Medicare Ordered to Consider Coverage for Sex-Change Surgery

May 30, 2014 3:45 pm ET

(Updates with comments from attorney in fourth paragraph.)

May 30 (Bloomberg) -- The U.S. Medicare program should cover the cost of sex reassignment surgery in some cases, an appeals board ruled today, overturning a long-held agency policy.

The ruling by the Departmental Appeals Board doesn’t require coverage of all sex reassignment surgeries. Instead, the program can determine whether the procedure is medically appropriate on a case-by-case basis.

Still, policies by Medicare, the $512 billion U.S. health plan for the elderly and disabled, are often followed by private insurers, potentially making the surgery more accessible to younger transgender Americans. The policy barring payments for the surgeries was based on “information compiled in 1981” that’s now obsolete, the appeals board said.

“Transgender and gender-variant people continue to face many barriers in seeking health services,” Amy Nelson, a supervising attorney at Whitman-Walker Health, a clinic in Washington, said in a statement. “Insurance coverage decisions should be consistent with science, and for far too long, that has not been the case.”

The clinic serves more than 700 transgender people and about 5 percent of them are enrolled in Medicare, it said.

Contractors who administer Medicare “may cover this care case-by-case or under a local coverage determination based on clinical evidence to determine medical appropriateness,” said Aaron Albright, an agency spokesman, in an e-mail.

The beneficiary who contested the policy was identified by the Associated Press as Denee Mallon of Albuquerque, New Mexico, a 74-year-old Army veteran. Mallon won the appeal after a physician’s order for the surgery was denied. Six advocacy groups for transgender people backed Mallon in the appeal, according to the decision, which didn’t identify the complainant or say when the surgery was sought.

Medicare didn’t challenge the appeal, which began a year ago, according to the decision.