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Cruz v. Zucker

United States District Court, S.D. New York

July 29, 2015

ANGIE CRUZ, I.H., AR'ES KPAKA, and RIYA CHRISTIE, on behalf of themselves and all others similarly situated, Plaintiffs,
v.
HOWARD ZUCKER, as Commissioner of the Department of Health [of the State of New York], Defendant

Page 335

For Angie Cruz, on behalf of themselves and all others similarly situated, Plaintiffs: Adriene L. Holder, LEAD ATTORNEY, The Legal Aid Society, New York, NY; Belkys Raquel Garcia, LEAD ATTORNEY, Legal Aid Society (BX2), Bronx, NY; Judith A. Goldiner, Scott Alan Rosenberg, LEAD ATTORNEYS, The Legal Aid Society (Civil Div. NYC), New York, NY; Kimberly Forte, Rebecca Antar Novick, LEAD ATTORNEYS, Legal Aid Society, New York, NY; Mary Jane Eaton, LEAD ATTORNEY, Christopher James McNamara, Lee Larson Hulsebus, Wesley Railey Powell, Willkie Farr & Gallagher LLP (NY), New York, NY; Megan Yolanda Hogan, LEAD ATTORNEY, Norman Paul Ostrove, Willkie Farr & Gallagher LLP, New York, NY; Pooja Sunder Gehi, LEAD ATTORNEY, Elana Carroll Redfield, Sylvia Rivera Law Project, New York, NY; Sumani Vani Lanka, Virginia & Ambinder, LLP, New York, NY.

For I.H., on behalf of themselves and all others similarly situated, Plaintiff: Adriene L. Holder, LEAD ATTORNEY, The Legal Aid Society, New York, NY; Belkys Raquel Garcia, LEAD ATTORNEY, Legal Aid Society (BX2), Bronx, NY; Judith A. Goldiner, Scott Alan Rosenberg, LEAD ATTORNEYS, The Legal Aid Society (Civil Div. NYC), New York, NY; Kimberly Forte, Rebecca Antar Novick, LEAD ATTORNEYS, Legal Aid Society, New York, NY; Mary Jane Eaton, LEAD ATTORNEY, Willkie Farr & Gallagher LLP (NY), New York, NY; Megan Yolanda Hogan, LEAD ATTORNEY, Willkie Farr & Gallagher LLP, New York, NY; Pooja Sunder Gehi, LEAD ATTORNEY, Elana Carroll Redfield, Sylvia Rivera Law Project, New York, NY; Sumani Vani Lanka, Virginia & Ambinder, LLP, New York, NY.

For Ar'es Kpaka, Riya Christie, Plaintiffs: Christopher James McNamara, Lee Larson Hulsebus, Wesley Railey Powell, Mary Jane Eaton, Willkie Farr & Gallagher LLP (NY), New York, NY; Norman Paul Ostrove, Willkie Farr & Gallagher LLP, New York, NY; Sumani Vani Lanka, Virginia & Ambinder, LLP, New York, NY.

For Howard Zucker, as Commissioner of the Department of Health, Defendant: John Peter Gasior, LEAD ATTORNEY, Office of the Attorney General, New York State, New York, NY; Peter W. Beauchamp, Zoey Chenitz, Office of The Attorney General of The State of New York, New York, NY.

OPINION

Page 336

JED S. RAKOFF, United States District Judge.

The intersection of our cognition with our emotions is both the essence of our humanity and the source of our anxiety. According to the plaintiffs in this class action, someone who is born with the physical equipment of one sex but emotionally identifies as someone of the opposite sex suffers severe anxiety and emotional distress that may, however, be materially alleviated by available medical procedures. Plaintiffs further contend that New York wrongly denies Medicaid coverage for many such procedures, regarding them as merely " cosmetic" or the like. The immediate question before the Court is whether the plaintiffs here can sue for redress of this alleged wrong. The Court concludes that they can.

Page 337

Plaintiff Angie Cruz, now fifty years old, alleges that she was assigned male at birth but has identified as female since she was ten years old. See Amended Class Action Complaint dated March 27, 2015, ECF No. 27 (" Am. Compl." ) ¶ ¶ 91, 93. She began taking hormones as a teenager in an effort to bring her physical appearance into alignment with her gender identity and has undergone hormone therapy for much of her adult life, purchasing her hormones sometimes from doctors and pharmacies and sometimes on the street. Id. ¶ ¶ 94-95. Although this therapy has given her body a more feminine appearance, she still experiences intense distress and interference with her capacity for normal activity as a result of the mismatch between her body and her identity. Id. ¶ ¶ 96, 99, 104-05. Cruz is a " categorically needy" Medicaid recipient, meaning that she meets one of nine eligibility categories set forth in the federal Medicaid Act, 42 U.S.C. § 1396a(a)(10)(A)(i). Id. ¶ ¶ 29, 91.

