification that the proposed 
regulation not be applied in a manner that conflicts with or supersedes 
exemptions, rights, or protections contained in several civil rights 
statutes, such as the Architectural Barriers Act of 1968, the Americans 
with Disabilities Act of 1990 (as amended by the Americans with 
Disabilities Act Amendments Act of 2008), and Section 508 of the 
Rehabilitation Act of 1973.
    Some commenters requested that the word ``obligations'' be added in 
order to specify that the proposed regulation not be applied in a 
manner that conflicts with or supersedes the exemptions, rights, 
protections or obligations contained in several civil rights statutes. 
This addition would help clarify that this consideration is intended to 
help reduce redundancy, compliance burdens, and confusion for 
healthcare providers.
    Response: The Department appreciates all these comments in support 
of the proposed rule. The Department declines to add the word 
``obligations,'' as the final rule's language adequately addresses its 
interaction with other civil rights statutes.
    Comment: One commenter noted that a number of provisions in the 
proposed rule seem to contradict portions of the recent Conscience Rule 
published by the Department.\274\ In particular, this proposed rule 
eliminates and narrows definitions advanced by the 2016 Rule, while the 
Conscience Rule expands definitions and protections. This proposed rule 
seeks to drastically cut costs of enforcement by eliminating notice and 
taglines requirements and other costs for providers, while the 
Conscience Rule will impose new costs on providers and individuals. 
Finally, this proposed rule and the Conscience Rule use different 
definitions to define health programs and activities.
---------------------------------------------------------------------------

    \274\ 45 CFR part 88.
---------------------------------------------------------------------------

    Response: The 2019 Conscience Rule and this final rule rely on 
different statutes, and different underlying regulations for those 
statutes, so it is not surprising that there should be differences 
between their respective definitions and protections. The four civil 
rights statutes underlying Section 1557 have implementing regulations 
containing appropriate definitions, protections, and enforcement 
mechanisms. As explained herein, the Department has now deemed most of 
the parallel provisions in the 2016 Rule to be unnecessary, 
superfluous, or unduly burdensome. Therefore the Department considers 
it appropriate to finalize a Section 1557 rule that is shorter than the 
2016 Rule and relies more substantially on those underlying 
regulations. In contrast, the 2019 Conscience Rule (which has been 
vacated and is subject to pending litigation) modified previous 
regulations that are only three sentences long, and that lack the kinds 
of definitions and enforcement mechanisms found in regulations 
implementing other civil rights laws enforced by the Department. In 
promulgating the 2019 Conscience Rule, the Department concluded more 
extensive regulations were needed in the absence of existing 
regulations containing such provisions.
    Comment: One commenter stated that the proposed rule's changes to 
the relationship to other laws section at Sec.  92.6 are contrary to 
the requirements of Section 1557, because the 2016 Rule stated that 
neither it nor Section 1557 would apply a lesser standard than Title 
VI, Title IX, Section 504, or the Age Act. In contrast, the proposed 
rule expressly states that application of the proposed rule will not be 
required if the proposed rule violates, departs from, or contradicts a 
number of other Federal civil rights laws.
    Response: The Department seeks to give all laws their fullest 
possible effect. It does not believe that the other laws referenced at 
Sec.  92.6 are generally in conflict with Title VI, Title IX, Section 
504, or the Age Act, except to the extent that some of them (e.g., 
RFRA) may be specifically designed to limit the applicability of other 
Federal laws and governmental actions.
e. Summary of Regulatory Changes
    For the reasons described in the proposed rule and having 
considered the comments received, the Department finalizes Sec.  92.6 
and repeals Sec. Sec.  92.2(b) and 92.3 of the 2016 Rule without 
change.

C. Section 1557 Regulation, Subpart B: Specific Applications to Health 
Programs or Activities (Sections 92.201-92.205 of the 2016 Rule)

    The Department requested comment on the proposed retention and 
modification of the provisions in Subpart B of the Section 1557 
regulation, which imposes specific requirements on covered entities as 
regards individuals with LEP or disabilities.
(1) Meaningful Access for Individuals With Limited English Proficiency 
(45 CFR 92.101)
    The Department proposed Sec.  92.101(a), which states that any 
entity operating or administering a health program or activity subject 
to the Section 1557 regulation is obligated to take reasonable steps to 
ensure meaningful access to such programs or activities by LEP 
individuals. It also proposed Sec.  92.101(b), which states that OCR 
may assess how an entity balances the following four factors:
    (1) The number or proportion of LEP individuals eligible to be 
served or likely to be encountered in the eligible service population;
    (2) the frequency with which LEP individuals come in contact with 
the entity's health program, activity, or service;
    (3) the nature and importance of the entity's health program, 
activity, or service; and
    (4) the resources available to the entity and costs.
    Section Sec.  92.101(b) retains many of the 2016 Rule's provisions 
related to access for LEP individuals. It removes definitions of the 
terms ``qualified bilingual/multilingual staff'' and ``individual with 
limited English proficiency,'' but the 2019 NPRM expressed the 
Department's commitment to interpreting those terms naturally and 
consistently with the 2016 Rule.\275\ It also repeals the 2016 Rule's 
definition of ``national origin.''
---------------------------------------------------------------------------

    \275\ 85 FR 27860-61, 27866.
---------------------------------------------------------------------------

    The Department requested comment on whether the proposed retention 
of some provisions that impose requirements on covered entities under 
the Section 1557 Regulation (which govern health programs or 
activities), but not on entities that only receive HHS funding for 
human services, would cause problems or confusion, and (if so) whether 
this might warrant amendments to the Department's Title VI regulation.
    Comment: In response to the Department's request for comment 
concerning possible amendments to the underlying civil rights 
regulations, some commenters said that they were unable to provide 
meaningful comments without HHS first providing explanations and 
rationale for any proposed changes, and that unanticipated changes 
could not be

[[Page 37210]]

made in a final rule without first giving the public an opportunity to 
comment on those proposed changes.
    Response: The Department did not propose changes to regulations 
other than those finalized here, but simply invited comment on whether 
to consider doing so. In this final rule, the Department does not 
implement any such changes, and in this respect finalizes the proposed 
rule without change. The Department here finalizes only those changes 
proposed in the 2019 NPRM (with minor and primarily technical changes 
to these).
    Comment: Some commenters opposed the proposed rule's revisions to 
the requirements for meaningful access for LEP individuals, arguing 
that they weaken nondiscrimination requirements. These commenters noted 
that instead of requiring covered entities to take reasonable steps to 
provide meaningful access for each ``LEP individual eligible to be 
served or likely to be encountered,'' the proposed rule only requires 
covered entities to take steps to ensure meaningful access for ``LEP 
individuals'' generally. These commenters contend that this change will 
result in a number of LEP individuals unable to access healthcare, and 
will contribute to discrimination and to healthcare disparities for LEP 
individuals. Many commenters stated that lack of understanding in a 
medical setting could cause harm and possibly death to patients with 
LEP. One commenter emphasized the facilitative role that interpreters 
play to decrease risk associated with miscommunication between patients 
and providers. A commenter expressed concerns that healthcare services 
would dramatically decrease for individuals with LEP who are unable to 
access an interpreter. Another commenter objected to the notion that 
oral interpretation for patients would not be required. Some commenters 
also oppose the replacement of the 2016 Rule's two-factor test with a 
four-factor test. One commenter recommended replacing the term 
``reasonable'' in the Department's LEP Guidance meaningful access 
standard with the term ``all,'' saying that the word ``reasonable'' 
leaves too much room for ambiguity in its application.
    Response: The 2016 Rule imposed a stringent requirement on covered 
entities to take reasonable steps to provide meaningful access to each 
LEP individual eligible to be served or likely to be encountered. This 
provision could potentially be interpreted to require a covered entity 
to provide language assistance services to every LEP individual it 
comes into contact with. This final rule instead follows DOJ's 
longstanding LEP guidance (under Executive Order 13166), and HHS's 
corresponding LEP guidance from 2003, by saying that a covered entity 
under Title VI must take reasonable steps to ensure meaningful access 
to its programs or activities by LEP individuals.\276\ Adopting this 
language would apply the same standard to both health and human 
services programs within the Department, and would conform to the other 
Federal agencies that follow DOJ's LEP Guidance, consistent with its 
civil-rights coordinating authority. Because Section 1557 incorporates 
the enforcement mechanisms available under Title VI (which encompasses 
LEP status under Lau v. Nichols),\277\ it is appropriate for this final 
rule to adopt the Title VI standard requiring reasonable steps to 
ensure meaningful access.
---------------------------------------------------------------------------

    \276\ See 67 FR 41455 (June 18, 2002) (DOJ Guidance to Federal 
Financial Assistance Recipients Regarding Title VI Prohibition 
Against National Origin Discrimination Affecting Limited English 
Proficient Persons).
    \277\ 414 U.S. 563 (1974).
---------------------------------------------------------------------------

    This final rule also incorporates the four-factor test found in the 
DOJ LEP Guidance and reiterated in the Department's own 2003 LEP 
Guidance. That test is ``designed to be a flexible and fact-dependent 
standard,'' \278\ and is meant to strike a balance that ensures 
meaningful access by LEP individuals to critical services while not 
imposing undue burdens on small businesses, small local governments, or 
small nonprofits. As the 2019 NPRM made clear, an individualized case-
by-case assessment of the four factors is the starting point for 
exercising the Department's enforcement discretion in language access 
cases.\279\
---------------------------------------------------------------------------

    \278\ 68 FR 47314 (Aug. 8, 2003) (HHS Guidance to Federal 
Financial Assistance Recipients Regarding Title VI Prohibition 
Against National Origin Discrimination Affecting Limited English 
Proficient Persons).
    \279\ 84 FR 27865 (June 14, 2019).
---------------------------------------------------------------------------

    This final rule retains, and the Department will vigorously 
enforce, the underlying legal standard of Title VI: Recipients are 
prohibited from utilizing criteria or methods of administration which 
have the effect of subjecting individuals to discrimination on the 
basis of their race, color, or national origin, or have the effect of 
defeating or substantially impairing accomplishment of the program with 
respect to individuals on the basis of their race, color, or national 
origin. Entities that utilize such criteria or methods of 
administration have failed to take reasonable steps to ensure 
meaningful access to their programs by individuals with LEP and are 
operating their programs in violation of this final rule's prohibition 
against discrimination on the basis of national origin. All covered 
entities remain obligated to submit assurances that they will comply 
with Title VI and all other relevant civil rights law.\280\
---------------------------------------------------------------------------

    \280\ See 84 FR 27860.
---------------------------------------------------------------------------

    The language access provisions in this final rule are consistent 
with Title VI enforcement mechanisms and with the Department's 
longstanding guidance. Title VI enforcement mechanisms are broadly 
known to the regulated community, and the HHS LEP Guidance has been 
effective in helping covered entities comply with the statute and 
implementing regulations. The Department regards the four-factor test, 
employed since 2003, as the best way of balancing the relevant factors 
in ensuring nondiscrimination on the basis of national origin. Under 
this final rule, the Department's LEP Guidance will help covered 
entities assess their programs using the four factors to ensure 
meaningful access to their programs by individuals with LEP. By 
eliminating confusion, inconsistency, redundancy, and unnecessarily 
burdensome compliance costs, this final rule applies proven enforcement 
mechanisms and guidance to ensure access to covered programs by 
individuals with LEP.
    Comment: Commenters stated that the proposed rule significantly 
reduces the administrative burden placed on providers. For example, the 
proposed rule will allow retail pharmacies to provide patients with 
better quality of care in a more efficient manner. Another comment 
emphasized that under the 2016 Rule, providers are required to 
physically post the information at their facilities, on their websites, 
and in any ``significant'' publications and communications. This 
example underscored that the term ``significant'' has never been 
defined by OCR, which has resulted in providers using taglines notices 
in nearly every document provided to patients. This practice was 
described as administratively burdensome and counterproductive, because 
patients already receive numerous notices mandated by the Department. 
Another commenter expressed support for the proposed rule's empowerment 
of individual entities to take reasonable steps to ensure meaningful 
access.
    Response: The Department agrees, and recognizes the burdens imposed 
by the 2016 Rule's requirement to post notices and taglines in all 
significant communications and publications, as well as by the 
difficulty of determining the meaning of ``significant'' with

[[Page 37211]]

respect to the numerous and diverse types of programs covered by this 
final rule. These requirements were difficult for covered entities to 
implement due to different and overlapping language access requirements 
imposed by the Federal government and by many States.\281\ Stakeholders 
have informed the Department that the repetitive nature of these 
requirements dilutes the messages contained in significant 
communications to the point that some recipients may be disregarding 
the information entirely.\282\ In addition, many beneficiaries do not 
want to receive extra pages of information they have seen many times 
before, due to environmental concerns or annoyance.\283\ Most 
significantly, the Department has found scant evidence to demonstrate 
that repeatedly mailing all beneficiaries of Federal and other health 
programs taglines with 15 or more languages is an efficient use of 
covered entities' language access resources when the overwhelming 
majority of beneficiaries speak English.\284\ Savings from the notice 
and taglines requirements changes are described in more detail in the 
Regulatory Impact Analysis.
---------------------------------------------------------------------------

    \281\ E.g., 42 U.S.C. 300gg-15(b)(2) and 300gg-19(a)(1)(B) 
(requiring standards for ensuring that the Summaries of Benefits and 
Coverage and certain notices are provided in a culturally and 
linguistically appropriate manner); 42 U.S.C. 1396d(p)(5)(A) 
(requiring HHS to distribute to States an application form for 
Medicare cost-sharing in English and 10 non-English languages); 26 
CFR 1.501(r)-4(a)(1), (b)(5)(ii) (requiring a hospital organization 
to translate certain documents, among other requirements, to qualify 
for a tax-exempt status with respect to a hospital facility); 42 CFR 
422.2262(a)(1)-(2) and 422.2264(e) (setting forth Medicare Advantage 
marketing requirements, which include requiring Medicare Advantage 
organizations to translate marketing materials into non-English 
languages spoken by 5% or more of individuals in a plan service 
area), Sec.  423.2262(a)(1)-(2) and Sec.  423.2264(e) (setting forth 
Medicare Part D marketing requirements, which include requiring Part 
D plan sponsors to translate marketing materials into non-English 
languages spoken by 5% or more of individuals in a plan service 
area); 45 CFR 155.205(c)(2)(iii)(A) (Marketplaces must post taglines 
on their websites and include taglines in documents ``critical for 
obtaining health insurance coverage or access to health care 
services through a QHP''); 68 FR 47318 (Aug. 8, 2003)--Guidance to 
Federal Financial Assistance Recipients Regarding Title VI 
Prohibition Against National Origin Discrimination Affecting Limited 
English Proficient Persons (setting forth guidance on translating 
``vital'' documents).
    \282\ See Aetna, ``Member Reactions to 1557 Taglines'' (Apr. 
2017), available at https://www.regulations.gov/document?D=HHS-OCR-2019-0007-0002; American Health Insurance Plans and Blue Cross Blue 
Shield Association (May 5, 2017), available at https://www.regulations.gov/document?D=HHS-OCR-2019-0007-0003; 
Pharmaceutical Care Management Association (May 2, 2017), available 
at https://www.regulations.gov/document?D=HHS-OCR-2019-0007-0006.
    \283\ See Aetna (May 1, 2017), available at https://www.regulations.gov/document?D=HHS-OCR-2019-0007-0005; 
Pharmaceutical Care Management Association (Mar. 27, 2017), 
available at https://www.regulations.gov/document?D=HHS-OCR-2019-0007-0007; American Health Insurance Plans and Blue Cross Blue 
Shield Association (May 5, 2017), available at https://www.regulations.gov/document?D=HHS-OCR-2019-0007-0003.
    \284\ See Pharmaceutical Care Management Association (Mar. 27, 
2017), available at https://www.regulations.gov/document?D=HHS-OCR-2019-0007-0007; American Health Insurance Plans and Blue Cross Blue 
Shield Association (May 5, 2017), available at https://www.regulations.gov/document?D=HHS-OCR-2019-0007-0003.
---------------------------------------------------------------------------

    Comment: Some commenters stated that the notices and taglines 
requirements of the 2016 Rule are burdensome, but that the Department 
should consult with stakeholders to determine how to most effectively 
and efficiently communicate with LEP individuals, rather than repeal 
the requirements.
    Response: The Department consulted with the public before and since 
issuing policy guidance to recipients on compliance with the Title VI 
obligation to take reasonable steps to ensure meaningful access to 
their programs by individuals with LEP. The Department also provided 
stakeholders with an opportunity to comment on the proposed rule during 
the public comment period.
    Comment: The Department received comments opposing the proposed 
rule's revised Sec.  92.101, which requires covered entities to take 
reasonable steps to ensure meaningful access to its programs or 
activities by individuals with LEP. Commenters asserted that the 
proposed change is contrary to congressional intent because the 
language in Section 1557 is clear that ``an individual shall not'' be 
subject to discrimination on the prohibited grounds. Others stated that 
the proposed Sec.  92.101 inappropriately changes the Section 1557 
regulation language and shifts the focus of the regulation from an 
individual's rights to the covered entity's programs or activities, 
thus weakening meaningful access and running contrary to the text of 
Section 1557.
    Still others recommended that--through sub-regulatory guidance--the 
Department should communicate to providers the flexibility of the LEP 
access requirement.
    Response: This final rule fully retains all protections offered by 
Section 1557, and it does not shift any focus from an individual's 
rights to the covered entity's programs or activities. It ensures that 
covered entities do not use their programs or activities to 
discriminate on the basis of any individual's national origin, which 
includes (under Lau's disparate impact analysis) requiring those 
entities to provide reasonable access to LEP individuals.
    Comment: The Department received comments asserting that language 
assistance is necessary for individuals with LEP to access Federally 
funded programs and activities in the healthcare system. Several 
commenters argued that adequate translation services are a civil right 
and an important tool for informing individuals with LEP of their 
healthcare rights. One commenter also expressed concern that informed 
consent is compromised when a language barrier prevents a patient from 
understanding what he or she is consenting to. Many commenters also 
said that individuals with LEP face unique challenges in healthcare 
that are mitigated by language access services, and that the proposed 
rule might weaken access by patients with LEP to quality healthcare, 
resulting in patients' avoiding or postponing the medical care they 
require out of fear of discrimination or mistreatment due to their 
national origin or the language they speak.
    Response: The Department strongly agrees that language assistance 
is often vital for ensuring access to Federally funded programs and 
activities in the healthcare system by individuals with LEP. The 
Department believes this final rule highlights its commitment to 
ensuring that individuals with LEP receive language access services 
that are appropriate under the circumstances and consistent with 
longstanding enforcement mechanisms and guidance. Accordingly, this 
final rule clarifies throughout Sec.  92.101 that where language 
assistance services are required to be offered by a covered entity, 
they must be no-cost, timely, and accurate; that translators or 
interpreters provided in order to comply with the law must meet 
specific minimum qualifications, including ethical principles, 
confidentiality, proficiency, effective interpretation, and the ability 
to use specialized terminology as necessary in the healthcare setting; 
and that a covered entity may not require an individual with LEP to 
bring his or her own interpreter or rely on a minor child or 
accompanying adult to facilitate communication, except under limited 
exceptions. In addition, the Department expects that the cost savings 
estimated below resulting from repeal of notice and taglines 
requirements will, where applicable, free up resources that entities 
can use to provide more access to LEP individuals.
    Comment: A commenter said that the proposed rule weakens system-
wide standards governing access to language assistance services and 
will

[[Page 37212]]

disincentivize the broader system from embedding and institutionalizing 
LEP services.
    Response: The Department knows of no evidence to support this 
assertion and considers it an improbable one, as this final rule simply 
applies the longstanding and well-known enforcement mechanisms of Title 
VI that have proven effective over time in ensuring access by 
individuals with LEP to covered programs.
    Comment: Commenters said that it would be beneficial if the 
Department contacted providers with educational documents outlining the 
requirements under the proposed rule.
    Response: It is not Department practice to reach out to all covered 
entities individually upon every regulatory change. At the same time, 
OCR does engage in various kinds of outreach to the regulated 
community. The proposed rule was published in the Federal Register and 
publicized on OCR's website, and this final rule will be publicized 
similarly. The Department expects its changes to reduce confusion among 
covered entities. If OCR sees evidence that this final rule's changes 
are causing any new confusion, OCR will consider issuing relevant 
guidance and education.
    Comment: The Department received comments opposing the elimination 
of the provision requiring the Director to consider, if relevant, 
whether an entity has developed and implemented an effective written 
language access plan appropriate to its particular circumstances. 
Commenters stated that language access plans are important for 
evaluating compliance with Section 1557 and for planning efforts to 
address the needs of LEP individuals.
    Response: The HHS LEP Guidance continues to encourage recipients to 
produce language access plans, but does not require them, and offers 
assistance to help ensure that implementation provides meaningful 
access by individuals with LEP. DOJ's LEP Guidance also does not 
require entities to produce such a plan. This final rule brings the 
Department's LEP regulations into closer conformity with the DOJ 
guidance, while Departmental guidance continues to encourage covered 
entities to go beyond minimum regulatory requirements.
    Comment: One commenter argued that the justifications related to 
costs and resource availability do not supersede the right to 
meaningful access for individuals with LEP. Another commenter objected 
to cost's being the primary determinant for compliance with the 
proposed rule.
    Response: Cost is not the primary factor in the four-factor 
analysis; no single factor is determinative. The four-factor analysis 
does not supersede the right to meaningful access but rather helps 
determine when an entity has taken reasonable steps to secure that 
right.
    Comment: Some commenters believe the four-factor analysis under 
Sec.  92.101(b) is too broad, lacks clarity, does not ensure that 
translation and other language services are available under important 
medical circumstances, may require recipients to provide unnecessarily 
expensive services, and/or weakens recipient language access 
obligations to serve persons who speak infrequently encountered 
languages. Others said that the proposed rule does not require a 
medical provider to make any effort to secure translation services when 
a patient faces a dire medical condition. Others supported the proposed 
rule's changes, indicating they would provide more flexibility for 
covered entities while ensuring that LEP persons have meaningful access 
to services. Some indicated that covered entities should not be 
required to provide expensive forms of language assistance, such as 
video remote interpreting services.
    Response: The Department agrees with commenters who state that the 
four-factor analysis is an appropriate way to allow flexibility for 
covered entities while ensuring meaningful access for LEP individuals. 
As to the specific hypothetical situations described by commenters, OCR 
will evaluate such situations as they are presented to OCR on a case-
by-case basis. The fact-dependent nature of Title VI analysis makes it 
impossible to make pronouncements on such situations without all the 
relevant facts.
    Comment: Some commenters requested that this final rule stipulate 
that health insurance plans are in compliance with the four-factor test 
if they incorporate either State LEP requirements or items 4-7 of the 
National Standards for Culturally and Linguistically Appropriate 
Services (CLAS).
    Response: The ACA instructs the Department to apply to Section 1557 
the enforcement mechanisms available under Title VI, which include 
mechanisms for enforcing language access cases. This final rule relies 
on longstanding Federal practice in enforcing Title VI; it is far from 
clear that the Department would have statutory authority to enforce the 
CLAS standards or State LEP requirements instead. Moreover, recipients 
that provide language assistance in accordance with CLAS standards and 
State LEP requirements may still be utilizing other methods of 
administration that violate the final rule.
    Comment: Some commenters suggested that administrative burden would 
be relieved by adopting uniform language access policies with other 
components in the Department like CMS, arguing that it would improve 
patient experiences and reduce errors.
    Response: Because CMS program regulations are often implemented 
under different statutes than are civil rights regulations, and because 
LEP standards under Title VI have been subject to longstanding 
standards under DOJ and HHS guidance, the Department does not believe 
it is necessary at this time to adopt uniform language access standards 
across these different regulations. This final rule addresses 
regulations under Section 1557 and the civil rights statutes it 
incorporates.
    Comment: Some commenters argued the proposed rule weakens the 
qualifications for language service providers by eliminating the words 
``qualified'' and ``above average familiarity with'' from the proposed 
description of language interpreters and translators.
    Response: This final rule does not weaken any qualifications for 
language service providers. It continues to use the term ``qualified'' 
six times in its regulatory text to describe ``interpreters,'' 
``translators,'' or ``staff'' as relevant. As stated in the 2019 NPRM, 
this final rule eliminates the term ``qualified'' from the 2016 Rule 
only where it was redundant and clearly implied by the context--namely, 
a list of the translator's/interpreter's mandatory qualifications, a 
list that remains unchanged from the 2016 Rule.\285\ And the 2016 Rule 
expressly declined to include any reference to ``above average 
familiarity.'' \286\
---------------------------------------------------------------------------

    \285\ 84 FR 27860, 27866.
    \286\ 81 FR 31390-91.
---------------------------------------------------------------------------

    Comment: A commenter asserted that the proposed rule will adversely 
affect the patient-provider dialogue in addiction treatment programs, 
and underscored the importance of transparency in discussions about 
substance use history.
    Response: The Department is not aware of any evidence to 
demonstrate this assertion, and believes that relying on the 
Department's underlying regulations and guidance will not result in 
such adverse effects.
    Comment: Commenters expressed concern over the Department's 
proposal to remove requirements on video

[[Page 37213]]

interpreting quality standards as it relates to using video remote 
interpreting (VRI) services for LEP individuals or spoken language 
interpreting. Many commenters noted that most VRI services are done on 
the same equipment and through the same network and bandwidth for both 
spoken language and sign language, and that if these standards are 
removed for spoken language interpreters, there will be an unintended 
consequence of lower-quality VRI services for deaf and hard of hearing 
individuals. Other commenters noted that while they appreciated the 
incorporation of the ADA's definition of VRI, they opposed the removal 
of the technical and training requirements for the use of VRI for 
spoken language interpretation.
    Some commenters recommended that all covered healthcare entities 
prioritize the use of on-site sign language interpreters, limit usage 
of VRI to specific situations, and maintain either a directory of local 
interpreters available for on-site work or a contract with an 
interpreter service provider to secure on-site interpreters when 
needed. Commenters offered detailed suggestions for regulations to 
limit VRI usage.
    Response: In place of blanket requirements for VRI standards, this 
final rule adopts the four-factor analysis regarding access for LEP 
individuals, which will help covered entities balance competing 
considerations related to VRI quality standards. Where high-quality VRI 
is necessary to provide meaningful access to LEP persons, high-quality 
VRI will be required just as it was under the 2016 Rule. Furthermore, 
as is made clear in the next subsection (on proposed Sec.  92.102), 
this final rule continues to hold covered entities to the ADA Title II 
standards for video interpretive services where these are needed for 
effective communication for deaf or hard of hearing individuals.
    The Department requested comment on whether HHS's Title VI 
regulations at 45 CFR part 80 should be amended to address the Lau v. 
Nichols \287\ precedent.
---------------------------------------------------------------------------

    \287\ Lau v. Nichols, 414 U.S. 563 (1974).
---------------------------------------------------------------------------

    Comment: A commenter stated that the Department's regulations 
implementing Title VI do not need to be amended to address Lau v. 
Nichols as HHS and DOJ have followed this Supreme Court precedent for 
decades.
    Response: The Department agrees and will continue to enforce Title 
VI consistent with Federal law.
    In reviewing Sec.  92.101 and public comments, the Department 
observed that the proposed rule inadvertently omitted the word ``or'' 
from the end of paragraph (b)(4)(ii)(A), concerning exceptions to the 
prohibition on using an adult accompanying an individual with LEP to 
interpret or facilitate communication. The ``or'' had been included in 
the parallel provision of the 2016 Rule at Sec.  92.201(e)(2)(i); in 
the preamble to the proposed rule, the Department explained that it 
would apply those exceptions ``[l]ike the current rule'' (meaning as in 
Sec.  92.201(e) of the 2016 Rule). 84 FR at 27866. To correct this, the 
Department finalizes Sec.  92.101 with a technical change to insert 
``or'' at the end of paragraph (b)(4)(ii)(A).
(2) Effective Communication for Individuals With Disabilities (45 CFR 
92.102)
    The Department proposed to retain the 2016 Rule's provisions on 
effective communication for individuals with disabilities. 84 FR at 
27866-67.
    Comment: A commenter suggested that each Section 1557 covered 
entity should simply comply with the standards that apply to each 
entity under the ADA, in order to reduce burden, confusion, and 
complexity.
    Response: As a general matter, the Department does not view a 
covered entity's compliance with other Federal regulations, adopted 
with different requirements and for different purposes, as 
determinative of a covered entity's compliance with Section 1557.
    Comment: The Department received comments expressing concern that 
the proposed rule would cause major harm to people with disabilities, 
affecting their access to effective healthcare, especially for those 
individuals in underserved and rural communities. Commenters suggested 
that because the current rule is working as it was intended, there is 
not sufficient reason to reopen it. Commenters argued that the ability 
to effectively communicate includes the individual patient as well as 
the patient's family/caregivers, and that the inability to effectively 
communicate can have significant adverse effects on an individual's 
access to healthcare. Other commenters expressed support for retaining 
the provisions of 45 CFR 92.202 (redesignated Sec.  92.102), regarding 
effective communication for individuals with disabilities. Commenters 
noted that effective communication is a critical component to accessing 
and receiving healthcare and that often covered entities rely on 
communication methods that are the preference of the covered entity 
rather than the choice of the individual with a disability. Commenters 
stated that giving primary consideration to the choice of aid or 
service requested by an individual with a disability helps to ensure 
effective communication and equal opportunity in the healthcare 
setting. Commenters commended HHS for holding all recipients of Federal 
financial assistance from HHS to the higher ADA Title II standards.
    Response: Access to care continues to be a critical concern for the 
Department, and access to care clearly requires effective 
communication. The Department does not believe this final rule will 
impede individuals' access to care, but that instead it will assist 
individuals in understanding a covered entity's legal obligations and 
their own rights under Section 1557. In addition, the rule will assist 
the Department in complying with the mandates of Congress and further 
substantive compliance. Finally, because this final rule will lift 
unnecessary regulatory burdens on providers, the Department hopes that 
it will increase access to care, including in underserved and rural 
communities.
    Comment: Commenters noted that the current regulation's language 
tracks the statutory text of Title I and Title III of the ADA and the 
regulatory language of Title II of the ADA, all of which protect 
against discrimination based on association or relationship with a 
person with a disability. They said that the proposed rule's 
elimination of the 2016 Rule's prohibition on associational 
discrimination will therefore create bewilderment concerning providers' 
responsibilities and individuals' rights. Commenters argued that 
deleting the language will create uncertainty and confusion regarding 
the responsibilities of providers and the rights of persons who 
experience discrimination, and inconsistencies with other regulatory 
requirements that entities are subject to, including the ADA and 
Section 504.
    Response: As stated above, protections against discrimination on 
the basis of association will be available under this final rule to the 
extent that they are available under the incorporated civil rights 
statutes and their implementing regulations. The Department notes that 
courts have often relied on ADA statutory provisions in their handling 
of Section 504 claims.\288\
---------------------------------------------------------------------------

    \288\ See Memorandum on Coordination of Federal Agencies' 
Implementation of Title II of the Americans with Disabilities Act 
and Section 504 of the Rehabilitation Act, Acting Assistant Attorney 
General (April 24, 2018); see, e.g., Theriault v. Flynn, 162 F.3d 
46, 48 n.3 (1st Cir. 1998); Henrietta D. v. Bloomberg, 331 F.3d 
261,272 (2d Cir. 2003); Helen L. v. DiDario, 46 F.3d 325, 330 n.7 
(3rd Cir. 1995); Baird ex rel. Baird v. Rose, 192 F.3d 462, 468 (4th 
Cir. 1999); Delano-Pyle v. Victoria Cty., Tex., 302 F.3d 567, 574 
(5th Cir. 2002); McPherson v. Michigan High School Athletic Ass 'n, 
Inc., 119 F.3d 453, 459-60 (6th Cir. 1997); Gorman v. Bartch, 152 
F.3d 907, 912 (8th Cir. 1998); Zukle v. Regents of Univ. of Cal., 
166 F.3d 1041, 1045 n.11 (9th Cir. 1999); Cohan ex rel. Bass v. N.M. 
Dept. of Health, 646 F.3d 717, 725-26 (10th Cir. 2011); Bircoll v. 
Miami-Dade Cty., 480 F.3d 1072, 1088 n.21 (11th Cir. 2007).

