Flack, Cody et al v. Wisconsin Department of Health Services et al
Filing
217
ORDER granting plaintiffs' motion for summary judgment and denying plaintiffs' motion to strike. Signed by District Judge William M. Conley on 8/16/2019. (DPM)
IN THE UNITED STATES DISTRICT COURT
FOR THE WESTERN DISTRICT OF WISCONSIN
CODY FLACK, et al.,
Individually and on behalf of all others similarly situated
v.
Plaintiffs,
WISCONSIN DEPARTMENT OF HEALTH
SERVICES, et al.,
OPINION AND ORDER
18-cv-309-wmc
Defendants.
Over a year ago, this court preliminarily enjoined enforcement of Wis. Admin. Code
§§ DHS 107.03(23)-(24) (the “Challenged Exclusion”) against the originally named
plaintiffs, Cody Flack and Sara Ann McKenzie, who are transgender individuals with severe
gender dysphoria. The Challenged Exclusion denied coverage for medically prescribed
gender-conforming surgery and related hormones under Wisconsin Medicaid. Since then,
the court broadened the preliminary injunction enjoining enforcement during the
pendency of the lawsuit and certified a class. 1 (Prelim. Injunction Op. & Order (dkt. #70)
39; Class Cert. & Prelim. Injunction Amend. Op. (dkt. #150) 27.) Presently before the
court is plaintiffs’ motion for summary judgment, seeking declaratory and permanent
Previously, the Challenged Exclusion only referred to Wis. Admin. Code § DHS 107.03(23)-(24).
(See, e.g., Class Cert. & Prelim. Injunction Amend. Op. (dkt. #150) 1; Prelim. Injunction Op. &
Order (dkt. #70) 6.) However, plaintiffs were granted leave to file a second amended complaint to
(1) include Wis. Admin. Code § DHS 107.10(4)(p) as part of the “Challenged Exclusion,”
(2) replace former defendant Seemeyer with DHS Secretary-Designee Andrea Palm, and
(3) conform the class definition to that already certified by the court. (See Consent Mot. for Leave
to File 2d Amend. Compl. (dkt. #189) 1; June 26, 2019 Order (dkt. #208).) Accordingly,
throughout the rest of the opinion, the “Challenged Exclusion” will include § DHS 107.10(4)(p)
and defendants refer to DHS and Palm.
1
injunctive relief. (Pls.’ Mot. Summ. J. (dkt. #151) 1-2.) For the reasons that follow,
plaintiffs’ motion will be granted. 2
UNDISPUTED FACTS 3
A. Gender Dysphoria
1. Diagnosis
At its most basic level, gender identity is understood by the medical profession to
mean one’s internal sense of one’s sex. Everyone has a gender identity, and for most people,
their gender identity is consistent with the sex designated on their birth certificate
(variously referred to in medical literature as one’s “assigned,” “designated” or “natal” sex).
Transgender people have a gender identity that differs from their natal sex. Accordingly,
a transgender woman was assigned a natal sex of male but has a female gender identity,
while a transgender man was assigned a natal sex of female but has a male gender identity.
Also before the court is plaintiffs’ motion to strike the declaration and testimony of Michelle
Ostrander, Ph.D. (Mot. Strike (dkt. #192) 1-2.) That motion will be denied.
2
Viewing the facts in the light most favorable to defendants as the non-moving parties, the
following facts are material and undisputed for purposes of summary judgment, except where noted
below. These facts are drawn from the parties’ stipulated facts (dkt. #154) and plaintiffs’ proposed
findings of fact (dkt. #153), as well as defendants’ responses (dkt. #183) and plaintiffs’ replies
(dkt. #196). The court also relies on findings of fact set forth in its prior opinions to which neither
party has objected. While the court greatly appreciates the parties stipulating to certain proposed
findings of fact, doing so is significantly less helpful when they largely overlap with plaintiffs’
separate, proposed findings of fact. (Compare Stip. PFOF (dkt. #154) ¶¶ 2-9, 12, 92-95 with Pls.’
PFOF (dkt. #153) ¶¶ 13-25.) Likewise, parties are reminded that in proposing facts, “[e]ach fact
must be proposed in a separate, numbered paragraph, limited as nearly as possible to a single factual
proposition.” (Prelim. Pretrial Packet (available at dkt. #114) 3 (emphasis added).) While objecting
to the inclusion of more than one fact per numbered paragraph is often times a matter of form over
substance, streamlining proposed facts is nevertheless appreciated by both the court and opposing
counsel.
3
2
According to plaintiffs’ experts, one’s gender identity is an immutable characteristic.
Defendants dispute this. In particular, defendants argue that “[o]ne’s self-awareness as
male or female changes gradually during infant life and childhood” based on “interactions
with parents, peers, and environment,” noting that “[n]ormative psychological literature”
fails “[to] address if and when gender identity becomes crystallized and what factors
contribute to the development of a gender identity that is not congruent with the gender
of rearing.” (Defs.’ Resp. to Pls.’ PFOF (dkt. #183) ¶¶ 35-36 (quoting Endocrine Society’s
Clinical Practice Guidelines (dkt. #166-9) 7).)
Regardless of its origins, there is now a consensus within the medical profession that
gender dysphoria is a serious medical condition, which if left untreated or inadequately
treated can cause adverse symptoms, such as anxiety, depression, serious mental distress,
self-harm, and suicidal ideation, all of which can cause social and occupational dysfunction.
DSM-5 contains the psychiatric consensus as to its definition, diagnostic criteria and
features:
Gender dysphoria refers to the distress that may accompany the
incongruence between one’s experienced or expressed gender
and one’s assigned gender. Although not all individuals will
experience distress as a result of such incongruence, many are
distressed if the desired physical interventions by means of
hormones and/or surgery are not available. The current term
is more descriptive than the previous DSM-IV term gender
identity disorder and focuses on dysphoria as the clinical
problem, not identity per se.
3
(DSM-5 (dkt. #21-1) 5.) 4 Not every transgender person suffers from gender dysphoria,
and for those who do, the severity of the symptoms and necessary treatment will vary by
individual.
2. Treatment
The World Professional Association of Transgender Health outlines the clinical
guidelines for treating gender dysphoria in its Standards of Care for the Health of Transsexual,
Transgender, and Gender Nonconforming People, 7th Edition (2011) (the “WPATH Standards
of Care”). 5 The WPATH Standards of Care identify psychotherapy, hormone therapy,
and a number of surgical procedures as accepted treatment options for gender dysphoria.
In 2017, the Endocrine Society also published clinical practice guidelines addressing
hormone treatments for gender dysphoria. 6
DSM-5 is the fifth edition of the American Psychiatric Association’s Diagnostic and Statistical
Manual of Mental Disorders, which “is the handbook used by health care professionals in the
United States and much of the world as the authoritative guide to the diagnosis of mental
disorders.”
DSM-5:
Frequently
Asked
Questions,
Am.
Psychiatric
Ass’n,
https://www.psychiatry.org/psychiatrists/practice/dsm/feedback-and-questions/frequently-askedquestions (last visited Aug. 8, 2019).
4
WPATH “is an international, multidisciplinary, professional association whose mission is to
promote evidence-based care, education, research, advocacy, public policy, and respect in
transsexual and transgender health.” (WPATH Standards of Care (dkt. #166-8) 8.) The Standards
of Care “are based on the best available science and expert professional consensus,” with the goal
of “provid[ing] clinical guidance for health professionals to assist transsexual, transgender, and
gender-nonconforming people with safe and effective pathways to achieving lasting personal
comfort with their gendered selves, in order to maximize their overall health, psychological wellbeing, and self-fulfillment.” (Id.)
5
The Endocrine Society is “the primary professional home for endocrine scientists and clinical
practitioners,” and is “devoted to advancing hormone research, excellence in the clinical practice of
endocrinology, broadening understanding of the critical role hormones play in health, and
advocating on behalf of the global endocrinology community.” About the Endocrine Society, Endocrine
Soc’y, https://www.endocrine.org/about-us (last visited Aug. 6, 2019).
