Flack v. Wis. Dept. of Health Servs.

Citation328 F.Supp.3d 931
Decision Date25 July 2018
Docket Number18-cv-309-wmc
Parties Cody FLACK and Sara Ann Makenzie, Plaintiffs, v. WIS. DEPT. OF HEALTH SERVS. and Linda Seemeyer, in her official capacity, Defendants.
CourtU.S. District Court — Western District of Wisconsin

Joseph J. Wardenski, Jennifer Klar, Orly May, Relman, Dane & Colfax PLLC, Washington, DC, Robert Theine Pledl, Mark A. Peterson, Daniel A. Peterson, McNally Peterson, S.C., Milwaukee, WI, Abigail Koelzer Coursolle, National Health Law Program, Los Angeles, CA, Catherine Anne McKee, National Health Law Program, Carrboro, NC, for Plaintiffs.

Steven Carl Kilpatrick, Colin Thomas Roth, Jody J. Schmelzer, State of Wisconsin Department of Justice, Madison, WI, for Defendants.

OPINION AND ORDER

WILLIAM M. CONLEY, District Judge

As a group, transgender individuals have been subjected to harassment and discrimination in virtually every aspect of their lives, including in housing, employment, education, and health care. Their own families, acquaintances and larger communities can be sources of harassment. For some transgender individuals, though certainly not all, the dissonance between their gender identity and their natally assigned sex can manifest itself in the form of "gender dysphoria

," a serious medical condition recognized by both sides' experts and the larger medical community as a whole. Plaintiffs Cody Flack and Sara Ann Makenzie both have long-term gender dysphoria for which they have received previous treatments covered by Wisconsin Medicaid, including hormone therapy. However, Wisconsin Medicaid categorically denies coverage for medically-prescribed "[t]ranssexual surgery" and related drugs. Wis. Admin. Code § DHS 107.03(23)-(24). Plaintiffs filed suit challenging this exclusion under the Equal Protection Clause and the Affordable Care Act, and seek to preliminarily enjoin defendants from enforcing this exclusion against their requests for insurance coverage (dkt. # 40). The court held oral argument on plaintiffs' motion for a preliminary injunction on July 19, 2018.

As discussed below, plaintiffs have established a reasonable likelihood of prevailing on the merits of their ACA claim, as well as more than a negligible chance of prevailing on the merits of their equal protection claim. Moreover, the immediate consequence for both individuals is the effective denial of medical procedures that: (1) meet the prevailing standard of care; and (2) are specifically prescribed by their treatment providers to avoid further psychological harm caused by gender dysphoria

. Accordingly, despite defendants' repeated assertions to the contrary, plaintiffs have established a material risk of irreparable harm and a reasonable likelihood of success on the merits. The court will, therefore, grant plaintiffs' motion for a preliminary injunction.

UNDISPUTED FACTS1
A. Gender Dysphoria

Every person has a "gender identity." For most people, their gender identity matches the natal sex assigned at birth. For transgender individuals, however, that is not true: their gender identity differs from the sex they were assigned at birth. Specifically, a transgender woman's birth-assigned sex is male, but she has a female gender identity; a transgender man's birth-assigned sex is female, but he has a male gender identity.2

Gender dysphoria

is a serious medical condition, which if left untreated or inadequately treated can cause adverse symptoms. The DSM-5 contains the psychiatric consensus as to the definition, diagnostic criteria and features for gender dysphoria.

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.

(DSM-5 Excerpt (dkt. # 21-1) 5.)3 It is worth emphasizing that not every transgender person has gender dysphoria

. Adults with gender dysphoria"often" have "a desire to be rid of primary and/or secondary sex characteristics and/or a strong desire to acquire some primary and/or secondary sex characteristics of the other gender." (Id. at 8.) Untreated, gender dysphoria can result in psychological distress: "preoccupation with cross-gender wishes often interferes with daily activities." (Id. at 12.) Impairment—such as the development of substance abuse, anxiety and depression—is also a possible "consequence of gender dysphoria." (Id. at 9.) Finally, gender dysphoria"is associated with high levels of stigmatization, discrimination, and victimization, leading to negative self-concept, increased rates of mental disorder comorbidity, school dropout, and economic marginalization, including unemployment, with attendant social and mental health risks...." (Id. at 12.)

