SDNY allows Medicaid to deny gender transition treatment

In a ruling last week arguably even worse for Medicaid law than for transgender health-related advocacy, Judge Kevin Castel of the Southern District of NY held that an MTF trans person had no cause of action against the decision of NY State's Medicaid agency to eliminate coverage for any "care, services, drugs or supplies rendered for the purpose of gender reassignment." Casillas v. Daines, 2008 WL 3157825.   [Opinion here]

The decision turned less on transgender-specific issues than on the judge's extraordinarily cramped reading of Medicaid law. Judge Castel found that the entitlement to services established in the Medicaid statute was essentially eviscerated by a regulation that allows state agencies (Medicaid is a joint federal-state program, administered by the states) to "place appropriate limits" on services through "utilization control procedures." The phrase "utilization control" generally refers to a cap on the number of events within a certain category, such as hospitalizations or doctor visits.

In what appears to be the first judicial decision to adopt this interpretation, Casillas holds that "utilization control" is so unclear that it could mean almost anything. As a result, the court reasoned, the plaintiff lacked an enforceable right of action for denial of benefits because the language of the regulation so undercut the statutory text that one could not say that a right had been unambiguously conferred, as required under Blessing v. Firestone, 520 U.S. 329 (1997). Rather, this aspect of the Medicaid entitlement had been rendered too "vague and amorphous" for judicial enforcement.

This is a terrible blow to Medicaid recipients, persons who are so indigent that they qualify despite an extraordinarily strict means test to get into the program. Nothing in the Casillas opinion limits its applicability to gender reassignment care; the same argument could be deployed with regard to other conditions as well. To my knowledge, no court of appeals or even another district court has relied on this particular analysis in granting a motion to dismiss for failure to state a claim.

Plaintiff also challenged the NY State policy on equal protection grounds, an argument rejected by the court in a few sentences. Ruling that the policy needed to meet only a rational basis standard, the court found "a more than sufficient rational basis" in the agency's stated concern with health (the risk of complications from genital surgery and long-term administration of estrogen) and with the need to conserve limited medical resources.

Comments

[Harper Jean Tobin]

Terrible decision. It's notable, however, that while the court seems to suggest broad discretion for states to exclude medically necessary services of whatever kind, the decision here is based on the Gonzaga/Blessing test for Section 1983 remedies. That at least technically leaves open the possibility of a different result on the merits, which could be reached by a federal preemption claim.

Nevertheless, this "carve-out" regulation could make for a daunting uphill fight if it's accepted as a limit on the statutory text, and judges' general suspicion of trans litigants' claims probably doesn't help matters.