6
4
Dr. Julie Sager, DHS’s medical director for Wisconsin Medicaid’s Bureau of
Benefits Management (“BBM”) from 2016 until April 24, 2019, considered both sources
to be generally accepted in the medical community and to outline the appropriate
standards for assessing the medical necessity of treatment for gender dysphoria. Transitionrelated medical interventions have the following goals: (1) preventing or eliminating the
development of unwanted secondary sex characteristics of the assigned sex; (2) promoting
or reconstructing the development of desired secondary sex characteristics of the sex
associated with the patient’s gender identity; (3) reducing symptoms of gender dysphoria;
and (4) enhancing the patient’s ability to “pass” as the sex associated with the patient’s
gender identity, decreasing harassment, mistreatment, and other discrimination to which
transgender people are subjected because they are gender nonconforming.
The WPATH Standards of Care state that “sex reassignment surgery is effective and
medically necessary,” while also recognizing that many transgender people who are
diagnosed with gender dysphoria will not require surgery. (WPATH Standards of Care
(dkt. #166-8) 61 (capitalization altered).) “While most professionals agree that genital
surgery and mastectomy cannot be considered purely cosmetic, opinions diverge as to what
degree other surgical procedures (e.g., breast augmentation, facial feminization surgery)
can be considered purely reconstructive.” (Id. at 65.) For appropriate candidates, however,
major medical organizations, including the American Medical Association, Endocrine
Society, and American Psychiatric Association view gender-confirming surgeries as
medically accepted, safe, and effective treatments for severe gender dysphoria.
Even
defendants acknowledge that DHS does not consider surgical treatments for gender
5
dysphoria to be experimental. (See Prelim. Injunction Op. & Order (dkt. #70) 26 n.22
(recognizing defendants’ concession).)
B. Wisconsin Medicaid
Medicaid, a joint federal-state program, was established in 1965 under Title XIX of
the Social Security Act to provide medical assistance to eligible low-income individuals.
See 42 U.S.C. §§ 1396-1396w-5 (the “Medicaid Act”). Medicaid allows states to provide
medical services to individuals whose resources and income are insufficient to cover the
cost of necessary medical services through federal reimbursement to participating states for
a substantial portion of the medical costs. The program’s total budget is approximately
$9.7 billion and approximately 1.2 million people rely on Wisconsin Medicaid.
Defendant Wisconsin Department of Health Services (“DHS”) is responsible for
administering the Wisconsin Medicaid program. It receives Medicaid funding from the
federal government, including reimbursement for over half the state’s Medicaid
expenditures from the U.S. Department of Health and Human Services. 7 Defendant
Andrea Palm serves as DHS’s secretary-designee, making her responsible for implementing
the Medicaid Act consistent with both state and federal requirements. At the state level,
Wisconsin Medicaid is governed by Wis. Stat. §§ 49.43-.65 and its implementing
regulations are found at Wis. Admin. Code § DHS 101-09.
Wisconsin Medicaid beneficiaries receive health care coverage through either a fee-
Like all other states, Wisconsin participates in Medicaid. On average, Wisconsin pays 40.6% of
that amount.
7
6
for-service plan administered directly by DHS or an HMO Medicaid plan offered through
third-party managed care organizations. For the fee-for-service plans, DHS uses its own
staff to review prior authorization requests, instead of using a third-party administrator.
The prior authorization staff typically uses DHS’s published guidelines to make clinically
appropriate and coverage determinations for requested services.
Where published
guidelines do not exist -- as is currently true here for gender-confirming surgeries -- medical
doctors in BBM, which is part of DHS’s Division of Medicaid Services, review the request
under statutory and regulatory limits. 8 Dr. Lora Wiggins is BBM’s chief medical officer
and until April 24, 2019, Dr. Julie Sager served as BBM’s medical director.
The vast majority -- approximately 80% -- of Wisconsin Medicaid beneficiaries are
enrolled in HMO Medicaid plans, which are offered by the following managed care
organizations: (1) Blue Cross Blue Shield of Wisconsin; (2) Care Wisconsin Health Plan;
(3) Children’s Community Health Plan; (4) Dean Health Plan, Inc.; (5) Group Health
Cooperative of Eau Claire; (6) Group Health Cooperative of South Central Wisconsin;
(7) Independent Health Care Plan; (8) MHS Health Wisconsin; (9) MercyCare Insurance
Company; (10) Molina Healthcare of Wisconsin; (11) Network Health Plan; (12) Quartz
Health Solutions, Inc.; (13) Security Health Plan; (14) Trilogy Health Insurance, Inc.; and
Unsurprisingly, the BBM medical directors are responsible for overseeing the clinical
appropriateness and content of DHS policies, setting clinical policy, and supporting DHS’s prior
authorization staff when requests are made outside the published guidelines or when a clarification
is needed.
8
7
(15) UnitedHealthcare Community Plan. 9
These managed care organizations are
responsible for administering, managing and overseeing the Medicaid benefits provided to
enrolled beneficiaries in their plans in accordance with DHS’s published guidelines and
minimum standards.
Accordingly, each managed care organization’s clinical staff is
responsible for reviewing and addressing prior authorization requests. Following a prior
authorization denial, a beneficiary has the option of submitting his or her request to DHS
for a determination whether DHS would have covered the service under the DHS fee-forservice plan. If the treatment was medically necessary and the fee-for-service plan would
have covered it, DHS compels the managed care organization to cover the treatment as
well.
C. Challenged Exclusion
1. Overview
The Medicaid regulations were amended to include Wis. Admin. Code §§ DHS
107.03(23)-(24) in 1996, and they have been enforced since 1997, resulting in the denial
of coverage for medical and surgical treatment for gender dysphoria for a majority of the
period since. 10
They exclude from Wisconsin Medicaid coverage “[d]rugs, including
hormone therapy, associated with transsexual surgery or medically unnecessary alteration
For various periods since January 1, 2009, Children’s Community Health Plan Central, Compcare,
CommunityConnect, Physicians Plus Insurance Corporation, Deal Health Plan SE, Gundersen,
HTHP, and Unity also offered Wisconsin Medicaid plans.
9
While the parties stipulated that “Defendants enforce the Challenged Exclusion through the
present day” (Stip. of Facts (dkt. #154) ¶ 11), the court previously enjoined them from doing so
in this case (Class Cert. & Prelim. Injunction Amend. Op. (dkt. #150) 27).
10
8
of sexual anatomy or characteristics” and “[t]ranssexual surgery.” Wis. Admin. Code
§§ DHS 107.03(23)-(24). 11 “Transsexual surgery” is not defined in the regulations, but
DHS interprets it to mean any surgical procedure intended to treat gender dysphoria. 12
Across the country, only nine states -- including Wisconsin -- have categorical Medicaid
exclusions on gender-confirming healthcare.
Even though managed care organizations offering Wisconsin Medicaid plans are
primarily responsible for enforcing the Challenged Exclusion by denying their plan
members’ prior authorization requests for services and treatment, DHS has not provided
the managed care organizations formal guidance on how to interpret the Challenged
Exclusion. Participating managed care organizations have denied coverage to transgender
beneficiaries for gender-confirming treatments, including hormone therapy, surgery and
related services under the Challenged Exclusion.
2. DHS’s Evaluation of the Exclusion
When the Challenged Exclusion went into effect on February 1, 1997, DHS’s
predecessor, the Wisconsin Department of Family and Health Services, opined that the
excluded services were “medically unnecessary” and that the Challenged Exclusion was
The amendment labeled “transsexual surgery” and the associated “drugs, including hormone
therapy” as “not medically necessary,” along with other excluded services including “ear lobe
repair,” “non-medical food,” “services related to surrogate parenting,” and “tattoo removal.”
(Clearinghouse Rule 96-154 (dkt. #21-12) 3.)
11
In fact, for purposes of summary judgment, DHS acknowledges “transsexual surgery” is itself an
outdated term that is inconsistent with current medical terminology. (See Defs.’ Resp. to Pls.’ PFOF
(dkt. #183) ¶ 80.)
