Planned Parenthood Arizona Inc v. Tom Betlach

FOR PUBLICATION

UNITED STATES COURT OF APPEALS

FOR THE NINTH CIRCUIT

PLANNED PARENTHOOD ARIZONA No. 12-17558

INCORPORATED; UNKNOWN PARTIES,

named as Jane Doe #1, Jane Doe #2, D.C. No.

and Jane Doe #3; ERIC REUSS, M.D., 2:12-cv-01533-

Plaintiffs-Appellees, NVW

v.

TOM BETLACH, Director, Arizona

Health Care Cost Containment

System; TOM HORNE, Attorney

General,

Defendants-Appellants.

PLANNED PARENTHOOD ARIZONA No. 13-15506

INCORPORATED; UNKNOWN PARTIES,

named as Jane Doe #1, Jane Doe #2, D.C. No.

and Jane Doe #3; ERIC REUSS, M.D., 2:12-cv-01533-

Plaintiffs-Appellees, NVW

v.

OPINION

TOM BETLACH, Director, Arizona

Health Care Cost Containment

System; TOM HORNE, Attorney

General,

Defendants-Appellants.

2 PLANNED PARENTHOOD V. BETLACH

Appeal from the United States District Court

for the District of Arizona

Neil V. Wake, District Judge, Presiding

Argued and Submitted

June 12, 2013—San Francisco, California

Filed August 22, 2013

Before: Marsha S. Berzon and Jay S. Bybee, Circuit

Judges, and Consuelo B. Marshall, Senior District Judge.*

Opinion by Judge Berzon

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

*

The Honorable Consuelo B. Marshall, Senior District Judge for the

U.S. District Court for the Central District of California, sitting by

designation.

**

This summary constitutes no part of the opinion of the court. It has

been prepared by court staff for the convenience of the reader.

PLANNED PARENTHOOD V. BETLACH 3

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.

COUNSEL

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.

4 PLANNED PARENTHOOD V. BETLACH

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.

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

PLANNED PARENTHOOD V. BETLACH 5

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.

6 PLANNED PARENTHOOD V. BETLACH

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.

PLANNED PARENTHOOD V. BETLACH 7

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

8 PLANNED PARENTHOOD V. BETLACH

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. §§ 1396a(a)(23)(B) & 1396d(a)(4)(C). Section

1396a(a)(23)(B) thus carves out and insulates family planning

services from limits that may otherwise apply under approved

state Medicaid plans, assuring covered patients an unfettered

choice of provider for family planning services.

B. Arizona’s House Bill 2800

In spring 2012, the Arizona legislature enacted House Bill

2800 (“HB 2800”), which provides:

[Arizona] or any political subdivision of

[Arizona] may not enter into a contract with

or make a grant to any person that performs

nonfederally qualified abortions or maintains

or operates a facility where nonfederally

qualified abortions are performed for the

provision of family planning services.

2012 Ariz. Leg. Serv. Ch. 288 (H.B. 2800) (West) (codified

at Ariz. Rev. Stat. § 35-196.05(B)). HB 2800 defines a

PLANNED PARENTHOOD V. BETLACH 9

“nonfederally qualified abortion” as “an abortion that does

not meet the requirements for federal reimbursement under

title XIX of the social security act,” i.e., the requirements of

the Hyde Amendment, as applied to the Medicaid Act. Id.

§ 35-196.05(F)(4). See generally Harris v. McRae, 448 U.S.

297, 302–03 (1980) (explaining the background of the Hyde

Amendment). Under the Hyde Amendment — actually, a

rider that Congress attaches to each year’s appropriations

legislation — federal funds (including Medicaid funds) may

not be used to pay for abortions except in cases of danger to

the life of the mother, rape, or incest. See Consolidated

Appropriations Act, 2012, Pub. L. No. 112-74, §§ 613–14,

125 Stat. 786, 925–96 (2011).1

C. Planned Parenthood’s Challenge to HB 2800

Planned Parenthood of Arizona is a nonprofit network of

13 clinics that offer a range of family planning and

reproductive health services, including annual gynecological

exams, pap smears, testing and treatment for sexually

transmitted diseases, and contraceptive counseling. For those

services, Planned Parenthood has a longstanding provider

agreement with Arizona’s Medicaid program, known as the

Arizona Health Care Cost Containment System or

“AHCCCS” (pronounced “Access”). Together, Planned

Parenthood of Arizona clinics treat about 3,000 Medicaid

1

Arizona restricts the use of public funds for abortions except where an

abortion is necessary to save the life or health of the mother. See Ariz.

Rev. Stat. § 35-196.02.

10 PLANNED PARENTHOOD V. BETLACH

patients each year, for which the clinics receive about

$350,000 in payments.2

In addition to the family planning and reproductive health

services described above, five of the 13 Planned Parenthood

clinics in Arizona also perform abortions. Except under the

narrow circumstances permitted by Arizona and federal law,

Planned Parenthood does not receive any public funds or

reimbursement for the abortions it performs.

