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Texas Transgender ‘Abuse’ Policy Portends Biden Investigation

March 10, 2022, 10:40 AM

The administration has just two options to stop Texas from investigating families for child abuse if they are suspected of seeking gender-affirming care for transgender children—pulling federal health funding or suing the state.

Attorneys say both options are likely being discussed at the Departments of Justice and Health and Human Services, especially in light of strong statements and guidance opposing the state’s actions by President Joe Biden and his agencies March 2.

A Texas judge last week issued an injunction against the state’s child protective services agency temporarily blocking it from investigating the parents of a transgender teen for alleged child abuse.

Opponents of the Texas policy are waiting for more federal actions. New York Attorney General Letitia James called on the DOJ Wednesday to investigate Texas Gov. Greg Abbott’s policy.

Advocates and former HHS officials said the likely road for the administration is an HHS or DOJ investigation and possible DOJ involvement in the ongoing litigation. Withdrawal of federal health funds for an entire state agency is possible, but it would be a “nuclear option,” said Leon Rodriguez, who ran the HHS’s Office of Civil Rights (OCR) under President Barack Obama. He’s now a partner as Seyfarth Shaw LLP.

The OCR enforces Section 1557 of the Affordable Care Act, which “prohibits discrimination on the basis of race, color, national origin, sex, age, and disability in covered health programs or activities.” It typically handles complaints about actions of individual health providers or hospitals. It rarely uses its enforcement power against an entire state’s policy.

“Short of litigating or initiating funding removal or withdrawal proceedings, there’s not a whole lot in their toolkit,” said Joseph Wardenski, a former DOJ civil rights attorney.

A supporter of Texas’s authority says the Biden administration is going too far by including transgender issues in the ACA’s nondiscrimination clause. “I see no basis for them to be able to enforce Section 1557 against any state by reinterpreting sex to cover something that is not in the statute, which is what it sounds like they’re trying to,” said Roger Severino, former Trump administration OCR director. “They’re on thin ice in their announcement suggesting they have an authority that is actually blocked by court injunctions.”

But, other observers like Katie Keith, director of the health policy and the law initiative at Georgetown Law’s O’Neill Institute, pointed out that the injunctions are fairly narrow and only applied to specific plaintiffs.

“I suspect the Administration is carefully weighing what else they can do and how quickly they can do it, looking for the widest positive impact while not creating challenges in other lawsuits,” Laura Durso, who was OCR chief of staff until earlier this year, said in an email.

The HHS actions thus far “made crystal clear that any enforcement of this policy violates multiple federal laws. In addition, HHS also mobilized its own law enforcement arm and invited parents who are targeted by this policy to bring individual complaints to HHS,” said Shannon Minter, legal director for the National Center for Lesbian Rights.

Gender-affirming care for children with gender dysphoria often includes puberty blocking drugs, which are reversible. Sex hormone treatment isn’t recommended until around the age of 16, when a minor has the mental capacity to give informed consent, under the Endocrine Society’s medical guidelines. And genital surgeries aren’t recommended, and typically aren’t available, until a patient has reached the age of 18.

Call for Complaints

HHS Secretary Xavier Becerra put out a rare call March 2 asking people in Texas to file complaints if they believe they were “being targeted by a child welfare investigation because of this discriminatory gubernatorial order.”

This is the “clearest invitation I’ve ever seen to a marginalized population to file complaints,” said Matthew Cortland, a senior resident fellow at Data for Progress working on disability and health care.

Getting these complaints would not only help the agency investigate allegations of federal law violations, but it could also help the agency as it prepares to come out with a new 1557 regulation.

Severino said a new regulation is the OCR’s only option. “The only way I see for HHS to do anything in enforcement on gender identity is to pass a new regulation that would have to be upheld in court.”

Regulations from both the Obama administration and Trump administration implementing Section 1557 are still tied up in court. Those court cases found that the word “sex” could not be interpreted to include gender identity in the regulations. However, the Biden administration announced in May 2021 that it would interpret “sex” in the statute itself to include gender identity in light of the Supreme Court’s finding in Bostock v. Clayton County.

Complaint data “would give OCR more of a record to come out more strongly in rulemaking if they got a bunch of complaints,” said Keith. That could lead to policies that “more directly combat” the actions by Texas and others like it.

Once the agency receives a complaint, it can investigate. If the OCR finds a civil rights violation occurred, it can file a complaint with an HHS administrative law judge. If the judge finds a violation, the HHS then has the authority to order various streams of federal funding be withheld, said Rodriguez.

The option to remove federal funds has “almost never been used. We only used it once during the time that I was director,” and that was against an individual, he said

What “makes it a really brutal penalty is that it’s everything. So there’s no sliding scale here, there’s no sentencing guidelines. This is a 100% withhold if it is implemented,” Rodriguez said.

Lawsuit Involvement

The Biden administration could get involved in one other major way—a lawsuit.

The DOJ is probably waiting to see what happens in the Texas courts before getting involved. The existing case, backed by the ACLU and Lambda Legal, is going well so far for the plaintiffs, Wardenski said.

“Part of why the guidance OCR released is so powerful is that every move they make on this issue is heavily scrutinized and will brought up in court,” Durso said.

The DOJ could also file a statement of interest in this case, like it did in Arkansas when the state passed a law prohibiting gender-affirming care for transgender children, Keith said

The ACLU will be able to use the HHS guidance in its case, Cortland said. “HHS clearly staked out a position that providing supportive medical care to trans children is not abuse.”

To contact the reporter on this story: Shira Stein in Washington at sstein@bloomberglaw.com

To contact the editor responsible for this story: Fawn Johnson at fjohnson@bloombergindustry.com