# Planned Parenthood of Grt TX v. Courtney Ph

> Court of Appeals for the Fifth Circuit · November 23, 2020 · 981 F.3d 347

URL: https://www.frixlaw.com/law-library/cases/4635587

## Case

- **Court:** Court of Appeals for the Fifth Circuit
- **Decided:** November 23, 2020
- **Citations:** 981 F.3d 347
- **Precedential status:** Published
- **Opinion:** Opinion
- **Nature of suit:** Civil Rights
- **Cited by:** 30 later opinions in the Frix Law Library

## Citator (automated)

- No negative treatment found by the automated citator. That is not the same as a confirmation that the case is good law; read the citing cases.
- Full citator and citing cases: https://www.frixlaw.com/law-library/cases/4635587

## How later opinions describe it (automated extraction)

- finding plaintiffs were “not likely to prevail on the merits of their § 1983 claims and, as a result, [were] not entitled to a preliminary injunction”

## Opinion text

Case: 17-50282 Document: 00515648975 Page: 1 Date Filed: 11/23/2020

IN THE UNITED STATES COURT OF APPEALS
FOR THE FIFTH CIRCUIT United States Court of Appeals
Fifth Circuit

FILED
November 23, 2020
No. 17-50282
Lyle W. Cayce
Clerk
PLANNED PARENTHOOD OF GREATER TEXAS FAMILY PLANNING
AND PREVENTATIVE HEALTH SERVICES, INCORPORATED; PLANNED
PARENTHOOD SAN ANTONIO; PLANNED PARENTHOOD CAMERON
COUNTY; PLANNED PARENTHOOD GULF COAST, INCORPORATED;
PLANNED PARENTHOOD SOUTH TEXAS SURGICAL CENTER; JANE
DOE, I; JANE DOE 2; JANE DOE 4; JANE DOE 7;
JANE DOE 9; JANE DOE 10; JANE DOE 11,

Plaintiffs–Appellees,

v.

SYLVIA HERNANDEZ KAUFFMAN, in her official capacity as Inspector
General of HHSC; CECILE ERWIN YOUNG, in her official capacity as
Executive Commissioner of HHSC,

Defendants–Appellants.

Appeal from the United States District Court
for the Western District of Texas
USDC No. 1:15-CV-1058

Before OWEN, Chief Judge, and JOLLY, JONES, SMITH, STEWART,
DENNIS, ELROD, SOUTHWICK, HAYNES, GRAVES, HIGGINSON,
COSTA, WILLETT, HO, DUNCAN, ENGELHARDT, Circuit Judges.∗

∗
JUDGE OLDHAM is recused and did not participate in the decision. JUDGE WILSON
joined the court after this case was submitted and did not participate in the decision.
Case: 17-50282 Document: 00515648975 Page: 2 Date Filed: 11/23/2020

No. 17-50282
PRISCILLA R. OWEN, Chief Judge, joined by JOLLY, JONES, SMITH,
ELROD, SOUTHWICK, HAYNES, WILLETT, HO, DUNCAN and
ENGELHARDT, Circuit Judges:∗∗

In this interlocutory appeal of a preliminary injunction, the dispositive
issue is whether 42 U.S.C. § 1396a(a)(23) gives Medicaid patients a right to
challenge, under 42 U.S.C. § 1983, a State’s determination that a health care
provider is not “qualified” within the meaning of § 1396a(a)(23). Our decision
rests primarily on two independent bases: (1) the Supreme Court’s decision in
O’Bannon v. Town Court Nursing Center,1 and (2) the text and structure of
§ 1396a(a)(23), which does not unambiguously provide that a Medicaid patient
may contest a State’s determination that a particular provider is not
“qualified”; whether a provider is “qualified” within the meaning of
§ 1396a(a)(23) is a matter to be resolved between the State (or the federal
government) and the provider. We overrule the decision by a panel of this
court2 that the district court duly followed in the present case. Accordingly,
we vacate the preliminary injunction.
I
Five Medicaid providers were among the plaintiffs in the district court
and are appellees in this court. They are Planned Parenthood Gulf Coast, Inc.
(PP Gulf Coast), headquartered in Houston; Planned Parenthood Greater
Texas, Inc., headquartered in Dallas and providing services in parts of north
and central Texas; and three providers—Planned Parenthood of Cameron
County, Planned Parenthood San Antonio, and Planned Parenthood South
Texas Surgical Center—that the district court described as operating “under

∗∗
JUDGE HAYNES concurs in the judgment and joins in the reasoning of Sections I, II,
and V.
447 U.S. 773 (1980).
1

Planned Parenthood of Gulf Coast, Inc. v. Gee, 862 F.3d 445 (5th Cir. 2017), cert.
2

denied, 139 S. Ct. 408 (2018).
2
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No. 17-50282
the umbrella of Planned Parenthood South Texas.” We will refer to the
Medicaid providers collectively as the Providers. Seven individuals, to whom
we will refer collectively as the Individual Plaintiffs, received or sought
services from one or more of the Providers. The two defendants in the district
court and the appellants in this court are the Executive Commissioner of the
Texas Health and Human Services Commission, and that Commission’s
Inspector General (OIG), in their respective official capacities. We will refer to
the defendants collectively as HHSC.
The Providers provide family planning and other health services to
approximately 12,500 Medicaid patients at thirty health centers each year.
Their services include examinations, cancer screenings, testing and treatment
for sexually transmitted diseases, as well as basic healthcare for both men and
women. Each of the Providers is a member of Planned Parenthood Federation
of America (Planned Parenthood); they must adhere to certain medical and
organizational standards to operate under the name “Planned Parenthood.”
As participants in the Texas Medicaid program, the Providers entered
into Medicaid provider agreements under which they are required to comply
with all Texas Medicaid policies and applicable state and federal regulations.
The OIG oversees compliance with state Medicaid policies. Texas law
authorizes the OIG to conduct investigations and to terminate Medicaid
provider agreements for noncompliance.3 The OIG may terminate a Medicaid
provider agreement when “prima facie evidence” establishes that a provider
has committed a “program violation” or is “affiliated with a person who
commits a program violation.” 4 A “program violation” includes any violation
of federal law, state law, or the Texas Medicaid program policies.

3 1 TEX. ADMIN. CODE §§ 371.3, 371.1703(c) (2020).
4 Id. §§ 371.1703(c), (c)(6)-(7).
3
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In 2015, the Center for Medical Progress (CMP), a pro-life organization,
released video recordings of conversations that occurred at PP Gulf Coast
headquarters. The CMP videos depict two individuals posing as
representatives from a fetal tissue procurement company discussing the
possibility of a research partnership with PP Gulf Coast. The release of these
videos prompted congressional investigations. The Senate Judiciary
Committee released a report, 5 as did a House Select Investigative Panel of the
Committee on Energy and Commerce.6 An alternative report to the House
Committee’s report was issued by committee members in the minority. 7
In October 2015, the OIG sent each Provider a Notice of Termination of
its respective Medicaid provider agreement, stating that each was “no longer
capable of performing medical services in a professionally competent, safe,
legal, and ethical manner.” The Notice listed the bases for termination and
stated that, unless the Providers responded within thirty days, a Final Notice
of Termination would issue.
The Providers and Individual Plaintiffs sued in federal court to block the
terminations. They asserted that the terminations violated rights conferred
by 42 U.S.C. § 1396a(a)(23) and sought relief under § 1983. They also
contended that the OIG’s actions violated their Fourteenth Amendment Equal
Protection rights.

5 MAJORITY STAFF OF S. COMM. ON THE JUDICIARY, 114TH CONG., MAJORITY REPORT
ON HUMAN FETAL TISSUE RESEARCH: CONTEXT AND CONTROVERSY (Comm. Print 2016),
https://www.grassley.senate.gov/sites/default/files/judiciary/upload/22920%20-%20FTR.pdf.
6 SELECT INVESTIGATIVE PANEL OF THE ENERGY & COM. COMM., 114TH CONG., FINAL

REPORT xviii-xix (Comm. Print 2017), https://www.govinfo.gov/content/pkg/CPRT-
114HPRT24553/pdf/CPRT-114HPRT24553.pdf.
7 DEMOCRATIC MEMBERS, SELECT INVESTIGATIVE PANEL OF THE ENERGY & COM.

COMM., 114TH CONG., SETTING THE RECORD STRAIGHT: THE UNJUSTIFIABLE ATTACK ON
WOMEN’S HEALTH CARE & LIFE-SAVING RESEARCH (Comm. Print 2016),
https://www.stemexpress.com/wp/wp-content/uploads/2018/01/20161228-Full-Dem-
Report.pdf.
4
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The OIG sought a stay of proceedings, which the district court granted,
pending the issuance of a Final Notice of Termination. The OIG then sent the
Final Notice. The Final Notice stated that the Inspector General had
determined that the Providers were “not qualified to provide medical services
in a professionally competent, safe, legal[,] and ethical manner under the
relevant provisions of state and federal law pertaining to Medicaid providers.”
The OIG based this conclusion on the CMP videos, evidence provided by the
United States House of Representatives’ Select Investigative Panel, and the
OIG’s consultation with its Chief Medical Officer. The Final Notice stated that
“numerous violations of generally accepted standards of medical practice” had
occurred and asserted that PP Gulf Coast had engaged in misrepresentations.
The Notice also stated that under the OIG’s regulations, affiliates of a
terminated entity are subject to termination. 8 The Providers and Individual
Plaintiffs thereafter filed an amended complaint and a new motion for a
preliminary injunction.
The district court conducted a three-day evidentiary hearing, during
which it reviewed the CMP videos and heard testimony from medical and
ethics experts. The OIG introduced evidence that, it asserts, shows PP Gulf
Coast violated federal regulations relating to fetal tissue research by altering
abortion procedures for research purposes or allowing the researchers
themselves to be involved in performing abortions. 9

8 See 1 TEX. ADMIN. CODE § 371.1703(c)(7).
9 See 42 U.S.C. § 289g-1(b)(2)(A)(ii) (requiring researchers to certify that “no alteration
of the timing, method, or procedures used to terminate the pregnancy was made solely for
the purposes of obtaining the tissue”); id. at § 289g-1(c)(4) (requiring researchers to certify
that they “had no part in any decisions as to the timing, method, or procedures used to
terminate the pregnancy made solely for the purposes of the research”); 45 C.F.R. § 46.204(i)
(requiring that “[i]ndividuals engaged” in research involving “[p]regnant women or fetuses”
“have no part in any decisions as to the timing, method, or procedures used to terminate a
pregnancy”).
5
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Following the hearing, the district court issued a memorandum and
order granting the Providers and Individual Plaintiffs’ motion for a
preliminary injunction and prohibiting the termination of the Providers’
Medicaid provider agreements.10 The district court held that § 1396a(a)(23)
granted rights to the Individual Plaintiffs upon which a § 1983 action
challenging the OIG’s termination decision could be based. 11 The district court
concluded from the evidence adduced at the preliminary injunction hearing
that the Individual Plaintiffs were likely to succeed on the merits of their
§ 1983 claim because the OIG “did not have prima facie . . . evidence, or even a
scintilla of evidence, to conclude the bases of termination set forth in the Final
Notice merited finding the . . . Providers were not qualified.” 12 This appeal
ensued.
A three-judge panel of this court held, based on Planned Parenthood of
Gulf Coast, Inc. v. Gee,13 that the Individual Plaintiffs could maintain a § 1983
suit.14 The panel also held that the district court abused its discretion by
reviewing the agency’s decision de novo rather than applying the arbitrary and
capricious standard and by considering factual matters beyond those contained
in the administrative record that was before the HHSC.15 We granted en banc
review. 16
The preliminary injunction issued by the district court was based solely
on the claims of the Individual Plaintiffs. The district court did not consider

10 Planned Parenthood of Greater Tex. Family Plan. & Preventative Health Servs., Inc.
v. Smith, 236 F. Supp. 3d 974, 1000 (W.D. Tex. 2017).
11 Id. at 988.
12 Id. at 998.
13 862 F.3d 445 (5th Cir. 2017), cert. denied, 139 S. Ct. 408 (2018).
14 See Planned Parenthood of Greater Tex. Family Plan. & Preventative Health Servs.,

Inc. v. Smith, 913 F.3d 551, 554, 559-62 (5th Cir. 2019).
15 Id. at 569.
16 Planned Parenthood of Greater Tex. Family Plan. & Preventative Health Servs., Inc.

v. Smith, 914 F.3d 994, 996 (5th Cir. 2019) (mem.).
6
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whether the Providers were entitled to a preliminary injunction.17 The
question before us is whether the Individual Plaintiffs may bring a § 1983 suit
to contest the State’s determination that the Providers were not “qualified”
providers within the meaning of 42 U.S.C. § 1396a(a)(23). We hold that they
may not. We accordingly vacate the preliminary injunction.
Because the district court did consider the Providers’ claims, no aspect
of those claims is before us in this interlocutory appeal. Accordingly, we do not
reach an issue addressed by JUDGE HIGGINSON ’s opinion concurring in part
and dissenting in part, which is whether the Medicaid agreements of entities
affiliated with PP Gulf Coast were properly terminated.18
II
“A preliminary injunction is an ‘extraordinary remedy’ . . . .” 19
Applicants must show:
(1) a substantial likelihood of success on the merits, (2) a
substantial threat of irreparable injury if the injunction is not
issued, (3) that the threatened injury if the injunction is denied
outweighs any harm that will result if the injunction is granted,
and (4) that the grant of an injunction will not disserve the public
interest. 20

17 Planned Parenthood of Greater Tex. Family Plan. & Preventative Health Servs., Inc.
v. Smith, 236 F. Supp. 3d 974, 988 (W.D. Tex. 2017) (“The Court need not conclude all
Plaintiffs have a substantial likelihood of prevailing on the Medicaid Act claim for a
preliminary injunction to issue at this time. If Plaintiffs satisfy the elements needed to show
a substantial likelihood of success on the Individual Plaintiffs’ § 1396a(a)(23) claim only, so
long as the other factors are met, a preliminary injunction is appropriate. Accordingly,
because this Court [hold]s the Individual Plaintiffs have a right of action, it need not decide
whether the Provider Plaintiffs also have such a right, either on their own behalf or on the
behalf of their patients.” (citations omitted)).
18 See HIGGINSON, J., concurring in part and dissenting in part, post at 2.
19 Texans for Free Enter. v. Tex. Ethics Comm’n, 732 F.3d 535, 536 (5th Cir. 2013)

(quoting Byrum v. Landreth, 566 F.3d 442, 445 (5th Cir. 2009)).
20 Id. at 537 (quoting Byrum, 566 F.3d at 445).

