An Introduction to the new Section 1557 health care civil rights rules: Federal Investigations 101

Section 1557 of the Affordable Care Act (Section 1557) prohibits discrimination on the basis of race, color, national origin, language, age, disability, or sex (including pregnancy, sexual orientation, gender identity, and sex characteristics), in covered, health programs or activities. See: 42 U.S.C. §18116 et seq. On May 6, 2024, HHS released the long-awaited the Section 1557 final rule, which becomes law on July 5, 2024, 60 days after Federal Register publication. Final Rule

There is much to consider in the final rule, which has many new requirements for federally subsidized health care entities. To facilitate final rule understanding, I will post different articles discussing significant health care civil rights changes.

In this article, I will focus on what happens if your organization is alleged to have violated the new regulations by engaging in prohibited discrimination, followed by a federal investigation.

So, a federal  enforcement agency has called your hospital, alerting you that the agency has begun a federal investigation concerning allegations of health care civil rights violations. The agency has scheduled a meeting with the hospital CEO, counsel, and other staff to discuss the allegations. The agency could be the Department of Health and Human Services, the Centers for Medicare and Medicaid Services, and/or the Department of Justice, which represents the United States in litigation.

What do you do?

The feds do not require a warrant to conduct investigations of federally funded entities. By signing Certificates of Assurance that enable federal funds to be released, heath care organizations agree to comply with federal civil rights laws, and to cooperate in federal investigations of compliance. See: Guardians Ass’n v. Civil Serv. Comm’n, 463 U.S. 582(1983) 28 C.F.R. § 42.105(a)(1) and 28 C.F.R. 42.204(a).

For example, here is the United States’ legal authority for conducting an Americans with Disabilities Act investigation of a federally funded entity:

“The United States is authorized under 28 C.F.R. Part 35, Subpart F and G, to investigate complaints under Title II of the ADA and the Department of Justice’s Title II Implementing regulation, to issue findings, and, where appropriate, to negotiate and secure voluntary compliance agreements. 28 C.F.R. § 35.172.”

And this is an example of the United States’ legal authority, here HHS’ Office for Civil Rights (OCR):

“OCR initiated the complaint investigation pursuant to its jurisdictional authority under Section 504 of the Rehabilitation Act of 1973, 29 United States Code (U.S.C.) § 794 et seq., and its implementing regulation, 45 Code of Federal Regulations (C.F.R.) Part 84 (Section 504); and Title II of the Americans with Disabilities Act of 1990,42 U.S.C. § 12131 et seq., and its implementing regulation, 28 C.F.R. Part 35 (the ADA). [Hospital] receives federal financial assistance through its participation in the Medicare and Medicaid programs and is subject to Section 504. [Hospital] is also subject to the ADA.  Because [Hospital] receives Federal financial assistance from the USDHHS, it is also subject to Title VI of the Civil Rights Act of 1964, 42 U.S.C. 2000d et seq., (Title VI) and its implementing regulation, 45 C.F.R. Part 80. Title VI prohibits discrimination on the basis of race, color, or national origin in any program or activity receiving Federal financial assistance.”

The consequences can be serious if the feds find that the investigation is warranted. Some of the options could then include: a lawsuit, federal court consent decree settling the case, enforcement agreement with oversight by the federal agencies involved, referral to other agencies (See: DOJ), and ongoing federal inspection and investigation of your hospital.

In addition, hospital accreditation could be implicated (See: https://ocrportal.hhs.gov/ocr/aoc/instruction.jsf . There may be significant financial penalties.

In my post DOJ-career, I have been involved with federal investigations where federal funding to several recipients totaling more than $500,000,000.00 was frozen because of civil rights considerations. Until the violations were remedied, the funds stayed frozen. Health care entities can also be removed or suspended from participating in Medicare and Medicaid reimbursement if found to be in violation of federal civil rights laws: https://oig.hhs.gov/exclusions/

Probably the question I am most frequently asked is what happens in a federal investigation? Federal agencies follow a checklist or script in conducting complaint-based investigations. The checklist is NOT available to the public through FOIA or any other means. It is a protected investigative tool of the United States.

 I conducted innumerable federal investigations during my career as a Senior Trial Attorney in DOJ’s Civil Rights Division. Since leaving DOJ, I have worked with many states, cities, hospitals and others who are under active federal investigation.

 I once represented a large hospital that had been sued, was being investigated by HHS, and eventually, by DOJ. Before the HHS Regional Director visited the hospital to discuss settlement, we actively prepared hospital staff for the feds checking out the hospital in person and for the questions they would be asked in interviews by federal investigators, similar to witness preparation for a court trial. We gathered relevant materials requested by HHS and additional information to show how seriously we took the investigation. This advance preparation is crucial. All staff were very grateful for the time we spent preparing them for what was their first federal investigation and interviews.

 With the new §1557 final rule, federally subsidized health care entities must “develop and implement written policies and procedures to facilitate compliance with Section 1557” by May 6, 2025. Thy must also train relevant employees [including leadership and physicians] on the covered entity's Section 1557 policies and procedures” by March 2, 2025 See: 45 C.F.R. § 92.8 and 92.9 et seq.

 There is much for Section 1557 covered entities to do and much for federal investigations to examine for compliance with the new laws.

 So, what do you do about that federal call? Here are examples of what to expect when you and the feds are sitting in a conference room discussing the allegations and investigations.

 Before they arrive, I recommend retaining expert outside legal counsel to help develop policies and procedures to comply with Section 1557 and to assist in communications with the federal agencies and with the broader investigation.

 ·      Identify your Section 1557 or Civil Rights Coordinator, and provide notices showing identification of the Coordinator, their name, contact info, and address. This question is almost certain to be one of the first inquiries you receive;

·      Provide example of your organization’s grievance and complaint process, including translated notices about how patients can file an internal civil rights complaint;

·      Identify any similar complaints to the one being investigated, provide records of those complaints, and the results of your internal investigations;

·      Provide examples of internal training (PPTs, audio files, Internet links), disclose whether training is mandatory, and how often staff training occurs;

·      Understand current federal enforcement consequences, including monitoring agreements, consent decrees, lawsuits, and financial penalties;

·      Be prepared to act quickly to satisfy federal investigators’ requests;

·      Have trained staff in place to implement new federal requirements – no key position vacancies; and

·      Provide policies and procedures to comply with Section 1557.

 Having such policies and procedures, including those complying with Section  1557, a Language Access Plan, ADA Transition Plan, plus Effective Communication Plan, that are compliant and implemented are of vital importance. To achieve the best possible outcome in any investigation, have your house in order before that conference room meeting with the feds.

Don’t repeat the mistake of a large hospital sued and investigated for several ADA violations. A hospital VP testified that the hospital trained its employees on applicable policies and procedures. However, she could provide no examples of updated policies and any relevant training since none existed. The federal appeals court decided that “…  [T]he evidence of [hospital’s] failure to revise its ADA compliance policy, which it admits needs revision, and its lack of training on addressing the needs of the hearing impaired, creates a possible inference that the plaintiffs’ problems with the provision of auxiliary services will continue in the future.”

Be prepared.