218 F. Supp. 3d 246
S.D.N.Y.2016Background
- Plaintiffs (class action) allege New York Medicaid regulation §505.2(1) unlawfully excludes coverage for: (1) gender-affirming care for individuals under 18 (the "Age Exclusion") and (2) certain cosmetic procedures related to gender dysphoria even when medically necessary (the "Cosmetic Exclusion").
- On July 5, 2016 the Court granted summary judgment to plaintiffs on the Cosmetic Exclusion holding it violated Medicaid Availability and Comparability requirements, but denied summary judgment on the Age Exclusion due to genuine factual disputes about medical necessity for minors and the State’s formulary policy for hormone therapies.
- Plaintiffs moved for reconsideration under Rule 60 after New York published an October 5, 2016 Notice of Proposed Rulemaking (NPRM) that would, if finalized, explicitly authorize coverage of medically necessary surgeries and hormone therapies for individuals under 18.
- The State conceded that publication of the NPRM eliminated the factual disputes the Court had identified, but argued final judgment should be deferred until (and unless) the proposed rule is adopted through SAPA procedures.
- The Court found the State’s concession established ongoing violation of federal law and that delaying relief pending uncertain state rulemaking was neither necessary for economy nor federalism; the Court granted reconsideration and directed entry of final judgment for plaintiffs.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Validity of Cosmetic Exclusion | Cosmetic Exclusion bars medically necessary procedures and violates Medicaid Availability/Comparability | State defended exclusion as permissible regulation | Court previously granted summary judgment for plaintiffs on this claim (Cosmetic Exclusion invalid) |
| Validity of Age Exclusion | Age Exclusion unlawfully denies Medicaid coverage for medically necessary treatment of minors with gender dysphoria | State disputed medical necessity for minors and its formulary application for off‑label hormone use; later conceded facts | Court found conceded facts removed disputes and granted final judgment for plaintiffs on Age Exclusion |
| Effect of NPRM on factual disputes | NPRM admission resolves factual disputes identified in July 5 Opinion | NPRM is not final; SAPA process could reverse course so entry of judgment should await final adoption | Court held the State’s concession is dispositive; delay is unjustified and judgment should enter now |
| Federalism / Delay as basis to defer relief | Plaintiffs entitled to enforcement of federal Medicaid rights now | State argued economy and federalism counsel waiting for state rulemaking to conclude | Court held §1983 federal protection of rights outweighs delay; immediate relief appropriate |
Key Cases Cited
- Cruz v. Zucker, 195 F. Supp. 3d 554 (S.D.N.Y. 2016) (district court opinion addressing Cosmetic and Age Exclusions under Medicaid)
- Roach v. Morse, 440 F.3d 53 (2d Cir. 2006) (federal courts have paramount role enforcing federal rights and §1983 plaintiffs need not exhaust state remedies)
- Patsy v. Bd. of Regents, 457 U.S. 496 (U.S. 1982) (recognition of §1983 enforcement of federal rights)