DocketNumber: Civil Action No.: 3:18-2078-MGL
Citation Numbers: 326 F. Supp. 3d 39
Judges: Lewis
Filed Date: 8/28/2018
Status: Precedential
Modified Date: 7/25/2022
I. INTRODUCTION
This is an action for violation of 42 U.S.C. § 1396a(a)(23)(A), a provision of the *42Medicaid Act, and related constitutional claims. The Court has jurisdiction over this matter under
Pending before the Court is Plaintiffs' Motion for Temporary Restraining Order and Preliminary Injunction. ECF No. 5. Having carefully considered Plaintiffs' Motion, the response, the reply, the record, and the applicable law, it is the judgment of the Court Plaintiffs' Motion will be granted, and Plaintiffs' requested preliminary injunction will be issued.
II. FACTUAL AND PROCEDURAL HISTORY
This action arises out of the South Carolina Department of Health and Human Services' (SCDHHS) termination of Plaintiff Planned Parenthood South Atlantic (PPSAT) from South Carolina's Medicaid program. SCDHHS is the state agency that administers South Carolina's Medicaid program, and Defendant is the director of SCDHHS. ECF No. 1 ¶ 16.
PSSAT operates two health centers in South Carolina-one in Charleston and one in Columbia.
On August 24, 2017, South Carolina Governor Henry McMaster issued Executive Order No. 2017-15 directing all State agencies to "take any and all necessary actions ... to cease providing State or local funds ... to any physician or professional medical practice affiliated with an abortion clinic and operating concurrently with and in the same physical, geographic location or footprint as an abortion clinic." ECF No. 5-2 at 14. On July 13, 2018, Governor McMaster issued Executive Order No. 2018-21 instructing SCDHHS to "deem abortion clinics ... and any affiliated physicians or professional medical practices ... enrolled in the Medicaid program as unqualified to provide family planning services and, therefore, to immediately terminate them upon due notice and deny any future such provider enrollment applications for the same."
PPSAT and Ms. Edwards filed their complaint in this matter on July 27, 2018. ECF No. 1. Ms. Edwards has brought suit on her own behalf and as representative of a purported class of South Carolina Medicaid beneficiaries who have obtained or seek to obtain covered healthcare services from PPSAT. See
*43Plaintiffs filed their Motion for Temporary Restraining Order and Preliminary Injunction on July 30, 2018. ECF No. 5. Defendants filed a response in opposition on August 13, 2018, ECF No. 16, to which Plaintiffs replied on August 20, 2018, ECF No. 24. On August 23, 2018, the Court held a hearing on Plaintiffs' Motion at which counsel for Plaintiffs and Defendant were present. The Court, having been fully briefed on the relevant issues, is now prepared to discuss the merits of Plaintiffs' Motion for Temporary Restraining Order and Preliminary Injunction.
The Court notes there are two additional motions pending. ECF Nos. 6, 25. In the interest of expeditiously ruling on Plaintiffs' Motion for Temporary Restraining Order and Preliminary Injunction, however, the Court will address the other pending motions at a later date.
III. STANDARD OF REVIEW
"A plaintiff seeking a preliminary injunction must establish that he is likely to succeed on the merits, that he is likely to suffer irreparable harm in the absence of preliminary relief, that the balance of equities tips in his favor, and that an injunction is in the public interest." Winter v. Nat. Res. Def. Council, Inc. ,
IV. DISCUSSION AND ANALYSIS
As an initial matter, the Court notes Plaintiffs are moving for injunctive relief on their Medicaid Act claim only. ECF No. 5-1 at 14. Therefore, the Court will confine its analysis to that claim. The Court will first consider whether Ms. Edwards has made the requisite showing for injunctive relief on her Medicaid Act claim.