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“We review a preliminary injunction for abuse of discretion, reviewing findings
of fact for clear error and conclusions of law de novo.” 21 When a district court
applies incorrect legal principles, it abuses its discretion.22
We first consider whether the Individual Plaintiffs have a right under
§ 1396a(a)(23) to challenge a determination that a Medicaid provider is not
“qualified.” If they do not have such a right, then our inquiry is at an end
because without a right that can be vindicated by a § 1983 action, the
Individual Plaintiffs cannot bring this suit.
Section 1983 supplies remedies for “the deprivation of any rights,
privileges, or immunities secured by the Constitution and laws.” 23 The
Supreme Court’s seminal decision in Gonzaga University v. Doe 24 explained,
repeatedly, that “[s]ection 1983 provides a remedy only for the deprivation of
rights” and that “it is rights, not the broader or vaguer benefits or interests,
that may be enforced under the authority of that section.” 25
The Individual Plaintiffs rely upon 42 U.S.C. § 1396a(a)(23) as the source
of their right to challenge the termination of the Providers’ Medicaid
agreements. This provision is sometimes referred to as the “any-qualified-
provider” or “free-choice-of-provider” provision.
Under subpart 23(A) of the statute, a State Medicaid plan must permit
an individual eligible for medical assistance to obtain that assistance from any
“qualified” provider who undertakes to provide such services:
(a) Contents

21 Id. (emphasis omitted) (citing Janvey v. Alguire, 647 F.3d 585, 595 (5th Cir. 2011)).
22 See Atchafalaya Basinkeeper v. U.S. Army Corps of Eng’rs, 894 F.3d 692, 696 (5th
Cir. 2018).
23 42 U.S.C. § 1983.
24 536 U.S. 273 (2002).
25 Id. at 283 (emphasis in original) (internal quotation marks omitted); see also id. at

285 (explaining that the inquiry “is to determine whether . . . a statute ‘confer[s] rights on a
particular class of persons’” (alteration in original) (quoting California v. Sierra Club, 451
U.S. 287, 294 (1981))).
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A State plan for medical assistance must—
....
(23) provide that (A) 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 . . . . 26

The statute provides in subpart 23(B) that a State’s Medicaid plan must
also provide that an individual eligible for medical assistance who is enrolled
in certain managed care systems or organizations cannot be restricted from
obtaining “family planning services and supplies” 27 from the “qualified person”
of his or her choice:
(a) Contents
A State plan for medical assistance must—
....
(23) provide that . . . (B) an enrollment of an individual
eligible for medical assistance in a primary care case-
management system (described in section 1396n(b)(1) of this
title), 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, except as provided in subsection
(g), in section 1396n of this title, and in section 1396u-2(a) of
this title, except that this paragraph shall not apply in the
case of Puerto Rico, the Virgin Islands, and Guam, and
except that nothing in this paragraph shall be construed as
requiring a State to provide medical assistance for such
services furnished by a person or entity convicted of a felony
under Federal or State law for an offense which the State

26 42 U.S.C. § 1396a(a)(23)(A).
27 Id. at § 1396d(a)(4)(C) (defining eligible costs and services to include “family
planning services and supplies furnished (directly or under arrangements with others) to
individuals of child-bearing age (including minors who can be considered to be sexually
active) who are eligible under the State plan and who desire such services and supplies”).
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agency determines is inconsistent with the best interests of
beneficiaries under the State plan or by a provider or
supplier to which a moratorium under subsection (kk)(4) is
applied during the period of such moratorium . . . . 28

Both subparts (A) and (B) use the term “qualified” as a modifier in
describing a provider from whom a person eligible for Medicaid assistance may
obtain care or supplies. In O’Bannon v. Town Court Nursing Center,29 the
Supreme Court determined that individuals who are Medicaid beneficiaries do
not have a right under 42 U.S.C. § 1396a(a)(23) to contest a state or federal
agency’s determination that a Medicaid provider is not “qualified.” 30
The question addressed by the Supreme Court in O’Bannon was whether
Medicaid beneficiaries residing in a nursing home “have a constitutional right
to a hearing before a state or federal agency may revoke the home’s authority
to provide them with nursing care at government expense.” 31 The Department
of Health, Education and Welfare (HEW) had notified the nursing home that
it “no longer met the statutory and regulatory standards for skilled nursing
facilities and that, consequently, its Medicare provider agreement would not
be renewed.” 32 A state agency followed suit.33 The nursing home and residents
who were Medicaid beneficiaries brought an action in federal court contending
that, under the Due Process Clause, they “were entitled to an evidentiary
hearing on the merits of the decertification decision before the Medicaid

28Id. at § 1396a(a)(23)(B).
29447 U.S. 773 (1980).
30 Id. at 785-86.
31 Id. at 775; see also id. at 784 (explaining that the “question is whether the patients

have an interest in receiving benefits for care in [the nursing home] that entitles them, as a
matter of constitutional law, to a hearing before the Government can decertify that facility”).
32 Id. at 776.
33 Id.

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payments were discontinued.” 34 In addressing this claim, the Supreme Court
confirmed that the Due Process Clause does not confer a “right to a hearing”
in the abstract; rather, it does so only as a prerequisite to a deprivation of “life,
liberty, or property.” 35 Accordingly, for the O’Bannon beneficiaries to prevail
on their due process claim, they had to show that the termination of the
nursing home’s Medicaid agreement “amount[ed] to a deprivation of an[]
interest in life, liberty, or property.” 36
The O’Bannon Medicaid beneficiaries contended that because 42 U.S.C.
§ 1396a(a)(23) granted them the right to obtain services from any qualified
provider, they had had a property right to remain in the home of their choice
and, therefore, they had a right to a hearing to challenge whether cause existed
for the termination of their preferred providers’ Medicaid agreements. 37
The Supreme Court rejected the beneficiaries’ argument.38 The Court
held that “the Court of Appeals failed to give proper weight to the contours of
the right conferred by the statutes and regulations.” 39 The Court specifically

34 Id. at 777; see Brief for Respondents at 26, O’Bannon v. Town Ct. Nursing Ctr., 447
U.S. 773 (1980) (No. 78-1318) (“The Patients’ right to pre-termination process is based upon
their right not to be deprived of ‘life, liberty, or property, without due process of law . . .’ as
guaranteed by the Fifth and Fourteenth Amendments to the United States Constitution.”
(alteration in original)).
35 O’Bannon, 447 U.S. at 788, 790; see U.S. CONST. amend. XIV, § 1.
36 O’Bannon, 447 U.S. at 787; see also Ky. Dep’t of Corrs. v. Thompson, 490 U.S. 454,

460 (1989) (“We examine procedural due process questions in two steps: the first asks
whether there exists a liberty or property interest which has been interfered with by the
State; the second examines whether the procedures attendant upon that deprivation were
constitutionally sufficient.” (citations omitted) (first citing Bd. of Regents of State Colls. v.
Roth, 408 U.S. 564, 571 (1972); and then citing Hewitt v. Helms, 459 U.S. 460, 472 (1983))).
37 O’Bannon, 447 U.S. at 779, 779 n.8, 784 (explaining that the Court of Appeals had

identified Medicaid provisions, including 42 U.S.C. § 1396a(a)(23), that gave “Medicaid
recipients the right to obtain services from any qualified facility,” and that the nursing home
patients contended these provisions “g[a]ve them a property right to remain in the home of
their choice absent good cause for transfer and therefore entitle[d] them to a hearing on
whether such cause exist[ed]”).
38 Id. at 785.
39 Id. at 786.

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identified the any-qualified-provider provision, § 1396a(a)(23), holding that
“while a patient has a right to continued benefits to pay for care in the qualified
institution of his choice, he has no enforceable expectation of continued benefits
to pay for care in an institution that has been determined to be unqualified.” 40
Therefore the patients did not have the right to question a state or federal
agency’s determination that an institution was unqualified. The any-qualified-
provider provision, the Court explained, was among statutes and regulations
that “involve[] the Government’s attempt to confer an indirect benefit on
Medicaid patients by imposing and enforcing minimum standards of care on
facilities like” the nursing home.41 The Court reasoned that “[w]hen
enforcement of those standards requires decertification of a facility, there may
be an immediate, adverse impact on some residents. But surely that impact,
which is an indirect and incidental result of the Government’s enforcement
action, does not amount to a deprivation of any interest in life, liberty, or
property.”42 Consequently, the patients had no right under § 1396a(a)(23)(A)
to challenge the decertification decision. 43
In O’Bannon, the Court explained that § 1396a(a)(23) “gives [Medicaid]
recipients the right to choose among a range of qualified providers, without
government interference” and “[b]y implication, . . . also confers an absolute
right to be free from government interference with the choice to remain in a
home that continues to be qualified.” 44 The Court juxtaposed these granted
rights with those that § 1396a(a)(23) “clearly does not confer,” beginning with
the right “to enter an unqualified home and demand a hearing to certify it.” 45

40 Id.
41 Id. at 787.
42 Id.
43 Id. at 775, 785.
44 Id. at 785 (emphasis in original).
45 Id.

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Most relevant here, the Court explicitly stated that § 1396a(a)(23) does not
grant Medicaid beneficiaries the right “to continue to receive benefits for care
in a home that has been decertified.” 46 In reaching this conclusion, the Court
noted that “decertification does not reduce or terminate a patient’s financial
assistance, but merely requires him to use it for care at a different facility.” 47
The O’Bannon beneficiaries also argued that being transferred to
another nursing home “may have such severe physical or emotional side effects
that it is tantamount to a deprivation of life or liberty.” 48 The Court rejected
this argument as well. The Court compared Medicaid beneficiaries whose
preferred provider has been decertified to patients without Medicaid whose
preferred provider’s license has been revoked, reasoning that, while “[b]oth
may be injured by the closing of a [provider] due to revocation of [the provider’s]
state license or [the provider’s] decertification as a Medicaid
provider[,] . . . [neither patient] would have any claim against the responsible
governmental authorities for the deprivation of an interest in life, liberty, or
property.”49
Having concluded that the termination of the nursing home’s Medicaid
provider agreement “did not directly affect the patients’ legal rights or deprive
them of any constitutionally protected interest in life, liberty, or property,” 50
the Court determined that the Medicaid beneficiaries did not have a due
process right to a hearing on whether the federal and state agencies were
justified in terminating the nursing home’s Medicaid provider agreement. 51

46 Id.
47 Id. at 785-86.
48 Id. at 784.
49 Id. at 787.
50 Id. at 790.
51 Id. at 775, 785.

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The Supreme Court’s decision in O’Bannon resolves this case.52 It
establishes that § 1396a(a)(23) does not give Medicaid beneficiaries a right to
question a State’s determination that a provider is unqualified. Medicaid
beneficiaries have an “absolute right” under § 1396a(a)(23) to receive services
from a provider whom the State has determined is “qualified,” but beneficiaries
have no right under the statute to challenge a State’s determination that a
provider is unqualified.
Because the Individual Plaintiffs do not have a right to continued
benefits to pay for care from the Providers, they are not likely to prevail on the
merits of their § 1983 claims and, as a result, are not entitled to a preliminary
injunction.53 Accordingly, the injunction issued by the district court, which
was based entirely on the § 1983 claims of the Individual Plaintiffs, 54 must be
vacated.
III
Even absent O’Bannon’s holding, the text of § 1396a(a)(23) does not
unambiguously grant Medicaid patients the right to be involved in or to contest
a state agency’s determination that a provider is not “qualified.” The any-
qualified-provider provision expressly contemplates that the chosen provider
is both “qualified” and willing to provide the services sought. 55 The two
requirements cannot be divorced from one another. It is a chicken-and-egg

52 Accord Does v. Gillespie, 867 F.3d 1034, 1047 (8th Cir. 2017) (SHEPHERD, J.,
concurring) (“O’Bannon controls the outcome of this case. The plaintiffs are asserting a
right—the absolute right to a particular provider of their choosing—that § 23(A) does not
grant them.”).
53 See Tex. Med. Providers Performing Abortion Servs. v. Lakey, 667 F.3d 570, 574 (5th

Cir. 2012) (quoting Bluefield Water Ass’n, Inc. v. City of Starkville, Miss., 577 F.3d 250, 252
(5th Cir. 2009)).
54 See Planned Parenthood of Greater Tex. Family Plan. & Preventative Health Servs.,

Inc. v. Smith, 236 F. Supp. 3d 974, 987-88 (W.D. Tex. 2017).
55 See 42 U.S.C. § 1396a(a)(23)(A).

