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Two years after a federal court decision expanded Medicaid coverage for gender dysphoria in New York, the state has issued new guidance to streamline delivery of those benefits.

The guidance, effective Sept. 1, came after advocates prepared to take legal action against the state over how different Medicaid plans have handled coverage for transgender individuals seeking surgery or other treatments.

While Medicaid plans in New York have been required to cover those services since 2015, the state’s new guidance sets guidelines for insurers on how those claims should be evaluated. Like many states, New York has private insurers manage Medicaid plans for beneficiaries.

“It’s eliminating barriers that the Medicaid managed care plans had placed toward approvals of medically necessary care for gender dysphoria,” said Rebecca Novick, director of the health law unit at the Legal Aid Society. “Plans were issuing denials that were in opposition to the care, words and spirit of the regulation.”

Each denial was done on a case-by-case basis, but one in particular was an impetus for the new guidance, Novick said.

An attorney within her unit, Heidi Bramson, represented a client that identified as gender nonbinary, meaning they did not identify as neither a man nor a woman. Bramson’s client was diagnosed by a medical professional with gender dysphoria, but their Medicaid claim for treatment was denied.

They appealed the denial to an administrative judge, as one is allowed to do in New York when a Medicaid claim is denied. The judge affirmed the denial because Bramson’s client was not seeking to transition to a specific gender, she said.

“It came out that it was denied on the grounds that an individual that identifies as nonbinary is not protected by the regulations,” Bramson said.

That will change under the new guidance. Medicaid plans must “recognize that gender dysphoria affects people of all genders, and is not limited to people with binary gender identities,” the guidance said.

The Legal Aid Society, along with the Sylvia Rivera Law Project and the firm Willkie Farr & Gallagher, had prepared to start a new legal action with the state after the administrative hearing. They reached out to the state Attorney General’s Office about the case and argued that the denial violated the decision in Cruz v. Zucker.

In that case, the same group of attorneys filed a federal lawsuit against the state Department of Health in 2014 challenging the state’s ban on Medicaid coverage for gender dysphoria treatment. The lawsuit ended in a repeal of that ban and final regulations issued in 2016 on how Medicaid plans should cover treatment for gender dysphoria.

In May, Novick and Bramson told the state Attorney General’s Office that denying Medicaid coverage for their client based on gender identity violated the Cruz decision.

“We said that this denial of care was a violation of Cruz, that our client was a class member and should have been protected,” Bramson said.

The attorneys were also preparing to file an Article 78 petition to challenge the decision when it was overturned by the state Department of Health.

“I think that raising it with the attorney general certainly helped to move it along,” Novick said.

At the same time, a coalition of transgender advocacy groups had contacted the state with their own set of recommendations on how Medicaid coverage could be improved for those seeking to transition. Many of them were included in the new guidance.

Medicaid plans will have less flexibility when evaluating a claim for treatment of gender dysphoria. Plans will have to explain how a beneficiary’s documentation for treatment, such as a diagnosis by a medical professional, contradicts the medical necessity of the request.

One part of the new guidance would allow a beneficiary to obtain two letters of documentation from health professionals at the same institutional provider. Some plans were forcing beneficiaries to seek a second letter from a different institutional provider who may not be familiar with their identity.

“What the plans were doing were imposing administrative burdens on their beneficiaries,” Bramson said. “So, if someone had to get two letters from the same provider, their plan may ask them to go back and get a letter from a different provider.”

As for the letters themselves, Medicaid plans will no longer be allowed to ask for supporting documents or justification of someone’s condition and circumstances. They will have to accept a medical professional’s recommendation without asking for more information.

That seems to be the underlying theme of the new guidance: Plans must accept the recommendation of a licensed health professional for the treatment of gender dysphoria, regardless of how they have treated those claims in the past.

“It clarifies that plans can impose prior authorization requirements but they have to accept the treatment provider’s medical necessity,” Novick said. “If someone diagnoses someone with gender dysphoria, the plans shouldn’t be in the business of questioning that.”

That includes treatments that are considered cosmetic in nature. The new guidance affirmed that plans could not automatically deny those treatments.

New York is one of 17 states and the District of Columbia that currently have policies explicitly covering transition-related health care in their Medicaid programs, according to the National Center for Transgender Equality.