On July 25, 2022, the Department of Health and Human Services issued a new the proposed rule (afterwards published in the Federal Register on August 4) in section 1557 of the Affordable Care Act (ACA), which prohibits discrimination on the basis of race, color, national origin, sex, age, or disability in certain health programs and activities. The comment period closes on October 3.
This proposed rule is a significant extensive update to the implementing regulations for section 1557. This alert does not discuss the entirety of the proposed rule. Instead, it specifically addresses two parts affecting digital health that are notably new additions to the Section 1557 rulemaking history—namely, the proposed expansion of Section 1557 to “clinical algorithms” and services telehealth.
Scope of the Proposed Rule
The proposed rule applies broadly to both payers and providers.
- HHS proposes to apply Section 1557 to: (1) any health program or activity that receives federal financial assistance from HHS; (2) any health program or activity administered by HHS; and (3) any program or activity administered by an entity under Title I of the ACA (eg, the Exchanges).
- HHS proposes to broadly define “health program or activity,” ranging from, but not limited to, the provision of health care services to the provision of health education to health care professionals.
- HHS proposes to define “federal financial assistance” broadly to include grants, loans, and other types of federal assistance.
For payers, as proposed, Section 1557 would apply to health plans, Medicare Advantage organizations, Medicare Part D plan sponsors, and Medicaid managed care organizations. Additionally, because Section 1557 would apply to the entity, not to a particular product, insurers would have to comply with all lines of business, even when serving as a third-party administrator for a self-insured employer plan. .
For providers, as proposed, section 1557 would apply if they receive federal financial assistance through participation in Medicare or Medicaid. Notably, for the first time, HHS is proposing to include Medicare Part B, which means that providers who receive payments for outpatient services under Part B will have to comply with Section 1557.
Adding “Clinical Algorithms”
For the first time, HHS proposes to apply section 1557 to covered entities that use “clinical algorithms” in their decision making. As proposed, “clinical algorithms” would broadly include “tools used to guide healthcare decision-making and may range in form from flowcharts and clinical guidelines to complex computer algorithms, decision support interventions, and models.” While covered entities would not be responsible for clinical algorithms they did not develop, they would be responsible for “any decisions made in reliance” on such tools.
As proposed, clinical algorithms will include a broad spectrum of tools that inform clinical decision making. Further clarity is needed on the breadth of tools that HHS intends to include under the proposed rule. For example, as proposed, “clinical algorithms” appear to encompass most any modern digital tool used in clinical settings, given the widespread use of clinical decision support tools by covered entities. Aligning the definition with guidance from the Food and Drug Administration for artificial intelligence and machine learning, clinical decision support software (both hardware and non-hardware), and software-as-a-medical-device would provide useful clarity.
The proposed rule provides selected examples where the use of clinical algorithms has resulted in discrimination. As such, HHS states at several points in the preamble that clinical algorithms should be used to supplement, not replace, clinical judgment. However, further clarity is needed regarding the purpose of “any decision made on the basis of reliance,” which remains unclear in the proposed rule. Additionally, further clarity is needed on the closely related notion—which remains undefined in the proposed rule—of what it means to “supplement,” as opposed to replace, clinical judgment, given that the purposes of use of such tools can vary greatly and influence clinical judgment in nuanced ways.
Adding Telehealth Services
Also for the first time, HHS proposes to apply Section 1557 to covered entities providing telehealth services. As proposed, HHS refers to this as an “affirmative duty” that covered entities must not discriminate in providing their health programs and activities via telehealth. HHS defines telehealth in line with how it is already defined by the Health Resources Services Administration, which includes a variety of technologies, such as live video and store-and-forward modes.
However, further clarity is needed from HHS regarding other potentially involved virtual care technologies that may be related to telehealth but are typically treated separately. For example, remote patient monitoring and mobile health applications are mentioned briefly in the examples but not in the definition discussion. As another example, remote therapeutic management is not mentioned, but is separately part of other recent rules from the Centers for Medicare and Medicaid Services.
HHS provides several examples of disparities in access to telehealth services, such as based on race or disability, that may result in discrimination. As proposed, to ensure compliance, covered entities would have to account for communications regarding the availability of telehealth services, the process for scheduling telehealth appointments, and the telehealth appointment itself. Under the proposed rule, this would include, for example, appropriate aids and auxiliary services for individuals with disabilities and language assistance for individuals with limited English proficiency.
Many covered entities may already comply with these proposed requirements under existing operational policies. However, if finalized, covered entities should closely review such policies, particularly given the inclusion of payments made under Medicare Part B. However, for new entrants to the telehealth services market, these requirements may result in additional operational costs.