Fifth Circuit Rules States Can Exclude Planned Parenthood from Medicaid

On November 23, the US Court of Appeals for the Fifth Circuit, sitting en banc (full court), ruled that Medicaid patients do not have a right to challenge a state’s determination that a health care provider is not “qualified” under federal Medicaid law. The ruling in Planned Parenthood of Greater Texas v. Kauffman a preliminary injunction preventing Texas from excluding Planned Parenthood from the state’s Medicaid program, although the ruling has not yet taken effect.

The case dates back to 2015, when Texas sent Planned Parenthood providers Notice of Termination letters, seeking to end the Medicaid provider agreements the state had with the Planned Parenthoods and bar them from receiving reimbursement for Medicaid patients. The Planned Parenthood affiliates and several of their patients sued, asserting that the terminations violated federal Medicaid’s free-choice-of-provider requirement (also known as freedom of choice), which protects the right of patients to receive services from any qualified Medicaid provider.

A district court and a three-judge panel of the Fifth Circuit agreed with the plaintiffs and issued and upheld a preliminary injunction blocking the terminations. The case was then appealed to the full Fifth Circuit.

The en banc Fifth Circuit ruled that while Medicaid’s free-choice-of-provider requirement gives Medicaid patients an “absolute right” to receive services from a qualified Medicaid provider, it does not give those same patients “a right to question a State’s determination that a provider is unqualified.” Because the district court and panel decisions were based solely on the claims of the patient-plaintiffs, the en banc court did not consider whether the providers (Planned Parenthood) were entitled to a preliminary injunction or whether the providers were “qualified” within the meaning of federal Medicaid law.

In reaching its decision, the appellate court also expressly overruled Planned Parenthood of Gulf Coast, Inc. v. Gee, a previous, similar case arising out of Louisiana’s termination of Medicaid provider agreements affiliated with Planned Parenthood.

In recent years, a number of states have sought to exclude Planned Parenthood and other providers from their state Medicaid programs, using a variety of mechanisms. Most of these efforts have been stopped by the courts, making the Fifth Circuit’s ruling very troubling. NFPRHA continues to assess the implications of the Fifth Circuit’s ruling and what it means for Medicaid providers, and will provide more analysis in the coming weeks. In the meantime, if you have any questions, please contact Robin Summers, VP of Health Care Strategy & Analysis and Senior Counsel, at rsummers@nfprha.org.