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proposition. A provider is not eligible to be chosen unless both conditions are
met—that it is qualified and willing to provide services.
The most natural reading of § 1396a(a)(23) is that it is up to the provider
to establish that it is both “qualified” and willing to provide the services. A
Medicaid patient is not involved in a provider’s willingness to accept Medicaid
procedures, regulations, and reimbursement rates. Additionally, whether a
provider is “qualified” is largely a factual determination with the facts more
readily available to the provider, not the Medicaid patient. If a state agency
or actor determines that a particular provider is not qualified, in most if not
all cases, it is the provider who has the most incentive to contest such a finding
and to seek a resolution. It requires a strained reading of § 1396a(a)(23) to
conclude that a Medicaid patient has the independent right to have a particular
provider declared “qualified” when the provider itself does not challenge a
finding that it is not qualified. It requires an equally strained reading of
§ 1396a(a)(23) to conclude that it is only when a provider itself contests a
finding that it is not “qualified” that a Medicaid patient has the right to have
that particular provider declared “qualified” in the face of the contrary finding.
Where is the language in § 1396a(a)(23) that grants a right to a Medicaid
patient, either independent of the provider’s right or exercised in tandem with
the provider, to have a particular provider declared “qualified”? It is not
there,56 and that is why the Supreme Court held as it did in O’Bannon. A
Medicaid patient may choose among qualified and willing providers but has no
right to insist that a particular provider is “qualified” when the State has
determined otherwise.
In Gonzaga University, the Supreme Court “reject[ed] the notion that
[its] cases permit anything short of an unambiguously conferred right to

56 See id.
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support a cause of action brought under § 1983.” 57 The Court explained that
“[a] court’s role in discerning whether personal rights exist in the § 1983
context should . . . not differ from its role in discerning whether personal rights
exist in the implied right of action context.” 58 In determining “whether
Congress intended to create a federal right” the Supreme Court has held that
“the question . . . is definitively answered in the negative whe[n] a statute by
its terms grants no private rights to any identifiable class.” 59 The inquiry when
determining if a statute grants a right “is to determine whether or not a statute
‘confer[s] rights on a particular class of persons.’” 60 “Accordingly, whe[n] the
text and structure of a statute provide no indication that Congress intends to
create new individual rights, there is no basis for a private suit, whether under
§ 1983 or under an implied right of action.” 61
The Gonzaga decision also re-emphasized “that it is only violation of
rights, not laws, which give rise to § 1983 actions.” 62 The Court explained,
to “seek redress through § 1983, . . . a plaintiff must assert the violation of a
federal right, not merely a violation of federal law.” 63
The Supreme Court’s opinion in Armstrong v. Exceptional Child Center,
Inc.64 also supports the conclusion that Congress did not intend to create a
right under § 1396a(a)(23) such that Medicaid patients could contest a state’s

57 Gonzaga Univ. v. Doe, 536 U.S. 273, 283 (2002).
58 Id. at 285.
59 Id. at 283-84 (emphasis in original) (internal brackets and quotation marks omitted)

(quoting Touche Ross & Co. v. Redington, 442 U.S. 560, 576 (1979)).
60 See id. at 285 (“[T]he initial inquiry—determining whether a statute confers any

right at all—is no different from the initial inquiry in an implied right of action case, the
express purpose of which is to determine whether or not a statute ‘confer[s] rights on a
particular class of persons.’” (alteration in original) (quoting California v. Sierra Club, 451
U.S. 287, 294 (1981))).
61 Id. at 286.
62 Id. at 283 (emphasis in original) (citing Blessing v. Freestone, 520 U.S. 329, 340

(1997)).
63 Id. at 282 (emphasis and alteration in original) (quoting Freestone, 520 U.S. at 340).
64 575 U.S. 320 (2015) (plurality opinion).

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determination that a particular provider is not “qualified.” While the statute
unambiguously provides that a Medicaid beneficiary has the right to obtain
services from the qualified provider of her choice, § 1396a(a)(23) does not
unambiguously say that a beneficiary may contest or otherwise challenge a
determination that the provider of her choice is unqualified. In Armstrong the
Supreme Court disavowed, in part, its decision in Wilder v. Virginia Hospital
Ass’n 65 declaring in Armstrong that “our later opinions plainly repudiate the
ready implication of a § 1983 action that Wilder exemplified. See Gonzaga
Univ. v. Doe . . . (expressly ‘reject[ing] the notion,’ implicit in Wilder, ‘that our
cases permit anything short of an unambiguously conferred right to support a
cause of action brought under § 1983’).” 66
The right asserted by the Individual Plaintiffs is not unambiguously
conferred. Section 1396a(a)(23) says that State Medicaid plans must “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 . . . who undertakes to
provide him such services, and . . . an enrollment of an individual eligible for
medical assistance in [certain entities] shall not restrict the choice of the
qualified person from whom the individual may receive services.” 67 The only
unambiguous directives are that a State must include such a provision in its
Medicaid plan and that beneficiaries have the right to choose among qualified
providers. This subsection does not say that a Medicaid patient has a right to
contest a State’s determination that a provider is not “qualified.” The
Individual Plaintiffs can only infer, at best, that if they have a right to obtain
assistance from a “qualified” provider, then they have a right to contest a

65 496 U.S. 498 (1990).
66 Armstrong, 575 U.S. at 330 n.* (citing Gonzaga, 536 U.S. at 283).
67 42 U.S.C. § 1396a(a)(23).

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State’s determination that a particular provider is not “qualified” to perform
the necessary services. But such an inference is not “an unambiguously
conferred right.”68
Neither the text nor the structure of § 1396a(a)(23) indicates that
Congress intended to give Medicaid beneficiaries the right to intervene or
otherwise interject themselves into state or federal administrative or court
proceedings whose purpose is to determine whether a particular provider is
“qualified.” Nor does the text or structure of § 1396a(a)(23) suggest that while
state or federal administrative or court proceedings are ongoing to resolve the
issue of a provider’s qualification, or after there is a final determination by the
State that the provider is not “qualified,” a Medicaid patient has the right to
litigate separately or anew whether her provider is “qualified.” If Congress
had intended such a scheme with its inherent potential for conflict, that intent
must have been plainly—unambiguously—expressed. 69 It was not.
This conclusion is borne out by the text and structure of other closely
related federal statutes. Statutory provisions, including other subsections of
§ 1396a, permit a State to exclude providers from Medicaid plans for a host of
reasons,70 while other statutory provisions, also including other subsections of
§ 1396a, mandate exclusion for various reasons.71 Section 1396a(p)(3) provides

68 Gonzaga, 536 U.S. at 283 (“We now reject the notion that our cases permit anything
short of an unambiguously conferred right to support a cause of action brought under
§ 1983.”).
69 See id. at 290 (“In sum, if Congress wishes to create new rights enforceable under

§ 1983, it must do so in clear and unambiguous terms—no less and no more than what is
required for Congress to create new rights enforceable under an implied private right of
action.”).
70 See, e.g., 42 U.S.C. § 1396a(p)(1) (“In addition to any other authority, a State may

exclude any individual or entity for purposes of participating under the State plan under this
subchapter for any reason for which the Secretary could exclude the individual or entity from
participation in a program under subchapter XVIII under section 1320a-7, 1320a-7a, or
1395cc(b)(2) of this title.”); id. § 1320a-7(b).
71 See, e.g., id. §§ 1396a(p)(2), 1320a-7(a).

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that “the term ‘exclude’ includes the refusal to enter into or renew a
participation agreement or the termination of such an agreement.” 72 None of
these statutes suggest that Medicaid patients have a right to challenge
whether, as either a factual or legal matter, a State’s exclusion or removal of a
provider is permitted or mandated by these statutes.
The any-qualified-provider provision is not analogous to the provision of
the Medicaid Act at issue in Wilder v. Virginia Hospital Ass’n.73 The Supreme
Court reasoned in Suter v. Artist M. 74 that “the Boren Amendment [the subject
of Wilder] actually required the States to adopt reasonable and adequate rates,
and that this obligation was enforceable by the providers.” 75 The Court
continued, “[w]e relied in part on the fact that the statute and regulations set
forth in some detail the factors to be considered in determining the methods
for calculating rates.” 76
The language at issue in the present case is more akin to the statute
under consideration in Suter v. Artist M., which was a provision in the
Adoption Assistance and Child Welfare Act of 1980 (Adoption Act).77 “The
Adoption Act establishe[d] a federal reimbursement program for certain
expenses incurred by the States in administering foster care and adoption
services.” 78 To participate, a State was required to submit a plan to the
Secretary of Health and Human Services for approval. 79 The Adoption Act
required the plan to provide that “in each case, reasonable efforts will be made
(A) prior to the placement of a child in foster care, to prevent or eliminate the

72 Id. § 1396a(p)(3).
73 496 U.S. 498 (1990).
74 503 U.S. 347 (1992).
75 Id. at 359.
76 Id. (citing Wilder, 496 U.S. at 519 n.17).
77 Id. at 350.
78 Id. at 350-51.
79 Id. at 351 (citing 42 U.S.C. §§ 670, 671).

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need for removal of the child from his home, and (B) to make it possible for the
child to return to his home.” 80 The plaintiffs sought, and the district court
granted, injunctive relief requiring a state agency to assign a caseworker to
each child placed in the agency’s custody within three working days of the time
the case was first heard in state court, and to reassign a caseworker within
three working days of the date any caseworker relinquished responsibility for
a particular case. 81 Though the language of § 671(a)(15) would seemingly
satisfy the first factor identified in Blessing v. Freestone, which is that
“Congress must have intended that the provision in question benefit the
plaintiff,” 82 the Supreme Court held that it did not confer rights upon which a
§ 1983 suit could be based. 83 The Court reasoned that the “reasonable efforts”
directive “will obviously vary with the circumstances of each individual case.
How the State was to comply with this directive, and with the other provisions
of the Act, was, within broad limits, left up to the State.” 84 The Court then
observed that “[o]ther sections of the Act provide enforcement mechanisms for
the ‘reasonable efforts’ clause,” including the Secretary’s “authority to reduce
or eliminate payments to a State on finding that the State’s plan no longer
complies with § 671(a) or that ‘there is a substantial failure’ in the
administration of a plan such that the State is not complying with its own

80 Id. (quoting 42 U.S.C. § 671(a)(15) (1980) (amended 1997)).
81 Id. at 352-53.
82 Blessing v. Freestone, 520 U.S. 329, 340 (1997) (citing Wright v. City of Roanoke

Redevelopment & Hous. Auth., 479 U.S. 418, 430 (1987)).
83 Suter, 503 U.S. at 363 (“Careful examination of the language relied upon by

respondents, in the context of the entire Act, leads us to conclude that the ‘reasonable efforts’
language does not unambiguously confer an enforceable right upon the Act’s beneficiaries.
The term ‘reasonable efforts’ in this context is at least as plausibly read to impose only a
rather generalized duty on the State, to be enforced not by private individuals, but by the
Secretary in the manner previously discussed . . . . [We] conclude[] that § 671(a)(15) does not
create a federally enforceable right to ‘reasonable efforts’ under § 1983 . . . .”).
84 Id. at 360.

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plan.” 85 The Court observed that while these enforcement provisions “may not
provide a comprehensive enforcement mechanism so as to manifest Congress’
intent to foreclose remedies under § 1983,” the Court concluded that “they do
show that the absence of a remedy to private plaintiffs under § 1983 does not
make the ‘reasonable efforts’ clause a dead letter.” 86
The same can be said of the any-qualified-provider provision in
§ 1396a(a)(23). Whether a particular provider is “qualified” “will obviously
vary with the circumstances of each individual case,” 87 and though courts are
equipped to determine if a particular provider is qualified in the broad sense
of that term, just as they are equipped to determine whether a child protective
agency made “reasonable efforts” in a particular case, the fact that the courts
could make such determinations if called upon by Congress is not dispositive.
There must be a grant of a right to beneficiaries. 88 Further, the Medicaid Act
leaves it up to a State to determine if a particular provider’s Medicaid
agreement should be terminated because the provider is not “qualified” or
terminated on other grounds. 89 There are enforcement mechanisms in the
Medicaid Act analogous to those in the Adoption Act referenced by the
Supreme Court in Suter. The Medicaid Act provides that the Secretary may
reduce or eliminate payments to a state agency if the Secretary finds that state
agency’s plan does not comply with 42 U.S.C. § 1396a 90 or “that in the
administration of the plan there is a failure to comply substantially with any
such provision” of § 1396a. 91 Though a Medicaid beneficiary does not have the

85 Id. (citing 42 U.S.C. § 671(b) (1980) (amended 1994)).
86 Id. 360-61.
87 Id. at 360.
88 See supra note 71.
89 See supra notes 70-71 and accompanying text.
90 See supra text accompanying note 85.
91 42 U.S.C. § 1396c.

