Obamacare LGBTQ+ Discrimination Clause Could Cause Circuit Split

Sixth Circuit judges grappled Wednesday with whether two groups representing conservative doctors should have a chance to challenge an antidiscrimination provision of the Affordable Care Act that they say threatens their religious liberty, in a case that presents the possibility of a circuit split.

The judges grilled attorneys on both sides on a range of topics related to the care of transgender people, though standing for the two groups—the American College of Pediatricians and the Catholic Medical Association—was the issue of the day for the oral argument, which went more than 10 minutes past the allotted time. Two other federal appeals courts have already ruled on the issue.

Senior US Circuit Judge Danny J. Boggs, for example, asked the doctors’ attorney Christopher P. Schandevel whether he objected “to the general principle of nondiscrimination” in a scenario where a transgender person seeks care for a routine issue like strep throat.

Schandevel, of the conservative legal group Alliance Defending Freedom, said the groups have made clear that its doctors treat people in those circumstances.

US Circuit Judge Chad A. Readler was more blunt, asking Justice Department attorney McKaye L. Neumeister what is enough to demonstrate the conservative groups “have standing from an enforcement perspective?”

Tennessee Litigation

Wednesday’s oral argument was the next step in litigation that originated in Tennessee over whether the Health and Human Services Department would enforce the ACA’s antidiscrimination provision against doctors who cite their religious beliefs as a reason to deny gender-affirming care.

The department says it hasn’t threatened to enforce the provision against the groups, and in fact has said it won’t require doctors to provide care they object to on religious grounds. The agency will respect the providers’ rights under the Religious Freedom Restoration Act, it said.

The conservative groups, however, say the threat of enforcement or loss of federal money is too great and wants to enjoin the federal government from enforcing the provision.

The controversy dates to 2016, when the Obama administration adopted a rule implementing the ACA’s Section 1557 to make clear that it bars discrimination against people based on their sexual orientation or gender identity.

The Trump administration rolled back the rule in 2020, saying Section 1557 didn’t prohibit doctors from refusing to provide care to LGBTQ+ people. In 2022 the HHS under Biden announced a notice of proposed rulemaking that treated gender-identity and sexual-orientation discrimination as actionable under Section 1557.

This lawsuit, however, presented a pre-enforcement challenge, and the groups didn’t sufficiently allege that they face a credible threat of enforcement, US District Judge Travis R. McDonough of Tennessee said in November 2022. The claim that they’ll be subject to HHS action is purely speculative, he said.

The Sixth Circuit applies a strict test to determine standing, McDonough said. A “mere possibility” of enforcement isn’t enough, he said, ruling that a plaintiff suffers an injury in fact only when there is a “certainly impending” injury.

Potential Circuit Split

If upheld, the decision will result in a circuit split on the prerequisites required to demonstrate standing, with the Fifth and Eighth Circuit saying that conservative medical groups faced a credible threat that the government would take action against them for violating the provision, the groups said.

And Judge Matthew Kacsmaryk of Texas in November 2022 enjoined HHS from acting on its 2021 interpretation of the rule. That case, which didn’t raise a RFRA argument, is on appeal to the Fifth Circuit and will be argued in early January.

Schandevel said at the outset of Wednesday’s oral argument that “the federal government’s radical interpretation of Section 1557’s prohibition on sex discrimination threatens to drive thousands of conscientious medical providers out of the practice of medicine altogether.” He later said that his clients don’t have to show “literal certainty” that the provision will be enforced against them to have standing.

Neumeister argued otherwise.

“At this point in time there isn’t a substantial risk of enforcement against these plaintiffs for any of these practices that they have identified,” she said.

The case is Am. Coll. of Pediatricians v. Becerra, 6th Cir., No. 23-5053, oral argument 12/6/23.

—With assistance from Mary Anne Pazanowski.