---------------------------------------------------------------------------

[[Page 37214]]

    Comment: Several commenters objected that the definition of 
auxiliary aids and services at proposed Sec.  92.102(b)(1) excludes the 
term ``Qualified'' before ``Interpreters'' in subsection (i) and before 
``Readers'' in subsection (ii), despite being part of the ADA 
definition at 28 CFR 35.104. Some Commenters strongly encouraged the 
Department to incorporate the ADA definition of ``Qualified Reader'' as 
follows: ``Qualified reader means a person who is able to read 
effectively, accurately, and impartially using any necessary 
specialized vocabulary.'' \289\
---------------------------------------------------------------------------

    \289\ 28 CFR 35.104.
---------------------------------------------------------------------------

    Response: As stated above regarding Sec.  92.101(a), this final 
rule eliminates the term ``qualified'' from the 2016 Rule only where it 
was redundant and clearly implied by the context. In this case, 
subsection (b)(2) clearly lists the mandatory qualifications for 
interpreters required under subsection (b)(1), and it adopts that list 
from the ADA definition at 28 CFR 35.104 and Sec.  36.303(f). It would 
therefore be redundant to describe those interpreters in subsection 
(b)(1) as ``qualified.'' No definition of ``Qualified Reader'' appears 
in the 2016 Rule, so the Department is making no change in that regard. 
But the Department interprets this subsection naturally as requiring 
qualifications for readers that are similar to the expressly stated 
qualifications for interpreters.
    Comment: Commenters argued that although the proposed rule claims 
to incorporate the definition of auxiliary aids and services from the 
regulations implementing Title II of the ADA, the rule as proposed 
changes the definition of auxiliary aids and services, omitting 
``acquisition or modification of equipment and devices; and other 
similar services and actions'' from the list of examples of aids and 
services. Commenters noted that this proposed change will confuse 
providers and people with disabilities and will lead both groups to 
assume the list in the proposed rule is exhaustive. Commenters opposed 
these deletions and requested that the Department retain the definition 
of auxiliary aids and services from the 2016 Rule.
    Response: The Department's definition of auxiliary aids and 
services is consistent with, even if not identical to, that of the ADA. 
The Department does not deem it necessary to incorporate all of the 
ADA's examples, as neither the ADA's list nor this final rule's list 
claims to be exhaustive.
    Comment: Some commenters expressed concern regarding the narrowing 
of the ``free of charge'' and ``timely manner'' provision at proposed 
Sec.  92.102(b)(2). Commenters noted that the 2016 Rule's language is 
consistent with existing ADA Title II regulations, which provide that 
covered entities may not place a surcharge on a particular individual 
or group of individuals with a disability to cover the costs of the 
provision of auxiliary aids or program accessibility. Commenters 
asserted that the proposed Sec.  92.102(b)(2) significantly narrows 
this provision by stating that ``interpreting service'' shall be 
provided to individuals free of charge and in a timely manner. These 
commenters strongly opposed this change and encourage the Department to 
replace the words ``interpreting service'' with ``auxiliary aids and 
services'' to be consistent with the ADA and to prevent unnecessary 
confusion over the requirement.
    Response: Like Sec.  92.202 of the 2016 Rule, which it replaces, 
Sec.  92.102 of this final rule continues to incorporate the ADA Title 
II regulations at 28 CFR 35.160-164. The new section also includes new 
language on the qualifications for interpreters, which is where the 
term ``free of charge'' now appears; the term did not appear in Sec.  
92.202 of the 2016 Rule. To the extent that auxiliary aids must be 
provided free of charge under the 2016 Rule, they must still be 
provided free of charge under this final rule.
    Comment: One commenter asked that the phrase ``in a timely manner'' 
as used in Section 92.102(b)(2) of the proposed rule be clarified with 
clear guidance as to what can and cannot be considered ``in a timely 
manner.''
    Response: Application of the term ``in a timely manner'' requires a 
nuanced analysis that is fact-dependent. Its meaning can be understood 
from the long history of enforcement of Section 504 and the ADA in the 
courts and administratively.
    Comment: Some commenters supported an exemption from the auxiliary 
aids and services requirement for covered entities with fewer than 15 
employees, stating that it would help alleviate financial and 
administrative burden for smaller physician group practices that may 
already have limited resources. Others said that in some areas of the 
country, especially in small and rural communities, such an exemption 
could effectively bar access to many providers. Commenters said that 
any such exemption would be inconsistent with the standard present in 
Title II \290\ and Title III \291\ of the ADA, which require the same 
businesses to provide auxiliary aids and services to individuals with 
disabilities where necessary to ensure effective communication, 
regardless of the number of employees. They said that the existence of 
two competing regulatory standards will confuse small covered entities 
as to which standard they should follow. Several commenters noted that 
although a small economic burden may be placed on small businesses that 
have to comply with this requirement, there are programs that provide 
tax benefits and funding for the provision of reasonable 
accommodations, significantly reducing the burden placed on these 
entities.\292\ Some commenters noted that because Titles II and III of 
the ADA already provide for sufficient mechanisms for providers to 
request exemptions based on a fundamental alteration in the nature of 
goods and services provided and undue burden, no additional exemption 
is needed through Section 1557.
---------------------------------------------------------------------------

    \290\ 28 CFR 35.104.
    \291\ See 42 U.S.C. 12182(b)(A)(iii) (under Title III, privately 
operated public accommodations regardless of their size are 
obligated to provide appropriate auxiliary aids and services, when 
necessary to ensure effective communication with individuals with 
disabilities, unless the entity can demonstrate that taking such 
steps would fundamentally alter the nature of their programs, 
services or activities, or would result in undue financial and 
administrative burdens).
    \292\ Commenters cited U.S. Department of Justice American with 
Disabilities Act Update: A Primer for Small Business. (2010). 
Retrieved from https://www.ada.gov/regs2010/smallbusiness/smallbusprimer2010.htm; Internal Revenue Service. (n.d.); Form 8826, 
Disabled Access Credit. Retrieved from https://www.irs.gov/forms-pubs/about-form-8826.
---------------------------------------------------------------------------

    Response: The Department believes that in the interest of 
uniformity and consistent administration of the law, all employers that 
receive Federal financial assistance from HHS, regardless of their 
size, should be held to the auxiliary aids and services requirement. 
The Department recognizes the importance of individuals being able to 
effectively communicate with their healthcare providers and is aware 
that the inability to effectively communicate can have significant 
adverse effects on individuals' access to effective healthcare. The 
Department's decision to require all entities, regardless of size, to 
provide auxiliary aids and services is consistent with OCR's policy for 
almost two decades,\293\ so covered entities will

[[Page 37215]]

be familiar with the obligations being imposed. Title II and Title III 
of the ADA already require public and private healthcare entities to 
provide auxiliary aids and services regardless of the number of 
employees. Both Titles state that an entity is not required to take any 
action that it can demonstrate would result in a fundamental alteration 
in the nature of a service, program, or activity or in undue financial 
and administrative burdens, and Sec.  92.102 incorporates both of those 
limitations through its incorporation of the ADA Title II regulations 
at 28 CFR 35.160-164. Therefore, the Department finds it appropriate 
not to adopt an exemption from the auxiliary aids and services 
requirement for covered entities with fewer than 15 employees.
---------------------------------------------------------------------------

    \293\ See Notice of Exercise of Authority Under 45 CFR 
84.52(d)(2) Regarding Recipients With Fewer Than Fifteen Employees, 
65 FR 79368 (Dec. 19, 2000).
---------------------------------------------------------------------------

    Comment: Commenters said that the ``primary consideration'' 
standard has evolved such that patients will demand that a particular 
translator or interpreter be used, regardless of the expense. These 
commenters argued that when patients demand use of a certain company or 
specific commercial service, this creates additional unnecessary costs 
for the covered entity. One commenter stated that Title III of the ADA 
should be the standard that applies to private businesses covered by 
Section 1557 regarding effective communication for individuals with 
disabilities. The commenter asserted that the Title II primary 
consideration standard is not appropriate for use in a clinical setting 
and that treating clinicians or the entities themselves are in the best 
position to determine the types of services necessary to address the 
communication needs of their patients. The commenter argued that 
applying Title II standards to private entities has created significant 
confusion for medical group practices accustomed to following 
longstanding Title III rules.
    Response: Since the 2015 NPRM, the Department has held that it is 
appropriate, as a condition of receipt of Federal financial assistance 
from HHS, to hold all recipients to the higher 2010 ADA Title II 
standards regarding effective communication with individuals with 
disabilities.\294\ The Department does not consider the commenters' 
concerns to be a sufficient reason to change this policy. Section 
92.102 of this final rule seeks to avoid confusion by providing covered 
entities with clear, specific guidance to help them understand their 
rights and responsibilities regarding effective communication with 
individuals with disabilities. As mentioned above, it also incorporates 
the ``undue burden'' and ``fundamental alteration'' limitations of ADA 
Title II, in order to avoid excessively burdening covered entities.
---------------------------------------------------------------------------

    \294\ 80 FR 54186.
---------------------------------------------------------------------------

(3) Accessibility Standards for Buildings and Facilities (45 CFR 
92.103)
    The Department proposed at Sec.  92.103(a) to retain the 2016 
Rule's requirement that new construction or alteration of buildings or 
facilities subject to Section 1557 must comply with the 2010 ADA 
Standards for Accessible Design by January 18, 2018, and to retain the 
2016 Rule's allowance of departures from the 2010 ADA standards where 
other methods are permitted that provide substantially equivalent or 
greater access to and usability of the building. 84 FR at 27867. The 
Department proposed at Sec.  92.103(b) to create a safe harbor for new 
construction or alteration of buildings or facilities subject to 
Section 1557, allowing existing facilities which were only required to 
be compliant with the Uniform Federal Accessibility Standards 
(``UFAS''), the 1991 ADA Standards, or the 2010 ADA Standards as of 
July 18, 2016, to be deemed compliant, unless there is new construction 
or alteration after January 18, 2018. Finally, the Department proposed 
at 92.103(c) to identify the three applicable building and facility 
detailed technical accessibility standards by cross-reference to their 
underlying regulations, instead of listing them in a separate 
definitions section.
    Upon further consideration of this language and the public 
comments, the Department observed a potential ambiguity in Sec.  92.203 
of the 2016 Rule. The rule distinguished between construction or 
alteration commenced ``on or after July 18, 2016'' in the first 
sentence of Sec.  92.203(a), those commenced ``on or before July 18, 
2016'' in the first sentence of Sec.  92.203(b), and those commenced 
``before July 18, 2016'' in the last sentence of Sec.  92.203(b). This 
potentially left it unclear how the rule would apply to construction or 
alteration commenced on July 18, 2016. To avoid confusion, the 
Department is finalizing Sec.  92.103 with a technical change, by 
deleting the phrase ``on or'' from the first sentence of Sec.  
92.103(a), and adding ``on or'' before the word ``before'' in the last 
sentence of Sec.  92.103(b). This resolves the ambiguity while 
providing leeway to activities commenced on July 18, 2016 where it was 
not clear how the 2016 Rule applied.
    Comment: Commenters supported the proposal to continue to apply the 
2010 ADA Standards' definition of ``public building or facility'' to 
all entities covered under Section 1557, by retaining the provisions of 
45 CFR 92.203 (redesignated Sec.  92.103) regarding accessibility 
standards for buildings and facilities. Commenters opposed any type of 
additional exemption from the requirements concerning multistory 
building elevators \295\ and Text Telephone (TTY) requirements.\296\ 
Some commenters strongly opposed the proposed rule's incorporation of 
the private entity TTY standard from the 2010 ADA Standards, and 
requested the retention of the existing TTY ratios, and the adoption of 
stringent Real-Time Text (RTT) ratios. Others noted that lack of 
accessible medical equipment presents barriers to effective healthcare 
for people with impaired mobility or strength and other disabilities, 
and they requested that the Department require healthcare facilities to 
follow the 2017 Architectural and Transportation Barriers Compliance 
Board (U.S. Access Board) Standards for Accessible Medical Diagnostic 
Equipment.\297\
---------------------------------------------------------------------------

    \295\ See 42 U.S.C. 12101 et seq. Exception 1 of section 206.2.3 
of the 2010 ADA standards exempts multistory buildings besides the 
professional office of a healthcare provider owned by private 
entities from the requirement to provide an elevator to facilitate 
an accessible route throughout the building. This exemption does not 
apply to public entities.
    \296\ The 2010 ADA Standards also specifies TTY requirements for 
public buildings different from private buildings. Compare ADA 2010 
Standard 217.4.3.1 (public buildings) with ADA 2010 Standard 
217.4.3.2 (private buildings).
    \297\ See Information and Communication Technology (ICT) 
Standards and Guidelines, 82 FR 5790 (Jan. 18, 2017) (final rule); 
83 FR 2912 (Jan. 22, 2018) (technical edits).
---------------------------------------------------------------------------

    Response: The Department believes that, because the great majority 
of entities covered by the 2016 Rule have already been subject to the 
2010 ADA Standards, an approach that emphasizes uniform application of 
the 2010 Standards will promote conformity with pre-existing civil 
rights statutes while enabling greater consistency among implementing 
agencies. Any significant reevaluation of those standards or adoption 
of new standards is beyond the scope of this regulation. In the case of 
adopting new standards, the Department also declines to make such a 
significant regulatory change without the benefit of notice and public 
comment.
(4) Accessibility of Information and Communication Technology (45 CFR 
92.104)
    The Department proposed to retain the 2016 Rule's provisions on 
accessibility of information and communication technology for 
individuals with disabilities. 84 FR at 27867. The Department also 
proposed at 92.104(c) to update the 2016 Rule's

[[Page 37216]]

outdated term ``electronic and information technology'' with the term 
``information and communication technology,'' as defined in the U.S. 
Access Board regulations. 84 FR at 27871.
    Comment: Commenters expressed concern with the Department's 
proposed change to the definition of ``information and communication 
technology'' (ICT), in proposed Sec.  92.104(c). Commenters noted that 
the critical phrase ``but are not limited to'' has been removed from 
the definition the Department claims to have incorporated from the U.S. 
Access Board's definition for ICT.\298\ The commenters argue that due 
to the difficulty in predicting what technologies will be in place 
moving forward, it is important to maintain flexibility and ensure that 
the regulation keep pace with emerging technologies.
---------------------------------------------------------------------------

    \298\ See 36 CFR app. A Sec.  1194 (2011) (defining ICT as 
``Information technology and other equipment, systems, technologies, 
or processes, for which the principal function is the creation, 
manipulation, storage, display, receipt, or transmission of 
electronic data and information, as well as any associated content. 
Examples of ICT include but are not limited to: Computers and 
peripheral equipment; information kiosks and transaction machines; 
telecommunications equipment; customer premises equipment; 
multifunction office machines; software; applications; websites; 
videos; and electronic documents.'').
---------------------------------------------------------------------------

    Response: The list of auxiliary aids was not intended as an all-
inclusive or exhaustive catalogue of possible or available auxiliary 
aids or services--nor could it possibly be, given the new devices that 
will become available with emerging technology. The Department omitted 
the phrase ``but are not limited to'' merely in order to avoid 
unnecessary legal jargon. The plain meaning of ``include'' already 
encompasses ``but are not limited to,'' as it signifies that the listed 
items are only parts of a larger whole.
    Comment: One commenter requested that the Department require 
recipients of Federal financial assistance to ensure that health 
programs or activities provided through their websites comply with the 
requirements of Title III, rather than Title II, of the ADA, if the 
recipient is otherwise covered by Title III. The commenter argued that 
the burden placed on small practices by having to comply with both 
Title II and Title III would likely outweigh any benefit to individuals 
who require accessible technology.
    Response: The Department believes that this comment understates the 
benefit of the Title II standards to individuals who require accessible 
technology. Effective communication is a critical component for 
individuals to be able to access and receive healthcare, and this 
includes being able to access covered entities' websites. The 
Department believes that in the interest of uniformity of access for 
individuals with disabilities, all entities that receive Federal 
financial assistance from HHS should be held to the higher information 
and communication technology standards of Title II. The ADA does not 
exempt small providers from this requirement, although Sec.  92.104 
does incorporate the ADA's ``undue financial and administrative 
burden'' and ``fundamental alteration'' exemptions in order to protect 
covered entities from excessive burdens.
    Comment: Some commenters stated that the Department should cross-
reference Section 508 in its proposed Sec.  92.104. The commenters 
noted that although the proposed rule tracks the concepts of the 
Section 508 regulations, it does not include the appropriate cross-
reference, which will cause confusion if and when the Section 508 
regulations are updated.
    Response: If and when Section 508 regulations are updated, the 
Department will evaluate whether or not to update Sec.  92.104 
accordingly. Because this final rule does not incorporate Section 508 
regulations but merely tracks them, the Department believes that a 
cross reference could cause unnecessary confusion if and when Section 
508 regulations are updated or changed.
(5) Requirement To Make Reasonable Modifications (45 CFR 92.105)
    The Department proposed at Sec.  92.105 to retain the 2016 Rule's 
requirement that covered entities make reasonable modifications to 
policies, practices, or procedures when necessary to avoid 
discrimination on the basis of disability, unless the covered entity 
can demonstrate that the modification would fundamentally alter the 
health program or activity. 84 FR at 27868. The Department sought 
comment on whether to include an exemption for ``undue hardship.'' Id.
    Comment: Commenters strongly opposed an exemption for undue 
hardship in regard to the requirement that covered entities make 
reasonable modifications to policies, practices, or procedures when 
necessary, to avoid discrimination on the basis of disability, except 
if the modification would fundamentally alter the nature of the health 
program or activity. Commenters pointed out that the current 
regulations track Title II of the ADA. Commenters stated that Title III 
does not absolve a covered entity from providing all forms of auxiliary 
aids if providing a particular auxiliary aid would result in undue 
burden, and that a provider has an obligation to find an alternative 
auxiliary aid in such cases. Commenters noted that because Title II and 
III of the ADA already provide mechanisms for providers to request 
exemptions based on an undue burden, no additional exemption is needed. 
Commenters stated that the substitute language proposed is from 
regulations related to employment and ill-fitting and inappropriate in 
a healthcare context. Commenters requested that if an exemption for 
undue hardship is provided, it should mirror the undue burden provision 
of the ADA, to ensure the two Federal laws are in sync and do not 
conflict with one another and lead to confusion.
    Response: The Department agrees with commenters who ask that the 
regulations continue tracking Title II of the ADA, whose requirement 
for reasonable modifications includes a fundamental alteration 
exemption but no undue hardship exemption. The Department believes that 
this position helps promote continued consistency with pre-existing 
civil rights statutes. The reasonable modification analysis already 
applies to many entities subject to Section 1557 and is well-defined by 
regulation and decades of case law. Continuing to apply the 
``reasonable modification'' analysis to Section 1557 promotes 
consistency with pre-existing civil rights law and is consistent with 
the U.S. Supreme Court's decision interpreting Section 504 in Alexander 
v. Choate, 469 U.S. 287 (1985), Title II of the ADA, and OCR's 
longstanding interpretation of Section 504.
    Comment: Commenters objected to substituting the Title II 
reasonable modification language with language stating that covered 
entities ``shall make reasonable accommodation to the known physical or 
mental limitations of an otherwise qualified'' individual with a 
disability. Further, a commenter argued that use of the term ``known,'' 
outside the employment context, would suggest an overly narrow 
interpretation of the scope of Section 1557 and introduce an 
unnecessarily burdensome and intrusive process into the healthcare 
context. Commenters expressed concern that importing the ``known 
physical or mental limitation'' language would suggest to covered 
entities that their obligations are limited, and would create an undue 
focus on the measures that entities must take in response to requests 
for modifications.
    Response: The Department shares the concern that introduction of 
the phrase ``known physical or mental limitations'' may cause covered 
entities to introduce

[[Page 37217]]

exceedingly burdensome and intrusive processes into the healthcare 
context. In contrast, the concept of reasonable modification taken from 
Title II has long applied to a wide range of entities covered by 
Section 1557, making such entities familiar with the requirements 
imposed, and is well-defined by regulation and decades of case law. The 
Department believes that continuing to apply the reasonable 
modification analysis to Section 1557 will help promote consistency 
with pre-existing civil rights statutes.
    Comment: Several commenters noted that the citation for the 
proposed reasonable modification language the Department claims 
conforms to the Department of Justice's Section 504 coordinating 
regulations is to a non-existent portion of the Code of Federal 
Regulations. These commenters argue that these incorrect citations make 
it impossible for the public to analyze the context or case law of the 
proposed imported language and that such uncertainty makes it 
impossible for the public to reliably know what the Department is 
proposing.
    Response: The Department thanks these commenters for bringing this 
citing error to its attention. For clarity, the Department notes that 
it intended to cite to 28 CFR 42.511, not Sec.  92.205.\299\ But for 
the reasons stated above, the Department has determined that it should 
retain the current Title II reasonable modification language.
---------------------------------------------------------------------------

    \299\ See 84 FR 27868 (citing to 28 CFR 92.205).
---------------------------------------------------------------------------

    Comment: Some commenters recommended that the rule include the 
addition of examples of programmatic modifications that are often 
needed by those with disabilities, such as the modification of wait 
times, office hours, and other business practices that can make 
accessibility to healthcare for people with disabilities difficult.
    Response: The Department declines to enshrine a list of examples of 
``programmatic modifications'' needed by those with disabilities. 
Because this final rule applies to a diverse range of covered entities, 
codifying examples would not provide meaningful guidance to the full 
spectrum of regulated covered entities. The Department believes that 
each covered entity ought to determine for itself which programmatic 
modifications with respect to its health programs and activities should 
be undertaken to avoid discrimination on the basis of disability, 
subject to enforcement by OCR in case of a complaint.
    Comment: Commenters found inappropriate the Department's requesting 
comment on whether it has struck the appropriate balance in proposed 
Sec. Sec.  92.102 through 92.105 with respect to Section 504 rights and 
obligations imposed on the regulated community, as such a balancing 
exercise is not called for by the statute and inserts inappropriate 
regulatory subtlety.
    Response: In any rulemaking, addressing obstacles that impede 
individuals from exercising their rights should be balanced against 
potentially unnecessary obligations that may be imposed on the 
regulated community. Agencies engage in this type of balancing in order 
to ensure that the interests and issues of both individuals and the 
regulated community are fairly considered during the rulemaking 
process, helping to minimize the burden associated with Federal 
regulations.
    Comment: A commenter said that in order to promote clarity and 
affirm that VRI quality standards apply in any remote interpreting 
situation that may arise for a person with a disability, Sec.  92.101 
of the proposed rule ought to cross-reference the VRI quality standards 
in Sec.  92.102.
    Response: Section 92.102 covers individuals with disabilities. 
Sec.  92.101 covers individuals with LEP status, which is not a 
disability. Individuals with disabilities have different needs than LEP 
individuals, and the current regulatory text reflects that difference. 
If an LEP individual happens also to have a disability, then the VRI 
quality standards of Sec.  92.102 will apply to him/her.
(6) Summary of Regulatory Changes
    The Department finalizes the proposed sections Sec.  92.101 through 
92.105 without change, except that technical changes are made to add 
the word ``or'' at the end of Sec.  92.101(b)(4)(ii)(A), to delete the 
phrase ``on or'' from the first sentence of Sec.  92.103(a), and to add 
the phrase ``on or'' before the word ``before'' in the last sentence of 
Sec.  92.103(b).

D. Title IX Regulations

    The Department proposed to conform its Title IX regulations to 
current statutory provisions.
(1) Nomenclature, Rules of Appearance, Effective Date Modifications to 
Rules at 45 CFR 86.31 and 86.71
    The Department proposed to make a nomenclature change to the Title 
IX regulation by replacing ``United States Commissioner of Education'' 
with the official's current title, ``Secretary of Education.'' \300\ 
The Department also proposed to update the Title IX regulation's 
statutory citations to include the full current text of Title IX as 
amended by the CRRA.
---------------------------------------------------------------------------

    \300\ See 45 CFR 86.2(n).
---------------------------------------------------------------------------

    The Department also proposed to repeal a prohibition on 
discrimination on the basis of ``rules of appearance'' in 45 CFR 86.31. 
The Department further proposed to update the enforcement section in 
the Department's Title IX regulation at 45 CFR 86.71, which currently 
discusses only enforcement procedures for the interim period before the 
issuance of the consolidated Title IX regulation. This final rule 
applies language from the Title IX regulation, which incorporates Title 
VI procedures.
    Comment: The Department received comments indicating that the rules 
of appearance prohibition is well supported by Title IX and that HHS 
provides no basis for removing the prohibition.
    Response: This final rule's NPRM explained that currently, the 
Department is the only Federal agency with Title IX regulatory language 
prohibiting discrimination ``against any person in the application of 
any rules of appearance.'' \301\ The phrase ``rules of appearance'' 
does not appear in Title IX and was never defined in any agency's Title 
IX regulations. Consequently, the Department believes the phrase may 
cause confusion in the public about Title IX's coverage and compliance 
responsibilities, and has already led to at least one lawsuit. Because 
this language is not in the current regulations of any other agencies, 
this final rule limits the potential for conflicting and inequitable 
Federal agency enforcement of Title IX with respect to ``rules of 
appearance.''
---------------------------------------------------------------------------

    \301\ See, e.g., 47 FR 32527 (July 28, 1982) (Department of 
Education Title IX regulation); 65 FR 52858 (Aug. 30, 2000) (common 
rule adopted by twenty agencies), 66 FR 4627 (Feb. 20, 2001) (common 
rule adopted by Department of Energy); 82 FR 46656 (Oct. 6, 2017) 
(U.S. Department of Agriculture adopting common rule).
---------------------------------------------------------------------------

(2) Abortion Neutrality of 20 U.S.C. 1688 in 45 CFR 86.2 and 86.18
    The Department also proposed to modify its Title IX regulations, at 
45 CFR 86.18, to reflect the statutory text Congress enacted in Title 
IX. This text includes what some commenters referred to as the Danforth 
Amendment, 20 U.S.C. 1688, which states that Title IX is not to be 
construed to force or require any individual or hospital or any other 
institution, program, or activity receiving Federal funds to perform or 
pay for an abortion; to require or prohibit any person, or public or 
private entity, to provide or pay for any benefit or service, including 
the use

[[Page 37218]]

of facilities, related to an abortion; or to permit a penalty to be 
imposed on any person or individual because such person or individual 
is seeking or has received any benefit or service related to a legal 
abortion.\302\ The Department also proposed to add a provision, similar 
to the provision of the Section 1557 regulation discussed above under 
``relation to other laws,'' ensuring that its Title IX regulation would 
be construed consistently with various religious freedom and conscience 
statutes, including the explicit religious exemptions in the text of 
Title IX itself.
---------------------------------------------------------------------------

    \302\ See Public Law 100-259, 102 Stat. 28, sec. 8 (Mar. 22, 
1988) (codified at 20 U.S.C. 1688).
---------------------------------------------------------------------------

    Comment: One commenter stated that adding Title IX's abortion 
neutrality language in the Department's Title IX regulations would be a 
violation of the plain language of the definition of sex discrimination 
in the regulations, which includes termination of pregnancy. Others 
noted that discrimination based on termination of pregnancy has been 
recognized by courts as sex discrimination and therefore argued that 
the proposed rule is contrary to civil rights laws and constitutional 
principles. Some noted that Title IX itself expressly does not permit 
penalties based on a woman's prior termination of pregnancy.
    Others, however, supported the incorporation of Title IX's 
religious exemptions and other Federal conscience statutory 
protections, arguing that they are consistent with abortion neutrality. 
Still others stated that discrimination on the basis of sex should not 
include termination of pregnancy at all, under existing law and the 
statutory text of Section 1557 and Title IX. Some submitted legislative 
history from Title IX (Senate Committee Report 100-64) to show that 
Congress intended to allow for abortion exemptions and exclusion of 
health insurance coverage for abortion services, and that Congress did 
not intend to require all hospitals to provide abortion services to the 
general public.\303\ But other commenters were critical of using 
legislative history to interpret a statute.
---------------------------------------------------------------------------

    \303\ See Senate Committee Report 100-64 (``This bill does not 
expand abortion rights. Religiously-controlled organizations will 
continue to be able to apply for, and receive, an exemption from 
Title IX requirements where compliance with those requirements would 
violate their religious tenets. For example, a religiously 
controlled university that wished to exclude insurance coverage of 
abortions from an otherwise comprehensive student health insurance 
policy, could seek a religious exemption. . . . Title IX covers only 
students and employees, and does not reach the public at large. 
Therefore, claims that the bill would require hospitals to provide 
abortion services to the general public are false.'').
---------------------------------------------------------------------------

    Response: This final rule does not remove the language from the 
Department's Title IX regulations that prohibits certain forms of 
discrimination on the basis of ``termination of pregnancy.'' \304\ 
However, as stated above in the section on discrimination on the basis 
of sex (subsection on ``termination of pregnancy''), the Title IX 
regulations are governed by the text of the Title IX statute and cannot 
be ``construed to require or prohibit any person, or public or private 
entity, to provide or pay for any benefit or service, including the use 
of facilities, related to an abortion'' (20 U.S.C. 1688). This final 
rule adds language to the Title IX regulations in order to make this 
clear. Although some commenters cite legislative history, the 
Department interprets the statutory text as written. Regardless, the 
Department does not believe there is tension between the legislative 
history and the text.
---------------------------------------------------------------------------

    \304\ See 45 CFR Sec.  86.21(c)(3), 86.40(b)(1), 86.40(b)(4), 
86.40(b)(5), 86.51(b)(2), 86.51(b)(6), 86.57(b), 86.57(c), 86.57(d).
---------------------------------------------------------------------------

    By adding the abortion neutrality language to the Title IX 
regulations, and stating in the Section 1557 regulation that it will be 
applied consistent with Title IX (including that language), this final 
rule ensures compliance with the rationale in Franciscan Alliance, 
where the Court rightly held that the Department's regulations 
forbidding discrimination on the basis of sex must be construed in 
light of the underlying text of Title IX, including abortion 
neutrality.
    Comment: Commenters stated that religious exemptions would make it 
harder to find healthcare in low provider areas, and that religious 
refusals also harm people who live in rural areas and must travel for 
an abortion. However, other commenters stated that this inclusion of 
various Federal conscience statutes and appropriations riders would 
ensure that healthcare providers who have conscience objections to 
abortion will feel welcome within the healthcare profession and will 
ease retention of healthcare providers already in the field.
    Some specifically stated their support for the Department's 
inclusion of the First Amendment, and for Department guidance that the 
proposed rule be construed consistent with religious liberty and free 
speech protections, to clarify that the interpretation, application, 
and enforcement of the proposed rule will be consistent with religious 
liberty. Other commenters stated that referring to the First Amendment 
rightly addresses the recent Supreme Court ruling in NIFLA v. 
Becerra.\305\ Commenters were concerned that the 2016 Rule would 
require a faith-based hospital to inform a patient about terminating 
her pregnancy in direct contravention of sincerely-held religious 
beliefs. This would be in conflict with NIFLA, where the Supreme Court 
held that such a mandate ``imposes an unduly burdensome disclosure 
requirement that will chill [] protected speech.'' \306\
---------------------------------------------------------------------------

    \305\ Natl. Inst. of Fam. and Life Advocates v. Becerra, 138 S. 
Ct. 2361 (2018).
    \306\ Id. at 2378.
---------------------------------------------------------------------------

    Response: The Department agrees that this final rule should be 
construed consistent with the First Amendment, conscience statutes, and 
all relevant statutes and appropriations riders relating to abortion, 
to the extent they remain in effect or applicable. Agency regulations 
are subject to the requirements of the First Amendment in any case, and 
the Department considers it appropriate to say so explicitly here. All 
the other laws referenced establish Congressionally required parameters 
that may apply to the Department's interpretation, implementation, and 
enforcement of Title IX and of this final rule.\307\ Commenters' policy 
objections to these statutory constraints are not a sufficient reason 
for the Department not to finalize this provision of the rule, which 
will ensure compliance with statutory requirements.
---------------------------------------------------------------------------

    \307\ To the extent the relevant provisions are found in an 
appropriations rider, they apply to the Department's interpretation, 
implementation, and enforcement of Title IX every year that they are 
enacted.
---------------------------------------------------------------------------

(3) Summary of Regulatory Changes
    For the reasons described herein and having considered the comments 
received, the Department finalizes changes to 45 CFR 86.2, 86.18, 
86.31, and 86.71 without change.