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right to contest, through a § 1983 suit, a determination that a particular
provider is not qualified, that does not render the any-qualified-provider
provision a “dead letter” for the same reasons that the “reasonable efforts”
provision in Suter was not a “dead letter.”
Under federal regulations promulgated under the Medicaid Act, a state
Medicaid agency must provide an avenue for a provider to appeal a
determination that it is not “qualified.” 92 Texas has provided an
administrative procedure for such appeals.93 There is no analogous provision
for Medicaid beneficiaries when a particular provider is deemed unqualified,
indicating that there is no such right.
If a Medicaid beneficiary is denied medical assistance, the Medicaid Act
does provide some remedy. A State’s plan must “provide for granting an
opportunity for a fair hearing before the State agency to any individual whose
claim for medical assistance under the plan is denied or is not acted upon with
reasonable promptness.” 94 We do not address today whether the Medicaid Act
“provide[s] a comprehensive enforcement mechanism so as to manifest
Congress’ intent to foreclose remedies under § 1983” 95 in a case in which a
Medicaid beneficiary seeks care or services from a provider whom the State
has determined is “qualified.” We do not reach that question for the same
reason that the Supreme Court did not reach a similar question in Suter: “We

92 42 C.F.R. § 455.422 (“The State Medicaid agency must give providers terminated or
denied under § 455.416 any appeal rights available under procedures established by State
law or regulations.”).
93 See 1 TEX. ADMIN. CODE § 371.1703(f)(2) (2020) (“A person may request an

administrative hearing after receipt of a final notice of termination in accordance with
§ 371.1615 of this subchapter (relating to Appeals) unless the termination is required under
42 C.F.R. § 455.416.”).
94 42 U.S.C. § 1396a(a)(3).
95 Suter v. Artist M., 503 U.S. 347, 360 (1992).

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need not consider this question today due to our conclusion that the [Medicaid]
Act does not create the federally enforceable right asserted by respondents.” 96
Though the Medicaid Act, in § 1396a(a)(23), does give a Medicaid
beneficiary the right to receive care or services from a provider that a State
has determined is “qualified,” that provision does not unambiguously provide
that a Medicaid beneficiary has the right to contest a State’s termination of a
provider’s Medicaid agreement on the basis that the provider is not “qualified”
or the State’s determination that the agreement should be terminated on other
grounds permissible under the Medicaid Act.
IV
At least six other circuit courts have considered whether § 1396a(a)(23)
confers a right upon Medicaid beneficiaries that can be enforced under 42
U.S.C. § 1983, 97 and there is a conflict.98 The Eighth Circuit has concluded, as
do we today, that § 1396a(a)(23) “does not unambiguously create a federal right
for individual patients that can be enforced under § 1983.” 99
The Eighth Circuit recognized that the Medicaid Act is legislation
enacted under the Spending Clause 100 that directs the Secretary of Health and
Human Services to approve a State’s Medicaid plan if it “fulfills the conditions
specified in subsection (a)” of § 1396a. 101 Subsection 23 is among “some eighty-

96 Id. at 360 n.11.
97 Planned Parenthood S. Atl. v. Baker, 941 F.3d 687 (4th Cir. 2019); Planned
Parenthood of Kan. v. Andersen, 882 F.3d 1205 (10th Cir. 2018), cert. denied, 139 S. Ct. 638
(2018); Does v. Gillespie, 867 F.3d 1034 (8th Cir. 2017); Planned Parenthood Ariz. Inc. v.
Betlach, 727 F.3d 960 (9th Cir. 2013), cert. denied, 571 U.S. 1198 (2014); Planned Parenthood
of Ind., Inc. v. Comm’r of Ind. State Dep’t of Health, 699 F.3d 962 (7th Cir. 2012), cert. denied,
569 U.S. 1004 (2013); Harris v. Olszewski, 442 F.3d 456 (6th Cir. 2006).
98 See Gee v. Planned Parenthood of Gulf Coast, Inc., 139 S. Ct. 408, 408 (2018)

(THOMAS, J., dissenting from denial of writ of certiorari).
99 Does, 867 F.3d at 1037.
100 Id. at 1039.
101 Id. at 1040 (quoting 42 U.S.C. § 1396a(b)).

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three conditions” set forth in § 1396a(a). 102 The Eighth Circuit observed that
the Medicaid Act is “a directive to the federal agency charged with approving
state Medicaid plans,” 103 and “[e]ven whe[n] a subsidiary provision includes
mandatory language that ultimately benefits individuals, a statute phrased as
a directive to a federal agency typically does not confer enforceable federal
rights on the individuals.” 104
Like the Eighth Circuit, we also see the potential for parallel litigation
and conflicting results if Medicaid patients could bring a § 1983 suit
challenging termination of a provider’s contract after state appellate
proceedings had determined that the termination was proper and
permissible. 105 If Congress contemplated such a regime, it must have created
it in unambiguous terms. 106 In a health care system that is massive and costs
taxpayers billions of dollars each year, it is difficult to conclude from so thin a
read of § 1396a(a)(23) that Congress envisioned states’ spending additional
millions of dollars defending suits in courts across the country brought by
Medicaid patients when particular providers are excluded or terminated.
We further agree with the Eighth Circuit that “[t]he absence of a remedy
for patients under § 1983 . . . does not make the [any-qualified]-provider
provision an empty promise.” 107 A Medicaid provider who wishes “to continue
providing services ha[s] an obvious incentive to pursue administrative appeals
and judicial review in state court if the alternative avenue of recruiting
patients to sue in federal court is not available.” 108 Additionally, both providers

102 Id.
103 Id. at 1041 (quoting Armstrong v. Exceptional Child Ctr., Inc., 575 U.S. 320, 331
(2015) (plurality opinion)).
104 Id. (citing Univs. Rsch. Ass’n, Inc. v. Coutu, 450 U.S. 754, 756 n.1, 772-73 (1981)).
105 Id. at 1041-42.
106 See supra note 71.
107 Does, 867 F.3d at 1046.
108 Id.

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and patients “may urge the Secretary to withhold federal funds from a State
that fails to comply substantially with the conditions of § 23(A).” 109 The
assertion in JUDGE DENNIS’s dissenting opinion that our holding today means
that Medicaid beneficiaries “must meekly accept what choices the state allows”
rings particularly hollow. 110 Providers like the Planned Parenthood plaintiffs
in the present case surely have the resources and motivation to contest
termination of their Medicaid agreements through the state administrative
process.111 Individual providers, as noted earlier in this opinion, can contest
termination of a Medicaid agreement if they remain willing to provide services
to Medicaid recipients.
However, five other circuits, the Fourth, Sixth, Seventh, Ninth, and
Tenth, have held that § 1396a(a)(23) bestows a private right that Medicaid
beneficiaries can vindicate through a § 1983 claim. 112 To the extent that these
cases hold that a Medicaid patient has a right to contest, by means of a § 1983
suit or otherwise, a State’s determination that a provider is not “qualified”
within the meaning of § 1396a(a)(23), we disagree that § 1396a(a)(23)
unambiguously grants such a right for the reasons already considered in this
opinion.
In three cases from other circuits, a state actor or agency terminated a
provider agreement or sought to exclude a provider solely on the basis that the

109 Id.
110 See DENNIS, J., dissenting, post at 2.
111 1 TEX. ADMIN. CODE § 371.1703(f)(2) (2020).
112 Planned Parenthood S. Atl. v. Baker, 941 F.3d 687 (4th Cir. 2019); Planned

Parenthood of Kan. v. Andersen, 882 F.3d 1205 (10th Cir. 2018), cert. denied, 139 S. Ct. 638
(2018); Planned Parenthood Ariz. Inc. v. Betlach, 727 F.3d 960 (9th Cir. 2013), cert. denied,
571 U.S. 1198 (2014); Planned Parenthood of Ind., Inc. v. Comm’r of Ind. State Dep’t of Health,
699 F.3d 962 (7th Cir. 2012), cert. denied, 569 U.S. 1004 (2013); Harris v. Olszewski, 442 F.3d
456 (6th Cir. 2006).
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provider or an affiliate performed abortions.113 It is not clear whether any or
all of those circuits would permit a Medicaid patient to pursue a § 1983 claim
asserting that a State’s finding that a provider was not “qualified” was
erroneous, an abuse of discretion, arbitrary and unreasonable, or violated a
statutory or constitutional provision. 114
Some of the circuits’ opinions have sought to distinguish the Supreme
Court’s decision in O’Bannon by perceiving a right within § 1396a(a)(23) upon
which Medicaid patients may sustain a suit against a state agency or actor. In
Planned Parenthood South Atlantic v. Baker, the Fourth Circuit characterized
O’Bannon as “sp[eaking] to the narrow question whether residents of a nursing
home had a right to a pre-termination hearing before the state could close a
home that all parties agreed was professionally ‘unqualified’ to render patient
care.” 115 Similarly, the Tenth Circuit asserted that “O’Bannon addressed

113 Baker, 941 F.3d at 692 (“PPSAT was terminated solely because it performed
abortions outside of the Medicaid program.”); Betlach, 727 F.3d at 962 (“The Arizona law
extends the ineligibility [for the State’s Medicaid program] to non-abortion services such as
gynecological exams and cancer screenings unless the patient’s provider agrees to stop
performing privately funded elective abortions.”); Planned Parenthood of Ind., Inc., 699 F.3d
at 967 (“The new law goes a step further [than forbidding federal funds to pay for most non-
therapeutic abortions] by prohibiting abortion providers from receiving any state-
administered funds, even if the money is earmarked for other services. The point is to
eliminate the indirect subsidization of abortion.” (emphasis in original)).
114 See Baker, 941 F.3d at 705 (recognizing that States “retain discretionary authority

to disqualify providers as professionally incompetent for nonmedical reasons such as fraud
and for any number of unprofessional behaviors,” but not addressing whether a Medicaid
patient could sue under § 1983 to challenge a State’s particular qualification determination,
nor what level of deference, if any, would be accorded to the state’s determination in such a
suit); Betlach, 727 F.3d at 962, 972 (noting that § 1396a(p)(1) provides “states with authority
to exclude providers on specified grounds,” but not addressing whether a Medicaid patient
could sue under § 1983 to challenge a State’s particular qualification determination, nor what
level of deference, if any, would be accorded to the State’s determination in such a suit);
Planned Parenthood of Ind., Inc., 699 F.3d at 967-68, 979-80 (noting that the Medicaid Act
outlines “specific grounds upon which states may bar providers from participating in
Medicaid,” but not addressing whether a Medicaid patient could sue under § 1983 to
challenge a State’s particular qualification determination, nor what level of deference, if any,
would be accorded to the State’s determination in such a suit).
115 Baker, 941 F.3d at 704.

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a . . . situation . . . [in which] no one contested that the nursing home was
unqualified to perform the services.” 116
With great respect for our sister courts, those statements are
demonstrably incorrect. Though the O’Bannon opinion reflects that Medicaid
entities had decertified the nursing home based on findings that the home
failed to meet numerous standards for skilled nursing facilities, 117 neither the
nursing home nor its residents agreed with those assessments. The residents,
who were Medicaid beneficiaries, along with the nursing home, filed suit in
federal court contending “that both the nursing home and the patients were
entitled to an evidentiary hearing on the merits of the decertification decision
before the Medicaid payments were discontinued.” 118 Clearly, the Medicaid
patients sought to challenge the agencies’ determination that the nursing
home was no longer “qualified” to provide services within the meaning of
§ 1396a(a)(23). 119 The Medicaid beneficiaries in O’Bannon did not take the
position, as the Fourth and Tenth Circuits’ decisions necessarily imply, that
the nursing home was “professionally unqualified,” 120 but that the Medicaid
residents nevertheless had a right to remain at the home, and Medicaid must
continue paying for services performed by an unqualified provider. Instead,
the Medicaid residents sought to challenge the determination that the nursing
home was not a “qualified” provider.
Several circuits, including a panel in our circuit, have attempted to
distinguish O’Bannon by declaring that it involved only whether there was a
right to due process and that it did not address whether the individuals

116 Andersen, 882 F.3d at 1231.
117 O’Bannon v. Town Ct. Nursing Ctr., 447 U.S. 773, 775-76, 776 n.3 (1980).
118 Id. at 777 (emphasis added).
119 See id.
120 See Baker, 941 F.3d at 704 (internal quotation marks omitted).

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receiving Medicaid assistance had substantive rights under § 1396a(a)(23). 121
But this, too, is demonstrably incorrect. The Supreme Court made plain in
O’Bannon that in order to resolve whether the right to due process entitled the
Medicaid nursing home residents to a hearing on the merits of whether the
provider was “qualified,” the Court had to determine whether § 1396a(a)(23)
granted an underlying substantive right that would permit the residents to
challenge a State’s determination that a provider is not qualified. 122 The Court
held that there is no such substantive right. 123 The fact that the claim in
O’Bannon was brought as a constitutional challenge rather than under § 1983
does not permit us to ignore the Supreme Court’s construction of
§ 1396a(a)(23), and it is not a basis for distinguishing O’Bannon, as the
dissenting opinion of JUDGE DENNIS asserts in the present case. 124

121 See id. (“In point of fact, the patients [in O’Bannon] did not bring a substantive
claim seeking to vindicate their rights under the [any-qualified]-provider provision, but
rather sued for violation of their procedural due process rights.” (citing O’Bannon, 447 U.S.
at 775)); Andersen, 882 F.3d at 1231 (“[W]e note that the nursing home residents in O’Bannon
asserted procedural due-process rights, not substantive rights, as the patients do here.”);
Planned Parenthood of Gulf Coast, Inc. v. Gee, 862 F.3d 445, 460 (5th Cir. 2017) (concluding
O’Bannon “is inapposite. There, the patient-plaintiffs’ injuries were alleged to stem from a
deprivation of due process rights, specifically, the right to a hearing to contest the state’s
decertification of a health care provider, not just its Medicaid qualification” and “[i]n contrast,
the Individual Plaintiffs here assert the violation of a substantive right.” (citing O’Bannon,
447 U.S. at 776 n.3)); Planned Parenthood of Ind., Inc. v. Comm’r of Ind. State Dep’t of Health,
699 F.3d 962, 977 (7th Cir. 2012) (asserting that O’Bannon is a “due-process case” and that
by contrast “Planned Parenthood and its patients are not suing for violation of their
procedural rights; they are making a substantive claim that Indiana’s defunding law violates
§ 1396a(a)(23).” (emphasis in original)); see also DENNIS, J., dissenting, post at 7.
122 O’Bannon, 447 U.S. at 786 (“In holding that these provisions create a substantive

right to remain in the home of one’s choice absent specific cause for transfer, the Court of
Appeals failed to give proper weight to the contours of the right conferred by the statutes and
regulations. As indicated above, while a patient has a right to continued benefits to pay for
care in the qualified institution of his choice, he has no enforceable expectation of continued
benefits to pay for care in an institution that has been determined to be unqualified.”).
123 See id. at 785-86.
124 See DENNIS, J., dissenting, post at 7.

