Amicus Curiae Brief — Robert M. Kerr, Director, South Carolina Department of Health and Human Services, Petitioner v. Planned Parenthood South Atlantic, et al.
Supreme Court briefMay 11, 2022
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No. 21-1431
In the Supreme Court of the United States
__________________
ROBERT M. KERR, IN HIS OFFICIAL CAPACITY AS
DIRECTOR, SOUTH CAROLINA DEPARTMENT OF HEALTH
AND HUMAN SERVICES,
Petitioner,
v.
PLANNED PARENTHOOD SOUTH ATLANTIC, ET AL.,
Respondents.
__________________
On Petition for Writ of Certiorari to the
United States Court of Appeals
for the Fourth Circuit
__________________
BRIEF OF AMICI CURIAE
102 SOUTH CAROLINA LEGISLATORS
IN SUPPORT OF PETITIONER
__________________
TIMOTHY J. NEWTON
Counsel of Record
MURPHY & GRANTLAND, P.A.
Post Office Box 6648
Columbia, South Carolina 29260
(803) 454-1242
tnewton@murphygrantland.com
Counsel for Amici Curiae
May 11, 2022
Becker Gallagher · Cincinnati, OH · Washington, D.C. · 800.890.5001
i
TABLE OF CONTENTS
TABLE OF AUTHORITIES . . . . . . . . . . . . . . . . . . iii
INTEREST OF AMICI CURIAE . . . . . . . . . . . . . . . . 1
INTRODUCTION AND SUMMARY
OF ARGUMENT . . . . . . . . . . . . . . . . . . . . . . . . . . 2
ARGUMENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
I.
South Carolina’s actions were consistent with
its public policy interest in avoiding use of
taxpayer funds to pay for abortions . . . . . . . . 6
II.
Our federal system allows States to retain
their sovereignty except where expressly
overridden by constitutionally authorized
federal law . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
III.
Courts should be reticent to override state
law in the context of Spending Clause
legislation. That is why private enforceability
of Spending Clause legislation has been
interpreted narrowly . . . . . . . . . . . . . . . . . . . . 8
IV.
Edwards lacks a private right of action under
the any-qualified provider requirement for
Medicaid plans to challenge South Carolina’s
decision to disqualify Planned Parenthood as
a provider under its Medicaid program . . . . 12
A. This Court has held that Medicaid
recipients lack a private right of action to
challenge decertification determinations
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
ii
B. The particular statutory right sought to
be enforced is devoid of any evidence of
Congressional intent to create a private
right of action . . . . . . . . . . . . . . . . . . . . . . 15
V.
The improper posture adversely affected the
substantive rights of the State of South
Carolina and its citizens . . . . . . . . . . . . . . . . 19
VI.
Recognition of a private right of action to
chal l enge a St a te’s qualification
determination frustrates South Carolina’s
interests and Congressional intent. . . . . . . . 23
CONCLUSION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
APPENDIX
Appendix A List of Amici Legislators and Former
Legislators. . . . . . . . . . . . . . . . . . . App. 1
Appendix B Letter in the Department of Health
and Human Services, January 19,
2018 . . . . . . . . . . . . . . . . . . . . . . . . App. 8
Appendix C Letter in the Department of Health
and Human Services, April 19, 2016
. . . . . . . . . . . . . . . . . . . . . . . . . . . App. 10
iii
TABLE OF AUTHORITIES
CASES
Addis v. Whitburn,
153 F.3d 836 (7th Cir. 1998). . . . . . . . . . . . . 20, 22
Alexander v. Sandoval,
532 U.S. 275 (2001). . . . . . . . . . . . . . 11, 16, 17, 18
Armstrong v. Exceptional Child Center, Inc.,
575 U.S. 320 (2015). . . . . . . . . . . . . . . . . . . . 11, 17
Blessing v. Freestone,
520 U.S. 329 (1997). . . . . . . . . . . . . . . . . . . . 10, 18
Bond v. United States,
572 U.S. 844 (2014). . . . . . . . . . . . . . . . . . . . . 8, 22
California v. Sierra Club,
451 U.S. 287 (1981). . . . . . . . . . . . . . . . . . . . . . . 17
Does v. Gillespie,
867 F.3d 1034 (8th Cir. 2017). . . . . . . . . 12, 21, 24
First Med. Health Plan, Inc. v. Vega-Ramos,
479 F.3d 46 (1st Cir. 2007) . . . . . . . . . . . . . . 19, 20
Gonzaga Univ. v. Doe,
536 U.S. 273 (2002). . . . . . . . . . . . . . . . . 10, 11, 17
Kelly Kare, Ltd. v. O’Rourke,
930 F.2d 170 (2d Cir. 1991) . . . . . . . . . . . . . . . . 21
Maher v. Roe,
432 U.S. 464 (1977). . . . . . . . . . . . . . . . . . . . . . . . 7
Manion v. N.C. Med. Bd.,
693 Fed. App’x 178 (4th Cir. 2017) . . . . . . . . . . 20
iv
Murphy v. Nat’l Collegiate Athletic Ass’n,
138 S. Ct. 1461 (2018). . . . . . . . . . . . . . . . . . . . 7, 8
Nat’l Fed’n of Independent Business v. Sebelius,
567 U.S. 519 (2012). . . . . . . . . . . . . . . . . . . . . . 8, 9
O’Bannon v. Town Court Nursing Ctr.,
447 U.S. 773 (1980). . . . . . . . . . . . . . . . . . . passim
Pennhurst State Sch. and Hosp. v. Halderman,
451 U.S. 1 (1981). . . . . . . . . . . . . . . . . . . . . . . . . . 9
Planned Parenthood of Greater Tex. Family
Planning and Preventive Health Servs., Inc.
v. Smith, 913 F.3d 551 (5th Cir. 2019) . . . . 20, 25
Planned Parenthood of Greater Texas Family
Planning and Preventative Health Servs., Inc.
v. Kauffman, 981 F.3d 347 (5th Cir. 2020). . passim
Planned Parenthood of Gulf Coast, Inc. v. Gee,
862 F.3d 445 (5th Cir. 2017). . . . . . . . . . . . . . . . 24
Planned Parenthood of Indiana, Inc. v.
