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Federal Court Permanently Enjoins Wisconsin Medicaid from Enforcing State Statutory Exclusion of Coverage for Gender Transition

Posted on: August 26th, 2019 by Art Leonard No Comments

Last year, U.S. District Judge William M. Conley granted a preliminary injunction to several named plaintiffs in a case challenging a 1996 amendment to Wisconsin’s Medicaid statute under which transgender Medicaid participants were denied coverage for their gender transitions.  At that time, the court had concluded that the plaintiffs were likely to win their case on the merits and that delaying their access to gender transition coverage pending a final ruling on the merits would cause them irreparable injury, far outweighing any harm to the state.  The court refused to stay its preliminary injunction pending a possible appeal.  On August 16, Judge Conley issued his final ruling on the merits in the case, having in the interim certified it as a class action extending to all transgender people in the state who relied on Medicaid for their health care coverage, and making the injunction permanent.  The judge ordered the parties to “meet and confer” within 14 days on the scope of relief and final wording of an injunction.  Flack v. Wisconsin Department of Health Services, 2019 U.S. Dist. LEXIS 139388, 2019 WL 3858297 (W.D. Wis., Aug. 16, 2019).

Judge Conley premised his ruling on three sources of law: Section 1557 of the Affordable Care Act, the “Availability and Comparability” provisions of the Medicaid Act, and the Equal Protection Clause of the 14th Amendment.  Providing three independent and equal bases for the ruling makes it eminently defensible should the state decided to seek review at the 7th Circuit.  In this connection, the 7th Circuit has previously found thta government policies that disadvantage transgender people may violate the Equal Protection Clause, and it has adopted an interpretation of Title IX of the Education Amendments of 1972 that accepts the contention that a federal law banning sex discrimination would extend to gender identity discrimination, although this holding might be adversely affected by a Supreme Court ruling under Title VII in a pending case from the 6th Circuit, R.G. & G.R. Harris Funeral Homes v. EEOC, to be argued on October 8.

Judge Conley accepted the plaintiffs’ contention that the standards of care for gender dysphoria published by the World Professional Association of Transgender Health (WPATH), most recently updated in 2011, as supplemented by clinical guidelines on hormone treatment for gender dysphoria published in 2017 by the Endocrine Society, represent a medical consensus recognized by numerous professional health care associations and many, many court decisions, defining the standard of care in the context of any dispute about medically necessary treatment for gender dysphoria.  There is near-unanimity among federal courts at this point that gender dysphoria can be a serious medical condition and that, depending on the symptoms of the individual transgender person, various forms of treatment involved in transition, including hormone therapy and gender confirmation surgery (GCS), may be medically necessary.  The published standards emphasize, as does Judge Conley, that not every person who identifies as transgender experiences gender dysphoria (a “disconnect” between their gender identity and their anatomy), and that there is a range of severity, so not every person with gender dysphoria will necessarily seek GCS.  The Medicaid program’s coverage should depend upon competent medical professionals diagnosing gender dysphoria in the individual case and determining that hormone therapy and or GCS are medically necessary for the individual in question.

A significant problem for the defendants in this case, who include various officials as well as the state’s health services department, was that the legislature, evidently for political reasons, voted in 1996 to forbid the use of state Medicaid funds for gender transition, even though the particular treatments and procedures involved remain covered for a variety of other medical conditions.  For example, somebody suffering a severe hormone deficiency could obtain hormone replacement therapy under Medicaid, and a woman with breast cancer would be covered for a mastectomy, while transgender people would be denied coverage for hormone therapy or mastectomies, even though there was a medical consensus that these treatments were necessary to deal with their gender dysphoria.  The legislature did not undertake any serious study of the expenses of providing such treatment or of the professional medical standards in effect for treating gender dysphoria at that time.  The state tried to defend the statute in this case by coming up with various post hoc arguments that were easily discredited by the court, which observed that the state had failed to present credible expert testimony that there was a sound medical reason to deny the specified procedures to individuals for whom it was medically necessary.