A. Likelihood of Success on the Merits
1. Contentions of the Parties
Ms. Edwards argues she is likely to succeed on her Medicaid Act claim because Defendant's termination of PPSAT from South Carolina's Medicaid program violates 42 U.S.C. § 1396a(a)(23)(A), which provides "any individual eligible for medical assistance ... may obtain such assistance from any institution, agency, community pharmacy, or person, qualified to perform the service or services required ... who undertakes to provide him such services...." Ms. Edwards asserts it is uncontested PPSAT is a medically and professionally qualified provider, and § 1396a(a)(23)(A) therefore guarantees her the right to choose PPSAT as her provider. She explains § 1396a(a)(23)(A) prohibits Defendant from excluding PPSAT from South Carolina's Medicaid program merely because PPSAT provides abortions outside the Medicaid program. Ms. Edwards further maintains § 1396a(a)(23)(A) creates a private right of action for Medicaid beneficiaries enforceable through
In support of her contentions, Ms. Edwards notes the overwhelming majority of courts that have considered these issues, including the Fifth, Sixth, Seventh, Ninth, and Tenth Circuit Courts of Appeals, have held § 1396a(a)(23)(A) creates a private right of action and prohibits a State from terminating qualified providers from its Medicaid program for reasons unrelated to professional competency to perform the services at issue.
Defendant responds Ms. Edwards is unlikely to succeed on her Medicaid Act claim because § 1396a(a)(23)(A) fails to create a private right of action enforceable through § 1983. Defendant posits *44§ 1396a(a)(23)(A), when read in context of § 1396a(a) as a whole, is meant to protect patients in the aggregate, not to confer an unambiguous right upon individuals such as Ms. Edwards. Accordingly, Defendant asserts the remedy for a violation of § 1396a(a)(23)(A) is the termination of federal funding to an offending State's Medicaid program as opposed to a private action. Defendant acknowledges the majority of courts to consider this issue have held § 1396a(a)(23)(A) does confer a private right of action upon patients, but Defendant relies upon Does v. Gillespie ,
Defendant insists that, even if Ms. Edwards were able to maintain her Medicaid Act claim, the claim lacks merit. Defendant posits § 1396a(a)(23)(A) does not define the term "qualified," and § 1396a(p)(1) permits a State to exclude providers from its Medicaid program for any reason established by State law. Defendant argues it may therefore terminate PPSAT from South Carolina's Medicaid program because PPSAT performs abortions, and
2. Analysis
a) Private Right of Action
The Court must first determine the threshold issue of whether § 1396a(a)(23)(A) creates a private right of action enforceable through § 1983 such that Ms. Edwards may pursue her Medicaid Act claim. Although there is no controlling precedent on this issue, the Fifth, Sixth, Seventh, Eighth, Ninth, and Tenth Circuit Courts of Appeals have considered this question, and all of those courts except the Eighth Circuit have held § 1396a(a)(23)(A) does confer a private right of action. Planned Parenthood of Kan. v. Andersen ,
To create a private cause of action enforceable through § 1983, a federal statute must unambiguously confer a federal right, not simply a benefit or interest. Gonzaga Univ. v. Doe ,
*45and whether the obligation created by the statute is mandatory. Blessing v. Freestone ,
Section 1396a(a)(23)(A) provides "any individual eligible for medical assistance ... may obtain such assistance from any institution, agency, community pharmacy, or person qualified to perform the service or services required ... who undertakes to provide him such services." The Court holds this language unambiguously confers a right upon Medicaid-eligible patients, such as Ms. Edwards. See, e.g. , Andersen ,
Moreover, the right conferred-the right to obtain assistance from any qualified and willing provider-is neither vague nor amorphous. See Comm'r of Ind. ,
The Court rejects Defendant's suggestion there is no private right of action under § 1396a(a)(23)(A) because the appropriate remedy for violation of the provision, according to Defendant, is the termination of federal funding to an offending State's Medicaid program. The ability to withhold federal funding does not constitute a comprehensive enforcement scheme revealing an intent of Congress to foreclose private enforcement, and "private enforcement of § 1396a(a)(23) in suits under § 1983 in no way interferes with the Secretary's prerogative to enforce compliance using [his] administrative authority." Comm'r of Ind. ,
The Court likewise rejects Defendant's contention that a beneficiary's ability to challenge the termination of a provider deemed unqualified by a State from the State's Medicaid program has been foreclosed by the Supreme Court's decision in O'Bannon v. Town Court Nursing Center ,
Accordingly, the Court holds, in accordance with the Fifth, Sixth, Seventh, Ninth, and Tenth Circuit Courts of Appeals, that § 1396a(a)(23)(A) confers a private right of action enforceable through § 1983 on Medicaid patients such as Ms. Edwards.