Comm’r of the Indiana State Dep’t of Health,
699 F.3d 962 (7th Cir. 2012). . . . . . . . . . . . . . . . . 7
Planned Parenthood S. Atlantic v. Baker,
487 F. Supp. 3d 443 (D.S.C. 2020) . . . . . . . . . . . 13
Planned Parenthood South Atlantic v. Baker,
941 F.3d 687 (4th Cir. 2019). . . . . . . . . . 19, 20, 21
Planned Parenthood South Atlantic v. Baker,
326 F. Supp. 3d 39 (D.S.C. 2018) . . . . . . . . . . . . 12
Rust v. Sullivan,
500 U.S. 173 (1991). . . . . . . . . . . . . . . . . . . . . . . . 7
v
Suter v. Artist M.,
503 U.S. 347 (1992). . . . . . . . . . . . . . . . . . . . 23, 24
Wilder v. Virginia Hosp. Ass’n,
496 U.S. 498 (1990). . . . . . . . . . . . . . . . . . . . . 9, 10
Wright v. City of Roanoke Redevelopment
and Housing Auth., 479 U.S. 418 (1987) . . . . 9, 18
STATUTES
42 U.S.C. § 1320a-2 . . . . . . . . . . . . . . . . . . . . . . . . . 17
42 U.S.C. § 1320a-10 . . . . . . . . . . . . . . . . . . . . . . . . 17
42 U.S.C. § 1396a(a)(23)(A) . . . . . . . . . . . . . . 4, 11, 19
42 U.S.C. § 1396a(p). . . . . . . . . . . . . . . . . . . . . . . . . 15
42 U.S.C. § 1396a(p)(1) . . . . . . . . . . . . . . . . . . . 17, 19
42 U.S.C. § 1396a(p)(3) . . . . . . . . . . . . . . . . . . . . . . 15
42 U.S.C. § 1396d(l)(2)(A) . . . . . . . . . . . . . . . . . . . . 21
42 U.S.C. § 1396d(m) . . . . . . . . . . . . . . . . . . . . . . . . 21
42 U.S.C. § 1396d(n) . . . . . . . . . . . . . . . . . . . . . . . . 21
42 U.S.C. § 1396d(p). . . . . . . . . . . . . . . . . . . . . . . . . 21
42 U.S.C. § 1396d(q). . . . . . . . . . . . . . . . . . . . . . . . . 21
42 U.S.C. § 1396d(s) . . . . . . . . . . . . . . . . . . . . . . . . . 21
42 U.S.C. § 1396r-1c(b)(2) . . . . . . . . . . . . . . . . . . . . 21
42 U.S.C. § 1396r-1c(b)(2)(A) . . . . . . . . . . . . . . . . . . 21
42 U.S.C. § 1396r-1c(b)(2)(B) . . . . . . . . . . . . . . . . . . 22
vi
42 U.S.C. § 1983 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
42 U.S.C. § 2000d . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
S.C. Code Ann. § 43-5-1185 . . . . . . . . . . . . . . . . . . . . 6
REGULATIONS
42 C.F.R. § 431.51 . . . . . . . . . . . . . . . . . . . . . . . . . . 22
42 C.F.R. § 431.51(a)(1) . . . . . . . . . . . . . . . . . . . . . . 22
42 C.F.R. § 431.51(b) . . . . . . . . . . . . . . . . . . . . . . . . 22
42 C.F.R. § 431.51(b)(1)(i) . . . . . . . . . . . . . . . . . . . . 16
42 C.F.R. § 431.51(c)(2) . . . . . . . . . . . . . . . . . . . 16, 22
S.C. Code Regs. 126-150 . . . . . . . . . . . . . . . . . . . . . 24
S.C. Code Regs. 126-404 . . . . . . . . . . . . . . . . . . . . . 23
RULES
S. Ct. R. 37.3(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
S. Ct. R. 37.6. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
1
INTEREST OF AMICI CURIAE1
Amici are 99 current and 3 former South Carolina
state legislators.
Amici have interests in supporting the State of
South Carolina’s longstanding tradition of promoting a
culture that values human life, in upholding South
Carolina state law prohibiting state family planning
funds from being used to pay for abortions, and in
ensuring that agencies that do not perform abortions
receive sufficient funding to be able to provide medical
care and important women’s health and family
planning services to women in South Carolina. Amici
also have an interest in ascertaining that when the
State of South Carolina enters into agreements with
the federal government, this State knows the terms of
those agreements—including whether private third
parties will be allowed to sue to enforce them.
Furthermore, Amici have an interest in maintaining
their ability to determine whether providers are
qualified to provide certain medical services under the
State of South Carolina’s Medicaid program.
A list of the amici legislators and former legislators
is included in the appendix of this brief.
1
Pursuant to Supreme Court Rule 37.3(a), amici certify that
Petitioners and Respondents have given consent to the filing of
amicus briefs. Pursuant to Supreme Court Rule 37.6, counsel for
amici certifies that no counsel for a party authored this brief in
whole or in part and that no person other than amici or their
counsel made a monetary contribution intended to fund the
preparation or submission of this brief. Counsel of Record for all
parties received timely notice of the amici curiae’s intention to file
this brief.
2
INTRODUCTION AND SUMMARY
OF ARGUMENT
The Fourth Circuit began with the blithe statement
that “this case is not about abortion.” (ECF No. 80, p.
3, filed Mar. 8, 2022.) Perhaps so, but abortion’s pale
shadow hangs over every issue in this case.
Consistently with South Carolina law prohibiting
the use of public funding for abortions, Planned
Parenthood South Atlantic (hereinafter “Planned
Parenthood”) was disqualified as a provider in South
Carolina under the Medicaid Act. Planned Parenthood
could end this litigation today by ceasing its practice of
abortions in South Carolina. Julie Edwards could then
have her “free choice of provider” and South Carolina
could protect its citizens from funding abortions.
Instead, Planned Parenthood, through its clients, has
prosecuted this litigation all around the country. With
grim determination, Planned Parenthood and its
clients seek to force all Americans to sponsor abortions
whether they like it or not.
Medicaid represents more than 15% of every
healthcare dollar spent in the United States and is the
primary financing vehicle for states to provide health
coverage to low-income residents. Because of the
Medicaid program’s size, the federal government vests
states with considerable authority over how to run
their Medicaid programs, leaving many program
aspects to a state’s discretion. If a state Medicaid plan
deviates from those broad federal guidelines, there is a
simple remedy: the federal government can withhold
the federal funding stream. But unless there is express
3
language to the contrary, the Medicaid statutory
regime generally does not confer Medicaid providers or
beneficiaries with private rights that can be invoked in
a federal lawsuit such as a § 1983 civil rights action.
Provider and beneficiary complaints must be made, if
at all, through the state’s administrative appeal
process. The Fourth Circuit’s decision here upsets this
straightforward framework.
The State of South Carolina has public policy
interests in promoting life, in safeguarding taxpayer
dollars from funding abortions, and in ensuring that
providers of family planning services that receive state
funding do not contravene those interests. In
furtherance of this policy, South Carolina deemed
abortion clinics and associated medical practices
unqualified under the Medicaid program to provide
family planning services.
Rather than pursue available state administrative
remedies, Respondents Julie Edwards, a Medicaid
beneficiary, and Planned Parenthood, a putative
Medicaid provider, sued in federal court. Medicaid
gives neither Respondent a private right in these
circumstances. Accordingly, the decision to enjoin
South Carolina’s choice by implying such a right absent
a clear Congressional statement should be reversed.
If Edwards’ complaint were that she was prevented
from obtaining service from a provider undisputedly
qualified under the Medicaid Act due to some wrongful
conduct by the State, her claim would have merit. But
here, Edwards has injected herself into the
determination over which providers are qualified. She
is on shaky ground because the statute grants the
4
authority to determine which providers are qualified to
the states, subject to an administrative appeal remedy.
The Circuits are split over whether Medicaid’s anyqualified-provider requirement, 42 U.S.C.
§ 1396a(a)(23)(A),2 creates a private right of action in
favor of Medicaid recipients seeking medical services,
and this case provides this Court an ideal opportunity
to resolve the conflict. This Court should reverse the
decision below for several reasons. This Court has held
that government action directed at a third party and
affecting a plaintiff only indirectly or incidentally does
not give rise to a right enforceable by that plaintiff.
