Following is an update to the 2011 story involving the state of Indiana's attempt to withhold Medicaid funding to Planned Parenthood (PP) of Indiana. PP argues that Indiana cannot exclude it from federal Medicaid funds.
The circuit court's opinion can be read here (PDF). The circuit court judges were Diane Sykes (who wrote the opinion), Richard Cudahy, and Michael Kanne.
THE 7TH CIRCUIT COURT'S SPECIFIES THE CRITERIA FOR A PROVIDER TO RECEIVE MEDICAID FUNDS
The opinion explains the matter thusly:
Under § 1396a(a)(23) state Medicaid plans “must” allow beneficiaries to obtain medical care from “any institution, agency, . . . or person, qualified to perform the service.” This is individual-rights language, stated in mandatory terms, and interpreting the right does not strain judicial competence.
That means anyone qualified to perform a medical service covered by Medicaid must receive federal Medicaid funds, according to the circuit court's opinion.
INDIANA'S EXAMPLES SHOWING THE COURT'S CRITERIA IS NOT DECISIVE
However, the court's own analysis of the case may not adhere to that criteria. First, let's look at the rationale for why PP is considered a "qualified" provider, as well as the definition of "qualified" the court claims to be following (emphasis mine):
Although Indiana has broad authority to exclude unqualified providers from its Medicaid program, the State does not have plenary authority to exclude a class of providers for any reason—more particularly, for a reason unrelated to provider qualifications. In this context, “qualified” means fit to provide the necessary medical services—that is, capable of performing the needed medical services in a professionally competent, safe, legal, and ethical manner. The defunding law excludes Planned Parenthood from Medicaid for a reason unrelated to its fitness to provide medical services, violatingits patients’ statutory right to obtain medical care from the qualified provider of their choice.
We now read ahead to the court's dismissal, for example, of two of Indiana's arguments from precedent that they can view PP as an unqualified provider. Here is the first, retold in the the circuit court opinion (emphasis mine):
Indiana also points to 42 U.S.C. § 1320a-7(b)(14), which allows states to exclude providers who are in default on their student-loan payments, and from this provision makes another argument by implication: If the states may refuse to subsidize student-loan delinquents with Medicaid dollars, then they must have the authority to “avoid indirect financing” of any “non-Medicaid” conduct. But like § 1396a(p)(1), this statute merely stipulates a particular ground for excluding a Medicaid provider; it does not imply that the states may establish any rule of exclusion and declare it a provider “qualification” for purposes of § 1396a(a)(23). That would make the free-choice-of-provider requirement a nullity.
And the second (emphasis mine):
Nor does Guzman v. Shewry, 552 F.3d 941 (9th Cir. 2009), help Indiana’s case. There, a provider was suspended from California’s Medicaid program based on a pending criminal investigation. He claimed that federal law occupies the entire field of regulation pertaining to Medicaid and therefore preempted the state’s disciplinary measure. The Ninth Circuit rejected this argument, relying in part on 42 U.S.C. § 1320a-7(b)(5), which provides that the states may suspend or exclude providers from participating in Medicaid “for reasons bearing on the individual’s or entity’s professional competence, professional performance, or financial integrity.” The court remarked that this provision presupposes state regulatory authority over provider qualifications. Guzman, 552 F.3d at 949.
Here we have two examples of precedent provided by Indiana's attorneys. Both were examples of Medicaid funds legally being withheld from an entity apart from that entity's competence to perform medical services. Remember, the 7th Circuit Court on Tuesday insisted:
“qualified” means fit to provide the necessary medical services—that is, capable of performing the needed medical services in a professionally competent, safe, legal, and ethical manner.
Both examples presented by Indiana demonstrate that competency to perform a particular medical service can be trumped by factors unrelated to those medical services. I did not see the 7th Circuit Court address that aspect of Indiana's argument. And yet, in its opinion, the 7th Circuit Court specifically ruled against Indiana because it supposedly disqualified PP for reasons other than it's ability to perform certain medical services:
The [State of Indiana's] defunding law excludes Planned Parenthood from Medicaid for a reason unrelated to its fitness to provide medical services, violating its patients’ statutory right to obtain medical care from the qualified provider of their choice.
The 7th Circuit Court's opinion here is worded such that there are no reasons to withhold Medicaid funding from any entity capable of performing certain medical services. Yet, Indiana's lawyers produced several examples (such as the 2 described above) that demonstrate that is not ultimately the decisive factor. A doctor behind on student loans can still legitimately perform medical services. In the example in which there was a criminal investigation on the provider, the 7th Circuit Court considered it okay to suspend their Medicaid dollars even though there was no guilt at the time the funds were withheld. As well, one of the reasons the 7th Circuit Court supported that opinion is because of the question of the "financial integrity" of a provider. We'll take another look at that aspect of PP's financial statements in a moment.