In summer 2012, Planned Parenthood received a letter,

sent by AHCCCS to all Arizona Medicaid providers,

concerning the implementation of HB 2800. The letter asked

Planned Parenthood to return a signed form attesting that, as

of August 2, 2012, it “[would] not perform any abortions . . .

or maintain or operate a facility where any abortion is

performed” except in cases of rape, incest, or medical

necessity. If Planned Parenthood did not return the signed

attestation by the deadline, the letter explained, AHCCCS

would “terminate [its] provider participation agreement” and

would no longer “reimburse [Planned Parenthood] for ANY

medical services.”

Rather than sign and return the form, Planned Parenthood

and several individual plaintiffs filed suit to block HB 2800

from going into effect. The individual plaintiffs are three

Arizona women who, through Medicaid, receive family

planning services at the Planned Parenthood clinics in Yuma

and Flagstaff, and Dr. Eric Reuss, an obstetrician-

2

Planned Parenthood estimates that those reimbursements cover 55% of

the costs it incurs in providing Medicaid services. Arizona disputes this

estimate but does not provide an estimate of its own. This factual dispute

is not material to any of the legal issues in this case.

PLANNED PARENTHOOD V. BETLACH 11

gynecologist in private practice in Scottsdale, who, like

Planned Parenthood, has a Medicaid provider agreement with

AHCCCS.3 The initial complaint alleged that HB 2800

violates the Medicaid Act free-choice-of-provider

requirement as well as several constitutional provisions.

Finding that Planned Parenthood was likely to succeed on its

Medicaid Act claim, the district court granted a preliminary

injunction barring Arizona from implementing HB 2800

while the lawsuit was pending. Arizona timely appealed the

preliminary injunction to this court.

Meanwhile, Planned Parenthood moved for summary

judgment solely on the Medicaid Act claim, which it

stipulated would fully resolve the case. In February 2013, the

district court granted summary judgment for Planned

Parenthood, holding that HB 2800 violates the Medicaid

Act’s free-choice-of-provider requirement. Under that

requirement, the district court explained, Arizona

unambiguously “lacks [the] authority” to “limit the range of

qualified Medicaid providers for reasons unrelated to a

provider’s ability to deliver Medicaid services.” Based on its

legal ruling, the district court permanently enjoined Arizona

from enforcing HB 2800 against plaintiffs, from

“disqualifying otherwise qualified providers from receiving

Medicaid reimbursement for medical services covered by

Medicaid on the basis that these providers provide otherwise

legal abortions,” and from “requiring providers to sign the

attestation form issued by [AHCCCS] in furtherance of [HB

2800] . . . [or] enforcing any previously signed attestation

3

We refer to the plaintiffs collectively as “Planned Parenthood.” The

named defendants are Tom Betlach, AHCCCS Director, and Tom Horne,

Arizona Attorney General. We refer to the defendants collectively as

“Arizona.”

12 PLANNED PARENTHOOD V. BETLACH

forms.” Arizona timely appealed to this court. We

consolidated the new appeal with Arizona’s already pending

preliminary injunction appeal.

DISCUSSION

A. § 1396a(a)(23) Confers a § 1983 Right of Action

There is an issue to be addressed at the threshold; whether

Planned Parenthood has pleaded a viable cause of action.

Planned Parenthood asserts a right of action for enforcement

of the Medicaid Act’s free-choice-of-provider requirement

under § 1983. Arizona objects, maintaining that the free-

choice-of-provider provision does not satisfy the requisites

for a § 1983 claim. Joining two of our sister circuits, we hold

that § 1396a(a)(23) may be enforced through individual

§ 1983 lawsuits. See Planned Parenthood of Ind., 699 F.3d at

968; Harris, 442 F.3d at 459.4

Section 1983 creates a federal remedy against anyone

who, under color of state law, deprives “any citizen of the

United States . . . of any rights, privileges, or immunities

secured by the Constitution and laws.” 42 U.S.C. § 1983.

Section 1983 thus authorizes lawsuits “to enforce individual

rights under federal statutes,” not “‘the broader or vaguer

“benefits” or “interests”’” a federal statute may implicate.

City of Rancho Palos Verdes v. Abrams, 544 U.S. 113,

4

In addition, the Eleventh Circuit, in the course of deciding that the

Medicaid free-choice-of-provider provision does not create a private right

“enforceable by health care providers” on their own behalf, indicated that

“Medicaid recipients . . . have enforceable rights under [that provision].”

Silver v. Baggiano, 804 F.2d 1211, 1216–18 (11th Cir. 1986) (emphasis

added), abrogated on other grounds by Lapides v. Bd. of Regents of Univ.

Sys. of Ga., 535 U.S. 613 (2002).

PLANNED PARENTHOOD V. BETLACH 13

119–20 (2005) (emphasis added) (quoting Gonzaga Univ. v.

Doe, 536 U.S. 273, 283 (2002)).

To determine whether a federal statutory provision creates

a private right enforceable under § 1983, we consider three

factors: First, “Congress must have intended that the

provision in question benefit the plaintiff”; second, the

plaintiff must have “demonstrate[d] that the right assertedly

protected . . . is not so ‘vague and amorphous’ that its

enforcement would strain judicial competence”; and third,

“the provision giving rise to the asserted right” must be

“couched in mandatory, rather than precatory, terms.”