This Court has also held that a plaintiff must establish
a private right of action under the specific statute at
issue. And Edwards cannot show a private right to
dictate to the State of South Carolina which providers
are qualified under the Medicaid Act. At most, the
Medicaid Act provides administrative remedies for
medical providers—the only parties directly affected by
such decisions—to challenge adverse state action, and
Planned Parenthood pursued those remedies after the
deadline for doing so.
At the heart of this case is the meaning of the word
“qualified” within the Medicaid Act. The courts below
leaned heavily upon Planned Parenthood’s undisputed
competence to provide non-abortive healthcare. (ECF
No. 80, p. 3, filed Mar. 8, 2022.) But this is not a
2
The Fourth Circuit adopted Planned Parenthood and Edwards’
characterization of section 1396a(a)(23)(A) as the “free-choice-ofprovider provision.” (ECF No. 80 at p. 5.) Following the statutory
language, amici refer to it as the “any-qualified-provider”
requirement.
5
licensing case. The question is not whether Planned
Parenthood may provide services in the private market,
but whether public funding must be used to support
Planned Parenthood given its dogged determination to
practice abortions. The Fourth Circuit’s “professional
competence” standard for qualification effectively reads
out of the Medicaid Act the provisions empowering
states to set qualification standards as well as the
administrative remedy for such disputes.
The Fourth Circuit treated the any-qualifiedprovider provision as a civil rights issue. But in so
doing, the court usurped the United States Department
of Health and Human Services’ (HHS) authority and
ignored case law and regulations that clarify the
meaning of “qualified.” Not only that, the court created
a loophole where providers may forfeit their
administrative rights and use beneficiaries as proxies
to evade the state administrative appeal process that
Congress intended.
Plaintiffs seek the moral high ground by
emphasizing freedom of choice. Both sides have made
free choices; the question is which choice ties the hands
of the others.
All agree Edwards has a right to seek treatment
from any qualified provider under the Medicaid Act.
But here Edwards, with full knowledge of Planned
Parenthood’s commitment to the termination of unborn
human life, seeks to force South Carolina to accept
Planned Parenthood as a qualified provider. The
precedent Edwards seeks may drastically and
adversely affect the ability of states to determine
qualified providers under the Medicaid Act.
6
The State of South Carolina’s commitment to the
belief that all human life is intrinsically valuable is
laudable. Amici rightfully oppose the attempt to
conscript all Americans into indirectly sponsoring what
cannot be funded directly—the willful termination of
unborn human life. After all, children who are aborted
are denied any choice, including their right to life.
Accordingly, amici respectfully request that this
Court grant certiorari and clarify the existence and
contours of any implied private right of action arising
from the any-qualified-provider provision. This Court
should hold that Edwards lacks a private right of
action to challenge South Carolina’s qualification of
medical providers under the Medicaid Act, reverse the
Fourth Circuit, vacate the injunction, and restore the
statutory regime that Congress enacted.
ARGUMENT
I.
South Carolina’s actions were consistent
with its public policy interest in avoiding
use of taxpayer funds to pay for abortions.
South Carolina has a “strong culture and
longstanding tradition of protecting and defending life
and liberty of the unborn.” (Executive Order No. 201715, in Kerr Pet. for Cert., p. 112a.) In furtherance of
that policy, a South Carolina statute specifically
prohibits state funds appropriated for family planning
from being used to pay for abortions. S.C. Code Ann.
§ 43-5-1185. Pursuant to that statute, South Carolina’s
governor issued an executive order directing the State
Department of Health and Human Services (DHHS) to,
among other things, deem abortion clinics and
7
associated medical practices unqualified under the
Medicaid program to provide family planning services.
(Exec. Order No. 2018-21, in Kerr Pet. for Cert., pp.
119a to 121a.)
The federal and state governments are free to
discourage abortion by prohibiting federal funds
recipients from engaging in activities that directly or
indirectly promote abortion. Rust v. Sullivan, 500 U.S.
173, 200-01 (1991). States participating in the Medicaid
program are not required to pay for non-therapeutic
abortions. Maher v. Roe, 432 U.S. 464, 465-66 (1977).
“It is settled law that the government’s refusal to
subsidize abortion does not impermissibly burden a
woman’s right to obtain an abortion.” Planned
Parenthood of Indiana, Inc. v. Comm’r of the Indiana
State Dep’t of Health, 699 F.3d 962, 969 (7th Cir. 2012).
South Carolina’s action was consistent with its
public policy of protecting and defending the life and
liberty of the unborn. South Carolina’s action was also
consistent with federal and state policies of preventing
taxpayer funds from paying for abortions.
II.
Our federal system allows States to retain
their sovereignty except where expressly
overridden by constitutionally authorized
federal law.
The federal government and the States both wield
sovereign powers. Murphy v. Nat’l Collegiate Athletic
Ass’n, 138 S. Ct. 1461, 1475 (2018). “The legislative
powers granted to Congress are sizable, but they are
not unlimited.” Id. at 1476. The Tenth Amendment
reserves all powers not enumerated in the Constitution
8
to the States. Id. The States have broad authority to
enact legislation for the public good through their
police power. Bond v. U.S., 572 U.S. 844, 854 (2014).
Congress cannot issue direct orders to state
governments. Murphy, 138 S. Ct. at 1476. The federal
government may not adopt measures to indirectly
coerce a State to adopt a federal regulatory system as
its own. Nat’l Fed’n of Independent Business v.
Sebelius, 567 U.S. 519, 578 (2012). This healthy
balance of power is designed to reduce the risk of
tyranny and abuse by the government. Murphy, 138
S.Ct. at 1477. It also places political accountability on
the governmental actors who devised the regulatory
program. National Federation, 567 U.S. at 578 (2012).
For these reasons, legislation affecting the federal
balance requires a clear statement of Congressional
intent. Bond, 572 U.S. at 858. Federal courts must be
certain of legislative intent before interpreting a
federal law to intrude on state police powers. Id. at
858-60. Any ambiguity in the federal statute will be
resolved in favor of state law. Id. at 859-60.
III.
Courts should be reticent to override state
law in the context of Spending Clause
legislation. That is why private
enforceability of Spending Clause legislation
has been interpreted narrowly.
The Spending Clause in the federal Constitution
has been interpreted to allow Congress to grant federal
funds to the States while conditioning the grant upon
compliance by the States with measures Congress
could not directly mandate. National Federation, 567
9
U.S. at 576. “Relatively mild encouragement” of this
type is permissible, whereas “economic dragooning that
leaves the States with no real option but to acquiesce”
is forbidden. Id. at 580-82.
Legislation under the Spending Clause is in the
nature of a contract. Pennhurst State Sch. and Hosp. v.
Halderman, 451 U.S. 1, 17 (1981). The federal
government offers federal funds with strings attached,
and the States have the option to agree to comply with
the conditions in return for receipt of the federal funds.
Id. The legitimacy of Spending Clause legislation
depends upon whether a State voluntarily and
knowingly accepts the terms of the contract. Id. Thus,
any conditions on the grant of federal funds must be
unambiguous. Id.
