Flack v. Wis. Dept. of Health Servs.
328 F. Supp. 3d 931 (2018)
Premium Feature
Subscribe to Lexplug to listen to the Case Podcast.
Rule of Law:
A state Medicaid program's categorical exclusion of coverage for medically necessary gender-affirming surgery likely violates Section 1557 of the Affordable Care Act, which prohibits discrimination "on the basis of sex," because such an exclusion discriminates based on both natal sex and transgender status.
Facts:
- Cody Flack, a transgender man, and Sara Ann Makenzie, a transgender woman, are enrolled in Wisconsin's Medicaid program.
- Both Flack and Makenzie were diagnosed with gender dysphoria, a serious medical condition causing significant psychological distress.
- Wisconsin has a regulation, Wis. Admin. Code § DHS 107.03(24), which categorically excludes 'Transsexual surgery' from Medicaid coverage.
- Flack's treating physicians determined that a double mastectomy and male chest reconstruction were medically necessary to treat his gender dysphoria.
- Makenzie's treating physicians recommended genital reconstruction surgery, specifically a bilateral orchiectomy and vaginoplasty, as medically necessary treatment for her gender dysphoria.
- The Wisconsin Department of Health Services (DHS) denied prior authorization for Flack's surgery, citing the categorical exclusion without assessing its medical necessity.
- Makenzie was informed by her surgeon that Medicaid would not cover her recommended surgery due to the same exclusion, causing her severe distress.
Procedural Posture:
- Plaintiff Cody Flack's surgeon sought prior authorization for his surgery from the Wisconsin Department of Health Services (DHS).
- DHS denied the prior authorization request, citing the state regulation's categorical exclusion.
- Flack appealed the denial to a state administrative law judge (ALJ).
- The ALJ dismissed the appeal, upholding the denial on the grounds that the regulation explicitly defined the surgery as a non-covered service.
- Flack's formal request for reconsideration was subsequently denied by DHS.
- Cody Flack and Sara Ann Makenzie filed suit against the DHS Secretary in the U.S. District Court for the Western District of Wisconsin.
- Plaintiffs moved for a preliminary injunction to enjoin defendants from enforcing the exclusion against them during the pendency of the lawsuit.
Premium Content
Subscribe to Lexplug to view the complete brief
You're viewing a preview with Rule of Law, Facts, and Procedural Posture
Issue:
Does a state Medicaid regulation that categorically excludes coverage for 'transsexual surgery,' even when medically necessary to treat gender dysphoria, violate Section 1557 of the Affordable Care Act's prohibition on sex discrimination?
Opinions:
Majority - Conley, J.
Yes. A state Medicaid regulation that categorically excludes coverage for 'transsexual surgery,' even when medically necessary, likely violates Section 1557 of the Affordable Care Act’s prohibition on sex discrimination. The court granted the plaintiffs' motion for a preliminary injunction, finding they had a reasonable likelihood of success on the merits of their ACA claim. The regulation constitutes discrimination on the basis of sex in two ways. First, it discriminates based on natal sex by denying coverage for procedures that would be covered for other medical reasons if the patient's natal sex aligned with their gender identity. For example, Medicaid would cover a mastectomy for a natal female for cancer treatment, but denies it for a transgender man (natal female) for gender dysphoria. Second, citing Seventh Circuit precedent like Hively and Whitaker, the court found that discrimination against transgender individuals is a form of sex discrimination because it is based on the failure to conform to sex-based stereotypes. The regulation unlawfully singles out transgender people and denies them medically necessary care available to others.
Analysis:
This decision represents a significant application of the evolving legal understanding that statutory prohibitions on 'sex' discrimination encompass discrimination based on gender identity and transgender status. It provides a strong basis for challenging state Medicaid exclusions that categorically deny coverage for gender-affirming care, shifting the focus from whether the care is legitimate to whether the exclusion is discriminatory. By grounding its reasoning in the Affordable Care Act, the court established a powerful statutory avenue for relief that can be more direct than complex Equal Protection claims. This ruling signals to other states that categorical bans on medically necessary treatments for gender dysphoria are legally vulnerable and inconsistent with federal anti-discrimination law.