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An individual eligible for Medicaid assistance may have the right based
on § 1396a(a)(23) that the Supreme Court identified in O’Bannon in dicta: “[b]y
implication, it also confers an absolute right to be free from government
interference with the choice to remain in a home that continues to be
qualified.” 125 But in each of the three sentences that follow the one just quoted,
the Supreme Court made clear that § 1396a(a)(23) does not confer a right to
contest, collaterally attack, or litigate a State’s determination that a provider is
not “qualified.” The Court said:
[First, § 1396a(a)(23)] clearly does not confer a right on a recipient
to enter an unqualified home and demand a hearing to certify it,
nor does it confer a right on a recipient to continue to receive
benefits for care in a home that has been decertified.

Second, although the regulations do protect patients by limiting
the circumstances under which a home may transfer or discharge
a Medicaid recipient, they do not purport to limit the Government's
right to make a transfer necessary by decertifying a facility.

Finally, since decertification does not reduce or terminate a
patient’s financial assistance, but merely requires him to use it for
care at a different facility, regulations granting recipients the right
to a hearing prior to a reduction in financial benefits are
irrelevant. 126
The central holding in O’Bannon was that regardless of whether the State’s
qualification decision was correct, the individual beneficiaries did not have a
right that would allow them to “demand a hearing” to challenge that
determination. 127
The Sixth Circuit’s conclusion in Harris v. Olszewski that § 1396a(a)(23)
creates a private right 128 was unnecessary to the judgment that it issued. In

125 O’Bannon, 447 U.S. at 785.
126 Id. at 785-86 (emphasis omitted).
127 Id. at 785.
128 Harris v. Olszewski, 442 F.3d 456, 461-65 (6th Cir. 2006).

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Harris, as a cost-savings measure, a Michigan agency contracted with only one
provider of incontinence products after a competitive-bidding process.129 A
Medicaid beneficiary who used incontinence products filed suit seeking to
certify a class and to enjoin enforcement of the single-source-provider contract
so the class could obtain supplies from other qualified providers. 130 The Sixth
Circuit rendered judgment against the beneficiaries because it held that
incontinence products are “medical devices” within the meaning of 42 U.S.C.
§ 1396n(a)(1)(B), and “medical devices” are excepted from the “freedom-of-
choice provision” in § 1396a(a)(23) when a State acquires them through a
competitive bidding process.131 The Sixth Circuit addressed the threshold
issue of whether § 1396a(a)(23) bestowed a right upon individuals receiving
Medicaid assistance upon which a § 1983 suit could be based, even though it
was not required to decide that issue in order to render the judgment that it
did.
Regardless, the Sixth Circuit’s conclusion that § 1396a(a)(23) confers a
right upon which a § 1983 suit could be based is inapposite in the present
context. The Medicaid beneficiaries in Harris sued to obtain access to
additional qualified providers, not to contest the qualifications of the sole
provider with whom Michigan’s Department of Community Health had
contracted to obtain all incontinence supplies for Medicaid beneficiaries. 132
The Michigan agency had never determined that the suppliers from which the
beneficiaries sought products were not “qualified” providers. 133 The
qualifications of the existing supplier and the sought-after suppliers were
simply not at issue. The Sixth Circuit’s conclusion that the Medicare

129 Id. at 460, 463.
130 Id. at 460.
131 Id. at 465-69.
132 Id. at 460.
133 See id. at 459-60.

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beneficiaries had enforceable rights under § 1396a(a)(23) is consistent with the
dicta in O’Bannon, which said that under § 1396a(a)(23), “a patient has a right
to continued benefits to pay for care in the qualified institution of his choice.” 134
It does not contradict O’Bannon’s conclusion that § 1396a(a)(23) does not grant
Medicaid beneficiaries a right to payments for care at institutions that a State
has determined to be unqualified.
V
In concluding that 42 U.S.C. § 1396a(a)(23) does not give Medicaid
patients the right to challenge a State’s determination that a particular
Medicaid provider is unqualified, we expressly overrule Planned Parenthood
of Gulf Coast, Inc. v. Gee.135 The Gee case arose out of a Louisiana agency’s
termination of the Medicaid provider agreements of two Louisiana clinics
affiliated with PP Gulf Coast. 136 PP Gulf Coast and several Medicaid patients
of the Louisiana clinics bypassed state administrative procedures and sued the
Louisiana agency charged with managing its Medicaid program, the Louisiana
Department of Health and Hospitals (LDHH), under 42 U.S.C. § 1983, arguing
that the clinics were “qualified” and that LDHH had failed to identify any valid
ground under federal or state law for terminating their provider agreements. 137
After concluding that Medicaid patients had the right under § 1396a(a)(23) to
bring a § 1983 suit to contest the termination of the providers, a divided panel
of this court upheld a preliminary injunction enjoining LDHH from
terminating the provider agreements. 138 The Gee opinion conflicts with the
import of the Supreme Court’s decision in O’Bannon and whether
§ 1396a(a)(23) confers a private right of action upon Medicaid patients seeking

134 O’Bannon v. Town Ct. Nursing Ctr., 447 U.S. 773, 786 (1980).
135 862 F.3d 445 (5th Cir. 2017).
136 Id. at 450-52.
137 Id. at 450-53.
138 Id. at 459, 473.

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to challenge a State’s determination that a Medicaid provider is not “qualified”
within the meaning of that statute.
We also disavow the conclusion in Gee that a state agency or actor cannot
legitimately find that a Medicaid provider is not “qualified” unless under state
or federal law the provider would be unqualified to provide treatment or
services to the general public, including Medicaid patients who paid for the
care or services with private funds. Federal law expressly allows states to
terminate a provider’s Medicaid agreement on many grounds, including those
articulated in the Medicaid Act, none of which contemplate that the provider
must also be precluded from providing services to all non-Medicaid patients
before termination is permissible. 139 For example, termination can occur
because of a provider’s excessive charges; 140 fraud, kickbacks, or other
prohibited activities; 141 failure to provide information; 142 failure to grant
immediate access under specified circumstances;143 or default on loan or
scholarship obligations. 144 These provisions make clear that a state agency
may determine that a Medicaid provider is unqualified and terminate its
Medicaid provider agreement even if the provider is lawfully permitted to
provide health services to the general public. Medicaid patients would
nevertheless be foreclosed from challenging the termination decision based on

139 See, e.g., 42 U.S.C. § 1396a(p)(1) (“In addition to any other authority, a State may
exclude any individual or entity for purposes of participating under the State plan under this
subchapter for any reason for which the Secretary could exclude the individual or entity from
participation in a program under subchapter XVIII under section 1320a-7, 1320a-7a, or
1395cc(b)(2) of this title.”); id. § 1320a-7(b)(6) (permitting exclusion for excessive charges or
unnecessary services); id. § 1320a-7(b)(7) (permitting exclusion for “an act which is described
in section 1320a-7a, 1320a-7b, or 1320a-8 of this title”); id. § 1320a-7a(a)(1)(A) (permitting
exclusion for presenting a claim “for a medical or other item or service that the person knows
or should know was not provided as claimed”).
140 Id. § 1320a-7(b)(6).
141 Id. § 1320a-7(b)(7).
142 Id. § 1320a-7(b)(9)-(11).
143 Id. § 1320a-7(b)(12).
144 Id. § 1320a-7(b)(14).

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the holding in O’Bannon and the lack of unambiguous provisions in
§ 1396a(a)(23) conferring a right to challenge a State’s determination that a
provider is not “qualified.”
VI
JUDGE DENNIS’s dissenting opinion asserts that this court is ignoring
stare decisis. 145 An opinion of a panel does not bind the en banc court. Our
court adheres to what we sometimes call the “rule of orderliness.” “It is a well-
settled Fifth Circuit rule of orderliness that one panel of our court may not
overturn another panel’s decision, absent an intervening change in the law,
such as by a statutory amendment, or the Supreme Court, or our en banc
court.”146 “Indeed, even if a panel’s interpretation of the law appears flawed,
the rule of orderliness prevents a subsequent panel from declaring it void.” 147
But the court sitting en banc may overrule or abrogate a panel’s decision if the
en banc court concludes that panel opinion’s holding was indeed flawed. No
decision of this court has held that the court sitting en banc cannot overrule a
prior panel decision unless it considers all the elements and principles
embodied in the doctrine of stare decisis.
That does not mean that principles underpinning the doctrine of stare
decisis have no place in the en banc court’s decision about whether to overturn
or abrogate a panel’s prior decision. But the analysis is not as exacting as that
undertaken by the Supreme Court of the United States in applying the stare
decisis doctrine, as it must, in deciding whether to overturn its own precedent.
Nor does the failure of the en banc court to grant rehearing of a panel’s
decision impart greater precedential value to that decision than it would have

145 See DENNIS, J., dissenting, post at 22-24.
146 Jacobs v. Nat’l Drug Intel. Ctr., 548 F.3d 375, 378 (5th Cir. 2008) (emphasis
omitted).
147 Id.
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if no vote of the en banc court had occurred. A vote not to rehear a case en banc
is no different in terms of stare decisis than the Supreme Court’s denial of a
petition for certiorari. The Supreme Court is not precluded by stare decisis
from considering the same issue, presented in a subsequent case, even though
it previously declined to consider the precise issue by denying a petition for
certiorari in a prior case.
The en banc court is today overruling the decision of a panel of this court
in Planned Parenthood of Gulf Coast, Inc. v. Gee.148 The vote to grant
rehearing in that case failed in an evenly divided vote (7 to 7). 149 The same
issue has now been presented in the present case. The en banc court has
concluded that the panel’s decision in Gee seriously misunderstood the import
of the Supreme Court’s decision in O’Bannon v. Town Court Nursing Center 150
and failed to apply the Supreme Court’s construction of § 1396a(a)(23) in
O’Bannon. That determination alone warrants overruling or abrogating the
Gee decision, even were the doctrine of stare decisis fully applicable when a
Court of Appeals sitting en banc weighs whether to overturn existing precedent
established by a panel’s decision.
* * *
The preliminary injunction issued by the district court is VACATED.

148 862 F.3d 445 (5th Cir. 2017), cert. denied, 139 S. Ct. 408 (2018).
149 Planned Parenthood of Gulf Coast, Inc. v. Gee, 876 F.3d 699, 699 (5th Cir. 2017)
(mem.).
150 447 U.S. 773 (1980).
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JENNIFER WALKER ELROD, Circuit Judge, joined by JONES, SMITH,
WILLETT, HO, DUNCAN, and ENGELHARDT, Circuit Judges, concurring:
I concur in full with Chief Judge Owen’s excellent majority opinion.
First, as she observed, a conclusion that the qualified-provider provision
confers a private right to contest a state’s termination of a Medicaid agreement
would be inconsistent with the Supreme Court’s decision in O’Bannon v. Town
Ct. Nursing Ctr., 447 U.S. 773 (1980). Second, as Chief Judge Owen also noted,
even without O’Bannon, the qualified-provider provision does not
unambiguously provide that a Medicaid patient may contest a State’s
determination that a particular provider is not “qualified.” Thus, the
preliminary injunction entered in this case must be vacated.
I write separately to further explicate why the Supreme Court’s
Spending Clause opinions in Gonzaga Univ. v. Doe, 536 U.S. 273 (2002), and
Armstrong v. Exceptional Child Ctr., Inc., 575 U.S. 320 (2015) foreclose any
contention that the Medicaid Act’s qualified-provider provision confers such a
private right. I also provide a third reason why the preliminary injunction
must be vacated: even if the qualified-provider provision did confer a private
federal right—enforceable through 42 U.S.C. § 1983—to contest a state’s
qualification determination, the plaintiffs’ claims would fail on the merits.
I.
Congress may prescribe the terms on which it gives federal money to the
states, but “it must do so unambiguously.” Pennhurst State Sch. & Hosp. v.
Halderman, 451 U.S. 1, 17 (1981). Spending Clause legislation is “much in the
nature of a contract”: the states receive federal funds in exchange for
compliance with concomitant conditions. Id. By “insisting that Congress
speak with a clear voice,” Pennhurst’s clear-statement rule “enable[s] the
States to exercise their choice [to enter that quasi-contract] knowingly,
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cognizant of the consequences of their participation.” Id.; see also Will v. Mich.
Dep’t of State Police, 491 U.S. 58, 65 (1989) (“[I]f Congress intends to alter the
‘usual constitutional balance between the States and the Federal Government,’
it must make its intention to do so ‘unmistakably clear in the language of the
statute.’” (quoting Atascadero State Hosp. v. Scanlon, 473 U.S. 234, 242
(1985))).
For a time, the Supreme Court interpreted Pennhurst’s clear-statement
rule to mean that statutes create a “‘federal right’ that is enforceable under
§ 1983” whenever “the provision in question was intend[ed] to benefit the
putative plaintiff.” Wilder v. Va. Hosp. Ass’n, 496 U.S. 498, 509 (1990) (quoting
Golden State Transit Corp. v. City of Los Angeles, 493 U.S. 103, 106 (1989)). In
Blessing v. Freestone, the Court distilled that standard into a three-factor
inquiry, asking: (1) whether Congress “intended that the provision in question
benefit the plaintiff”; (2) whether “the right assertedly protected by the statute
is not so ‘vague and amorphous’ that its enforcement would strain judicial
competence”; and (3) whether “the provision giving rise to the asserted right
[is] couched in mandatory, rather than precatory, terms.” 520 U.S. 329, 340–
41 (1997).
But the Supreme Court has since changed course. In Gonzaga, the Court
abandoned the lenient Wilder/Blessing framework, instead requiring “an
unambiguously conferred right” to support enforceability through § 1983. 1