Under § 1983, citizens have a cause of action for the
deprivation of rights, privileges, or immunities secured
by the Constitution and federal laws. 42 U.S.C. § 1983.
In early cases, this Court applied Section 1983 broadly
unless exceptions applied. Wright v. City of Roanoke
Redevelopment and Housing Auth., 479 U.S. 418, 423
(1987). This Court held that mandatory conditions for
state receipt of federal funds impose a binding
obligation on the States that is enforceable by thirdparty beneficiaries if the conditions are found to be
intended to benefit the putative plaintiff. Wilder v.
Virginia Hosp. Ass’n, 496 U.S. 498, 509-12 (1990).
Chief Justice Rehnquist dissented in Wilder. He
argued that a private right of action should only be
imposed when the text of the statute confers
identifiable, enforceable rights on the particular
plaintiff seeking to enforce those rights. Id. at 526.
10
Chief Justice Rehnquist argued that substantive rights
are not conferred merely because federal funds are
conditioned upon a particular requirement unless it is
clear that Congress intended to allow private
enforcement. Id. at 527.
In Blessing v. Freestone, 520 U.S. 329 (1997), this
Court applied a three-prong test to ascertain whether
a statutory provision gives rise to a federal right under
Section 1983. “First, Congress must have intended that
the provision in question benefit the plaintiff.” Id. at
340. The second factor requires the plaintiff to
demonstrate that the right assertedly protected is not
so vague and amorphous that its enforcement would
strain judicial competence. Id. at 340-41. Third, the
statute must unambiguously impose a binding
obligation on the States that is couched in mandatory,
as opposed to precatory, terms. Id. at 341. If these
three factors are met, there is a rebuttable
presumption that the federal statute creates an
individual right. This presumption may be rebutted if
Congress either specifically foreclosed a remedy, or
impliedly forbade recourse to Section 1983 by creating
a comprehensive scheme that is incompatible with
individual enforcement. Id. at 341.
This Court subsequently clarified that Blessing was
not intended to allow a private right of action under
Section 1983 merely because the plaintiff “falls within
the general zone of interest that the statute is intended
to protect.” Gonzaga Univ. v. Doe, 536 U.S. 273, 283
(2002). Only an unambiguously conferred right
supports a cause of action under Section 1983. Id.
Intent will not be inferred when the statute by its
11
terms grants no private rights to any identifiable class.
Id. at 283-84. The text of the federal statute must be
phrased with an unmistakable focus on the benefitted
class. Id. at 284. When the text and structure of a
statute provides no indication that Congress intended
to create new individual rights, there is no basis for a
private Section 1983 action. Id. at 286. Statutes that
are merely directives and that lack rights-creating
language will not suffice. Armstrong v. Exceptional
Child Center, Inc., 575 U.S. 320, 331 (2015).
An example of a statute that unambiguously creates
a private right of action is found in 42 U.S.C. § 2000d,
which provides that “no person shall be subjected to
discrimination.” Alexander v. Sandoval, 532 U.S. 275,
288 (2001). This provision focuses on the victims of
discrimination and commands all government actors to
refrain from discriminating against them. It strongly
implies “not just a private right but also a private
remedy.” Id. at 286.
In contrast, Medicaid’s any-qualified-provider
provision suggests neither a private right nor a private
remedy. The statute merely provides that “[a] State
plan for medical assistance must . . . provide that . . .
any individual eligible for medical assistance . . . may
obtain such assistance from any institution, agency, . . .
or person, qualified to perform the service or services
required . . . who undertakes to provide him such
services . . . .” 42 U.S.C. § 1396a(a)(23)(A). The focus is
on the plan, not individual rights. The text and
structure of the provision contains no hint that
Congress supposed that the conditions it imposed on
states accepting Medicaid funds were to be enforced by
12
private parties through individual actions in federal
court. The Fifth and Eighth Circuits correctly held that
the any-qualified-provider provision creates no private
rights. Planned Parenthood of Greater Texas Family
Planning and Preventative Health Servs., Inc. v.
Kauffman, 981 F.3d 347 (5th Cir. 2020); Does v.
Gillespie, 867 F.3d 1034, 1046 (8th Cir. 2017).
IV.
Edwards lacks a private right of action
under the any-qualified provider
requirement for Medicaid plans to
challenge South Carolina’s decision to
disqualify Planned Parenthood as a
provider under its Medicaid program.
There is no allegation in this case that the State of
South Carolina took any action directly against
Edwards. The alleged harm is that the State of South
Carolina violated Edwards’ rights by terminating
Planned Parenthood from South Carolina’s Medicaid
program. Planned Parenthood South Atlantic v. Baker,
326 F. Supp. 3d 39, 42 (D.S.C. 2018). The relief she
sought and obtained—an injunction preventing the
State of South Carolina from terminating its Medicaid
enrollment with Planned Parenthood—restrains South
Carolina’s action against Planned Parenthood. Id. at
50. The nexus between the alleged violation of
Edwards’ any-qualified-provider rights and South
Carolina’s actions exists only through a third party,
Planned Parenthood. Any harm accruing to Edwards is
indirect.
13
A. This Court has held that Medicaid
recipients lack a private right of action to
challenge decertification determinations.
This Court distinguishes between “government
action that directly affects a citizen’s legal rights, or
imposes a direct restraint on his liberty, and action
that is directed against a third party and affects the
citizen only indirectly or incidentally.” O’Bannon v.
Town Court Nursing Ctr., 447 U.S. 773, 788 (1980).
Other circuits have held that O’Bannon “resolves the
case” against Medicaid recipients as to their right to
challenge a state’s decision as to a provider’s
qualification. Kauffman, 981 F.3d at 357.
The district court ignored O’Bannon in granting
Plaintiffs’ motion for summary judgment and issuing a
permanent injunction enjoining South Carolina from
disqualifying Planned Parenthood as a Medicaid
provider. Planned Parenthood S. Atlantic v. Baker, 487
F. Supp. 3d 443, 449 (D.S.C. 2020). The Fourth Circuit
sought to distinguish O’Bannon, going so far as to state
that “O’Bannon has little to do with this case.” (ECF
No. 80 at p. 12.) However, the Fifth Circuit found the
Fourth Circuit’s reasons to be “demonstrably incorrect.”
Kauffman, 981 F.3d at 365-66.
The Fourth Circuit’s attempt to distinguish
O’Bannon on the ground that Planned Parenthood
“remains a qualified institution” assumes the very
issue to be decided. (ECF No. 80 at p. 24.) With respect,
the issue is Edwards’ right to challenge South
Carolina’s disqualification of Planned Parenthood as a
Medicaid provider. The Fourth Circuit sidestepped this
question by proceeding directly to the merits, and only
14
after revolving them in favor of Edwards, returning to
consider whether she had a private right of action to
raise the issue in the first place. If Medicaid recipients
lack a private right of action, any decision on the
merits is not properly before the court.
