Very Brief Blog: HHS to Reverse Obama-Era Definition of "Sex" within ACA Regs That Included "Transgender" Issues

As reported by Politico on May 24, 2019, the administration has released rulemaking that will role back what is framed as an error of legal interpretation in prior HHS regulations.

• See Politico article here.  The Hill here.  NYT here.  WSJ here. WaPo here.  Breitbart here.
• See the Notice of Proposed Rulemaking online at HHS here.
• 204 pages.
• The proposed rule has not yet appeared in Federal Register.
• CMS fact sheet released with the rule, here.
• The previous (currently effective) final rule appeared May 18, 2016, 81FR31375, here.
• The 2016 regulations defined "sex" as appears in ACA Section 1557 to include transgender issues.
• The text of ACA Section 1557 is concise (codified as 42 USC 18116, here.)
• As of May 24, HHS website still referred to the May 2016 final rule, here, including a 64-question FAQ on the 2016 rule.  Cloud copy here.  
• The HHS 1557 webpage notes that the May 2016 rule was under an injunction since December 2016 regarding those parts that pertained to gender (Franciscan Alliance).
• CMS published a proposed rule that also touched on transgender issues specifically within Medicare/Medicaid programs, June 16, 2016, 81FR39447, online here.  This was a proposed rule, not a finalized or effective one.

Regarding transgender issues, the new proposed rule states that in the old May 2016 final rule: " the Department defined discrimination “on the basis of sex” to cover, among other things, discrimination on the basis of sex stereotyping [and] gender identity..."    The May 2016 rule covered additional areas such as multi-lingual services (where most of the regulatory costs lie).   

The rule covers litigation history (including Franciscan Alliance).  The rule notes that on April 5, 2019, DOJ filed a brief stating that "Since the 1557 rules was issued, the United States has returned to its longstanding position that the term 'sex' in Title VII does not refer to gender identity, and there is no reason why Section 1557, which incorporates [analogous prohibition] should be treated differently."  HHS notes that the proposed rule being released now in May 2019 would bring HHS regulations into line with the position taken in court by DOJ in April 2019.  In contrast, the 2016 final rule "created confusion regarding Title IX's definition of discrimination on the basis of sex."

Total savings due to decreased regulatory burden are estimated at $3.5B over 5 years (page 124).

The new rule posits $3.5B in 5-year savings whereas the original rule projected only $1B in 5-year costs.  The new rule cites a range of resources for which HHS says it had previously severely underestimated costs (p. 122-123).

HHS adds, "Covered entities would enjoy increased freedom to adapt their Section 1557 compliance programs to most efficiently address their particular needs, benefiting both covered entities and individuals....Covered entities would be free under the proposed rule to implement policies and procedures that comply with Federal civil rights laws in creative, effective, and efficient ways that are tailored to the covered entities and to the communities they serve. (p. 125)."

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Numerous court filings both pro and con Franciscan Alliance online here.

The rulemaking refers to the Attorney General's role in supervising implementation of Title IX. which is applied here (see Executive Order 12250, Jimmy Carter, 1980).  The rulemaking also refers to Executive Order 13771 (see Reducing Regulation and Controlling Costs, Donald Trump, 2017).

For an October 2018 NYT article on Title IX, here.

For a concurrent discussion of CDC and LGBT issues, here.