Details for Department of Health Services (Legal Counsel) - Ad from 2021-01-13

Office of Legal Counsel
F-02318 (12/2018)
The Wisconsin Department of Health Services (the “department”) proposes an order
to repeal DHS 107.03 (23) and (24), and DHS 107.10 (4) (p), relating to Medicaidcovered services.
Preservation of the public peace, health, safety, or welfare necessitates adoption of an
emergency rule prior to the time it would take to promulgate an equivalent permanent
rule. Exclusions in ss. DHS 107.03 (23) and (24) and DHS 107.10 (4) (p) were ruled
unconstitutional and unenforceable by a federal district court. However, it is likely that
certain Medicaid beneficiaries are failing to seek or receive critical treatment because
the rule provisions excluding this coverage have not yet been repealed.
Statute interpreted
Not applicable.
Statutory authority
Section 49.45 (1) and (2), 227.11 (2) (a), Stats.
Explanation of agency authority
The Medicaid program is jointly funded with federal and state dollars. There are
numerous federal requirements that states must meet in order to receive funding.
Under 42 CFR 431.10, two primary requirements are to (1) designate a single state
agency to administer the state’s Medicaid program, and (2) have that agency develop
a state Medicaid plan which sets forth how the Medicaid program will be administered.
Section 49.45 (1), Stats., designates the department as the state agency responsible for
administering the Medicaid program in Wisconsin. In accordance with this framework,
the legislature has expressly directed the department to administer and supervise
the Medicaid program in order to provide appropriate health care for eligible persons.
Within certain parameters, agencies are authorized to promulgate rules interpreting
provisions of any statutes they enforce or administer.
Related statute or rule
U.S. CONST. amend. XIV, s. 1; 42 USC s. 18116.
Plain language analysis
The department proposes to repeal s. DHS 107.03 (23) and (24) which, respectively,
exclude Medicaid coverage for “[d]rugs, including hormone therapy, associated
with transsexual surgery or medically unnecessary alteration of sexual anatomy or
characteristics” and “transsexual surgery.” The department also proposes to repeal
DHS 107.10 (4) (p), which reiterates that drugs related to the excluded services in s.
DHS 107.03 (23) and (24) are non-covered services.
The basis for the proposed repeal is Flack v. Wis. Dep’t of Health Servs., 395 F. Supp.
3d 1001 (W.D. Wis. 2019), in which the United States District Court for the Western
District of Wisconsin concluded that the challenged exclusions in ss. DHS 107.03 (23)
and (24) and 107.10 (4) (p) violated the federal Medicaid Act and the Equal Protection
Clause of the Fourteenth Amendment to the United States Constitution. Based on
those conclusions, the court permanently enjoined the department from enforcing the
exclusions in ss. DHS 107.03 (23) and (24) and DHS 107.10 (4) (p).
There are no reasonable alternatives to the proposed repeal, and these exclusions
must be repealed in order to ensure that the department complies with the district
court’s permanent injunction, and to ensure consistency between department policy
and its rule so that the public is aware that Medicaid coverage is available for the
currently-excluded services.
Summary of, and comparison with, existing or proposed federal regulations
There are no existing or proposed federal regulations that directly address activities to
be regulated under Medicaid laws. However, 42 USC s. 18116 makes it unlawful for any
health program or activity that receives funding from the federal government to refuse to
treat an individual, or otherwise discriminate against the individual, on the basis of race,

color, national origin, sex, age, or disability.
Comparison with rules in adjacent states
Ill. Admin. Code tit. 89, § 140.6 provides that the state’s Medicaid program does
not cover “medical or surgical transsexual treatment, for dates of service prior to
April 1, 2015.”
Iowa Admin. Code r. 441-78.1(4) excludes sex reassignment surgeries and
“procedures related to transsexualism . . . [and] gender identity disorders” from
coverage for state Medicaid. However, in 2019, the Supreme Court of Iowa held that
this rule was unconstitutional and in violation of the Iowa Civil Rights Act. Good v.
Iowa Dept. of Human Servs, 924 N.W.2d 853 (Iowa 2019).
The Michigan Medicaid Provider Manual contains a nondiscrimination provision
consistent with the nondiscrimination provision in Section 1557 of the Affordable
Care Act.
Minn. R. 9505.0020 lists services not covered by state Medicaid, and transsexual
surgery and related drugs are not included in the list of services not covered.
Summary of factual data and analytical methodologies
No factual data or analytical methodologies were relied upon. This repeal is based on
a federal court’s order permanently enjoining the Department from enforcing ss. DHS
107.03(23) to (24) and DHS 107.10 (4) (p).
Analysis and supporting documents used to determine effect on small business
The department published a notice in the Administrative Register which requested
comments on the economic impact on the proposed rule. The economic impact
commenting period ran from May 26, 2020 to June 9, 2020.
Effect on small business
The proposed rule will not affect small businesses.
Agency contact person
Mark R. Thompson
Attorney, Office of Legal Counsel
608) 267-1279
Statement on quality of agency data
As provided in the “summary of factual data and analytical methodologies,” no data was
used for this proposal rule section repeal.
Place where comments are to be submitted and deadline for submission
Comments may be submitted to the agency contact person that is listed above until
the deadline given in the upcoming notice of public hearing. The notice of public
hearing and deadline for submitting comments will be published in the Wisconsin
Administrative Register and to the department’s website, at https://www.dhs.wisconsin.
gov/rules/permanent.htm. Comments may also be submitted through the Wisconsin
Administrative Rules Website, at:
SECTION 1. DHS 107.03 (23) and (24) are repealed.
SECTION 2. DHS 107.10 (4) (p) is repealed.
SECTION 3. EFFECTIVE DATE. As provided in s. 227.24 (1) (c), Stats., this emergency
rule shall take effect upon publication in the official state newspaper. It shall remain in
effect for the time provided in s. 227.24 (1) (c), Stats., and, if applicable, s. 227.24 (2),
PUB: WSJ: January 13, 2021
#34262-1 WNAXLP