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Jul 2018

New Healthcare Laws Potentially Increase Access to Care for Transgender People

Originally published back in 2015 on and written by SAC’s very own Nina Zhang

To obtain the medical treatment they desire to change their sex, transgender people have been testing healthcare laws in two ways: 1) challenging them on discrimination grounds, and 2) seeking recognition of such treatment as “medically necessary.”¹

Section 1557 of the Patient Protection and Affordable Care Act  

Section 1557 of the Patient Protection and Affordable Care Act (PPACA) is the first federal civil rights law to prohibit sex discrimination in healthcare under “any health program or activity, any part of which is receiving Federal financial assistance…or under any program or activity that is administered by an Executive agency or any entity established under [Title I of PPACA].”²

In July 2012 the Department of Health and Human Services’ (HHS) Office for Civil Rights issued guidance in a letter responding to 12 Lesbian Gay Bisexual Transgender (LGBT) groups’ request for clarification that sex discrimination includes discrimination on the basis of gender identity under Section 1557.³

The letter states: “We agree that Section 1557’s sex discrimination prohibition extends to claims of discrimination based on gender identity or failure to conform to stereotypical notions of masculinity or femininity and will accept such complaints for investigation. Section 1557 also prohibits sexual harassment and discrimination regardless of the actual or perceived sexual orientation or gender identity of the individuals involved.”4

This provision has provided fertile ground for transgender individuals to seek care and for civil rights organizations to test the interpretation of the law.

Taylor v. Lystila

In April 2014, Lambda Legal, a civil rights organization that focuses on LGBT communities through impact litigation, societal education, and public policy work, tested this interpretation when it filed suit with the U.S. District Court for the Central District of Illinois, Urbana Division on behalf of 45-year-old Naya Taylor, a transgender woman, to enforce Section 1557.5 Lambda’s lawsuit is the first lawsuit to enforce 1557 on behalf of a transgender individual.6

According to the complaint, Ms. Taylor started buying hormones from the Internet without doctor supervision for hormone replacement therapy, but during a delay in shipment, she asked Dr. Lystila, her primary care physician, to prescribe her estrogen.7

Dr. Lystila claimed that she was not experienced in providing hormones to transgender people.8 In fall 2013, Taylor also asked Dr. Lystila to perform blood work to check her hormone levels.9 After Dr. Lystila permitted her physician’s assistant to draw blood and order results, she allegedly indicated that they would not provide any further blood work or monitoring in connection with Taylor’s transition-related care.10 Dr. Lystila and other doctors in the clinic she worked in allegedly regularly monitored the hormone levels of other patients.11

Moreover, the clinic allegedly told her that it did not have to “treat people like you.”12 Dianne Kauffman with the Carle Foundation, the clinic’s parent group, also allegedly told Taylor that because the clinic has Middle Eastern doctors and they have religious beliefs, they do not have to treat “people like you.”13

Taylor passed away from a heart attack in June 2014.14 The status of the case is pending.15

Cruz v. Zucker

In June 2014, the Sylvia Rivera Law Project,16 the Legal Aid Society, and the law firm Willkie Farr & Gallagher LLP filed a federal class action lawsuit against Howard Zucker, Commissioner of the New York State Department of Health on behalf of 50-year-old Angie Milan-Cruz and another plaintiff known as I.H., two transgender women seeking sex reassignment surgery.17

The suit challenges New York State’s Medicaid regulation, enacted in 1998, which provides: “payment is not available for care, services, drugs, or supplies rendered for the purpose of gender reassignment or any care, services, drugs, or supplies intended to promote such treatment.”18 Previous suits challenging state Medicaid statutes or regulations excluding care for gender reassignment, especially sex reassignment surgery, have been unsuccessful.19

The suit challenges the regulation on three grounds: 1) New York State’s Medicaid regulation conflicts with the federal Medicaid Act, which prohibits certain forms of discrimination in state Medicaid programs, 2) New York State’s Medicaid regulation conflicts with PPACA’s Section 1557, discussed above, and 3) the New York State Constitution prohibits discrimination on the basis of sex.20

The complaint also requests the court to issue a permanent injunction ordering Zucker to provide Plaintiffs with medical assistance coverage as medically necessary for the purpose of gender reassignment to treatment Plaintiffs’ gender dysphoria.21

Defendants answered on August 12, 2014.22 In the meantime, on July 24, 2014, the parties stipulated and the court ordered that I.H. be provided coverage for her surgery.23 The parties also stipulated that the grant of the injunction shall not be deemed an admission by Defendant or the Department of Health that it violated the rights of Plaintiffs or the other class members.24

