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Ban on Planned Parenthood Medicaid Funding Likely Illegal

Oct. 29, 2019, 2:24 PM

A preliminary injunction barring South Carolina from its attempt to stop Planned Parenthood South Atlantic from receiving Medicaid funds will remain in place, the Fourth Circuit ruled Oct. 29. The ban likely violates the Medicaid Act, the court signaled.

PPSAT operates two health-care centers in South Carolina, which offer family planning and preventative care services, including cancer screenings, contraceptive counseling, and pregnancy testing, the court said. The organization has long been a South Carolina Medicaid provider that receives reimbursements for care provided to Medicaid beneficiaries.

South Carolina terminated PPSAT’s Medicaid provider agreement in 2018 in accordance with executive orders issued by Gov. Henry McMaster (R) designed to prevent the state from indirectly subsidizing abortion services.

PPSAT and patient Julie Edwards sued, saying the move violated their rights under the Medicaid Act and the 14th Amendment. The U.S. District Court for the District of South Carolina issued a preliminary injunction halting the state’s move, based on Edwards’ Medicaid Act claim.

The U.S. Court of Appeals for the Fourth Circuit affirmed.

The Medicaid Act’s free-choice-of-provider provision, which guarantees patients access to qualified and willing medical providers, unambiguously gives individual patients like Edwards a private right of action to challenge a state’s exclusion of a health-care provider from its Medicaid roster, the court said. It noted that five other circuits have reached the same conclusion.

The district court was also right in concluding that the plaintiffs are likely to succeed on the merits of their case, the appeals court said. Although the Medicaid Act doesn’t define the term “qualified,” its plain meaning is that a provider be professionally capable or competent to perform the medical services required, the court said.

While the act gives states discretionary authority to disqualify providers as professionally incompetent for nonmedical reasons, like fraud, it “in no way confers a blank check,” the court said. The state didn’t dispute PPSAT’s medical qualifications to perform family planning services, and the organization hasn’t been accused of professional wrongdoing.

Given the “deep national divide” on abortion, Congress has struck a balance by prohibiting federal funds from being used to finance most abortions, but protecting an individual’s right to seek out non-abortion services from a qualified family-planning provider of her choice, the court said. “This implicit bargain agreed to by the political branches is one that we are bound to respect,” it said.

The opinion was written by Judge J. Harvie Wilkinson III and joined by Judge James Wynn, Jr. and Judge Julius Richardson, who also wrote a concurrence.

Planned Parenthood receives funding from Bloomberg Philanthropies, the charitable organization founded by Michael Bloomberg. Bloomberg Law is operated by entities controlled by Michael Bloomberg.

The plaintiffs are represented by Burnette Shutt & McDaniel PA. Joshua Baker, head of the South Carolina’s Department of Health and Human Services, is represented by Jolley Law Group LLC.

The case is Planned Parenthood S. Atl. v. Baker, 4th Cir., No. 18-02133, 10/29/19.

To contact the reporter on this story: Brian Flood in Washington at bflood@bloomberglaw.com

To contact the editors responsible for this story: Jo-el J. Meyer at jmeyer@bloomberglaw.com; Patrick L. Gregory at pgregory@bloomberglaw.com