Medicare Coverage for Sex Change Therapy: What’s Next

By Matthew Lawrence and Elizabeth Guo

Last month Medicare’s policy on coverage for sex change therapy changed somewhat. (See Matt’s earlier post here.) Specifically, Medicare’s Departmental Appeals Board invalidated the long-standing National Coverage Determination that dubbed sex change therapy to be non-covered, per se.

Co-blogger Elizabeth Guo and I have done some further digging on this issue and put together two posts answering some questions left open by Medicare’s decision and the news coverage surrounding it.  In this post we discuss next steps: what the change in coverage policy means for Medicare beneficiaries who want coverage for sex change therapy, and what, if any, additional developments are likely to follow.  In a companion post, we will be discussing the somewhat unusual process that was used to make this policy change.

As of right now, Medicare beneficiaries are in a sort of limbo. Medicare might cover sex change therapy for any given patient, but it might not. As a result of the DAB decision, Medicare does not have in place any National Coverage Determination governing sex change therapy (because the DAB invalidated the old NCD precluding coverage). In such a situation, discretion falls to regional contractors to decide what care is “reasonable and necessary” and so covered by Medicare. If a contractor denies coverage, the beneficiary can appeal through a multi-tiered administrative process and, ultimately, to an ALJ for a hearing. (That could take a very long time. See Matt’s earlier post about the long backlog of appeals here.)

Some help may come through the prior determination process, which would allow beneficiaries to ask a contractor about coverage in advance and so avoid the financial risk of a denial. (See more here.) But an adverse prior determination cannot be appealed. So if Medicare allows a beneficiary to seek a prior determination on sex change therapy but the beneficiary thinks his or her contractor got it wrong, she will have to go through with the surgery and appeal the denial after the fact.

Until the CMS issues more guidance, those seeking coverage for sex change therapy would be wise to support their claims by reference to the standards articulated by the World Professional Association for Transgender Health’s (WPATH) in its Standards of Care for the Health of Transsexual, Transgender, and Gender-Nonconforming People. The Departmental Appeals Board cited those standards with apparent approval in its decision (see its decision here), so they are going to be entitled at least to something like Skidmore deference until Medicare issues a binding set of standards.

Finally, we both expect Medicare either to open a new National Coverage Determination process or series of Local Coverage Determinations in the near future to articulate more specific standards for coverage of sex change therapy.  (Recall that the DAB decision vacated, but did not replace, the old NCD precluding coverage.)  Note, though, that this may be fairly limited. Though some types of sex change therapy may represent current standard of care, CMS may refuse to cover other types of transsexual surgery until studies can sufficiently show that those procedures are safe and effective. In the past, CMS has narrowly tailored its NCDs to cover only services deemed effective in extensive medical literature. CMS has also used NCDs to proscribe coverage for services or procedures whose safety and efficacy remains unknown due to conflicting or controversial evidence.

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