b) Exhaustion of Administrative Remedies
The Court must next consider Defendant's assertion Ms. Edwards is unable to maintain her Medicaid Act claim because she has failed to exhaust available state administrative remedies. Defendant argues Ms. Edwards' application for Medicaid, ECF No. 25-4, and the SCDHHS Medicaid Member Handbook, ECF No. 25-5, require her to pursue an administrative appeal. The provision Defendant relies upon in Ms. Edwards' Medicaid application states: "If I think SCDHHS ... has made an error I can appeal its decision. To appeal means to tell someone at SCDHHS that I think the action is wrong, and ask for a fair hearing." ECF No. 25-4 at 16. The relevant portion of the SCDHHS Medicaid Member Handbook provides: "You can ask for an appeal if your Medicaid coverage has changed, ended, or been denied. You can also ask for an appeal if a medical service you need has been denied or delayed." ECF No. 25-5 at 21.
"[A]s a general rule, a plaintiff bringing a suit pursuant to
The Medicaid Act contains no provision explicitly requiring the exhaustion of state administrative remedies prior to bringing a § 1983 suit for violation of the Act. Id. Likewise, the Court does not interpret the Medicaid Act as implicitly requiring exhaustion of administrative remedies. Although there is a state administrative appeal process available to Ms. Edwards, the "mere provision of state administrative remedies ... is not enough to demonstrate an implicit Congressional intent to impose an exhaustion requirement on a plaintiff seeking to bring a § 1983 action." Id. (citations omitted). Further, the relevant provisions of Ms. Edwards' Medicaid application and the SCDHHS Medicaid Member Handbook speak in optional rather than mandatory terms; they provide Ms. Edwards "can" appeal, not that she must.
Accordingly, the Court holds Ms. Edwards was not required to exhaust state administrative remedies prior to bringing this action. See id. at 220 (holding the "existence of state administrative review procedures does not suffice to evidence Congress' intent to implicitly create an exhaustion requirement" for claims under a different provision of the Medicaid Act given "the strong presumption against requiring the exhaustion of state administrative remedies in § 1983 suits.").
The Court further holds, even if there were a requirement for Ms. Edwards to exhaust state administrative remedies, her failure to do so would be excused under the circumstances because the pursuit of an administrative appeal before SCDHHS would be futile given the clear *47directive in Governor McMaster's Executive Order No. 2018-21 for SCDHHS to deem abortion clinics unqualified to provide family planning services and to terminate them from South Carolina's Medicaid program. See Shalala v. Ill. Council on Long Term Care, Inc. ,
c) Violation of 42 U.S.C. § 1396a(a)(23)(A)
The Court will now turn to the question of whether Defendant's termination of PPSAT from South Carolina's Medicaid program violates § 1396a(a)(23)(A). The Court notes the Fifth, Seventh, Ninth, and Tenth Circuit Courts of Appeals have held, in well-reasoned and persuasive opinions, that similar terminations of PPSAT affiliates from the Medicaid programs of other states violated § 1396a(a)(23)(A). Andersen ,
As set forth above, § 1396a(a)(23)(A) provides "any individual eligible for medical assistance ... may obtain such assistance from any institution, agency, community pharmacy, or person qualified to perform the service or services required ... who undertakes to provide him such services...." The Medicaid Act does not define the term "qualified." In § 1396a(a)(23)(A), however, the term "qualified" is modified by the phrase "to perform the service or services required." See Betlach ,