Furthermore, the vehicle by which a private right of
action is brought to challenge a state’s decertification
decision is not outcome-determinative. O’Bannon
squarely held that the any-qualified-provider statute
“does not confer a right on a recipient to enter an
unqualified [provider] and demand a hearing to certify
it.” 447 U.S. at 785. In O’Bannon, this Court expressly
rejected the argument that the any-qualified-provider
requirement creates substantive rights in favor of
Medicaid beneficiaries with respect to state actions
directed against Medicaid providers. Id. at 786 (“In
holding that [the any-qualified-provider requirement
and two other] provisions create a substantive right to
remain in the home of one’s choice . . . the Court of
Appeals failed to give proper weight to the contours of
the right conferred by the statutes and regulations.”)
(emphasis added). This Court did not limit its holding
to constitutional due process claims. This Court’s
specific holding was that the state’s action against the
provider “did not directly affect the patients’ legal
rights.” O’Bannon, 447 U.S. at 790. Under O’Bannon,
Edwards lacks a right to demand that Planned
Parenthood be qualified.
15
B. The particular statutory right sought to be
enforced is devoid of any evidence of
Congressional intent to create a private
right of action.
If Edwards were complaining that South Carolina
wrongfully prevented her from receiving treatment
from a qualified provider, her argument that Section
1396a(a)(23)(A) affords her a private right of action
would be much stronger. But here she seeks to force
South Carolina’s hand in determining Planned
Parenthood to be qualified. The any-qualified-provider
provision does not evidence unmistakable
Congressional intent to allow Medicaid recipients such
as Edwards to inject themselves into the determination
which providers are qualified under any standard.
Kauffman, 981 F.3d at 360. The source of the statutory
right sought to be enforced must be found elsewhere.
A separate statute establishes the authority of a
State to qualify or disqualify a medical provider from
its Medicaid program. Kauffman, 981 F.3d at 360. The
Medicaid Act sets forth the exclusion power of a State
in 42 U.S.C. § 1396a(p) (hereinafter “the qualification
provision”). That subsection provides that “[i]n 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 . . . .” Id. “Exclude” is defined to “include[] the
refusal to enter into or renew a participation
agreement or the termination of such an agreement.”
42 U.S.C. § 1396a(p)(3). A regulation promulgated
under the authority of the any-qualified-provider
16
statute confirms that States retain the ability to set
reasonable standards relating to the qualifications of
providers of Medicaid services. 42 C.F.R.
§ 431.51(b)(1)(i) and (c)(2).
This Court has held that a party seeking to enforce
a statute must possess a private right of action under
the particular statute sought to be enforced. Alexander,
532 U.S. at 285-86. In Alexander, the plaintiff claimed
disparate treatment in violation of a Department of
Justice regulation. Id. at 278-79. This Court held that
the claim could not be brought under Section 601 of
Title VI of the Civil Rights Act of 1964 because that
statute only prohibits intentional discrimination. Id. at
280-81. Thus, any disparate-impact claim could only be
brought under Section 602, and any associated private
right of action “must come, if at all, from the
independent force of § 602.” Id. at 286. This Court
based its analysis solely on the language of Section 602
and found no evidence of Congressional intent to create
a freestanding private right of action under that
statute. Id. at 293.
In this case, as in Alexander, Edwards must
demonstrate unmistakable evidence of Congressional
intent to create a private right of action under the
specific statute at issue. Because Edwards claims harm
only through South Carolina’s disqualification of
Planned Parenthood as a provider, she must have a
private right of action to enforce the qualification
provision, either separately or in addition to a private
right of action under the any-qualified-provider
requirement. Edwards can do no such thing.
17
The qualification provision bluntly specifies that a
State may exclude a Medicaid provider for any reason
that HHS could exclude that provider “in addition to
any other authority.” 42 U.S.C. § 1396a(p)(1). Because
the qualification provision is not contained in a list of
requirements for a state Medicaid plan, 42 U.S.C.
§§ 1320a-2 and 1320a-10 do not apply and the strict
requirements of Alexander, Gonzaga, and Armstrong
apply with full force. Those cases set a high hurdle for
proving a right of private enforcement.
“Statutes that focus on the person regulated rather
than the individuals protected create no implication of
an intent to confer rights on a particular class of
persons.” Alexander, 532 U.S. at 289 (quoting
California v. Sierra Club, 451 U.S. 287, 294 (1981)).
When the statute’s focus is on the agency doing the
regulating, the potential for private enforcement is
even further removed. Alexander, 532 U.S. at 289.
The qualification provision “entirely lack[s] the sort
of ‘rights-creating’ language critical to showing the
requisite congressional intent to create new rights.”
Gonzaga, 536 U.S. at 287. It grants no private rights to
any identifiable class. Id. at 284. It is not phrased with
an unmistakable focus on the parties claiming the
benefit—Medicaid beneficiaries. Id. Moreover, “the
modern jurisprudence permitting intended
beneficiaries to sue does not generally apply to
contracts between a private party and the
government.” Armstrong, 575 U.S. at 332.
Furthermore, the administrative remedies in the
Medicaid Act are incompatible with private
enforcement of the qualification provision. “The express
18
provision of one method of enforcing a substantive rule
suggests that Congress intended to preclude others.”
Alexander, 532 U.S. at 290. The existence of such
remedies is relevant not only to rebut a presumption of
Congressional intent to create a private right of action
under Blessing, it is also relevant to the question
whether Congress intended to create a private right in
the first place. Alexander, 532 U.S. at 290. When it is
clear that Congress intended to confer a right, then the
lack of an adequate scheme of administrative remedies
supports an inference that the injured party may sue
under Section 1983. Wright, 479 U.S. at 224-29.
However, when there is no indication Congress
intended to benefit a claimant, the lack of
administrative remedies only buttresses the conclusion
that a private right of action in favor of that claimant
was not contemplated. It would be anomalous to imply
a private right of action from Congressional silence
after this Court has expressly held that no such right
exists. O’Bannon, 447 U.S. at 790.
Nothing in the qualification provision provides the
least hint of any indication that Congress intended
Edwards and her fellow Medicaid beneficiaries to be
allowed to privately enforce it under Section 1983. The
structure and language of the Medicaid Act strongly
supports the conclusion that a State’s qualification or
disqualification is reviewable only through the
prescribed administrative system and by only the
directly affected party—the medical provider.
19
V.
The improper posture adversely affected
the substantive rights of the State of South
Carolina and its citizens.
At best, the any-qualified-provider provision confers
only a right to choose among qualified providers. 42
U.S.C. § 1396a(a)(23)(A); O’Bannon, 447 U.S. at 785.
Nothing in that subsection grants Medicaid
beneficiaries a right to determine for themselves which
providers are qualified. The Medicaid Act addresses
qualifications in a separate statutory provision: the
qualification provision. 42 U.S.C. § 1396a(p)(1). The
courts below ignored the qualification requirement and
lowered the bar to what amounts to a licensing
standard.
The Fourth Circuit erred by overlooking statutory
context and applying a dictionary definition to
interpret the word “qualified.” See Planned Parenthood
South Atlantic v. Baker, 941 F.3d 687, 702 (4th Cir.
2019). The court narrowly construed “qualifications” to
mean “a provider’s competency to perform a particular
medical service.” Id. at 702. The court held that the
term does not relate to “any conceivable state interest.”
Id. The Fourth Circuit reaffirmed this holding in ruling
on the permanent injunction. (ECF No. 80, p. 19.) In so
doing, the court turned the qualification provision on
its head.