Blessing v. Freestone, 520 U.S. 329, 340–41 (1997) (internal

citation and quotation marks omitted). If all three prongs are

satisfied, “the right is presumptively enforceable” through

§ 1983. Gonzaga, 536 U.S. at 284. The defendant may

overcome the presumption by demonstrating that Congress

foreclosed private enforcement expressly “or impliedly, by

creating a comprehensive enforcement scheme that is

incompatible with” individual private lawsuits. Id. at 284 n.4

(quoting Blessing, 520 U.S. at 341).

That Congress intended the free-choice-of-provider

requirement to create an individual right is evident; Arizona

does not contend otherwise. The statutory language

unambiguously confers such a right upon Medicaid-eligible

patients, mandating that all state Medicaid plans provide that

“any individual eligible for medical assistance . . . may obtain

such assistance from any institution, agency, community

pharmacy, or person, qualified to perform the service or

services required.” 42 U.S.C. § 1396a(a)(23) (emphasis

added). “While express use of the term ‘individuals’ (or

‘persons’ or similar terms) is not essential to finding a right

for § 1983 purposes, usually such use is sufficient for that

14 PLANNED PARENTHOOD V. BETLACH

purpose.” Ball v. Rodgers, 492 F.3d 1094, 1108 (9th Cir.

2007); see also Gonzaga, 536 U.S. at 284 (pointing to

similarly individually focused language in Title VI of the

Civil Rights Act of 1964, 42 U.S.C. § 2000d, and Title IX of

the Education Amendments of 1972, 20 U.S.C. § 1681(a), as

prototypical examples of rights-creating language). The two

other federal circuits that have directly considered the

Medicaid free-choice-of-provider provision under the

Blessing/Gonzaga framework have agreed that it contains

rights-creating language sufficient to establish the first

Gonzaga requisite for a right enforceable under § 1983. See

Planned Parenthood of Ind., 699 F.3d at 974; Harris,

442 F.3d at 461.5

Nor does Arizona question whether the statute is

“couched in mandatory, rather than precatory, terms,”

Blessing, 520 U.S. at 347, as it indubitably is. See 42 U.S.C.

§ 1396a(a) (“A State plan for medical assistance must—”).

Arizona’s § 1983 challenge centers, instead, on the

“vague and amorphous” prong of the Blessing/Gonzaga

standard. See Blessing, 520 U.S. at 340–41. The concern

underlying this factor is that some statutory rights do not give

courts “meaningful instruction” for the resolution of

particular cases. Watson v. Weeks, 436 F.3d 1152, 1162 (9th

Cir. 2006). Where a provision “suppl[ies] concrete and

objective standards for enforcement,” that concern does not

arise. Id. at 1161. In the Medicaid Act context, a provision

will satisfy this prong of the Blessing/Gonzaga “right”

requirement if a state’s compliance with the provision can be

ascertained by reviewing “sources such as a state’s Medicaid

5

Harris was cited with approval by this court in Ball, 492 F.3d at 1109.

PLANNED PARENTHOOD V. BETLACH 15

plan, agency records and documents, and the testimony of

Medicaid recipients and providers.” Ball, 492 F.3d at 1115.

The free-choice-of-provider requirement does “supply

concrete and objective standards for enforcement.” Watson,

436 F.3d at 1161. The provision specifies that any individual

Medicaid recipient is free to choose any provider so long as

two criteria are met: (1) the provider is “qualified to perform

the service or services required,” and (2) the provider

“undertakes to provide [the recipient] such services.”

42 U.S.C. § 1396a(23)(A). These are objective criteria, well

within judicial competence to apply. The second criterion

raises a simple factual question no different from those courts

decide every day. For example, a doctor could establish that

requisite by submitting a declaration or sworn testimony that

she is willing to provide Medicaid patients with the service in

question. The first criterion, whether the doctor is qualified to

do so, may require more factual development or expert input,

but still falls well within the range of judicial competence.

The requirement could be established, for example, by a

combination of evidence as to the medical licenses the doctor

holds and evidence as to the licenses necessary under state

law to perform family planning services. Together, the two

criteria do not require courts to engage in any balancing of

competing concerns or subjective policy judgments, but only

to answer factual, yes-or-no questions: Was an individual

denied the choice of a (1) qualified and (2) willing provider?

The answer to these questions is “likely to be readily

apparent.” Harris, 442 F.3d at 462.

Arizona contends otherwise, seizing on the statutory term

“qualified” as “too vague for the court to enforce.” We

disagree.

16 PLANNED PARENTHOOD V. BETLACH

Watson held that a provision requiring states to set

“reasonable [eligibility] standards” was too vague for judicial

enforcement because the provision did not tie

“reasonableness” to any objective standard. 436 F.3d at 1162

(citation and quotation marks omitted) (emphasis added). By

contrast, the statutory term here, “qualified,” is tethered to an

objective benchmark: “qualified to perform the service or

services required.” 42 U.S.C. § 1396a(a)(23)(A) (emphasis

added). A court can readily determine whether a particular

health care provider is qualified to perform a particular

medical service, drawing on evidence such as descriptions of

the service required; state licensing requirements; the

provider’s credentials, licenses, and experience; and expert

testimony regarding the appropriate credentials for providing

the service. This standard is not subjective or amorphous, and

requires no balancing.6 It is no different from the sorts of

qualification or expertise assessments that courts routinely

make in various contexts.