12
9
“expected to result in nominal savings for state government.” 13 (Clearinghouse Rule 96154 (dkt. #21-12) 2, 3; Fiscal Estimate (dkt. #21-14) 2.) However, DHS has been unable
to find evidence that before implementation of the Challenged Exclusion it or its
predecessor ever found or opined that the excluded services were experimental, ineffective
or unsafe. 14 Likewise, DHS is unaware of any information indicating that the conclusion
that the excluded services were not medically necessary was based on any systematic study
or review of the medical literature. Nor is DHS aware of information indicating that it
undertook any study or review of the costs associated with enforcing, amending or
eliminating the Challenged Exclusion between its effective date and the start of this lawsuit.
Since the filing of this lawsuit, the only investigations into the financial impact on
DHS, Wisconsin Medicaid or the State of Wisconsin from enforcing, amending or
eliminating the Challenged Exclusion were the August and November 2018 reports of
David Williams, submitted in connection with this lawsuit.
Similarly, the only
investigation into the safety or efficacy of the medical or surgical treatments for gender
dysphoria performed by DHS since February 1, 1997, were the reports of Lawrence Mayer,
Michelle Ostrander, Chester Schmidt and Daniel Sutphin, also submitted in connection
with this lawsuit. In contrast, DHS’s own medical providers, the individuals charged with
making clinical coverage determinations for Wisconsin Medicaid, acknowledge that
The fiscal estimate notes that Wisconsin Medicaid “has hardly ever paid for any of those services
or for those purposes, but questions about coverage continue to come up.” (Fiscal Estimate (dkt.
#21-14) 3.)
13
In addressing the analyses that were or were not undertaken, further references to DHS include
its predecessor, the Wisconsin Department of Family and Health Services, as applicable.
14
10
gender-confirming hormone and surgical treatments for gender dysphoria can be medically
necessary and that the Challenged Exclusion conflicts with current medical practice. 15
Finally, since its enactment, neither DHS nor its predecessor have studied the public
health effects or costs of enforcing, amending or eliminating the Challenged Exclusion
outside of this lawsuit. Nor is DHS aware of information indicating that it formally
considered amending or eliminating the Challenged Exclusion between February 1, 1997,
and July 17, 2016. DHS is also unaware of information indicating that it reviewed or
considered the efficacy of the Challenged Exclusion following the publication of Version 7
of the WPATH Standards of Care in 2011 or DSM-5’s information about the treatment
of gender dysphoria following its publication in 2013.
For purposes of this lawsuit,
defendants estimate that removing the Challenged Exclusion and covering genderconfirming surgeries would cost between $300,000 and $1.2 million annually. There is no
dispute that these amounts are actuarially immaterial as they are equal to approximately
0.008% to 0.03% of the State’s $3.9 billion share of Wisconsin Medicaid’s $9.7 billion
annual budget.
3. Enforcement
Since January 1, 2009, DHS has denied Wisconsin Medicaid coverage to ten feefor-service beneficiaries; since 2014, HMOs administering Wisconsin Medicaid have
denied numerous requests for gender-confirming surgical procedures, hormone treatments
Although defendants unsurprisingly dispute the characterization (and presumably its relevance),
plaintiffs argue that continued enforcement of the Challenged Exclusion is, therefore, “exclusively”
motivated by politics. (Defs.’ Resp. to Pls.’ PFOF (dkt. #183) ¶ 6.)
15
11
and other medical treatments and services. Each of these denials was based on application
of the Challenged Exclusion, since the denied procedures are covered by Wisconsin
Medicaid when deemed medically necessary for other conditions.
Even so, DHS has no published coverage guidelines for gender-confirming health
care, nor has it provided formal guidance to Wisconsin Medicaid HMOs about what is
excluded by the Challenged Exclusion. As a result, before 2016, DHS sporadically covered
chest surgeries to treat gender dysphoria under a regulation allowing coverage for
procedures to treat a condition that significantly interferes with a person’s personal/social
adjustment or employability. See Wis. Admin. Code § DHS 107.06(2)(c) (requiring prior
authorization for “[s]urgical or other medical procedures of questionable medical necessity
but deemed advisable in order to correct conditions that may reasonably be assumed to
significantly interfere with a recipient’s personal or social adjustment or employability, an
example of which is cosmetic surgery.”). Moreover, in 2016, BBM’s clinical staff wrote to
DHS management, opining that the Challenged Exclusion conflicted with federal law
because of a final rule implementing the Affordable Care Act’s § 1557 prohibiting
discrimination on the basis of gender identity (the “Section 1557 Final Rule”) and asking
if gender-confirming surgeries could be approved. BBM never received a formal written
response. Instead, mid-level DHS management, which the parties agree was comprised of
political appointees, explained informally that DHS’s upper management instructed that
BBM medical directors were to just leave prior authorization requests, so that they would
expire.
Following this letter, BBM received no further direction from DHS management,
12
and BBM’s clinical staff never received written clarification about what procedures were
subject to the Challenged Exclusion. As a result, Dr. Sager and Dr. Wiggins concluded
that the best option was to deny all requests for surgery and related gender-conforming
hormones to comply with the Department’s directives to the HMOs, even though doing
so was contrary to their clinical opinion that the treatments could be both medically
necessary and acceptable under current medical standards.
On January 4, 2017, following a preliminary injunction from the Northern District
of Texas enjoining part of the “Section 1557 Final Rule,” the former director of Wisconsin
Medicaid, Michael Heifetz, wrote contract administrators at Wisconsin managed care
organizations, informing them that Wisconsin Medicaid would continue to enforce the
Challenged Exclusion. (Jan. 4, 2017 Letter (dkt. #165-1) 1.) In part, the letter advised
that:
The Department will continue to abide by its own regulations
related to covered services under Medical Assistance/Medicaid
(“MA”). Specifically, under the Department’s MA regulations,
transsexual surgery and medically unnecessary hormone
therapy are not covered services. (See Wis. Admin. Code
§§ DHS 107.03(23), (24); 107.10(4)(p)).
. . .
The
Department will continue to make coverage decisions under its
regulations, and will not reimburse entities for procedures that
fall outside the Department’s regulations.
(Id.)
As a result, Wisconsin Medicaid’s current policy under the Challenged Exclusion is
to exclude from coverage certain medical procedures, services or treatments that are
deemed medically necessary by a beneficiary’s medical provider to treat gender dysphoria,
even though those same procedures are covered when deemed medically necessary to treat
13
other conditions.
mastectomy,
These treatments include orchiectomy, penectomy, vaginoplasty,
reduction
mammoplasty,
breast
reconstruction,
hysterectomy,
oophorectomy, and salingo-oophorectomy. The Challenged Exclusion also categorically
excludes from coverage feminizing genitoplasty, chondrolaryngoplasty, phalloplasty,
metoidioplasty, masculinizing genitoplasty, and intersex surgery (both male to female and
female to male). While the Challenged Exclusion categorically excludes some hormone
therapy treatments, Wisconsin Medicaid covers the following hormones when medically
necessary to treat conditions other than gender dysphoria: estradiol, medroxyprogesterone
acetate (Provera), micronized progesterone, and testosterone cypionate.
Wisconsin
Medicaid also covers some hormones for the treatment of gender dysphoria, but only if not
associated with surgery. 16
In 2019, Dr. Julie Sager sought to have a formal discussion with DHS leadership
about providing Wisconsin Medicaid coverage for gender-confirming treatment. She was
asked to prepare a proposal about an appropriate policy.
In preparation for these
discussions, she requested and received a spreadsheet from BBM’s medical coder
identifying gender-confirming procedures and the coverage for those procedures when
treating conditions other than gender dysphoria. A large majority of those procedures are
covered by Wisconsin Medicaid when not treating gender dysphoria. (See generally Gender
Reassignment Procedure Code List (dkt. #166-10).)17
Despite this latter exception, the parties agree that some hormone treatments for gender
dysphoria have been denied because Wisconsin Medicaid managed care organizations make their
own drug coverage determinations.
