Last week, Judge Rakoff held that a class action of transgender individuals challenging the coverage of gender dysphoria treatments under New York’s Medicaid program will proceed to trial. Specifically, the class challenged the New York Department of Health (“DOH”)’s exclusion of coverage for gender reassignment and hormone therapy for individuals under 18, and a blanket ban on “cosmetic” procedures (even if deemed medically necessary).
Judge Rakoff dispensed with a number of pre-trial motions, including the defendant’s request to reconsider the motion to dismiss based on intervening DOH guidance (but not a formal regulation) that would have allowed medically necessary cosmetic procedures. Judge Rakoff noted that while “a court is bound to give deference to an agency’s interpretation of its own ambiguous regulation,” the new guidance did not affect the underlying challenge to the regulation:
The Court will give no deference to the June Guidance because the plain language of [the regulation] unambiguously foreceloses its interpretation . . . . The questions of whether plaintiffs have benefitted from defendant’s publication of guidance that contradicts a duly promulgated regulation and under what authority he undertook that publication are not before the Court. Plaintiffs do not share defendant’s apparent ability to disregard duly promulgated regulations and allege that any valid application of the plain language of [the regulation] would stop them from receiving coverage for medically necessary cosmetic surgeries.
Judge Rakoff also rejected a request to decertify the class based on commonality among the age exclusion and cosmetic exclusion plaintiffs. Instead, Judge Rakoff divided the class into two subclasses, one for those affected by the age exclusion (made up of plaintiffs under the age of 18) and one for those affected by the cosmetic exclusion. Judge Rakoff noted that since a named plaintiff under the age of 18 was added in the amended complaint, both subclasses had an adequate class representative.
The two issues to be decided at trial are “(1) what treatments are medically necessary for individuals under 18 with gender dysphoria and (2) to what extent DOH has consistently followed a bona fide policy of limiting coverage of drug uses to those listed in the Medicaid Compendia in the context of treatments for gender dysphoria.”