September 2016

What Hospitals and Other Providers Need to Know About New Federal Non-Discrimination Rules

4 min

*Originally published August 23, 2016 by AHLA

On May 18, finalized regulations were published implementing nondiscrimination requirements set forth in Section 1557 of the Affordable Care Act (ACA).

What Is Section 1557?

Section 1557 is the nondiscrimination law set forth in the ACA. It prohibits covered entities from discriminating on the basis of race, color, national origin, sex (which includes gender identity), age, or disability in health programs and activities.


Covered entities are entities that provide or administer health-related services or insurance coverage and receive "federal financial assistance." Federal financial assistance includes Medicare, Children's Health Insurance Program and Medicaid, meaningful use payments, U.S. Department of Health and Human Services (HHS) grants, Centers for Medicare & Medicaid Services gain-sharing demonstration projects, federal premium and cost-sharing subsidies, etc.

HHS identified the following entities as likely receiving federal financial assistance:

  • Health insurers;
  • Hospitals;
  • Skilled nursing facilities;
  • Home health agencies;
  • Ambulatory surgical centers;
  • Hospices;
  • Community mental health centers;
  • Physicians;
  • Laboratories;
  • Outpatient rehab facilities; and
  • Etc.

Federal financial assistance does not include Medicare Part B payments. Entities that only receive Medicare Part B payments will not be subject to the rule.

If a covered entity is principally engaged in providing or administering health services or insurance coverage, the rule applies to all operations of the organization even if only part of the health services or insurance coverage receives federal financial assistance. The nondiscrimination rules may also apply to the employee health benefit programs offered to the covered entity's employees.

What Is required?

Section 1557 requires covered entities to:

  • Not discriminate in the provision of health care and insurance coverage. A covered entity will need to submit an assurance that the entity's health program or activity does not discriminate on the basis of race, color, national origin, sex, age, or disability and is compliant with Section 1557 when it applies for federal financial assistance. The rule includes a number of provisions to protect transgender patients, including requirements that transgender patients be treated in a manner consistent with their gender identity and that health insurance programs not discriminatorily deny or limit coverage or impose additional cost sharing for services related to gender transition.
  • Provide appropriate auxiliary aids for individuals with disabilities. A covered entity will need to provide appropriate auxiliary aids and services—including qualified interpreters for individuals with disabilities and information in alternate formats, all free of charge and in a timely manner—when such aids and services are necessary to ensure an equal opportunity to participate to individuals with disabilities.
  • Provide language assistance services for individuals with limited English proficiency. A covered entity must provide language assistance services—including translated documents and oral interpretation, all free of charge and in a timely manner—when such services are necessary to provide meaningful access to individuals with limited English proficiency.
  • Adopt grievance procedures and a key contact person. If the entity has 15 or more employees, it must designate at least one employee to coordinate its compliance efforts under Section 1557 and adopt a grievance procedure for prompt and equitable resolutions of grievances under Section 1557.
  • Post notice and taglines. Covered entities must post a notice informing beneficiaries, enrollees, applicants, or members of the public about their rights and letting individuals with disabilities and with limited English proficiency know about the right to receive communication assistance, free of charge. Covered entities are required to post taglines (short non-English statements that language assistance is available) in the top 15 languages spoken by individuals with limited English proficiency in the state(s) in which the covered entity operates.

The notice and taglines must be:

  • Posted in significant publications and significant communications in a conspicuously visible font size;
  • Accessible from the home page of the covered entity's website; and
  • In a conspicuous physical location where the entity interacts with the public.

Some leeway is provided for covered entities when posting notices and taglines in small-sized publications, such as postcards.


Failure to comply with the Final Rule can result in the loss of federal funding. Individuals who believe they experienced discrimination may sue the offender, either individually or as part of a class action.

Effective Date?

The effective date of the final rule was July 18. Covered entities have until October 16 to post notices and taglines. If the rule requires changes to health insurance or group health plan design, the plan must be compliant on the first day of the first plan year beginning on or after January 1.