Blue Cross Transgender Care Lawsuit Tests ACA’s Anti-Discrimination Policy

Litigation between a patient and Blue Cross and Blue Shield of Illinois could dramatically increase third party administrators’ potential liability under the Affordable Care Act’s anti-discrimination provisions.

This month, a federal judge approved a class action lawsuit against a nonprofit insurance company alleging that it refuses to cover the care of a gender-affirming transgender teen under a self-funded employee benefit plan it runs for Catholic health care initiatives. violates AKD. Patricia and Nolle Pritchard of Washington State initiated a lawsuit two years ago after Blue Cross and Blue Shield of Illinois refused to cover gender-affirming care for their son, who was identified as a SW, under the policy of the Englewood, Colorado-based company. , Catholic Health Initiative. .

If plaintiffs win, the implications could go beyond transgender people’s rights to access health care and significantly change the relationship between health insurance companies and the employers whose self-funded health insurance plans they administer.

This lawsuit could set a legal precedent whereby third-party administrators receiving federal funds would be held accountable for their employer clients’ coverage policies, said Abigail Coursol, senior lawyer for the National Health Laws Program. “This is an evolving area of ​​law and it really just goes to show how complex our healthcare system is and how difficult it is to figure out who really makes the decisions about what is covered, how it is covered and who can be held responsible for those decisions. ” she said.

Companies such as Blue Cross and Blue Shield of Illinois may find themselves in a situation where they refuse to comply with the policies of their customers, refuse to do business with employers who have religious objections to certain medical care, pay for such treatment themselves, or refuse Medicare and Reimbursement. Medicaid to avoid anti-discrimination rules.

Blue Cross and Blue Shield of Illinois declined to comment on the ongoing lawsuit. Chicago-based Catholic health initiative CommonSpirit Health, which is not a party to the lawsuit, did not respond to a request for an interview.

Under Section 1557, organizations receiving federal funds such as Medicare and Medicaid payments cannot discriminate on the basis of sex, which the Department of Health and Human Services defines as medical discrimination against transgender people. Religious employers can get exemptions, but Blue Cross and Blue Shield of Illinois and their parent company Health Care Service Corp. are not religious organizations.

Exceptions for the employer

The Religious Freedom Restoration Act of 1993 was not designed to allow private businesses to deny health care payments to workers based on the religious beliefs of their owners. That changed in 2014 when the Supreme Court ruled that the private lobby owners’ beliefs of the Hobby Lobby exempt the artisan retail chain from covering the cost of contraceptives for its employees. The decision paved the way for other employers to claim religious exceptions to federal law. Service provider groups, including the American Medical Association, have called for an end to exclusion of payers from gender verification services.

More than half of US residents are insured under self-insurance plans, and these insurers have little ability to challenge their employers’ exclusions from coverage, said Mark Silberman, vice chairman of the healthcare practice group at law firm Benesch Friedlander Coplan & Aronoff.

“It’s complicated. Most employers with self-insurance plans say, “This is a benefit that we provide, and if you don’t want to use this benefit, you don’t have to,” Zilberman said. “The problem is this: most people don’t have the luxury of brusquely and carelessly choosing their employer based on the insurance coverage they provide.”

In the lawsuits, Blue Cross claims that religious exemptions for employers, such as Catholic Health Initiatives, allow third-party administrators to enforce the claims of their self-insured customers, even those that the federal government classifies as discriminatory.

Judge Robert Bryan of the U.S. District Court for the Western District of Washington wrote in May 2021 that because the Blue Cross itself is not a religious organization, it may be subject to federal anti-discrimination rules. Bryan also noted that the Supreme Court had previously held that the protection against sex discrimination in the Civil Rights Act of 1964 extended to LGBTQ workers, and that it would be “logically inconsistent” if federal law did not classify discrimination against transgender people as gender prejudice.

What’s more, Brian wrote, Blue Cross and Blue Shield of Illinois are already partnering with some self-funded employers that have transgender coverage exceptions to offer workers the option to sign up for alternative plans that cover gender-affirming care. The federal government is in the process of determining the legal obligations of third party administrators under Section 1557.

“Section 1557 builds on these other civil rights laws, and courts consistently interpret civil rights laws to provide protection, in fairly similar cases, to the circumstances of people who are gay or transgender,” said Christine Monahan, professor at Georgetown University. Center for Health Insurance Reform. “Even though HHS right now might be repeating itself about this, the judge is saying, ‘I’m going to see what the courts say and make a decision based on that.'”

HHS a href=””> in June released a proposal to review liability on a case-by-case basis, “depending on the extent to which administrators have been involved in developing exceptions to coverage for employer clients. The department’s current policy requires that trans people be protected by the ACA’s anti-discrimination rules, which is similar to the position taken by President Barack Obama’s administration but runs counter to rules revised during President Donald Trump’s administration.

Brian’s decision to allow the lawsuit came as LGBTQ people are increasingly taking to the courts to challenge coverage denials. “This is an area where we are seeing a lot of litigation and I expect to see more, especially as decisions about what healthcare workers should get are becoming more and more political,” Kursoll said.

Pritchard family

CP, now 16, was diagnosed with gender dysphoria before he and his parents sought medical attention for gender confirmation. According to the original complaint, the Prichards sued Blue Cross and Blue Shield of Illinois for violating the advice of CP’s doctors and denying him hormone therapy and chest reconstruction surgery. The family subsequently paid $10,000 for the treatment out of their own pocket.

The Pritchard family now represents a class of transgender patients who work for more than 370 employers who refuse to cover care for gender-affirming women and contract Blue Cross and Blue Shield of Illinois for employee health benefits.

While the wording of the policy varies between employers, the insurer consistently enforces its exclusions by rejecting all claims that include “gender dysphoria” and “gender reassignment,” Bryan wrote in an opinion this month. If the Pritchards win their case, the insurance company won’t be able to deny gender verification claims for any patient enrolled in a self-funded health plan, said Omar Gonzalez-Pagan, advisor and health strategist at the Lambda Legal Defense and Education Foundation. who represents the Pritchards.

“It’s a question, ‘Can a client force Blue Cross and Blue Shield of Illinois to discriminate and do something illegal? I think the answer is no,” Gonzalez-Pagan said. “The law doesn’t allow you to evade legal liability because some client told you to.”

In June, federal courts in Georgia and North Carolina ruled in separate class action lawsuits that public employers cannot exclude or deny insurance coverage for gender-affirming care. In August, the Seventh Circuit Court of Appeals ruled that the parents of a child with autism could sue their employer, aged care company Heart of CarDon, for refusing treatment, which they allege violates section 1557 of the Autism Act.

These legal advances contrast with a growing number of state laws passed and proposed to limit transgender people’s access to health care. More than 145 bills targeting transgender people have been introduced in 34 states this year, the Human Rights Campaign, an LGBTQ advocacy organization, said this month in a report that catalogs violence against transgender people.

The Human Rights Campaign did not elaborate on how many laws target transgender patients’ access to health care. But one example is from Florida, where the Department of Health passed a rule in August banning Medicaid coverage for the care of gender-verifying women. A federal judge upheld the rule in October after a group of patients filed a Section 1557 lawsuit.

“In the near future, there will be more confusion than clarity,” Zilberman said.

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