E. Conforming Amendments to CMS Regulations

    The Department proposed to make conforming amendments to ten 
regulations of CMS that prohibited discrimination on the basis of 
gender identity and/or sexual orientation in the establishment and 
operation of ACA exchanges; in the marketing and design practices of 
health insurance issuers under the ACA; in the administration, 
marketing, and enrollment practices of QHPs under the ACA; in 
beneficiary enrollment and the promotion and delivery of services under 
Medicaid; and in the delivery of services under the PACE program. These 
conforming changes were proposed, among other

[[Page 37219]]

reasons, to ensure uniformity across the Department with respect to 
regulations that cover many of the same entities.
(1) Generally
    Comment: Several commenters contended that the proposed rule 
exceeds the authority of the Director of OCR by attempting to remove 
references to gender identity and sexual orientation from all HHS 
healthcare regulations, including those issued by other HHS agencies 
unrelated to Section 1557, although the rule purported to be 
promulgated by authority from Section 1557 and other sections within 
the ACA. Commenters stated that the nondiscrimination protections 
proposed to be eliminated from CMS regulations are unrelated to Section 
1557 and its regulation, and that this elimination was proposed without 
sufficient legal, policy, or cost-benefit analyses as well as without 
knowledge of their potential impacts on various CMS programs and on 
LGBT patients, who (commenters said) may be discriminated against if 
these amendments are finalized. Also, commenters contend the conforming 
amendments, if implemented, would affect a wide range of healthcare 
programs, including private insurance and education programs. Some said 
they were unaware of any instances in which inclusion of sexual 
orientation as a basis for nondiscrimination in these CMS rules had 
been challenged or opposed. Others said that it was arbitrary to single 
out sexual orientation and gender identity for elimination, since some 
of the CMS regulations being amended also protect other characteristics 
not expressly enumerated by statute.
    Response: Both the proposed rule and this final rule are 
promulgated by the Secretary of Health and Human Services, who has 
jurisdiction over all Department regulations, including those falling 
under the jurisdiction of CMS. Moreover, each of the programs, 
activities, or entities in the proposed conforming amendments falls 
within the scope of Section 1557 as entities established under Title I 
of the ACA (for example, Exchanges \308\), entities administered under 
Title I of the ACA (for example, QHPs \309\) or health programs or 
activities receiving Federal financial assistance from the Department, 
including contracts of insurance.\310\ The ACA and certain Federal 
statutes identifying other protected categories provide the bases for 
the nondiscrimination clauses in health programs and activities funded 
or administered by HHS.\311\
---------------------------------------------------------------------------

    \308\ See Public Law 111-148, tit. I, subtit. D, Part II 
(Consumer Choices and Insurance Competition Through Health Benefit 
Exchanges).
    \309\ See Public Law 111-148, tit. I, subtit. D, Part I 
(Establishment of Qualified Health Plans).
    \310\ These include Medicare Advantage (Medicare Part C) plans, 
Medicare Part D plans, Medicaid Managed Care Organizations (MCOs), 
Medicaid Prepaid Inpatient Health Plans, (PIHPs), Medicaid Prepaid 
Ambulatory Health Plans (PAHPs), Medicaid Primary Care Case Managers 
(PCCMs), Primary Care Case Management Entities (PCCM-Es) and 
Programs for All-inclusive Care for the Elderly serving Medicare and 
Medicaid beneficiaries (PACE).
    \311\ See 42 CFR 438.3(d)(4), 438.206(c)(2), 440.262, 
460.98(a)(3), 460.112(a).
---------------------------------------------------------------------------

    The Department has reviewed the legal authorities underlying and 
cited in the nondiscrimination provisions of these CMS regulations and 
the explanations set forth in those rules. Some of them relied on or 
referenced Section 1557, some relied on different statutory provisions, 
and some are cross-referenced in the 2016 Rule. None of the statutory 
authorities underlying the CMS rules amended here explicitly references 
sexual orientation or gender identity. To the extent some of those 
regulations were promulgated based on broad authority to issue 
regulations,\312\ inclusion of nondiscrimination criteria that are not 
explicitly set forth in other applicable civil rights statutes may not 
necessarily exceed the Department's statutory authority. Nevertheless, 
the Department deems it appropriate to pursue a more uniform practice 
concerning nondiscrimination categories across programs and activities 
to which Section 1557 applies, and to do so consistent with the 
government's position concerning discrimination on the basis of sex.
---------------------------------------------------------------------------

    \312\ See, e.g., ACA Section 1321 (42 U.S.C. 18041(a)) 
(authorizing the Secretary to ``issue regulations setting standards 
. . . with respect to . . . the establishment and operation of 
Exchanges . . . the offering of qualified health plans through such 
Exchanges . . . and . . . such other requirements as the Secretary 
determines appropriate'').
---------------------------------------------------------------------------

    In addition, for several of the CMS final rules, their 
corresponding proposed rules had not mentioned adding sexual 
orientation and gender identity as nondiscrimination categories.\313\ 
Although some of those proposed rules also did not mention adding other 
common nondiscrimination categories, the Department now views the 
addition of sexual orientation and gender identity as nondiscrimination 
categories as having presented different legal and policy concerns from 
other categories. Notably, these nondiscrimination categories are not 
required by applicable law, appear in only a handful of federal 
antidiscrimination statutes, and have been the subject of extensive 
litigation, controversy, and confusion generally. Thus, the Department 
believes the addition of sexual orientation and gender identity as 
nondiscrimination categories in its regulations should have been 
submitted for public comment and, notwithstanding the lack of legal 
challenge to these CMS regulations on this basis, proposes conforming 
amendments for purposes of clarity, consistency, and uniformity.
---------------------------------------------------------------------------

    \313\ See, e.g., 78 FR 13406 (Feb. 27, 2013) (final rule) and 77 
FR 70584, 70585 (Nov. 26, 2012) (NPRM).
---------------------------------------------------------------------------

    Therefore, the Department deems it appropriate to finalize the 
proposed conforming amendments to these CMS regulations without change 
(with the exception of a technical correction described below), in 
order to create a more uniform practice concerning nondiscrimination on 
the basis of sex among HHS programs to which Section 1557 applies, and 
to avoid the possibility that there was insufficient statutory 
authority to impose gender identity or sexual orientation 
nondiscrimination prohibitions through those regulations.
    The Department is unaware of any data that would make cost-benefit 
analyses for these specific changes possible, and notes that the 
insertion of sexual orientation and gender identity language (repealed 
by these amendments) had already been implemented without any cost-
benefit analyses. These provisions are eliminated for reasons parallel 
to those put forth here and in the proposed rule with respect to proper 
statutory construction, legal authority, and the Department's policy 
goals.
    Comment: Some commenters supported proposals to remove the 
provisions prohibiting discrimination on the basis of sexual 
orientation specifically from regulations encompassed by the conforming 
amendments, in order to reflect current law and current regulatory 
policy. They reiterated the 2016 Rule's statement that there is no 
settled statutory law or court-settled law that discrimination on the 
basis of sexual orientation is legally included within the reach of 
Title IX.
    Response: For the reasons explained above, the Department agrees 
with the 2016 Rule's decision not to include an explicit prohibition on 
sexual orientation discrimination. Similarly, the Department concludes 
it is appropriate to remove such language through these conforming 
amendments.
(2) Delivery of Medicaid Services (42 CFR 438.3(d)(4), 438.206(c)(2), 
440.262)
    The Department proposed conforming amendments to multiple 
provisions in Title 42 of the Code of Federal Regulations that apply to 
delivery of

[[Page 37220]]

Medicaid services found in Sec.  438.3(d)(4) as applied to MCOs, PIHPs, 
PAHPs, PCCMs or PCCM entities, Sec.  438.206(c)(2) by MCOs, PIHPs, and 
PAHPs participating in State efforts, and Sec.  440.262 by the States 
themselves.
    Three of the provisions applied to Medicaid managed care. The 
Department proposed on June 1, 2015, and then finalized on May 6, 2016, 
a regulation with several nondiscrimination provisions applicable to 
fee-for-service medical assistance under Medicaid. 80 FR 31098 (June 1, 
2015) (Medicaid NPRM); 81 FR 27895 (May 6, 2016) (Medicaid final rule). 
The Department prohibited discrimination on the basis of ``sexual 
orientation and ``gender identity'' by MCOs, PIHPs, PAHPs, PCCMs, and 
PCCM-Es. 42 CFR 438.3(d)(4). And it required that certain of these 
entities promote access and/or delivery of services ``in a culturally 
competent manner to all enrollees . . . regardless of gender, sexual 
orientation or gender identity.'' 42 CFRSec.  438.206(c)(2).
    In promulgating these regulations, the Department relied on a 
statute granting general rulemaking authority to the Secretary of HHS 
to make and publish rules and regulations as may be necessary to 
efficiently administer Medicare and Medicaid. Section 1102 of the 
Social Security Act, 42 U.S.C. 1302(a). It also cited provisions of the 
Social Security Act that require Medicaid State plans for medical 
assistance to ``provide . . . such methods of administration . . . as 
are found by the Secretary to be necessary for the proper and efficient 
operation of the plan.'' Section 1902(a)(4) of the Social Security Act 
(42 U.S.C. 1396a(a)). And it cited Section 1902(a)(19) of the Social 
Security Act to justify additional methods of administration and new 
protected categories necessary for the proper operation of a State 
plan, for best interest of the beneficiaries, and for cultural 
competency. 81 FR 27895 (Medicaid final rule). None of these 
authorities prohibits discrimination on the basis of gender identity or 
sexual orientation.
    In reviewing Sec.  440.262, the Department became aware that in 
proposing a conforming amendment to the first sentence, the proposed 
rule is worded to delete the second sentence of that section, which 
reads ``These methods must ensure that beneficiaries have access to 
covered services that are delivered in a manner that meets their unique 
needs.'' The Department's intent was to make a conforming amendment to 
the first sentence of that section, but not to delete the second 
sentence. Therefore, the Department finalizes the conforming amendment 
to the first sentence of Sec.  440.262 without change, but makes a 
technical correction by finalizing the section to retain the second 
sentence of that section. In other words, the Department is finalizing 
the change to the first sentence of Sec.  440.262, but is not 
finalizing the deletion of the second sentence. In addition, the 
Department corrects the grammar of the second sentence, by changing the 
word ``meet'' to ``meets.'' Medicare's PACE Program Employees and 
Organizations (42 CFR 460.98(b)(3), 460.112(a)).
    The Department proposed conforming amendments to two provisions 
that apply to PACE, a health program receiving HHS Federal financial 
assistance that is therefore subject to Section 1557.
    In 2006, the Department promulgated a regulation administering PACE 
that prohibited discrimination on the basis of sexual orientation. 71 
FR 71244 (Dec. 8, 2006) (PACE final rule). Sexual orientation had not 
been identified as a protected category in the statute authorizing 
PACE. See Public Law 98-21, as amended (codified at 42 U.S.C. 1396u-4 
et seq.).
    In the PACE final rule, in response to a request from two 
commenters to ``broaden the list of categories under which the PACE 
Organization cannot discriminate to include sexual orientation,'' the 
Department agreed to amend 42 CFR 460.98(b)(3) to prohibit 
discrimination on the basis of sexual orientation for Medicare and 
Medicaid participants. The PACE proposed rule also prohibited 
discrimination on the basis of sexual orientation by employees and 
contractors of Medicare-participating PACE programs. 42 CFR 460.112(a) 
(providing that ``[e]ach participant has the right not to be 
discriminated against in the delivery of required PACE services based 
on race, ethnicity, national origin, religion, sex, age, sexual 
orientation, mental or physical disability, or source of payment'').
    Medicare Part A programs, including PACE, are subject to Title VI, 
Title IX, Section 504, and the Age Act. OCR has the authority to review 
recipient policies and procedures and certify that recipients of 
Federal financial assistance under Medicaid Part A comply with Title 
VI, Title IX, Section 504, and the Age Act, and their implementing 
regulations. CMS now directs applicants to an online attestation portal 
on the OCR website to assure compliance with those four civil rights 
statutes as well as with Section 1557.
    In reviewing Sec.  460.112(a), the Department became aware that in 
proposing a conforming amendment to the first two sentences, the 
proposed rule is worded to delete the remainder of the subsection. The 
Department's intent was to make a conforming amendment to the first two 
sentences of subsection (a), but not to delete its remainder. 
Therefore, the Department finalizes the conforming amendment to the 
first two sentences of Sec.  460.112(a) without change, but as a matter 
of technical correction does not finalize the deletion of the remaining 
sentences, and instead finalizes subsection (a) to retain the remainder 
of that subsection.
    Comment: Commenters expressed concern that PACE organizations would 
be allowed to discriminate against LGBTQ people under the proposed 
rule.
    Response: The Department believes that everyone should be treated 
with dignity and respect and given every protection afforded by the 
Constitution and the laws passed by Congress. None of the statutes 
authorizing the PACE regulations prohibits discrimination on the basis 
of gender identity or sexual orientation.
(3) General Standards for Exchanges, QHPs for Exchanges, and Health 
Plan Issuers (45 CFR 155.120(c)(ii)), 156.200(e))
    In 2012, the Department added ``sexual orientation'' and ``gender 
identity'' into certain regulations for the administration of the ACA 
by States, the Exchanges, and QHP issuers. 77 FR 18469 (Mar. 27, 2012) 
(``Administration of Exchanges final rule''). The Department cited 
Section 1321 of the ACA as its authority to add new nondiscrimination 
requirements. 76 FR at 41873, 41897 (July 15, 2011) (``Administration 
of Exchanges proposed rule'').
    Section 1321 is a general regulatory provision allowing HHS to 
regulate establishment, operation, and standards in Exchanges and for 
QHPs. It does not contain the words ``sexual orientation'' or ``gender 
identity,'' or specify that the authority to set standards includes the 
authority to specify classes protected from discriminatory conduct that 
are not otherwise specified in nondiscrimination statutes.\314\ 
Sections 155.120(c)(ii) and 156.200(e) were both later referenced in 
the preamble to the 2016 Rule as nondiscrimination provisions that the 
2016 Rule

[[Page 37221]]

``complements.'' See 81 FR 31376, 31428 (May 18, 2016). The 2016 Rule 
also provided that the States, Exchanges, and issuers are ``obligated 
to comply with both sets of requirements.'' Id.
---------------------------------------------------------------------------

    \314\ Section 1321(a) of the ACA provides that the Secretary of 
the Department of Health and Human Services ``shall, as soon as 
practicable after the date of enactment of this Act, issue 
regulations setting standards for meeting the requirements under 
this title, and the amendments made by this title, with respect to--
(A) the establishment and operation of Exchanges (including SHOP 
Exchanges); (B) the offering of qualified health plans through such 
Exchanges . . .'' 42 U.S.C. 18041(a)(1)(A)-(B).
---------------------------------------------------------------------------

(4) Guaranteed Coverage (45 CFR 147.104(e))
    In the February 27, 2013 edition of the Federal Register, the 
Department finalized a new regulation expanding the nondiscrimination 
provisions applicable to QHP issuers, including prohibitions on 
discrimination on the basis of gender identity and sexual orientation, 
citing Section 1321(a) of the ACA as the applicable statutory 
authority. 78 FR 13406 (Guaranteed Coverage final rule, codified at 45 
CFR 147.104(e)). Nevertheless, the language in the final rule 
prohibiting discrimination on the basis of gender identity and sexual 
orientation was not in the proposed rule. See 77 FR 70584, 70613 (Nov. 
26, 2012). It appears that the Department added this language in 
response to a commenter asking that HHS ``broaden[ ] [Sec.  147.104(e)] 
to apply to all forms of discrimination prohibited by the March 27, 
2012 Exchange final rule and section 1557 of the Affordable Care Act, 
such as discrimination based on age, disability, race, ethnicity, 
gender, and sexual orientation, not just discrimination against 
individuals with significant or high cost healthcare needs.'' 78 FR at 
13417.
    As legal authority, the Department also relied on Section 2702 of 
the Public Health Service Act, as amended by the Affordable Care Act, 
Public Law 111-148 (Mar. 23, 2010), which only required that any 
``individual or group market in a State must accept every employer and 
individual in the State that applies for such coverage.'' There was no 
explicit reference to categories of individuals protected by 
nondiscrimination laws.
    The rule administered the ACA's guarantee of coverage in the group 
and individual health insurance markets. See 42 U.S.C. 300gg-1. The 
Department attached the sexual orientation and gender identity 
nondiscrimination provision as part of the requirement for issuers to 
accept every employer and individual in the State who applies for 
coverage, subject to a few exceptions. Section 300gg-1 does not specify 
nondiscrimination criteria, including sexual orientation or gender 
identity.
    The rule applied not only to the health plan issuer but also to its 
``officials, employees, agents and representatives.'' 45 CFR 
147.104(e). It prohibited these covered entities from discriminating 
based on a variety of bases, including an individual's sex, sexual 
orientation, or gender identity. Id. In the Guaranteed Coverage final 
rule, the Department justified the 45 CFR 147.104(e) nondiscrimination 
provision on the ground that it ``ensures consistency with . . . the 
non-discrimination standards applicable to QHPs under Sec.  
156.200(e),'' to which sexual orientation and gender identity 
provisions had previously been added (as described above). 78 FR at 
13426. The Guaranteed Coverage final rule was also referenced in the 
preamble to the 2016 Rule, which described it as both ``independent 
of''' and ``complement[ary]'' to Section 1557. 81 FR at 31428.\315\
---------------------------------------------------------------------------

    \315\ See 81 FR 31376, 31428 (May 18, 2016) (``We noted that 
this section [92.207] is independent of, but complements, the 
nondiscrimination provisions that apply to . . . issuers of 
qualified health plans under other Departmental regulations, and 
that entities covered under those provisions and Section 1557 are 
obligated to comply with both sets of requirements.'').
---------------------------------------------------------------------------

    The Department notes that this amendment to the Guaranteed Coverage 
final rule does not negate the rule's requirement that health insurance 
issuers offering group or individual coverage ``must offer to any 
individual or employer in the State all products that are approved for 
sale in the applicable market, and must accept any individual or 
employer that applies for any of those products.'' 45 CFR 147.104(a). 
That requirement applies independent of the explicit nondiscrimination 
categories set forth in Sec.  147.104(a).
(5) Enrollment in QHPs Through Exchanges by Agents or Brokers (45 CFR 
155.220(j)(2)(i))
    In the December 2, 2015 edition of the Federal Register, the 
Department proposed a rule that would prohibit agents or brokers from 
discriminating on the basis of sexual orientation and gender identity 
when assisting individuals and employers in applying for or enrolling 
in QHPs sold through a Federally-facilitated Exchange. 80 FR 75488. 
This proposed rule was adopted without change in March of the following 
year. 81 FR 12204 (Mar. 8, 2016) (codified at 45 CFR 155.220(j)(2)(i)). 
The final rule also stated that covered entities must comply with 
``certain other Federal civil rights laws [that] impose non-
discrimination requirements,'' such as Section 1557 of the ACA.\316\ 
The final rule further directed issuers who seek certification of one 
or more QHPs to the OCR website for information about the Section 1557 
NPRM.\317\
---------------------------------------------------------------------------

    \316\ 81 FR 12312 (``Issuers that receive Federal financial 
assistance, including in connection with offering a QHP on an 
Exchange, are subject to Title VI of the Civil Rights Act of 1964, 
the Age Discrimination Act of 1975, section 504 of the 
Rehabilitation Act of 1973, and section 1557 of the Affordable Care 
Act'').
    \317\ Id.
---------------------------------------------------------------------------

(6) Enrollment in QHPs and Exchanges by QHP Issuers (45 CFR 
156.1230(b)(2))
    In the September 6, 2016 edition of the Federal Register, the 
Department proposed a gender identity and sexual orientation 
nondiscrimination provision to rules governing marketing or conduct by 
issuers of individual market QHPs sold through the Federally-
facilitated Exchanges in the direct enrollment of individuals in a 
manner that is considered to be through the Exchange. 81 FR 61456. The 
rule proposed that QHP issuers would be required to ``refrain from 
marketing or conduct that is misleading . . . coercive, or 
discriminates based on race, color, national origin, disability, age, 
sex, gender identity, or sexual orientation.'' Id. The proposed 
language was finalized that December. 81 FR 94058 (Dec. 22, 2016) 
(codified at 45 CFR 156.1230(b)(3), since redesignated as 45 CFR 
156.1230(b)(2) (see 84 FR 17454, 17568 (Apr. 25, 2019, effective June 
24, 2019))). The Department cited Section 1321 of the ACA as its 
authority to promulgate the nondiscrimination provision. The authority 
section of the regulation also encompasses Section 1311 of the ACA, 
which prohibits QHPs from ``employ[ing] marketing practices or benefit 
designs that have the effect of discouraging the enrollment in such 
plan by individuals with significant health needs.'' \318\
---------------------------------------------------------------------------

    \318\ 42 U.S.C. 18031.
---------------------------------------------------------------------------

(7) Summary of Regulatory Changes
    The Department finalizes without change the proposed conforming 
amendments at 42 CFR 438.3(d), 438.206(c)(2), and 460.98(b)(3), and 45 
CFRSec.  147.104(e), 155.120(c)(ii), 155.220(j)(2)(i), and 156.200(e). 
It finalizes the proposed conforming amendment of the first sentence of 
Sec.  440.262 without change, but retains the second sentence of that 
section without deleting it, and makes one grammatical correction to 
the second sentence. It finalizes the proposed conforming amendment of 
the first two sentences of Sec.  460.112(a) without change, but retains 
the remainder of that subsection without deleting it.
    With respect to 45 CFR 156.1230(b)(2), the proposed rule indicated 
it would amend Sec.  156.1230(b)(3), but effective June 24, 2019, Sec.  
156.1230(b)(3) was redesignated as Sec.  156.1230(b)(2). See 84 FR at 
17568.

[[Page 37222]]

Therefore, this rule finalizes the change at the redesignated location 
of the text at Sec.  156.1230(b)(2).

IV. Regulatory Impact Analysis

    The Department has examined the impacts of this final rule as 
required by Executive Order 12866 on Regulatory Planning and Review, 58 
FR 51735 (Oct. 4, 1993); Executive Order 13563 on Improving Regulation 
and Regulatory Review, 76 FR 3821 (Jan. 21, 2011); Executive Order 
13132 on Federalism, 64 FR 43255 (Aug. 4, 1999); Executive Order 13175 
on Tribal Consultation, 65 FR 67249 (Nov. 6, 2000); Executive Order 
13771 on Reducing Regulation and Controlling Costs, 82 FR 9339 (Jan. 
30, 2017); the Congressional Review Act (Pub. L. 104-121, sec. 251, 110 
Stat. 847 (Mar. 29, 1996)); the Unfunded Mandates Reform Act of 1995, 
Public Law 104-4, 109 Stat. 48 (Mar. 22, 1995); the Regulatory 
Flexibility Act (Pub. L. 96-354, 94 Stat. 1164 (Sept. 19, 1980); 
Executive Order 13272 on Proper Consideration of Small Entities in 
Agency Rulemaking, 67 FR 53461 (Aug. 16, 2002); Executive Order 12250, 
Leadership and Coordination of Nondiscrimination Laws, 45 FR 72995 
(Nov. 2, 1980), and the Paperwork Reduction Act of 1995, 44 U.S.C. 
3501, et seq.

A. Executive Orders 12866 and Related Executive Orders on Regulatory 
Review

    Executive Order 12866 directs agencies to assess all costs and 
benefits of available regulatory alternatives and, if regulation is 
necessary, to select regulatory approaches that maximize net benefits 
(including potential economic, environmental, public health and safety 
effects; distributive impacts; and equity). Executive Order 13563 is 
supplemental to Executive Order 12866 and reaffirms the principles, 
structures, and definitions governing regulatory review established 
there.
    As discussed below, the Department has estimated that this final 
rule will have a beneficial effect on the economy greater than $100 
million in at least one year. Thus, it has been concluded that this 
final rule is economically significant. It has, therefore, been 
determined that this final rule is a ``significant regulatory action'' 
under Executive Order 12866 and, accordingly, the Office of Management 
and Budget (OMB) has reviewed this final rule.
    The executive summary at the beginning of this preamble contains a 
summary of this final rule in its summary of major provisions, and 
describes the reasons it is needed in describing the purpose of this 
final rule.
(1) Consideration of Regulatory Alternatives
    The Department carefully considered several alternatives, including 
the option of not pursuing any regulatory changes, but rejected that 
approach for several reasons.
    First, not pursuing any regulatory changes would be inconsistent 
with the Administration's policies of appropriately reducing regulatory 
burden, in general, with respect to individuals, businesses and others, 
and from the ACA specifically.
    Second, not pursuing any regulatory change would be inconsistent 
with various court rulings that have rejected or undermined the legal 
positions taken by the Department in the 2016 Rule. It would not, for 
example, ensure that the text of the Code of Federal Regulations 
accurately reflects the vacatur of the provisions including gender 
identity and termination of pregnancy as prohibited grounds of 
discrimination on the basis of sex. It also would not account for the 
decision of the Northern District of Illinois that the ``plain and 
unambiguous'' statutory text of Section 1557 indicated that a plaintiff 
could only use the enforcement mechanism of the underlying civil rights 
statute that corresponds to its claim. Briscoe v. Health Care Serv. 
Corp., 281 F. Supp. 3d 725, 737-38 (N.D. Ill. 2017) (dismissing a 
Section 1557 claim for sex discrimination using a disparate impact 
standard, because plaintiffs cannot bring disparate impact claims under 
Title IX); accord Galuten on Behalf of Estate of Galuten v. Williamson 
Med. Ctr., 2019 WL 1546940, at * (M.D. Tenn. Apr. 9, 2019); E.S. by and 
through R.S. v. Regence BlueShield, 2019 WL 4566053, at *4 (W.D. Wash. 
Sept. 24, 2018); but see Rumble v. Fairview Health Servs., No. 14-cv-
2037 (SRN/FLN) (D. Minn. Mar. 16, 2017) (declining to determine the 
specific standard on a motion to dismiss and rejecting the implication 
that Congress meant to create a ``new anti-discrimination framework 
completely `unbound by the jurisdiction of the four referenced 
statutes,' '' but concluding Congress ``likely'' intended a single 
standard to avoid ``patently absurd consequences''). In addition, it 
would fail to account for the decisions of Federal courts in 
California, New York, and Iowa that did not recognize disparate impact 
claims for sex discrimination under Section 1557, because such claims 
are not cognizable under Title IX. See Condry v. UnitedHealth Group, 
No. 3:17-cf-00183-VC (N.D. Calif. June 27, 2018) (Slip. Op. at 7); 
Weinreb v. Xerox Business Services, 323 F. Supp. 3d 501, 521 (S.D.N.Y. 
2018); York v. Wellmark, Inc., No. 4:16-cv-00627-RGE-CFB, Slip. Op. at 
*30 (S.D. Iowa Sep. 6, 2017). A court in Pennsylvania similarly 
indicated that there is no disparate impact claim for discrimination on 
the basis of race under Section 1557, because such claims are 
unavailable under Title VI. See Southeastern Pennsylvania v. Gilead, 
102 F. Supp. 3d 688 (E.D. Pa. 2015); but see Callum v. CVS Corp., 137 
F. Supp. 3d 817 (D.S.C. 2015).
    Third, the Department believes that the status quo would not 
address, much less remedy, public confusion regarding complainants' 
rights and covered entities' legal obligations. The Department believes 
that revisiting the rule will address inconsistences between the 
Department's underlying regulations and the regulations and actions 
taken by other components of the Government. As applied to sex 
discrimination claims, the 2016 Rule set forth a definition of 
discrimination on the basis of sex under Section 1557 implementing 
Title IX that varied from the practice of other Departments. If the 
Department uses interpretations of Title IX that differ from other 
Departments and from the legal interpretation of the U.S. Government as 
set forth by the Department of Justice, it could lead to inconsistent 
outcomes across complainants and covered entities, with the problem 
especially acute in cases involving a single covered entity being 
investigated with respect to the same allegations by multiple 
Departments that come to different conclusions on effectively the same 
question.
    The Department also considered adding ``gender identity'' and 
``sexual orientation'' to a definition of ``sex'' or ``on the basis of 
sex'' under Title IX. The Department concluded it is inappropriate to 
do so in light of the ordinary public meaning of discrimination on the 
basis of sex under Title IX. This final rule will also significantly 
restore the ability of States to establish policies in this area, based 
on their weighing of the competing interests at stake. As a policy 
matter, the Department believes State and local entities are better 
equipped to address with sensitivity issues of gender dysphoria, sexual 
orientation, and any competing privacy interests, especially when young 
children or intimate settings are involved. The Department's position 
will not bar covered entities from choosing to grant protections on the 
basis of sexual orientation and gender identity that do not conflict 
with any other Federal law. The Department has also determined that 
economic incentives, performance objectives, or

[[Page 37223]]

other related forms of regulation are neither appropriate nor feasible 
solutions to the problems to be solved.
    The Department also considered simply repealing the 2016 Rule in 
toto and not issuing a replacement regulation. Such an approach would 
be consistent with the Administration's goals of reducing the 
regulatory burden on covered entities, and is allowed under Section 
1557, as that provision does not require the Department to issue 
implementing regulations. However, the Department is committed to 
vigorous enforcement of civil rights and nondiscrimination laws as 
directed by Congress, and considers it worthwhile to set forth that 
commitment in a Section 1557 regulation which takes the position that 
the Department will use the enforcement mechanisms available under the 
statutes cited in Section 1557 and their underlying regulations. 
Additionally, the Department believes that certain provisions--such as 
those addressing the assurance of compliance with Section 1557, 
effective communication and accessibility for individuals with 
disabilities, and certain language access services--address 
applications of civil rights laws without the statutory or legal 
conflicts, or excessive regulatory burdens, entailed by other 
provisions of the current Rule.
    The Department also considered retaining the provision on visual 
standards for video remote interpreting services for LEP individuals. 
However, the burden of requiring covered entities to provide video 
technology training and utilize expensive software does not appear to 
be justified based on minimal benefit to language speakers who can 
effectively communicate when there is clear audio transmission through 
the remote interpreting service.
    Accordingly, the Department believes it is appropriate to clarify 
how OCR will enforce the ACA's nondiscrimination protections by 
replacing the 2016 Rule with regulatory provisions (1) applying the 
enforcement mechanisms provided under the civil rights statutes and 
related implementing regulations cited in Section 1557 to the contexts 
identified in Section 1557, (2) vesting enforcement authority under 
Section 1557 with the Director of the Office for Civil Rights, and (3) 
specifying how Section 1557 enforcement shall interact with existing 
laws--while retaining certain language and disability access provisions 
and the assurances provision.
    With respect to the requirement that covered entities provide 
nondiscrimination notices and taglines, the Department considered 
keeping the requirement but limiting the frequency of required mailings 
to one per year to each person served by the covered entity. To 
estimate the cost of this option, the Department adopted the base 
assumptions described in this Regulatory Impact Analysis regarding the 
number of covered entities and the average unit cost associated with 
the low-end and high-end costs of a notice and taglines mailing 
(materials, postage, and labor).\319\ The Department adjusted the 
volume of mailings based on the average number of individuals served by 
each covered entity.\320\ The Department assumed the same covered 
entity compliance rate for the insurance industry as under this 
Regulatory Impact Analysis but assumed an increased compliance rate for 
non-insurers (assuming 30% instead of 10%) to reflect that more 
entities would likely comply with the requirements if the burden were 
to be significantly reduced to one mailing per customer/patient per 
year. Based on this method, the estimated total cost of this 
alternative is approximately $63 million per year. Although this option 
poses a significantly reduced burden, the Department believes the costs 
under this alternative still outweigh the benefits because such mass 
multi-language taglines mailings would still be received overwhelmingly 
by English speakers and because the requirement to issue 
nondiscrimination notices would be largely duplicative of 
nondiscrimination notice requirements that already exist under Section 
1557's underlying civil rights regulations.\321\
---------------------------------------------------------------------------