6

Arizona also argues that the right is too vague to be judicially

enforceable because “it would be a usurpation of [Arizona’s] delegated

power [to define provider qualifications under state law] for a court to

second-guess Arizona’s determination.” This argument is inapposite to the

second Blessing prong, which asks only whether the provision in question

provides adequate guidance for judicial application, not whether the right

that the provision confers impinges upon any other concerns,

constitutional or otherwise. Whether the Medicaid Act’s free-choice-of-

provider provision impermissibly interferes with state police powers goes

to the merits of an action brought under the provision, not whether the

provision supports a right of action under § 1983. In any event, Arizona’s

argument lacks merit. A court applying the free-choice-of-provider

provision in a § 1983 case does not usurp a state’s authority to set medical

qualifications; instead, it defers to and applies the state’s own

determination of appropriate qualifications for the services provided.

PLANNED PARENTHOOD V. BETLACH 17

In light of the foregoing analysis, we hold that Medicaid

beneficiaries enjoy an unambiguously conferred individual

right to a free choice of provider under § 1396a(a)(23).

Arizona makes no attempt to demonstrate that Congress has

expressly or impliedly foreclosed § 1983 remedies for this

right, nor would any such attempt succeed. See Ball, 492 F.3d

at 1116–17. Medicaid’s free-choice-of-provider requirement

therefore creates a right that may be enforced under § 1983.

B. HB 2800 Violates § 1396a(a)(23)

We now turn to the merits of the case: whether HB 2800,

as applied in the context of Arizona’s Medicaid program,

violates the Medicaid Act’s free-choice-of-provider

requirement.7

1. We begin, as always, with the “cardinal canon” of

statutory construction: Congress “says in a statute what it

means and means in a statute what it says there.” Conn. Nat’l

Bank v. Germain, 503 U.S. 249, 253–54 (1992). “In

determining the scope of a statute,” we “giv[e] the words

used their ordinary meaning,” Moskal v. United States,

498 U.S. 103, 108 (1990) (internal quotation marks and

citation omitted), unless Congress has directed us to do

otherwise.

7

This case only concerns HB 2800’s application in the context of

withholding Medicaid reimbursement. We express no opinion on HB

2800’s validity as applied in the context of state programs not governed

by the Medicaid Act.

18 PLANNED PARENTHOOD V. BETLACH

The relevant Medicaid provision states:

A State plan for medical assistance must . . .

provide that (A) any individual eligible for

medical assistance . . . may obtain such

assistance from any institution, agency,

community pharmacy, or person, qualified to

perform the service or services required . . . ,

who undertakes to provide him such services,

and (B) an enrollment of an individual eligible

for medical assistance 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 [family

planning services] . . . .

42 U.S.C. §§ 1396a(a)(23) (emphasis added). “‘[A]ny means

all” except to the extent that “Congress . . . add[s] language

limiting the breadth of that word.” Merritt v. Dillard Paper

Co., 120 F.3d 1181, 1186 (11th Cir. 1997) (internal quotation

marks and citation omitted). So a state Medicaid plan must

allow any given Medicaid recipient to seek family planning

care from any and all providers, subject only to two

limitations: (1) the provider is “qualified to perform the

service or services required” and (2) the provider “undertakes

to provide [the patient] such services.” We agree with the

Seventh Circuit that “[r]ead in context, the term ‘qualified’ as

used in § 1396a(a)(23) unambiguously relates to a provider’s

. . . . capab[ility] of performing the needed medical services

in a professionally competent, safe, legal, and ethical

manner.” Planned Parenthood of Ind., 699 F.3d at 978. Our

reasons for so concluding are several.

PLANNED PARENTHOOD V. BETLACH 19

First, the term “qualified” is not specially defined within

the Medicaid Act. We therefore read that term, as it appears

in § 1396a(a)(23), as conveying its ordinary meaning, which

is: “having an officially recognized qualification to practice

as a member of a particular profession; fit, competent.”

Oxford English Dictionary (3d ed. 2007); see also Black’s

Law Dictionary (9th ed. 2009) (“[p]ossessing the necessary

qualifications; capable or competent”). And, as the overall

context of the Medicaid Act is the provision of medical

services, the pertinent professions which providers must be

“qualified” to practice are the various medical professions.

Second, were there any doubt as to how we should read

the word “qualified” in § 1396a(a)(23), Congress removed it

by adding the further specification “qualified to perform the

service or services required.” 42 U.S.C. § 1396a(a)(23)(A)

(emphasis added). We must “give effect, if possible, to every

. . . word of a statute.” United States v. Menasche, 348 U.S.

528, 538–39 (1955) (internal quotation marks omitted). Here,

the words “to perform the service or services required”

modify the adjective “qualified,” telling us that Congress

meant for that adjective not to refer to a Medicaid Act-

specific authorization, but to denote the capability to carry

out a particular activity — “perform[ing] the [medical]

service” that a given Medicaid recipient requires. The

provision thus indexes the relevant “qualifications” not to any

Medicaid-specific criteria (whether imposed by the federal

government or the states), but to factors external to the

Medicaid program; the provider’s competency and

professional standing as a medical provider generally. The

verb “perform” here is key: It confirms that the relevant

question is not whether the provider is qualified in some

sense specific to Medicaid patients, but simply whether the

provider is qualified in a general sense to perform, i.e., carry

20 PLANNED PARENTHOOD V. BETLACH

out, the service in question, whether for Medicaid patients or

for any other patients. See “perform,” Oxford English

Dictionary (9th ed. 2009) (I.1.a: “to carry out in action,

execute, or fulfil”; I.2.b: “To do, carry out, execute, or

accomplish . . . an action, operation, process, function . . .”).

