It prohibits discrimination on the basis of race, color, national origin, sex, age, and disability by applying existing civil rights laws to health insurers and providers that receive federal financial assistance. Specifically, the provision covers health insurers on the federal and state exchanges, hospitals, and physicians who receive Medicaid, meaningful use payments, and other forms of federal funding.
However, under the proposed rules issued by the Office of Civil Rights at the Department of Health and Human Services (HHS), Section 1557 would not reach physicians who receive Medicare Part B payments but no other federal funding.
If the proposed rules are accepted without change, a nontrivial segment of physicians will be exempt from complying with the ACA’s nondiscrimination provision. Contrary to the text and purpose of Section 1557, this would allow physician bias—a well-documented factor that may contribute to health disparities based on race and ethnicity (see, e.g., here and here), sex (here, here, and here), sexual orientation (here), age (here and here), and disability status (here)—to remain unchecked in many cases.
HHS offers two justifications for its decision to exempt Medicare Part B physicians, neither of which are compelling. The first is a pragmatic argument: HHS concludes that the number of physicians who would be exempt is very small, though its analysis likely significantly underestimates the impact of the exemption.
Second, HHS offers a substantive argument based on its prior interpretations of civil rights laws. However, these prior interpretations rely on inapplicable and outmoded rationales that run counter to Section 1557’s application of civil rights laws to health insurance and its sweeping breadth generally.