    \319\ The average of the low ($0.035) and high ($0.32) unit 
costs is $0.18 per notice and tagline mailing.
    \320\ The estimated volume is expected to vary based on covered 
entity type. For instance, each of the 180 health insurance issuers 
serve 685,138 individuals on average, based on the number of insured 
individuals (123 million), which equates to 685,138 mailings per 
issuer. Each of the 185,649 physicians' offices serve 1,703 
individuals, based on the average number of individuals (316 
million) associated with 990 million physicians visits. On average, 
each covered entity serves about 3,000 persons per entity, which 
equates to 3,000 mailings per entity, based on 820 million persons 
served by 275,002 covered entities.
    \321\ See 45 CFR 80.6(d) (Title VI), 84.8 (Section 504), 86.9 
(Title IX), 91.32 (Age Act).
---------------------------------------------------------------------------

(2) Considerations for Cost-Effective Design
    In this final rule, the Department replaces much of the 2016 Rule, 
to significantly reduce regulatory burdens and to return to the 
longstanding understanding of the underlying nondiscrimination 
obligations imposed by the civil rights laws referenced in Section 
1557.
    In the preamble to the 2016 Rule, the Department observed that 
there were pre-existing requirements under Federal civil rights laws 
that, ``except in the area of sex discrimination,'' applied to a large 
percentage of entities covered by the 2016 Rule. 81 FR at 31446. Thus, 
in the 2016 Rule the Department concluded it did not expect covered 
entities to undertake additional costs with respect to that rule's 
prohibitions on discrimination on the basis of race, color, national 
origin, age, or disability, ``except with respect to the voluntary 
development of a language access plan.'' Id.
    By finalizing this rule without the 2016 Rule's definition of sex 
discrimination and eliminating the requirements regarding notices, 
taglines, and visual standards in video remote interpreting services 
for LEP individuals, language access plans, and duplicative grievance 
procedures, the final rule also allows covered entities the freedom to 
order their operations more efficiently, more flexibly, and in a more 
cost-effective manner.
    Accordingly, returning to the familiar longstanding requirements is 
a cost-effective way of (1) removing the unjustified burdens imposed by 
the 2016 Rule; (2) reducing confusion among the public and covered 
entities; (3) promoting consistent, predictable, and cost-effective 
enforcement; and (4) creating space for innovation in the provision of 
compliant services by covered entities (including flexible and 
innovative language access practices and technology), while faithfully 
and vigorously enforcing Section 1557's civil rights protections.
(3) Methodology for Cost-Benefit Analysis
    For purposes of this Regulatory Impact Analysis (RIA), the final 
rule adopts the list of covered entities and other cost assumptions 
identified in the 2016 Rule's RIA and that of the 2019 proposed rule. 
The use of assumptions from the 2016 Rule in the present RIA, however, 
does not mean that the Department adopts those assumptions in any 
respect beyond the purpose of estimating (1) the number of covered 
entities that would be relieved of burden, and (2) cost relief. For 
example, the 2016 Rule based several cost estimates on an expansive 
definition of Federal financial assistance, which significantly 
impacted the number of covered entities currently burdened by the 2016 
Rule; thus, it is appropriate to use that definition for estimating 
cost relief. Such use, however, should not be interpreted as an 
endorsement or

[[Page 37224]]

acceptance of the definition for any other purpose.
    The Department also does not ``carry over'' every assumption from 
the 2016 Rule for this final rule's RIA calculation. Most notably, the 
Department no longer considers its prior estimates of costs imposed due 
to the 2016 Rule's taglines requirement to be accurate or valid, and 
provides a more thorough and accurate estimate for purposes of this 
final rule.
    Cost savings result from the repeal of (1) the provision on the 
incentive for covered entities to develop language access plans and (2) 
the provisions on notice and taglines. In addition, the Department 
quantitatively analyzes and monetizes the impact that this final rule 
may have on covered entities' voluntary actions to re-train their 
employees on, and adopt policies and procedures to implement, the legal 
requirements of this final rule. The Department analyzes the remaining 
benefits and burdens qualitatively because of the uncertainty inherent 
in predicting other concrete actions that such a diverse scope of 
covered entities might take in response to this final rule.
    The Department also considered the public comments submitted in 
response to the proposed rule. The Department appreciates the 
information and various perspectives provided in those comments, which 
are summarized below and for which responses are provided.\322\
---------------------------------------------------------------------------

    \322\ The population, labor, and similar statistical data used 
in this RIA are also not changed from those used in the RIA in the 
proposed rule, because updating that data from the time of the 
proposed rule in June 2019 to the time of the publication of this 
final rule would not lead to substantive changes in the analysis.
---------------------------------------------------------------------------

(4) Cost-Benefit Analysis
a. Overview
    In the 2016 Rule, the Department estimated $942 million \323\ in 
costs (over five years) due to impacts on personnel training and 
familiarization, enforcement, posting of nondiscrimination notices and 
taglines, and revisions in covered entity policies and procedures. 81 
FR 31446, and 31458-59 (at Table 5). As stated earlier, the Department 
estimated in the 2016 Rule that these costs would arise primarily from 
requirements imposed by the 2016 Rule with which covered entities were 
not already complying.\324\ The Department specifically identified the 
2016 Rule's interpretation of sex discrimination to cover gender 
identity and sex stereotyping,\325\ and the 2016 Rule's consideration 
of language access plans for compliance purposes, as provisions 
triggering the imposition of new costs.\326\ See 81 FR 31459--Table 5.
---------------------------------------------------------------------------

    \323\ Throughout the regulatory impact analysis in the 2016 
Rule, the 2016 estimates used 2014 dollars unless otherwise noted.
    \324\ 81 FR 31446 (``to the extent that certain actions are 
required under the final rule where the same actions are already 
required by prior existing civil rights regulations, we assume that 
the actions are already taking place and thus that they are not a 
burden imposed by the rule'').
    \325\ 81 FR 31455 (``Although a large number of providers may 
already be subject to state laws or institutional policies that 
prohibit discrimination on the basis of sex in the provision of 
health services, the clarification of the prohibition of sex 
discrimination in this regulation, particularly as it relates to 
discrimination on the basis of sex stereotyping and gender identity, 
may be new.'').
    \326\ Although the 2016 Rule did not require covered entities to 
develop a language access plan, the Rule stated that the development 
and implementation of a language access plan is a factor the 
Director ``shall'' take into account when evaluating whether an 
entity is in compliance with Section 1557. 45 CFR 92.201(b)(2). 
Therefore, the Department anticipated that 50% of covered entities 
would be induced to develop and implement a language access plan 
following issuance of the 2016 Rule. 81 FR 31454.
---------------------------------------------------------------------------

    In 2016, the Department estimated that the 2016 Rule's 
nondiscrimination notice requirement would impose approximately $3.6 
million in one-time additional costs on covered entities. 81 FR 31469. 
Regarding these requirements, the Department stated: ``We are uncertain 
of the exact volume of taglines that will be printed or posted, but we 
estimate that covered entities will print and post the same number of 
taglines as notices and therefore the costs would be comparable to the 
costs for printing and disseminating the notice, or $3.6 million.'' 81 
FR 31469. Thus, the total notice and taglines cost was estimated at 
$7.2 million in the first year and was predicted to go down to zero 
after year one, despite the regulatory requirement for covered entities 
to provide notices and taglines to beneficiaries, enrollees, and 
applicants by appending notices and taglines to all ``significant 
publications and significant communications'' larger than postcards or 
small brochures. Compare 81 FR 31458 (Table 5), with 45 CFR 92.8.
    For reasons explained more fully below, the 2016 estimate of $7.2 
million in one-time costs stemming from the notice and taglines 
requirement was a gross underestimation, and thus this final rule's 
elimination of those requirements would generate a large economic 
benefit of approximately $2.9 billion over five years on the repeal of 
the notice and taglines provision.
    Table 1 shows the expected cost savings from the repeal of the 
notice and taglines provision and the quantified costs to firms for 
training and revising procedures and policies.

                Table 1--Accounting Table of Economic Benefits and Costs of All Finalized Changes
                                                  [In millions]
----------------------------------------------------------------------------------------------------------------
                                       Year 1       Year 2       Year 3       Year 4       Year 5       Total
----------------------------------------------------------------------------------------------------------------
Savings:
    Total (undiscounted)..........         $643         $614         $585         $556         $528       $2,926
    Total (3%)....................          624          579          536          494          455        2,688
    Total (7%)....................          601          536          478          425          376        2,416
Costs--Quantified Costs:
    Total (undiscounted)..........          276            0            0            0            0          276
    Total (3%)....................          269            0            0            0            0          269
    Total (7%)....................          259            0            0            0            0          259
                                   -----------------------------------------------------------------------------
            Net Total               ...........  ...........  ...........  ...........  ...........        2,650
             (undiscounted [bond]                                                                    $2,319 (3%)
             3% [bond] 7%)........                                                                   $2,157 (7%)
----------------------------------------------------------------------------------------------------------------
Non-quantified benefits and costs are described below.


[[Page 37225]]

b. Generally Applicable Benefits and Burdens
i. Simplification and Flexibility
    This final rule would result in other tangible benefits for covered 
entities. First, because this final rule is simpler and more easily 
administrable, it would be less likely that covered entities will need 
to pay for legal advice or otherwise expend organizational resources to 
understand their obligations under Section 1557, either in general or 
with respect to any particular situation that arises. Second, this 
final rule reduces 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 controversy 
over the meaning of Section 1557. The Department solicited comment 
regarding the nature and magnitude of such ongoing costs incurred by 
covered entities, and below the Department summarizes and responds to 
significant comments regarding the regulatory impact of changes to the 
notice and taglines requirements.
    This final rule will also carry intangible benefits, including that 
covered entities would enjoy increased freedom to adapt their Section 
1557 compliance programs to most efficiently address their particular 
needs, benefiting both covered entities and individuals. The value of 
knowledge of civil rights is difficult to quantify. Covered entities 
will be free under the final rule to implement policies and procedures 
that comply with Federal civil rights laws in creative, effective, and 
efficient ways that are tailored to the covered entities and the 
communities that they serve.
ii. Policies and Procedures Concerning Gender Identity
    In the proposed rule, the Department anticipated that the 2016 Rule 
likely induced many covered entities to conform their policies and 
operations to reflect gender identity as a protected category under 
Title IX. The Department requested and received public comments on the 
possible benefits and burdens related to changes in the proposed rule.
    Comment: Many commenters contended that the proposed rule would 
lead covered entities to remove protections from transgender 
individuals in their policies and procedures. Commenters contended that 
these changes would lead to a wide range of burdensome results, 
including discrimination on the basis of gender identity and resulting 
negative health consequences, increased costs for treatment of such 
conditions, cost-shifting to transgender individuals, and increased 
burdens on the public health system due to the changes. Commenters also 
contended that similar results would occur from the Department's 
decision not to include sexual orientation nondiscrimination provisions 
in the proposed rule.
    Response: The Department does not believe that this final rule will 
lead to significant burdens on entities due to changes to the gender 
identity language from the 2016 Rule, nor that the commenters have 
identified sufficient data to show that these negative consequences 
will occur or the extent to which they will occur. In December 2016, 
the Franciscan Alliance court preliminarily enjoined the gender 
identity provisions of the 2016 Rule on a nationwide basis, and more 
recently the court vacated those provisions. Consequently, this final 
rule's revisions to the provisions addressing gender identity do not 
change covered entities' obligations. Therefore, even though some 
entities may have changed their policies and procedures at the outset 
of the 2016 Rule, the Department concludes that because the gender 
identity provisions of the 2016 Rule have been vacated prior to this 
rule being finalized, it is even less likely than at the time of the 
proposed rule that this final rule will lead to changes in policies and 
procedures concerning gender identity. In addition, as explained above, 
the 2016 Rule did not include language prohibiting discrimination on 
the basis of sexual orientation status standing alone as a form of sex 
discrimination. The Department therefore does not anticipate any 
material change to covered entities' policies concerning sexual 
orientation as a result of this final rule.
    In addition, it is worth noting that many covered entities are 
located in jurisdictions that prohibit sexual orientation and gender 
identity discrimination under State or local laws. Therefore, such 
entities are unlikely to change their policies, training, or grievance 
procedures concerning gender identity as a result of this final rule. 
Moreover, nothing in this final rule, or in the court decisions, 
prohibits entities from maintaining gender identity nondiscrimination 
policies and procedures voluntarily, and the Department believes some 
covered entities will continue to do so.
    If some entities change their policies and procedures based on this 
final rule, such a reversion may entail amending organizational 
nondiscrimination policies and training materials, and communicating 
those changes to employees. The process of voluntarily reverting to 
previous practices would likely result in net cost savings to covered 
entities. Otherwise these entities likely would not take such action. 
In addition, the Department believes that, if this final rule led to 
covered entities changing policies and procedures, some covered 
entities may no longer incur costs associated with processing 
grievances related to gender identity discrimination under Title IX, 
because such claims will not be cognizable under this final rule.
    The Department, however, is uncertain as to the total number of 
covered entities that will change their policies and grievance 
processes to reflect the changes in this final rule. The reasons for 
this uncertainty include, as stated above, the fact that such changes 
would only be indirectly attributable to this rule, not caused by this 
rule, because previous court rulings have negated the gender identity 
provisions from the 2016 Rule for over three years, and this rule has 
no effect on State and local gender identity protections. The 
Department is not aware of data about how many entities might change 
their policies for these indirect reasons.
    Similarly, the Department also lacks the data necessary to estimate 
the number of individuals who currently benefit from covered entities' 
policies governing discrimination on the basis of gender identity who 
would no longer receive those benefits after publication of this rule--
nor data to estimate how many of those individuals may experience the 
workplace and health-related negative consequences that many commenters 
contend will result from this final rule. The Department similarly 
lacks data to estimate what greater public health costs, cost-shifting, 
and expenses may result from entities changing their nondiscrimination 
policies and procedures after promulgation of this rule. The Department 
reiterates that it believes these effects will be minimal, again due to 
the fact that gender identity provisions were vacated from the 2016 
Rule by the Franciscan Alliance court before this rulemaking was 
finalized.
c. Baseline Assumptions
    The following discussion identifies the economic baselines from 
which the Department measures the expected costs and benefits of this 
final rule. Its baselines includes the cost estimates in the 2016 Rule, 
in addition to data it has gathered since the 2016 Rule was 
implemented, as described in more detail below. The Department also 
considered public comments, and

[[Page 37226]]

responds to significant comments in this discussion.
    Key assumptions track those set forth in the proposed rule and 
include the following: (1) The 2016 Rule triggered significant activity 
on the part of covered entities, generating both costs and benefits; 
(2) under the December 2016 nationwide preliminary injunction in 
Franciscan Alliance, and the October 2019 final judgment in that case, 
the gender identity and termination of pregnancy provisions of the 2016 
Rule have been unenforceable and are now absent from the 2016 Rule, 
without regard to whether this rule is finalized; (3) covered entities 
were already generally complying with civil rights laws and related 
regulations that were in effect before the 2016 Rule, and so this final 
rule generally does not impose any new burden beyond those imposed 
prior to the issuance of the 2016 Rule; \327\ (4) the projected costs 
from the 2016 Rule for years 1 and 2 have been incurred, and the 
projected costs from years 3, 4, and 5 have not been incurred; (5) 
repeal of the 2016 Rule's notice and taglines requirements does not 
affect notice or taglines requirements required by CMS guidance or 
regulations that do not reference, rely on, or depend upon the taglines 
requirements of the 2016 Rule; (6) a relatively small percentage of 
physicians and hospitals currently append notices and taglines to 
billing statements sent to patients, while all insurance companies 
append notices and taglines to their explanations of benefits 
statements; and (7) covered employers are more likely to train 
employees who interact with the public than those who do not.
---------------------------------------------------------------------------

    \327\ OMB Circular A-4 discusses the practice whereby an RIA for 
a rule codifying a policy may include the impacts of that policy, 
even if the effects follow directly from an action by another branch 
of the federal government. The Circular notes that: ``In some cases, 
substantial portions of a rule may simply restate statutory 
requirements that would be self-implementing, even in the absence of 
the regulatory action. In these cases, you should use a pre-statute 
baseline. If you are able to separate out those areas where the 
agency has discretion, you may also use a post-statute baseline to 
evaluate the discretionary elements of the action.'' Although a 
baseline established prior to the Franciscan Alliance court's 
December 2016 and October 2019 orders would be considered analogous 
to the pre-statute baseline discussed in Circular A-4, given the 
existence of the RIA for the 2016 Rule, an assessment relative to a 
pre-Franciscan Alliance baseline would add little to the body of 
relevant analysis, and the longstanding duration of the court orders 
contributes to a lack of new data pertaining to certain alleged 
effects of language falling under those orders. For these reasons, 
the baseline established after December 2016, which isolates the 
effects most directly attributable to certain elements of this 
rule's finalization, is emphasized throughout the relevant parts of 
this RIA.
---------------------------------------------------------------------------

d. Covered Entities
i. Entities Covered by Section 1557
    The 2016 Rule and this final rule apply to any entity that has a 
health program or activity, any part of which receives Federal 
financial assistance from the Department, any program or activity 
administered by the Department under Title I of the ACA, or any program 
or activity administered by an entity established under such Title. 
Covered entities under the 2016 Rule's definition \328\ include the 
following:
---------------------------------------------------------------------------

    \328\ As noted above, we use the list and number of covered 
entities and other figures from the 2016 Rule's RIA in this RIA for 
the sake of consistency and convenience, but such use does not mean 
that we adopt or accept any of the underlying analysis, definitions, 
or assumptions from the 2016 Rule's RIA for any other purpose 
related to this final rule.
---------------------------------------------------------------------------

(A) Entities With a Health Program or Activity, Any Part of Which 
Receives Federal Financial Assistance From the Department
    The RIA for the 2016 Rule stated that the Department, through 
agencies such as the Health Resources and Services Administration 
(HRSA), the Substance Abuse and Mental Health Services Administration 
(SAMHSA), the Centers for Disease Control and Prevention (CDC), and the 
Centers for Medicare & Medicaid Services (CMS), provides Federal 
financial assistance through various mechanisms to health programs or 
activities of local governments, State governments, and the private 
sector. An entity may receive Federal financial assistance from more 
than one component in the Department. For instance, Federally qualified 
health centers receive Federal financial assistance from CMS by 
participating in Medicaid programs and may also receive Federal 
financial assistance from HRSA through grant awards. Because more than 
one funding stream may provide Federal financial assistance to an 
entity, the examples we provide may not uniquely capture entities that 
receive Federal financial assistance from only one component of the 
Department. Under the 2016 Rule, the covered entities consisted of the 
following:
    (i) Entities receiving Federal financial assistance through their 
participation in Medicare (excluding Medicare Part B) or Medicaid 
(about 133,343 facilities).\329\ Examples of these entities cited in 
the 2016 Rule's RIA include:

    \329\ CMS, Provider of Service file (June 2014), https://www.cms.gov/Research-Statistics-Data-and-Systems/Downloadable-Public-Use-Files/Provider-of-Services/POS2014.html.
---------------------------------------------------------------------------

 Hospitals (includes short-term, rehabilitation, psychiatric, 
and long-term)
 Skilled nursing facilities/nursing facilities (facility-based 
and freestanding)
 Home health agencies
 Physical therapy/speech pathology programs
 End-stage renal disease dialysis centers
 Intermediate care facilities for individuals with intellectual 
disabilities
 Rural health clinics
 Physical therapy--independent practice
 Comprehensive outpatient rehabilitation facilities
 Ambulatory surgical centers
 Hospices
 Organ procurement organizations
 Community mental health centers
 Federally qualified health centers.

    (ii) Laboratories that are hospital-based, office-based, or 
freestanding that receive Federal financial assistance through Medicaid 
payments for covered laboratory tests (about 445,657 laboratories with 
Clinical Laboratory Improvement Act certification).
    (iii) Community health centers receiving Federal financial 
assistance through grant awards from HRSA (1,300 community health 
centers).\330\
---------------------------------------------------------------------------

    \330\ HRSA, Justification of Estimates for Appropriation 
Committee For Fiscal Year 2016, 53, http://www.hrsa.gov/about/budget/budgetjustification2016.pdf.
---------------------------------------------------------------------------

    (iv) Health-related schools in the United States and other health 
education entities receiving Federal financial assistance through grant 
awards to support 40 health professional training programs that include 
oral health, behavioral health, medicine, geriatric, and physician's 
assistant programs.\331\
---------------------------------------------------------------------------

    \331\ HRSA, Justification of Estimates for Appropriation 
Committee For Fiscal Year 2016, 53, http://www.hrsa.gov/about/budget/budgetjustification2016.pdf.
---------------------------------------------------------------------------

    (v) State Medicaid agencies receiving Federal financial assistance 
from CMS to operate CHIP (includes every State, the District of 
Columbia, Puerto Rico, Guam, the Northern Marianas, U.S. Virgin 
Islands, and American Samoa).
    (vi) State public health agencies receiving Federal financial 
assistance from CDC, SAMHSA, and other HHS components (includes each 
State, the District of Columbia, Puerto Rico, Guam, the Northern 
Marianas, U.S. Virgin Islands, and American Samoa).
    (vii) QHP issuers receiving Federal financial assistance through 
advance payments of premium tax credits and cost-sharing reductions 
(which include at least the 169 health insurance issuers in the 
Federally-facilitated Exchanges receiving Federal financial assistance

[[Page 37227]]

through advance payments of premium tax credits and cost-sharing 
reductions, and at least 11 health insurance issuers operating in the 
State Exchanges).\332\
---------------------------------------------------------------------------

    \332\ Qualified Health Plans Landscape Individual Market Medical 
(2015), https://data.healthcare.gov/dataset/2015-QHP-Landscape-Individual-Market-Medical/mp8z-jtg7.
---------------------------------------------------------------------------

    (viii) Physicians receiving Federal financial assistance through 
Medicaid payments, ``meaningful use'' payments, and other sources, but 
not Medicare Part B payments (Medicare Part B payments to physicians 
are not Federal financial assistance). The Medicare Access and CHIP 
Reauthorization Act amended Section 1848 of the Act to sunset 
``meaningful use'' payment adjustments for Medicare physicians after 
the 2018 payment adjustment.
    In the 2016 Rule, the Department estimated that that rule likely 
covered almost all licensed physicians because they accept Federal 
financial assistance from sources other than Medicare Part B. Many 
physicians participate in more than one Federal, State, or local health 
program that receives Federal financial assistance, and many practice 
in several different settings, which increases the possibility that 
they may receive payments constituting Federal financial assistance.
    For the sake of consistency and convenience, the Department uses 
the 2016 Rule's RIA estimate of the number of physicians receiving 
Federal financial assistance. As the 2016 Rule RIA noted, based on 2010 
Medicaid Statistical Information System data (the latest available), 
about 614,000 physicians accept Medicaid payments and are covered under 
Section 1557 as a result.\333\ This figure represents about 69% of 
licensed physicians in the United States, based on the 890,000 licensed 
physicians reported in the Area Health Resource File.\334\ In addition, 
physicians receiving Federal payments from non-Part B Medicare sources 
will also come under Section 1557. The 2016 RIA noted that, as of 
January 2014, 296,500 Medicare-eligible professionals had applied for 
funds to support their ``meaningful use'' technology efforts.\335\ 
Adding the approximately 614,000 physicians who receive Medicaid 
payments to the 296,500 physicians who receive meaningful use payments 
would yield over 900,000 physicians potentially reached by Section 1557 
because they participate in Federal programs other than Part B of 
Medicare. Because physicians can receive both Medicaid and meaningful 
use payments, and these figures are not adjusted for duplication, the 
900,000 result is best interpreted as an upper bound.
---------------------------------------------------------------------------

    \333\ John Holahan and Irene Headen, Kaiser Commission on 
Medicaid and the Uninsured, Medicaid Coverage and Spending in Health 
Reform: National and State-by-State Results for Adults at or Below 
133% FPL (2010), https://kaiserfamilyfoundation.files.wordpress.com/2013/01/medicaid-coverage-and-spending-in-health-reform-national-and-state-by-state-results-for-adults-at-or-below-133-fpl.pdf. 
Estimates are based on data from FY 2010 MSIS.
    \334\ HRSA, Area Health Resource Files (2015), http://ahrf.hrsa.gov.
    \335\ Mynti Hossain and Marsha Gold, Mathematical Policy 
Research Inc.: Prepared for The Office of the National Coordinator 
for Health Information Technology, HHS, Monitoring National 
Implementation of HITECH: Status and Key Activity Quarterly Summary 
(Jan. to Mar. 2014), http://www.healthit.gov/sites/default/files/globalevaluationquarterlyreport_januarymarch2014.pdf.
---------------------------------------------------------------------------

    When the Department compared the upper-bound estimated number of 
physicians participating in Federal programs other than Medicare Part B 
(over 900,000) to the number of licensed physicians counted in HRSA's 
Area Health Resource File (approximately 890,000), and allowing for 
duplication in both the Medicare/Medicaid and HRSA numbers,\336\ the 
Department concluded in the 2016 Rule RIA that almost all practicing 
physicians in the United States are reached by Section 1557 because 
they accept some form of Federal remuneration or reimbursement apart 
from Medicare Part B.
---------------------------------------------------------------------------

    \336\ The Area Health Resource File itself double counts 
physicians who are licensed in more than one State.
---------------------------------------------------------------------------

(B) Programs or Activities Administered by the Department Under Title I 
of the ACA
    This final rule applies to programs or activities administered by 
the Department under Title I of the ACA. Such programs or activities 
include temporary high-risk pools (section 1101), temporary reinsurance 
for early retirees (section 1102), Department mechanisms for 
identifying affordable health insurance coverage options (section 
1103), the wellness program demonstration project (section 1201, adding 
Public Health Service (PHS) Act 2705(l)), the provision of community 
health insurance options (section 1323), and the establishment of risk 
corridors for certain plans (section 1342).
(C) Entities Established Under Title I of ACA
    This final rule applies to the health insurance exchanges 
established under Title I of the ACA. Such exchanges currently include 
the 12 State Exchanges (and D.C. Exchange), six State Exchanges on the 
Federal platform and 32 Federally-facilitated Exchanges.\337\ Title I 
additionally establishes State advisory councils concerning community 
health insurance (section 1323) and certain reinsurance entities under 
the transitional reinsurance program (section 1341).
---------------------------------------------------------------------------

    \337\ CMS, State-Based Exchanges for Plan Year 2018 (Nov. 1, 
2019), https://www.cms.gov/CCIIO/Resources/Fact-Sheets-and-FAQs/state-marketplaces.html.
---------------------------------------------------------------------------

ii. Entities Covered by Title IX
    Title IX applies to recipients of Federal financial assistance for 
education programs or activities. 20 U.S.C. 1681. The population of 
applicable covered entities is defined by the term ``recipient'' in the 
Department's Title IX regulations. The population includes any State or 
political subdivision thereof, or any instrumentality of a State or 
political subdivision thereof, any public or private agency, 
institution, or organization, or other entity, or any person, to whom 
Federal financial assistance is extended directly or through another 
recipient and that operates an education program or activity that 
receives such assistance, including any subunit, successor, assignee, 
or transferee thereof. See, e.g., 45 CFR 86.2. Under the definition of 
program or activity, recipients of Federal financial assistance within 
the scope of Title IX may include colleges, universities, local 
educational agencies, vocational education systems, or other entities 
or organizations principally engaged in the business of providing 
education. See, e.g., 45 CFR part 86, App. A (cross-referencing 
Appendix B to 45 CFR part 80).
e. Cost Savings From Eliminating Notice and Taglines Requirement
    The Department's baseline for calculating the savings from 
repealing the notice and taglines requirement includes approximately 
$585 million in additional average annual costs (over the next five 
years) that were not considered in the 2016 Rule. It is important to 
note that, while industry estimates prompted the Department to reassess 
the burdens imposed by the 2016 Rule, the Department conducted and 
relied upon its own cost analysis in developing the RIA for this final 
rule.
    The 2016 Rule estimated $7.1 million for covered entities and 
$70,400 for the Federal government in combined annual costs for 
printing and distributing nondiscrimination notices and taglines, with 
the costs being apportioned roughly equally between notices and 
taglines. 81 FR at 31453. As explained in detail below, the Department 
estimates the combined notice and taglines requirement has actually 
cost

[[Page 37228]]

covered entities hundreds of millions of dollars per year.
    The 2016 Rule requires covered entities to include a notice and 
taglines for any ``significant'' document or publication, but did not 
define the term ``significant.'' 45 CFR 92.8(f)(1)(i).\338\ Thus, 
covered entities have interpreted this provision to require a notice 
and taglines to accompany many communications from covered entities, 
including annual benefits notices, medical bills from hospitals and 
doctors, explanations of benefits from health insurance companies or 
health plans, and communications from pharmacy benefit managers.
---------------------------------------------------------------------------

    \338\ After publishing the 2016 Rule, OCR issued guidance 
explaining that any significant publication printed on an 8.5 x 11 
sheet of paper is not considered small sized and, thus, must include 
a minimum of 15 taglines. See OCR, Question 23, General Questions 
about Section 1557 (May 18, 2017), https://www.hhs.gov/civil-rights/for-individuals/section-1557/1557faqs/index.html.
---------------------------------------------------------------------------

    This led to an extraordinary amount of mailed or electronically 
delivered communications by entities such as plan administrators and 
pharmacy benefit managers, including with every auto-ship refill 
reminder, formulary notice, and specialty benefit letter. Further, some 
other entities that operate in multiple States have interpreted the 
2016 Rule as requiring them to include taglines for as many as 60 
languages, or have included that many taglines in mailed or 
electronically-delivered communications due to the cost or technical 
barriers to customizing mailing inserts on a State-by-State basis, and 
thus have incurred costs to send up to an additional two double-sided 
pages of notices with each communication.\339\
---------------------------------------------------------------------------

    \339\ Although OCR has issued guidance stating that a covered 
entity may identify the top 15 languages spoken across all the 
States that the entity serves, See https://www.hhs.gov/civil-rights/for-individuals/section-1557/1557faqs/aggregation_tagline/index.html, evidence of notices that some covered entities shared 
with OCR suggests covered entities with beneficiaries in multiple 
States may issue more comprehensive tagline notices with more than 
15 languages, likely because of reasonable interpretations of the 
relevant provisions of the 2016 Rule, and the higher cost of 
attempting to tailor notices and taglines to individuals based on 
their specific State.
---------------------------------------------------------------------------

