HHS’ Proposed Anti-Discrimination Regulations: Protective But Not Protective Enough

By Elizabeth Guo

Last week, the Department of Health and Human Services (HHS) Office of Civil Rights (OCR) released a proposed rule implementing section 1557 of the Affordable Care Act (ACA). Section 1557 applies the Rehabilitation Act of 1973 to the ACA so that a covered entity cannot discriminate against an individual on the basis of a disability in any health program or activity. The proposed rule clarified how OCR intended to enforce and interpret section 1557’s nondiscrimination provision.

As Timothy Jost and other commentators have noted, the government’s proposed interpretation of section 1557 significantly expands the number of health entities that need to meet the Rehabilitation Act’s nondiscrimination requirements. The regulation proposes to encompass all entities that operate a health program or activity, any part of which receives federal financial assistance. The regulation then broadly interprets “federal financial assistance” to include “subsidies and contracts of insurance.” Thus, an insurer receiving premium tax credits or cost-sharing reduction payments through participating in a health insurance Marketplace would need to ensure that all its health plans meet the Rehabilitation Act’s nondiscrimination requirements, regardless of whether the plans are sold through the Marketplace, outside the Marketplace, or through an employee benefit plan. This broad interpretation means that the Rehabilitation Act’s nondiscrimination provisions will now apply to a number of previously excluded plans.

Expanding the number of plans needing to meet section 1557’s nondiscrimination requirements will provide greater protection to more individuals with disabilities. In the United States, the Rehabilitation Act and the Americans with Disabilities Act (ADA) prohibit discrimination against individuals with disabilities. Both acts protect disabled individuals, but courts have consistently interpreted only the Rehabilitation Act as prohibiting insurers from designing their health plans to discriminate against individuals with disabilities. On the other hand, courts have held that the ADA provides a safe harbor for insurers when designing their benefit plans. Thus, some insurers under the ADA may be able to exclude all drugs treating HIV/AIDS from their formulary or place all drugs treating HIV/AIDS on the highest cost-sharing tier, benefit designs that the Rehabilitation Act would likely prohibit. See also Kelsey Berry’s post on this topic.  Read More

Medicare Coverage for Sex Change Surgery: How We Got Here

As mentioned in co-blogger Matthew Lawrence‘s prior posts (here) and (here), Medicare’s Departmental Appeals Board (DAB) recently vacated a decades-old National Coverage Determination (NCD) precluding coverage for sex change therapy.  That opens the door for Medicare coverage for sex change therapy, but does not guarantee coverage.

In this second blog of a two-part post, we will discuss how we got here: the somewhat unique process taken by the Centers for Medicare & Medicare Services (CMS) to invalidate its old coverage decision.

The decision has a somewhat odd procedural history.  On the morning of March 29, 2013, the CMS announced that it was reconsidering the NCD through the formal process for doing so, and sought public comment on what it should do.  (See enthusiastic coverage here.)  The statutory, public process for reconsideration of an NCD includes the opportunity for comment and so on, analogous to notice and comment rulemaking.  And the ultimate decision is subject to judicial review.  (See here for more on the NCD process.)  The NCD reconsideration process could have not only vacated the old standard, but offered specific standards to govern coverage across claimants (and thereby avoided some of the limbo discussed in our last post).

But on the night of March 29, 2013, the CMS rescinded its call for public comment, saying that it would instead allow a “just filed” appeal challenging the NCD before the DAB to proceed.  (See here.)  The DAB process is more adversarial and pits a single beneficiary challenging CMS policy in his or her case against the CMS.  (Although there are opportunities for amici to participate.  In this case, six amici participated, and all of them argued that the ban was unlawful.)  The CMS went on to decline to defend the policy, which made the ultimate DAB decision vacating the (undefended) policy unsurprising.

We can’t say why the CMS chose to rescind the reconsideration process rather than push for the individual appeal before the DAB to be held in abeyance pending the outcome of the reconsideration.  (In federal court, the doctrine of “ripeness” would have made the pendency of the NCD reconsideration grounds for dismissal of the individual appeal.)  And for transgender persons seeking coverage, the process by which their cause was furthered is surely of little moment.  But we can’t help but note that, for better or worse, proceeding through the DAB rather than the formal NCD reconsideration process meant less public attention on the proceeding, and less opportunity for comment by interested groups.

Is Medicare’s System for Challenging Coverage Determinations Unintentionally Unfair?

On March 25, Susan Jaffe published a blog post in the New York Times about Medicare’s recent change to cover skilled therapy (e.g. physical therapy, nursing care) where it is “reasonable and necessary” maintain a patient’s condition and to prevent deterioration, even when it is not likely that the patient will improve. Jaffe notes that the revisions will likely have a substantial impact on thousands of Medicare beneficiaries even though the change has been largely unnoticed.

The revision highlights a potential problem with the system in place for challenging Medicare coverage. The revision itself is unremarkable, reflecting what national Medicare policies professed, but what local contractors sometimes ignored. What is remarkable is the time it took for Medicare to make the revision, from when the controversy appeared to when Medicare posted the change in its manuals. This delay is problematic because it reflects a dichotomy in how coverage decisions are challenged and changed under Medicare – due not to medical necessity but to political and financial circumstances beyond patient control.

Constituents can change Medicare coverage policies through two processes. One is through the litigation system. Judges can overturn Medicare coverage decisions after patients have exhausted Medicare’s internal adjudication process. Yet, litigation can take years and judges usually defer to Medicare’s judgment. National Coverage Determinations (NCDs) provide an alternative under which constituents can encourage Medicare to reconsider or overturn a prior coverage decision. NCDs supersede Local Coverage Determinations (LCDs) – coverage decisions that affect a region of the United States. When Medicare determines that the LCDs for a specific technology or service are “inconsistent or conflict with each other to the detriment of Medicare beneficiaries,” Medicare can decide to issue an NCD to provide uniform coverage.

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