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October 27, 2016—On May 18, 2016, the U.S. Department of Health and Human Services (HHS) Office of Civil Rights (OCR) published a Final Rule entitled “Nondiscrimination in Health Programs and Activities.” Most of the provisions set forth in the rule went into effect on July 18, 2016, and mandate a number of compliance and notice requirements that must be met by various entities under Section 1557 of the Affordable Care Act (ACA). Despite the fact that a number of these requirements apply to all healthcare providers and pharmacies, we have noted that many pharmacies and healthcare providers in the industry have not taken the appropriate steps to assure that they are in compliance with the nondiscrimination rules. A failure to review and revise current policies and practices to adhere to the nondiscrimination rules can lead to OCR enforcement actions – up to and including the suspension, termination, or refusal to grant or continue federal financial assistance (e.g., Medicare Part D participation) or a referral to the Department of Justice.

What are Section 1557 and the Final Rule?

Section 1557 of the ACA prohibits discrimination on the basis of race, color, national origin, sex, age, or disability in certain health programs and activities. Section 1557 mirrors other federal civil rights laws in the types of discrimination that are covered, including Title VI of the Civil Rights Act of 1964, Title IX of the Education Amendments of 1972, Section 504 of the Rehabilitation Act of 1973, and the Age Discrimination Act of 1975. The Final Rule clarifies the requirements of Section 1557 and sets out the standards for implementation of key components of the ACA’s nondiscrimination provisions.

Why Do Section 1557 and the Final Rule Apply to Pharmacies?

  • To put it simply, Section 1557 and the Final Rule applies to health programs and activities that receive funds from HHS. So, if your business accepts payments from programs like Medicare Part D or Tricare, Section 1557 and the Final Rule apply to your pharmacy and you now have a number of new rules and notification requirements to which you must adhere. The primary requirements are set forth below.

Compliance Coordinator

  • Any pharmacy to which Section 1557 and the Final Rule apply (and who employ 15 or more persons) must designate at least one employee to coordinate compliance. In most instances, this person will most likely be the same individual responsible for compliance under Section 504 or Title IX. This person is also responsible for ensuring that the pharmacy investigates any grievances that allege noncompliance with Section 1557 or the Final Rule.

Grievance Procedures

  • Many pharmacies covered by Section 1557 and the Final Rule will already have in place a written process for handling grievances for disability discrimination under Section 504. The Final Rule indicates that a pharmacy or other entity whose grievance procedures meet the requirements under the Section 504 regulation may utilize the same procedures, with appropriate modifications to address claims regarding race, color, national origin, sex, and age discrimination. As with the appointment of a compliance coordinator, this rule only applies to pharmacies or healthcare providers that employ 15 or more persons. A sample grievance procedure is available on the HHS website HERE.

Notice of Nondiscrimination

By October 16, 2016, all pharmacies and healthcare providers to which Section 1557 and the Final Rule apply must have posted the following information in (a) a conspicuous physical location where the pharmacy interacts with the public (e.g. a storefront), (b) in a conspicuous location on the company’s website and (c) in any “significant publications” and “significant communications” that are targeted to patients and the public:

  • The pharmacy does not discriminate on the basis of race, color, national origin, sex, age, or disability;
  • The pharmacy provides appropriate auxiliary aids and services, in a timely manner and free of charge, to individuals with disabilities;
  • The pharmacy provides language assistance services, in a timely manner and free of charge, to individuals with limited English proficiency;
  • Information on how to obtain the available the available aids and services noted above;
  • An identification of, and contact information for, the employee responsible for coordinating compliance with Section 1557 (if applicable);
  • Information on the availability of a grievance procedure and how to file a grievance (if applicable); and
  • Information on how to file a discrimination complaint with the Department of Human Services Office of Civil Rights.

The postings must be in a conspicuous and visible font size. While the Final Rule does not specifically define “significant publications and significant communications,” several examples were cited in the comments to the Rule and included patient handbooks, outreach publications, or other written notices pertaining to rights or benefits.

If you have questions with regard to compliance with 1557, please do not hesitate to contact any one of the following attorneys:

Brian Dickerson, FisherBroyles Partner
Brian E. Dickerson

Nicole Waid, FisherBroyles Partner
Nicole Hughes Waid

Anthony Calamunci, FisherBroyles Partner
Anthony J. Calamunci

Amy Butler, FisherBroyles Partner
Amy L. Butler