July 7, 2016

The decision represents a dramatic victory for transgender New Yorkers.

New York State must remove restrictions on medically necessary healthcare for transgender Medicaid recipients following an opinion issued on July 5 by a federal judge in Manhattan.  Under the ruling, New York will be one of very few states where transgender individuals can obtain Medicaid funding for treatments that will bring their physical appearance in line with their gender. A trial will be held to determine to what extent coverage must be provided for transgender Medicaid recipients under the age of 18.

The decision came in Cruz v. Zucker, 14 Civ. 4456 (JSR), a class action lawsuit filed by The Sylvia Rivera Law Project, The Legal Aid Society and Willkie Farr & Gallagher LLP on behalf of Medicaid-eligible transgender individuals diagnosed with gender dysphoria in the United States District Court for the Southern District of New York. In early 2015, the same case prompted the New York State Department of Health to amend a regulation, 18 N.Y.C.R.R. §505.2(l), adopted in 1998 by Governor George Pataki’s administration that had banned Medicaid coverage of all transgender care. As a result, in March 2015 the state began covering hormone therapy and gender-reassignment surgery for adults. But the revised regulation still excluded coverage for certain treatments deemed “cosmetic procedures”—such as facial feminization surgery, breast augmentation and tracheal shaving—which experts in the case testified are medically necessary for some patients to reduce the acute distress and suicide risk associated with gender dysphoria.

Judge Jed S. Rakoff ruled the regulation violated the federal Medicaid Act, which requires state Medicaid programs to provide Medicaid recipients with coverage for medically necessary treatment falling within certain specified categories to Medicaid recipients, and prohibits Medicaid plans from selectively denying coverage of treatments on the basis of diagnosis. Judge Rakoff ruled that New York must provide Medicaid coverage for the procedures that the state had previously deemed “cosmetic,” and thus not covered. Some Medicaid recipients have been denied coverage for the procedures in recent months, even after demonstrating they were medically necessary.

The revised regulation also excluded all treatment for people under age 18, including pubertal suppressants (also known as puberty blockers), which allow transgender adolescents to temporarily delay the physical changes associated with puberty, permitting them additional time to determine whether to seek further medical treatment for their gender dysphoria. Judge Rakoff concluded that there are disputed issues of material fact regarding what types of treatments are medically necessary to treat gender dysphoria in individuals under the age of 18, necessitating a bench trial to resolve those issues.

Along with colleagues from The Sylvia Rivera Law Project and The Legal Aid Society, Willkie partners Mary Eaton and Wesley Powell and associates Norman Ostrove, Arthur Biller, Christopher McNamara, Nicolas Heliotis and Timothy Fleming represent the class action plaintiffs.

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