Arizona urges us to read § 1396a(a)(23) as having the

opposite meaning from the one we ascribe to it: Rather than

guaranteeing patient choice, Arizona contends in its briefs,

the provision empowers states to restrict patient choice to a

limited list of providers “for any reason supplied by State

law.” Arizona’s argument hinges on construing the statutory

term “qualified” not according to its ordinary meaning, but

instead as a Medicaid-specific term of art conferring upon the

states plenary authority to withhold Medicaid funds on any

policy grounds they prefer to pursue. Under Arizona’s

reading, states can determine for any reason that a provider is

not qualified for Medicaid purposes, even if the provider is

otherwise legally qualified, through training and licensure, to

provide the requisite medical services within the state.

There are three fatal flaws with Arizona’s reading of the

statute. The first, to restate the obvious, is that “[i]n

determining the scope of a statute,” we do “giv[e] the words

used their ordinary meaning,” Moskal, 498 U.S. at 108

(internal citation and quotation marks omitted), unless the

statute directs us to do otherwise. As a court, “we are not

vested with the power to rewrite” the Medicaid Act, “but

rather must construe what Congress has written.” See Ariz.

State Bd. of Educ. for Charter Sch. v. U.S. Dep’t of Educ.,

464 F.3d 1003, 1007 (9th Cir. 2006) (internal quotation marks

omitted). Nowhere in the Medicaid Act has Congress given

a special definition to “qualified,” much less indicated that

PLANNED PARENTHOOD V. BETLACH 21

each state is free to define this term for purposes of its own

Medicaid program however it sees fit.

Second, as a court, we have a “duty to give effect, if

possible, to every . . . word of a statute.” Menasche, 348 U.S.

at 538–39 (internal quotation marks omitted); see also United

States v. LKAV, 712 F.3d 436, 440 (9th Cir. 2013). “It is for

us to ascertain — neither to add nor to subtract, neither to

delete nor to distort.” Ariz. State Bd., 464 F.3d at 1007

(quoting 62 Cases, More or Less, Each Containing Six Jars

of Jam v. United States, 340 U.S. 593, 596 (1951)). Arizona’s

reading detaches the word “qualified” from the phrase in

which it is embedded; “qualified to perform the service or

services required” (and from the overall context of the

Medicaid statute, which governs medical services).

Additionally, “[w]e must avoid an interpretation that

would produce absurd results.” LKAV, 712 F.3d at 444

(internal quotation marks omitted). Read as Arizona suggests,

the free-choice-of-provider requirement would be self-

eviscerating. “If the states are free to set any qualifications

they want — no matter how unrelated to the provider’s fitness

to treat Medicaid patients — then the free-choice-of-provider

requirement could be easily undermined by simply labeling

any exclusionary rule as a ‘qualification.’” Planned

Parenthood of Ind., 699 F.3d at 978.

For instance, were Arizona free to define “qualified” for

§ 1396a(a)(23) purposes to mean doctors who do not perform

elective abortions, then another state might be equally free to

extend Medicaid funds only to doctors who do perform such

abortions. If a state wished to interpret “qualified” to mean

only osteopaths (or only M.D.’s), or only non-smokers (or

only smokers), or only affiliates of the state university

22 PLANNED PARENTHOOD V. BETLACH

medical school, on the grounds that only doctors within that

category are worthy of receiving Medicaid funds, then, on

Arizona’s reading of § 1396a(a)(23), it would be free to do

so. Giving the word “qualified” such an expansive meaning

would deprive the provision within which it appears of any

legal force. Moreover, that interpretation would permit states

freely to erect barriers to Medicaid patients’ access to family

planning medical providers others in the state are free to use.

Such a result would eliminate “the broad access to medical

care that § 1396a(a)(23) is meant to preserve.” Planned

Parenthood of Ind., 699 F.3d at 978. “When a natural reading

of [a statute] leads to a rational, common-sense result, an

alteration of meaning is not only unnecessary, but also

extrajudicial.” Ariz. State Bd., 464 F.3d at 1008.

Finally, the free-choice-of-provider provision appears in

a list of mandatory requirements that apply to all state

Medicaid plans. On Arizona’s reading, however, the free-

choice-of-provider provision does not set any requirement at

all for state plans. Instead, it permits states self-referentially

to impose for Medicaid purposes whatever standards for

provider participation it wishes.

For all these reasons, the free-choice-of-provider

provision unambiguously requires that states participating in

the Medicaid program allow covered patients to choose

among the family planning medical practitioners they could

use were they paying out of their own pockets.

2. While we could perhaps stop there, we recognize that

“a section of a statute should not be read in isolation from the

context of the whole Act.” Richards v. United States,

369 U.S. 1, 11 (1962). Taking that broader approach, we

conclude that our reading of § 1396a(a)(23) is bolstered

PLANNED PARENTHOOD V. BETLACH 23

rather than undermined by considering its statutory context.

