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Federal District Court Issues Nationwide Preliminary Injunction on OCR’s Interpretation of “Sex” Under Section 1557

On December 31, 2016, U.S. District Court Judge Reed O’Connor granted the plaintiff’s motion for preliminary injunction in their challenge to the definition of “sex” under the Office for Civil Rights (OCR) Section 1557 final regulations. The practical effect of Judge O’Connor’s ruling is that any current steps that covered entities such as hospitals, SNFs, physician clinics, or pharmacies are taking to comply with Section 1557’s requirements related to the term “gender identity” can be put on hold.

Section 1557 is the nondiscrimination section of the Patient Protection or Affordable Care Act (ACA) more commonly known as Obamacare. It applies longstanding Civil Rights legislation to recipients of Federal financial assistance such as Medicare Part A or Medicaid. Section 1557 clarifies that these covered entities must comply with Title VI of the Civil Rights Act of 1964, Section 504 of the Rehabilitation Act of 1973, and the Age Discrimination Act of 1975 in their provision of services to patients.

For the first time, Section 1557 also requires covered entities to comply with Title IX of the Education Amendments of 1972, which prohibits discrimination on the basis of sex. At issue in the plaintiff’s case in Franciscan Alliance, Inc. et al. v. Sylvia Burwell (No. 7:16-cv-001007-O; U.S. District Court Northern District of Texas) was OCR’s interpretation of the term “on the basis of sex” in the regulations.

In the final Section 1557 regulations, OCR defined “on the basis of sex” to include an individual’s “gender identity.” It further defined “gender identity” as “an individual’s internal sense of gender, which may be male, female, neither, or a combination of male or female, and which may be different from an individual’s sex assigned at birth,” (45 CFR § 92.4).

The plaintiffs in Franciscan Alliance argued that the term “sex” as used in Title IX did not include gender identity and that OCR exceeded the scope of the statute by interpreting the term to include an individual’s gender identity. Judge O’Connor agreed and issued the preliminary injunction.

The impact of Judge O’Connor’s ruling is that covered entities subject to compliance with Section 1557’s final regulation's can put any current changes being implemented related to the regulations interpretation of the term “on the basis of sex” on hold. For example, some covered entities were updating the gender section on patient intake forms to include male, female, male-to-female transgender, female-to-male transgender, or "other." Currently, these changes are paused while the preliminary injunction is in effect.

The nationwide preliminary injunction applies to covered entities from (Maine to Hawaii) are subject to the ruling. It is important to note, however, that the injunction is limited and only applies to OCR’s interpretation of “on the basis of sex” as including gender identity and termination of pregnancy. Covered entities must still post the required notices throughout their facilities, on their websites, and in significant publications and significant communications with respect to other aspects or 1557. They must also ensure that individuals with limited English proficiency having meaningful access to care through the use of qualified interpreters or qualified translators.

It is important to note that Section 1557 is a regulation that appears to be in flux. Accordingly, OCR keeps a running list of helpful Frequently Asked Questions on its website. There, it notes that Judge O’Connor’s ruling is limited to gender identity and termination of pregnancy as those terms are interpreted to be included in the definition of “sex.” As such, OCR indicates that it will continue enforcement with respect to other types of sex discrimination including harassment based on sex or gender stereotyping. Examples of gender stereotyping are available from OCR’s website here.

Zachary J. Buxton

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