Health Law Daily Planned Parenthood wrongfully terminated from state Medicaid program
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Thursday, October 31, 2019

Planned Parenthood wrongfully terminated from state Medicaid program

By Cathleen Calhoun, J.D.

What were the court’s reasons for finding Planned Parenthood cannot be excluded from Medicaid?

The federal Court of Appeals for the Fourth Circuit affirmed a lower court ruling requiring the South Carolina Department of Health and Human Services (SCDHHS) to continue to reimburse Planned Parenthood South Atlantic (Planned Parenthood) for Medicaid services. SCDHHS had stopped reimbursement because Planned Parenthood provided abortion services, and not for any other reason. One of the plaintiffs, a Medicaid recipient, chose Planned Parenthood as her provider for birth control. In making its decision, the court found Congress’s intent to create an individual right enforceable under 42 U.S.C. §1983 in the free-choice-of-provider provision unambiguous, pointed to a plain-language reading of the provision’s mandate, and noted Supreme Court precedent (Planned Parenthood South Atlantic v. Baker, October 29, 2019, Wilkinson, J.).

Medicaid termination. Planned Parenthood offers family planning, reproductive health, and preventive care services to its patients, including Medicaid beneficiaries. Planned Parenthood performs abortions, but South Carolina Medicaid only covers abortions under limited circumstances required by federal law. On July 13, 2018, the governor of South Carolina issued an executive order instructing SCDHHS to terminate from Medicaid physicians and professional medical practices affiliated with abortion clinics. According to SCDHHS, Planned Parenthood’s termination was part of a plan by the governor that was designed to prevent the state from indirectly subsidizing abortion services. As a result, SCDHHS terminated Planned Parenthood from its Medicaid program.

Lower court ruling. On July 27, 2018, Planned Parenthood and the individual plaintiff (plaintiffs) filed suit in federal district court in South Carolina. The individual plaintiff brought suit on her own behalf and that of a purported class of South Carolina Medicaid beneficiaries who received, or would like to receive, healthcare services at Planned Parenthood. Plaintiffs brought the action under 42 U.S.C. § 1983, seeking injunctive and declaratory relief on the grounds that SCDHHS violated their rights under the Medicaid Act and the Fourteenth Amendment. Finding it likely that plaintiffs would succeed in proving that the SCDHHS violated the Medicaid Act (42 U.S.C. § 1396a(a)(23)) by terminating Planned Parenthood from its Medicaid program, a federal district court in South Carolina granted a preliminary injunction requiring SCDHHS to continue to reimburse Planned Parenthood for Medicaid services (see State wrongly terminated provider from Medicaid for abortions not paid for by state, August 29, 2018), and this appeal followed.

Analysis.The Fourth Circuit strongly agreed that Planned Parenthood should continue to receive Medicaid reimbursement. The court focused mainly on two reasons why the plaintiffs should prevail:

  1. The Medicaid Act’s free-choice-of-provider provision creates a private right enforceable under §1983. The court pointed out that the provision reads:
  2. A State plan for medical assistance must—provide that any individual eligible for medical assistance (including drugs) may obtain such assistance from any institution, agency, community pharmacy, or person, qualified to perform the service or services required (including an organization which provides such services, or arranges for their availability, on a prepayment basis), who undertakes to provide him such services…(42 U.S.C. § 1396a(a)(23)(A)).  “It is difficult to imagine a clearer or more affirmative directive,” the court said. Congress could have made an exception for providers offering abortion services, but it did not, the court added.
  3. "Qualified" should be given its plain meaning. The court noted that South Carolina focused on the word "qualified" in its argument that it could exclude Planned Parenthood. Focusing on that word in isolation, according to the court, ignored the reality that the word is part of an objective benchmark—qualified to perform the service or services required. Because the Medicaid Act does not define the term "qualified," the court considered its plain meaning—having an officially recognized qualification to practice as a member of a particular profession; fit, competent.

Conclusion. The court agreed with the district court that the individual plaintiff demonstrated a substantial likelihood of success on her free-choice-of-provider claim, since she has a private right of action to challenge South Carolina’s denial of her right to the qualified and willing family-planning provider of her choice. The court held that the district court did not abuse its discretion in enjoining South Carolina from terminating Planned Parenthood’s provider agreement. The court added that the plaintiff would suffer irreparable harm in the absence of a preliminary injunction. "Denial of her statutory right to select a qualified provider visits a tangible harm: diminished access to high-quality health care suited to the individual plaintiff’s needs," the court said.

The case is No. 18-2133.

Attorneys: Mary Malissa Burnette (Burnette Shutt & McDaniel, PA) for Planned Parenthood South Atlantic and Julie Edwards. Kelly McPherson Jolley (Jolley Law Group, LLC) for Joshua Baker.

Companies: Planned Parenthood South Atlantic

MainStory: TopStory CaseDecisions CMSNews CoPNews ExclusionsNews MedicaidNews MarylandNews NorthCarolinaNews SouthCarolinaNews VirginiaNews WestVirginiaNews

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