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A Texas Court Ruled Providers Can Discriminate Against Trans People and Those Seeking Abortion Care. Here’s What’s Next.


Last week, Judge Reed O’Connor of the United States District Court of the Northern District of Texas issued a final order regarding the non-discrimination provision of the Patient Protection and Affordable Care Act (ACA) — and it affects LGBTQ people as employees, contractors, and even as patients trying to access care. The non-discrimination provision of the ACA, Section 1557, has been under attack by the Trump administration with a proposed regulatory change that would severely limit the expansive interpretation of “sex-based” discrimination in health care that the Obama administration put in place.

How the ACA Tried to Expand Protections for Trans People in Health Care

When the ACA (also known as Obamacare) was passed in 2010, it included a section of the law, section 1557, which prohibits any covered entity receiving funds from the department of Health and Human Services (HHS) from discriminating against patients or employees on the basis of race, color, national origin, sex, age, or disability in certain health programs or activities. Covered entities would have included any entity receiving funds from HHS, impacting contractors, hospitals, education institutions, every major insurer in the United States, and more.

In May 2016, two years after the full law went into effect, the Obama administration issued a rule that clarified the intent of Section 1557, explaining that by “sex,” they intended to include LGBT individuals in that definition. The rule particularly discussed the impact of discrimination against transgender people in health care that it was attempting to correct. The Obama administration’s interpretation of Section 1557 was a game changer in favor of equitable access to health care.

On December 31, 2016, one day prior to implementation of the final rule, O’Connor issued a nationwide injunction against the Obama administration to stop it from enforcing the policy. The judge did this at the request of eight states, a group of medical providers known as the Franciscan Alliance, the Christian Medical and Dental Associations, and Specialty Physicians of Illinois. The case, referred to as Franciscan Alliance v. Burwell, claimed the Obama administration overstepped its procedural authority when HHS issued the final rule, by usurping the authority of the states. It also argues that the requirement that covered entities justify their refusal to comply is a burden on their free exercise of religion and/or an invasion by the government in provider conscience, when forced to provide quality care in the context of transition-related care or abortion.

After Donald Trump assumed the presidency and appointed Tom Price and Jeff Sessions as secretaries of HHS and the Department of Justice, respectively, the position of the United States government flipped from defending this expansive view of “sex-based” discrimination to supporting a narrow definition — and the federal government stopped defending the rule. In February 2017, the federal government stated an intention to rewrite the regulatory interpretation and rules for applying the law. The Trump administration did not issue a proposed rule until May 2019. Tuesday’s ruling moves the case forward.

In O’Connor’s Ruling, Provider Rights Matter More Than Patients

O’Connor issued the ruling because he viewed the Trump administration’s slow movement to issue a proposed regulatory interpretation change as inadequate to address Franciscan Alliance’s claims of infringement on their religious expression and provider conscience rights. The required open-comment period for the proposed rule closed on August 13. A new final rule has not yet been issued.

The ruling formalizes the injunction O’Connor issued on December 31, 2016, preventing the federal government from enforcing requirements to provide language-inclusive notifications and signage, protect people with abortion and pregnancy histories, not discriminate against people of transgender identity, and prevent the use of genetic information to deny coverage or care. The ruling did not, however, change the exceptional finding that the Obama administration sought to curb — that discrimination was so rampant that no federal agency could be the only source of relief. Patients have an individual “right of private action,” or the ability to seek legal remedy by way of court intervention. Patients are still able to seek legal recourse when experiencing provider or insurer discrimination, so long as the provider or insurer offers the same or a similar type of care or coverage to similarly situated patients.

The American Civil Liberties Union (ACLU) of Texas and the River City Gender Alliance, in a joint amicus brief, argued that because Franciscan Alliance had not yet been able to prove they were “damaged” under the rule, the Religious Freedom Restoration Act (RFRA) claim could not be proven. O’Connor rejected that position, citing the Supreme Court decision in the Hobby Lobby case. O’Connor argued that the government needed to protect its interest (protecting transgender people and those seeking abortion services) with the “least restrictive means” to the entities who’s so-called religious freedom would be impinged upon by serving those patients.

O’Connor ruled that the least restrictive protection of those seeking transition-related care and abortion services would be to create a government-run resource list and to direct patients seeking those types of care to those providers. While not a bad idea, the argument does not address an environmental lack of providers and coverage of these services when discrimination is allowed to run rampant. Texas leaves much wanting in terms of accessible abortion services, with only 12 abortion services providers in the state, according to the National Abortion Federation. The U.S. Transgender Survey found substantial discrimination experienced by trans people in health care in Texas. The ACLU and Gender Alliance argued, that the government’s interest is an equitable health care environment for all Americans, particularly those most vulnerable to discriminatory practices.

An interesting provision of the Obama final rule was a scope that included employer-sponsored plans held by insurance companies receiving funds from HHS, grantees and contractors of HHS, and education entities funded by HHS — which meant institution-sponsored student health plans also had to provide similar coverage, and these entities could not discriminate in employment practices. The rule intersected with Title VII and Title IX. And because the rule was issued by HHS, the court found the rule’s expansiveness a violation of the Administrative Procedures Act.

O’Connor did not make a ruling on issues of Title VII and Title IX, despite Franciscan Alliance requesting this. The court also refused to rule on the Spending Clause, First Amendment, Tenth Amendment, and Eleventh Amendment claims. Rather, O’Connor simply moved to eliminate the sections of the rule applying to abortion and gender identity — essentially attempting to strike the affected portions of the rule from the federal register.

If the name of the judge sounds familiar, it should. Reed O’Connor has made his career as one of the most conservative jurists in the nation and was likely shopped for this case by the Franciscan Alliance legal team. In 2015, prior to the Supreme Court ruling in favor of marriage equality, O’Connor ruled that the Family Medical Leave Act (FMLA) did not apply to same-sex couples. In August 2016, O’Connor issued an injunction preventing the implementation of an Obama-era Title IX guidance protecting transgender children in education. Additionally, O’Connor is the same judge that has inexplicably found the entire ACA “unconstitutional” and, earlier this year, found the Indian Child Welfare Act is unconstitutional.

On the Franciscan Alliance case, an appeal will likely be filed. Once an appeal is filed, the case will move to the 5th circuit court. Thus far, no circuit court has ruled against the Obama-era interpretation of Section 1557. The Supreme Court does not typically hear a case unless and until different circuit courts make conflicting rulings.

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