Gender dysphoria

can be alleviated through living consistently with one's gender identity, including being treated by others accordingly.4 Likewise, "appropriate individualized medical care as part of their gender transitions" can mitigate or prevent symptoms of gender dysphoria

. (Defs.' Resp. to Pls.' PFOF (dkt. # 54) ¶ 16.) In 2011, the World Professional Association of Transgender Health published the seventh version of Standards of Care for the Health of Transsexual, Transgender, and Gender Nonconforming People (the "WPATH Standards of Care"), which identifies psychotherapy, hormone therapy and various surgical procedures as treatment possibilities for gender dysphoria.5

Before gender-confirming surgery, those with gender dysphoria

"are at increased risk for suicidal ideation, suicide attempts, and suicides." (DSM-5 Excerpt (dkt. # 21-1) 8.) Defendant contends that even after surgery, gender dysphoria may still result in suicide, self-harm, or serious psychological distress. (See Mayer Dep. (dkt. # 55-3) 54:18-20.) The parties agree that gender-confirming surgical procedures are not necessary to alleviate gender dysphoria for all transgender people. Plaintiffs, on the other hand, contend that surgery is the only effective treatment for many transgender people and that gender-confirming surgical procedures are "safe and effective treatments." (Pls.' PFOF (dkt. # 20) ¶¶ 18-19.) Defendants respond that "[t]here is inadequate evidence to conclude that surgical treatments are of proven medical value or usefulness for treating gender dysphoria." (See e.g. , Defs.' Resp. to Pls.' PFOF (dkt. # 54) ¶¶ 15, 18-19.)

B. Wisconsin Medicaid

Medicaid is a joint federal-state program to provide medical assistance to eligible low-income individuals; it was established in 1965 under Title XIX of the Social Security Act. Through Medicaid, the federal government generally reimburses a substantial portion of a state's expenditures to provide medical services to people whose resources and incomes are insufficient to afford necessary medical services.

Like all its sister states, Wisconsin participates in Medicaid. The Wisconsin Department of Health Services ("DHS") is the state agency charged with administering the Wisconsin Medicaid Program consistent with state and federal requirements. DHS receives federal funding for the program, including reimbursement of over half of the state's Medicaid expenditures from the U.S. Department of Health and Human Services. Defendant Linda Seemeyer is the DHS Secretary and she is responsible for implementing the Medicaid Act consistent with federal requirements. Wisconsin Medicaid provides coverage for "[p]hysician services," including "any medically necessary diagnostic, preventative, therapeutic, rehabilitative or palliative services ... within the scope of the practice of medicine and surgery" that are "in conformity with generally accepted good medical practice" and provided by a physician or under one's direct supervision, unless otherwise excluded. See Wis. Admin. Code § DHS 107.06(1) ; see also id. § 107.08(1)(a)-(b) (providing coverage for hospital inpatient and outpatient services that "are medically necessary" and provided under a doctor's direction). Wisconsin Medicaid has a budget of approximately $9.7 billion to provide for its roughly 1.2 million enrollees. Approximately 5,000 of those enrollees are transgender, and some subset of this population suffers from gender dysphoria

.

In addition to the requirements of federal law, defendants' administration of Wisconsin Medicaid is governed by Wisconsin Statutes §§ 49.43 -.65 and Wisconsin Administrative Code §§ DHS 101.01 -.36. Included in the governing regulations is the "Challenged Exclusion," § 107.03(23)-(24), at issue in this case. The Challenged Exclusion provides that "The following services are not covered under MA: ... (23) Drugs, including hormone therapy, associated with transsexual surgery or medically unnecessary alteration of sexual anatomy or characteristics; [and] (24) Transsexual surgery." Wis. Admin. Code § DHS 107.03(23)-(24).6 The Challenged Exclusion was adopted in 1996 and has remained in effect since February 1, 1997.7

At the time of its adoption, DHS found these services were "medically unnecessary." (Clearinghouse Rule 96-154 (dkt. # 21-12) 2, 3.) Other coverage exclusions created by the 1996 amendments included "non-medical food," "ear lobe repair," "tattoo removal," and "services related to surrogate parenting." (Id. at 3.) The parties disagree about whether potential cost savings motivated these exclusions (Defs.' Resp. to Pls.' PFOF (dkt. # 54) ¶ 45), although the fiscal estimate noted that "[t]he rule changes are expected to result in nominal savings for state government" (Fiscal Estimate (dkt. # 21-14) 2).

DHS's website includes the following notice:

For people who need medical interventions such as hormones or surgery, these might be covered under private insurance plans. Currently, Wisconsin BadgerCare,
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