Health Reform WK-EDGE State wrongly terminated provider from Medicaid for abortions not paid for by state
Thursday, September 6, 2018

State wrongly terminated provider from Medicaid for abortions not paid for by state

By David Yucht, J.D.

Finding it likely that Planned Parenthood South Atlantic (Planned Parenthood) and one of its patients would succeed in proving that the South Carolina Department of Health and Human Services (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. SCDHHS could not terminate Planned Parenthood for performing abortions when its inclusion in South Carolina’s Medicaid program did not result in direct or indirect use of state funds to pay for abortions (Planned Parenthood South Atlantic v. BakerAugust 28, 2018, Lewis, M.).

Termination from Medicaid. Planned Parenthood offers its patients, including Medicaid beneficiaries, family planning, reproductive health, and preventive care services. Planned Parenthood performs abortions at its South Carolina facilities, but South Carolina Medicaid does not cover abortions except 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. Consequently, SCDHHS terminated Planned Parenthood from its Medicaid program. Seeking declaratory and injunctive relief, Planned Parenthood and one of its Medicaid beneficiary patients sued alleging violations of the Medicaid Act as well as the Fourteenth Amendment of the Constitution. Shortly thereafter, Planned Parenthood and the patient filed a motion for a temporary restraining order and preliminary injunction.

Likelihood of success on the merits. The court determined that the patient in this case demonstrated a likelihood of success on the merits. As a preliminary matter, the court found that § 1396a(a)(23)(A) conferred a private right of action enforceable through a Civil Rights Action under 42 U.S.C. § 1983. Section 1396a(a)(23)(A) provides "any individual eligible for medical assistance…may obtain such assistance from any institution." The court held that this statutory language unambiguously conferred a right upon Medicaid-eligible patients, such as the patient in this case, which was neither vague nor amorphous.

The court also determined that there was no need for the patient in this case to exhaust state administrative remedies prior to filing suit. Unless there is a Congressional mandate otherwise, an individual bringing a § 1983 action does not have to exhaust state administrative remedies prior to suing in federal court. The Medicaid Act contained no provision explicitly requiring the exhaustion of state administrative remedies prior to bringing a § 1983 suit and the court did not interpret the Medicaid Act as implicitly requiring exhaustion. The court further held that even if there were a requirement to exhaust state administrative remedies, the failure to do so would be excused under these circumstances because the pursuit of an administrative appeal before SCDHHS would be futile given the clear directive in the Governor’s executive order.

Moreover, the court found that because the patient was an "individual eligible for medical assistance" and Planned Parenthood was "qualified" to perform the services, it was likely that the patient here would eventually prevail on her claims. SCDHHS argued that pursuant to § 1396a(p)(1) it could exclude Planned Parenthood from its Medicaid program for any reason established by state law. Consequently it could terminate Planned Parenthood from Medicaid because Planned Parenthood performs abortions and S.C. Code Ann. § 43-5-1185 mandates that "State funds appropriated for family planning must not be used to pay for abortions." The court was not impressed with this argument because Planned Parenthood’s inclusion in South Carolina’s Medicaid program does not result in direct or indirect use of state funds to pay for abortions. Also, the court rejected SCDHHS’s "implication" that § 1396a(p)(1) allowed a state to terminate a Medicaid provider for any reason supported by state law.

Irreparable harm-balance of equities-public interest. The court concluded that the patient would suffer irreparable harm in the absence of a preliminary injunction because she would be deprived of her statutory right to select the qualified and willing medical care provider of her choice. Finding that SCDHHS would suffer no harm if injunctive relief were granted but simply have to continue to reimburse Planned Parenthood for Medicaid services as it had done previously, the court held that the balance of the equities favored the patient. Granting this injunction would serve the public interest by preserving the statutory right of Planned Parenthood Medicaid patients to have the qualified provider of their choice and ensuring affordable access to competent health care by some of South Carolina’s neediest citizens.

The case is No. 3:18-cv-02078-MGL.

Attorneys: Kathleen McColl McDaniel (Burnette Shutt & McDaniel, PA) for Planned Parenthood South Atlantic. Kelly M. Jolley (Jolley Law Group LLC) for Joshua Baker.

Companies: Planned Parenthood South Atlantic

MainStory: TopStory CaseDecisions NewsFeed AccessNews ContraceptionCoverageNews MedicaidNews SouthCarolinaNews

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