16
17
At least as of mid-April 2019, further discussions between DHS management and BBM about
14
Finally, DHS applies the Challenged Exclusion only to beneficiaries who are at least
21 years old. For younger beneficiaries, DHS considers requests for coverage under the
Early and Periodic Screening, Diagnostic, and Treatment (“EPSDT”) provisions. See 42
U.S.C. §§ 1396a(a)(10)(A), 1396d(a)(4)(b); Wis. Admin. Code § DHS 107.22. (But see
Vordermann Decl. (dkt. #99) ¶¶ 8-12 (recounting denial of coverage for orchiectomy for
19-year-old sufferer of gender dysphoria by HMO).) When reviewing an HMO denial of
a request for gender confirming surgery for a beneficiary who was under 21 years old in
July 2018, Wisconsin Medicaid’s then-medical director, Dr. Sager, concluded that the
requested surgery was medically necessary, recommending approval for coverage.
In
making that decision, Dr. Sager considered the WPATH Standards of Care, the Endocrine
Society Guidelines and other state Medicaid agencies’ guidelines.
D. Named Plaintiffs 18
Plaintiffs Cody Flack, Sara Ann Makenzie, Marie Kelly and Courtney Sherwin are
all adult, transgender, residents of Wisconsin enrolled in Wisconsin Medicaid. They all
suffer from gender dysphoria. Each of their individual treatment providers have concluded
that hormone therapy and gender-confirming surgery are medically necessary.
After
nevertheless being denied coverage under the Challenged Exclusion, they each joined this
suit on behalf of themselves and a class of similarly-situated plaintiffs.
Cody Flack, one of the two originally named plaintiffs, sought Medicaid coverage
for chest reconstructive surgery that his treatment providers deemed medically necessary.
policy changes had not occurred.
18
Additional information about the named plaintiffs can be found in the court’s prior opinions.
15
His prior authorization request was denied and then affirmed on appeal under the
Challenged Exclusion without considering his treatment providers’ determination that
surgery was a medical necessity given the severity of his gender dysphoria. Following this
court’s entry of a preliminary injunction last summer, DHS reviewed Cody’s prior
authorization request for the chest surgery for medical necessity.
Dr. Sager, then
Wisconsin Medicaid’s BBM medical director, concluded that his requested surgeries were
medically necessary to treat his gender dysphoria. In making her determination, Sager
relied on the WPATH Standards of Care and the Endocrine Society Guidelines as indicia
of the prevailing, accepted medical standards of care. 19
After entry of the court’s preliminary injunction and Dr. Sager’s finding that the
surgery was medically necessary, plastic surgeon Clifford King performed Cody’s double
mastectomy and male chest reconstruction on September 25, 2018. Following surgery,
Cody’s gender dysphoria has greatly diminished.
He was relieved that his outward
appearance matched his male gender and that he would no longer be misgendered because
of his breasts. He began looking forward to going out in public. He felt “more upbeat and
hopeful about [his] life in general.” (Flack Suppl. Decl. (dkt. #91) ¶ 4.) He is considering
obtaining a phalloplasty to further his gender transition.
Sara Ann Makenzie, the other originally named plaintiff, first encountered the
Challenged Exclusion when she sought a chest reconstruction prescribed by her doctors.
She contacted DHS to inquire about Wisconsin Medicaid coverage for the procedure, but
Dr. Sager testified that she would use the same type of review if considering similar, prior
authorization requests and denials if not bound by the Challenged Exclusion.
19
16
was informed that it was not a covered benefit. 20 (Makenzie Decl. (dkt. #23) ¶ 19.) She
then obtained a personal loan from her bank to pay for the surgery out-of-pocket. UW
Health plastic surgeon Venkat Rao performed the surgery in August 2016. She contends
that this surgery helped alleviate her gender dysphoria.
After her medical providers
recommended that she obtain a bilateral orchiectomy and vaginoplasty to create femaleappearing external genitalia, Sara Ann was twice told Wisconsin Medicaid would not cover
the surgery. Following this court’s preliminary injunction in July 2018, Sara Ann’s HMO,
Care Wisconsin, reviewed her prior authorization request for coverage for genital
reconstruction surgery and related procedures, determining that the surgeries were
medically necessary and coverage for the surgery was appropriate.
Since 2011, plaintiff Marie Kelly has taken feminizing hormones to treat her gender
dysphoria and to further her gender transition. 21 While the hormones have helped, she
still suffers “exacerbated” gender dysphoria and anxiety because of her facial hair, maleappearing chest, and male-appearing genitalia. Her medical providers have recommended
that she obtain electrolysis for facial hair removal, a female chest reconstruction, and a
female genital reconstruction. The providers consider each of these procedures to be
Defendants object to this proposed fact as ‘vague, ambiguous, and lack[ing] sufficient foundation
to enable Defendants to adequately respond.” (Defs.’ Resp. to Pls.’ PFOF (dkt. #183) ¶ 156.)
However, the court finds this objection entirely unpersuasive. Sara Ann can testify to her
communications with defendants’ representative. Moreover, defendants were free to take discovery
to refute her claim of a coverage denial, but absent that, the court will accept her representation,
particularly since it is wholly consistent with defendants’ admitted policy of denying coverage under
the Challenged Exclusion without regard to medical necessity.
20
Unlike the other named plaintiffs, Marie’s history with Wisconsin Medicaid is more complicated.
Following placement by a staffing agency at a temporary position in January 2019, her income
surpassed the Wisconsin Medicaid limits. After leaving that position, Marie then re-enrolled in
Wisconsin Medicaid.
21
17
medically necessary. After inquiring whether Wisconsin Medicaid would provide coverage
for these procedures -- including as recently as in August 2018 -- Marie was repeatedly told
that they were not covered because of the Challenged Exclusion. Since then, Marie has
been unable to obtain these treatments for her gender dysphoria, and she cannot afford to
pay for them herself.
In March 2018, plaintiff Courtney Sherwin began taking feminizing hormones
under the supervision of her primary care physician. She has been denied coverage for
some of the hormone treatments prescribed by her doctors under the Challenged Exclusion,
forcing her to pay out-of-pocket for them. Moreover, while the hormones have helped,
Courtney continues to suffer from severe gender dysphoria because of her male-appearing
body and her male-sounding voice, as well as the harassment they engender. Courtney’s
medical providers have concluded that a genital reconstruction, consisting of an
orchiectomy, penectomy and vaginoplasty, and a breast augmentation are medically
necessary to treat her gender dysphoria.
They also believe that the orchiectomy is
particularly urgent because it would stop her body from producing testosterone and
alleviate the adverse side effects from her testosterone-blocking spironolactone.
Her
current HMO, Quartz, has denied coverage for these gender-confirming surgical treatments
based on the Challenged Exclusion, and she cannot afford to pay for these procedures
herself.
Although their exact number is unknowable, other transgender Wisconsin Medicaid
beneficiaries with gender dysphoria have also been denied coverage for gender-confirming
surgeries under the Challenged Exclusion (or at least are likely to have been discouraged
18
from applying because of it). Defendants concede for purposes of summary judgment that
there are potentially hundreds of transgender Wisconsin Medicaid beneficiaries (if not
more) who may be denied gender-confirming surgeries and related hormone treatments
during their lifetimes if the Challenged Exclusion remains in place. For example, Lexie
Vordermann is a 19-year-old transgender Wisconsin Medicaid beneficiary who has been
denied coverage for an orchiectomy by her HMO, Quartz, in early 2018 because of the
Challenged Exclusion.
In September 2018, her doctor submitted a second prior
authorization request, but Quartz denied it as well, citing the Challenged Exclusion. While
DHS has maintained that the Challenged Exclusion does not apply to beneficiaries under
21 years of age, Lexie’s denials have been based on the Challenged Exclusion.
Another class member, Emma Grunenwald-Ries, a transgender Wisconsin Medicaid
beneficiary, experiences significant gender dysphoria related to her voice, chest and
genitalia.
She is seeking a number of surgeries recommended by her primary care
physician, including facial feminization, chest reconstruction, and genital reconstruction.
UW Health surgeon Katherine Gast agreed to perform genital reconstruction surgery, but
has not submitted a prior authorization request, believing it would be denied because of
the Challenged Exclusion. Emma suffers from daily anxiety, worry, and stress about her
inability to obtain treatment. She is also upset that the Challenged Exclusion stands in
the way of her completing her medical transition.