1 As the partially dissenting opinion notes, Gonzaga did not expressly state that the
Wilder/Blessing framework had been overruled. Nevertheless, the Court explicitly “reject[ed]
the notion that [Supreme Court] cases permit anything short of an unambiguously conferred
right to support a cause of action brought under § 1983,” and then listed features of statutes
that do not confer such a right. Gonzaga, 536 U.S. at 283. Moreover, Justice Stevens,
dissenting in Gonzaga, noted that the majority opinion had adopted a “‘new’ approach to
discerning a federal right.” 536 U.S. at 302 (Stevens, J., dissenting). And the Supreme
Court’s later decision in Armstrong—the controlling opinion, not just a plurality—made
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Gonzaga, 536 U.S. at 283; see also id. (“[I]t is only violations of rights, not laws,
which give rise to § 1983 actions.”). In that case, the Supreme Court held that
the Federal Education Rights and Privacy Act’s (FERPA) “nondisclosure
provision”—which denies federal funding to schools that permit the release of
students’ education records without their parents’ written consent—did not
“confer enforceable rights.” Id. at 278–79, 289. Instead of evaluating this
provision under the three Wilder/Blessing factors, the Court observed that the
statute merely told a federal agency when to grant funding and when to
withhold it. Id. at 282–83, 289. The nondisclosure provision defined one of
many prohibited “polic[ies] or practice[s],” and the statute established that
“[n]o [Department of Education] funds shall be made available” to a school that
maintained these policies or practices. Id. at 287 (quoting 20 U.S.C.
§ 1232g(b)(1)). The nondisclosure provision thus had an “aggregate, not
individual, focus.” Id. at 290. The provision spoke “only to the Secretary of
Education[’s]” transactions with schools wanting federal funding, and was thus
“two steps removed” from the students and parents whom the statute
ultimately benefitted. Id. at 287. The statute’s references to these benefitted
individuals were made only “in the context of describing the type of ‘policy or
practice’ that triggers a funding prohibition.” Id. at 288.
The Court also recognized that Congress chose tools other than private
lawsuits to enforce the statute’s terms. The statute “expressly authorized the
Secretary of Education to ‘deal with violations’ of the Act . . . and required the

explicit what Gonzaga held implicitly: the Wilder/Blessing framework no longer controls.
Armstrong, 575 U.S. at 330 n* (“[The plaintiffs] do not assert a § 1983 action, since our later
opinions plainly repudiate the ready implication of a § 1983 action that Wilder exemplified.”).
We therefore must follow the Supreme Court’s lead and apply the “‘new’ approach to
discerning a federal right” exemplified by Gonzaga and Armstrong. Gonzaga, 536 U.S. at 302
(Stevens, J., dissenting).
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Secretary to ‘establish or designate [a] review board’ for investigating and
adjudicating such violations.” Id. at 289 (quoting 20 U.S.C. § 1232g(f)–(g)).
Congress thus expressly empowered the executive branch—not the judiciary—
to keep schools from disclosing education records without parental consent.
The Court also observed that the enforcement mechanism—the
withholding of federal funds—was triggered only if a recipient institution
“fail[ed] to comply substantially with any requirement” of FERPA. Id. at 279
(emphasis added); see also id. at 288–89. This indicated that the statute was
concerned less with the protection of each individual person benefitted by the
statute—and therefore did not contemplate enforcement through lawsuits for
each individual violation—than it was about general compliance enforced
holistically by the Secretary of Education. Id. at 288–89.
Hitting even closer to the qualified-provider provision at issue in the
instant case, four Supreme Court Justices applied Gonzaga to the Medicaid
Act in a plurality opinion in Armstrong. In that case, a provider sued, alleging
that the reimbursements it received from the state of Idaho were too low to
comply with 42 U.S.C. § 1396a(a)(30)(A), which required Idaho’s Medicaid plan
to “assure that payments are consistent with efficiency, economy, and quality
of care” while “safeguard[ing] against unnecessary utilization of . . . care and
services.” Armstrong, 575 U.S. at 323 (quoting 42 U.S.C. § 1396a(a)(30)(A)).
The plurality opined that the provider had no private right of action because
42 U.S.C. § 1396c, like the statute in Gonzaga, merely told a federal agency
when to withhold funding and explicitly contemplated that withholding of
funding was the statute’s enforcement mechanism. Id. at 331–32 (plurality).
Here, just like the statutes in Gonzaga and Armstrong, the qualified-
provider provision does not create an “unambiguously conferred right.”
Gonzaga, 536 U.S. at 283; see also Armstrong, 575 U.S. at 331–32 (plurality).
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As a starting matter, like the provisions at issue in Gonzaga and Armstrong,
the qualified-provider provision is “two steps removed” from the individuals
that it ultimately benefits, more directly governing the federal government’s
interactions with the states. Gonzaga, 536 U.S. at 287; see also Armstrong,
575 U.S. at 331–32 (plurality). The clause appears in a long list—the exact
same list as the provision in Armstrong—of what “State plan[s] for medical
assistance must” have. 42 U.S.C. § 1396a(a). And the statute expressly directs
the Secretary of Health and Human Services (HHS) to “approve any plan which
fulfills the conditions” set out in that list. 42 U.S.C. § 1396a(b). The provision
is thus “phrased as a directive to the federal agency charged with approving
state Medicaid plans, not as a conferral of the right to sue upon the
beneficiaries of the State’s decision to participate in Medicaid.” Armstrong,
575 U.S. at 331 (plurality); see also Gonzaga, 536 U.S. at 287. The provision’s
references to the individuals whom the statute ultimately benefits are made
only in the context of what the states must do to receive federal funding. 2 See
Gonzaga, 536 U.S. at 288.
Moreover, just as in Gonzaga and Armstrong, Congress expressly
provided for other enforcement mechanisms. Congress gave the Secretary of
Health and Human Services the power to withhold federal funds from a state
that fails to comply with the codified conditions. 42 U.S.C. § 1396c; Gonzaga,
536 U.S. at 282–83, 289; Armstrong, 575 U.S. at 331–32 (plurality). Congress

2 As Judge Duncan observed at en banc oral argument, the words “individual” and
“individuals” are used a total of over 400 times in 42 U.S.C. § 1396a. See Oral Argument at
34:14–34:31. The mere existence of this word, then, can hardly confer an individual right.
See Does v. Gillespie, 867 F.3d 1034, 1042 (8th Cir. 2017) (“The reference to an ‘individual’ is
nested within one of eighty-three subsections and is two steps removed from the Act’s focus
on which state plans the Secretary ‘shall approve . . . .’” (emphasis omitted) (quoting 42
U.S.C. § 1396a(b))).
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also gave the Secretary the power to promulgate any other rules necessary for
the “proper and efficient” operation of a state plan, id. § 1396a(a)(4), and the
Secretary has used that authority to require states to give providers the right
to appeal their exclusion from the Medicaid program. 42 U.S.C.
§ 1396a(a)(4)(A); 42 C.F.R. § 1002.213. The statute thus does not
contemplate—either by its express terms or its administrative
implementation—enforcement through private-patient lawsuits. Indeed, as
Judge Colloton of the Eighth Circuit observed, allowing these lawsuits would
create “a curious system for review of a State’s determination that a Medicaid
provider is not ‘qualified’” and risk “parallel litigation and inconsistent
results.” Does v. Gillespie, 867 F.3d 1034, 1041–42 (8th Cir. 2017).
Furthermore, the qualified-provider provision is part of a “substantial
compliance” regime, just like the provisions in Gonzaga and Armstrong. The
Medicaid Act directs the Secretary to withhold Medicaid funding from a state
only if the Secretary determines that “in the administration of the plan there
is a failure to comply substantially” with a provision of the statute. 42 U.S.C.
§ 1396c(2) (emphasis added). Substantial-compliance regimes like these have
an “aggregate focus,” are “not concerned with whether the needs of any
particular person have been satisfied,” and thus do not “give rise to individual
rights.” Gonzaga, 536 U.S. at 288 (internal quotation marks and citations
omitted). Even if Texas unlawfully terminated a qualified provider within the
meaning of the qualified-provider provision,3 it would not necessarily lead to
the state’s loss of Medicaid funds. Texas would lose Medicaid funds only if the

3 For the reasons explained in Part II of this concurring opinion, Texas has not done
so.

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Secretary determined that this single failure to comply—in tandem with any
other unlawful terminations of “qualified” providers—amounted to
“substantial[]” noncompliance. 42 U.S.C. § 1396c(2).
Converting this substantial-compliance regime, holistically evaluated
and enforced by the Secretary, to a system allowing plaintiffs to sue for each
and every individual violation would conflict with the statute’s text and
structure as well as Supreme Court precedent. And as amici Louisiana and
Mississippi point out, it could also have drastic consequences, opening the
floodgates of litigation against states that make hundreds of routine Medicaid
termination decisions every year. 4 State officials would potentially “not even
[be] safe doing nothing” because recognizing a private right to challenge a
state’s qualification determinations “may enable Medicaid recipients to
challenge the failure to list particular providers, not just the removal of former
providers.” Gee v. Planned Parenthood of Gulf Coast, Inc., 139 S. Ct. 408, 409
(2018) (Thomas, J., dissenting from denial of certiorari).
In sum, the qualified-provider provision is “two steps” removed from the
patients it ultimately benefits, expressly contemplates other enforcement
mechanisms, and is part of a substantial-compliance regime. These same three
features prevented the provisions in Gonzaga and Armstrong from creating an
“unambiguously conferred right.” They should do the same here. Indeed, the
Eighth Circuit, looking at these same three features of the qualified-provider
provision, came to this same conclusion. See Gillespie, 867 F.3d at 1046.
The plaintiffs’ arguments against this conclusion are unavailing. The
plaintiffs, along with the dissenting opinions, state that this case differs from

4Louisiana, for example, asserts in its amicus brief that it took 182 disqualification
actions in fiscal year 2017.
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Armstrong because Armstrong was an implied-right-of-action case whereas the
instant case arises under § 1983. But the Armstrong plurality expressly
considered whether “the Medicaid Act itself” is a “source of a cause of action,”
and answered in the negative because the provision in question “lack[ed] the
sort of rights-creating language needed to imply a private right of action.” 575
U.S. at 331 (emphasis added) (plurality). The analysis for determining
whether Congress “intended to create a federal right” is the same regardless of
whether the lawsuit is brought under the statute itself or through § 1983.
Gonzaga, 536 U.S. at 283 (emphasis omitted); see also id. at 285–86 (“[W]here
the text and structure of a statute provide no indication that Congress intends
to create new individual rights, there is no basis for a private suit, whether
under § 1983 or under an implied right of action.”). The Armstrong plurality’s
persuasive reasoning thus extends into the § 1983 context. See id. at 283
(“[W]e further reject the notion that our implied right of action cases are
separate and distinct from our § 1983 cases. To the contrary, our implied right
of action cases should guide the determination of whether a statute confers
rights enforceable under § 1983.”).
The plaintiffs also argue that Gonzaga and Armstrong merely “clarified
the application of the first Wilder/Blessing factor: the determination of whether
a provision contains individual rights-granting language.” This ignores
Armstrong’s recognition—one made by a majority of the Court, not just a
plurality—that Gonzaga “plainly repudiate[d]” Wilder. See Armstrong, 575
U.S. at 330 n* (“[The plaintiffs] do not assert a § 1983 action, since our later

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opinions plainly repudiate the ready implication of a § 1983 action that Wilder
exemplified.”).5
The plaintiffs do no better by insisting—in an argument echoed by Judge
Higginson’s partially dissenting opinion—that this court recently “recognized
Wilder’s vitality” in Legacy Cmty. Health Servs., Inc. v. Smith, 881 F.3d 358
(5th Cir. 2018). Of course, it is the en banc court’s prerogative to overrule any
contrary panel decision. See, e.g., Hogue v. Johnson, 131 F.3d 466, 491 (5th
Cir. 1997). Here, however, there is no need. As the partially dissenting opinion
properly points out, Gonzaga characterized Wilder as turning on the relevant
statute’s “explicit[] conferr[al]” of “specific monetary entitlements upon the
plaintiffs.” Gonzaga, 536 U.S. at 280. Legacy, like Wilder, was a case about
specific monetary entitlements. See Legacy, 881 F.3d at 363, 371–72. This
case, like Gonzaga, is not. See Gonzaga, 536 U.S. at 288 n.6 (concluding that
a provision did not create an enforceable federal right when it was “a far cry
from the sort of individualized, concrete monetary entitlement found