    To estimate the volume of notices and taglines that accompany an 
annual benefits notice, we began with the approximately 300 million 
persons in the United States who have health insurance,\340\ or 
approximately 91% of the U.S. population. The Department then assumed 
that the annual notice of benefits (that includes a notice and 
taglines) is sent to each policyholder, not to each individual member 
of a covered household, such as covered children. Of the total U.S. 
population, 306 million individuals belong to 117.7 million households. 
For the data set relied on, a ``household'' includes ``all the people 
who occupy a housing unit . . . . The occupants may be a single family, 
one person living alone, two or more families living together, or any 
other group of related or unrelated people \341\ who share living 
arrangements.'' \342\ By implication, 17.3 million individuals do not 
belong to a household,\343\ and live in group quarters.\344\ The 
Department assumed that the percentage of the U.S. population that is 
uninsured, 9%, is the same percentage of U.S. individuals belonging to 
U.S. households that are uninsured. To calculate the number of annual 
benefits notices, the Department added the total number of individuals 
that do not belong to a household (17.3 million) to the total number of 
households (117.7 million), and discounted the sum (135 million) by 9% 
to exclude those individuals who are not insured. The total number of 
annual notices of benefits that include a nondiscrimination notice and 
taglines is therefore approximately 123 million (approximately 91% of 
135 million).
---------------------------------------------------------------------------

    \340\ Calculated by subtracting total uninsured population (28.1 
million as of 2016), See https://www.census.gov/library/publications/2017/demo/p60-260.html, from the total U.S. Population 
(327 million as of March 14, 2018), See https://www.census.gov/popclock.
    \341\ The calculations do not take into account households where 
two or more unrelated persons have individual coverage, and thus 
receive separate annual notices at the same household. The 
Department believes, however, that this exclusion has only a minor 
impact on the overall figures.
    \342\ U.S. Census Bureau, American Community Survey and Puerto 
Rico Community Survey 2016 Subject Definitions 76, https://www2.census.gov/programs-surveys/acs/tech_docs/subject_definitions/2016_ACSSubjectDefinitions.pdf (defining ``household'' under 
``Household Type and Relationship'').
    \343\ The Department subtracted 306 million individuals 
belonging to a household from the total U.S. population of 323.4 
million individuals. See U.S. Census Bureau, https://factfinder.census.gov/faces/tableservices/jsf/pages/productview.xhtml?src=bkmk (relied on 2016 population nationally).
    \344\ U.S. Census Bureau, American Community Survey and Puerto 
Rico Community Survey 2016 Subject Definitions 76, https://www2.census.gov/programs-surveys/acs/tech_docs/subject_definitions/2016_ACSSubjectDefinitions.pdf (``People not living in households 
are classified as living in group quarters.''). ``Group quarters 
include . . . college residence halls, . . . skilled nursing 
facilities, . . . correctional facilities, and workers' 
dormitories.'' U.S. Census Bureau, 2016 American Community Survey/
Puerto Rico Community Survey Group Quarters Definitions, 1 https://www2.census.gov/programs-surveys/acs/tech_docs/group_definitions/2016GQ_Definitions.pdf.
---------------------------------------------------------------------------

    To estimate the volume of notices and taglines that accompany 
communications from the health insurance Exchanges, the Department 
assumes the Exchanges send communications to the 11.8 million 
individuals enrolled in the individual market.\345\ It assumes that the 
Exchanges send out approximately 1.5 notices per person per year. This 
accounts for the annual re-enrollment communication plus additional 
communications Exchanges will send for special enrollment periods. 
Thus, the total estimated volume of notices and taglines attributable 
to the Exchanges is 17.7 million.
---------------------------------------------------------------------------

    \345\ See CMS, Health Insurance Exchanges 2018 Open Enrollment 
Period Final Report (Apr. 3, 2018), https://www.cms.gov/Newsroom/MediaReleaseDatabase/Fact-sheets/2018-Fact-sheets-items/2018-04-03.html.
---------------------------------------------------------------------------

    To estimate the volume of notices and taglines that accompany 
hospital bills and explanations of benefits sent by insurance companies 
(or health plans) for hospital admissions, the Department first 
estimated the total number of hospital bills and explanation of 
benefits that would be sent to patients annually. There are 35 million 
hospital admissions per year.\346\ For the purpose of this estimate, 
the Department assumes that each admission generates three bills from 
one hospital visit--each of which would include a notice and taglines 
document, for a total of 105 million bills, assuming three bills per 
admission.\347\ The Department assumes that 10% of the 105 million 
bills will have a notice and taglines document attached, for a total of 
10.5 million notice and taglines documents.
---------------------------------------------------------------------------

    \346\ CDC, Chartbook on Long-Term Trends in Health (2016), 
http://www.cdc.gov/nchs/data/hus/hus16.pdf#317.
    \347\ The Department presumes one hospital visit likely will 
generate a bill from the physician and two bills from any 
combination of services, such as anesthesia, ambulance service, 
imaging/radiology, or laboratory or blood work.
---------------------------------------------------------------------------

    For patients who were insured upon admission to the hospital, in 
addition to the three hospital bills they would receive (on average), 
they would receive three associated explanations of benefits from their 
insurer or health plan, each of which would also include notice and 
taglines documents. If more than three service providers bill a patient 
for a hospital visit, then the savings associated with this patient 
encounter will be greater than estimated due to the additional notice 
and taglines documents that the insurer would send with each additional 
explanation of benefits beyond the initial three assumed. If fewer than 
three service providers bill for a hospital visit, then the savings 
will be less due to the decreased volume of notice and taglines 
documents that the insurer would send because the insurer would send 
fewer than three explanation of benefits. Given that approximately 91% 
of the U.S. population is insured, the

[[Page 37229]]

Department estimates that approximately 32 million of the 35 million 
hospital admissions are associated with insured patients (91% of 35 
million hospital admissions).\348\ This assumption does not account for 
variation in healthcare consumption between the insured and uninsured 
populations. It is possible that more hospital admissions are 
attributable to the uninsured than the insured population. If such is 
the case, the Department's estimate for the number of notices and 
taglines attributable to explanations of benefits would be lower. 
Further, this estimate does not account for outpatient hospital visits, 
which would increase the volume of notices and taglines. Moreover, if 
the elderly, nearly all of whom are insured by Medicare, make up a 
disproportionate share of hospital admissions, the Department's 
estimate for the number of notices and taglines attributable to 
explanations of benefits would be higher.
---------------------------------------------------------------------------

    \348\ Calculated by subtracting total uninsured population (28.1 
million as of 2016), See https://www.census.gov/library/publications/2017/demo/p60-260.html, from the total U.S. Population 
in 2016 (323,405,935), See https://www.census.gov/popclock. http://news.gallup.com/poll/225383/uninsured-rate-steady-fourth-quarter-2017.aspx?g_source=Well-Being&g_medium=newsfeed&g_campaign=tiles.
---------------------------------------------------------------------------

    As discussed further below, the Department assumes 100% of 
insurance companies are compliant with the notice and taglines 
requirement. Thus, approximately 96 million notice and taglines 
documents are attributable to the explanations of benefits sent by 
insurers (32 million admissions times three explanation of benefits). 
Using rounded values, approximately 107 million additional notices and 
taglines (96 million plus 11 million) are related to hospital 
admissions.
    To estimate the volume of notices and taglines that accompany 
doctor's bills and explanations of benefits from a physician's visit, 
the Department relied on data showing that individuals visit 
physicians' offices approximately 990 million times each year.\349\ 
Given that approximately 9% \350\ of Americans are uninsured, the 
Department assumes (and subtracting an estimated 5% for uninsured 
patients who do not visit the doctor, except in an emergency) that 95% 
of individuals who see doctors every year are insured in some form. The 
Department assumes that each visit to a compliant doctor's office will 
generate at least one bill from the doctor and at least one explanation 
of benefits from the health insurance company. As explained below, it 
also assumes that 10% of doctors and 100% of insurance companies comply 
with the notice and taglines requirement. Thus, approximately 99 
million notices and taglines are attributable to doctors billing the 
patients directly, and approximately 941 million are attributable to 
explanations of benefits sent by insurers, which results in a total of 
1.04 billion additional notices and taglines related to physician 
visits.
---------------------------------------------------------------------------

    \349\ CDC, Ambulatory Care Use and Physician Office Visits 
(2016), https://www.cdc.gov/nchs/fastats/physician-visits.htm. As 
noted above, the Department relies on the 2016 RIA assumption that 
virtually all doctors receive Federal financial assistance and, 
thus, are subject to the 2016 Rule.
    \350\ Calculated by subtracting total uninsured population (28.1 
million as of 2016), See https://www.census.gov/library/publications/2017/demo/p60-260.html, from the total U.S. Population 
in 2016 (323,405,935), See https://www.census.gov/popclock.
---------------------------------------------------------------------------

    Because experience and substantial feedback from healthcare 
insurers suggests a very high degree of compliance with the notice and 
taglines requirements when it comes to documents such as explanations 
of benefits, the Department presumes 100% compliance for purposes of 
this RIA. Anecdotal evidence, however, suggests that hospital and 
physician compliance with the notice and taglines requirements in the 
documents discussed above is not standard industry practice. The 
Department estimates that, at most, 10% of such covered entities 
include notices and taglines in their significant mailed communications 
with patients. Although, according to the 2016 Rule's RIA, most 
hospitals and physicians are covered entities under Section 1557, the 
Department believes their failure to adopt notices and taglines as a 
standard billing and communication practice may be due to the fact the 
notice and taglines requirement in the 2016 Rule mentions a duty to 
notify ``beneficiaries, enrollees, applicants, and members of the 
public'' and does not explicitly mention ``patients.'' 45 CFR 92.8(a). 
Additionally, the preamble to the 2016 Rule explained that the notice 
and taglines requirement covered communications ``pertaining to rights 
or benefits,'' which insurance companies have universally interpreted 
as applying to significant numbers of communications they send to 
beneficiaries. 81 FR at 31402. For these reasons, the Department's 
calculations presume a 10% compliance rate for hospitals and physicians 
and a 100% compliance rate by health insurance companies concerning the 
notice and taglines requirement as it relates to bills and explanations 
of benefits, respectively.
    To estimate the volume of notices and taglines that accompany 
pharmacy-related communications, the Department relied on estimates 
from the Pharmaceutical Care Management Association, which, due to the 
nature of its organization, obtained an estimated number of impacted 
beneficiaries from its member organizations. Approximately 173 million 
beneficiaries are being impacted annually by the notice and taglines 
requirement, and these beneficiaries receive between 6 and 28 
communications per year with an accompanying notice and taglines. The 
Department relied on the average of this estimate (17 communications 
per year per beneficiary) to determine that 2.9 billion prescription-
related communications (e.g., communications from pharmacy benefit 
managers) are sent each year.\351\
---------------------------------------------------------------------------

    \351\ Source: Pharmaceutical Care Management Association (May 2, 
2017), available at https://www.regulations.gov/document?D=HHS-OCR-2019-0007-0006.
---------------------------------------------------------------------------

    To calculate the costs of the notice and taglines requirement, the 
Department assumes that the underlying communication to which a 
nondiscrimination notice and taglines document is attached is a 
communication that is on average three sheets of paper or less. 
Combined with the nondiscrimination notice and taglines (which 
constitute another 1-4 sides of a page, that is, 1 sheet single-sided 
\352\ to 2 sheets of paper double-sided), the total number of sheets of 
paper that would be transmitted is equivalent to 4-5 sheets of paper or 
less. The associated costs of the notice and taglines requirement are 
(1) materials, (2) postage, and (3) labor. Because of the uncertainty 
around some of the estimates, we report ranges for some values in this 
analysis.
---------------------------------------------------------------------------

    \352\ Although this cost-benefit analysis assumes a lower-bound 
estimate that a notice of nondiscrimination and 15 taglines may be 
printed on one side of one sheet of paper, the Department believes 
that a notice of that length is likely noncompliant with the 2016 
Rule requirement to be posted ``in conspicuously-visible font 
size.'' See also OCR, Sample Notice Informing Individuals About 
Nondiscrimination and Accessibility Requirements and Sample 
Nondiscrimination Statement: Discrimination is Against the Law 
(printed on two sides of one sheet of paper), https://www.hhs.gov/sites/default/files/sample-ce-notice-english.pdf.
---------------------------------------------------------------------------

    For materials, the Department assumes that materials (paper and 
ink) per notice and taglines mailing insert will cost between $0.025 
and $0.10. The Department assumes that low materials cost would be 
$0.025 to print a 1-page notice and taglines on a single sheet of paper 
single-sided, and the high materials cost of $0.10 to print a 4-page 
notice and taglines on 2 sheets of paper double sided.
    For postage, the Department estimates that the additional weight of 
the notice

[[Page 37230]]

and taglines inserts result in a range of no incremental postage costs 
(low-end) to $0.21 per mailing (high-end). For instance, if an 
underlying communication is three sheets of paper or less, a covered 
entity's inclusion of one double-sided page (or shorter) of notice and 
taglines insert would likely weigh one ounce or less (approximately 
four letter-sized pages weigh one ounce).\353\ Consequently, in this 
scenario, the notice and taglines insert would not increase the total 
weight of the mailing beyond the one ounce of postage that a covered 
entity would already expect to incur. If, however, a covered entity 
included 2 sheets of paper double-sided containing the 
nondiscrimination notice and taglines, added to a communication of 
three sheets of paper or more, the total weight of the mailing would 
likely be at least five sheets of paper, and therefore over one ounce. 
The marginal cost of postage for each ounce is $0.20.\354\
---------------------------------------------------------------------------

    \353\ See ``How Many Sheets of Paper Fit in a 1 Ounce Envelope 
for Mailing Purposes,'' https://www.reference.com/business-finance/many-sheets-paper-fit-1-ounce-envelope-mailing-purposes-84ba93a60789c2e1.
    \354\ See U.S. Postal Service Postage Rates, https://www.stamps.com/usps/current-postage-rates/.
---------------------------------------------------------------------------

    For labor, the Department estimates the burden to download, print, 
and include these notices and taglines with all significant 
communications for an office clerk (Occupation Code No. 43-9061) with a 
mean hourly wage of $16.92/hour \355\ plus an additional $16.92/hour in 
fringe benefits, or $33.84/hour for labor costs.\356\ Based on 
experience, entities can manually fold and insert notices and taglines 
into envelopes at a rate of approximately 360 per hour. Entities that 
use commercial machines can fold and insert notices and taglines as 
fast as 5,400 envelopes per hour.\357\ The Department uses the average 
of 2,880 notices and taglines that can be folded and placed into an 
envelope in an hour. Under these assumptions, the unit labor cost per 
notice and taglines mailing is $0.01.
---------------------------------------------------------------------------

    \355\ BLS, Occupational Employment and Wages (May 2018), https://www.bls.gov/oes/2018/may/oes_nat.htm.
    \356\ CMS estimates that the labor costs would be a one-time 
cost of $16,244 for Medicaid managed care and a one-time cost of 
$9,669 for CHIP managed care. The Department assumes for its 
calculations that the labor costs for the notice and tagline 
provisions are not one-time but are ongoing costs associated with 
the value of office clerks' time printing and including the notices 
and taglines with significant publications and significant 
communications.
    \357\ See, e.g., Pitney Bowes, ``Folders and Inserters,'' 
https://www.pitneybowes.com/nz/folders-inserters.html.
---------------------------------------------------------------------------

    Considering materials, postage, and labor, the per-unit cost for 
the notice and taglines insert ranges from $0.035 at the low end (for 
one single-sided sheet of paper of notice and taglines) to $0.32 at the 
high end (for two double-sided sheets of paper of notice and taglines), 
if the Department assumes that the average underlying mailer is 3 
sheets of paper.
    In addition, the Department estimates that some of these costs 
would be mitigated absent this final rule, due to transitions to 
electronic delivery for some communications affected by the 2016 Rule. 
The Department estimated, in the RIA for the Proposed Rule, that 
electronic delivery would reduce costs of affected communications by 
approximately 10-20% absent this final rule, shifting linearly from 10% 
in the first year to 20% in the fifth year following implementation (in 
other words, increasing by 2.5 percentage points each year). Survey 
results from Cognizant \358\ indicate that 70 percent of respondents 
consider it important to be able to view medical care-related 
statements (e.g., explanation of benefits documents) electronically, 
and that 42 percent are able to do so currently. But the same survey 
found that ``[a]doption rates are low for the digital services 
currently offered by health insurers, even for those that respondents 
rated as very important,'' with ``just about half of the members who 
were aware of'' a given digital service having actually ``used it.'' 
According to another survey by InstaMed,\359\ 23% of providers offer 
some electronic billing, but even out of those providers who do, 58% 
still provide fewer than half of their bills electronically.\360\ 
Moreover, it is likely that younger generations are the ones currently 
enrolling in e-statements; given that a disproportionate amount of 
health care services and products, especially pharmaceuticals, are 
consumed by the elderly, the communications containing the notices and 
taglines affected by this rule may be relatively unlikely to use e-
statements. Therefore, as one end of a range of electronic delivery 
estimates, the Department maintains the earlier assumption of 10 
percent in the first year, growing linearly to 20 percent in the fifth 
year after finalization, and departs from the preliminary RIA's 
assumption only in that the linear growth is extended past the fifth 
year. At the opposite end of the range of estimates, the electronic 
delivery rate is assumed to be 21 percent upfront (reflecting the 
higher of the two survey results cited above, with adjustment to 
account for the fact that in those surveys, 50% or less of patients 
offered electronic delivery have been accepting it) and 42 percent in 
Year 5 (reflecting the same survey, without such adjustment), with 
subsequent increases continuing at 5.25 percentage points per year.
---------------------------------------------------------------------------

    \358\ See https://www.cognizant.com/InsightsWhitepapers/The-Digital-Mandate-for-Health-Plans-codex1760.pdf.
    \359\ See https://www.instamed.com/white-papers/trends-in-healthcare-payments-annual-report/.
    \360\ See https://www.cognizant.com/InsightsWhitepapers/The-Digital-Mandate-for-Health-Plans-codex1760.pdf and https://www.instamed.com/white-papers/trends-healthcare-payments-report-2018/.
---------------------------------------------------------------------------

    In combining the two input ranges for Table 2 below--the cost per 
printed and mailed communication and the electronic delivery rates--the 
low ends are used together and the high ends are used together, to 
reflect that entities facing relatively high costs for printed 
communications would have greater incentive to shift to electronic 
delivery where feasible. The primary estimates relied on for Table 1, 
however, use simply the midpoint of each of the two input ranges.
    Electronic delivery would eliminate postage costs, but may to a 
certain extent merely shift the costs of paper and printing from the 
entity providing the communication to the consumer/beneficiary/patient, 
given that some consumer/beneficiary/patient recipients of electronic 
communications will print them out and incur costs for the paper and 
ink associated with doing so. The Department has not included such 
consumer/beneficiary/patient costs in its estimates.
    The Department averages the low and high-end estimates to determine 
a primary estimate of annual cost savings, which results in average 
savings of approximately $0.58 billion per year, over the first five 
years, after adjusting for electronic delivery.
    As discussed above, the proposed rule noted that, with repeal of 
the 2016 Rule requirements, the Department assumed that two other 
regulatory requirements for taglines would also be fully repealed 
because they depend on, or refer to, the 2016 Rule for authority for 
the taglines requirement. The first is the requirement placed on Health 
Insurance Exchanges (see 45 CFR 155.205(c)(2)(iii)(A)), which the 
Department estimates issue 17.7 million communications per year, 
primarily through eligibility and enrollment communications. The second 
is the requirement placed on QHP issuers (see HHS Notice of Benefit and 
Payment Parameters for 2016; 2016 Rule, 80 FR 10750, 10788 (Feb. 27, 
2015)), whose costs are incorporated into the volume calculations for 
annual notices of benefits, and explanations of benefits discussed in 
more detail above. Those

[[Page 37231]]

two other regulations have not yet been amended in this respect, but 
the Department clarified above that because those requirements inform 
entities they will be deemed in compliance if they are in compliance 
with the Section 1557 rule's notice and taglines requirement, and 
because the latter has now been repealed by this final rule, covered 
entities do not need to independently comply with those two other 
regulatory requirements cross referencing the Section 1557 rule. As a 
result, these estimates continue to assume this final rule will result 
in cost savings with respect to those requirements.
    The Department also assumes that health insurance entities would 
not voluntarily append notices and taglines to routine monthly premium 
statements absent the 2016 Rule, but are doing so because of it (or 
because of a requirement in another regulation that bases its 
requirement on the 2016 Rule's requirement).

    Table 2--Annual Savings From Repeal of Requirement To Publish and Mail Notices and Taglines, by Volume of
                     Transactions per Type per Year After Accounting for Electronic Delivery
                                                  [in millions]
----------------------------------------------------------------------------------------------------------------
                                                             Estimated low Savings      Estimated high savings
                                               Count             ($0.035/unit)               ($0.32/unit)
----------------------------------------------------------------------------------------------------------------
Exchange eligibility and enrollment                 17.7  Year 1: $1................  Year 1: $4.
 communications.                                          Year 5: $0................  Year 5: $3.
Annual notice of benefits...............             123  Year 1: $4................  Year 1: $31.
                                                          Year 5: $3................  Year 5: $23.
Explanations of Benefits--hospital                    96  Year 1: $3................  Year 1: $24.
 admissions.                                              Year 5: $3................  Year 5: $18.
Explanations of Benefits--physician's                941  Year 1: $30...............  Year 1: $238.
 visits.                                                  Year 5: $26...............  Year 5: $175.
Medical bills--hospital admissions......              11  Year 1: $0................  Year 1: $3.
                                                          Year 5: $0................  Year 5: $2.
Medical bills--physician visits.........              99  Year 1: $3................  Year 1: $25.
                                                          Year 5: $3................  Year 5: $18.
Pharmacy-related notices................           2,900  Year 1: $91...............  Year 1: $733.
                                                          Year 5: $81...............  Year 5: $538.
                                         -----------------------------------------------------------------------
    Total, accounting for electronic               4,188  Year 1: $132..............  Year 1: $1,059.
     communications.                                      Year 5: $117..............  Year 5: $777.
----------------------------------------------------------------------------------------------------------------

    The primary estimate of annual savings is approximately $0.63 
billion in Year 1 and $0.51 billion in Year 5 after accounting for 
electronic delivery. The Department assumes that the nine other CMS 
regulations or guidelines requiring taglines will continue to be in 
effect, and the cost of complying with these CMS requirements would 
need to be subtracted from the total savings that the 2016 Rule's 
rescission generates for the healthcare sector as set forth in Table 2. 
These requirements include (1) Group Health Plans and Health Insurance 
Issuers requirements; \361\ (2) Navigator requirements; \362\ (3) Non-
Navigator Assistance Personnel requirements; \363\ Medicaid 
requirements; \364\ Medicaid Managed Care requirements; \365\ CHIP 
requirements; \366\ CHIP Managed Care requirements; \367\ Hospitals 
Qualifying for Tax-Exempt Status requirements; \368\ and Medicare 
Advantage (Part C) and Prescription Drug Plans (Part D) 
requirements.\369\
---------------------------------------------------------------------------

    \361\ 45 CFR 147.136(e)(2)(iii) and (e)(3), and Sec.  
147.200(a)(5).
    \362\ 45 CFR 155.215(c)(4).
    \363\ 45 CFR 155.215(c)(4).
    \364\ 42 CFR 435.905(b)(3).
    \365\ 42 CFR 438.10(d)(2) through (3), (d)(5)(i) and (iii), and 
(j).
    \366\ 42 CFR 457.340(a).
    \367\ 42 CFR 457.1207.
    \368\ 26 CFR 1.501(r) through 1(b)(24)(vi).
    \369\ Medicare Marketing Guidelines Sec.  30.5.1, https://www.cms.gov/Medicare/Health-Plans/ManagedCareMarketing/FinalPartCMarketingGuidelines.html.
---------------------------------------------------------------------------

    Comment: Some commenters indicated that the notice and taglines 
requirements that the Department proposed for removal led to 
substantial costs that the Department understated. For example, they 
contended costs may be higher than the Department estimated in the 
proposed rule because plans had to revise internal documents, incur 
significant IT costs, and work with outside vendors to implement the 
2016 Rule. Commenters also contended the 2016 Rule resulted in 
significant annual printing costs.
    One commenter calculated that the costs of the mailings related to 
pharmacy services yielded additional costs of $1 billion a year. The 
commenter supported the Proposed Rule's RIA aggregate estimate that the 
requirement would save plans $101 to $928 million a year and provided a 
specific example in which an affected entity reported incurring $3.9 
million in printing costs and $4 million in operations costs to send 
55.5 million communications.
    Another company reported almost $1 million in annual increased 
expenses on toner, developer, paper, and postage related to notice and 
taglines requirements. Another commenter stated the costs associated 
with complying with the 2016 Rule's requirement accounts for 4.5% of 
one company's budgeted operating income. Some commenters also stated 
the proposed rule would significantly reduce the administrative burden 
placed on providers, saying that what constitutes a ``significant'' 
communication has been insufficiently clear and has resulted in broad 
interpretations and providers using the taglines in almost every 
document.
    Some commenters estimated that the dental profession has spent over 
$240 million to date on compliance with the 2016 Rule. The commenter 
noted that the time and cost for dental offices to interpret the 
regulations, print documents, alter existing publications, and modify 
websites has been significant. Several dental offices believe repealing 
the notice and taglines requirements will lead to cost savings and will 
allow staff to spend time on appropriate patient care and communication 
instead.
    One commenter explained that in its Pennsylvania line of business, 
it serves

[[Page 37232]]

800,000 persons and sends them 2-page double-sided notices and taglines 
6,205,000 times a year under the 2016 Rule, resulting in $245,175 in 
annual mailing costs. The commenter noted it has similar experiences in 
all of its Medicaid lines of business.
    Other commenters suggested the Department overestimated the costs 
of the 2016 Rule's notice and taglines requirements. One association 
stated that the Department's estimate in the proposed rule 
overestimated by failing to account for notices generated by a machine, 
included in bulk mailings, or facilitated through the use of computers. 
The commenter also believed that, while electronic delivery would 
eliminate postage costs, it would not shift the cost of paper and 
printing to the consumer/beneficiary/patient, stating it is unlikely 
that a significant percentage of individuals would download and print 
documents sent to them electronically. Similarly, the commenter 
contended the Department failed to account for the significant degree 
to which communications can be provided electronically and the degree 
to which some entities, such as insurance plans, have already been 
doing so for years.
    Another commenter, however, agreed with OCR's calculation that the 
notice and taglines requirement has resulted in the inclusion of one to 
two sheets of paper. Similarly, one commenter stated it implemented 
multiple versions of the two-page notice and taglines on thousands of 
documents in its businesses, which consumed significant resources. The 
commenter noted that the requirements also impacted covered entity 
partners as well, particularly print vendors.
    Some commenters asked the Department to separate out costs for 
providing notices as distinct from providing taglines, and for posting 
notices as distinct from mailing them.
    Response: The Department appreciates the comments regarding the 
costs of the 2016 Rule's notice and taglines requirements. The 
Department agrees with commenters who contend that the requirements 
imposed significant and costly burdens far beyond the estimates set 
forth in the 2016 Rule. The Department finalizes this rule in 
significant part to relieve those burdens.
    Some commenters contended the Department's estimates in the 
proposed rule were understated, and others contended the Department's 
estimates were overstated. The comments generally provided data from 
specific entities or circumstances.
    The Department's estimate of the average cost of mailings is based 
on data received from covered entities across the affected industry, 
and generally takes into account processes and methods used in mailings 
such as machines, computers, and bulk handling. Although the Department 
suggested that some patients and beneficiaries might print notices 
electronically mailed to them, the Department did not factor those 
potential costs in its estimate. To the extent that commenters 
contended the Department failed to consider the extent to which notices 
and taglines are delivered electronically, this is incorrect, as the 
Department's preliminary estimates included downward adjustments to its 
estimates based on electronic delivery, and its revised estimates 
reflect a broader range of potential electronic delivery rates. 
Moreover, other commenters contend that they continue to experience 
significant costs based on non-electronic delivery--contending in some 
cases that the Department's estimates of those costs were understated.
    Commenters were correct to identify that some costs, such as 
revising internal documents, IT costs, and setting up relationships 
with outside vendors, resulted from the 2016 Rule. The Department does 
not estimate that this final rule will lead to cost savings with regard 
to those types of expenses, however, because they are generally sunk 
costs that covered entities incurred at the time of the 2016 Rule and 
will not be able to recover as a result of this final rule. This final 
rule does not prohibit entities from continuing to provide the type and 
number of notices and taglines required by the 2016 Rule, but gives 
covered entities the flexibility to not provide them.
    The Department declines to accept the suggestion of some commenters 
that the Department separate out the costs of notices from the costs of 
taglines. Information from covered entities indicates that notices and 
taglines are usually provided together, often on overlapping pages. 
Because this final rule removes both requirements, the Department's 
estimates are intended to cover the costs of both notices and taglines.
    Comment: One commenter stated that the Department improperly relied 
on healthcare corporations for its fact-finding and analysis in the 
proposed rule. In particular, conclusions that the repetitive nature of 
notices and taglines dilute messages, that beneficiaries do not want to 
receive them, and that there is no evidence that more beneficiaries 
have sought language assistance because of the notices, were largely 
gathered from the covered entities themselves.
    Response: The Department relies on its own data, publicly available 
data, and data submitted by members of the public--including covered 
entities--to attempt to estimate the impact of its regulations. The 
Department takes into consideration the sources of the data it 
considers, and attempts to weigh all such data appropriately based on 
the information the Department has available to it.
f. Costs Arising From Removal of Notice and Taglines Requirement
    Repealing the notice and taglines requirement may impose costs, 
such as decreasing access to, and utilization of, healthcare for non-
English speakers by reducing their awareness of available translation 
services.
    Comment: Some commenters generally supported the Department's 
assessment that the benefits from the notice and taglines requirements 
were hard to quantify and likely not significant. A health insurance 
plan commenter stated that since the implementation of the 2016 Rule, 
it has not experienced significant changes in its member demographics 
or languages spoken, and has not seen any notable increases in requests 
for translation services. One commenter also stated that its pharmacy 
benefit manager found that since 2017, the volume of valid complaints 
about discrimination are less than 1% overall and could be better 
handled by personnel already in place. The commenter stated further 
that since 2017, it has filled approximately 3.5 billion prescriptions 
and mailed nearly half a billion beneficiary communications. In this 
time period, approximately 0.002% (26 of 14,000) of calls made to the 
discrimination hotline were closely related to a complaint. Several 
commenters stated they did not see a significant increase in requests 
after the 2016 Rule required notices and taglines, but instead 
experienced relatively flat demand.
    Some commenters also expressed concerns regarding wastefulness of 
the notice and taglines. A commenter calculated that it has spent 
nearly $16 million since 2017 to accommodate the current requirements 
and will save at least $3.5 million annually under the proposed rule. 
One commenter suggested that an analysis of the impact of the notice 
and taglines should take into account the content and frequency of the 
notices, overall consumer health literacy, costs and administrative 
burdens, and whether notices are truly meaningful to consumers.