19
OPINION
I. Plaintiffs’ Motion to Strike
Before turning to plaintiffs’ motion for summary judgment, the court must first
address their lengthy motion to strike the declaration and exclude testimony of defense
expert Michelle Ostrander, Ph.D. (Mot. to Strike (dkt. #192) 1.) Plaintiffs raise three
arguments: (1) failure to comply with Federal Rule of Civil Procedure 26(a)(2)(B);
(2) failure to meet the requirements of Daubert and Federal Rule of Evidence 702; and
(3) the Hayes reports that she purports to incorporate as her opinions are inadmissible
hearsay.
(Mot. to Strike Br. (dkt. #193) 18.)
Defendants contend that Ostrander
“adequately disclosed her opinions,” has appropriate “expertise to opine on the available
scientific evidence regarding the safety and efficacy of surgical gender dysphoria
treatments,” and plaintiffs’ motion seeks “to exclude her testimony without having to
grapple with its substance.” (Mot. to Strike Opp’n (dkt. #200) 1, 3.)
While Plaintiffs’ motion will be denied, the actual relevance of Ostrander’s
“opinion” is quite limited. First, Ostrander expressly “take[s] no position on the medical
necessity of any particular medical procedure or service for any particular patient, including
the named plaintiffs in this case” (Ostrander Decl. (dkt. #188) ¶ 12), something that
should be obvious on its face given that she has no medical degree. Likewise, she makes
no claim of any medical expertise, including treatment methods for gender dysphoria, nor
did she review DSM-5, WPATH or other standards of care for gender dysphoria. (See
Ostrander Dep. (dkt. #206) 84:25-85:25 (“I believe the DSM-5 is the current standard
for diagnosis. As far as the specific for those, I’m not familiar with those off the top of my
20
head.”; “I am aware of the WPATH standards of care for the treatment of gender
dysphoria; but as to the specifics, I could not speak to those.”); see also id. at 109:10-111:9
(relying on a report’s summary of the difference between “gender identity disorder” and
“gender dysphoria,” adding that the diagnostic criteria are “outside of [her] area of
expertise”).)
Second, even accepting her declaration on its face, she does nothing more than
compile “[i]n [her] role as Product Manager at Hayes, Inc.,” various “custom research”
prepared largely by unnamed others at Hayes for unnamed “healthcare providers, payers,
[or] policy makers” which purport to analyze “the available scientific evidence regarding
the efficacy and safety of” “Sex Reassignment Surgery” and “Ancillary Procedures and
Services for the treatment of Gender Dysphoria” in 2014 and 2018. (Ostrander Decl. (dkt.
#188) ¶¶ 3, 11-9.) While she “worked with analysts in authoring and developing the
August 2018 report and reviewed and approved the report prior to its publication,” she
had no role in developing the other three reports. (See id. ¶ 9.) “The analyses and
conclusions” found in these reports, attached to her barebones declaration, “represent [her]
professional opinion about the available scientific evidence regarding the efficacy and
safety of the medical procedures and services . . . as of the dates of those documents.” (Id.
¶ 11.) Ostrander’s declaration does not explain the methodology for assigning grades,
although she provides some detail during her deposition. (Ostrander Dep. (dkt. #206)
50:15-51:23; 122:20-123:8.)
Third, whatever the evidentiary value these private analyses may have, it pales in
comparison to that of the peer reviewed studies they purport to criticize, and, more
21
importantly, to the consensus of medical professionals as to the efficacy and safety of
gender-confirming surgery. 22
Fourth, and finally, Ostrander’s “opinions” are entirely unhelpful to the issue of fact
here: whether gender-confirming surgery and related hormones are now a generally
accepted form of medical treatment for gender dysphoria. Even accepting Ostrander’s
conclusion that studies provide “very low” quality evidence, that does not change the fact
that the larger medical community considers these treatments to be acceptable. (See Am.
Med. Assoc. (dkt. #21-5) 2 (“[M]edical and surgical treatments for gender dysphoria, as
determined by shared decision making between the patient and physician, are medically
necessary as outlined by generally-accepted standards of medical and surgical practice.”);
Am. Endocrine Soc’y (dkt. #21-9) 3 (“Medical intervention for transgender individuals
(including both hormone therapy and medically indicated surgery) is effective, relatively
safe (when appropriately monitored), and has been established as the standard of care.”).)
Further, it is somewhat perplexing that at summary judgment, defendants relied only on
the “opinions” of a lone, non-medical, professional researcher, rather than on the
previously filed declarations of the few medical professionals who had questioned the
efficacy and safety of gender-confirming care. (See Sutphin Decl. (dkt. #118); Schmidt
Decl. (dkt. #56); Mayer Decl. (dkt. #55-4); Mayer Rpt. (dkt. #55-1).) For all these
reasons, Ostrander’s “opinions” are of limited value. Even so, plaintiffs’ motion to strike
is denied.
22
Ostrander’s declaration and deposition also both fail to identify any consumers of these reports.
22
II. Summary Judgment
Summary judgment is appropriate where the moving party: (1) “shows that there is
no genuine dispute as to any material fact” and (2) it “is entitled to judgment as a matter
of law.” Fed. R. Civ. P. 56(a). Plaintiffs move for summary judgment on their claims
under: (1) § 1557 of the Affordable Care Act; (2) the Medicaid Act’s Availability and
Comparability provisions; and (3) the Equal Protection Clause of the Fourteenth
Amendment. The court addresses each claim in turn.
A. Affordable Care Act
Plaintiffs contend that the Challenged Exclusion violates § 1557 of the Affordable
Care Act by unlawfully discriminating on the basis of sex and ask the court not to change
its analysis from that undertaken at the preliminary injunction stage of this litigation.
(Summ. J. Br. (dkt. #152) 20.) In response, defendants merely repeat their creative
“Spending Clause” argument: “Wisconsin could not have understood that Title IX would
impose on it a new anti-discrimination requirement when this federal law passed” because
“the Seventh Circuit did not hold that sexual orientation and transgender status
discrimination were covered under Title VII and Title IX, respectively, until decades after
the enactment of Title IX.” (Opp’n (dkt. #182) 5, 7-9.)
The court found defendants’ argument less than persuasive before and that has not
changed. (Prelim. Injunction Op. & Order (dkt. #70) 29-30 (“Perhaps defendants’ least
persuasive, though most creative, argument is that § 1557 cannot be read to cover
transgender status without violating the Spending Clause of the United States
Constitution because ‘Wisconsin could have had no idea that this interpretation would
23
someday prevail when it chose to accept federal Medicaid funding.’ Nonsense.” (internal
citation omitted)).)
Indeed, the court adopts the same analysis contained in the
preliminary injunction opinion and order, finding that the Affordable Care Act’s § 1557
provides a private right of action and the Challenged Exclusion discriminates on the basis
of sex. (Id. at 23-31.) Accordingly, plaintiffs’ motion for summary judgment on their
§ 1557 claim is granted.
B. Medicaid Act
Plaintiffs next contend that the Challenged Exclusion violates the Availability and
Comparability Provisions of the Medicaid Act by denying coverage for medically necessary
treatments for gender dysphoria despite those treatments being covered for other
diagnoses. (Summ. J. Br. (dkt. #152) 30-37.) In response, defendants argue that the
exclusion of “transsexual surgery” and associated hormones is entitled to “[s]ignificant
deference” because there is evidence that these treatments are unproven and thus “not
medically necessary” under Wis. Admin. Code § DHS 101.03(96m).
Accordingly,
defendants assert, plaintiffs have not -- and cannot -- show that “the Challenged Exclusion
is unreasonable as a matter of law” in violation of the Medicaid Act. (Opp’n (dkt. #182)
10, 22, 23.)
As an initial matter, “[a]lthough participation in Medicaid is optional, once a state
has chosen to take part . . . it must comply with all federal statutory and regulatory
requirements.” Bontrager v. Ind. Family and Soc. Servs. Admin., 697 F.3d 604, 605 (7th Cir.
2012) (quoting Miller ex rel Miller v. Whitburn, 10 F.3d 1315, 1316 (7th Cir. 1993)).
