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Planned Parenthood Arizona Incorporated v. Betlachl

United States Court of Appeals, Ninth Circuit

August 22, 2013

Planned Parenthood Arizona Incorporated; Unknown Parties, named as Jane Doe #1, Jane Doe #2, and Jane Doe #3; Eric Reuss, M.D., Plaintiffs-Appellees,
v.
Tom Betlach, Director, Arizona Health Care Cost Containment System; Tom Horne, Attorney General, Defendants-Appellants. Planned Parenthood Arizona Incorporated; Unknown Parties, named as Jane Doe #1, Jane Doe #2, and Jane Doe #3; Eric Reuss, M.D., Plaintiffs-Appellees,
v.
Tom Betlach, Director, Arizona Health Care Cost Containment System; Tom Horne, Attorney General,

Argued and Submitted June 12, 2013—San Francisco, California

Appeal from the United States District Court for the District of Arizona Neil V. Wake, District Judge, Presiding D.C. No. 2:12-cv-01533-NVW

Logan Johnston, Johnston Law Offices, PLC, Phoenix, Arizona, for Defendant-Appellant Tom Betlach.

Steven H. Aden (argued) and Catherine Glenn Foster, Alliance Defending Freedom, Washington, D.C.; Robert Lawrence Ellman, Arizona Attorney General's Office, Phoenix, Arizona, for Defendant-Appellant Tom Horne.

Andrew D. Beck and Susan Talcott Camp, American Civil Liberties Union Foundation, New York, New York; Alice J. Clapman (argued), Planned Parenthood Federation of America, Washington, D.C.; Roger Evans, Planned Parenthood Federation of America, New York, New York; Kelly Joyce Flood and Daniel J. Pochoda, ACLU Foundation of Arizona, Phoenix, Arizona; Daniel B. Pasternak and Laurence J. Rosenfeld, Squire Sanders LLP, Phoenix, Arizona, for Plaintiffs-Appellees.

Denise Mary Burke, Americans United for Life, Washington, D.C., for Amicus Curiae 29 Arizona Senators, Representatives, and Representatives-Elect.

Lawrence John Joseph, Law Office of Lawrence J. Joseph, Washington, D.C., for Amicus Curiae Eagle Forum Education & Legal Defense Fund.

Alisa Beth Klein and Mark B. Stern, Appellate Staff, United States Department of Justice, Civil Division, Washington, D.C., for Amicus Curiae United States of America.

Before: Marsha S. Berzon and Jay S. Bybee, Circuit Judges, and Consuelo B. Marshall, Senior District Judge. [*]

SUMMARY [**]

Civil Rights

The panel affirmed the district court's summary judgment and permanent injunction, and also dismissed an appeal of the district court's preliminary injunction, in this action challenging an Arizona statute that bars patients eligible for the state's Medicaid program from obtaining covered family planning services through health care providers who perform abortions in cases other than medical necessity, rape, or incest. See Ariz. Rev. Stat. § 35-196.05(B).

The panel held that the Medicaid Act's free-choice-of-provider requirement, 42 U.S.C. § 1396a(a)(23), confers a private right of action under 42 U.S.C. § 1983. The panel then held that the Arizona statute contravenes the Medicaid Act's requirement that states give Medicaid recipients a free choice of qualified provider. The panel held that the Arizona law violates this requirement by precluding Medicaid patients from using medical providers concededly qualified to perform family planning services to patients in Arizona generally, solely on the basis that those providers separately perform privately funded, legal abortions.

The panel dismissed Arizona's appeal from the district court's preliminary injunction on the grounds that the district court's entry of final judgment and a permanent injunction mooted the appeal.

OPINION

BERZON, Circuit Judge:

An Arizona statute bars patients eligible for the state's Medicaid program from obtaining covered family planning services through health care providers who perform abortions in cases other than medical necessity, rape, or incest. See Ariz. Rev. Stat. § 35-196.05(B). Such abortions are already ineligible for Medicaid coverage and so must be paid for with private funds. The Arizona law extends the ineligibility to non-abortion services such as gynecological exams and cancer screenings unless the patient's provider agrees to stop performing privately funded elective abortions.

Before the Arizona law could go into effect, Planned Parenthood of Arizona and several individual plaintiffs filed this lawsuit challenging the Arizona law as a violation of the federal Medicaid Act. That Act provides that state Medicaid programs must allow Medicaid recipients to obtain care from "any [provider] qualified to perform the service or services required, " and that enrollment in a Medicaid managed-care plan "shall not restrict the choice of the qualified [provider] from whom the individual may receive" "family planning services." 42 U.S.C. §§ 1396a(a)(23) & 1396d(a)(4)(C). This provision is known as the Act's free-choice-of-provider requirement. See Planned Parenthood of Ind. v. Comm'r of the Ind. State Dep't of Health, 699 F.3d 962, 968 (7th Cir. 2012).

