In a pair of rulings issued last month, a state appeals board ordered Medicaid to pay for two people to travel out of state to undergo sex-change operations. The state estimates the procedures, also known as sex-reassignment surgery, will cost $50,000 to $60,000 each.

"This is very controversial and in need of clarity," said state Medicaid director Doug Porter. "We've decided to make it real crystal clear that it's not a covered service."

But Porter said the state plans to continue covering other services — such as hormone treatment and psychotherapy — for people diagnosed with gender-identity disorders. State officials argue that those treatments are just as effective as surgery but are less risky and far less expensive.

"We understand this is a very real condition for some people," Porter said. "We just think psychotherapy and hormone treatment is a better way to go."

Many transgender people and medical experts who treat gender-identity disorders disagree. In some cases, they argue, surgery is the only effective treatment.

"It's the only thing that repairs our mental health and makes us feel whole and able to get back on track," said Lee, one of the two people who won on appeal last month. Lee is her middle name; she requested that her full name not be published.

Lee, 51, said she has been undergoing hormone treatment and living as a woman for the past six years. She is scheduled to undergo sex-change surgery this fall in Colorado.

Chris Daley, director of the California-based Transgender Law Center, said the state's plan to remove sex-reassignment surgery from its list of covered services is "pure politics and bad public policy."

Daley said there is evidence, including in Washington state, that people who undergo sex-change surgeries often are able for the first time to become productive members of society.

"We all understand the impulse to rein in costs," Daley said, "but there's no cost-benefit in denying necessary health care."

People with gender-identity disorder, also known as gender dysphoria, feel trapped inside a body of the opposite sex. The condition is often associated with other illnesses, including depression.

While gender-identity disorder has been recognized for more than two decades by the American Psychiatric Association, few government or private insurance programs pay for treatment.

Washington is one of very few states where sex-change surgeries have been covered by Medicaid, a state-federal program that provides health coverage for the poor and disabled.

Controversy erupted

Medicaid officials say the state has covered only six operations in Washington state during the past 15 years. Though those procedures made up a tiny portion of the surgeries covered by Medicaid, the issue caused a political uproar earlier this year.

After the state Auditor's Office revealed the state had paid for sex-change procedures, Republicans in the state Legislature tried unsuccessfully to impose a ban. And U.S. Sen. Charles Grassley, a high-ranking Republican from Iowa, said in a letter to Democratic Gov. Christine Gregoire that he was asking federal inspectors to look into the matter.

Even before the controversy erupted, however, state Medicaid officials were working on rules that classify sex-reassignment surgery as "experimental" and not eligible for coverage.

Medicaid officials say the state has paid for two sex-change surgeries since 2000, at a total cost of about $113,000.

In one of those cases, the state initially denied coverage for a woman who was seeking to become a man, even though several medical professionals had deemed the surgery "medically necessary." After that person appealed the denial, the state eventually agreed in a legal settlement to cover the surgery.

That person is now legally a man and, for the first time in two decades, is holding down a job and is no longer on public assistance.

Two years ago, as part of a broader shift to a new system for determining what services to cover, the state commissioned a report evaluating studies on the effectiveness of sex-change treatments.

The report — conducted by Hayes Inc., a health-care research company — concluded there is not enough evidence to show that sex-change surgery is any more effective than hormone treatment and psychotherapy.

"The evidence available to us today is that [surgery] is not medically necessary," Porter said.

2 denials overturned

Though the Hayes report has been sharply criticized by some medical experts, the state began using it as grounds for denying requests from people seeking coverage for sex-change surgeries.

So far, however, the state has not been able to make those denials stick.

Last month, the Department of Social and Health Services' Board of Appeals ruled in favor of Lee and another person seeking coverage for sex-change surgeries. The state has asked the board to reconsider its rulings; it can't appeal them in court.

Both cases involve men seeking to become women. Both suffer from depression and were backed by numerous medical professionals who said surgery would be best for them.

In both cases, the appeals judges said the clients had demonstrated that surgery is medically necessary.

The appeals judges also pointed out that sex-reassignment surgery is covered under current Medicaid regulations. And they noted that, at the time the surgeries were initially denied, the state had not yet gotten the Hayes report or switched to its new process for determining what to cover.

The state has three more requests pending from people seeking coverage for sex-change surgeries. All three have been denied and are on appeal.

Since all three requests were submitted under the state's new process based on the Hayes report, Medicaid officials think their denials are more likely to be upheld.

In the meantime, the state has begun rewriting the regulation that lists which services are and aren't covered under Medicaid. As part of that effort, Porter said the state plans to remove surgery as a covered treatment for gender-identity disorder.

The rewrite process, which includes a lengthy public-comment period, could take as long as nine months.

Ralph Thomas: 360-943-9882 or rthomas@seattletimes.com

More local news headlines...

Buy a link