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Health care lawyer on the 1557 Final Rule, discrimination, and provider religious rights

Part B News recently explored the ramifications of the recenlty-published 1557 Final Rule and the Bostock Supreme Court decision that seems to invalidate its effect on medical practice. Here with further thoughts on the subject is Melodie Hengerer, of counsel with Baker Donelson in Baltimore.
Were it not for Bostock, would the rule have given providers a right to discriminate against trans patients?
Despite the definition of “sex” [addressed in the rule] it seems clear to me from a reading of the Section 1557 FAQs and Fact Sheet that OCR does not intend to allow health care providers to discriminate against transgender individuals.  In discussing what types of discrimination constitute discrimination on the basis of sex, OCR says that the Final Rule prevents discrimination “on the basis of pregnancy, gender identity and sex stereotyping,” citing SCOTUS’s decision in Price Waterhouse that determined 25 years ago that discrimination based on stereotypical ideas about gender is unlawful sex discrimination.  OCR reserves comment on whether or not discrimination on the basis of sexual orientation is included in the definition. 
This leads me to believe that OCR may be laying the groundwork to differentiate between gender identity and sexual preference.  The difference is important, particularly in the health care space.  Many transgender individuals have specific clinical needs or a medical diagnosis of gender dysphoria, which can necessitate a broad spectrum of medical treatments, including hormone therapy, breast augmentation, facial feminization surgery, mental health services, and other related medical procedures.  By contrast, an individual’s sexual orientation or sexual preference does not inherently make them a member of a specific patient population.  It makes sense that HHS would want to protect transgender individuals as a patient population to ensure their access to health care.  
What if a provider has a religious reason for denying care relating to a patient's gender identity? Do they have recourse?
The Section 1557 Final Rule doesn’t include a religious exemption, but it adds a section requiring that the ACA be enforced in a manner that is consistent with other laws, including the Religious Freedom Restoration Act (RFRA) and other federal conscience-protection laws.  
Notably, although the Conscience Final Rule was vacated in November 2019 after a federal judge in New York struck it down, HHS proposed a similar rule in mid-January, “Ensuring Equal Treatment of Faith-Based Organizations,” with the intent of providing clarity about their rights and obligations of faith-based organizations.  This rule is meant to bolster the rights afforded to faith-based organizations granted under the First Amendment and the Religious Freedom Restoration Act.   It remains to be seen whether and how this proposed rule will affect health care discrimination claims under the ACA.
I have dealt with this issue in practice, and it can be quite a sticky one.  At this point, because the ACA has no specific exemptions, OCR seems to suggest that whether and to what extent a faith-based hospital or an individual provider can refuse to provide care is more properly guided by RFRA, the First Amendment and other conscience-protections laws.  This is an issue to watch, to be sure.  
Apart from patient discrimination in the practice, what's another notewrothy aspect of the rule?
What’s most important, in my view, is the practical effect the new Rule could have on access.  The new Rule narrows the scope of Section 1557 to apply to a more limited class of health care entities.  So, even if the Rule protects transgender patients from discrimination in health care, it could effectively cut off meaningful access by eliminating insurance coverage for transgender services.    
Under the 2016 Rule, insurers had to comply with Section 1557 across all lines of business, but the Final Rule applies only to those lines of business that receive federal funding.  In short, this means insurers are now only required to comply with Section 1557 for specific products or operations that receive federal funding, like Medicare and Medicaid plans, but other offerings, like employer-sponsored group plans or other marketplace plans, are now exempt from 1557.  So transgender patients who once had coverage for transgender services, may still find themselves with access to quality healthcare providers, but without the means to pay for their services. 
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