[[Page 37233]]

    Other commenters suggested that the 2016 Rule's notice and taglines 
requirements likely yielded benefits to intended individuals. A 
hospital commented that it observed a 10% increase in the volume of 
interpreter service encounters each year over the last three years. 
Another commenter stated that it saw a 28% reduction on its per-member 
per-month claims cost with its Spanish-speaking population. Several 
commenters from a variety of organizations request an analysis of the 
impact on those who most use the services affected by the proposed 
provision (LEP individuals) and on those who provide services to the 
impacted population. Several organizations, including a State 
government, also contended that LEP individuals are a significant 
portion of the population and tend towards poorer health outcomes. They 
also suggested that removing the notice and taglines requirements may 
cause such individuals to delay care or not receive care until their 
medical issues are more severe and costlier to treat, and they urged 
the Department to estimate such costs.
    Another commenter stated that even though HHS justified the 
proposed rule in part by citing data that over three-quarters of the 
U.S population over the age of 18 speak only English at home and are 
not well served by taglines or notices, the commenter believes that if 
a quarter of the population does not speak English at home that is an 
argument against repealing the notice and taglines.
    Several commenters suggested repeal of the taglines provisions may 
negatively impact LEP individuals. One commenter cited a study claiming 
that health inequities cost the U.S. economy $309.3 billion a year.
    Response: The Department appreciates the comments concerning the 
effectiveness and benefits of the notice and taglines requirements from 
the 2016 Rule. As noted in the proposed rule, previously received 
reports from covered entities are consistent with some public comments 
suggesting that the 2016 Rule's requirements did not appreciably 
increase the use of translation services. One such report indicated 
that utilization of translation services did not appreciably rise after 
the 2016 Rule's imposition of notice and taglines requirements.\370\ 
Although some commenters contended that they experienced an increase in 
translation services after the 2016 Rule, others reported a different 
experience. The Department generally agrees with the latter, and the 
difference in reports from different commenters and other sources 
reinforces the Department's view of the difficulty of attempting to 
calculate the 2016 Rule's benefits to individuals needing translation 
services. The Department does not believe it has data enabling it to 
fulfill the request of commenters who urged the Department to calculate 
the value of such benefits lost as the result of this final rule, as 
distinct from data that more generally estimate costs resulting from 
inequality or delay in care.
---------------------------------------------------------------------------

    \370\ See Aetna (May 1, 2017), available at https://www.regulations.gov/document?D=HHS-OCR-2019-0007-0005.
---------------------------------------------------------------------------

    As noted in the proposed rule, there are other reasons to believe 
the 2016 Rule's notice and taglines requirements imposed burdens 
disproportionate to potential benefits for intended beneficiaries. The 
vast majority of recipients of taglines do not require translation 
services. For example, according to Census statistics, as of 2015, over 
three-quarters (79%) of the U.S. population over age five speak only 
English at home, followed by Spanish (13%).\371\ Although a commenter 
contends this statistic provides an argument in favor of maintaining 
multi-language taglines, the Department disagrees regarding a 
requirement to send such taglines where almost 80% of the recipients 
likely speak only English at home, and a majority of the remainder 
spoke English ``very well.'' \372\ Additionally, of persons selecting a 
written language preference when registering for coverage on the 
HealthCare.gov platform for 2017, 90.29% selected English, followed by 
8.23% who selected Spanish.\373\ These data indicate that, for the 
large majority of people who receive them, the required language 
taglines mailings provide little to no benefit because they are already 
proficient English speakers with little need for translation services.
---------------------------------------------------------------------------

    \371\ U.S. Census Bureau, B16007: Age by Language Spoken at Home 
for the Population 5 Years and Over, 2011-2015 American Community 
Survey (American FactFinder) (2017), https://factfinder.census.gov/bkmk/table/1.0/en/ACS/16_5YR/S1601/0100000US. See also Kimberly 
Proctor, Shondelle M. Wilson-Frederick, et al., The Limited English 
Proficient Population: Describing Medicare, Medicaid, and Dual 
Beneficiaries, 2.1 Health Equity 87 (May 1, 2018), http://online.liebertpub.com/doi/10.1089/heq.2017.0036 (identifying Spanish 
as the language of the largest majority of limited English 
proficient speakers in Medicaid and Medicare, according to the 2014 
American Community Survey).
    \372\ U.S. Census Bureau, B16007: Age by Language Spoken at Home 
for the Population 5 Years and Over, 2011-2015 American Community 
Survey (American FactFinder) (2017), https://factfinder.census.gov/bkmk/table/1.0/en/ACS/16_5YR/S1601/0100000US.
    \373\ CMS, Race, Ethnicity, and Language Preference in the 
Health Insurance Marketplaces 2017 Open Enrollment Period (April 
2017), https://www.cms.gov/About-CMS/Agency-Information/OMH/Downloads/Data-Highlight-Race-Ethnicity-and-Language-Preference-Marketplace.pdf. States that that do not use the HealthCare.gov 
platform, such as California and New York, were not included in this 
report.
---------------------------------------------------------------------------

    Furthermore, the 2016 Rule's requirements added 47 languages to 
existing language access requirements, but that only increased access 
to 0.4% of the entire U.S. population. This was after broadly defining 
``limited English proficiency'' to include those who speak English 
``well'' but not ``very well.'' \374\ The Department's Office for Civil 
Rights also produced a list of the top 15 languages in each State; 
however, 26 of the languages on OCR's list are spoken by less than 
0.004 percent of the population. As a result, in some States, 
especially those with sparser populations, the 2016 Rule required 
health insurance issuers to provide taglines services in languages 
spoken by very few people in the State. For instance, in Wyoming, 
issuers needed to provide translation notices in Gujarati and Navajo in 
every significant communication sent to beneficiaries to account for 
approximately 40 Gujarati speakers and 39 Navajo speakers; in Montana 
issuers were required to provide notices to account for approximately 
80 speakers of Pennsylvania Dutch; and in Puerto Rico, issuers had to 
provide taglines notices to account for approximately 22 Korean 
speakers and 22 French Creole speakers.\375\
---------------------------------------------------------------------------

    \374\ See HHS OCR, Frequently Asked Questions to Accompany the 
Estimates of at Least the Top 15 Languages Spoken by Individuals 
with Limited English Proficiency under Section 1557 of the 
Affordable Care Act, Question 2 (Sept. 1, 2016), https://www.hhs.gov/civil-rights/for-individuals/section-1557/1557faqs/top15-languages/index.html (using 2013 year estimates). See U.S. 
Census Bureau, Language Spoken at Home by Ability to Speak English 
for the Population 5 Years and Over, https://factfinder.census.gov/faces/tableservices/jsf/pages/productview.xhtml?pid=ACS_14_5YR_B16001&prodType=table (2016 year 
estimates).
    \375\ OCR, Resource for Entities Covered by Section 1557 of the 
Affordable Care Act, Estimates of at Least the Top 15 Languages 
Spoken by Individuals with Limited English Proficiency for the 50 
States, the District of Columbia, and the U.S. Territories (Aug. 
2016), https://www.hhs.gov/sites/default/files/resources-for-covered-entities-top-15-languages-list.pdf.
---------------------------------------------------------------------------

    The Department also continues to believe that the notice and 
taglines required by the 2016 Rule imposed burdens on many recipients 
and may interfere in their receipt and understanding of important 
healthcare information. Prior to the proposed rule, the Department 
received many communications from beneficiaries and advocacy groups 
complaining about the excessive amount of paperwork they receive. These 
individuals and groups

[[Page 37234]]

explained that few people read the notice and taglines and most ignore 
the last pages of lengthy health documents. Additionally, documents 
that contain a significant number of pages that recipients do not value 
can often induce annoyance or frustration due to perceived wasting of 
time, ignorance of the customers' actual needs or language abilities, 
waste of economic resources, or insensitivity to environmental 
concerns.
    These communications coincide with the views of some commenters and 
generally support the Department's conclusion that the 2016 Rule has 
resulted in ``cognitive overload,'' where individuals experience a 
diminished ability to process information when inundated with 
duplicative information and paperwork. These frustrations, though 
difficult to quantify, are reasonable to expect given the large volume 
of healthcare communications with notice and taglines that most 
Americans receive. It is also reasonable to expect that repeated 
mailings of taglines to people who do not want them may negatively 
impact their likelihood to read truly significant documents from their 
insurers or doctors, and may negatively impact health outcomes in some 
cases.
    It is also noteworthy that other rules exist to benefit the persons 
whom the 2016 Rule's notice and taglines requirements intended to 
assist. Regulations under Section 504 of the Rehabilitation Act 
generally require the provision of auxiliary aids and services in 
health programs or activities that receive Federal financial 
assistance. 45 CFR 84.52(d). Because the notice requirement under the 
2016 Rule required frequent mailed notification of the availability of 
auxiliary aids and services, the Department suggested in the proposed 
rule that repealing the notice of nondiscrimination requirement may 
result in additional societal costs, such as decreased utilization of 
auxiliary aids and services by individuals with disabilities due to 
their reduced awareness of such services. Some commenters agreed, but 
they did not suggest any way to reliably calculate such effects, and 
the Department is not aware of any. This impact may also be limited 
because the Section 504 regulations already require recipients of 
Federal financial assistance employing fifteen or more persons to 
provide notice to participants, beneficiaries, applicants, employees, 
and other interested persons of the availability of such aids and 
services. 45 CFR 85.12 and Sec.  84.22(f).
    Additionally, some commenters contended that repealing the notices 
and taglines may lead to persons not being made aware of their right to 
file complaints with OCR, and that some of those persons may suffer 
remediable grievances but will not complain to OCR absent notices 
informing them of the process. The Department continues, however, to 
not be aware of a way to quantify those potential effects. In addition, 
as noted above, the regulations implementing Section 1557's four 
underlying statutes already contain notice provisions, see 45 CFR 80.6 
and Appendix to Part 80 (Title VI), Sec.  84.8 (Section 504), Sec.  
86.9 (Title IX) and Sec.  91.32 (Age Act), and therefore this potential 
cost may be minimal.
g. Cost Savings From Changes to Language Access Plan Provisions
    Although the 2016 Rule did not require covered entities to develop 
a language access plan, the Rule stated that the development and 
implementation of a language access plan is a factor the Director 
``shall'' take into account when evaluating whether an entity is in 
compliance with Section 1557. 45 CFR 92.201(b)(2). Therefore, the 
Department anticipated that 50% of covered entities would develop and 
implement a language access plan following issuance of the 2016 Rule. 
81 FR at 31454.
    Comment: One commenter noted that physician group practices report 
financial losses and significant costs when treating patients that 
require interpretation or translation services. The commenter stated 
that providing reimbursement at the Federal level would help offset 
extra costs incurred to provide these services free of charge and 
reimburse group practices for increased upfront costs and time required 
to care for LEP individuals. The commenter contended that face-to-face 
interpretation services cost between $50 and $150 per hour and may 
include a minimum hour requirement and transportation fee. The 
commenter points to one practice that reported being billed nearly $300 
for a single in-person interpreter service this year due to a minimum 
rate and transportation fee. The practice reported paying $1,200 in 
interpretation fees for one month for nine individuals.
    Response: The Department appreciates these comments. With respect 
to serving LEP patients, this final rule gives more flexibility to 
covered entities, while specific obligations to patients will be 
governed by criteria that has been set forth in longstanding 
guidelines. It is not within the scope of this rule to provide for 
Federal reimbursements.
    Comment: Several commenters claim the proposed rule failed to 
consider the benefits to LEP individuals that will be lost by repealing 
certain provisions. Such commenters state there are tens of millions of 
LEP people who rely on protections from Section 1557. Another commenter 
notes that four million Medicare beneficiaries are LEP. A commenter 
notes that only 15 States use the Medicaid option to reimburse for 
interpretation. Commenters state that the language access protections 
in the 2016 Rule benefit Latino/a patients, Asian American and AAPI 
patients, LEP gender-based violence victims, low-income LEP patients, 
older adults, people with disabilities, and lower-income older adults.
    Some commenters contend that the rule will lead to reduced 
awareness of language services by LEP persons and by the general public 
about their rights and protections. One commenter stated that if the 
rule is finalized, organizations like community health centers that are 
not funded or do not receive reimbursement for language services will 
face increased burdens when fewer clients will be aware of their 
language access rights and likely turn to them instead of to covered 
entities.
    Commenters opposing the proposed rule claimed it would lead to 
inequality and a reduction in the quality of language access available; 
the avoidance of care, leading to worsened conditions and avoidable 
higher-cost hospital services; increased costs due to missed 
appointments, delayed care, and ``non-compliant'' self-care; increased 
Emergency Room use; lower preventive care access and use; malpractice 
costs; avoidable hospital readmissions; higher rates of uninsurance; 
unnecessary tests and procedures; higher rates of mortality; 
misunderstood diagnoses and prognoses leading to poor quality of care; 
and costs due to lower rates of outpatient follow-up, poor medication 
adherence, and lack of understanding of discharge diagnosis and 
instructions.
    One commenter claimed that HHS's estimate that covered entities 
would save around $17.7 million per year by eliminating references to 
language access plans overlooks larger healthcare savings generated by 
access to interpretation services. Two commenters point to a 2017 study 
finding that easily accessible language interpretation services avoided 
an estimated 119 readmissions that were associated with savings of 
$161,404 per month in an academic hospital. Two commenters pointed to a 
2010 report finding that at least 35 of 1,373 malpractice claims were 
linked to inadequate language access.

[[Page 37235]]

    Another commenter cited a report that found that 2.5% of one 
malpractice carrier's closed claims involved language issues that cost 
the carrier over $5 million in damages, settlements, and legal fees. 
Costs included damages paid to patients, legal fees, time lost when 
defending the lawsuit, loss of reputation and patients, fear of 
possible monetary loss, and stress.
    Response: The Department acknowledges the potential of reduced 
awareness of the availability of language services by LEP individuals 
by the changes made in this rule, or downstream effects on malpractice 
claims due to less awareness. As noted above, however, this final rule 
continues to provide protections for LEP individuals and commits the 
Department to enforcement of Section 1557. The Department believes, 
therefore, that the negative effects predicted by some commenters may 
be mitigated by the continued commitment to enforcement of Section 
1557. The data cited by commenters either do not assess the overall 
impact of the 2016 Rule as compared to a regime with continued 
enforcement of Section 1557, or address information about broader 
matters without providing a method for the Department to specifically 
analyze how this final rule will cause the effects commenters fear may 
occur. In this respect, the Department believes that malpractice 
carriers themselves, not Federal civil rights regulators, are best 
equipped to determine what practices malpractice carriers should 
require for the sake of reducing their own financial risk.
    Therefore, in consideration of the public comments and the 
Department's analyses, the Department adopts the estimates from the 
proposed rule concerning changes to language access plan provisions.
    In the proposed rule, OCR estimated that the burden for developing 
a language access plan is approximately three hours of medical and 
health service manager staff time in the first year, and an average of 
one hour of medical and health service manager staff time per year to 
update the plan in subsequent years. Throughout, we assume that the 
total dollar value of labor, which includes wages, benefits, and 
overhead, is equal to 200 percent of the wage rate. The value of an 
hour of time for people in this occupation category, after adjusting 
for overhead and benefits, is therefore estimated to be $109.36 based 
on Bureau of Labor Statistics (BLS) data for 2018.\376\ These are 
within the general range provided by some commenters' description of 
costs they have experienced.
---------------------------------------------------------------------------

    \376\ BLS, Occupational Employment and Wages (May 2018), https://www.bls.gov/oes/2018/may/oes_nat.htm.
---------------------------------------------------------------------------

    The Department estimated that approximately 269,141 entities could 
potentially make changes and develop language access plans in response 
to the 2016 Rule, as part of the requirement to take reasonable steps 
to provide meaningful communication with LEP individuals (calculated by 
reducing the 275,002 affected entities by the 5,861 hospitals and 
nursing care facilities that were already subject to language access 
plan requirements under Medicare Part A). The Department further 
assumed that only 50% of the identified entities would actually make 
changes to implement a language access plan. If the actual compliance 
rate were higher, the costs would be higher. These assumptions imply 
that the total cost of developing language access plans will be 
approximately $44.1 million (269,141 entities multiplied by 50% of 
entities multiplied by 3 hours per entity multiplied by $109.36 per 
hour) in the first year and approximately $14.7 million (269,141 
entities multiplied by 50% of entities multiplied by 1 hour per entity 
multiplied by $109.36 per hour) per year in subsequent years. The 
Department assumes sunk costs cannot be recovered by this rule, and 
therefore that initial language access plan development costs 
attributable to the 2016 Rule cannot be recovered.
    By repealing the provision of the 2016 Rule regarding the Language 
Access Plans, the Department estimates annual savings are $14.7 
million.
h. Cost Savings Attributed to Covered Entities' Handling of Certain 
Grievances
    This final rule repeals the requirement for each covered entity 
with 15 or more employees to have a compliance coordinator and a 
written grievance procedure to handle complaints alleging violations of 
Section 1557. The Department estimates that, under the final rule, 
covered entities no longer have to incur certain labor costs associated 
with processing grievances related to sex discrimination complaints as 
they relate to gender identity as defined under the 2016 Rule because 
such definitions would be repealed and no longer binding. This repeal 
would not, however, affect the independent obligations that entities 
covered by Section 1557 have to comply with Federal regulations under 
Section 504 and Title IX to have written processes in place to handle 
grievances alleging certain disability and sex discrimination claims, 
respectively.\377\
---------------------------------------------------------------------------

    \377\ See, e.g., 45 CFR 84.7(a) (HHS regulations implementing 
Section 504) (requiring a written process to be in place for 
handling grievances alleging disability discrimination), Sec.  
86.8(a) (HHS regulations implementing Title IX) (requiring a written 
process to be in place for handling grievances alleging sex 
discrimination).
---------------------------------------------------------------------------

    For the sake of consistency and convenience, the Department used 
the methodology from the 2016 Rule as a foundation for estimating the 
projected savings from this proposed rule provision.
    The 2016 Rule estimated that, in years three through five of the 
2016 Rule's implementation, covered entities with 15 or more employees 
would incur $85.5 million in costs annually to handle Section 1557 
grievances. 81 FR at 31458. This estimate assumed that covered entities 
would experience an average increase in grievances equal to OCR's 
projected long-term increase in caseload of about 1%. Id. The 2016 Rule 
monetized this 1% increase in caseload as a labor cost equivalent to 1% 
of the annual median wage for a medical and health service manager 
(occupation code 11-9111). Id. The Department continues to assume that 
OCR's increase in caseload attributed to the 2016 Rule reasonably 
informs the increase in grievance processing that covered entities will 
experience.
    Based on OCR's tracking of Section 1557 complaints received from 
promulgation of the 2016 Rule (May 18, 2016) until present, OCR 
predicts that its long-term caseload would have increased 5% rather 
than 1% as originally predicted. Further, OCR believes roughly 60% of 
this increase (which equals 3% of the overall increase) would have been 
attributable to discrimination claims based on the 2016 Rule's 
definition of sex discrimination with respect to gender identity and 
sex stereotyping. The Department uses the phrase ``would have'' with 
regard to OCR's caseload because, as described above, the Department 
has been preliminarily enjoined on a nationwide basis by a Federal 
court from enforcing claims based on the 2016 Rule's definition of sex 
discrimination, and those provisions have now been vacated by the same 
court.
    The 2016 Rule asserted that private parties have the right to 
challenge a violation of Section 1557 or the 2016 Rule in Federal 
court, independent of OCR enforcement or involvement. 45 CFR 92.302(d). 
In the preamble to the 2016 Rule, the Department suggested that the 
ability for private parties to sue

[[Page 37236]]

under the 2016 Rule would result in covered entities bearing increased 
compliance costs. 81 FR at 31395 (``the presence of a coordinator and 
grievance procedure enhances the covered entity's accountability and 
helps bring concerns to prompt resolution, oftentimes prior to an 
individual bringing a private right of action.''). The preliminary 
injunction did not apply to suits filed by private parties. Although 
the Supreme Court has recognized a private right of action for some 
civil rights statutes enforced by the Department, under this final rule 
the Department would no longer assert in the regulatory text or the 
preamble to the rule that a private right of action exists for parties 
to sue covered entities for any and all alleged violations. Because the 
issue of whether a person has a right to sue in Federal court under 
Section 1557 is one determined by the courts themselves and not by the 
Department's regulations, the Department does not estimate that this 
change will lead to any economic impact.
    Although this final rule removes from the 2016 Rule the expansive 
inclusion of gender identity and sex stereotyping in the definition of 
sex discrimination, a court has recently vacated the gender identity 
provisions of the 2016 Rule. Regarding sex stereotyping, to the extent 
the 2016 Rule used that term to encompass gender identity, the sex 
stereotyping provision had no real-world effect after the court 
decision. To the extent sex stereotyping in the 2016 Rule did not 
encompass gender identity, the Supreme Court already recognized a 
degree of relevance of sex stereotyping in sex discrimination claims. 
This is discussed in more detail in the section above on sex-based 
discrimination. Therefore, the Department does not believe there would 
be a direct material economic impact regarding grievance procedures 
from this final rule's change in the definitions concerning sex 
stereotyping.
    In addition, due to voluntary policies or more stringent State 
requirements, the Department expects that 50% of covered entities would 
likely continue to accept and handle grievances alleging discrimination 
based on gender identity and sex stereotyping as set forth under the 
2016 Rule.
    In the proposed rule, the Department estimated that covered 
entities would have experienced a 3% increase in gender identity and 
sex stereotyping grievance claims over the long term due to the 2016 
Rule, and half of that caseload (1.5%) could have been due to the 2016 
Rule's language encompassing gender identity and sex stereotyping 
claims in States where covered entities are not otherwise required to 
handle those claims. The proposed rule estimated an annual savings in 
labor attributed to a 1.5% decrease in grievance caseload as $123.4 
million, representing 1.5% of the annual median wage of a medical and 
health service manager ($199,472 fully loaded) multiplied by the 41,250 
covered entities with 15 or more employees.
    Nevertheless, in this final rule the Department does not estimate a 
cost savings concerning grievance procedures. This is because, as 
stated repeatedly elsewhere, the court order vacating the gender 
identity provisions of the 2016 Rule means that this final rule's 
changes concerning gender identity will have no direct material 
economic impact. The Franciscan Alliance court order forms the new 
legal baseline in this respect, and therefore the primarily-emphasized 
economic baseline, for the purposes of this estimate. To the extent 
sex-stereotyping claims remain viable, they were already authorized by 
the Supreme Court's longstanding interpretation of sex stereotyping.
i. Additional Costs for Training and Familiarization
    To comply with the final rule, the Department anticipates that some 
covered entities may incur costs to re-train employees in order to 
realize potential longer-term costs savings from the deregulatory 
aspects of this final rule's changes. The Department assumes that 
employers are most likely to train employees who interact with the 
public, and will therefore likely train between 40% and 60% of their 
employees, as the percentage of employees that interact with patients 
and the public varies by covered entity. For purposes of the analysis, 
the Department assumes that 50% of the covered entity's staff will 
receive one-time training on the requirements of the regulation. It 
uses the 50% estimate as a proxy, given the lack of certain information 
as described below. For the purposes of the analysis, the Department 
does not distinguish between employees whom covered entities will train 
and those who obtain training independently of a covered entity.
i. Number of Covered Entities That May Train Workers
    The 2016 Rule estimated that 275,002 covered entities would train 
their employees on the rule's requirements in general (including 
training regarding language access provisions), and used that 275,002 
figure as the basis for calculating costs to covered entities arising 
specifically out of the rule's prohibition on discrimination on the 
basis of sex. See 81 FR at 31450. The Department assumes, for purposes 
of this analysis, that the 2016 Rule's estimate was an accurate and 
reasonable basis for calculating costs arising from the need to provide 
training regarding the 2016 Rule.

       Table 3--Number of Healthcare Entity Firms Covered by Rule
------------------------------------------------------------------------
                                                             Number of
              NAIC                     Entity type             firms
------------------------------------------------------------------------
62142..........................  Outpatient mental                 4,987
                                  health and substance
                                  abuse centers.
621491.........................  HMO medical centers....             104
621492.........................  Kidney dialysis centers             492
621493.........................  Freestanding ambulatory           4,121
                                  surgical and emergency
                                  centers.
621498.........................  All other outpatient              5,399
                                  care centers.
6215...........................  Medical and diagnostic            7,958
                                  laboratories.
6216...........................  Home healthcare                  21,668
                                  services.
6219...........................  All other ambulatory              6,956
                                  healthcare services.
62321..........................  Residential                       6,225
                                  intellectual and
                                  developmental
                                  disability facilities.
6221...........................  General medical and               2,904
                                  surgical hospitals.
6222...........................  Psychiatric and                     411
                                  substance abuse
                                  hospitals.
6223...........................  Specialty (except                   373
                                  psychiatric and
                                  substance abuse)
                                  hospitals.
6231...........................  Nursing care facilities           8,623
                                  (skilled nursing
                                  facilities).
44611..........................  Pharmacies and drug              18,852
                                  stores.
6211...........................  Offices of physicians..         185,649
524114.........................  Insurance Issuers......             180

[[Page 37237]]

 
                                 Navigator grantees.....             100
                                                         ---------------
    Total Entities.............  .......................         275,002
------------------------------------------------------------------------

ii. Number of Individuals Who Will Receive Training
    The first category of healthcare staff that may receive training 
comprises health diagnosing and treating practitioners. This category 
includes physicians, dentists, optometrists, physician assistants, 
occupational, physical, speech and other therapists, audiologists, 
pharmacists, registered nurses, and nurse practitioners. The BLS 
occupational code for this grouping is 29-1000, and the 2018 reported 
count for this occupational group is approximately 5.4 million, with 
average loaded wages of $98.04 per hour.
    The second category of healthcare staff that the Department assumes 
will receive training comprises degreed technical staff (Occupation 
code 29-2000) and accounts for 3.1 million workers with average loaded 
wages of $46.52 per hour. Technicians work in almost every area of 
healthcare: x-ray, physical, speech, psychiatric, dietetic, laboratory, 
nursing, and records technicians, to name but a few areas.
    The third category of healthcare staff that the Department assumes 
will receive training comprises non-degreed medical assistants 
(Occupation code 31-0000), and includes psychiatric and home health 
aides, orderlies, dental assistants, and phlebotomists. Healthcare 
support staffs (technical assistants) operate in the same medical 
disciplines as technicians, but often lack professional degrees or 
certificates. The Department refers to this workforce as non-degreed, 
compared to medical technicians who generally have degrees or 
certificates. There are approximately 4.1 million individuals employed 
in these occupations, with average loaded wages of $31.14 per hour.
    The fourth category of healthcare staff that the Department assumes 
will receive training is healthcare managers (approximately 0.4 million 
based on BLS data for occupation code 11-9111), with average loaded 
wages of $109.36 per hour. Because the Department assesses costs of 
familiarization with the regulation for one manager at each entity, it 
assumes that those managers will have already become familiar with the 
regulation and will not need additional training.
    The fifth category of healthcare staff that the Department assumes 
will receive training is office and administrative assistants--Office 
and Administrative Support Occupation (Occupation code 43-0000). These 
workers are often the first staff patients encounter in a health 
facility and, because of this, covered entities might find it important 
that staff, such as receptionists and assistants, receive training on 
the regulatory requirements. Approximately 2.8 million individuals were 
employed in these occupations in health facilities in 2018, with 
average loaded wages of $36.50 per hour. The Department assumes that 
outreach workers are included in the five categories listed above, 
especially in the manager category.
iii. Total Costs of Training
    The 2016 Rule estimated that covered entities would incur $420.8 
million in undiscounted costs to train employees on the requirements of 
the Rule, distributed roughly evenly over the first two years after the 
2016 Rule's effective date. 81 FR at 31458. This conclusion presumed 
covered entities were already periodically training employees on their 
obligations under Section 1557, but that the 2016 Rule's new sex 
discrimination requirements would induce covered entities to engage in 
additional ``comprehensive training.'' 81 FR at 31447.
    For the purposes of this regulatory impact analysis, the Department 
assumes covered entities would face similar costs to retrain the 
workforce on this final rule's requirements.\378\ However, because some 
covered entities will avoid incurring training expenses when they are 
not required to (as they will not be subject to the final rule), and 
because several States with large populations already prohibit gender 
identity discrimination in healthcare, the Department further assumes 
that only 50% of covered entities would modify their policies and 
procedures to reflect the changes in the final rule. Moreover, to the 
extent entities were motivated to provide training specifically due to 
the sex discrimination components of the 2016 Rule, a court has already 
vacated the gender identity and termination of pregnancy provisions of 
the 2016 Rule, and this final rule simply amends the Code of Federal 
Regulations to conform to the vacatur in that regard. The Department 
further assumes that 50% of covered entities, or 137,501, would train 
their employees to reflect the changes in this final rule. As in the 
2016 Rule, the Department assumes that approximately half of the 
employees at these covered entities will engage in an average of an 
additional hour of training, and that this will occur in the first year 
of implementing this rule. These assumptions imply total training costs 
of $235.9 million. The 2016 Rule's calculations of training costs did 
not anticipate any ongoing training costs after year one--either in the 
form of annual refresher training for returning employees or training 
for new employees. The Department now believes that covered entities 
likely incur such costs, but assumes that equal costs would also be 
incurred under this final rule. Therefore, the Department has excluded 
ongoing training costs from the calculation of the baseline and from 
the calculation of the projected costs of the proposed rule, because 
such training has a net zero effect on projected costs.
---------------------------------------------------------------------------

    \378\ Training costs in the 2016 Rule relied upon 2014 wages. 
See, e.g., 81 FR at 31451 (estimating the median hourly wage for 
occupation code 29-1000 at $36.26, unloaded, at https://www.bls.gov/oes/special.requests/oesm14nat.zip .
---------------------------------------------------------------------------

j. Additional Costs for Revising Policies and Procedures
    As discussed above, the Department anticipates that 50% of covered 
entities, or approximately 137,501 entities, would choose to revise 
their policies or procedures to reflect this final rule's clarification 
of the application of Section 1557, while other covered entities may 
retain their policies to ensure compliance with State or local laws. 
The Department assumes that it would take, on average, three to five 
hours for a provider to modify policies and procedures concerning this 
final rule. The Department selects four hours, the midpoint of this 
range, for the analysis. The Department further assumes that an average 
of three of these hours would be spent by a mid-level manager 
equivalent to a first-line

[[Page 37238]]

supervisor (Occupation code 43-1011), at a cost of $57.06 per hour 
\379\ after adjusting for overhead and benefits, while an average of 
one hour would be spent by executive staff equivalent to a general and 
operations manager (Occupation code 11-1021), at a cost of $119.12 per 
hour \380\ after adjusting for overhead and benefits. The total cost 
for the estimated 137,501 covered entities to make their policies and 
procedures consistent with the final rule's changes is estimated to be 
approximately $39.9 million following implementation of this rule.
---------------------------------------------------------------------------

    \379\ BLS, Occupational Employment and Wages, May 2018, https://www.bls.gov/oes/2018/may/oes_nat.htm.
    \380\ Id.
---------------------------------------------------------------------------

    The above estimates of time and number of entities that would 
choose to revise their policies under the regulation are approximate 
estimates based on general BLS data. Due to the wide range of types and 
sizes of covered entities, from complex multi-divisional hospitals to 
small neighborhood clinics and physician offices, the above estimates 
of time and number of entities that would choose to revise their 
policies under the regulation is difficult to calculate precisely.
k. Other Benefits or Costs
    The 2016 Rule's regulatory impact analysis did not include an 
economic cost-benefit analysis of the regulation's impact on health 
insurance benefit design. The Department lacks sufficient data on how 
much burden the 2016 Rule has placed on the development and operation 
of insurance benefits policies, and thus is unable to fully assess the 
benefit of removing this requirement.
    The Department received several comments concerning the impact of 
the proposed rule on issues concerning discrimination on the basis of 
LGBTQ status, sex stereotyping, termination of pregnancy, and other 
provisions.
    Comment: Many commenters objected that the Department did not 
estimate the potential for increases in the denial, delay, or 
substandard delivery of healthcare services from the rule's changes 
concerning gender identity.
    One commenter suggested exploring quantitative analysis based on a 
survey by Harvard University and National Public Radio (NPR) in which 
18% of LGBTQ people polled in 2017 reported foregoing care that they 
need, including preventive care, due to fears of or experiences of 
discrimination (including 22% of transgender people).\381\ The comment 
estimated that this regulation will cost $1.4 billion in excess costs 
over the next ten years simply to treat cases of four particular 
cancers that would have been detected and prevented by screening, and 
that there will be an 18% increase in preventable mortality from these 
four cancers among LGBT people. The comment cited the 2016 value of a 
statistical life (VSL) used by the U.S. Department of Transportation to 
estimate these preventable deaths as being worth $39 billion to the 
U.S. economy over the next ten years.
---------------------------------------------------------------------------

    \381\ NPR, ``Discrimination in America: Experiences and Views of 
LGBTQ Americans'' (Nov. 2017), available at https://www.npr.org/documents/2017/nov/npr-discrimination-lgbtq-final.pdf.
---------------------------------------------------------------------------

    Another commenter provided a list of potential sources of economic 
costs the proposed rule could produce concerning transgender patients, 
including out-of-pocket costs shifted because of transgender 
exclusions; increased costs from healthcare issues exacerbated by 
discriminatory delay or denial of care; increased costs related to sex 
coding; or increased costs due to substandard delivery of care. Other 
commenters similarly contended that literature on increased costs due 
to discrimination could be used to estimate economic costs. But such 
commenters did not provide quantitative values of such costs, or of 
ways to attribute the costs or portions thereof to this rulemaking.
    One healthcare provider stated that they have not incurred any 
unreasonable costs in delivering care to its LGBTQ patients from 
complying with nondiscrimination protections based on sexual 
orientation and gender identity. The commenter added that adopting 
transgender-inclusive healthcare practices can reduce the costs 
associated with complications that arise when care is delayed or denied 
transgender patients due to discrimination.
    One commenter stated that patients without primary care would 
experience an increase in emergency room visits, which would result in 
increased costs for the healthcare system--including from hospitals' 
and the government's absorbing and subsidizing the costs of uninsured 
patients.
    Commenters raised similar comments concerning sexual orientation as 
did the commenters discussing gender identity or LGBTQ issues more 
broadly, contending the proposed rule should estimate the impact of not 
including protections against sexual orientation discrimination.
    Response: The Department appreciates the comments concerning the 
regulatory impact of this final rule's changes concerning gender 
identity.
    This rule commits the Department to vigorous enforcement of the 
nondiscrimination provisions of Section 1557 and Title IX as 
incorporated therein, according to the plain meaning of the protections 
set forth in those statutes. In addition, the gender identity 
provisions of the 2016 Rule were preliminarily enjoined on a nationwide 
basis by a court from December 2016 until October 2019, when they were 
vacated entirely. As a result, this final rule maintains the status quo 
with respect to gender identity under the enforcement of the Section 
1557 rule.
    Based on the Department's review of the public comments, the 
commenters did not provide, and the Department is not otherwise aware 
of, reliable data or methods to calculate the economic impacts 
concerning gender identity that they allege would be attributable to 
this final rule. Commenters cited various sources of data, but many 
were either too narrow in not providing a basis to estimate the impacts 
of this rule nationwide, or were too broad in discussing aspects of the 
healthcare system but not impacts of this specific rule. For example, 
citations to data about the percent of transgender persons who forgo 
care due to fears or experiences of discrimination, and a calculation 
of the costs to the healthcare system resulting from such occurrences, 
are not sufficient to estimate the effects of this final rule itself, 
due to court orders preliminarily enjoining and then vacating 
provisions in the 2016 Rule, State and local laws that already provide 
gender identity protections, and other factors that prevent the 
Department from showing that this final rule is causing those effects. 
For example, one poll cited by commenters was conducted in 2017, when 
the 2016 Rule was already in place, but when its gender identity 
provisions were preliminarily enjoined. So it is not clear from that 
poll that the 2016 Rule yielded the benefits the commenters say it did, 
and it is even less clear how this final rule will remove those 
benefits. Generally, the Department's review of comments is that 
concerns about increased costs to LGBT persons from this final rule do 
not offer sufficient quantitative evidence for the Department to 
provide an estimate along these dimensions.
    Finally, as discussed above, because the 2016 Rule contained no 
prohibition on sexual orientation discrimination in the 2016 Rule, the 
Department does not deem there to be an economic impact resulting from 
this final rule with respect to sexual orientation discrimination.

