Planned Parenthood of Greater Tex. Family Planning & Preventative Health Servs., Inc. v. Kauffman

981 F.3d 347

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.

No. 17-50282

United States Court of Appeals, Fifth Circuit.

FILED November 23, 2020

Jennifer Sandman, Roger K. Evans, Planned Parenthood Federation of America, New York, NY, Alice J. Clapman, Planned Parenthood Federation of America, Washington, DC, Thomas Hart Watkins, Esq., Husch Blackwell, L.L.P., Austin, TX, for Plaintiffs-Appellees.

Kyle Douglas Hawkins, Beth Ellen Klusmann, Esq., Office of the Attorney General, Office of the Solicitor General, Austin, TX, for Defendants-Appellants.

Michael Cantrell, Assistant Attorney General, Office of the Attorney General for the State of Arkansas, Little Rock, AR, for Amici Curiae Tate Reeves, Governor of the State of Mississippi, State of Arkansas, State of Indiana, State of Kansas, State of Kentucky, by and through Governor Matthew G. Bevin, State of Louisiana, State of Michigan, State of Missouri, State of Nebraska, State of Ohio, State of Oklahoma, State of South Carolina, State of Utah, State of West Virginia, State of Wisconsin.

Adam Gustafson, Boyden Gray & Associates, Washington, DC, for Amicus Curiae Kevin Donovan, M.D.

Steven H. Aden, Americans United for Life, Washington, DC, for Amicus Curiae 77 Members of Congress.

Jonathan F. Mitchell, Austin, TX, for Amici Curiae Senator Ted Cruz, Senator John Cornyn, 42 Members of Congress.

Elizabeth Baker Murrill, Esq., Assistant Attorney General, Office of the Attorney General for the State of Louisiana, Baton Rouge, LA, for Amicus Curiae Louisiana and Mississippi.

Martha Jane Perkins, National Health Law Program, Chapel Hill, NC, for Amici Curiae National Health Law Program, National Family Planning & Reproductive Health Association, IPAS, National Latina Institute for Reproductive Health, Asian & Pacific Islander American Health Forum, Sexuality Information and Education Council of the United States.

Boris Bershteyn, Thania Charmani, Sophia Morris Mancall-Bitel, Elizabeth Anne Molino Sauvigne, Attorneys, Skadden, Arps, Slate, Meagher & Flom, L.L.P., New York, NY, for Amici Curiae 18 United States Senators, Twenty-Five United States Senators.

Lawrence John Joseph, Washington, DC, for Amicus Curiae Eagle Forum Education and Legal Defense Fund.

Hillary Schneller, Center for Reproductive Rights, U.S. Litigation, New York, NY, for Amici Curiae Black Mamas Matter Alliance, Afiya Center, Black Women's Health Imperative, National Birth Equity Collaborative, Sistersong: The National Women of Color Reproductive Justice Collective, Women with a Vision,

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

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 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.

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.

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

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...