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The U.S. Supreme Court and Section 1557’s new health care civil rights regulations

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The U.S. Supreme Court’s late June decision (LOPER BRIGHT ENTERPRISES v. RAIMONDO, SECRETARY OF COMMERCE) overturning what is referred to as Chevron deference to agency interpretations of “ambiguous” statutes will have many significant, if presently unknown, consequences. The consequences may encompass challenges to include language and disability access requirements across many different areas – health care, courts, public schools, transportation, law enforcement, emergency responders and more

In the 6-3 decision, the justices eliminated a long-standing doctrine concerning regulators’ ability to interpret ambiguous laws. Under the doctrine, originating in the 1984 case Chevron v. Natural Resources Defense Council, courts deferred to an agency’s interpretation of ambiguous statutory authority if the agency’s definition was considered reasonable. I expect health care, environmental, workplace safety, labor regulations and related agency decisions will lead the list of forthcoming challenges made possible by the Court’s Loper Bright decision.

One of the first post-Chevron deference decisions came down on July 3, when a federal court in Mississippi ordered a nationwide injunction blocking HHS’s implementation and enforcement of the new Affordable Care Act Section 1557 regulations that pertain to “… extend[ing] discrimination on the basis of sex to include discrimination on the basis of gender identity.” See Tennessee v. Becerra, No.  1:24 cv161-LG-BWR (S.D. Miss., July 3, 2024). The Section 1557 regulations became the law on July 5, the above Mississippi injunction notwithstanding.

The court’s order does not cover any other sections of the final regulations. But that could change as more lawsuits arise that allege language and disability access regulations are unconstitutional.

In the Loper Bright case, the Supreme Court decided that federal courts shall no longer defer to agency actions, regulations, and expertise in making judicial decisions. Instead, the courts will now exclusively determine themselves whether statutes contain sufficient language to enable federal agencies to promulgate regulations to enforce statutory mandates.

As the Court held: “At best, Chevron has been a distraction from the question that matters: Does the statute authorize the challenged agency action?

The Court invoked the primacy of judicial review as a basis for overruling Chevron, a hint at what is to come – courts deciding the propriety of agency decision making and the end to deference to agency subject matter expertise. “Although the Court finally ends our 40-year misadventure with Chevron deference, its more profound problems should not be overlooked. Regardless of what a statute says, the type of deference required by Chevron violates the Constitution.”

In the decision’s wake, a  flood of new lawsuits is expected, challenging myriad regulations across the federal government. Perhaps my former USDOJ colleagues will need to staff up to defend against what promises to be a whole new trend in federal litigation.

But much uncertainty remains following the Court’s decision overturning Chevron: lower federal courts will now exclusively answer the Supreme Court’s rhetorical proposition – Does the statute authorize the challenged agency action? We do not know what factors will be used to make this determination and similarly, do not know what language Congress must include to enable federal regulatory action, safe from judicial invalidation. Answers to these questions await the coming flood of litigation and court decisions.

The Mississippi ruling is an early indication of what post-Chevron challenges may look like, at least in health care. The court decided:

“In the absence of Congressional action addressing discrimination on the basis of gender identity, the Executive Branch began publishing regulations and policy statements in 2016 that interpreted Title IX’s prohibition of discrimination on the basis of sex to include discrimination on the basis of gender identity. …[T]his lawsuit challenges HHS’s latest regulation, which purportedly implements the prohibition of discrimination set forth in Section 1557 of the Patient Protection and Affordable Care Act (“ACA”), 42 U.S.C. § 18116(a). The ACA incorporates the provisions of Title IX in order to address sex discrimination in the healthcare field.”

Although the Mississippi court cloaks the challenge to HHS’s Section 1557 regulations as falling under the Supreme Court’s Loper Bright decision, the Mississippi case is less about a federal agency overstepping its authority and more about the federal court disagreeing that sex discrimination includes gender identity and sexual orientation discrimination.

Seemingly, the Mississippi judge appeared eager to be one of the first judges to invoke the end of Chevron deference in a decision, which is essentially a difference in legal interpretation and reasoning between the judge, other federal courts, and HHS. The underlying statute, 42 U.S. Code § 18116, clearly empowers HHS to implement regulations prohibiting sex discrimination in health care and is not ambiguous.

The Mississippi court and HHS differ on the meaning of sex discrimination and whether gender identity and sexual orientation discrimination are included under the sex discrimination rubric. This difference between the court and HHS makes clear why it has always been expected that the expansion of sex discrimination to encompass gender identity and sexual orientation discrimination in health dare would be ultimately decided by the Supreme Court, an eventuality that I expect will occur within the coming one to three years.

In promulgating the 1557 final rule, HHS simply applied its own legal conclusion and extended the Supreme Court’s reasoning in Bostock v. Clayton County, (140 S. Ct. 1731, 2020), to encompass sexual orientation and gender identity discrimination in health care. The Bostock Court decided that the sex discrimination in employment prohibition of Title VII of the Civil Rights Act of 1964, 42 U.S.C. § 2000e, et seq., includes discrimination based on sexual orientation and gender identity. The Supreme Court held that “An employer who fires an individual for being homosexual or transgender fires that person for traits or actions it would not have questioned in members of a different sex. Sex plays a necessary and undisguisable role in the decision; exactly what Title VII forbids.” Id. Bostock at 1737. The Supreme Court left for another day the salient issue of whether sex discrimination in health care should cover sexual orientation and gender identity discrimination in health care. That other day is now fast approaching.

As we saw in Mississippi, other federal courts could determine that HHS exceeded its authority by including various language and disability access provisions in the final rule, such as requiring training, requiring Section 1557 coordinators, and mandating the translation of notices in 15 languages most widely spoken in a health care provider’s state. Although such provisions may well be safe from being overturned, we will closely watch evolving federal court decisions concerning Section 1557 and other federal laws requiring language and disability access.

The final legal word on these issues awaits further court decisions and the eventual determination by the Supreme Court.

© Bruce L. Adelson 2024. All Rights Reserved The material herein is educational and informational only.  No legal advice is intended or conveyed.

Bruce L. Adelson, Esq., is nationally recognized for his compliance expertise.  Mr. Adelson is a former U.S Department of Justice Civil Rights Division Senior Trial Attorney.  Mr. Adelson is a faculty member at the Georgetown University School of Medicine and University of Pittsburgh School of Law where he teaches organizational culture, implicit bias, cultural and civil rights awareness.

Mr. Adelson’s blogs are a Bromberg & Associates exclusive.

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