More from the 7th Circuit opinion:
It is true that Medicaid regulations permit the states to establish “reasonable standards relating to the qualifications of providers.” 42 C.F.R. § 431.51(c)(2). But Indiana claims plenary authority to exclude Medicaid providers for any reason, as long as it furthers a legitimate state interest—here, the State’s interest in avoiding indirect subsidization of abortion. This sweeping claim conflicts with the unambiguous language of § 1396a(a)(23) and finds no support in related Medicaid statutes and regulations.
The opinion went on from that paragraph to reiterate that "qualified" means competent to perform the medical services in question. The opinion reiterates that standard over and over. In other words, the state can establish "reasonable standards" relating to what is a "qualified" provider––the 7th Circuit Court insists Indiana's criteria is unreasonable on the grounds that PP is able to perform certain procedures covered by Medicaid. Yet the court was willing to suspend that standard altogether as we saw in the examples of the cases on student loans or a pending investigation, as well as other cases presented by Indiana to the courts.
SO DOES PLANNED PARENTHOOD USE MEDICAID DOLLARS FOR ABORTIONS?
Recall from The Catholic Voyager's previous coverage on this case, the state of Indiana submitted to the district court the following argument that PP has not demonstrated that it separates Medicaid funds from abortion services:
PPIN’s audited financial statements for 2009 and 2010 give rise to a reasonable inference that it commingles Medicaid reimbursements with other revenues it receives. ... financial statements provide no record that PPIN [Planned Parenthood of Indiana] makes any effort either to segregate Medicaid reimbursements from other unrestricted revenue sources or to allocate the costs of its various lines of business, whether abortion, family planning, cancer screenings, or other services. ... Medicaid, as a revenue line, is shown with other unrestricted sources of income ... This indicates that, while PPIN may not receive Medicaid reimbursements related directly to abortions (as federal and state laws generally prohibit), the Medicaid reimbursements it does receive for other services are pooled or commingled with other monies it receives and thus help pay for total operational costs.
In other words, PP uses Medicaid funds to pay for total operational costs, which of course includes abortion services not covered by Medicaid dollars. The only comment on this matter I saw from the 7th Circuit Court opinion reads as follows:
Planned Parenthood also performs abortions. The organization uses private funding to support its abortion services and takes steps to ensure that public and private funds are not commingled.
That's it. There is no substantiation that PP prevents Medicaid dollars from going to abortion services other than a cursory statement that it does so. The claim begs the question. The circuit court's opinion is filled with supporting documentation and analysis except on this point. What of the PP's audited financial statements as described by the state of Indiana during the district hearing?
It may be telling, however, that the circuit court's opinion elsewhere implies that Medicaid dollars do indirectly pay for PP's abortion services. Recall this earlier quote:
But Indiana claims plenary authority to exclude Medicaid providers for any reason, as long as it furthers a legitimate state interest—here, the State’s interest in avoiding indirect subsidization of abortion.
The circuit court's opinion describes the matter, in their own words, as Indiana avoiding "indirect subsidization of abortion." The court's opinion is not qualifying the statement as Indiana's "perception" only, but rather describing the situation as it exists.
So on the one hand, the court dismissively claimed PP separates use public funds from abortion services, and on the other, indicates that PP uses public funds indirectly to subsidize abortion.
Elsewhere, the 7th Circuit Court's opinion suggests the same thing:
After reading through the opinion, I was thus left vexed. It seemed that Indiana's strongest argument against funding PP was dismissed with no rebuttal, with no detailed explanation. Instead, the peripheral criteria of PP's "capability" to perform other funds appeared to be inconsistently described as the basis by which a provider must receive Medicaid funds.
So on the one hand, the court dismissively claimed PP separates use public funds from abortion services, and on the other, indicates that PP uses public funds indirectly to subsidize abortion.
Elsewhere, the 7th Circuit Court's opinion suggests the same thing:
The point [of defunding PP] is to eliminate the indirect subsidization of abortion....Act 1210 aims to prevent the indirect subsidization of abortion...In rebutting this argument, the court does not challenge Indiana's assertion that PP is using public funds to subsidize abortion. It rather seems to admit the claim as fact. Instead, the court insists repeatedly that PP must be funded simply because it is capable of performing other covered medical services.
After reading through the opinion, I was thus left vexed. It seemed that Indiana's strongest argument against funding PP was dismissed with no rebuttal, with no detailed explanation. Instead, the peripheral criteria of PP's "capability" to perform other funds appeared to be inconsistently described as the basis by which a provider must receive Medicaid funds.
