Medically necessary transgender surgery now covered by Wisconsin Medicaid after legal battle

Bruce Vielmetti | Milwaukee Journal Sentinel

Wisconsin will no longer categorically deny Medicaid coverage for medically necessary gender-confirming surgery, a practice a federal judge found violated patients' civil rights and federal health care law.

Lawyers for transgender residents who sued last year announced a settlement Tuesday after the deadline had passed for the state to appeal last month's final judgment in the class action case.

U.S. District Judge William Conley, of Madison, noted the “consensus within the medical profession (is) 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."

Four named plaintiffs will share about $840,000 in damages, and the state will pay about $1.35 million in legal fees to three law firms who handled their case.

“We applaud the Wisconsin Department of Health Services for accepting the Court’s rulings and the medical consensus that gender-confirming health care saves lives,” said lead attorney Joseph Wardenski of Relman Dane & Colfax in Washington, D.C.

Transgender people still face barriers to competent health care According to the U.S. Trans Survey, conducted by the National Center for Transgender Equality, a third of trans people have faced discrimination from a health care provider.

“We are delighted that the Court’s decision invalidating Wisconsin’s legally and medically indefensible coverage exclusion is now permanent.”

Rock Pledl of Milwaukee's Davis & Pledl congratulated "our clients for standing up for their own rights, sharing their stories with the court, and improving the lives of countless other transgender Wisconsin residents as a result of this victory.”

National Health Law Program also provided legal counsel.

As part of the settlement announced Tuesday, the state Department of Health Services must adopt and publicize a new, inclusive policy and notify transgender Medicaid recipients who may have been denied coverage in the past that they may now be eligible.

Cody Flack of Green Bay and Sara Ann Makenzie of Baraboo sued last year after the state denied coverage of surgeries their doctors said were medically necessary to treat their gender dysphoria.

Within three months, Conley issued a preliminary injunction ordering the state to pay for their treatment. Later, two more transgender women, Courtney Sherwin of Janesville and Marie Kelly of Milwaukee joined the suit, and in April, Conley certified it as a class action, extending the original injunction to cover anyone in the class, pending the final outcome of the lawsuit.

In August, Conley issued a 38-page order granting summary judgment for the plaintiffs. He found Wisconsin's exclusion violated Medicaid law, the Affordable Care Act and the equal protection rights of transgender patients who require gender-confirming surgery.

An estimated 5,000 transgender Wisconsin residents are enrolled in Medicaid. But only some of them suffer from gender dysphoria, and only a portion of those would desire gender-confirming surgeries and meet the medically necessary threshold for coverage. Gender dysphoria refers to the range of conditions suffered by those who identify as a gender other than the one assigned at birth.

Early in the case, the state argued covering the treatment would cost too much, but Conley noted that the estimates were $300,000 to $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," he wrote.

Wisconsin also suggested that the exclusion policy-protected public health since the gender-confirming surgeries were experimental, unsafe or ineffective. But Conley noted that was also unsupported and that officials now concede the general medical consensus about the treatments.

Though the federal Medicaid Act and state statutes say coverage should not be arbitrarily withheld based on diagnosis or condition, a Wisconsin Department of Health Services regulation from 1997 cites care related to gender transition — along with tattoo removal and earlobe repair — as "medically unnecessary."

Insurers have long debated whether care that changes a patient's body or appearance is just cosmetic rather than medically necessary, though doctors who treat transgender patients say it often is clearly the latter.

Wisconsin was one of 10 states that denied Medicaid coverage of treatments for gender transition, according to the lawsuit. Twenty states now explicitly cover gender transition and the rest have no explicit policy either way.

State bureaucrats cited the rule to deny breast removal or augmentation, genital surgeries and some hormone treatment coverage for transgender Medicaid recipients, even when admitting the procedures are effective in treating gender dysphoria, the range of conditions suffered by those who identify as a gender other than the one assigned at birth.

In addition to a fee-for-service care provided directly by DHS, more than a dozen managed care groups administer Medicaid in Wisconsin. Conley found that DHS's lack of guidance for interpreting the exclusion rule led the HMOs to also deny coverage and to often convince patients it wasn't worth appealing the decisions to DHS.

Wardenski and Pledl said their named plaintiffs met for the first time last week in Milwaukee and were very pleased with the outcome in the case.

"They didn't do it for the money but for the cause." said Wardenski.

Flack and Makenzie already had surgeries; and Kelly and Sherwin plan to have theirs next year.

Makenzie said the surgery turned her life around, making her more confident and positive with herself and others. "I feel phenomenal. Knowing that others won’t have to go through the same struggles I went through feels incredible."

Flack said when he first fought for the surgery, "I simply had my own transition and will to live in mind. This case gave me an opportunity to advocate for more than just myself."

Contact Bruce Vielmetti at (414) 224-2187 or bvielmetti@jrn.com. Follow him on Twitter at @ProofHearsay.