Accordingly, while a state “provid[ing] federally subsidized medical assistance to low-
24
income individuals and families” “may place appropriate limits on a service based on such
criteria as medical necessity or on utilization control procedures,” id. at 605, 608 (internal
citations and quotation marks omitted), these limits must be “‘reasonable’ and ‘consistent
with the objectives’ of the [Medicaid] Act,” Rush v. Parham, 625 F.2d 1150, 1155 (5th Cir.
1980) (quoting Beal v. Doe, 432 U.S. 438, 444 (1977)).
Still, as defendants point out, states have “significant discretion to decide which
treatments to cover” and the Medicaid Act does not require participating states to fund
experimental procedures as “such treatments are ‘medically un necessary.’” Miller, 10 F.3d
at 1318, 1321 (quoting Rush, 625 F.2d at 1156) (emphasis in original). Indeed, in Rush,
the Fifth Circuit held that “Georgia’s definition of medically necessary services can
reasonably exclude experimental treatment” when confronted with plaintiff’s complaint
that Georgia refused to pay for her “transsexual surgery” that was prescribed by her doctor.
625 F.2d at 1156. As the Seventh Circuit has explained, however, “the best indicator that
a procedure is experimental is its rejection by the professional medical community as an
unproven treatment”; put another way, “[i]f ‘authoritative evidence’ exists that attests to
a procedure’s safety and effectiveness, it is not ‘experimental.’” Miller, 10 F.3d at 1320.
Here, whatever the Fifth Circuit held in 1980, defendants’ assertion that
“transsexual surgery” and the associated hormone treatments are not medically necessary
is no longer reasonable. Even at the time the Challenged Exclusion became effective in
1997, DHS’s predecessor did not conclude that the excluded services were experimental,
ineffective or unsafe.
Moreover, at the time of implementation, DHS’s predecessor
conducted no systematic study or review of the available medical literature to conclude that
25
the excluded services were not medically necessary, nor can defendants point to any now.
To the contrary, as noted above, the medical profession has reached a formal consensus as
to the safety and efficacy of surgical treatments for severe gender dysphoria. Finally, DHS
has not examined the public health effects of enforcing, amending, or repealing the
Challenged Exclusion, aside from the analyses specifically performed and submitted for use
in this lawsuit.
Perhaps most compelling, when not constrained by the Challenged Exclusion, even
DHS through BBM medical personnel found gender-confirming surgery to be medically
necessary for some Medicaid patients, falling in line with the vast majority of states and
the American Medical Association, Endocrine Society, American Psychiatric Association,
and other medical organizations, all of which have already endorsed gender-confirming
surgeries as medically accepted, safe, and effective treatments for gender dysphoria.
Defendants’ arguments to the contrary are simply unpersuasive.
(Opp’n (dkt.
#182) 13-22.) First, defendants rely on two federal circuit court decisions that upheld
state prohibitions on coverage for treatment of gender-confirming surgery. (Id. at 13-14
(citing Smith v. Rasmussen, 249 F.3d 755, 760-61 (8th Cir. 2001); Rush, 625 F.2d at 115457).) The state of medical knowledge has evolved as to the treatment of gender dysphoria,
making these earlier cases medically suspect. Compare Smith, 249 F.3d at 760 (noting “the
lack of consensus in the medical community” about sex-reassignment surgery) with Good v.
Iowa Dept. of Human Servs., 924 N.W.2d 853, 857 (Iowa 2019) (noting uncontradicted
testimony establishing “the accepted standards of medical care to alleviate gender
dysphoria . . . involve the following options: socially transitioning to live consistently with
26
one’s gender identity, counseling, hormone therapy, and gender-affirming surgery to
conform one’s sex characteristics to one’s gender identity”); Hicklin v. Precynthe, No. 4:16cv-01357-NCC, 2018 WL 806764, at *3 (E.D. Mo. Feb. 9, 2018) (noting testimony
establishing that the WPATH Standards of Care are “the internationally recognized
guidelines for the treatment of persons with gender dysphoria”). Indeed, even the Rush
court recognized that “if defendants simply denied payment for the proposed surgery
because it was transsexual surgery [as opposed to being ‘experimental’ or ‘inappropriate’],
Georgia should now be required to pay for the operation, since a ‘state may not arbitrarily
deny or reduce the amount, duration, or scope of a required service . . . solely because of
the diagnosis, type of illness, or condition.’” 625 F.2d at 1156 n.12 (quoting 42 C.F.R.
§ 440.230.(c)(1), as corrected by 43 Fed. Reg. 57253 (Dec. 7, 1978)).
Defendants also point to a 2016 Centers for Medicare and Medicaid Services
Report, the Hayes, Inc. reports attached to the Ostrander Declaration, and two more recent
circuit court decisions rejecting prisoners’ Eighth Amendment claims for gender-confirming
surgery as evidence of “conflicting views about the efficacy of treatment.” (Opp’n (dkt.
#182) 14-22.) However, these documents do not create a material dispute of fact in large
part because they were not relied on by DHS in evaluating the Challenged Exclusion, either
before or after it became effective.
Moreover, the two circuit court decisions are factually and legally distinguishable.
Although decided in 2014, the First Circuit sitting en banc in Kosilek, 774 F.3d 63 (1st Cir.
2014), was actually considering an evidentiary record from 2006, at which time medical
experts disagreed as to whether anything less than a “sex reassignment surgery” for a
27
Massachusetts inmate’s gender dysphoria would constitute such inadequate medical care
as to be cruel and unusual under the Eighth Amendment. 23
Because there was a
disagreement among the medical experts in 2006 as to whether surgery, as opposed to
hormone and other therapy, would be necessary to treat Kolisek’s disorder, the First Circuit
held the decision of the Massachusetts’ DOC not to approve it did not violate the Eighth
Amendment, particularly in light of other, larger security and safety concerns within the
prison. Although the majority opinion and the DOC both emphasized that it was only
reaching this decision as to Kolisek’s individual treatment plan, one of the dissenters
suggested this result amounted to “a de facto ban on sex reassignment surgery for inmates
in this circuit.” 774 F.3d at 106-07. Regardless, the First Circuit’s majority opinion only
addressed WPATH’s 2011 recognition of the need for “flexible directions in treatment”
for gender dysphoria, which was not part of the evidentiary record, and the only mention
of DSM-5 is in recognition of the adoption of a “new” term “gender dysphoria,” likely
because it was only released around the time of the opinion itself.
In Gibson v. Collier, 920 F.3d 212 (5th Cir. 2019), petition for cert. filed, a panel of the
Fifth Circuit purported to follow the reasoning of Kosilek, by finding that the Texas
Department of Criminal Justice (“TDCJ”) could adopt a blanket prohibition on “sex
reassignment surgeries,” without regard to any individualized assessment of prisoners,
without offending the Eighth Amendment.
As the dissent explains, the majority’s
reasoning is difficult to follow given some procedural anomalies, not least of which was the
In Kosilek, the First Circuit still referred in its opinion to “gender identity disorder,” because that
was the accepted term in 2006, even though the court acknowledged that the recently adopted
DSM-5 had already adopted the more apt diagnosis of “gender dysphoria.”
23
28
pro se plaintiff Gibson’s (and later his appointed appellate counsel’s) decision not to
challenge what the Fifth Circuit described as “respected medical experts fiercely
question[ing] whether sex reassignment surgery, rather than counseling and hormone
therapy, is the best treatment for gender dysphoria.” Gibson, 920 F.3d at 215, 220, 223.
The oddest part of the Gibson decision is that the only “evidence” on this issue came
not from the record in that case, but rather from adoption of the same 2006 expert
testimony relied upon by the First Circuit in Kosilek.
Gibson, 920 F.3d at 221-25.
Regardless, based on Gibson’s failure to establish that surgery “is so universally accepted”
that its denial in favor of mental health counseling and hormone therapy “amounts to
deliberate indifference,” the Fifth Circuit found no Eighth Amendment violation. Id. at
220-21. More specifically, the court found that “it cannot be cruel and unusual to deny
treatment that no other prison has ever provided -- to the contrary, it would only be
unusual if a prison decided not to deny such treatment.” Id. at 216 (emphasis original).