On August 25, 2014, the parties stipulated to class action certification.25 The class consists of: “all New York State Medicaid recipients who have been diagnosed with Gender Identity Disorder or Gender Dysphoria, and whose expenses associated with medically necessary Gender Identity Disorder- or Gender Dysphoria- related treatment are not reimbursable by Medicaid pursuant to 18 N.Y.C.R.R. § 505.2(l).”26 The parties agreed in February 2015 to be ready for trial on August 5, 2015.27

In a separate but possibly related action, on December 11, 2014 New York Governor Andrew Cuomo issued a letter to insurance companies stating that if an issuer of a policy includes coverage for mental health conditions it may not exclude coverage for the diagnosis and treatment of gender dysphoria.28 That same month he proposed a regulation amending subdivision (l) of section 505.2 of Title 18 N.Y.C.R.R.29 The proposed regulation would repeal the payment ban and provide payment for medically necessary hormone therapy and/or gender reassignment surgery for the treatment of gender dysphoria.30

The Case for “Medically Necessary” Treatment

Transgender individuals and civil rights organizations are also beginning to use a recent Medicare appeals decision that prohibits a blanket ban on coverage for sex reassignment surgery to support their claims for coverage. The plaintiffs in Cruz v. Zucker have cited this decision in support of their claims.31

The Health Care Financing Administration, , the predecessor of the Centers for Medicare & Medicaid Services (CMS),  had published a National Coverage Determination (NCD) in 1981 that sex reassignment surgery is “controversial” and “experimental” and thus not covered.32 An NCD is a “determination by the Secretary [of Health and Human Services] with respect to whether or not a particular item or service is covered nationally under [title XVIII (Medicare)].”33 NCDs apply nationally and are binding at all levels of administrative review of Medicare claims.34 CMS and its contractors use applicable NCDs in determining whether a beneficiary may receive Medicare reimbursement for a particular item or service.35

Section 1862(a) (1)(A) of the Social Security Act bars Medicare payment for items or services “not reasonable and necessary for the diagnosis or treatment of illness or injury.”36

Applying the “reasonableness” standard used to review NCDs, in May 2014 the Appellate Division of HHS’ Departmental Appeals Board (DAB)37 ruled that a blanket ban on coverage for gender reassignment surgery was “not reasonable”, changing the Agency’s position on gender assignment surgery it had adopted more than 30 years ago.”38 As a result, Medicare can no longer automatically deny coverage requests for sex reassignment surgeries; in some instances they may be medically necessary.39

The decision was in response to a lawsuit filed in 2013 by 74-year-old Denee Mallon, a transgender woman and army veteran from Albuquerque, New Mexico who had been denied coverage for sex reassignment surgery.40

In removing the ban, the DAB reviewed the record developed before it, including expert medical testimony and studies published after 1981, finding that the evidence demonstrates that transsexual surgery is safe and effective and no longer experimental.41


A favorable decision for the plaintiffs in Cruz v. Zucker could have far-reaching consequences. The National Center for Transgender Equality and the National Gay and Lesbian Task Force found that 15 percent of transgender people lived on $10,000 per year or less, double the rate of the general population.42 A court judgment allowing access to care under Medicaid could make a critical difference in the lives of many transgender individuals. This decision and others that test Section 1557 could define the rights of transgender people for years to come.