Even if the word “qualified” within the free-choice-of-

provider requirement were ambiguous in isolation — which,

for all the reasons we have surveyed, it is not — it would lose

all trappings of ambiguity when considered within the

Medicaid Act as a whole.

Elsewhere in the Act, Congress has enumerated specific

circumstances under which the HHS Secretary may waive a

state’s compliance with the free-choice-of-provider

requirement enunciated in § 1396a(a)(23). For example,

§ 1396n(b) authorizes the HHS Secretary to grant “[w]aivers

to promote cost-effectiveness and efficiency.” Under that

subsection, the Secretary may waive the free-choice-of-

provider requirement so that a state may implement a

managed-care system, 42 U.S.C. § 1396n(b)(1), or limit

Medicaid recipients’ choice of providers to those “who meet,

accept, and comply with [state] reimbursement, quality, and

utilization standards,” id. § 1396n(b)(4). As another example,

§ 1315 authorizes the Secretary to waive the free-choice-of-

provider requirement to the extent necessary for a state to

carry out an approved “demonstration project.” Id.

§§ 1315(a)–(a)(1).

If Arizona’s reading of § 1323a(a)(23) were correct, these

waiver provisions would be unnecessary. After all, it is

Arizona’s position that states can preclude Medicaid

beneficiaries from choosing otherwise appropriate service

providers by defining certain classes of providers as

“unqualified,” for § 1323a(a)(23) purposes, “for any reason

supplied by State law.” If that were so, then states would not

need to go to the trouble of requesting waivers of

§ 1323a(a)(23) from HHS to implement managed-care

systems or hold providers to state efficiency standards. They

24 PLANNED PARENTHOOD V. BETLACH

could simply define all non-preferred providers as

“unqualified” for the purposes of § 1323a(a)(23).

Arizona agrees that we must read § 1396a(a)(23) within

its statutory context, but points instead to a different

provision of the Medicaid Act, the authority-to-exclude

provision at § 1396a(p)(1). That component of the Act

provides:

In addition to any other authority, a State may

exclude any individual or entity for purposes

of participating under the State plan . . . for

any reason for which the Secretary could

exclude the individual or entity . . . under

section 1320a-7, 1320a-7a, or 1395cc(b)(2) of

this title.

42 U.S.C. § 1396a(p)(1). Arizona reads the phrase “[i]n

addition to any other authority” to mean that states have

plenary authority to exclude providers from their Medicaid

plans. Just as Indiana did in defending its similar law,

Arizona “reads the phrase for more than it’s worth.” Planned

Parenthood of Ind., 699 F.3d at 979. This standard savings

clause “signals only that what follows is a non-exclusive list”

and “does not imply that the states have an unlimited

authority to exclude providers for any reason whatsoever.”

Id.8

8

Arizona also cites the regulation implementing § 1396a(p)(1). That

regulation provides, “Nothing contained in this part should be construed

to limit a State’s own authority to exclude an individual or entity from

Medicaid for any reason or period authorized by State law.” 42 C.F.R.

§ 1002.2 (emphasis added). That provision is only a limitation on

interpretation of the referenced “part” of the regulations — Title 42,

Chapter V, Subchapter B, Part 1002 — which does not encompass the

PLANNED PARENTHOOD V. BETLACH 25

Moreover, to the extent that § 1396a(p)(1) sheds light on

§ 1396a(a)(23), it does so in a way that undermines, rather

than aids, Arizona’s argument. The language refers to “any

other authority” (emphasis added), followed by a provision

providing states with authority to exclude providers on

specified grounds. This sequence indicates that the Medicaid

Act itself must provide that “other” authority, just as it

supplies the “authority” covered by the rest of the subsection.

Were it otherwise — were states free to exclude providers as

they see fit — then the bulk of § 1396a(p)(1) itself would be

unnecessary, as the “authority” it supplies would be

superfluous.

Further, the bases for excluding a provider from a state

Medicaid plan cross-referenced by § 1396a(p)(1) all refer to

“various forms of malfeasance such as fraud, drug crimes,

and failure to disclose necessary information to regulators.”

Planned Parenthood of Ind., 699 F.3d at 979. Read in

context, the § 1396a(p)(1) savings clause empowers states to

exclude individual providers on such grounds directly,

without waiting for the Secretary to act, while also

reaffirming state authority to exclude individual providers

pursuant to analogous state law provisions relating to fraud or

misconduct. It does not suggest that states may categorically

exclude a class of providers on grounds unrelated to medical

competency or legal and ethical propriety.

3. Both § 1396a(a)(23) itself and other provisions of the

Medicaid Act admit of some exceptions to the free-choice-of-

provider rule, but none apply to this case.

free-choice-of-provider requirement. See 42 C.F.R. § 1002.1 (listing

statutory provisions providing authority for the regulations in Part 1002).

26 PLANNED PARENTHOOD V. BETLACH

First, various provisions of the Medicaid Act allow states,

as Arizona has done, to seek permission from HHS to limit

recipients’ choice to the extent necessary to implement cost-

effectiveness standards or a demonstration project, see, e.g.,

42 U.S.C. § 1315 (describing waivers for demonstration

projects); § 1396n(b) (describing waivers for efficiency), or,

without a waiver, to exercise a statutory option to implement

a managed-care system for Medicaid recipients, see id.