The qualification provision “preserves the state’s
ability to exclude entities from participating in
Medicaid under ‘any other authority.’” First Med.
Health Plan, Inc. v. Vega-Ramos, 479 F.3d 46, 53 (1st
Cir. 2007). The legislative history indicates that the
qualification provision “was intended to permit a state
20
to exclude an entity from its Medicaid program for any
reason established by state law.” Id. “The program was
designed to provide the states with a degree of
flexibility in designing plans that meet their individual
needs.” Addis v. Whitburn, 153 F.3d 836, 840 (7th Cir.
1998). Therefore, “states are given considerable
latitude in formulating the terms of their own medical
assistance plans.” Id. This reflects the fact that
establishing qualifications for medical providers is a
traditional state function. Manion v. N.C. Med. Bd.,
693 Fed. App’x 178, 181 (4th Cir. 2017). It also
recognizes that States must expend significant
taxpayer resources to participate in the Medicaid
program. Planned Parenthood of Greater Tex. Family
Planning and Preventive Health Servs., Inc. v. Smith,
913 F.3d 551, 571 (5th Cir. 2019) (Jones, J.,
concurring).
The Fourth Circuit also erred in holding that the
qualification provision does not relate to any
conceivable state interest. Whereas the any-qualifiedprovider provision tends to benefit Medicaid
beneficiaries, the qualification provision gives States
flexibility to tailor their Medicaid programs to the
individual needs of the State.
The Fourth Circuit held that the any-qualifiedprovider provision “imposes limits on a state’s
qualification authority.” Baker, 941 F.3d at 704. This is
incorrect. The any-qualified-provider provision is
limited by the qualification provision, not vice versa.
O’Bannon, 447 U.S. at 785 (holding that the anyqualified provider requirement “gives recipients the
right to choose among a range of qualified providers,
21
without government interference”); Kelly Kare, Ltd. v.
O’Rourke, 930 F.2d 170, 177-78 (2nd Cir. 1991) (holding
that Medicaid beneficiaries have a legitimate
entitlement to a choice in providers only to the extent
those providers are qualified and participating in the
Medicaid program); Kauffman, 981 F.3d at 357-58
(same); Gillespie, 867 F.3d at 1046 (same).
In applying a dictionary definition, the Fourth
Circuit overlooked more pertinent indicators of the
legislative intent of the word “qualified” in the
Medicaid Act. See Baker, 941 F.3d at 702. The word
may not be defined in the any-qualified-provider
subsection, but it is used frequently in the Medicaid
Act. The Definitions section includes several uses of the
term. See 42 U.S.C. § 1396d(l)(2)(A) (defining
“federally-qualified health center services” and
“federally-qualified health center”); (m) (defining
“qualified family member”); (n) (defining “qualified
pregnant woman or child”); (p) (defining “qualified
medicare beneficiary”); (q) (defining “qualified severely
impaired individual”); and (s) (defining “qualified
disabled and working individual”). In each of these
definitions, the term “qualified” relates to qualifications
under the Medicaid Act or other relevant statutes.
A good indicator of legislative intent can be found in
42 U.S.C. § 1396r-1c(b)(2). In that subsection,
“qualified entity” is defined to mean an entity that is
both “eligible for payments under a State plan
approved under this subchapter” and “determined by
the State agency to be capable of making [requisite]
determinations.” Section 1396r-1c(b)(2)(A). States are
expressly allowed to limit the classes of entities that
22
may become qualified entities in order to prevent fraud
and abuse. Section 1396r-1c(b)(2)(B).
Ambiguities must be resolved in favor of state law.
Bond, 572 U.S. 859-60. The lack of a definition of
“qualified” in the any-qualified-provider requirement
reflects the fact that States are given great latitude to
determine qualifications for medical providers under
the Medicaid Act. See Addis, 153 F.3d at 840. The
Medicaid Act generally uses the term to refer to
qualifications under the statute, not just qualifications
to perform a particular operation.
The Fourth Circuit erred in construing “qualified”
solely through the lens of Medicaid beneficiaries’ rights
under the any-qualified-provider provision. HHS does
not appear to interpret the word “qualified” in that
provision independently of the qualification provision.
A HHS regulation promulgated under the anyqualified-provider provision associates the word
“qualified” with the freedom of States to set reasonable
standards for qualifications of providers. 42 C.F.R.
§ 431.51(a)(1), (b) and (c)(2). HHS, in an April 19, 2016
letter providing guidance to state Medicaid agencies,
interpreted the word “qualified” to mean “qualified to
furnish Medicaid services” within the meaning of 42
C.F.R. § 431.51. (App. 11-12, Appendix C) HHS
subsequently rescinded even that minor narrowing of
state authority because it unduly “limited states’
flexibility with regard to establishing reasonable
Medicaid provider qualification standards.” (App. 8-9,
Appendix B).
The word “qualified” in the any-qualified-provider
requirement plainly refers to the qualification
23
provision, and while its meaning encompasses both
professional competence and licensure requirements, it
is broad enough to include other state-specific reasons
for making eligibility decisions as well. The Fourth
Circuit’s interpretation to the contrary contravenes this
Court’s precedent holding that the any-qualifiedprovider requirement does not extend a right to
Medicaid beneficiaries to “continue to receive benefits
for care” from a provider “that has been decertified.”
O’Bannon, 447 U.S. at 785.
VI.
Recognition of a private right of action to
challenge a State’s qualification
determination frustrates South Carolina’s
interests and Congressional intent.
The Fourth Circuit worried that unless federal
courts step in and second-guess State disqualifications
of Medicaid providers, the any-qualified-provider
requirement will be robbed of all meaning. Not so. This
Court has held that private enforcement rights should
not be implied unless the lack of enforcement
mechanisms would reduce those rights to “a dead
letter.” Suter v. Artist M., 503 U.S. 347, 360-61 (1992).
Refusing to allow private enforcement of a State
qualification determination does not reduce the rights
of Medicaid beneficiaries to a dead letter because they
can still choose among qualified providers. And both
the federal HHS and the affected medical provider can
contest the State’s determination if appropriate. See
Kauffman, 981 F.3d at 362. Under South Carolina’s
Medicaid program, for example, medical providers have
a right to a hearing before a proposed exclusion,
suspension, or termination. S.C. Code Regs. 126-404.
24
South Carolina also allows administrative appeals. S.C.
Code Regs. 126-150.
The Eighth Circuit recognized that allowing a
private right of action in favor of Medicaid beneficiaries
“would result in a curious system for review.” Gillespie,
867 F.3d at 1041. The administrative regime requires
the medical provider to exhaust its administrative
remedies before seeking judicial review. Id. But a
private right of action allows individual beneficiaries to
separately litigate the qualifications of a provider
immediately in federal court under Section 1983. Id.
The potential for parallel litigation and inconsistent
results rightly gave the court reason to doubt that a
private right of action to contest a medical provider’s
qualifications under the Medicaid Act was intended. Id.
at 1042; Kauffman, 981 F.3d at 363-64.
Allowing Medicaid beneficiaries a private right of
action to enforce the qualification provision would
frustrate the administrative scheme Congress put in
place. Planned Parenthood has a right to challenge its
disqualification in state administrative proceedings.