Prison inmates have successfully sued to obtain hormone therapy and sex reassignment surgery on 8th Amendment grounds (cruel and unusual punishment). See Kosilek v. Spencer, CA No. 00-12455 MLW, 2012 WL 3799660 (D Mass 2012); Fields v. Smith, 653 F.3d 550 (7th Cir. 2011); Adams v. Federal Bureau of Prisons, 716 F. Supp.2d 107 (D Mass 2010).
42 U.S.C. § 18116(a); Section 1557 of the Patient Protection and Affordable Care Act,, (last visited September 12, 2014).
Letter from Leon Rodriguez, Dir., Office of Civil Rights, Dep’t of Health and Human Services, to Maya Rupert, Fed. Policy Director, Nat’l Center for Lesbian Rights (July 12, 2012) available at (last accessed September 12, 2014).
Complaint, Taylor v. Lystila, No. 2:14-cv-2072 (I.L.C.D., filed April 15, 2014).
Lambda Legal, Lambda Mourns Loss of Transgender Client Naya Taylor (June 26, 2014),
Complaint at 7, Taylor v. Lystila, No. 2:14-cv-2072 (I.L.C.D., filed April 15, 2014).
Taylor v. Lystila,, (last visited September 12, 2014).
Complaint at 6-7, Taylor v. Lystila, No. 2:14-cv-2072 (I.L.C.D., filed April 15, 2014).
Complaint at 7, Taylor v. Lystila, No. 2:14-cv-2072 (I.L.C.D., filed April 15, 2014).
Complaint at 7, Taylor v. Lystila, No. 2:14-cv-2072 (I.L.C.D., filed April 15, 2014).
Complaint at 8, Taylor v. Lystila, No. 2:14-cv-2072 (I.L.C.D., filed April 15, 2014).
Complaint at 3, 8, Taylor v. Lystila, No. 2:14-cv-2072 (I.L.C.D., filed April 15, 2014).
Taylor v. Lystila,, (last visited September 12, 2014).
Telephone interview with Christopher Clarke, Senior Staff Attorney, Lambda Legal (August 25, 2014).
The Sylvia Rivera Law Project is a legal aid organization that serves transgender, intersex and gender non-conforming people.
Larry Neumeister, New York Sued Over Transgender Medicaid Coverage, Associated Press, June 19, 2014,
N.Y. Comp. Codes R. & Regs. tit. 18, § 505.2(l) (1998).
See, e.g. Smith v. Rasmussen, 249 F.3d 755, 761 (8th Cir. 2001); Rush v. Johnson, 565 F. Supp. 856 (N.D. Ga. 1983); Ravenwood v. Daines, No. 06-CV-6355-CJS, 2009 WL 2163105, at 13 (W.D.N.Y. July 17, 2009); Casillas v. Daines, 580 F. Supp. 2d 247 (S.D.N.Y. 2008).
Complaint at 25-27, Cruz et al. v. Zucker, No. 1:2014cv04456 (S.D.N.Y., filed June 19, 2014).
Complaint at 28, Cruz et al. v. Zucker, No. 1:2014cv04456 (S.D.N.Y., filed June 19, 2014).
Answer, Cruz et al. v. Zucker, No. 1:2014cv04456 (S.D.N.Y., filed June 19, 2014).
Stipulation and Order, July 24, 2014.
Stipulation and Order, July 24, 2014.
Provisional Stipulation and Order of Class Certification, August 25, 2014.
Civil Case Management Plan, February 13, 2015.
NY St. Ins. Dept. 2014 Circular Letter No. 7, RE: Health Insurance Coverage for the Treatment of Gender Dysphoria.
37 N.Y. Reg. 2 (December 17, 2014);
Complaint at 60, Cruz et al. v. Zucker, No. 1:2014cv04456 (S.D.N.Y., filed June 19, 2014).
Decision No. 2576 at 4, Department of Health and Human Services, Appellate Division, May 30, 2014.
Act §§ 1862(1)(6)(A), 1869 (f)(1)(B); see also 42 C.F.R. § 400.202.
42 C.F.R. § 405.1060.
42 C.F.R. §§ 405.920, 405.921.
Decision No. 2576 at 2, Department of Health and Human Services, Appellate Division, May 30, 2014.
The Appellate Division is one of three divisions under the DAB. See Appellate Division,, (last visited September 12, 2014). It reviews disputes under a wide range of programs in almost all operating components of the Department of Health and Human Services, including National Coverage Determination complaints under CMS. See (last visited March 2, 2015).  The Civil Remedies Division conducts hearings on the record and makes initial decisions that may be appealed to the DAB. See The Civil Remedies Division,, (last visited September 12, 2014). The Medicare Operations Division, based on an initial determination by the Social Security Administration, provides the final administrative review of claims for entitlement to Medicare and individual claims for Medicare coverage and payment filed by beneficiaries or healthcare providers/suppliers. Medicare Operations Division,, (last visited September 12, 2014).  The DAB’s decisions are binding on HHS, but may be appealed to the federal court. Appellate Division,, (last visited September 12, 2014).
Decision No. 2576 at 1, Department of Health and Human Services, Appellate Division, May 30, 2014.
Lisa Leff, Medicare Ban on Sex Reassignment Surgery Lifted, Associated Press, May 30, 2014,
Decision No. 2576 at 10-24, Department of Health and Human Services, Appellate Division, May 30, 2014.
National Transgender Discrimination Survey, Preliminary Findings, November 2009, available at (last visited September 12, 2014).

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