§ 1396u-2(a). These exceptions have no bearing on this case.

Even if a state otherwise exercises its option to implement a

managed-care system, § 1396a(a)(23)(B) makes clear that as

to family planning services, state Medicaid plans must afford

recipients the full range of free choice of provider. Similarly,

efficiency waivers provided under § 1396n may never be

used to “restrict the choice of the individual in receiving

[family planning services].” Id. §§ 1396n(b), 1396d(a)(4)(C).

And while Arizona’s waiver is pursuant to § 1315, for

demonstration projects — a type of waiver that can perhaps

extend to family planning services if the Secretary so

provides — the Secretary has not so provided for Arizona.

Rather, as the district court determined, Arizona’s waiver

extends to the general free choice guarantee in

§ 1396a(a)(23)(A) only to the extent necessary to enroll

recipients in managed care, and does not extend at all to the

family planning services guarantee in § 1396a(a)(23)(B).

Second, § 1396a(a)(23) itself enumerates several

exceptions to its scope. For example, it does not apply in

Puerto Rico, Guam, or the Virgin Islands, nor does it interfere

with states’ separate statutory authority to subject new

providers to a temporary moratorium under § 1396a(kk)(4).

See id. § 1396a(a)(23)(B). The provision also specifies that it

shall not be construed to require states to allow persons or

entities “convicted of a felony . . . for an offense . . .

PLANNED PARENTHOOD V. BETLACH 27

inconsistent with the best interests of beneficiaries” to

participate in their Medicaid programs. Id. Again, none of

these exceptions apply here; Arizona is not a territory exempt

from the requirement, plaintiffs are not new providers being

excluded pursuant to a temporary moratorium, and Arizona

does not contend that any of the plaintiffs have been

convicted of felonies.

Finally, several provisions of the Medicaid Act in

addition to § 1396a(p)(1) recognize both federal and state

authority to exclude individual providers from public health

care programs on grounds related to fraud, patient abuse,

criminal activity, improper billing or record-keeping, and the

like. The Secretary is required to exclude providers convicted

of certain crimes related to health care fraud, patient abuse, or

controlled substances, see 42 U.S.C. § 1320a-7(a), and is also

permitted to exclude providers for certain other enumerated

reasons, including certain types of convictions, license

revocations, failures to disclose, false representations, and

defaults on loans, see id. § 1320a-7(b); see also id.

§ 1395cc(b)(2) (listing grounds on which Secretary may

refuse to enter into or terminate a provider agreement).

Another provision, the authority-to-exclude provision

mentioned above, empowers states to exclude providers on

any of these same grounds. Id. § 1396a(p)(1). Again, these

exceptions do not apply here. HB 2800 does not set out

grounds for excluding individual providers from Arizona’s

Medicaid program demonstrated to have engaged in some

type of criminal, fraudulent, abusive, or otherwise improper

behavior. Rather, it preemptively bars a class of providers on

the ground that their scope of practice includes certain

perfectly legal medical procedures.

28 PLANNED PARENTHOOD V. BETLACH

For the same reason, none of the cases cited by Arizona

in which courts have upheld the exclusion of particular

providers from state Medicaid programs supports the

proposition that states may exclude classes of providers from

their Medicaid programs because of legislative disapproval of

those providers’ scope of services.

Guzman v. Shewry, 552 F.3d 941 (9th Cir. 2009),

affirmed the denial of a preliminary injunction to a physician

suspended from California’s Medicaid program because he

was the subject of a fraud investigation, pursuant to a state

law requiring the temporary suspension of any provider under

such an investigation. Id. at 950 (citing Cal. Welf. & Inst.

Code § 14043.36(a)). In affirming the district court’s denial

of the injunction, Guzman held only that the Medicaid Act

does not preempt state laws providing for suspension of

providers in cases of possible fraud or abuse, as well as for

other reasons having to do with “professional competence,

professional performance, or financial integrity.” Id. at 949

(quoting 42 U.S.C. § 1320a-7(b)(5)). Guzman did not address

the free-choice-of-provider provision, and its holding is fully

consistent with ours, as the Arizona statute here challenged

restricts provider participation on none of the bases

mentioned in Guzman.

Similarly, Plaza Health Laboratories, Inc. v. Perales,

878 F.2d 577 (2d Cir. 1989), affirmed the denial of a

preliminary injunction to a medical laboratory challenging its

suspension from the New York Medicaid program because it

was subject to a felony indictment in New Jersey for dumping

hazardous waste. A New York state law authorized the

suspension of any provider indicted for “an act which would

be a felony under the laws of New York.” Id. at 579 (quoting

N.Y. Comp. Codes R. & Regs. tit. 18, § 515.7(b) (1988)).