Finding that plaintiffs were likely to succeed on the merits of their Medicaid Act claim and would be irreparably harmed were the statute to become effective, the district court first entered a preliminary injunction barring implementation of the Arizona law while this lawsuit was pending. Arizona appealed that injunction to this court. Meanwhile, proceedings continued in the district court, with that court ultimately holding that the Arizona law runs afoul of the Medicaid Act's free-choice-of-provider requirement and granting summary judgment to the plaintiffs. To enforce that judgment, the district court permanently enjoined Arizona from enforcing the law against Medicaid providers. Arizona again appealed.

The district court's entry of final judgment and a permanent injunction moots Arizona's appeal of the preliminary injunction. See Planned Parenthood of Cent. & N. Ariz. v. Arizona, 718 F.2d 938, 949–50 (9th Cir. 1983); SEC v. Mount Vernon Mem'l Park, 664 F.2d 1358, 1361–62 (9th Cir. 1982). We therefore dismiss that appeal (Case No. 12-17558), and consider here only Arizona's appeal of the summary judgment order and permanent injunction (Case No. 13-15506).

For the reasons here summarized and further explained below, we affirm. First, joining the only two other circuits that have decided the issue, we hold that the Medicaid Act's free-choice-of-provider requirement confers a private right of action under 42 U.S.C. § 1983. See Planned Parenthood of Ind., 699 F.3d at 968; Harris v. Olszewski, 442 F.3d 456, 459 (6th Cir. 2006).

Second, echoing the Seventh Circuit's recent determination with regard to a nearly identical Indiana law, we hold that the Arizona statute contravenes the Medicaid Act's requirement that states give Medicaid recipients a free choice of qualified provider. See 42 U.S.C. § 1396a(a)(23); Planned Parenthood of Ind., 699 F.3d at 968. The Arizona law violates this requirement by precluding Medicaid patients from using medical providers concededly qualified to perform family planning services to patients in Arizona generally, solely on the basis that those providers separately perform privately funded, legal abortions.

BACKGROUND

A. Medicaid and the Free-Choice-of-Provider Requirement

Medicaid is a cooperative federal-state program to help people of limited financial means obtain health care. Under the program, the federal government provides funds to the states, which the states then use (along with state funds) to provide the care. See Nat'l Fed'n of Indep. Bus. v. Sebelius, 132 S.Ct. 2566, 2581 (2012). Each state designs, implements, and manages its own Medicaid program, with discretion as to "the proper mix of amount, scope, and duration limitations on coverage." Alexander v. Choate, 469 U.S. 287, 303 (1985). But that discretion has limits: To receive Medicaid funding, states must comply with federal criteria governing, among other matters, who is eligible for care, what services must be provided, how reimbursement is to be determined, and what range of choice Medicaid recipients must be afforded in selecting their doctors. See 42 U.S.C. § 1396 et seq.; cf. Sebelius, 132 S.Ct. at 2581. If a state Medicaid plan fails to conform to the statutory criteria, the Secretary of Health and Human Services ("HHS") may withhold Medicaid funds from the state, either in whole or part. See 42 U.S.C. § 1396c; cf. Sebelius, 132 S.Ct. at 2607–08 (holding portions of 42 U.S.C. § 1396c unconstitutional but noting that "[n]othing in our opinion precludes Congress from . . . requiring that States accepting such [federal Medicaid] funds comply with the conditions on their use").

At issue here is the provision of the Medicaid Act known as the free-choice-of-provider requirement. See Planned Parenthood of Ind., 699 F.3d at 968. That provision imposes two criteria upon state Medicaid plans: First, with some exceptions, state plans must generally allow Medicaid recipients to obtain care from any provider who is "qualified to perform the service or services required" and "who undertakes to provide . . . such services." 42 U.S.C. § 1396a(a)(23)(A). Second, the provision adds an additional, more specific layer of protection for patients seeking family planning services, requiring that "enrollment of an individual eligible for [Medicaid] in a primary care case-management system . . ., a medicaid managed care organization, or a similar entity shall not restrict the choice of the qualified person from whom the individual may receive services under section 1396d(a)(4)(C) of this title, " i.e., "family planning services." Id. ยงยง 1396a(a)(23)(B) & 1396d(a)(4)(C). Section 1396a(a)(23)(B) ...


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