5 Tellingly, three of the five circuit courts that have held that the qualified-provider
provision creates an enforceable private right to challenge a state’s qualification
determination relied on the Wilder/Blessing framework before Armstrong clarified in 2015
that Wilder had been repudiated. See Planned Parenthood Ariz. Inc. v. Betlach, 727 F.3d
960, 966 (9th Cir. 2013) (relying on the three-factor inquiry set out in Blessing, though never
actually citing Wilder itself); Planned Parenthood of Ind. v. Comm’r of Ind. State Dep’t of
Health, 699 F.3d 962, 976 (7th Cir. 2012); Harris v. Olszewski, 442 F.3d 456, 463 (6th Cir.
2006). Another two circuit courts rely on Wilder even post-Armstrong, which, as explained
above, seems to misread the repudiation of Wilder joined by five justices in Armstrong. See
Planned Parenthood of Kan. v. Andersen, 882 F.3d 1205, 1229 (10th Cir. 2018); Planned
Parenthood S. Atl. v. Baker, 941 F.3d 687, 699 (4th Cir. 2019). The Eighth Circuit, by
contrast, correctly observed that it is no longer “enough, as Wilder and [Blessing] might have
suggested, to show simply that a plaintiff ‘falls within the general zone of interest that the
statute is intended to protect.’” Gillespie, 867 F.3d at 1039–40 (quoting Gonzaga, 536 U.S.
at 283). “In the final analysis, the resolution of this dispute will be determined not by
arithmetic, but rather, by the strength and persuasiveness of the several decisions.” New
York v. U.S. Dep’t of Justice, 960 F.3d 150, 153 (2d Cir. 2020) (Cabranes, J., concurring in
denial of rehearing en banc).
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enforceable in . . . Wilder”). Thus, even assuming arguendo that vestiges of the
Wilder/Blessing framework still remain in certain contexts, the qualified-
provider provision’s close similarity to the provisions in Gonzaga and
Armstrong—which ultimately did not create private enforceable rights—
demonstrates that the qualified-provider provision would not create such a
right even within that framework.
Finally, the plaintiffs point to 42 U.S.C. § 1320a-2 as evidence that
Congress contemplated enforcement of the qualified-provider provision
through private lawsuits. Congress enacted this provision in response to the
Supreme Court’s decision in Suter v. Artist M., 503 U.S. 347, 364 (1992), which
held that the Adoption Assistance and Child Welfare Act (AACWA) did not
contain an implied private right of action or confer a private right enforceable
via § 1983. The provision states:
In an action brought to enforce a provision of this chapter, such
provision is not to be deemed unenforceable because of its inclusion
in a section of this chapter requiring a State plan or specifying the
required contents of a State plan. This section is not intended to
limit or expand the grounds for determining the availability of
private actions to enforce State plan requirements other than by
overturning any such grounds applied in Suter v. Artist M.,
112 S. Ct. 1360 (1992), but not applied in prior Supreme Court
decisions respecting such enforceability; provided, however, that
this section is not intended to alter the holding in Suter v. Artist
M. that section 671(a)(15) of this title is not enforceable in a private
right of action.
42 U.S.C. § 1320a-2.
Other circuits have observed that this provision is “hardly a model of
clarity.” Sanchez v. Johnson, 416 F.3d 1051, 1057 n.5 (9th Cir. 2005); see also
Gillespie, 867 F.3d at 1044. The first sentence “disapproves one portion of
Suter: the Court had suggested that when a provision of the [AACWA] required
a state plan and specified the mandatory elements of a plan, it required only
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that a State have a plan approved by the Secretary which contained those
features, not that the plan actually be in effect.” Gillespie, 867 F.3d at 1044
(citing Suter, 503 U.S. at 358). No one in the instant case complains that
Texas’s Medicaid plan is not actually in effect. The provision’s second sentence
states (vaguely) that the provision’s purpose is narrowly drawn to overturn
portions of the Court’s reasoning in Suter and was not intended to limit or
expand private rights of action in any other manner—or even to alter the
ultimate holding in Suter itself. Indeed, the provision expressly acknowledges
that it does not touch any other Supreme Court decisions concerning private
rights of action prior to Suter. As the Eighth Circuit noted, the “other points
discussed in Suter, including the requirement of unambiguous notice to states
about conditions on the receipt of federal funds and the significance of an
alternative enforcement mechanism, were relevant considerations before Suter
and are beyond the scope of § 1320a-2.” Id. at 1045. Moreover, the provision
was adopted well before Gonzaga and Armstrong and did not inform the
analysis in either of those cases.
Our task is to determine whether the qualified-provider provision
unambiguously confers an individual right—enforceable through private-
patient lawsuits—to contest a state’s qualification determination. In that
endeavor, we are bound by Gonzaga and guided by the Armstrong plurality,
and for the reasons explained above, we must conclude that the statute does
not.
***
The providers in the instant case—by launching a lawsuit brought by
their patients instead of going through the appropriate administrative appeals
processes—attempt to make “an end run around” the enforcement tools that
Congress, HHS, and the state of Texas have chosen. Gee, 139 S. Ct. at 409
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(Thomas, J., dissenting from denial of certiorari) (quoting Planned Parenthood
of Gulf Coast, Inc. v. Gee, 876 F.3d 699, 702 (5th Cir. 2017) (Elrod, J., dissenting
from denial of rehearing en banc)). Gonzaga and Armstrong make clear that
this attempt must fail.
II.
The court’s judgment in the instant case is also correct for an additional
reason: even assuming that the Supreme Court’s decisions in O’Bannon,
Gonzaga, and Armstrong did not apply and private plaintiffs could sue states
under the qualified-provider provision, the private plaintiffs in the instant case
would fail on the merits of that claim. Judge Jones’s excellent panel opinion
correctly identified the appropriate substantive legal standard and the correct
standard of judicial review that would apply to these lawsuits, if they could be
brought. Under those standards, the Office of Inspector General’s (OIG)
decision to terminate Planned Parenthood’s Medicaid agreement would be
permissible. See Planned Parenthood of Greater Tex. Family Planning &
Preventative Health Servs., Inc. v. Smith, 913 F.3d 551 (5th Cir. 2019), reh’g
granted, 914 F.3d 994 (2019).
A.
To begin, the statute only allows Medicaid patients access to providers
who are “qualified.” 42 U.S.C. § 1396a(a)(23)(A). The majority correctly
concludes, consistent with O’Bannon, that a provider is qualified if and only if
the state has deemed that provider qualified to participate in Medicaid.
But even if “qualified” did limit a state’s discretion on what providers
may participate in its Medicaid plan, that limit must be, as Judge Jones
explained, one that is “an easy standard for the state to meet.” Smith, 913
F.3d at 565. Otherwise, it would be inconsistent with Medicaid regulations
that “allow states to set reasonable standards relating to the qualifications” of
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providers. Id. at 563 (quoting 42 C.F.R. § 431.51(c)(2)). Indeed, the previously
prevailing standard in this circuit acknowledged that “states retain broad
authority to define provider qualifications and to exclude providers on that
basis.” Planned Parenthood of Gulf Coast, Inc. v. Gee, 862 F.3d 445, 465 (5th
Cir. 2017); see also Detgen ex rel. Detgen v. Janek, 752 F.3d 627, 631 (5th Cir.
2014) (explaining that states possess “broad discretion to implement the
Medicaid Act”).
Other circuits have interpreted “qualified” more favorably to providers,
finding that a state agency errs anytime it terminates the Medicaid agreement
of a provider that is simply “capable of performing the needed medical services
in a professionally competent, safe, legal, and ethical manner.” See Planned
Parenthood of Ind. v. Comm’r of Ind. State Dep’t of Health, 699 F.3d 962, 978
(7th Cir. 2012). But, as Judge Jones explained, this vague definition is
susceptible to more-specific interpretations that would conflict with the
Medicaid Act’s text and structure. Smith, 913 F.3d at 564.
For starters, being “capable of” something merely denotes “the ability to
perform a function.” Id. at 563. The “capable of” definition could be interpreted
to allow providers to stay in the Medicaid program as long as they could have
operated safely, even if they were not actually doing so. But the use of
“qualified” in the statute’s text requires more: “qualified” means “[h]aving
qualities or possessing accomplishments which fit one for a certain . . .
function” and, often, it means that this fitness is “officially recognized.” Id. at
563–64 (alteration in original) (quoting The Oxford English Dictionary (online
ed. 2017)). The appropriate question, then, is not whether a provider has the
potential to operate safely, legally, and ethically, but whether it is actually
doing so.

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Furthermore, as Judge Jones explained, a “literal understanding” of the
“capable of” definition could posit that a provider is “qualified” until the state
has totally barred that provider from operating entirely. Id. at 564. But that
definition would conflict with the many Medicaid Act provisions that expressly
allow states to decertify providers for reasons wholly unrelated to the
provider’s license to provide care at all. Id. States can, for example, terminate
providers for “excessive charges; fraud, kickbacks, or other prohibited
activities; failure to provide information; failure to grant immediate access
under specified circumstances; default on loan or scholarship obligations; or
false statements or material misrepresentations of fact in certain
circumstances.” Gee, 862 F.3d at 477–78 (Owen, J., dissenting) (citing 42
U.S.C. §§ 1396a(p)(1)–(3), 1320a–7, 1395cc(b)(2)); see also Gee, 876 F.3d at 701
(Elrod, J., dissenting from denial of rehearing en banc) (explaining that
Medicaid providers may be terminated for reasons that would not require them
to shut down completely). This definition of “qualified” would also straitjacket
state agencies like the OIG that can decertify a provider from the Medicaid
program, but not from practicing in general. See Smith, 913 F.3d at 564; Tex.
Occ. Code Ann. §§ 151.003(2), 152.001(a); 25 Tex. Admin. Code § 139.1(a).
Moreover, Pennhurst’s clear-statement rule permits states to interpret
and implement a Spending Clause statute unless the statute “plainly
prohibit[s]” that interpretation. Detgen, 752 F.3d at 631. Texas has
interpreted “qualified” to mean that the OIG may terminate a Medicaid
provider’s agreement when the OIG establishes “by prima facie evidence” that
a provider has committed a “program violation”; is “affiliated” with a provider
that commits a program violation; or commits “an act for which sanctions,
damages, penalties, or liability could be assessed or are assessed by the OIG.”
1 Tex. Admin. Code § 371.1703(c)(6)–(8). Texas law further provides that those
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sanctions can be imposed when the provider “fails to provide an item or service
to a recipient in accordance with accepted medical community standards or
standards required by statute, regulation, or contract, including statutes and
standards that govern occupations.” Id. § 371.1659(2).
Nothing in the Medicaid Act “plainly prohibits” this interpretation. If
Congress wanted a more precise definition of “qualified,” it could have said so.
But the contract that Congress entered with the states contained no such
definition. United States v. Young, 458 F.3d 998, 1007 (9th Cir. 2006)
(O’Scannlain, J.) (“Congress knows how to define terms when it wants to give
them specific definitions . . . .”). Because the states have not committed to a
federal definition of “qualified,” they have wide latitude in determining who is
“qualified” and who is not, so long as they identify a regulation implicating
safety, legality, or ethics and rely on substantial evidence showing that the
provider violated that regulation.
B.
Again, even assuming arguendo that the private plaintiffs have an
enforceable federal right to challenge the state’s qualification determination, 6
the panel also correctly identified the standard of judicial review under which
these claims would be evaluated: the arbitrary-and-capricious standard,
limited to the state administrative record. Smith, 913 F.3d at 565. This circuit
has consistently applied this standard when reviewing the “substantive
adequacy and reasonableness” of a state agency’s determinations in the
Medicaid context. Abbeville General Hosp. v. Ramsey, 3 F.3d 797, 804 (5th Cir.
1993). In Abbeville, we held that the deferential arbitrary-and-capricious
standard applied to a state agency’s rate-setting action under the Medicaid