PLANNED PARENTHOOD V. BETLACH 29

Arizona reads Plaza Health to mean that states have “plenary

. . . authority” to disqualify providers from Medicaid “for

many reasons that advance State law and policy,” such as a

state policy against “engaging in industrial pollution.” But the

medical lab in Plaza Health was not categorically disqualified

from New York’s Medicaid program because of a generic

policy disfavoring pollution; it was individually excluded

because it had been indicted for a felony. No one questions

Arizona’s authority to exclude individual providers from its

Medicaid program on the basis of criminal or fraudulent

activity. Rather, Arizona seeks with HB 2800 to bar a class of

providers from Medicaid not because of misconduct by

particular providers, but because of blanket disapproval of

those providers’ legal scope of services.9

9

Arizona also relies on First Medical Health Plan, Inc. v. Vega-Ramos,

479 F.3d 46, 53 (1st Cir. 2007), which upheld the exclusion of a provider

from Puerto Rico’s Medicaid program on the basis of a Puerto Rico law

against self-dealing. Puerto Rico is exempt from the free-choice-of-

provider requirement, see 42 U.S.C. § 1396a(a)(23)(B), so Vega-Ramos

has no bearing on the Medicaid Act’s applicability in states subject to that

requirement.

In addition, Arizona invokes Kelly Kare, Ltd. v. O’Rourke, 930 F.2d

170 (2d Cir. 1991). Kelly Kare held that the free-choice-of-provider

requirement does not give individual Medicaid recipients a liberty or

property interest in continued care from a particular provider, so that a

provider can therefore be excluded without due process for the recipients.

Id. at 177–78. Here, the question is not the procedures due patients but the

substantive protections provided by the statute. Cf. Planned Parenthood

of Ind., 699 F.3d at 977.

Finally, Arizona cites Triant v. Perales, 112 A.D.2d 548, 548 (N.Y.

App. Div. 1985), in which an intermediate New York state court upheld

a physician’s exclusion from the New York Medicaid program because of

“completely and utterly deficient” record-keeping, pursuant to a state

regulation requiring Medicaid providers to maintain adequate records.

30 PLANNED PARENTHOOD V. BETLACH

4. Arizona makes three final arguments in defense of HB

2800. First, Arizona contends that HB 2800 “does not offend”

the free-choice-of-provider requirement because Planned

Parenthood “remains able to create a separate entity to

provide nonfederally qualified abortion services . . . and

thereby remain eligible to provide Medicaid family planning

services.” Even assuming Arizona’s separate entity

interpretation of HB 2800 is viable — which is far from clear

to us10 — the separate entity argument is irrelevant. The

Medicaid Act’s free-choice-of-provider requirement does not

include an exception allowing states to violate it so long as

providers can spin off affiliates.

Second, Arizona argues that “implementation of [HB

2800] would result only in an incidental loss of family

planning services” because Arizona has “approximately 2,000

Medicaid providers” of family planning services in addition

to Planned Parenthood. Even if true — which Planned

Parenthood contests — this fact is immaterial to whether HB

2800 violates the free-choice-of-provider requirement. As the

Seventh Circuit noted in rejecting a similar argument made

by Indiana, the free-choice-of-provider requirement “does not

simply bar the states from ending all choice of providers, it

guarantees to every Medicaid beneficiary the right to choose

any qualified provider.” Planned Parenthood of Ind.,

699 F.3d at 979. There is no exception to the free-choice-of-

Triant rested solely on New York state law and did not consider its

interaction with the federal Medicaid Act.

10

The most natural reading of the Arizona statute precludes Planned

Parenthood from providing Medicaid-covered family planning services in

clinics it “maintains or operates” if abortions are provided there, whether

by itself or by separate entities. See Ariz. Rev. Stat. § 35-196.05(B).

PLANNED PARENTHOOD V. BETLACH 31

provider requirement for “incidental” burdens on patient

choice.

Finally, Arizona invokes the Tenth Amendment, urging

this court to respect its “sovereign police power authority to

regulate the health and welfare of its citizens.” Whatever the

scope of Arizona’s Tenth Amendment powers to regulate

health care, this case does not implicate them. Nothing in

either the Medicaid Act’s free-choice-of-provider

requirement or the district court’s order casts any doubt on

Arizona’s authority to regulate the practice of medicine

within its borders. HB 2800 is a public funding statute,

conditioning the receipt of state monies on the range of

services that a health care provider offers; it does not have

any effect on whether a provider is authorized to practice

medicine in Arizona.

To the contrary, HB 2800’s purpose is to exclude

concededly qualified medical providers from eligibility for

public funds unless they decline to perform elective

abortions. Arizona has never claimed that Planned

Parenthood’s staff doctors are unqualified to perform

gynecological exams or STD testing. Quite the opposite; the

HB 2800 implementation letter made clear that if Planned

Parenthood agreed to stop performing privately funded,

elective abortions, it could continue providing all of its other

services at public expense.

5. The parties have directed the court’s attention to

various agency interpretations of § 1396a(a)(23). Because

“the term ‘qualified’ as used in § 1396a(a)(23)

unambiguously refers to the provider’s fitness to render the

medical services required,” Planned Parenthood of Ind.,

699 F.3d at 980, we need not and do not consider those

32 PLANNED PARENTHOOD V. BETLACH

interpretations. “If the intent of Congress is clear, that is the

end of the matter; for the court, as well as the agency, must

give effect to the unambiguously expressed intent of

Congress.” Chevron, U.S.A., Inc. v. Natural Res. Def.

Council, Inc., 467 U.S. 837, 842–43 (1984).

CONCLUSION

For the reasons explained above, the district court’s

summary judgment order and permanent injunction (Case No.

13-15506) are AFFIRMED. Arizona’s appeal of the

preliminary injunction (Case No. 12-17558) is DISMISSED

as moot.