It is undisputed PPSAT is professionally competent and is capable of performing family planning services for Medicaid patients. Defendant claims, however, it may exclude PPSAT from South Carolina's Medicaid program for any reason established by State law pursuant to § 1396a(p)(1). Defendant reasons it may therefore terminate PPSAT from the Medicaid program because PPSAT performs abortions, and
First,
Moreover, the Court rejects Defendant's implication § 1396a(p)(1) permits a State to terminate a provider from its Medicaid program for any reason whatsoever as long as the reason is bolstered by State law. Section 1396a(p)(1) provides a *48State may exclude a provider from its Medicaid program for any reason the Secretary of the United States Department of Health and Human Services may exclude a provider, "[i]n addition to any other authority." Although § 1396a(p)(1) gives States broad authority to exclude providers from their Medicaid programs, see, e.g. , Andersen ,
Thus, contrary to Defendant's suggestion, § 1396a(p)(1) does not permit a State to pass a law deeming a provider unqualified for reasons unrelated to professional competence to perform the services at issue and then to exclude the provider from its Medicaid program on the basis of that law. See Comm'r of Ind. ,
As explained above, Defendant's termination of PPSAT from South Carolina's Medicaid program was not based on any alleged incompetence or inability of PPSAT to perform the medical services at issue. Rather, it was based on the fact that PPSAT performs abortions outside the Medicaid program. Because it is undisputed PPSAT is professionally competent to perform family planning services, Defendant's termination of PPSAT from South Carolina's Medicaid program violates § 1396a(a)(23)(A). Accordingly, the Court holds Ms. Edwards is likely to succeed on the merits of her Medicaid Act claim.
B. Irreparable Harm
Ms. Edwards asserts she will suffer irreparable harm in the absence of preliminary relief because she is being deprived of her statutory right under § 1396a(a)(23)(A) to have the qualified and willing provider of her choice. She avers she is also suffering irreparable harm in the form of disruption of and reduced access to health care.
Defendant claims Ms. Edwards will suffer no harm without a preliminary injunction because she has no right to receive Medicaid services from a provider deemed unqualified by the State, such as PPSAT. Defendant reiterates its contention Ms. Edwards is unable to maintain a cause of action challenging Defendant's determination PPSAT is unqualified to provide Medicaid services. Defendant further suggests Ms. Edwards will suffer no harm because she can still obtain Medicaid services from PPSAT's physicians as long as they bill for such services outside of PPSAT.
The Court has no trouble concluding Ms. Edwards would suffer irreparable harm in the absence of a preliminary injunction because she would be deprived of her statutory right to select the qualified and willing provider of her choice. Ms. Edwards is insured through Medicaid, ECF No. 5-3 ¶ 2, and she wants to continue receiving care from PPSAT, ECF No. 5-3 ¶ 17. Defendant's termination of PPSAT from South Carolina's Medicaid program is depriving Ms. Edwards of her statutory right to choose PPSAT as her provider, and deprivation of this right constitutes irreparable harm.
Defendant's arguments regarding Ms. Edwards' alleged lack of irreparable harm are without merit. As set forth above, the Court holds § 1396a(a)(23)(A) provides Medicaid patients such as Ms. Edwards a private right of action enforceable under § 1983, and Defendant's termination of *49PPSAT from South Carolina's Medicaid program violates § 1396a(a)(23)(A). Thus, the Court rejects Defendant's contention Ms. Edwards will suffer no irreparable harm because she has no right to receive Medicaid services from PPSAT and no ability to challenge Defendant's termination of PPSAT from the State's Medicaid program.
