US Seems Likely to Prevail in LGBTQ+ Health Bias Standing Fight

The Fifth Circuit on Monday appeared likely to end a suit over a Biden administration notice warning doctors that it will interpret Obamacare’s anti-bias provision as prohibiting discrimination based on transgender status.

All three members of the panel—including Republican-appointees Edith H. Jones and Catharina Haynes—seemed skeptical of Susan Neese’s and James Hurly’s claim that they face a credible threat of enforcement as a result of the notice and, therefore, had standing to bring the pre-enforcement suit.

The Texas doctors argued in the US Court of Appeals for Fifth Circuit that they fear losing federal money due to the US Department of Health and Human Services’ statement that it will treat sex discrimination under Section 1557 of the Affordable Care Act as including gender-identity bias because both refuse to provide certain transgender-related care.

In the 2021 notice, the agency said it will apply the statute consistently with the US Supreme Court’s decision in Bostock v. Clayton County. Gender-identity discrimination in the terms or conditions of employment is actionable as sex discrimination under Title VII of the Civil Rights Act, the top court said in that 2020 opinion.

No Enforcement

HHS hasn’t enforced the notice against Neese, Hurly, or any other physician, and hasn’t threatened to do so, David Peters told the court. Peters, of the US Department of Justice, represents Secretary Xavier Becerra.

But the doctors here didn’t even allege that they’d engaged or intended to engage in any conduct that would violate Section 1557, Peters said. Neese, in her affidavit, said she treats everyone 16 years old and up and doesn’t deny care based solely on transgender status, he said.

Neese also said, however, that she doesn’t provide gender-affirming care to minors because it’s outside her scope of practice. She has no reason to fear enforcement, Peters said, because—as noted by Biden appointee Dana M. Douglas—the notice specifically says it won’t be used to punish doctors who refuse to provide treatments outside their specialties.

“I don’t understand why your clients brought this case,” Haynes told Jonathan Mitchell, of Austin, who represents the doctors. How can the doctors fear enforcement if they don’t categorically discriminate against patients based on transgender status, she said. “Do they want to discriminate?”

Notice Too Vague

Jones said the notice is vague as to what type of actions could lead to enforcement, making it easier to challenge standing.

Mitchell said that that some of Neese’s reasons for denying the care—for example, her belief that 16 year olds are too young to make a decision about transitioning—could trigger enforcement despite the notice’s alleged leeway for care outside of a doctor’s scope of practice. Jones agreed that Neese might legitimately fear enforcement for her refusal to provide gender-affirming care to a 16 year old.

Providing gender-affirming care to a minor is illegal in Texas at the moment, Haynes noted, and Neese likely wouldn’t face HHS enforcement for refusing to provide care that’s not allowed by the state.

Additionally, HHS has said it won’t enforce the notice when a doctor, in their medical judgment, believes the case to be inappropriate, Douglas said.

But the notice doesn’t provide a “safety valve,” Mitchell said.

New Rule Coming

Jones also questioned Mitchell about whether the court should decide the case at all. HHS in July 2022 proposed a new rule regarding protections against bias in health care. The rule isn’t yet final, but a final rule would supersede the notice at issue here, she said. The final rule would apply, he said.

The government’s interpretation of Section 1557’s prohibition of discrimination “based on sex” as precluding bias based on sexual orientation or gender identity has been hotly contested since 2016, when the Obama administration issued a rule to that effect.

HHS issued a new rule without the LGBTQ+ bias provisions in 2020, but several federal courts at least partially blocked that Trump-era version.

Judge Matthew Kacsmaryk, of the US District Court for the Northern District of Texas, found in November 2022 that the doctors had standing to challenge the notice and said and said that Bostock doesn’t apply to Title IX’s anti-discrimination protections, on which Section 1557’s sex bias protection is based. Title IX precludes discrimination in educational programs or activities.

The US Court of Appeals for the Eighth Circuit has barred HHS from taking action against Christian health-care providers based on the notice on the ground that it substantially interferes with their religious exercise rights. Neese and Hurley didn’t make a religion-based claim.

A case pending decision in the US Court of Appeals for the Sixth Circuit presents the same standing question—whether doctors who haven’t been threatened with HHS action can sue the agency to block the notice’s enforcement.

Fillmore Law Firm LLP, America First Legal Foundation, and Sprouse Shrader Smith PLLC also represent the doctors.

The case is Neese v. Becerra, 5th Cir., No. 23-10078, oral arguments 1/8/24.