6 And again, they do not.
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Act’s Boren Amendment. Id. at 803. Under this deferential standard, an
agency’s finding may be overturned only if it fails to satisfy “minimum
standards of rationality.” La. Envtl. Action Network v. U.S. E.P.A., 382 F.3d
575, 582 (5th Cir. 2004). Courts may consider only “whether the agency action
bears a rational relationship to the statutory purposes and [whether] there [is]
substantial evidence in the record to support it.” Id. (quoting Tex. Oil & Gas
Ass’n v. U.S. E.P.A., 161 F.3d 923, 934 (5th Cir. 1998) (internal quotation
marks removed)). In determining whether the agency had “substantial
evidence” for its action, the reviewing court looks only to the evidentiary record
that was before the agency when it made its decision. Luminant Generation
Co. v. U.S. E.P.A., 675 F.3d 917, 925 (5th Cir. 2012).
The Abbeville rule is deeply rooted in the longstanding precedent of this
court. Smith, 913 F.3d at 566. Abbeville itself recognized that the applicability
of this standard to state agency determinations is an “indisputable proposition”
supported by a “litany of cases.” Abbeville, 3 F.3d at 802 & n.6 (citing cases);
see also Miss. Hosp. Ass’n, Inc. v. Heckler, 701 F.2d 511, 517 (5th Cir. 1983)
(reviewing a state agency’s Medicaid reimbursement plan under the arbitrary-
and-capricious standard). Other courts have followed this approach as well.
See Smith v. Rasmussen, 249 F.3d 755, 760 (8th Cir. 2001); Brown v. Day, 434
F. Supp. 2d 1035, 1041 (D. Kan. 2006); Friedman v. Perales, 668 F. Supp. 216,
221 (S.D.N.Y. 1987), aff’d, 841 F.2d 47 (2d Cir. 1988).
The Abbeville rule is also comity enhancing, consistent with the Medicaid
Act’s system of “cooperative federalism.” Harris v. McRae, 448 U.S. 297, 308
(1980) (quoting King v. Smith, 392 U.S. 309, 316 (1968)). If HHS—rather than
Texas’s OIG—had terminated Planned Parenthood’s Medicaid agreement, the
decision would undoubtedly be reviewed under the arbitrary-and-capricious
standard. See 5 U.S.C. § 706(2)(A); see also Honey Grove Nursing Ctr. v. U.S.
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Dep’t of Health & Human Servs., 606 F. App’x 164, 167 (5th Cir. 2015)
(reviewing whether the Secretary’s decision imposing sanctions on Medicaid
provider was arbitrary and capricious). In a “federal-state cooperative” like
Medicaid, it would make little sense to review federal termination decisions at
one level of judicial review and state termination decisions at a less deferential
level. Smith, 913 F.3d at 567. Especially in light of Pennhurst’s clear-
statement rule, we should not infer that Congress intended to relegate states
to the position of distrusted, second-class decisionmakers without an express
indication in the statute saying as much.
The Abbeville standard also incentivizes providers to use the state-level
administrative appeal process that the Medicaid Act and its accompanying
regulations require. See Smith, 913 F.3d at 568 (describing the arbitrary-and-
capricious standard as “a feature—not a bug”). Without arbitrary-and-
capricious review limited to the state administrative record, providers would
be encouraged to do exactly what they did here—refuse to schedule an informal
resolution meeting to address the state’s concerns and refuse to submit
evidence and argument to the state agency—knowing full well that they could
simply hit the reset button once they got to court. This would render the state’s
administrative review processes largely meaningless, further undermining the
“federal-state cooperative” that the Medicaid Act contemplates and further
constraining the states with limitations that were not clearly stated in the
quasi-contract that they entered into with the federal government.
C.
Even under these standards—which, again, would apply only if the
private plaintiffs had an enforceable federal right 7—the OIG did not act

7 Again, they do not.
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arbitrarily or capriciously in evaluating whether Planned Parenthood was
“qualified.” In its Final Notice sent to the Planned Parenthood affiliates, the
OIG identified a number of “regulations concerning the ‘safe, legal, and ethical
manner’ of furnishing healthcare services.” Smith, 913 F.3d at 565. And based
on the record before it, the OIG pointed to “substantial evidence” of the
provider’s violations of these regulations.
Some of those regulations forbid researchers from taking “part in any
decisions as to the timing, method, or procedures used to terminate [a]
pregnancy made solely for the purposes of the research.” 42 U.S.C. § 289g-
1(c)(4); see also 45 C.F.R. § 46.204(i). The OIG relied on video footage 8 showing

8 The district court concluded, as PPGC alleged, that “the quality and strength of the
evidence [that the video] provides is suspect.” But the plaintiffs entered no evidence into the
administrative record or the district court record indicating that this video was deceptively
edited or otherwise unreliable. On appeal, the plaintiffs do not identify any evidence in the
district court record showing that the videos are unreliable, and they admitted at oral
argument that they provided no such evidence. See Oral Argument at 58:50-59:30. Even if
courts could consider evidence outside the administrative record—as the district court
seemed to believe—the district court erred on this point. The OIG provided the district court
with a declaration as to authenticity from the individual who filmed the footage. The OIG
also provided the district court with a report from a highly regarded forensic firm concluding
that both videos were authentic and not deceptively edited. The district court did not address
this evidence and does not identify any evidence in the district court record to the contrary.
PPGC’s allegation that the video is unreliable is further undermined by its
equivocation on whether it had access to the full video. In their preliminary injunction
motion, the plaintiffs said that the OIG’s “justification for termination is especially
inadequate when this video—the supposedly unedited version of which the Attorney General
has yet to provide to Plaintiffs—is the only ‘evidence’ of wrongdoing defendants can come up
with.” That conflicts with the cross-examination of Farrell, in which she admits that PPGC
had the full footage “sometime in January of 2016.”
The dissenting opinion’s mystifying digression about whether the video was
“authenticated” under Federal Rule of Evidence 901 is even further off the mark, which is
why no party bothered to brief it. The video’s connection to this case is that it informed the
OIG’s disqualification decision—a decision the district court was required to defer to so long
as it satisfied “minimum standards of rationality.” La. Envtl. Action Network, 382 F.3d at
582. It should go without saying that the Federal Rules of Evidence do not apply to Texas
state agency decision-making. Whether the video was “authenticated” under the federal
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that Planned Parenthood Gulf Coast (PPGC) has permitted doctors involved in
fetal-tissue research to perform abortions to secure that fetal tissue. As just
one example, in the video, PPGC Research Director Melissa Farrell mentions
a doctor who performed abortions and collected tissue for her own research.
Farrell reports that the doctor would pick the abortion patients she wanted
based on how beneficial that tissue would be for her own research. The doctor
would then collect her own specimens and “take it home with her in her cooler.”
The OIG also points to other regulations that expressly forbid the
alteration of the timing or method of an abortion for research purposes. See 42
U.S.C. § 289g-1(b)(2)(A)(ii). Many statements in the video support a finding
that PPGC doctors had done this. For example, Farrell stated that researchers
connected to PPGC have targeted specific fetal tissue in the past and that
PPGC is willing to alter the abortion procedures to meet the needs of those
researchers. Farrell also remarked that PPGC can get “creative” and alter a
procedure to obtain a high volume of intact liver, thymus, and neural tissue.
Still other regulations also prohibit the receipt of valuable consideration
in exchange for fetal tissue. See 42 U.S.C. § 289g-2(a); Tex. Penal Code Ann.
§ 48.02(a)-(b). On the video, Farrell asserted that even though PPGC was
“already set up” to do the fetal-tissue procurement, PPGC needed to “work out,
you know, something in terms of covering additional costs for additional . . .
things related to it.” Farrell discussed how she uses a contract’s language to
make it appear that payments are going only to “administrative costs” rather
than compensation for specimens, which she admits is “touchy” under federal
law. On the video, she says, “I’m very particular about working with the

rules during the district court proceedings is irrelevant to whether the video supported the
OIG disqualification decision, which—as explained above the line—it clearly did.
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language of the budget and contract to where the language is specific to
covering the administrative costs and not necessarily the per specimen.
Because that borders on some language in the federal regs, it’s a little touchy.”
Farrell also discussed how she creates a profit margin in a budget, even
discussing how researchers can buy meals for the staff as a bonus for enrolling
patients to donate fetal tissue under the vague category of “meeting cost.”
Other regulations prohibit misrepresentations to law-enforcement
officials. See, e.g., 1 Tex. Admin. Code § 371.1661(8). The OIG received
evidence from the U.S. House of Representatives Selective Investigation Panel.
That evidence documented a visit by the Texas Ranger Division and
discussions relating to PPGC’s transactions with a researcher who was
interested in obtaining fetal tissue. The U.S. House Panel’s evidence shows
that PPGC, at that time, had been informed that the Baylor College of
Medicine’s Independent Review Board had approved the researcher’s fetal-
tissue research proposal, but PPGC’s General Counsel told the Texas Rangers
that approval had not yet been obtained.
Texas’s Medicaid rules also allow termination of any entity affiliated
with an entity that has committed a program violation. 1 Tex. Admin. Code
§ 371.1703(c)(7); id. § 371.1605(a). Federal law expressly allows states to do
this. See 42 C.F.R. § 1001.1001(a)(1)(iii) (States “may exclude an entity . . . if
a person with a relationship with such entity . . . [h]as been excluded from
participation in Medicare or any State health care program.”). Here, the OIG
pointed to significant evidence—both from the video and elsewhere—that
Planned Parenthood South Texas (PPST) and Planned Parenthood of Greater
Texas (PPGT) were affiliated with PPGC. That evidence showed, for example,
that these entities had common identifying information, individual providers
that worked across affiliates, common control exercised by Planned
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Parenthood Federation of America, and shared participation in research
agreements.9 Though these entities argue on appeal that this conclusion was
unwarranted, they point to no evidence that was before the OIG that
undermines the agency’s conclusion. Indeed, these entities did not provide any
such evidence to the OIG.
Despite admitting that the OIG permissibly disqualified PPGC, the
partially dissenting opinion states, without elaboration, that the “legal
affiliat[ion]” between PPGC, PPST, and PPGT “ha[s] no bearing on whether
PPST or PPGT were qualified.” While it is unclear why even a solely legal
relationship between the three entities could be so easily dismissed, the facts
recited above show that the entities’ relationship is also functional. It would
be difficult to understand under any framework why an entity’s significant
overlap in leadership, personnel, and resources with an unqualified entity
could be thought to have “no bearing” on that entity’s own qualifications. But
the framework applicable here dispels any doubt: the OIG has “broad

9 In discussing what is required for affiliation, Judge Higginson compares this case to
Andersen, 882 F.3d at 1205. That comparison is misplaced. Andersen involved a federal
statute that required proof of ownership or control before a Medicaid contract could be
terminated. See id. at 1234. Here, Texas relies on a state regulation which permits
termination based on “affiliat[ion] with a person who commits a program violation.” 1 Tex.
Admin. Code § 371.1703(c)(6)–(8). Notably, Planned Parenthood calls the provider plaintiffs
“affiliates” throughout its own brief and acknowledges that they share membership in the
national Planned Parenthood Federation of America which “promulgates medical and other
standards to which . . . affiliates . . . must adhere.” Inexplicably, Planned Parenthood asserts
just two lines later that the provider plaintiffs are not affiliates. And, as I explain above the
line, other “legal and financial ‘functional’ overlaps” showing affiliation were never refuted
in the administrative process.

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discretion to implement the Medicaid Act” unless its interpretation is “plainly
prohibit[ed]” by “the statutory language.” Detgen, 752 F.3d at 631; see Smith,
913 F.3d at 563 (“[S]tates retain broad authority to define provider
qualifications and exclude providers on that basis.” (quoting Gee, 862 F.3d at
462)). Unsurprisingly, neither the partially dissenting opinion nor the
plaintiffs can point to any provision of the Medicaid Act plainly prohibiting
Texas’s affiliate rule—a rule the OIG permissibly applied to PPST and PGGT.
The Texas Inspector General reviewed this vast body of evidence
thoroughly, considering the U.S. House Panel’s evidence and watching the full
eight-hour video five times in addition to reviewing the video’s transcript. 10
The Inspector General also consulted with the OIG’s Chief Medical Officer,
who reviewed the video and informed the Inspector General that, in his

The entire video, which the state divided into 17 parts for ease of transmission, is
10

attached here. Some faces have been blurred due to patient privacy concerns. See Record on
Appeal at DX-2; (1) http://www.ca5.uscourts.gov/opinions/pub/17/17-50282-
vids/FNND0569_20150409071822-Redacted.mp4; (2) http://www.ca5.uscourts.gov/
opinions/pub/17/17-50282-vids/FNND0569_20150409074648.mp4; (3) http://www.ca5.
uscourts.gov/opinions/pub/17/17-50282-vids/FNND0569_20150409081515.mp4; (4)
http://www.ca5.uscourts.gov/opinions/pub/17/17-50282-vids/FNND0569_20150409
084341.mp4; (5) http://www.ca5.uscourts.gov/opinions/pub/17/17-50282-vids/FNND0569_
20150409091208.mp4; (6) http://www.ca5.uscourts.gov/opinions/pub/17/17-50282-vids/
FNND0569_20150409094034.mp4; (7) http://www.ca5.uscourts.gov/opinions/pub/17/17-
50282-vids/FNND0569_20150409100901-Redacted.mp4; (8) http://www.ca5.uscourts.gov/
opinions/pub/17/17-50282-vids/FNND0569_20150409103727.mp4; (9) http://www.ca5.
uscourts.gov/opinions/pub/17/17-50282-vids/FNND0569_20150409110553.mp4; (10)
http://www.ca5.uscourts.gov/opinions/pub/17/17-50282-vids/FNND0569_20150409
113420.mp4; (11) http://www.ca5.uscourts.gov/opinions/pub/17/17-50282-vids/FNND0569_
20150409120246.mp4; (12) http://www.ca5.uscourts.gov/opinions/pub/17/17-50282-vids/
FNND0569_20150409123112-Redacted.mp4; (13) http://www.ca5.uscourts.gov/opinions/pub/
17/17-50282-vids/FNND0569_20150409125940-Redacted.mp4; (14) http://www.ca5.uscourts.
gov/opinions/pub/17/17-50282-vids/FNND0569_20150409131657.mp4; (15) http://www.ca5.
uscourts.gov/opinions/pub/17/17-50282-vids/FNND0569_20150409134524-Redacted.mp4;
(16) http://www.ca5.uscourts.gov/opinions/pub/17/17-50282-vids/FNND0569_20150409
141350.mp4; (17) http://www.ca5.uscourts.gov/opinions/pub/17/17-50282-vids/FNND0569_
20150409144217.mp4
56
Case: 17-50282 Document: 00515648975 Page: 57 Date Filed: 11/23/2020

No. 17-50282
opinion, the video demonstrated that PPGC violated accepted medical and
ethical standards, in violation of Texas’s Medicaid program requirements. 1
Tex. Admin. Code § 371.1659(2). This entire review process lasted well over a
year. After this review, the OIG sent a Noti

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Source: Frix Law Library, https://www.frixlaw.com/law-library/cases/4635587. Public record. Not legal advice.