The bulk of Judge Conley’s opinion is devoted to describing the medical evidence in the case, much of it derived from expert testimony provided by the plaintiffs, whose two expert witnesses were experienced medical specialists who had treated hundreds of transgender individuals and who were well-recognized in their field.  The state’s response to this, from the point of view of litigation strategy, was pathetic.  It failed even to offer experts with facially relevant expertise to contest any of the medical evidence.  Indeed, officials of the Wisconsin Medicaid program conceded in their testimony that the WPATH standards describe safe and effective treatments for gender dysphoria in appropriate cases, and there was little dispute that the named plaintiffs qualified for these treatments but were denied coverage for them solely because of the statute.  The court also pointed out that the state had attempted to rely in its arguments on materials that could not have provided a basis for the statute when it was passed, because their publication post-dated it.  In addition, Judge Conley observed that scientific knowledge about gender identity had significantly moved on since the mid-1990s, making the treatments and procedures even safer and more effective today.

The defendants sought to rely on two decision from other circuits: Kosilek v. Spencer, 774 F.3d 63 (1st Cir. en banc, 2014), and Gibson v. Collier, 920 F.3d 212 (5th Cir. 2019), but Judge Conley concluded these rulings were not persuasive precedents for this case.

Kosilek culminated long-running litigation and was based on expert testimony presented to the trial court in 2006, predating the current WPATH and Endocrine Society standards.  Also, the en banc 1st Circuit, which was ruling on the question whether GCS was medically necessary in the 8th Amendment context of a state prisoner serving a life sentence for murder (and which, incidentally, was reversing a 3-judge panel decision in the plaintiff’s favor), was heavily influenced by prison security concerns raised by the state that are not relevant in to Medicaid.

As to Gibson, Judge Conley performed a total demolition job on the cock-eyed reasoning of the 5th Circuit panel, whose opinion was written by Trump appointee James Ho.  This was also a prisoner case, the issue being whether it violated the 8th Amendment for the state to maintain a categorical refusal to provide GCS to transgender inmates (unlike in Kosilek, where the court focused on the individual inmate rather than an explicitly categorical treatment ban).  Gibson was a pro se case at the trial level, where the unrepresented inmate was incapable of compiling a state-of-the-art record of expert medical testimony, leaving a factual record bare of the kind of detailed information available to Judge Conley in this case litigated by experience attorneys.  In the absence of such a record, Judge Ho invoked the 1st Circuit’s decision in Kosilek, with its reliance on out-of-date information.  Of course, unlike the present Medicaid case, a case involving a prison setting raises different issues.  On the other hand, Judge Conley’s opinion leaves little doubt that he found the 5th Circuit’s analysis unpersuasive on the key points in common: whether there is a medical consensus that GCS can be medically necessary and that it is a safe and effective treatment.

For the short Affordable Care Act portion of his analysis, Judge Conley refers the reader to his earlier preliminary injunction decision.  As to the Medicaid portion, he details the requirement under Medicaid to cover medically necessary treatments, and furthermore the specific ban on discriminating in coverage decisions depending on the diagnosis of the individual participant.  In the Equal Protection portion of the opinion, he explained that the parties agree that Equal Protection claims by transgender plaintiffs are subject to “some sort of heightened scrutiny,” requiring the state to take on the burden of proving that it has an “exceedingly persuasive” justification for carving out this particular exception from its Medicaid coverage.  The government’s justification, stated now in its defense of the 1996 enactment, was “containing costs and protecting public health in face of uncertainty.”  Conley found neither justification to be sufficient under heightened scrutiny.  For one thing, the state conceded that the legislature made no study prior to passing the statute, either of the costs involved in providing coverage or of the medical facts surrounding gender transition and available treatments.  The only cost projections introduced by the state now were undertaken in response to this litigation, two decades later, and showed that the additional cost to the state’s Medicaid budget on an annual basis amounted to little more than a rounding error.  And, the court observed, there was no credible evidence to support the contention that covering these procedures would endanger public health.

The court also rejected a “spending clause” constitutional argument raised for the first time in support of the state’s opposition to plaintiffs’ summary judgment motion: that it was somehow unfair to the state to impose this “new” burden on it as a matter of federal law when it wasn’t contemplated at the time the state agreed to expand the Medicaid program in response to the Affordable Care Act in 2014.   “Nonsense,” wrote the judge.  Too late, and too bad.

Plaintiffs are represented by attorneys from McNally Peterson, S.C, Milwaukee; Dane & Colfax PLLC, Washington; Abigail Koelzer Coursolle of the National Health Law Program, Los Angeles; and Catherine Anne McKee of the National Health Law Program, Washington.