Sixth Circuit Okays Tennessee's Ban on Gender-Affirming Care for Minors

Last March, Tennessee's legislature enacted a statute that bars healthcare providers from providing gender-affirming surgeries and administering hormones or puberty blockers to transgender minors. More specifically, a healthcare provider may not "administer or offer to administer" "a medical procedure" to a minor "for the purpose of" either "[e]nabling a minor to identify with, or live as, a purported identity inconsistent with the minor's sex," or "[t]reating purported discomfort or distress from a discordance between the minor's sex and asserted identity." With a few exceptions, prohibited medical procedures include "[s]urgically removing, modifying, altering, or entering into tissues, cavities, or organs" and "[p]rescribing, administering, or dispensing any puberty blocker or hormone." Tennessee's Attorney General is authorized to enforce these provisions, and it creates a private right of action for an injured minor or nonconsenting parent to sue a healthcare provider for violating the law.

The law was scheduled to go into effect on July 1, 2023. In April, three transgender minors, their parents, and a physician sued several state officials, asserting that the statute violated the due process and equal protection guaranteed by the U.S. Constitution, and sought an injunction of the law's prohibitions on hormone therapy and surgery. On June 28, 2023, the U.S. District Court for the Middle District of Tennessee granted the motion, in part, finding that the plaintiffs lacked standing to challenge the ban on surgeries, but concluded that the ban on hormone treatments and puberty blockers violated due process (by infringing on parents' fundamental right to direct the medical care of their children) and equal protection (by improperly discriminating on the basis of sex and because transgender persons constitute a quasi-suspect class and Tennessee could not satisfy the necessary justifications that come with this designation). The district court issued a statewide preliminary injunction; Tennessee appealed and sought a stay before the Sixth Circuit.

The Sixth Circuit stayed the preliminary injunction and temporarily gave Tennessee permission to enforce the law while the appeal of the district court's ruling proceeds. In a 2-1 decision, Chief Judge Jeffrey Sutton wrote, on behalf of himself and Judge Amul Thapar, that the preliminary injunction was too broad because it prohibited Tennessee from enforcing the law against the plaintiffs as well as "the other seven million residents of the Volunteer State." Addressing two of the four factors underlying a stay pending appeal, the panel also determined that (1) the plaintiffs were unlikely to prevail on their equal protection and due process claims, and (2) Tennessee "will suffer irreparable harm from its inability to enforce the will of its legislature, to further the public-health considerations undergirding the law, and to avoid irreparable health risks to its children." The panel held that "[l]ife-tenured federal judges should be wary of removing a vexing and novel topic of medical debate from the ebbs and flows of democracy by construing a largely unamendable federal constitution to occupy the field." Further, pointing to "the recent proliferation of legislative activity across the country" on gender-affirming care and the "high stakes of these nascent policy deliberations," the panel concluded that "sound government usually benefits from more rather than less debate," and that "silencing" legislatures on one side of the debate under the U.S. Constitution did not further such goals.

The panel recognized that other courts have taken different approaches to the issues and that several district courts have addressed similar laws in other States and assessed them in much the same way as the district court did here. But those perspectives did not "eliminate [the panel's] doubts about the ultimate strength of the challengers' claims." Judge Helene White wrote separately, concurring in part and dissenting in part; she "believe[s] that Tennessee's law is likely unconstitutional based on Plaintiffs' theory of sex discrimination," and, although she would not stay the district court's injunction, she would narrow its scope. Because the Court had only one week to resolve Tennessee's stay motion, the panel acknowledged it might not have had enough time "to see [its] own mistakes." It elected to expedite the appeal of the preliminary injunction and aims to resolve the appeal no later than September 30, 2023.

Tri-Agency FAQs Address Annual Limits and Facility Fees Under No Surprises Act

On July 7, 2023, the U.S. Departments of Labor (DOL), Health and Human Services (HHS), and the Treasury (collectively, the Departments) issued a new set of Frequently Asked Questions (FAQs) related to the No Surprises Act (NSA): FAQs About Affordable Care Act and Consolidated Appropriations Act, 2021 Implementation Part 60. The first FAQ addresses differences in terminology used in the Affordable Care Act (ACA) and NSA when dealing with maximum out-of-pocket (MOOP) determinations under ACA § 1302(c)(1). The guidance states that cost sharing for services provided by "participating providers" under the NSA is considered "in-network" cost sharing for purposes of the MOOP limit and cost sharing for services provided by "nonparticipating providers" under the NSA is considered "out-of-network" cost sharing for purposes of the MOOP limit. The guidance further notes that under the NSA, a plan or issuer must count any cost sharing payments made by the participant, beneficiary, or enrollee with respect to certain services subject to the surprise billing protections of the NSA toward any in-network deductible or in-network out-of-pocket maximums (including the MOOP limit). 

FAQ 2 clarifies that a plan or issuer cannot treat a facility or provider, including an air ambulance provider, with whom it has a contract but whom it considers not part of its network, as "out-of-network" for purposes of MOOP limits under the ACA. 

If a plan or issuer has a direct or indirect contractual relationship with a provider, facility, or provider of air ambulance services that sets forth the terms and conditions on which a relevant item or service is provided to a participant, beneficiary, or enrollee under the plan or coverage, the provider, facility, or provider of air ambulance services is considered participating for purposes the No Surprises Act and is also considered in-network for purposes of the MOOP limit under PHS Act section 2707 and ACA section 1302(c).

This guidance closes a potential loophole created by prior regulations and guidance that stated that if a plan includes a network of providers, the plan may, but is not required to, count an individual's out-of-pocket spending for out-of-network items and services toward the MOOP limit.

The FAQs also discuss how facility fees should be handled under the Departments' Transparency in Coverage (TiC) final rules issued in 2020 and the transparency provisions of the NSA. These laws and regulations require plans and issuers to maintain online price comparison tools and issue advanced explanation of benefits (AEOB) to participants after receiving good faith estimates (GFE) from providers and facilities. The new guidance states that facility fees, which may be charged by providers and facilities outside of hospital settings, are covered by the TiC price comparison and NSA GFE requirements. The Departments indicate that facility fees will be addressed in future proposed rules, and they urge providers and facilities to minimize the burdens on participants and beneficiaries created by these fees.

In the News

On July 7, 2023, Miller & Chevalier issued an EB Flash addressing the Tri-Agency Notice of Proposed Rulemaking on short-term limited-duration insurance (STLDI). The proposed rule would limit STLDI to an initial contract period of no more than three months and the maximum coverage period to no more than four months and would more clearly differentiate STLDI from comprehensive ACA coverage. Comments on the proposal are due September 11, 2023.

Upcoming Speaking Engagements and Events

Joanne Roskey and Anthony Shelley will present, "Discussion with EBSA: Enforcement & Regulatory Priorities Impacting Health Plans," at the BCBS 2023 Law, Audit, Compliance & Ethics Conference on August 9, 2023.

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