As healthcare organizations respond to COVID-19’s disparate impacts on different communities, they are updating and expanding their health equity initiatives and exploring ways to inform larger efforts, including updates to regulations. Regulators’ discussions about equity issues are growing more urgent and wide reaching, addressing topics such as corporate governance, business operations, and climate change in addition to familiar topics such as measuring and addressing health disparities. Given this rapidly expanding approach to health equity in regulations, stakeholders can expect significant policy changes at both the state and federal levels over the next 2 years. Stakeholders will have comment opportunities to influence how regulators advance health equity, including this spring when the Biden administration is expected to propose updates to the Affordable Care Act (ACA) section 1557 nondiscrimination rule.

ACA Section 1557 Nondiscrimination Rule

Section 1557 of the ACA applies to providers and insurers serving Medicare, Medicaid, and exchange enrollees as well as other situations described in the implementing rule. The statute prohibits entities administering covered programs from discriminating based on race, color, national origin, sex, age, or disability. The current regulatory agenda suggests that the Biden administration intends to propose updates to the rule-implementing section 1557 soon.

The rule underwent significant changes between the Obama and Trump administrations. The changes made by the Trump administration focused largely on language access support and access to healthcare for transgender individuals. At minimum, the Biden administration is expected to update those provisions to resemble the Obama administration’s version of the rule. Some have suggested that the Biden administration could also propose updates to the rule to advance racial equity, for example by enumerating examples of provider or insurer practices that are considered racial discrimination, adding provisions to diversify provider networks, or creating new requirements related to data collection and measurement of health inequities.

Additional Examples of Federal Activity

Examples of additional recent federal regulatory activity with equity components include:

• The Proposed 2023 Notice of Benefit and Payment Parameters
• Request-for-Information Data Metrics and Alternative Processes for Access to Care in the Medicaid Program
• Medicare 2023 Medicare Advance Notice
• Proposed 2023 Medicare Advantage and Part D Proposed Rule
• Center for Medicare & Medicaid Innovation Strategy Center Refresh

Examples of State Activity

Many states are also contemplating legislative or regulatory changes intended to improve health equity. For example, the Oregon legislature passed a law creating a prescription drug affordability review board that will assess whether a drug’s pricing has led to health inequities for communities of color. Colorado requested and received the Centers for Medicare and Medicaid Services’ (CMS) approval to provide gender-affirming care in the individual and small group health insurance markets as part of the state’s essential health benefits benchmark plan. Several other states are advancing policies to improve digital literacy or broadband access, citing the disproportionate impact of these factors on communities of color and residents in rural areas.

State Medicaid programs are also expanding their focus on health equity in requests for proposals (RFPs) from organizations bidding to provide Medicaid coverage as managed care organizations. For example, recent RFPs from Minnesota, Delaware, and Louisiana include new components focused on health equity. In addition, several states have cited health equity in 1115 waiver proposals, such as California’s CalAIM waiver, intended to address some of the challenges facing the state’s most vulnerable residents.

Finally, the National Association of Insurance Commissioners Special Committee on Race and Insurance continues to explore best practices, access and affordability issues, and data considerations related to race, diversity, and inclusion in the insurance sector, which may influence state insurance departments’ approaches to improving health equity.

Quality Reporting and Performance Programs

Equity is a core tenet of healthcare quality, and regulators recently cited health equity as their most urgent improvement priority. Quality reporting programs, including those with financial incentives, are being used to advance this agenda through health equity quality measures and revised data collection requirements.

Recent developments include:

• Potential use of a health equity index in future Medicare Advantage Star Rating scores
• Stratified reporting of quality measures by race and ethnicity for health plans participating in the Quality Rating System
• Announcement of a potential new Healthcare Effectiveness Data and Information Set measure evaluating screening and intervention for unmet food, housing, and transportation needs

Implementation of health equity measurement approaches like those referenced above require valid and reliable data. However, administrative barriers, lack of standard definitions, and resistance from individuals and providers limit the  availability of complete and self-reported information. The CMS’s recent proposal to expand race and ethnicity categories in the Qualified Health Plan Enrollee Survey is 1 example of regulators’ commitment to addressing these concerns.

Action Steps

In 2022, stakeholders can expect the introduction of new policies to improve health equity at both the state and federal levels. The window of opportunity to contribute to the definition of these polices may be short, with a significant comment opportunity expected this spring when proposed updates to the ACA Section 1557 rule are published.

Healthcare organizations should also pay attention to evolving expectations about health equity data and measurement. Succeeding in a changing quality landscape requires:

• Monitoring changes to quality reporting programs
• Assessing internal data availability and forecasting potential measure performance
• Strategizing operational approaches and partnerships to drive improvement

Healthcare organizations will need to understand where their health equity initiatives are robust and where they have gaps to position themselves for success in the new regulatory environment.

To stay up to date with policy and legislation related to healthcare equity, connect with us.