Even if the reasoning of Gibson, or at least Kosilek (which only endorsed the right of
a prison to deny reassignment surgery after an individualized assessment of the inmate’s
treatment needs for gender dysphoria), were adopted as law by the Seventh Circuit in
applying an Eighth Amendment “cruel and unusual” standard, both opinions hold the
plaintiff to a much higher burden of proof and rely on medical testimony now some thirteen
29
years old. 24 (See Prelim. Injunct. Op. & Order (dkt. #70) 20 n.15 (recognizing the limited
value of dated medical knowledge). At summary judgment, the only “opinion” offered to
dispute the current medical consensus is from a professional researcher purporting to
discount the reliability of peer reviewed studies rather than a medical society (or even a
lone doctor), disagreeing as to the existence of such a consensus.
As noted above, any attempt by defendants or their experts to contend that genderconfirming care -- including surgery -- is inappropriate, unsafe, and ineffective is
unreasonable, in the face of the existing medical consensus. The few documents cited by
defendants do not change the unreasonableness of the decision-making process or its
conclusion. Accordingly, the state’s adoption, or at least continued enforcement, of the
Challenged Exclusion is unreasonable as a matter of law and not entitled to deference. See
Lankford v. Sherman, 451 F.3d 496, 511 (8th Cir. 2006) (“While a state has discretion to
determine the optional services in its Medicaid plan, a state’s failure to provide Medicaid
coverage for non-experimental, medically-necessary services within a covered Medicaid
category is both per se unreasonable and inconsistent with the stated goals of Medicaid.”)
(collecting cases); White v. Beal, 555 F.2d 1146, 1151 (3d Cir. 1977) (“[W]hen a state
decides to distribute a service as part of its participation in Title XIX, its discretion to
determine how the service shall be distributed, while broad, is not unfettered: the service
Defendants also offer a fleeting cite here to Smith, 249 F.3d at 760-61. However, it, too, is
unavailing. First, the decision is 18 years old. Second, unlike DHS, the state there contracted with
a medical peer review organization that had “conducted a review of the medical literature and
contacted various organizations” to “report[] a lack of consensus on definition, diagnosis, and
treatment.” Id. Third, the Iowa Supreme Court recently affirmed a lower court decision
invalidating the prohibition on Medicaid coverage for gender-affirming procedures. See Good, 924
N.W.2d at 856.
24
30
must be distributed in a manner which bears a rational relationship to the underlying
federal purpose of providing the service to those in greatest need of it”); Rush, 625 F.2d at
1156 n.12 (“[A] ‘state may not arbitrarily deny or reduce the amount, duration, or scope
of a required service . . . solely because of the diagnosis, type of illness, or condition.’”
(quoting 42 C.F.R. § 440.230(c)(1), as corrected by 43 Fed. Reg. 57253 (Dec. 7, 1978))).
Finally, plaintiffs’ claims under the Availability and Comparability Provisions of the
Medicaid Act rise or fall together. The Availability Provision requires states to make
covered treatment available in “sufficient . . . amount, duration and scope to reasonably
achieve its purpose,” subject to “appropriate limits,” such as “medical necessity” or
“utilization control procedures.” 42 U.S.C. § 1396a(a)(10)(A); 42 C.F.R. § 440.230(b);
see also Bontrager, 697 F.3d. at 608 (Under federal regulations, “a state’s Medicaid plan
must ‘specify the amount, duration, and scope of each service that it provides,’ and ‘[e]ach
service must be sufficient in amount, duration, and scope to reasonably achieve its
purpose.’” (quoting 42 C.F.R. §§ 404.230(a)-(b), (d))). The Comparability Provision
“prohibits discrimination among individuals with the same medical needs stemming from
different medical conditions,” Davis v. Shah, 821 F.3d 231, 258 (2d Cir. 2016) (citations
omitted), by requiring participating States to provide medical assistance to all participants
in equal “amount, duration, [and] scope,” 42 U.S.C. § 1396a(a)(10)(B)(i); 42 C.F.R.
§ 440.240(a)-(b) (requiring “services available to any individual” be provided in “equal . . .
amount, duration, and scope for all beneficiaries”). As such, these provisions require that
states make offered services sufficiently available to treat beneficiaries without
discriminating based on diagnosis.
31
Here, there is no dispute that the Challenged Exclusion prevents Wisconsin
Medicaid from covering the medical treatment needs of those suffering from gender
dysphoria, at least for breast reconstruction, hysterectomy, mastectomy, oophorectomy,
orchiectomy,
penectomy,
reduction
mammoplasty,
salingo-oophorectomy
and
vaginoplasty, as well as estradiol, medroxyprogesterone acetate (Provera), micronized
progesterone, and testosterone cypionate hormone treatments. Nor is there any dispute
that these treatments are covered when used to treat other medical conditions.
Accordingly, the Challenged Exclusion both fails to make covered treatments available in
sufficient “amount, duration and scope” and discriminates on the basis of diagnosis. As
such, plaintiffs are entitled to summary judgment on these claims as well. See Davis, 821
F.3d at 256 (“By denying plaintiffs access to such services purely on the basis of the nature
of their medical conditions, New York’s restrictions thus provide some categorically needy
individuals lesser medical assistance than is available to others with the same levels of
medical need,” thereby “offer[ing] an unequal ‘scope’ of benefits” in violation of the
Comparability Provision.) (affirming summary judgment for plaintiffs on their
Comparability Provision claim); White, 555 F.2d at 1151 (“We find nothing in the federal
statute that permits discrimination based upon etiology rather than need for the service.”)
(affirming injunction prohibiting enforcement of state regulation limiting Medicaid
coverage for glasses to beneficiaries with eye disease); id. at 1152 (“The regulations permit
discrimination in benefits based upon the degree of medical necessity but not upon the
medical disorder from which the person suffers.”); Cruz v. Zucker, 195 F. Supp. 3d 554,
571 (S.D.N.Y. 2016) (holding that “a state cannot say ‘never’ when it comes to medically
32
necessary treatments, because there are no such reasons justifying categorical bans on
medically necessary treatment. A categorical ban on medically necessary treatment for a
specific diagnosis would not ‘adequately . . . meet the needs of the Medicaid population of
the state’” (internal citation omitted)) (granting plaintiffs summary judgment that ban on
coverage for presumptive cosmetic procedures violated Medicaid Availability Provision and
Comparability Provision). 25
C. Equal Protection Clause
The Equal Protection Clause of the Fourteenth Amendment prevents a state from
“deny[ing] to any person within its jurisdiction the equal protection of the laws.” U.S.
Const. amend. XIV, § 1. This “is essentially a direction that all persons similarly situated
should be treated alike” and accordingly “protects against intentional and arbitrary
discrimination.” Whitaker by Whitaker v. Kenosha Unified Sch. Dist. No. 1 Bd. of Educ., 858
F.3d 1034, 1050 (7th Cir. 2017) (internal citations and quotation marks omitted), cert.
dismissed sub nom. Kenosha Unified Sch. Dist. No. 1 Bd. of Educ. v. Whitaker ex rel. Whitaker,
138 S. Ct. 1260, 200 L. Ed. 2d 415 (2018). Plaintiffs contend that “the Challenged
The district court in Cruz had originally granted defendant’s motion for summary judgment in
part on plaintiffs’ Availability Provision claim relating to off-label uses of hormones to provide
hormone therapies to minors with gender dysphoria, and denied plaintiffs’ motion for summary
judgment in part on their Comparability Provision claim as to “drugs promoting hair growth or
loss,” because they did not appear to be covered by New York Medicaid for other conditions. 195
F. Supp. 3d at 573, 577. The court further denied motions for summary judgment on plaintiffs’
Availability and Comparability Provision claims relating to the medical necessity of providing
gender-confirming surgeries and specific hormone therapies for minors. Id. at 573-78. On
reconsideration, however, the court “direct[ed] the entry of final judgment for plaintiffs in all
respects” after the defendant published a Notice of Proposed Rulemaking that would authorize
New York Medicaid to “cover medically necessary surgeries and hormone therapies to treat gender
dysphoria (‘GD’) in individuals under age 18,” thereby resolving all disputes of fact. Cruz v. Zucker,