Plaintiff Ar'es Kpaka, also a categorically needy Medicaid recipient, alleges that, although born with a male body, she has identified as female since she was three years old. Id. ¶ 136. As an adolescent, she hid her gender identity from her mother and brothers until, at age twenty-one, she was forced to move out of her mother's home and became homeless for several months. Id. ¶ 137. Now twenty-three, she is undergoing hormone therapy but still struggles with depression relating to her gender identity. Id. ¶ ¶ 136, 138, 140.

Plaintiff Riya Christie alleges that, growing up in Jamaica, she faced violence because of her gender expression and suffered from severe depression and suicidal thoughts. Id. ¶ ¶ 149-50. At the age of twenty-one, she moved to the United States and was granted asylum on the ground that her gender identity made it unsafe for her to return home. Id. ¶ 152. Now twenty-three, she continues to experience pain and anxiety as a result of the incongruence between her body and her gender identity. Id. ¶ 159. She, like Cruz and Kpaka, is a categorically needy Medicaid recipient. Id. ¶ 136.

Each of the three named plaintiffs in this class action has been diagnosed with Gender Dysphoria (" GD" ) (formerly known as Gender Identity Disorder).[1] Id. ¶ ¶ 95, 138, 155. They allege that GD is recognized by the medical community as " 'an identifiable, severe and incapacitating disease.'" Id. ¶ 80 (quoting D. Harish & B. Sharma, Medical Advances in Transsexualism and the Legal Implications, 24 Am. J. Forensic Med. & Pathology 100, 101 (2003)). It is defined in the latest edition of the American Psychiatric Association's Diagnostic and Statistical Manual of Mental Disorders (" DSM-V" ) as a " marked incongruence between one's experienced/expressed gender and assigned gender," as manifested by at least two of the following: (i) a " marked incongruence between one's experienced/expressed gender and primary and/or secondary sex characteristics..." ; (ii) a " strong desire to be rid of one's primary and/or secondary sex characteristics..." ; (iii) " a strong desire for the primary and/or secondary sex characteristics of the other gender" ; (iv) a " strong desire to be of the other gender..." ; (v) a " strong desire to be treated as the other gender..." ; and (vi) a " strong conviction that one has the typical feelings and reactions of the other gender..." Id. ¶ 82 (quoting DSM-V § § 302.06, 302.85). The DSM-V further specifies that GD is " associated with clinically

Page 338

significant distress or impairment in social, occupational, or other important areas of functioning." Id.

Plaintiffs allege that, in order to alleviate the profound psychological suffering and social and occupational impairment that they experience as a result of their GD, they need certain treatments to facilitate their transitions to the gender with which they identify. The treatments they seek include breast augmentation, facial feminizing surgery, chondrolarngoplasty (commonly referred to as " tracheal shave" ), body sculpting procedures, and electrolysis. Id. ¶ ¶ 101, 141, 157. Plaintiffs allege that these treatments are safe, effective, and medically necessary. Id. ¶ ¶ 83-88. However, plaintiffs allege, they have been denied access to the needed treatments because such treatments are excluded from coverage under New York State's Medicaid program. Id. ¶ ¶ 103, 143, 158.

Prior to 1998, medical coverage was available under New York's Medicaid program for the treatment of GD, including hormone treatment and sex reassignment surgery. Id. ¶ 2. However, in 1998, the New York State Department of Health (" DOH" ), which is responsible for administering the state's Medicaid program, promulgated 18 N.Y.C.R.R. § 505.2( l ), which barred payment for all " care, services, drugs or supplies rendered for the purposes of gender reassignment" treatment or for " promoting" such treatment (" Section 505.2( l )" ). Id.

On June 19, 2014, plaintiffs filed a class action complaint on behalf of themselves and all similarly situated individuals against Dr. Howard Zucker, acting in his official capacity as Commissioner of DOH, alleging that Section 505.2( l ) violates various provisions of state and federal law. ECF No. 1. On August 21, 2014, the parties agreed to a Provisional Stipulation and Order of Class Certification, pursuant to which the Court certified a class consisting 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 ).

