Judge orders state to cover transgender surgery for 2 Medicaid recipients

Bruce Vielmetti | Milwaukee Journal Sentinel

A federal judge in Madison has ordered the state to pay for surgeries that two transgender Medicaid recipients need to treat their gender dysphoria.

Cody Flack of Green Bay and Sara Ann Makenzie of Baraboo sued in April, saying Wisconsin's rule denying all coverage for such surgeries violated the Affordable Care Act and their equal protection rights.

On Wednesday, U.S. District Judge William Conley, in a 39-page order, granted a preliminary injunction barring enforcement of the rule in question. He found the plaintiffs showed a reasonable likelihood of prevailing on their claims.

"The likelihood of ongoing, irreparable harm facing these two individual plaintiffs outweighs any marginal impacts on the defendants’ stated concerns regarding public health or limiting costs," Conley wrote.

The judge also suggested he might be inclined to expand the injunction to include any transgender Medicaid patient whose doctor recommends the surgery.

Rock Pledl, a Milwaukee attorney for the plaintiffs, said Flack could get his surgery in two or three weeks, and Makenzie, because of where she is in a paperwork process with an HMO, in a couple of months.

"This is tremendous," Pledl said of the ruling.

RELATED: Wisconsin unlawfully denies necessary treatment for transgender Medicaid recipients, lawsuit claims

Conley told the state he would not stay his order pending appeal to the 7th U.S. Circuit Court of Appeals, and declined to order the plaintiffs — who are indigent — to post any bond.

22-year-old rule excludes coverage

The Wisconsin rule that excludes coverage for undefined "transsexual surgery" was adopted in 1996.

Wisconsin Medicaid has a budget of approximately $9.7 billion to cover about 1.2 million eligible residents. An estimated 5,000 of those enrolled are transgender; some of them suffer from gender dysphoria, a range of conditions in those who identify as a gender other than the one assigned at birth.

Conley noted that not all who have gender dysphoria require surgery for treatment, or meet the strict medical requirements to be recommended for surgery. It's not as if his ruling will create a flood of the surgeries.

The state argued it could cost about $2.1 million to covering the procedures for all Wisconsin Medicaid beneficiaries. Conley questioned the figure,​ and wrote that if the injunction were expanded, the state would have more opportunity to provide better cost data.

Conley also noted that during oral arguments on the plaintiffs' motion July 19, the state could not point to another exclusion of Medicaid coverage based on cost versus medical efficacy.

Wisconsin's rule, he said, "feeds into sex stereotypes by requiring all transgender individuals receiving Wisconsin Medicaid to keep genitalia and other prominent sex characteristics consistent with their natal sex no matter how painful and disorienting it may prove for some."

Flack identified as a boy early

Flack, 30, has cerebral palsy, uses a motorized wheelchair and relies on Supplemental Security Income for the disabled as his sole support. He first identified as a boy at age 5, according to the suit, and began trying to transition to his male identity around 18.

After moving to Green Bay in 2012, he changed his name and his haircut and then began hormone therapy.

In October 2016, he had a hysterectomy. Because, technically, that was to treat dysmenorrhea, pain during menstruation, the surgery was covered by Medicaid — even though it also eased his gender dysphoria by making him feel more male.

Makenzie, 41, is also disabled and relies on Supplemental Security Income, and has been living as a woman since 2012.

She has been getting estrogen since 2013 — even though, under the regulation, it would be prohibited — and it has helped her. Both she and Flack fear that their hormone coverage might be rescinded at any time, since it also appears to be prohibited by the regulation, but was nevertheless approved.

While Flack seeks removal of his female breasts, Makenzie seeks genital transformation surgery. She took out a $5,000 loan to pay for breast implants after being denied Medicaid coverage.

After breast augmentation , Makenzie she has reported less mistreatment for being perceived as male. But she can't afford to take a loan for genital reconstruction, a much more expensive procedure.

10 states deny coverage

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

Whether changes to a patient's body or appearance is just a cosmetic desire or a medical necessity has long been debated by insurers. Doctors who treat transgender patients say it often is clearly the latter.

During Flack's appeal of his denial of coverage for a double mastectomy, the Department of Health Services acknowledge gender dysphoria is an accepted reason for the surgery, but an administrative law judge cited the rule against "transsexual surgery" in affirming the denial.

In the current lawsuit, the state argues the procedures have no proven medical benefit, despite detailed evidence from the plaintiffs' doctors about their patients' sustained efforts to conform their genders by other means, and the negative health consequences of being denied the surgeries.