218 F. Supp. 3d 246, 247-49 (S.D.N.Y. 2016).
25
33
Exclusion subjects transgender people to disparate and inferior health care on the basis of
sex,” and it further subjects them to discriminatory treatment because they are transgender,
which, they contend, is itself a suspect or quasi-suspect class. (Summ. J. Br. (dkt. #152)
37.) Regardless, there is no longer a disagreement between the parties that some form of
heightened scrutiny applies here. (Compare id. (arguing whether viewed as discrimination
on the basis of sex or transgender status “some form of heightened scrutiny” applies) with
Opp’n (dkt. #182) 29 n.7 (“In light of Whitaker and this Court’s previous decisions, and
in the furtherance of efficiency, the Department does not repeat its arguments for rational
basis review here.”)). 26
When a classification is based on sex, the state action is subject to heightened
scrutiny meaning that “the burden rests with the state to demonstrate that its proffered
justification is ‘exceedingly persuasive.’” Whitaker, 858 F.3d at 1050 (quoting United States
v. Virginia, 518 U.S. 515, 533 (1996)). More specifically, the state must “show that the
‘classification serves important governmental objectives and that the discriminatory means
employed are substantially related to the achievement of those objectives.’” Id. (quoting
Virginia, 518 U.S. at 524). In addition, “the justification must be genuine” and cannot be
hypothesized, created in response to litigation, or based on “overbroad generalizations
about sex.” Id. (citing Virginia, 518 U.S. at 533).
While defendants identify two possible government interests -- “containing costs
Accordingly, the court need not consider whether transgender status is a suspect or quasi-suspect
class and will proceed to analyze the Challenged Exclusion as a sex-based classification. See Boyden
v. Conlin, 341 F. Supp. 3d 979, 1000 n.16 (W.D. Wis. 2018) (outlining factors to determine
whether heightened scrutiny applies based on suspect or quasi-suspect class).
26
34
and protecting public health in face of uncertainty” (Opp’n (dkt. #182) 32) -- they do not
meet their burden of demonstrating that either justification was genuine, nor that the
Challenged Exclusion was substantially related to achieving those objectives. 27
As to
protecting public health, for reasons already discussed above, defendants provide no
evidence that, before adopting the Challenged Exclusion, DHS or its predecessor: (1) conducted
“any systematic study or review of relevant peer-reviewed scientific or medical literature
relating to the excluded services” to conclude that the services “were not medically
necessary”; or (2) made an informed determination that any of the excluded services were
experimental, unsafe, or ineffective in treating gender dysphoria. (Stip. PFOF (dkt. #154)
¶¶ 70-73.) To the contrary, DHS concedes that neither is true. Even after adoption of the
Challenged Exclusion, DHS neither “undertook any study or review of the safety or efficacy
of medical or surgical treatments for gender dysphoria,” nor “undertook any study or
review of the public health effects of enforcing, amending or eliminating the Challenged
Exclusion,” aside from the expert reports specially prepared in defense of plaintiffs’ present
lawsuit. (Id. ¶¶ 76-78.) Defendants stipulated to as much by agreeing that “DHS is not
aware of information indicating” that any of these things occurred. (Id. ¶¶ 70-73, 76-78.)
As also set forth in detail above, the medical consensus is that gender-confirming
treatment, including surgery, is accepted, safe, and effective in the treatment of gender
dysphoria, meaning that the denial of Medicaid benefits for needed medical treatment
For reasons discussed below, even accepting defendants’ argument that “intermediate scrutiny
does not require that a regulation perfectly solve the problem it was enacted to solve -- the regulation
is valid even if it only partially solves the problem” (id. at 30) (emphasis added), defendants’
evidence falls short of that mark.
27
35
completely fails to protect the public health. (See Mayer Rpt. (dkt. #55-1) 8-9 (recognizing
that gender dysphoria “is a serious medical condition that deserves to be treated” so that
“reducing or eliminating the very real distress associated with the condition is the
“[o]ptimality consideration[]”).) In fact, this consensus is so strong that it includes DHS’s
own former BBM medical director, Dr. Julie Sager, who acknowledged that removing the
Challenged Exclusion would be consistent with accepted medical practice and standards of
care, as well as BBM’s chief medical officer, Dr. Lora Wiggins, who considers surgical
treatment for gender dysphoria to be medically reasonable. So, too, Wisconsin Medicaid
has concluded that gender-confirming surgeries were medically necessary in at least a
handful of cases, including the approvals of chest surgeries before 2016. 28 Accordingly,
there is no evidence from which a reasonable jury could conclude that protecting the public
health was a genuine motivation for the Challenged Exclusion. 29
Defendants’ other, stated justification, based on cost-savings, fares no better on
summary judgment. While documents predating the Challenged Exclusion concluded that
it -- along with a larger list of excluded services -- “was expected to result in nominal
Defendants’ citation to the Ostrander Declaration and the attached reports does not help them.
There is no evidence to suggest that DHS or its predecessor entity considered these reports -- or
their underlying studies -- in adopting the Challenged Exclusion. In fact, it would have been
disingenuous to do so: the Hayes reports post-date the Challenged Exclusion by nearly two decades
and no medical literature search was performed. Likewise, there is no indication that these reports
have been relied on since then -- except, of course, during this litigation.
28
This conclusion is only strengthened by the uncontradicted evidence that: (1) mid-level DHS
management -- comprised of political appointees -- instructed BBM medical directors to just leave
prior authorization requests so that they would expire; and (2) Dr. Sager was ultimately
unsuccessful in her attempt to discuss with management the possibility of providing Wisconsin
Medicaid coverage for gender-confirming treatment. While plaintiffs argue political considerations
motivated the Challenged Exclusion, the court need not reach that.
29
36
savings,” those same documents add that Wisconsin Medicaid “has hardly ever paid for
any of those [excluded] services or for those purposes.” (Fiscal Estimate (dkt. #21-14) 23.) Likewise, since the Challenged Exclusion’s effective date, the only investigation DHS
has made into any actual cost savings from adoption of the Exclusion was performed in
connection with defendants’ defense of this lawsuit. (Stip. PFOF (dkt. #154) ¶¶ 74-75.)
Moreover, even these analyses reveal such small estimated savings resulting from the
Challenged Exclusion that they are both practically and actuarially immaterial. Defendants
estimate that removing the Challenged Exclusion and covering gender-confirming surgeries
would cost between $300,000 and $1.2 million annually, which actuarially speaking
amounts to one hundredth to three hundredth of one percent of the State’s share of
Wisconsin Medicaid’s annual budget. As in Boyden, 341 F. Supp. 3d at 1000-01, “the
court is hard-pressed to find that a reasonable factfinder could conclude that the cost
justification was an ‘exceedingly persuasive’ reason or that this minuscule cost savings
would further ‘important government objectives.” 30 Defendants’ argument that “a penny
saved is a penny earned” simply does not meet its burden under any form of intermediate
scrutiny. Indeed, no reasonable jury could conclude that cost concerns were genuine or an
“exceedingly persuasive” justification for the Challenged Exclusion. Accordingly, plaintiffs
are entitled to summary judgment on this claim as well.
In Boyden, the cost of covering gender-confirming care was “immaterial at 0.1% to 0.2% of the
total cost of providing health insurance to state employees.” 341 F. Supp. 3d at 1000.
30
37
ORDER
IT IS ORDERED that:
1) Plaintiffs’ motion for summary judgment (dkt. #151) is GRANTED and
defendants are PERMANENTLY ENJOINED from enforcing the Challenged
Exclusion (Wis. Admin. Code §§ DHS 107.03(23)-(24), 107.10(4)(p)) against
the named plaintiffs and other members of the class.
2) The parties may have fourteen (14) days to meet and confer on the scope of this
and any other permanent relief, at which point they are to submit a joint,
proposed injunction or competing proposals.
3) Plaintiffs’ motion to strike (dkt. #192) is DENIED.
4) The telephonic scheduling conference before Magistrate Judge Crocker remains
scheduled for August 27, 2019, at 2:30 p.m.
Entered this 16th day of August, 2019.
BY THE COURT:
/s/
__________________________________
WILLIAM M. CONLEY
District Judge
38
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