Court: Blue Cross Blue Shield of Illinois cannot administer health plans with gender-affirming exclusions

NEW YORK, Dec. 21 (TNSgov) -- Lambda Legal posted the following news release on Dec. 19, 2022:

A federal district judge today ruled that Blue Cross Blue Shield of Illinois (BCBSIL) cannot exclude coverage for medically necessary gender-affirming care in its administration of employer-provided ERISA health plans. This follows the district court's November 9, 2022, order certifying a class comprised of individuals who were, are, or will be denied pre-authorization or coverage of gender-affirming care as a result of BCBSIL's administration of categorical exclusions of such care.

The ruling came in a class action lawsuit filed by Lambda Legal and Sirianni Youtz Spoonemore Hamburger PLLC challenging BCBSIL's administration of the discriminatory blanket exclusion on behalf of a 17-year-old transgender young man, C.P., and his parents. The lawsuit, filed in the U.S. District Court for the Western District of Washington, argued that BCBSIL's administration of the exclusion is in direct violation of the health nondiscrimination law enacted as part of the Affordable Care Act, known as Section 1557.

"The court's decision not only establishes that categorical exclusions for coverage of gender-affirming care are unlawful discrimination, but it also concludes that health insurers who receive federal funds and act as third-party administrators have an independent duty to not administer discriminatory ERISA health plans," said Omar Gonzalez-Pagan, Counsel and Health Care Strategist for Lambda Legal. "This is a victory not only for C.P. and his parents, but also for the hundreds of transgender people who were, are, or were likely to be denied medically necessary gender-affirming care because of BCBSIL's administration of approximately 400 ERISA health plans with these unlawful exclusions. The court's decision sends a clear message that third-party administrators that accept federal funds cannot discriminate when administering employer-sponsored health plans."

"All we want is for our son to receive the medical care he needs to live, be healthy, and to thrive. I'm relieved the court saw the justice in our claim, and hope that BCBSIL will not continue to throw obstacles in our way to access the care our son needs and is legally entitled to," said Pattie Pritchard, C.P.'s mother and the primary beneficiary on the employer-provided health benefit plan that BCBSIL administers. "My son and all other transgender youth deserve the ability just to be themselves and to thrive. That's all we ask."

The court concluded that BCBSIL is a "health program or activity" that receives federal funds, such that BCBSIL cannot discriminate on the basis of race, national origin, sex, age and disability in any of its operations - including BCBSIL's administration of ERISA health plans as a third-party administrator. As such, BCBSIL cannot administer discriminatory terms of any health plans, including the plan provided by Pattie Pritchard's employer--St. Michael Medical Center in Bremerton, Washington, which is part of the Catholic Health Initiatives Franciscan Health System, now known as CommonSpirit Health.

"The court has pulled back the curtain and made it clear that BCBSIL cannot hide behind a defense that it was 'just following orders' from Pritchard's employer to apply the illegal exclusion," said Eleanor Hamburger of Sirianni Youtz Spoonemore Hamburger who has worked with C.P. and his parents during the past five years. "BCBSIL has a separate legal, contractual and fiduciary duty to C.P. and other class members to not discriminate in all of its operations and the court agreed."

C.P., a transgender young man, is a dependent on his mother's employer-provided health insurance plan and has obtained gender-affirming care on the recommendation of his health care providers. However, C.P. and his family were informed that some of his care would not be covered because of an exclusion of any care "for or leading to gender reassignment surgery", including the same care and medical interventions that other cisgender patients receive without question or problem. C.P.'s family has had to pay out-of-pocket for his care, causing unnecessary financial stress.

The case is C.P. v. Blue Cross Blue Shield of Illinois and is being litigated by Counsel and Health Care Strategist Omar Gonzalez-Pagan, Chief Legal Officer Jennifer C. Pizer, and Director of Constitutional Law Practice Karen Loewy for Lambda Legal, and Eleanor Hamburger and Daniel Gross of Sirianni Youtz Spoonemore Hamburger PLLC, in Seattle, Washington.

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Read the court's summary judgment decision here: https://www.lambdalegal.org/in-court/legal-docs/cp_wa_20221219_order

Read the court's class certification decision here: https://www.lambdalegal.org/in-court/legal-docs/cp_wa_20221212_amended-order

Learn more about the case here: https://www.lambdalegal.org/in-court/cases/cp-v-bcbsil

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Original text here: https://www.lambdalegal.org/news/cp_wa_20221219_court-rules-that-bcbs-cannot-administer-health-plans-with-gender-affirming-exclusions