[[Page 37239]]

    Consequently, commenters' warnings of effects of this rule's 
changes on these issues do not give rise to impacts that are properly 
attributable to this rule and that the Department believes can be 
estimated for the purposes of this analysis.
    Comment: One commenter contended that the Department should include 
analysis of the consequences of removing sex stereotyping language from 
the rule. The commenter suggested that costs of this rescission could 
include increased confusion for patients and covered entities, 
increased discrimination based on sex stereotyping with attendant 
economic and non-economic costs to patients and the public health 
system, increased need for legal advice, and increased litigation.
    Response: To the extent that sex stereotyping language from the 
2016 Rule was interpreted to encompass gender identity, court orders 
have preliminarily enjoined and now vacated those provisions. 
Therefore, this final rule does not directly induce changes in this 
regard. To the extent that sex stereotyping is a recognized category of 
sex discrimination under longstanding Supreme Court precedent, this 
final rule commits the Department to continuing to vigorously enforce 
Title IX through Section 1557, and therefore the Department estimates 
that this final rule will not have any material effect on the scope of 
sex stereotyping claims as authorized by Title IX and Section 1557.
    Comment: A commenter objected that the proposed rule did not 
estimate the economic impact of withdrawal of Federal guidance and 
technical support concerning the 2016 Rule.
    Response: All guidance and technical support concerning the 2016 
Rule was withdrawn by operation of the preamble to the proposed rule, 
which itself is a guidance document--not directly by this final rule. 
The outdated guidance documents are in the process of being removed 
from the Department's websites. The Department is not aware of any data 
that would allow it to estimate the effects of changes to its sub-
regulatory guidance. To the extent that certain guidance and technical 
support concerned provisions of the 2016 Rule that were enjoined and 
vacated, this final rule is not the direct cause of the Department's 
non-enforcement of those provisions.
    Comment: Some commenters contended that the proposed rule would 
lead to economic burdens concerning termination of pregnancy for women 
and other patients who are denied access to care. One commenter stated 
that there is well-documented research that shows the significant 
healthcare costs women experience when they face healthcare denials. 
Another commenter stated that women will suffer negative health effects 
or death if they are denied services relating to complications from an 
abortion or a miscarriage. Another commenter stated that there are 
costs to patients facing discrimination as a result of having a 
previous termination of pregnancy.
    Several commenters contended that the proposed rule would place 
undue costs and burdens on survivors of sexual and domestic violence. 
The commenters stated that healthcare programs provide critical and 
costly care for survivors of domestic violence, sexual assault, and 
human trafficking. The commenters stated that recent data from the CDC 
shows that the lifetime per-victim cost of intimate partner violence 
was $103,767 for women victims, with 59% going to medical costs, and 
that more than 550,000 injuries due to intimate partner violence 
require medical attention each year.
    Response: The Department appreciates comments in this regard. This 
final rule fully commits the Department to enforcement of Section 1557 
and Title IX to protect women from discrimination on the basis of sex, 
including and especially vulnerable populations such as survivors of 
domestic violence, sexual assault, and human trafficking. As noted 
above, court orders have already enjoined and now vacated the 
termination of pregnancy provisions from the 2016 Rule. Therefore, this 
final rule does not have a direct material economic impact with regard 
to discrimination on the basis of termination of pregnancy. This final 
rule further ensures the Department will enforce Section 1557 and Title 
IX consistent with the statutory provisions of Title IX. The Department 
lacks data or methods enabling it to provide quantitative estimates of 
any alleged economic impacts related to termination of pregnancy 
provisions.
    Comment: A commenter contended that the Department should conduct a 
cost-benefit analysis specifically on the impact of adopting Title IX's 
religious exemptions, or compliance with RFRA.
    Response: The Department disagrees. The Title IX statute already 
includes certain exemptions concerning religious groups, and RFRA 
protects certain exercises of religion from substantial burdens. This 
final rule affirms that the Department will only enforce Section 1557 
consistent with the statutory provisions of Title IX and RFRA, and 
amends the Title IX regulations to explicitly include the provisions of 
the Title IX statute concerning religious groups and abortion 
neutrality. As the Department is already bound by statute to implement 
Title IX and Section 1557 consistent with those statutes and with RFRA, 
the Department does not attribute its compliance with those statutes to 
be attributable to this final rule. Economic impacts due to compliance 
with Title IX and RFRA would be attributable, not to this final rule, 
but to those statutes themselves, and are not relevant for this 
regulatory impact analysis.
    Comment: One commenter stated that the Department should estimate 
the economic impacts of its conforming amendments.
    Response: Section 1557 encompasses all the CMS programs addressed 
by the conforming amendments, so the Department's estimates of impacts 
of changes to the Section 1557 rule already encompass the impact on 
entities covered by those rules.
(5) Impact on State, Local, and Tribal Entities Under Executive Orders 
12866, 13132, and 13175
a. State and Local Governments
    Executive Order 13132 establishes certain requirements that an 
agency must meet when it issues a rule that imposes substantial direct 
requirement costs on State and local governments, preempts State law, 
or otherwise has Federalism implications. Executive Order 13132, 64 FR 
43255 (Aug. 4, 1999). The Department does not believe that this final 
rule would (1) impose substantial direct requirements costs on State or 
local governments; (2) preempt State law; or (3) otherwise have 
Federalism implications. Section 1557 itself provides that it shall not 
be construed ``to supersede State laws that provide additional 
protections against discrimination on any basis described in subsection 
(a) [of Section 1557].'' 42 U.S.C. 18116(b).
    The final rule maintains the full force of Federal civil rights 
laws' protections against discrimination, but does not attempt to 
impose a ceiling on how those protections may be observed by States. 
State and local jurisdictions would continue to have the flexibility to 
impose additional civil rights protections.
    The Department believes that there would be reduced costs to State 
and local entities, by repealing wasteful Federal mandates and giving 
States more flexibility to address the needs of LEP individuals or 
other regional-specific issues.
    The Department believes that the change to its Title IX regulations 
will

[[Page 37240]]

not have a substantial direct effect on the States, on the relationship 
between the national government and the States, on the distribution of 
power and responsibilities among the various levels of government, or 
on tribal self-government or sovereignty. This final rule does not 
subject Title IX funding recipients to new obligations, but rather 
implements Title IX according to its statutory text, and relieves 
potential burdens on the States or tribes that could have resulted from 
any prior interpretation of Title IX by HHS that was inconsistent with 
the statute. This final rule allows States and tribes to adopt or 
continue to provide nondiscrimination protections on the basis of 
sexual orientation, gender identity, or termination of pregnancy, in 
State, local, and tribal law. Therefore, the Department has determined 
that this final rule does not have sufficient Federalism implications 
to warrant the preparation of a Federalism summary impact statement 
under Executive Order 13132, and that the rule would not implicate the 
requirements of Executive Orders 12866 and 13175 with respect to 
tribes.
    Comment: One commenter stated it was inconsistent for the 
Department to say the 2016 Rule imposed burdens on States but that the 
proposed rule would not impose new burdens.
    Response: The 2016 Rule imposed or may have imposed burdens 
concerning notices and taglines, as well as gender identity and 
termination of pregnancy provisions beyond the text of Title IX. This 
final rule can relieve such burdens without imposing new burdens. To 
the extent that the gender identity and termination of pregnancy 
provisions were vacated in October 2019, the Department agrees this 
final rule does not relieve such burdens, but to the same extent, this 
final rule does not impose any corresponding burdens.
    Comment: A commenter stated that HHS points to no evidence of 
substantial burdens on States and localities as regards the provision 
or coverage of medically necessary care related to gender transition.
    Response: The Department's conclusion that this final rule does not 
impose new burdens on States and localities is independent of the 
Department's suggestion that the 2016 Rule, to the extent it prohibited 
discrimination on grounds exceeding Title IX and State and local law, 
also imposed burdens on such States and localities.
    Comment: One commenter stated that the proposed rule could impose 
additional costs on States that adopted policies related to private 
insurance and Medicaid based on the 2016 Rule that see an increase in 
healthcare discrimination complaints in their State-level human rights 
commissions, as HHS OCR will no longer receive such complaints, and 
such States may reinstate or maintain exclusions and face costly 
litigation.
    Response: The court orders preliminarily enjoining and eventually 
vacating the 2016 Rule's gender identity and termination of pregnancy 
provisions have been in effect since December 2016. States have, 
therefore, not been bound by those provisions, and this final rule's 
changes in that regard will not cause States to need to change their 
policies in that regard. States will also not likely see an increase in 
complaints at the State level as a result of this rule, because HHS OCR 
has not been able to enforce those provisions for almost the entire 
lifespan of the 2016 Rule. Finally, this rule does not require States 
to reinstate exclusions from coverage, so litigation that States might 
face as a result of doing so are not directly attributable to this 
final rule.
b. Tribal Governments
    Executive Order 12866 directs that significant regulatory actions 
avoid undue interference with State, local, or tribal governments, in 
the exercise of their governmental functions. Executive Order 12866 at 
Sec.  6(a)(3)(B).\382\ Executive Order 13175 further directs that 
Agencies respect Indian tribal self-government and sovereignty, honor 
tribal treaty and other rights, and strive to meet the responsibilities 
that arise from the unique legal relationship between the Federal 
Government and Indian tribal governments. Executive Order 13175 at 
Sec.  2(a). The Department does not believe that the final rule would 
implicate the requirements of Executive Orders 12866 and 13175 with 
respect to tribal sovereignty.
---------------------------------------------------------------------------

    \382\ As stated in the preceding section, the final rule does 
not have Federalism implications.
---------------------------------------------------------------------------

(6) Avoidance of Inconsistent, Incompatible, or Duplicative Regulations
    Executive Order 12866 requires the Department to avoid issuing 
regulations that are inconsistent, incompatible, or duplicative with 
other regulations that it has issued or that have been issued by other 
Federal agencies. Executive Order 12866 at Sec.  1(b)(10). Section 1557 
itself requires avoidance of duplication by providing that the 
enforcement mechanisms under specifically identified civil rights laws 
``shall apply for purposes of violations'' of Section 1557. 42 U.S.C. 
18116(a).\383\ The preamble to the 2016 Rule repeatedly stated that, 
with the exception of issues concerning notices, sex discrimination, 
and language access plans, it was merely applying civil rights 
protections that were already applicable and familiar to covered 
entities. See 81 FR at 31446. (``It is important to recognize that this 
final rule, except in the area of sex discrimination, applies pre-
existing requirements in Federal civil rights laws to various entities, 
the great majority of which have been covered by these requirements for 
years.''); 81 FR at 31464 (``For the most part, because this regulation 
is consistent with existing standards applicable to the covered 
entities, the new burdens created by its issuance are minimal.'').
---------------------------------------------------------------------------

    \383\ For the applicable enforcement mechanisms, See 45 CFR 
parts 80 and 81 (Title VI), 85 (Section 504), 86 (Title IX), 90 and 
91 (Age Act).
---------------------------------------------------------------------------

    With regard to the current 2016 Rule's notice and taglines 
requirement, covered entities are already subject to dozens of 
regulations concerning multi-language taglines or notices concerning an 
individual's right to have documents translated. For example, CMS 
imposes taglines requirements on health insurance marketplaces, QHP 
issuers, group health plans and health insurance issuers, navigators, 
non-navigator assistance personnel, Medicaid, Medicaid managed care, 
Children's Health Insurance Program, Medicare Advantage, and Medicare 
Part D.\384\

[[Page 37241]]

Furthermore, a Department of Treasury regulation imposed taglines 
requirements for hospital organizations to qualify for tax-exempt 
status.\385\ Additionally, in 2003, the Department issued guidance 
under Title VI, setting forth a flexible four-factor framework to 
assess the necessity and reasonableness for providing written 
translation for LEP individuals.\386\ Finally, the ACA itself provides 
that each summary of benefits and coverage provided by issuers--perhaps 
the single most important health insurance-related document a person 
receives--must be ``presented in a culturally and linguistically 
appropriate manner.'' 42 U.S.C. 300gg-15(b)(2).
---------------------------------------------------------------------------

    \384\ 45 CFR 147.136(e)(2)(iii) and (e)(3) and Sec.  
147.200(a)(5) (requiring group health plans and QHP issuers to post 
taglines in languages in which 10% of individuals with LEP county-
wide are exclusively literate on internal claims and appeals 
notices, and requiring QHP issuers to post on its Summary of 
Benefits and Coverage), Sec.  155.215(c)(4) (requiring Navigators 
and non-Navigator personnel in States with Marketplaces operated by 
HHS to ``[p]rovide oral and written notice to consumers with LEP, in 
their preferred language, informing them of their right to receive 
language assistance services and how to obtain them''); 42 CFR 
435.905(b)(3) (Medicaid regulations requiring individuals to be 
``informed of the availability of language services . . . and how to 
access . . . [them] through providing taglines in non-English 
languages indicating the availability of language services''); Sec.  
438.10(c)(5)(i) through (ii) (Medicaid managed care regulations 
requiring taglines until July 1, 2017); Sec.  438.10(d)(2) through 
(3), (d)(5)(i), (d)(5)(iii) and (d)(5)(j) (Medicaid managed care 
regulations requiring taglines on ``all written materials for 
potential enrollees'' in the prevalent non-English languages in the 
State and requiring notification that ``oral interpretation is 
available for any language and written translation is available in 
prevalent languages'' during the rating period for contracts with 
managed care entities beginning on or after July 1, 2017), Sec.  
457.340(a) (applying certain Medicaid requirements to the Children's 
Health Insurance Program, including Sec.  435.905(b)(3), which 
requires individuals to be ``informed of the availability of 
language services . . . and how to access . . . [them] through 
providing taglines in non-English languages indicating the 
availability of language services''), 457.1207 (applying certain 
Medicaid managed care requirements to Children's Health Insurance 
Program managed care, including Sec.  438.10(c)(5)(i)-(ii) until the 
State fiscal year beginning on or after July, 1, 2018), Sec.  
438.10(d)(2)-(3), (d)(5)(i), (iii), (j) (applying certain Medicaid 
managed care requirements to Children's Health Insurance Program 
managed care, in the State fiscal year beginning on or after July, 
1, 2018); CMS, 2017 Medicare Marketing Guidelines, Sec.  30.5.1, 
Sec.  100.2.2, Sec.  8, Sec.  80-8 (Jun. 10, 2016), https://www.cms.gov/Medicare/Health-Plans/ManagedCareMarketing/Downloads/2017MedicareMarketingGuidelines2.pdf (providing a CMS Multi-Language 
Insert'' for certain Medicare Advantage Plan's and Medicare Part D 
Plan Sponsors' marketing materials meeting the percentage 
translation threshold in Sec.  422.2264(e) and Sec.  423.2264(e) of 
Title 42 of the CFR). As discussed in the RIA section, we presume 45 
CFR 155.205(c)(2)(iii)(A) (requiring Marketplaces and QHP issuers to 
post taglines on their websites and documents ``critical for 
obtaining health insurance coverage or access to health care 
services through a QHP'') and other provisions that depend or refer 
to 45 CFR part 92 for their tagline requirements will no longer 
apply under this final rule.
    \385\ See 79 FR 78954 (Dec. 31, 2014) (finalizing rule requiring 
the plain language summary of the financial assistance policy for 
hospital organizations to qualify as tax exempt, to indicate, if 
applicable, whether the summary, the financial assistance policy, 
and the application for such assistance are available in other 
languages).
    \386\ Guidance to Federal Financial Assistance Recipients 
Regarding Title VI Prohibition Against National Origin 
Discrimination Affecting Limited English Proficient Persons, 68 FR 
47315 (Aug. 8, 2003) (HHS LEP Guidance).
---------------------------------------------------------------------------

    Substantially replacing many provisions of the 2016 Rule, including 
removing the notice and taglines requirements, would eliminate 
significant redundancies identified above, while maintaining vigorous 
enforcement of existing Federal civil rights statutes.

B. Executive Order 13771 on Reducing and Controlling Regulatory Costs

    This final rule is deemed an E.O. 13771 deregulatory action. The 
Department estimates that this final rule would generate $0.24 billion 
in net annualized savings at a 7% discount rate (discounted relative to 
year 2016, over a perpetual time horizon, in 2016 dollars).
    Furthermore, Executive Order 13765 states that ``the Secretary of 
Health and Human Services (Secretary) and the heads of all other 
executive departments and agencies (agencies) with authorities and 
responsibilities under the [ACA] shall exercise all authority and 
discretion available to waive, defer, grant exemptions from, or delay 
the implementation of any provision or requirement of the [ACA] that 
would impose a fiscal burden on any State or a cost, fee, tax, penalty, 
or regulatory burden on individuals, families, healthcare providers, 
health insurers, patients, recipients of healthcare services, [or] 
purchasers of health insurance.'' Executive Order 13765, 82 FR 8351, 
8351 (Jan. 24, 2017). In implementing Section 1557 of the ACA, the 2016 
Rule imposed significant regulatory burdens on covered entities, 
including States, healthcare providers, and health insurers, without 
sufficient corresponding benefits for patients or beneficiaries. By 
proposing to substantially replace the 2016 Rule with a regulation that 
requires compliance with pre-existing civil rights laws, the Department 
is acting in accordance with Executive Order 13765 in exercising its 
authority and discretion to address the fiscal burdens on States, and 
the regulatory burdens imposed on individuals, families, healthcare 
providers, health insurers, patients, and recipients of healthcare 
service. The final rule will particularly reduce the economic burden 
imposed on healthcare providers and insurers required to provide 
taglines under the 2016 Rule. Decreasing the burden on these providers 
and insurers will allow them to pass along some of the cost savings to 
individuals, families, patients, and beneficiaries of insurance to whom 
they provide services or coverage. Additionally, eliminating the 
taglines requirement will alleviate burdens on patients and insurance 
beneficiaries that neither need nor want to receive repeated taglines 
mailings.

C. Congressional Review Act

    The Congressional Review Act (CRA) defines a ``major rule'' as 
``any rule that the Administrator of the Office of Information and 
Regulatory Affairs (OIRA) of the Office of Management and Budget finds 
has resulted in or is likely to result in--(A) an annual effect on the 
economy of $100,000,000 or more; (B) a major increase in costs or 
prices for consumers, individual industries, Federal, State, or local 
government agencies, or geographic regions; or (C) significant adverse 
effects on competition, employment, investment, productivity, 
innovation, or on the ability of United States-based enterprises to 
compete with foreign-based enterprises in domestic and export 
markets.'' 5 U.S.C. 804(2). Based on the analysis of this final rule 
under Executive Order 12866, this rule is expected to be a major rule 
for purposes of the CRA because it generates cost savings of over $100 
million. The Department will comply with the CRA's requirements to 
inform Congress.

D. Unfunded Mandates Reform Act

    This final rule is not subject to the Unfunded Mandates Reform Act 
because it falls under an exception for regulations that establish or 
enforce any statutory rights that prohibit discrimination on the basis 
of race, color, religion, sex, national origin, age, handicap, or 
disability. 2 U.S.C. 1503(2).

E. Regulatory Flexibility Act and Executive Order 13272 on Proper 
Consideration of Small Entities in Agency Rulemaking

    The Regulatory Flexibility Act (RFA) requires agencies to analyze 
regulatory options that would minimize any significant impact of a rule 
on small entities. Public Law 96-354, 94 Stat. 1164 (Sept. 19, 1980) 
(codified at 5 U.S.C. 601 through 612). The RFA requires an agency to 
describe the impact of a rulemaking on small entities by providing an 
initial regulatory flexibility analysis, unless the agency expects that 
the rule will not have a significant economic impact on a substantial 
number of small entities, provides a factual basis for this 
determination, and proposes to certify the statement. 5 U.S.C. 603(a), 
605(b). If an agency must provide an initial regulatory flexibility 
analysis, this analysis must address the consideration of regulatory 
options that would minimize the economic impact of the rule on small 
entities. 5 U.S.C. 603(c).
    For purposes of the RFA, small entities include small businesses, 
nonprofit organizations, and small governmental jurisdictions. HHS 
considers a rule to have a significant impact on a substantial number 
of small entities if it has at least a three percent impact on revenue 
for at least five percent of small entities.
    Based on its examination, the Department has concluded that this 
final rule does not have a significant economic impact on a substantial 
number of small entities. The preamble to the 2016 Rule discussed the 
character of small entities impacted by the 2016 Rule in detail. 81 FR 
at 31463-64. Although this final rule will affect numerous small 
entities, it does not create new or expanded requirements,

[[Page 37242]]

and, for all the reasons stated in the RIA, it will be reducing 
economic burdens on such entities overall. The changes concerning 
gender identity and termination of pregnancy, having already been 
vacated by court order, are not expected to result in any impact. The 
changes to the Department's Title IX rule would not impose any new 
substantive obligations on Federal funding recipients and, in fact, 
would provide regulatory clarity and relief for any small entities 
previously subject to several of the policies and requirements imposed 
by the Department. The changes made in conforming amendments overlap 
those made in the Section 1557 rule and described in the RIA.
    To the extent that this final rule imposes economic costs, these 
are generally limited to entities' voluntary choices to revise their 
policies and procedures and conduct training, and the Department 
believes these costs are well below those required to have a 
significant impact on a substantial number of small entities. In 
addition, the majority of the costs associated with this final rule are 
proportional to the size of entities, meaning that even the smallest of 
the affected entities are unlikely to face a substantial impact.
    For these reasons, the Secretary certifies that the final rule will 
not have a significant impact on a substantial number of small 
entities.
    Executive Order 13272 on Proper Consideration of Small Entities in 
Agency Rulemaking reinforces the requirements of the RFA and requires 
the Department to notify the Chief Counsel for Advocacy of the Small 
Business Administration if the final rule may have a significant 
economic impact on a substantial number of small entities under the 
RFA. Executive Order 13272, 67 FR 53461 (Aug. 16, 2002). Because the 
economic impact of the proposed rule is not significant under the RFA, 
the Department is not subject to Executive Order 13272's notification 
requirement.

F. Executive Order 12250 on Leadership and Coordination of 
Nondiscrimination Laws

    Pursuant to Executive Order 12250, the Attorney General has the 
responsibility to ``coordinate the implementation and enforcement by 
Executive agencies of . . . Title IX of the Education Amendments of 
1972 (20 U.S.C. 1681 et seq.)'' Executive Order 12250 at Sec.  1-2(b), 
45 FR 72995 (Nov. 2, 1980). The proposed rule was reviewed and approved 
by the Attorney General, and this final rule was also reviewed and 
approved by the Attorney General in finalizing the proposed rule 
without change.

G. Paperwork Reduction Act

    The Department has determined that this final rule does not impose 
additional reporting or recordkeeping requirements under the Paperwork 
Reduction Act of 1995, 44 U.S.C. 3501 et seq. Under the rule, OCR will 
update and revise its burden analysis by removing the burden associated 
with the posting of a nondiscrimination notice and taglines, 
development and implementation of a language access plan, and 
designation of a compliance coordinator and adoption of grievance 
procedures for covered entities with 15 or more employees. OCR has 
obtained Paperwork Reduction Act approval for this reporting 
requirement via an update to HHS Form 690 (Consolidated Civil Rights 
Assurance Form) \387\ separate from this rulemaking.
---------------------------------------------------------------------------

    \387\ See HHS OCR, Assurance of Compliance Portal, https://ocrportal.hhs.gov/ocr/aoc/instruction.jsf.
---------------------------------------------------------------------------

(D) Delegation of Authority
    Notice is hereby given that I have delegated to the Director, 
Office for Civil Rights (OCR), with authority to re-delegate, 
enforcement and administration of Section 1557 of the Patient 
Protection and Affordable Care Act [42 U.S.C. 18116]. This delegation 
includes the authority to develop and direct implementation of the 
requirements of Section 1557 of the Patient Protection and Affordable 
Care Act [42 U.S.C. 18116] as applied to the Department and recipients 
of the Department's funds. This delegation supersedes the delegation of 
authority under Section 1557 to the Health Resources and Services 
Administration (HRSA) on April 21, 2016 in 81 FR 25680 (April 29, 
2016).

List of Subjects

42 CFR Part 438

    Civil rights, Discrimination, Grant programs-health, Individuals 
with disabilities, Medicaid, National origin, Nondiscrimination, 
Reporting and recordkeeping requirements, Sex discrimination.

42 CFR Part 440

    Civil rights, Discrimination, Grant programs-health, Individuals 
with disabilities, Medicaid, National origin, Nondiscrimination, Sex 
discrimination.

42 CFR Part 460

    Age discrimination, Aged, Civil rights, Discrimination, Health 
Incorporation by reference, Individuals with disabilities, Medicare, 
Medicaid, National origin, Nondiscrimination, Religious discrimination, 
Reporting and recordkeeping requirements, Sex discrimination.

45 CFR Part 86

    Civil rights, Colleges and universities, Employment, Administrative 
practice and procedure, Buildings and facilities, Education of 
individuals with disabilities, Education, Educational facilities, 
Educational research, Educational study programs, Equal educational 
opportunity, Equal employment opportunity, Graduate fellowship program, 
Grant programs--education, Individuals with disabilities, 
Investigations, Reporting and recordkeeping requirements, Sex 
discrimination, State agreement program, Student aid, Women.

45 CFR Part 92

    Administrative practice and procedure, Age discrimination, Civil 
rights, Discrimination, Elderly, Healthcare, Health facilities, Health 
insurance, Health programs or activities, Individuals with 
disabilities, National origin, Nondiscrimination, Reporting and 
recordkeeping requirements, Sex discrimination.

45 CFR Part 147

    Age discrimination, Civil rights, Discrimination, Healthcare, 
Health insurance, Individuals with disabilities, National origin, 
Nondiscrimination, Reporting and recordkeeping requirements, Sex 
discrimination, State regulation of health insurance.

45 CFR Part 155

    Actuarial value, Administration and calculation of advance payments 
of the premium tax credit, Administrative practice and procedure, 
Advance payments of premium tax credit, Age discrimination, Civil 
rights, Cost-sharing reductions, Discrimination, Healthcare access, 
Health insurance, Individuals with disabilities, National origin, 
Nondiscrimination, Plan variations, Reporting and recordkeeping 
requirements, Sex discrimination, State and local governments.

45 CFR Part 156

    Administrative appeals, Administrative practice and procedure, 
Administration and calculation of advance payments of premium tax 
credit, Advertising, Advisory Committees, Age discrimination, Brokers, 
Civil rights, Conflict of interest, Consumer protection, Cost-sharing 
reductions, Discrimination, Grant programs-health, Grants 
administration,

[[Page 37243]]

Healthcare, Health insurance, Health maintenance organization (HMO), 
Health records, Hospitals, American Indian/Alaska Natives, Individuals 
with disabilities, Loan programs-health, Organization and functions 
(Government agencies), Medicaid, National origin, Nondiscrimination, 
Payment and collections reports, Public assistance programs, Reporting 
and recordkeeping requirements, Sex discrimination, State and local 
governments, Sunshine Act, Technical assistance, Women, Youth.
    For the reasons set forth in the preamble, the Department of Health 
and Human Services amends 42 CFR parts 438, 440, and 460 and 45 CFR 
parts 86, 92, 147, 155, and 156 as follows:

Title 42--Public Health

PART 438--MANAGED CARE

0
1. The authority citation for part 438 continues to read as follows:

    Authority:  42 U.S.C. 1302.

0
2. Amend Sec.  438.3 by revising paragraph (d)(4) to read as follows:


Sec.  438.3  Standard contract requirements.

* * * * *
    (d) * * *
    (4) The MCO, PIHP, PAHP, PCCM or PCCM entity will not discriminate 
against individuals eligible to enroll on the basis of race, color, 
national origin, sex, or disability and will not use any policy or 
practice that has the effect of discriminating on the basis of race, 
color, or national origin, sex, or disability.
* * * * *

0
3. Amend Sec.  438.206 by revising paragraph (c)(2) to read as follows:


Sec.  438.206  Availability of services.

