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

Wisconsin unlawfully denies Medicaid coverage for necessary transgender medical treatments, two transgender residents claim in a federal lawsuit filed Monday.

Their doctors say Cody Flack of Green Bay and Sara Ann Makenzie of Baraboo need additional surgery to help confirm their gender identities, but the state has turned them down for coverage, which they can't afford on their own, citing a rule that groups the treatments with tattoo removal and earlobe repair.

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 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.

Ever since, bureaucrats cite 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.

The lawsuit, filed in federal court in Madison, contends there is no rational or legitimate basis for excluding the coverage, which denies necessary care to members of a disfavored group.

"The Wisconsin policy is nonsensical, not supported by the medical community, and continues to exacerbate gender dysphoria that Mr. Flack and Ms. Makenzie experience," said Abigail Coursolle, senior attorney with the National Health Law Program.

The program, along with Relman, Dane & Colfax, a civil rights law firm in Washington, D.C., and Rock Pledl, of McNally Peterson in Milwaukee, represent the plaintiffs.

The suit says Wisconsin's coverage exclusion violates the Affordable Care Act, the Medicaid Act and the due process guarantee of the Fourteenth Amendment. It asks that the court enjoin enforcement of the regulation and award damages and costs to the plaintiffs.

The suit names as defendants the Wisconsin Department of Health Services, which administers Medicaid, and its secretary, Linda Seemeyer. DHS officials declined to discuss its coverage policies for transgender Medicaid recipients.

Flack, 30, has cerebral palsy and uses a motorized wheelchair. His sole support is Supplemental Security Income for the disabled. He first identified as a boy at age 5, according to the suit, and began trying to transition to his male identity around 18, but found it very hard until he moved from Pennsylvania to Green Bay in 2012.

In a more accepting environment, he changed his name and his haircut, his identification and began talk and then hormone therapy, which has helped him grow facial hair, lowered his voice and given him a more masculine appearance.

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.

Now, he'd like to have his breasts reconstructed, because they cause him to be mistaken as female, the suit says. Though a UW-Madison surgeon submitted for pre-authorization, endorsed by all of Flack's other doctors, coverage was denied, as was an appeal to the Division of Administrative Hearings.

Pledl points out that, for the appeal, Health Services admitted in a letter that it was just following the 1997 regulation and that the medical necessity of the procedure "was not taken into account."

“Since being denied coverage for surgery last summer, Mr. Flack’s gender dysphoria has worsened considerably," the suit states.

"Without any other financial means to obtain these medically necessary procedures, Mr. Flack feels hopeless and has experienced profound depression and emotional distress resulting from the denial and his inability to complete these critical steps of his gender transition.”

In a statement released by his lawyers, Flack said he's suing for the care "I need to finally feel like myself, on the inside and the outside,” and to help other transgender Wisconsin residents suffering because of denied Medicaid coverage.

Makenzie, 41, is a lifelong Wisconsin resident who has suffered from mental illnesses since childhood. Like Flack, she is disabled and relies on Supplemental Security Income.

Makenzie has lived as a woman since 2012. She legally changed her name and driver's license in 2013, got a new passport as a woman in 2014 and last year got an amended birth certificate identifying her as female.

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.

Last year, Makenzie sought breast augmentation. She borrowed $5,000 to pay for the surgery after the procedure was denied by Medicaid. Since then, she has reported less mistreatment for being perceived as male.

Now she is seeking genital reconstruction. Katherine Gast, a physician at UW Health in Madison, has found Makenzie meets the criteria for the procedure. That coverage was also denied, and Makenzie can't get a loan for the much more expensive "bottom surgery."

“She experiences profound distress at the sight of her male-appearing genitalia and tries to avoid sexual activity with her fiancée to minimize that distress," the suit states.

"However, that only results in further anxiety and depression, creating a Catch-22 for her and straining her relationship with her fiancée.”

“No one should have to struggle just to be who they are,” Makenzie said through her lawyers. “It’s important to me to do my part to help other transgender people, and myself, get the basic medical care we need. Wisconsin needs to know that our lives matter.”

New York's Medicaid program began covering transgender care in 2015 after a legal challenge similar to Flack and Makenzie's suit

State coverage for gender transition treatment has come up in Wisconsin before. Last year, two state employees and the ACLU sued after the Group Insurance Board — per a Department of Justice request — rescinded a rule change in 2016 to cover the treatments.

That case raised some of the same claims and remains pending in Madison federal court.

In 2005, the Legislature passed the Sex Change Prevention Act, aimed at blocking prison inmates from gender transition treatment. Three inmates sued, and in 2010 a federal court found the law unconstitutional on several grounds. The decision was upheld by the 7th U.S. Circuit Court of Appeals, and the U.S. Supreme Court declined the state's petition to consider the case.

Those cases, however, turned on the Eighth Amendment's proscription of cruel and unusual punishment for prisoners.

Shelley Gregory, transgender resource coordinator at MKE LGBT Community Center, said she was glad to hear of Monday's lawsuit. "I get so many calls wondering about coverage," she said.

Gregory estimates about 20,000 Wisconsin residents are transgender, but that not all seek full transition and the whole array of gender-affirming surgeries. She also notes that the Veterans Administration and some private insurers also do not cover the gender-affirming surgery.

She hopes courts may help, since "it's not a friendly political climate right now for all LGBT issues," even though the "level of visibility and acceptance (of transgender people) has increased substantially in 20 years, without question."