ECF No. 23. Subsequently, on December 17, 2014, DOH published a Notice of Proposed Rule Making that proposed amendments to Section 505.2( l ) (" Amended Section 505.2( l )" ).

The proposed Amended Section 505.2( l ) lifted the blanket ban on coverage for treatment of GD, making hormone therapy and gender reassignment surgery available to certain Medicaid recipients. Am. Compl. ¶ 5; Declaration of John Gasior dated April 17, 2015, ECF No. 31 (" Gasior Decl." ) Ex. 1. However, it preserved two important coverage exclusions. First, it excluded coverage for " cosmetic surgery, services, and procedures," which it defined as " anything solely directed at improving an individual's appearance," including but not limited to certain enumerated procedures such as breast augmentation, electrolysis, thyroid chondroplasty, and facial bone reconstruction, reduction, or sculpturing (the " Cosmetic Procedures Exclusion" ). Gasior Decl. Ex. 1. Second, it did not provide coverage for hormone therapy or gender reassignment surgery for individuals under the age of eighteen, or for gender reassignment surgery for individuals under the age of twenty-one where such surgery would result in sterilization (the " Youth Exclusion" ). Id.

The Amended Section 505.2( l ) came into effect on March 11, 2015. On March 27, 2015, plaintiffs filed their Amended Complaint.

Page 339

In it, plaintiffs allege that the Amended Section 505.2( l ) violates various provisions of Title XIX of the Social Security Act (the " Medicaid Act" ), the Patient Protection and Affordable Care Act (" ACA" ), and the New York State Constitution. Specifically, plaintiffs assert six causes of action: (I) violation of 42 U.S.C. § 1396a(a)(10)(A) and its implementing regulation, 42 C.F.R. § 440.210 (the " Availability Requirement" of the Medicaid Act); (II) violation of 42 U.S.C. § 1396a(a)(10)(B) and its implementing regulation, 42 C.F.R. § 440.240(b) (the " Comparability Requirement" of the Medicaid Act); (III) violation of 42 U.S.C. § § 1396a(a)(17), 1396a(a)(10)(B)(i) and their implementing regulation, 42 C.F.R. § 440.230(c) (the " Reasonable Standards Requirement" of the Medicaid Act); (IV) violation of Article I, Section 11 of the New York State Constitution, which guarantees equal protection of the laws; (V) Section 1557 of the ACA, 42 U.S.C. § 18116, which prohibits sex discrimination in the provision of healthcare; and (VI) violation of 42 U.S.C. § 1396a(a)(43), which requires states to provide " early and periodic screening, diagnostic, and treatment services" for eligible persons under the age of twenty-one (the " EPSDT Requirement" of the Medicaid Act).[2]

Defendant moved to dismiss the Amended Complaint. By " bottom line" Order dated June 26, 2015, the Court granted in part and denied in part defendant's motion. ECF No. 46. This Opinion explains the reasons for those rulings.

As discussed above, in their Amended Complaint, plaintiffs allege violations of various provisions of the federal Medicaid Act. Medicaid is a cooperative state and federal benefit program designed to provide necessary medical services to " needy persons of modest income." Cmty. Health Ctr. v. Wilson-Coker, 311 F.3d 132, 134 (2d Cir. 2002). " 'States need not participate in the program, but if they choose to do so, they must implement and operate Medicaid programs that comply with detailed federally mandated standards.'" Cmty. Health Care Ass'n of N.Y. v. Shah, 770 F.3d 129, 135 (2d Cir. 2014) (quoting Three Lower Cnties. Cmty. Health Servs., Inc. v. Maryland, 498 F.3d 294, 297 (4th Cir. 2007) (internal quotation marks omitted)). States that elect to receive federal Medicaid funds must submit a plan detailing how they will spend such funds to the Centers for Medicare and Medicaid Services, a federal agency within the Department of Health and Human Services. Wilson-Coker, 311 F.3d at 134 (citing 42 U.S.C. § § 1396, 1396a). State Medicaid plans are subject to extensive requirements, four of which are relevant here.

Availability. The Availability Requirement provides that a state plan for medical assistance " must provide ... for making medical assistance available [to all categorically needy individuals], including at least" certain enumerated types of care and services, including inpatient ...


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