* * * * *
    (c) * * *
    (2) Access and cultural considerations. Each MCO, PIHP, and PAHP 
participates in the State's efforts to promote the delivery of services 
in a culturally competent manner to all enrollees, including those with 
limited English proficiency and diverse cultural and ethnic 
backgrounds, disabilities, and regardless of sex.
* * * * *

PART 440--SERVICES: GENERAL PROVISIONS

0
4. The authority citation for part 440 continues to read as follows:

    Authority: 42 U.S.C. 1302.

0
5. Revise Sec.  440.262 to read as follows:


Sec.  440.262  Access and cultural conditions.

    The State must have methods to promote access and delivery of 
services in a culturally competent manner to all beneficiaries, 
including those with limited English proficiency, diverse cultural and 
ethnic backgrounds, disabilities, and regardless of sex. These methods 
must ensure that beneficiaries have access to covered services that are 
delivered in a manner that meets their unique needs.

PART 460--PROGRAMS OF ALL-INCLUSIVE CARE FOR THE ELDERLY (PACE)

0
6. The authority citation for part 460 continues to read as follows:

    Authority:  42 U.S.C. 1302, 1395l, 1395eee(f), and 1396u-4(f)).

0
7. Amend Sec.  460.98 by revising paragraph (b)(3) to read as follows:


Sec.  460.98  Service delivery.

* * * * *
    (b) * * *
    (3) The PACE organization may not discriminate against any 
participant in the delivery of required PACE services based on race, 
ethnicity, national origin, religion, sex, age, mental or physical 
disability, or source of payment.
* * * * *

0
8. Amend Sec.  460.112 by revising paragraph (a) to read as follows:


Sec.  460.112  Specific rights to which a participant is entitled.

    (a) Respect and nondiscrimination. Each participant has the right 
to considerate, respectful care from all PACE employees and contractors 
at all times and under all circumstances. Each participant has the 
right not to be discriminated against in the delivery of required PACE 
services based on race, ethnicity, national origin, religion, sex, age, 
mental or physical disability, or source of payment. Specifically, each 
participant has the right to the following:
    (1) To receive comprehensive health care in a safe and clean 
environment and in an accessible manner.
    (2) To be treated with dignity and respect, be afforded privacy and 
confidentiality in all aspects of care, and be provided humane care.
    (3) Not to be required to perform services for the PACE 
organization.
    (4) To have reasonable access to a telephone.
    (5) To be free from harm, including physical or mental abuse, 
neglect, corporal punishment, involuntary seclusion, excessive 
medication, and any physical or chemical restraint imposed for purposes 
of discipline or convenience and not required to treat the 
participant's medical symptoms.
    (6) To be encouraged and assisted to exercise rights as a 
participant, including the Medicare and Medicaid appeals processes as 
well as civil and other legal rights.
    (7) To be encouraged and assisted to recommend changes in policies 
and services to PACE staff.
* * * * *

Title 45--Public Welfare

PART 86--NONDISCRIMINATION ON THE BASIS OF SEX IN EDUCATION 
PROGRAMS OR ACTIVITIES RECEIVING FEDERAL FINANCIAL ASSISTANCE

0
9. The authority citation for part 86 is revised to read as follows:

    Authority:  20 U.S.C. 1681 through 1688; Pub. L. 100-259, 102 
Stat. 28 (Mar. 22, 1988).

0
10. Amend Sec.  86.2:
0
a. In paragraph (a), by adding ``, 1687, 1688'' after ``1686''; and
0
b. In paragraph (n), by removing the words ``United States Commissioner 
of Education'' and adding in their place the words ``Secretary of 
Education''.

0
11. Add Sec.  86.18 to read as follows:


Sec.  86.18  Amendments to conform to statutory exemptions.

    (a) Nothing in this part shall be construed to force or require any 
individual or hospital or any other institution, program, or activity 
receiving Federal funds to perform or pay for an abortion.
    (b) Nothing in this part shall be construed to require or prohibit 
any person, or public or private entity, to provide or pay for any 
benefit or service, including the use of facilities, related to an 
abortion. Nothing in the preceding sentence shall be construed to 
permit a penalty to be imposed on any person or individual because such 
person or individual is seeking or has received any benefit or service 
related to a legal abortion.
    (c) This part shall be construed consistently with, as applicable, 
the First Amendment to the Constitution, Title IX's religious 
exemptions (20 U.S.C. 1681(a)(3) and 1687(4)), the Religious Freedom 
Restoration Act (42 U.S.C. 2000b et seq.), and provisions related to 
abortion in the Church Amendments (42 U.S.C. 300a-7), the Coats-Snowe 
Amendment (42 U.S.C. 238n), section 1303 of the Patient Protection and 
Affordable Care Act (42 U.S.C. 18023), and appropriation rider 
provisions relating to abortion, to the extent they remain in effect or 
applicable, such as the Hyde

[[Page 37244]]

Amendment (e.g., Consolidated Appropriations Act, 2019, Pub. L. 115-
245, Div. B, secs. 506-07), the Helms Amendment (e.g., Continuing 
Appropriations Act, 2019, Pub. L. 116-6, Div. F, Title III), and the 
Weldon Amendment (e.g., Consolidated Appropriations Act, 2019, Pub. L. 
115-245, Div. B, sec. 507(d)).

0
12. Amend Sec.  86.31 by revising paragraph (b) to read as follows:


Sec.  86.31  Education programs or activities.

* * * * *
    (b) Specific prohibitions. Except as provided in this subsection, 
in providing any aid, benefit, or service to a student, a recipient 
shall not, on the basis of sex:
    (1) Treat one person differently from another in determining 
whether such person satisfies any requirement or condition for the 
provision of such aid, benefit, or service;
    (2) Provide different aid, benefits, or services or provide aid, 
benefits, or services in a different manner;
    (3) Deny any person any such aid, benefit, or service;
    (4) Subject any person to separate or different rules of behavior, 
sanctions, or other treatment;
    (5) Apply any rule concerning the domicile or residence of a 
student or applicant, including eligibility for in-State fees and 
tuition;
    (6) Aid or perpetuate discrimination against any person by 
providing significant assistance to any agency, organization, or person 
which discriminates on the basis of sex in providing any aid, benefit 
or service to students or employees;
    (7) Otherwise limit any person in the enjoyment of any right, 
privilege, advantage, or opportunity.
* * * * *

0
13. Revise Sec.  86.71 to read as follows:


Sec.  86.71  Enforcement procedures.

    For the purposes of implementing this Part, the procedural 
provisions applicable to Title VI of the Civil Rights Act of 1964 (42 
U.S.C. 2000d) are hereby adopted and incorporated herein by reference. 
These procedures may be found at 45 CFR 80.6 through 80.11 and 45 CFR 
part 81.

0
14. Revise part 92 to read as follows:

PART 92--NONDISCRIMINATION ON THE BASIS OF RACE, COLOR, NATIONAL 
ORIGIN, SEX, AGE, OR DISABILITY IN HEALTH PROGRAMS OR ACTIVITIES 
RECEIVING FEDERAL FINANCIAL ASSISTANCE AND PROGRAMS OR ACTIVITIES 
ADMINISTERED BY THE DEPARTMENT OF HEALTH AND HUMAN SERVICES UNDER 
TITLE I OF THE PATIENT PROTECTION AND AFFORDABLE CARE ACT OR BY 
ENTITIES ESTABLISHED UNDER SUCH TITLE

Subpart A--General Provisions
Sec.
92.1 Purpose.
92.2 Nondiscrimination requirements.
92.3 Scope of application.
92.4 Assurances.
92.5 Enforcement mechanisms.
92.6 Relationship to other laws.
Subpart B--Specific Applications to Health Programs or Activities
92.101 Meaningful access for individuals with limited English 
proficiency.
92.102 Effective communication for individuals with disabilities.
92.103 Accessibility standards for buildings and facilities.
92.104 Accessibility of information and communication technology.
92.105 Requirement to make reasonable modifications.

    Authority:  42 U.S.C. 18116; 5 U.S.C. 301, Pub. L. 100-259, 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).

Subpart A--General Provisions


Sec.  92.1  Purpose.

    The purpose of this part is to provide for the enforcement of 
section 1557 of the Patient Protection and Affordable Care Act, 42 
U.S.C. 18116, prohibiting discrimination under any health program or 
activity receiving Federal financial assistance, or under any program 
or activity administered by an Executive agency, or by any entity 
established, under Title I of such law, on the grounds of race, color, 
national origin, sex, age, or disability, except as provided in Title I 
of such law (or any amendment thereto). Section 1557 requires the 
application of the enforcement mechanisms under Title VI of the Civil 
Rights Act of 1964 (42 U.S.C. 2000d et seq.), Title IX of the Education 
Amendments of 1972 (20 U.S.C. 1681 et seq.), the Age Discrimination Act 
of 1975 (42 U.S.C. 6101 et seq.), and Section 504 of the Rehabilitation 
Act of 1973 (29 U.S.C. 794) for purposes of violations of Section 1557 
and this part.


Sec.  92.2  Nondiscrimination requirements.

    (a) Except as provided in Title I of the Patient Protection and 
Affordable Care Act (or any amendment thereto), an individual shall 
not, on any of the grounds set forth in paragraph (b) of this section, 
be excluded from participation in, be denied the benefits of, or be 
subjected to discrimination under any health program or activity, any 
part of which is receiving Federal financial assistance (including 
credits, subsidies, or contracts of insurance) provided by the U.S. 
Department of Health and Human Services; or under any program or 
activity administered by the Department under such Title; or under any 
program or activity administered by any entity established under such 
Title.
    (b) The grounds are the grounds prohibited under the following 
statutes:
    (1) Title VI of the Civil Rights Act of 1964 (42 U.S.C. 2000d et 
seq.) (race, color, national origin);
    (2) Title IX of the Education Amendments of 1972 (20 U.S.C. 1681 et 
seq.) (sex);
    (3) The Age Discrimination Act of 1975 (42 U.S.C. 6101 et seq.) 
(age); or
    (4) Section 504 of the Rehabilitation Act of 1973 (29 U.S.C. 794) 
(disability).


Sec.  92.3  Scope of application.

    (a) Except as otherwise provided in this part, this part applies to
    (1) Any health program or activity, any part of which is receiving 
Federal financial assistance (including credits, subsidies, or 
contracts of insurance) provided by the Department;
    (2) Any program or activity administered by the Department under 
Title I of the Patient Protection and Affordable Care Act; or
    (3) Any program or activity administered by any entity established 
under such Title.
    (b) As used in this part, ``health program or activity'' 
encompasses all of the operations of entities principally engaged in 
the business of providing healthcare that receive Federal financial 
assistance as described in paragraph (a)(1) of this section. For any 
entity not principally engaged in the business of providing healthcare, 
the requirements applicable to a ``health program or activity'' under 
this part shall apply to such entity's operations only to the extent 
any such operation receives Federal financial assistance as described 
in paragraph (a)(1) of this section.
    (c) For purposes of this part, an entity principally or otherwise 
engaged in the

[[Page 37245]]

business of providing health insurance shall not, by virtue of such 
provision, be considered to be principally engaged in the business of 
providing healthcare.
    (d) Any provision of this part held to be invalid or unenforceable 
by its terms, or as applied to any person or circumstance, shall be 
construed so as to continue to give maximum effect to the provision 
permitted by law, unless such holding shall be one of utter invalidity 
or unenforceability, in which event the provision shall be severable 
from this part and shall not affect the remainder thereof or the 
application of the provision to other persons not similarly situated or 
to other, dissimilar circumstances.


Sec.  92.4  Assurances.

    (a) Assurances. An entity applying for Federal financial assistance 
to which this part applies shall, as a condition of any application for 
Federal financial assistance, submit an assurance, on a form specified 
by the Director of the Department's Office for Civil Rights, that the 
entity's health programs or activities will be operated in compliance 
with section 1557 and this part. A health insurance issuer seeking 
certification to participate in an Exchange or a State seeking approval 
to operate a State Exchange to which section 1557 or this part applies 
shall, as a condition of certification or approval, submit an 
assurance, on a form specified by the Director of the Department's 
Office for Civil Rights, that the health program or activity will be 
operated in compliance with section 1557 and this part. An applicant or 
entity may incorporate this assurance by reference in subsequent 
applications to the Department for Federal financial assistance or 
requests for certification to participate in an Exchange or approval to 
operate a State Exchange.
    (b) Duration of obligation. The duration of the assurances required 
by this subpart is the same as the duration of the assurances required 
in the Department's regulations implementing section 504 at 45 CFR 
84.5(b).
    (c) Covenants. When Federal financial assistance is provided in the 
form of real property or interest, the same conditions apply as those 
contained in the Department's regulations implementing section 504 at 
45 CFR 84.5(c), except that the nondiscrimination obligation applies to 
discrimination on all bases covered under section 1557 and this part.


Sec.  92.5  Enforcement mechanisms.

    (a) The enforcement mechanisms provided for, and available under, 
Title VI of the Civil Rights Act of 1964 (42 U.S.C. 2000d et seq.), 
Title IX of the Education Amendments of 1972 (20 U.S.C. 1681 et seq.), 
the Age Discrimination Act of 1975 (42 U.S.C. 6101 et seq.), or Section 
504 of the Rehabilitation Act of 1973 (29 U.S.C. 794), including under 
the Department's regulations implementing those statutes, shall apply 
for purposes of violations of Sec.  92.2 of this part.
    (b) The Director of the Office for Civil Rights has been delegated 
the authority to enforce 42 U.S.C. 18116 and this part, which includes 
the authority to handle complaints, initiate and conduct compliance 
reviews, conduct investigations, supervise and coordinate compliance 
within the Department, make enforcement referrals to the Department of 
Justice, in coordination with the Office of the General Counsel and the 
relevant component or components of the Department, and take other 
appropriate remedial action as the Director deems necessary, in 
coordination with the relevant component or components of the 
Department, and as allowed by law to overcome the effects of violations 
of 42 U.S.C. 18116 or of this part.


Sec.  92.6  Relationship to other laws.

    (a) Nothing in this part shall be construed to invalidate or limit 
the rights, remedies, procedures, or legal standards available to 
individuals aggrieved under Title VI of the Civil Rights Act of 1964 
(42 U.S.C. 2000d et seq.), Title VII of the Civil Rights Act of 1964 
(42 U.S.C. 2000e et seq.), Title IX of the Education Amendments of 1972 
(20 U.S.C. 1681 et seq.), the Age Discrimination Act of 1975 (42 U.S.C. 
6101 et seq.), or Section 504 of the Rehabilitation Act of 1973 (29 
U.S.C. 794), or to supersede State laws that provide additional 
protections against discrimination on any basis described in Sec.  92.2 
of this part.
    (b) Insofar as the application of any requirement under this part 
would violate, depart from, or contradict definitions, exemptions, 
affirmative rights, or protections provided by any of the statutes 
cited in paragraph (a) of this section or provided by the Architectural 
Barriers Act of 1968 (42 U.S.C. 4151 et seq.); the Americans with 
Disabilities Act of 1990, as amended by the Americans with Disabilities 
Act Amendments Act of 2008 (42 U.S.C. 12181 et seq.), Section 508 of 
the Rehabilitation Act of 1973, as amended (29 U.S.C. 794d), the Coats-
Snowe Amendment (42 U.S.C. 238n), the Church Amendments (42 U.S.C. 
300a-7), the Religious Freedom Restoration Act (42 U.S.C. 2000bb et 
seq.), Section 1553 of the Patient Protection and Affordable Care Act 
(42 U.S.C. 18113), Section 1303 of the Patient Protection and 
Affordable Care Act (42 U.S.C. 18023), the Weldon Amendment 
(Consolidated Appropriations Act, 2019, Pub. L. 115-245, Div. B sec. 
209 and sec. 506(d) (Sept. 28, 2018)), or any related, successor, or 
similar Federal laws or regulations, such application shall not be 
imposed or required.

Subpart B--Specific Applications to Health Programs or Activities


Sec.  92.101  Meaningful access for individuals with limited English 
proficiency.

    (a) Any entity operating or administering a health program or 
activity subject to this part shall take reasonable steps to ensure 
meaningful access to such programs or activities by limited English 
proficient individuals.
    (b) Specific applications--(1) Enforcement discretion. In 
evaluating whether any entity to which paragraph (a) of this section 
applies has complied with paragraph (a) of this section, the Director 
of the Department's Office for Civil Rights may assess how such entity 
balances the following four factors:
    (i) The number or proportion of limited English proficient 
individuals eligible to be served or likely to be encountered in the 
eligible service population;
    (ii) The frequency with which LEP individuals come in contact with 
the entity's health program, activity, or service;
    (iii) The nature and importance of the entity's health program, 
activity, or service; and
    (iv) The resources available to the entity and costs.
    (2) Language assistance services requirements. Where paragraph (a) 
of this section, in light of the entity's individualized assessment of 
the four factors set forth in paragraph (b)(1) of this section, 
requires the provision of language assistance services, such services 
must be provided free of charge, be accurate and timely, and protect 
the privacy and independence of the individual with limited English 
proficiency. Language assistance services may include:
    (i) Oral language assistance, including interpretation in non-
English languages provided in-person or remotely by a qualified 
interpreter for an individual with limited English proficiency, and the 
use of qualified bilingual or multilingual staff to communicate 
directly with individuals with limited English proficiency; and
    (ii) Written translation, performed by a qualified translator, of 
written content in paper or electronic form into languages other than 
English.

[[Page 37246]]

    (3) Specific requirements for interpreter and translation services. 
(i) Where paragraph (a) of this section, in light of the entity's 
individualized assessment of the four factors set forth in paragraph 
(b)(1) of this section, requires the provision of interpreter services, 
they must be provided by an interpreter who:
    (A) Adheres to generally accepted interpreter ethics principles, 
including client confidentiality;
    (B) Has demonstrated proficiency in speaking and understanding at 
least spoken English and the spoken language in need of interpretation; 
and
    (C) Is able to interpret effectively, accurately, and impartially, 
both receptively and expressly, to and from such language(s) and 
English, using any necessary specialized vocabulary, terminology and 
phraseology.
    (ii) Where paragraph (a) of this section, in light of the entity's 
individualized assessment of the four factors set forth in paragraph 
(b)(1) of this section, requires the provision of translation services 
for written content (in paper or electronic form), they must be 
provided by a translator who:
    (A) Adheres to generally accepted translator ethics principles, 
including client confidentiality;
    (B) Has demonstrated proficiency in writing and understanding at 
least written English and the written language in need of translation; 
and
    (C) Is able to translate effectively, accurately, and impartially 
to and from such language(s) and English, using any necessary 
specialized vocabulary, terminology and phraseology.
    (iii) If remote audio interpreting services are required to comply 
with paragraph (a) of this section, in light of the entity's 
individualized assessment of the four factors set forth in paragraph 
(b)(1) of this section, the entity to which section 1557 applies (as 
defined in Sec.  92.3 of this part) shall provide:
    (A) Real-time, audio over a dedicated high-speed, wide-bandwidth 
video connection or wireless connection that delivers high-quality 
audio without lags or irregular pauses in communication;
    (B) A clear, audible transmission of voices; and
    (C) Adequate training to users of the technology and other involved 
individuals so that they may quickly and efficiently set up and operate 
the remote interpreting services.
    (4) Restricted use of certain persons to interpret or facilitate 
communication. If an entity is required by paragraph (a) of this 
section, in light of the entity's individualized assessment of the four 
factors set forth in paragraph (b)(1) of this section, to provide 
interpretation services, such entity shall not:
    (i) Require an individual with limited English proficiency to 
provide his or her own interpreter;
    (ii) Rely on an adult accompanying an individual with limited 
English proficiency to interpret or facilitate communication, except
    (A) In an emergency involving an imminent threat to the safety or 
welfare of an individual or the public, where there is no qualified 
interpreter for the individual with limited English proficiency 
immediately available; or
    (B) Where the individual with limited English proficiency 
specifically requests that the accompanying adult interpret or 
facilitate communication, the accompanying adult agrees to provide such 
assistance, and reliance on that adult for such assistance is 
appropriate under the circumstances;
    (iii) Rely on a minor child to interpret or facilitate 
communication, except in an emergency involving an imminent threat to 
the safety or welfare of an individual or the public, where there is no 
qualified interpreter for the individual with limited English 
proficiency immediately available; or
    (iv) Rely on staff other than qualified bilingual/multilingual 
staff to communicate directly with individuals with limited English 
proficiency.
    (c) Acceptance of language assistance services is not required. 
Nothing in this section shall be construed to require an individual 
with limited English proficiency to accept language assistance 
services.


Sec.  92.102  Effective communication for individuals with 
disabilities.

    (a) Any entity operating or administering a program or activity 
under this part shall take appropriate steps to ensure that 
communications with individuals with disabilities are as effective as 
communications with others in such programs or activities, in 
accordance with the standards found at 28 CFR 35.160 through 35.164. 
Where the regulatory provisions referenced in this section use the term 
``public entity,'' the term ``entity'' shall apply in its place.
    (b) A recipient or State Exchange shall provide appropriate 
auxiliary aids and services, including interpreters and information in 
alternate formats, to individuals with impaired sensory, manual, or 
speaking skills, where necessary to afford such persons an equal 
opportunity to benefit from the service in question.
    (1) Auxiliary aids and services include:
    (i) Interpreters on-site or through video remote interpreting (VRI) 
services, as defined in 28 CFR 35.104 and 36.303(f); note takers; real-
time computer-aided transcription services; written materials; exchange 
of written notes; telephone handset amplifiers; assistive listening 
devices; assistive listening systems; telephones compatible with 
hearing aids; closed caption decoders; open and closed captioning, 
including real-time captioning; voice, text, and video-based 
telecommunication products and systems, text telephones (TTYs), 
videophones, and captioned telephones, or equally effective 
telecommunications devices; videotext displays; accessible information 
and communication technology; or other effective methods of making 
aurally delivered information available to individuals who are deaf or 
hard of hearing; and
    (ii) Readers; taped texts; audio recordings; Braille materials and 
displays; screen reader software; magnification software; optical 
readers; secondary auditory programs; large print materials; accessible 
information and communication technology; or other effective methods of 
making visually delivered materials available to individuals who are 
blind or have low vision.
    (2) When an entity is required to provide an interpreter under 
paragraph (b) of this section, the interpreting service shall be 
provided to individuals free of charge and in a timely manner, via a 
remote interpreting service or an onsite appearance, by an interpreter 
who
    (i) Adheres to generally accepted interpreter ethics principles, 
including client confidentiality; and
    (ii) Is able to interpret effectively, accurately, and impartially, 
both receptively and expressively, using any necessary specialized 
vocabulary, terminology and phraseology.
    (3) An interpreter for an individual with a disability for purposes 
of this section can include, for example, sign language interpreters, 
oral transliterators (individuals who represent or spell in the 
characters of another alphabet), and cued language transliterators 
(individuals who represent or spell by using a small number of 
handshapes).
    (c) Disability means, with respect to an individual, a physical or 
mental impairment that substantially limits one or more major life 
activities of such individual; a record of such an impairment; or being 
regarded as having such an impairment, as defined and construed in the 
Rehabilitation Act, 29 U.S.C. 705(9)(B), which incorporates the 
definition of disability in the Americans

[[Page 37247]]

with Disabilities Act (ADA), as amended (42 U.S.C. 12102 et seq.). 
Where this part cross-references regulatory provisions that use the 
term ``handicap,'' ``handicap'' means ``disability'' as defined in this 
section.


Sec.  92.103  Accessibility standards for buildings and facilities.

    (a) Each facility or part of a facility in which health programs or 
activities are conducted that is constructed or altered by or on behalf 
of, or for the use of, a recipient or State Exchange shall comply with 
the 2010 Standards, if the construction or alteration was commenced 
after July 18, 2016, except that if a facility or part of a facility in 
which health programs or activities are conducted that is constructed 
or altered by or on behalf of, or for the use of, a recipient or State 
Exchange, was not covered by the 2010 Standards prior to July 18, 2016, 
such facility or part of a facility shall comply with the 2010 
Standards if the construction was commenced after January 18, 2018. 
Departures from particular technical and scoping requirements by the 
use of other methods are permitted where substantially equivalent or 
greater access to and usability of the facility is provided. All newly 
constructed or altered buildings or facilities subject to this section 
shall comply with the requirements for a ``public building or 
facility'' as defined in section 106.5 of the 2010 Standards.
    (b) Each facility or part of a facility in which health programs or 
activities under this part are conducted that is constructed or altered 
by or on behalf of, or for the use of, a recipient or State Exchange in 
conformance with the 1991 Standards at appendix D to 28 CFR part 36 or 
the 2010 Standards shall be deemed to comply with the requirements of 
this section and with 45 CFR 84.23(a) and (b) with respect to those 
facilities, if the construction or alteration was commenced on or 
before July 18, 2016. Each facility or part of a facility in which 
health programs or activities are conducted that is constructed or 
altered by or on behalf of, or for the use of, a recipient or State 
Exchange in conformance with UFAS shall be deemed to comply with the 
requirements of this section and with 45 CFR 84.23(a) and (b), if the 
construction was commenced on or before July 18, 2016 and such facility 
was not covered by the 1991 Standards or 2010 Standards.
    (c) For purposes of this part:
    (1) ``1991 Standards'' refers to the 1991 Americans with 
Disabilities Act Standards for Accessible Design at appendix D to 28 
CFR part 36.
    (2) ``2010 Standards'' refers to the 2010 ADA Standards for 
Accessible Design, as defined in 28 CFR 35.104.
    (3) ``UFAS'' refers to the Uniform Federal Accessibility Standards 
as promulgated in 49 FR 31528 (Aug. 7, 1984).


Sec.  92.104  Accessibility of information and communication 
technology.

    (a) Entities required to comply with Sec.  92.2, unless otherwise 
exempted by this part, shall ensure that their health programs or 
activities provided through information and communication technology 
are accessible to individuals with disabilities, unless doing so would 
result in undue financial and administrative burdens or a fundamental 
alteration in the nature of the health programs or activities. When 
undue financial and administrative burdens or a fundamental alteration 
exist, the covered entity shall provide information in a format other 
than an electronic format that would not result in such undue financial 
and administrative burdens or a fundamental alteration, but would 
ensure, to the maximum extent possible, that individuals with 
disabilities receive the benefits or services of the health program or 
activity that are provided through information and communication 
technology.
    (b) A recipient or State Exchange shall ensure that its health 
programs or activities provided through websites comply with the 
requirements of Title II of the Americans with Disabilities Act (42 
U.S.C. 12131 through 12165).
    (c) For purposes of this part, ``information and communication 
technology'' (ICT) means information technology and other equipment, 
systems, technologies, or processes, for which the principal function 
is the creation, manipulation, storage, display, receipt, or 
transmission of electronic data and information, as well as any 
associated content. Examples of ICT include computers and peripheral 
equipment; information kiosks and transaction machines; 
telecommunications equipment; customer premises equipment; 
multifunction office machines; software; applications; websites; 
videos; and, electronic documents.


Sec.  92.105  Requirement to make reasonable modifications.

    Any entity to which section 1557 applies (as defined in Sec.  92.3 
of this part) shall make reasonable modifications to its policies, 
practices, or procedures when such modifications are necessary to avoid 
discrimination on the basis of disability, unless the covered entity 
can demonstrate that making the modifications would fundamentally alter 
the nature of the health program or activity. For the purposes of this 
section, the term ``reasonable modifications'' shall be interpreted in 
a manner consistent with the term as set forth in the regulation 
promulgated under Title II of the Americans with Disabilities Act, at 
28 CFR 35.130(b)(7).

PART 147--HEALTH INSURANCE REFORM REQUIREMENTS FOR THE GROUP AND 
INDIVIDUAL HEALTH INSURANCE MARKETS

0
15. The authority citation for part 147 continues to read as follows:

    Authority: 42 U.S.C. 18021, 18031, 18041, 18044, 18054, 18061, 
18063, 18071, and 18082, 26 U.S.C. 36B, 31 U.S.C. 9701.

0
16. Amend Sec.  147.104 by revising paragraph (e) to read as follows:


Sec.  147.104  Guaranteed availability of coverage.

* * * * *
    (e) Marketing. A health insurance issuer and its officials, 
employees, agents and representatives must comply with any applicable 
State laws and regulations regarding marketing by health insurance 
issuers and cannot employ marketing practices or benefit designs that 
will have the effect of discouraging the enrollment of individuals with 
significant health needs in health insurance coverage or discriminate 
based on an individual's race, color, national origin, present or 
predicted disability, age, sex, expected length of life, degree of 
medical dependency, quality of life, or other health conditions.
* * * * *

PART 155--EXCHANGE ESTABLISHMENT STANDARDS AND OTHER RELATED 
STANDARDS UNDER THE AFFORDABLE CARE ACT

Subpart B--General Standards Related to the Establishment of an 
Exchange

0
17. The authority citation for part 155 continues to read as follows:

    Authority: 42 U.S.C. 18021-18024, 18031-18033, 18041-18042, 
18051, 18054, 18071, and 18081-18083.

0
18. Amend Sec.  155.120 by revising paragraph (c)(1)(ii) to read as 
follows:


Sec.  155.120  Non-interference with Federal law and non-discrimination 
standards.

* * * * *
    (c) * * *
    (1) * * *

[[Page 37248]]

    (ii) Not discriminate based on race, color, national origin, 
disability, age, or sex.
* * * * *

0
 19. Amend Sec.  155.220 by revising paragraph (j)(2)(i) to read as 
follows:


Sec.  155.220  Ability of States to permit agents and brokers to assist 
qualified individuals, qualified employers, or qualified employees 
enrolling in QHPs.

* * * * *
    (j) * * *
    (2) * * *
    (i) Provide consumers with correct information, without omission of 
material fact, regarding the Federally-facilitated Exchanges, QHPs 
offered through the Federally-facilitated Exchanges, and insurance 
affordability programs, and refrain from marketing or conduct that is 
misleading (including by having a direct enrollment website that HHS 
determines could mislead a consumer into believing they are visiting 
HealthCare.gov), coercive, or discriminates based on race, color, 
national origin, disability, age, or sex;
* * * * *

PART 156--HEALTH INSURANCE ISSUER STANDARDS UNDER THE AFFORDABLE 
CARE ACT, INCLUDING STANDARDS RELATED TO EXCHANGES

0
20. The authority citation for part 156 continues to read as follows:

    Authority: 5 U.S.C. 552; 42 U.S.C. 300jj-11 and 300jj-14.

0
21. Amend Sec.  156.200 by revising paragraph (e) to read as follows:


Sec.  156.200  QHP issuer participation standards.

* * * * *
    (e) Non-discrimination. A QHP issuer must not, with respect to its 
QHP, discriminate on the basis of race, color, national origin, 
disability, age, or sex.
* * * * *

0
22. Amend Sec.  156.1230 by revising paragraph (b)(2) to read as 
follows:


Sec.  156.1230  Direct enrollment with the QHP issuer in a manner 
considered to be through the Exchange.

* * * * *
    (b) * * *
    (2) The QHP issuer must provide consumers with correct information, 
without omission of material fact, regarding the Federally-facilitated 
Exchanges, QHPs offered through the Federally-facilitated Exchanges, 
and insurance affordability programs, and refrain from marketing or 
conduct that is misleading (including by having a direct enrollment 
website that HHS determines could mislead a consumer into believing 
they are visiting HealthCare.gov), coercive, or discriminates based on 
race, color, national origin, disability, age, or sex.

    Dated: May 20, 2020.
Alex M. Azar II,
Secretary of Health and Human Services.
[FR Doc. 2020-11758 Filed 6-12-20; 4:15 pm]
BILLING CODE 4153-01-P