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From Health Law Daily, October 20, 2015

Planned Parenthood wins TRO battle, keeps Medicaid payments amidst termination war

By Bryant Storm, J.D.

A district court granted a temporary restraining order (TRO) for Planned Parenthood Gulf Coast, Inc. (PPGC) and three of its patients to prevent the Louisiana’s Department of Health and Hospitals (DHH) from suspending Medicaid payments to PPGC for services rendered to Medicaid beneficiaries. The court found that PPGC was likely to succeed on the merits of its claims that the state agency was violating Medicaid law as well as the Constitution by attempting to deny PPGC provider status for some reason unrelated to its fitness as a provider. The court deferred judgment on PPGC’s motion for a preliminary injunction so that a hearing could be held on the issue (Planned Parenthood Gulf Coast, Inc. v. Kliebert, October 18, 2015, deGravelles, J.).

Facilities. PPGC operates family planning centers and clinics in the Houston area of Texas and in Louisiana. The organization’s two Louisiana facilities participate in Louisiana’s Medicaid program. The facilities offer physical exams, contraception and contraceptive counseling, screening for breast cancer, screening and treatment for cervical cancer, testing and treating for certain sexually transmitted diseases, pregnancy testing and counseling, and certain procedures, including colposcopy. Neither of the facilities performs abortions. Almost 75 percent of the facilities’ patients are enrolled in Medicaid.

Videos. In response to series of heavily edited videos released by the Center for Medical Progress (CMP), “which purported to document discussions regarding the acquisition of tissue samples between various Planned Parenthood affiliates’ officials and disguised actors,” DHH requested that PPGC answer questions about it current operations. On July 24, 2015, PPGC answered questions via a letter, explaining that PPGC does not offer abortion services and describing itself as an affiliate of Planned Parenthood Federation of America (PPFA). PPGC answered “no” to questions regarding whether PPGC “facilities, or any affiliates, subsidiaries, or associates thereof, sell or donate any unborn baby organs or body parts.”

Contradiction. On August 4, 2015, DHH sent another letter to PPGC characterizing PPGC’s prior answers as being contradicted in an April 9, 2015, CMP video in which the Director of Research at PPGC allegedly discusses, at the PPGC facility in Texas, existing contracts for fetal tissue donation for the purpose of research. PPGC responded, denying the existence of any contradiction, noting that PPGC did not currently have a fetal tissue donation program in Texas, and neither sells nor donates fetal tissue.”

Termination. On August 3, 2015, via four letters, DHH gave PPGC 30-day notice of the agency’s intent to terminate PPGC’s Medicaid participation agreement. The letters did not give a reason for the termination decision. PPGC, on behalf of itself and three patients, filed a complaint against DHH. On the day of the termination notice, Bobby Jindal, governor of Louisiana, announced the termination, noting that he and DHH “decided to give the required 30-day notice to terminate the Planned Parenthood Medicaid provider contract because Planned Parenthood does not represent the values of the State of Louisiana in regards to respecting human life.”

For cause. At the first administrative termination hearing, DHH rescinded its at-will termination efforts and sent four new termination letters, which purported to terminate the PPGC provider agreements “for cause.” As “cause” for the termination, DHH cited a false claims settlement, a group of provider audits, and alleged misrepresentations in the PPGC letters regarding the CMP videos. After receiving the second round of termination letters, PPGC amended its complaint and filed a renewed motion for TRO.

PPGC arguments. PPGC argued that it was entitled to a TRO because DHH violated Section 1396a(a)(23) of the Social Security Act (SSA) by barring PPGC as a Medicaid provider for some reason “unrelated to its fitness to provide medical services” because DHH nowhere suggested that PPGC was not qualified to perform the Medicaid services it provides. PPGC also asserted two constitutional claims: (1) DHH singled the provider out for unfavorable treatment, without justification, in violation of the Fourteenth Amendment; and (2) DHH attempted to penalize PPGC’s free association with other Planned Parenthood entities in violation of the First Amendment. The provider also asserted that the harm to PPGC and its patients would be irreparable if the termination occurred. Additionally, PPGC asserted that the balance of harm favored continued Medicaid funding to PPGC and the public’s strong interest in “ensuring continued public access to crucial health services.”

DHH arguments. The agency asserted that the court lacked subject matter jurisdiction to decide the dispute because the case was not ripe and because PPGC and its patients lacked standing. DHH reasoned that no injury had been suffered and no hardship could be shown. Additionally, DHH asked the court to abstain from intervening so that the state administrative proceedings could provide a solution to the dispute. Finally, DHH argued that PPGC could not prevail on the merits of its case because (1) the plaintiffs had no property interest in the Medicaid provider agreements, (2) the available administrative appeal process complied with the necessary due process requirements, and (3) Section 1396a(a)(23) provided no private cause of action.

Ripeness, standing, abstention. The court held that the case was ripe for consideration because the concreate actions and certain threats of the second termination letters threatened harm to PPGC and its patients. The court also rejected DHH’s arguments regarding standing, noting that the threat of harm to PPGC and its patients was sufficiently clear to allow a finding of standing. In response to DHH’s abstention arguments, the court held that none of the doctrines relied upon by the agency applied. The court explained that the doctrines relied upon by DHH applied to uncertain state statutes, an ongoing state proceeding that is “judicial in nature,” two parallel suits in state and federal court, or the presence of a state-created avenue of relief, none of which were present in the case of PPGC’s lawsuit. Therefore, the court rejected all of DHH’s jurisdictional challenges and refused to abstain.

Merits. With regard to the applicability of a TRO, the court held that Section 1396a(a)(23) created a right to sue under 42 U.S.C. § 1983 because the Medicaid law contains rights-creating and mandatory language and has an unmistakable individual focus. In other words, the free-choice-of-provider provision confers a private right of action. The court rejected DHHs argument that even if the individual patients had the right to choose PPGC as a qualified provider and enforce that right under Section 1983, DHH can deem PPGC unqualified by exercising its termination powers. The court found no reasonable scenario where DHH could construe “qualified” to exclude a provider whose competence was not at issue. Thus, the court found it likely that PPGC would succeed on the merits of its claims because DHH conceded that PPGC was a competent and therefore “qualified” provider.

Harm. The court determined that in the absence of a TRO, thousands of Medicare beneficiaries would be unable to visit the Medicaid provider of their choice. The court reasoned that PPGC would also suffer irreparable harm because its provider termination would result in a significant enough reduction in revenue to require the provider to close its doors. Regarding the balance of harm, the court explained that the harms balance in favor of PPGC because the hindrances on the ability of DHH to administer its program and the costs to the state were limited or nonexistent. As for the public interest, the court found that it too favored injunctive relief because PPGC helps combat disease and provides the regular health care services for over 5,000 women.

The case is No. 3:15-cv-00565-JWD-SCR.

Attorneys: William E. Rittenberg (Rittenberg & Samuel, LLC) for Planned Parenthood Gulf Coast, Inc. Stephen Robert Russo, Louisiana Department of Health & Hospitals, for Kathy Kliebert. John Joseph Gaupp, U.S. Attorney's Office for the United States of America.

Companies: Planned Parenthood Gulf Coast, Inc.

MainStory: TopStory CaseDecisions CMSNews CoPNews MedicaidPaymentNews ProviderNews LouisianaNews

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