Planned Parenthood of Gulf Coast, Inc. v. Gee, 862 F.3d
445, 484 (5th Cir. 2017) (Owen, J., dissenting),
overruled, Kauffman, 981 F.3d at 369-70. Planned
Parenthood (and associated entities) often fails to
pursue its administrative remedies, preferring to join
with its clients in their private action in federal court.
Id. At a minimum, the existence of an adequate
administrative remedy for Planned Parenthood does
not render Edwards’ rights under the any-qualifiedprovider requirement “a dead letter.” Suter, 503 U.S. at
360-61.
25
As Judge Jones on the Fifth Circuit recently
recognized in encouraging the Fifth Circuit to
reconsider the questions presented here en banc, “it
makes no practical sense to hold that a Medicaid
provider . . . may simply bypass state procedures,
which are required by the Medicaid statute, and use
patients as stalking horses for federal court review of
its status.” Smith, 913 F.3d at 569 (Jones, J.,
concurring). The federal-court proceeding can
effectively second-guess and/or force the hand of both
HHS and the State Medicaid program administrator.
Moreover, it imposes the high cost of litigation on top
of an enormously expensive program. Id. at 571. The
Fifth Circuit’s en banc decision was based in part on
those concerns. Kauffman, 981 F.3d at 363-64.
CONCLUSION
Amici respectfully request that this Court grant the
petition, definitively resolve which framework lower
courts should use when deciding whether a statute
creates a private right enforceable, hold that Medicaid’s
any-qualified-provider provision does not create a
privately-enforceable right under § 1983, reverse the
Fourth Circuit, and vacate the order enjoining South
Carolina from enforcing its qualification determination.
26
Respectfully submitted,
TIMOTHY J. NEWTON
Counsel of Record
MURPHY & GRANTLAND, P.A.
Post Office Box 6648
Columbia, South Carolina 29260
(803) 454-1242
tnewton@murphygrantland.com
Counsel for Amici Curiae
APPENDIX
i
APPENDIX
TABLE OF CONTENTS
Appendix A List of Amici Legislators and Former
Legislators. . . . . . . . . . . . . . . . . . . App. 1
Appendix B Letter in the Department of Health
and Human Services, January 19,
2018 . . . . . . . . . . . . . . . . . . . . . . . . App. 8
Appendix C Letter in the Department of Health
and Human Services, April 19, 2016
. . . . . . . . . . . . . . . . . . . . . . . . . . . App. 10
App. 1
APPENDIX A
List of Amici Legislators and Former Legislators
Title
First
Last
Senate
Majority
Leader
Shane
Massey
Senator
Brian
Adams
Senator
Thomas
Alexander
Senator
George E.
“Chip”
Campsen
Senator
Richard
Cash
Senator
Wes
Climer
Senator
Thomas “Tom”
Corbin
Senator
Ronnie
Cromer
Senator
Tom
Davis
Senator
Billy
Garrett
Senator
Stephen
Goldfinch
Senator
Lawrence K.
“Larry”
Grooms
Senator
Penry
Gustafson
App. 2
Senator
Mike
Johnson
Senator
Josh
Kimbrell
Senator
Dwight
Loftis
Senator
Shane
Martin
Senator
Harvey
Peeler Jr.
Senator
Mike
Reichenbach
Senator
Rex
Rice
Senator
Katrina Frye
Shealy
Senator
Scott
Talley
Senator
Ross
Turner
Senator
Daniel B.
“Danny”
Verdin III
Senator
Tom
Young Jr.
Speaker
James H. “Jay”
Lucas
House Majority
Leader
Gary
Simrill
Speaker Pro
Tempore
Thomas E.
“Tommy”
Pope
Representative
Merita A.
“Rita”
Allison
Representative
William H.
Bailey
App. 3
Representative
Nathan
Ballentine
Representative
Bruce
Bannister
Representative
Linda “Lin”
Bennett
Representative
Bart
Blackwell
Representative
Jeffery A. “Jeff”
Bradley
Representative
Thomas C., Jr.
“Case”
Brittain
Representative
Bruce
Bryant
Representative
James Mikell
“Mike”
Burns
Representative
Paula Rawl
Calhoon
Representative
Micajah P.
“Micah”
Caskey
Representative
William M.
“Bill”
Chumley
Representative
Neal
Collins
Representative
Bobby
Cox
Representative
Westley P.
Cox
Representative
Heather
Ammons
Crawford
Representative
Victor M “Vic”
Dabney
Representative
Joeseph
Daning
Representative
Sylleste
Davis
App. 4
Representative
Greg
Delleney*
Representative
Jason
Elliott
Representative
Shannon
Erickson
Representative
Raye
Felder
Representative
Cally R. “Cal”
Forrest
Representative
Russell
Fry
Representative
Craig
Gagnon
Representative
Gil
Gatch
Representative
Leon D. “Doug”
Gilliam
Representative
Patrick
Haddon
Representative
Kevin
Hardee
Representative
Jackie E.
“Coach”
Hayes
Representative
William G.
“Bill”
Herbkersman
Representative
William Lee
Hewitt
Representative
Jonathon
Hill
Representative
David
Hiott
Representative
William M.
“Bill”
Hixon
Representative
Chip
Huggins
Representative
Max
Hyde Jr.
App. 5
Representative
Jeffery E. “Jeff”
Johnson
Representative
Stewart
Jones
Representative
Wallace H.
“Jay”
Jordan Jr.
Representative
Randy
Ligon
Representative
Steven
Long
Representative
Phillip
Lowe
Representative
Josiah
Magnuson
Representative
Robert J. III
“RJ”
May
Representative
Donald R. Jr.
“Ryan”
Mcabe
Representative
John
McCravy III
Representative
Sandy
McGarry
Representative
Adam
Morgan
Representative
Travis
Moore
Representative
Dennis
Moss
Representative
V. Stephen
“Steve”
Moss
Representative
Christopher J.
“Chris”
Murphy
Representative
Brandon
Newton
Representative
Weston
Newton
App. 6
Representative
Roger
Nutt
Representative
Melissa
Oremus
Representative
Joshua
Putnam*
Representative
Murrell
Smith Jr.
Representative
Garry
Smith
Representative
Leonidas E.
“Leon”
Stavrinakis
Representative
Edward R.
“Eddie”
Tallon*
Representative
Bill
Taylor
Representative
Anne
Thayer
Representative
McLain R.
“Mac”
Toole
Representative
Ashley
Trantham
Representative
John Taliaferro
“Jay”
West IV
Representative
Brian
White
Representative
William R.
“Bill”
Whitmire
Representative
Mark
Willis
Representative
Christopher
Sloan “Chris”
Wooten
App. 7
Representative
*Former
Richard L.
“Richie”
Yow
App. 8
APPENDIX B
DEPARTMENT OF HEALTH & HUMAN SERVICES
Centers for Medicare & Medicaid Services
7500 Security Boulevard, Mail Stop S2-26-12
Baltimore, MD 21244-1850
CMS
CENTERS FOR MEDICARE &
MEDICAID SERVICES
CENTER FOR MEDICAID &
CHIP SERVICES
__________________________________________________
SMD: #18-003
RE: Rescinding SMD #16-005
Clarifying “Free Choice of
Provider” Requirement
January 19, 2018
Dear State Medicaid Director:
On April 19, 2016, the Center for Medicaid and CHIP
Services (CMCS) and the Center for Program Integrity
(CPI) issued a State Medicaid Director Letter that
provided guidance to state Medicaid agencies on
compliance with Section 1902(a)(23) of the Social
Security Act (the “any willing provider” or “free choice
of provider” provision).
We are concerned that the 2016 Letter raises legal
issues under the Administrative Procedure Act, and
limited states’ flexibility with regard to establishing
App. 9
reasonable Medicaid provider qualification standards.
For these reasons, we are rescinding the April 19, 2016
Letter (SMD #16-005). States should continue to look
to Section 1902(a)(23) and our regulations at 42 C.F.R.
§ 431.51 to determine their obligations under Section
1902(a)(23).
We may provide further guidance in the future.
Sincerely,
/s/
Brian Neale
Director, CMCS
/s/
Alec Alexander
Director, CPI
App. 10
APPENDIX C
DEPARTMENT OF HEALTH & HUMAN SERVICES
Centers for Medicare & Medicaid Services
7500 Security Boulevard, Mail Stop S2-26-12
Baltimore, Maryland 21244-1850
CMS
CENTERS FOR MEDICARE &
MEDICAID SERVICES
CENTER FOR MEDICAID &
CHIP SERVICES
__________________________________________________
SMD # 16-005
Re: Clarifying “Free Choice of
Provider” Requirement in
C on jun ction with Stat e
Authority to Take Action
against Medicaid Providers
April 19, 2016
Dear State Medicaid Director:
The Center for Medicaid and CHIP Services (CMCS)
and Center for Program Integrity (CPI) are issuing this
State Medicaid Director Letter to provide guidance to
state Medicaid agencies on protecting the right of
Medicaid beneficiaries to receive covered services from
any qualified provider willing to furnish such services
when the state exercises its authority to take action
against providers that affects beneficiary access to
App. 11
those providers, including but not limited to the denial
or termination of provider enrollment, or the exclusion
of providers from program participation.
Background
Under section 1902(a)(23) of the Social Security Act,
Medicaid beneficiaries generally have the right to
obtain medical services “from any institution, agency,
community pharmacy, or person, qualified to perform
the service or services required . . . who undertakes to
provide . . . such services.” This provision is often
referred to as the “any willing provider” or “free choice
of provider” provision. Implementing regulations at 42
C.F.R. § 431.51(b)(1) require a state plan to allow a
beneficiary to obtain Medicaid services from any
institution, agency, pharmacy, person, or organization
that is (i) qualified to furnish services and (ii) willing to
furnish them to that particular beneficiary. There is an
exception for beneficiaries enrolled in certain managed
care plans (to permit such plans to restrict
beneficiaries to providers in the managed care plan
network), except that such plans cannot restrict free
choice of family planning providers. See section
1902(a)(23)(B); 42 C.F.R. § 431.51(b)(1); 42 C.F.R. Part
438.
State Authority
Qualifications
to
Establish
Provider
The “free choice of provider” provision does not infringe
on states’ traditional role of setting “reasonable
standards relating to the qualifications of providers.”
42 C.F.R. § 431.51(c)(2). States must propose any
standards relating to the qualifications of providers
App. 12
during the Medicaid state plan approval process, as
specified in section 1902(a)(22) of the Act. Because the
“free choice of provider” provision guarantees Medicaid
beneficiaries the right to see any willing and “qualified”
provider of their choice, this provision limits a state’s
authority to establish qualification standards, or take
certain actions against a provider, unless those
standards or actions are related to the fitness of the
provider to perform covered medical services—i.e., its
capability to perform the required services in a
professionally competent, safe, legal, and ethical
manner—or the ability of the provider to appropriately
bill for those services. Such reasons may not include a
desire to target a provider or set of providers for
reasons unrelated to their fitness to perform covered
services or the adequacy of their billing practices. The
failure of a state to apply otherwise reasonable
standards in an evenhanded manner may suggest such
targeting. For instance, if a state were to take certain
actions against one provider or set of providers, but not
other similarly situated providers, it would raise
questions as to whether the state is impermissibly
targeting disfavored providers.
Moreover, when invoking standards that are validly
related to a provider’s “qualifications,” the “free choice
of provider” provision ensures that a state may not
deny Medicaid beneficiaries the right to see the
provider of their choice unless there is a sufficient
basis. A state’s action against a provider affecting
beneficiary access to the provider must be supported by
evidence of fraud or criminal action, material noncompliance with relevant requirements, or material
issues concerning the fitness of the provider to perform
App. 13
covered services or appropriately bill for them. Taking
such action against a provider without such evidence
would not be in compliance with the free choice of
provider requirement. If a state does not have evidence
supporting its finding that a provider failed to meet a
state standard, that provider remains “qualified to
furnish” Medicaid services. 42 C.F.R. § 431.51(b)(1)(i).
The “free choice of provider” provision is specific with
respect to the free choice of family planning providers.
Consistent with the reasonable standards guidance
above, states may not deny qualification to family
planning providers, or take other action against
qualified family planning providers, that affects
beneficiary access to those providers—whether
individual providers, physician groups, outpatient
clinics or hospitals—solely because they separately
provide family planning services or the full range of
legally permissible gynecological and obstetric care,
including abortion services1 (not funded by federal
Medicaid dollars, consistent with the federal
prohibition), as part of their scope of practice.
Conclusion
Pursuant to § 431.51(b)(1)(i), states may establish
provider standards or take action against Medicaid
providers that affects beneficiary access to those
providers only (1) based on reasons relating to the
fitness of the provider to perform covered medical
1
Federal Medicaid funding of abortion services is not permitted
under federal law except in certain extraordinary circumstances
(in cases of rape, incest, or when the life of the woman would be in
danger).
App. 14
services or to appropriately bill for those services, and
(2) with supporting evidence of the provider’s failure to
meet the state’s reasonable provider standards. This is
consistent with longstanding CMS policy that Medicaid
beneficiaries are provided with competent care by
qualified providers and have the same ability to choose
among available providers as those with private
coverage.
Providing the full range of women’s health services
neither disqualifies a provider from participating in the
Medicaid program, nor is the provision of such services
inconsistent with the best interests of the beneficiary,
and shall not be grounds for a state’s action against a
provider in the Medicaid program.
CMS is available to work closely with each state to
ensure compliance with Medicaid’s “free choice of
provider” provision while at the same time preserving
states’ authority to take appropriate actions against
providers in their Medicaid programs. If you have any
questions regarding this information, please contact
Kirsten Jensen, CMCS Director Division of Benefits
and Coverage, 410-786-8146.
Sincerely,
/s/
Vikki Wachino
Director
cc:
National Association of Medicaid Directors
App. 15
National Academy for State Health Policy
National Governors Association
American Public Human Services Association
Association of State Territorial Health Officials
Council of State Governments
National Conference of State Legislatures
This is a copy of a public record, reproduced as it was published. It is not legal advice, and it may not be the version a court would rely on. Check the official source before you cite it.