Defendant's claim Ms. Edwards may still obtain services from PPSAT's physicians as long as they bill for her services outside of PPSAT is likewise lacking in merit. Section 1396a(a)(23)(A) affords Ms. Edwards the right to obtain services from any qualified "institution, agency, community pharmacy, or person." Thus, Ms. Edwards has the right to choose PPSAT, not just its physicians, as her provider, and Defendant's termination of PPSAT from the State's Medicaid program deprives her of that right.
Accordingly, the Court holds Ms. Edwards has demonstrated she is likely to suffer irreparable harm in the absence of preliminary relief.
C. Balancing of the Equities
Ms. Edwards insists the balance of the equities tips in her favor because she will suffer irreparable harm in the absence of a preliminary injunction, and Defendant would suffer no injury if the Court were to issue a preliminary injunction. She explains Defendant would suffer no injury because the State would simply continue to reimburse PPSAT for Medicaid services as it has done for years.
Defendant disagrees the balance of the equities tips in Ms. Edwards' favor. Defendant claims Ms. Edwards and other PPSAT Medicaid patients can seek health care services elsewhere in the absence of injunctive relief. Furthermore, Defendant maintains he would in fact suffer an injury if injunctive relief were granted because, as revealed by Governor McMaster's Executive Order No. 2017-15 and
The Court holds the balance of the equities tips in Ms. Edwards' favor. As stated above, Ms. Edwards, as well as other PPSAT patients insured through Medicaid, will suffer irreparable harm in the absence of an injunction because they will be deprived of their statutory right to the qualified provider of their choice. This harm is significant and can have substantial negative effects, including a potential lack of access to health care. Contrary to Defendant's suggestion, it is immaterial whether Ms. Edwards can seek health care from another provider because she is entitled to the qualified provider of her choice under § 1396a(a)(23)(A).
The Court agrees with Ms. Edwards the State would suffer no harm if injunctive relief were granted. As Ms. Edwards points out, the State would simply have to continue to reimburse PPSAT for Medicaid services as it has done previously. Defendant's argument injunctive relief would force it to subsidize abortions is without merit. As explained above, South Carolina's Medicaid program does not cover abortions except in narrow circumstances required by law, and PPSAT is reimbursed for Medicaid services on a fee-for-service basis. ECF No. 24-1 ¶¶ 2-3. Thus, PPSAT's inclusion in South Carolina's Medicaid program does not cause the *50State to subsidize abortions, and the fact PPSAT might have to reduce services and hours if it loses Medicaid patients fails to prove otherwise. Moreover, Defendant can have no legitimate interest in perpetuating circumstances contrary to law, and Defendant's termination of PPSAT from the Medicaid program violates § 1396a(a)(23)(A).
D. The Public Interest
Ms. Edwards argues a preliminary injunction would serve the public interest of ensuring continued access to crucial health services for Medicaid patients. Defendant claims injunctive relief would be adverse to the public interest because it would require the State to subsidize abortions in violation of
The Court has already rejected Defendant's claim a preliminary injunction would require the State to subsidize abortions, and the Court therefore rejects Defendant's argument injunctive relief is adverse to the public interest. The Court holds Plaintiffs' requested preliminary injunction would serve the public interest by preserving the statutory right of Ms. Edwards and other PPSAT patients insured through Medicaid to have the qualified provider of their choice. Injunctive relief further serves the public interest by helping to ensure affordable access to competent health care by some of South Carolina's neediest citizens.
In accordance with the above discussion, the Court holds Ms. Edwards has demonstrated she is likely to succeed on the merits of her Medicaid Act claim, she is likely to suffer irreparable harm in the absence of preliminary injunctive relief, the balance of equities tips in her favor, and her requested injunction is in the public interest. The Court will therefore issue a preliminary injunction enjoining Defendant from terminating the Medicaid enrollment agreement of PPSAT during the pendency of this litigation.
Because the Court holds preliminary injunctive relief is appropriate and warranted for Ms. Edwards' Medicaid Act claim, the Court declines to analyze whether preliminary injunctive relief is appropriate for PPSAT's claim. The Court likewise declines to address the remaining arguments of the parties, as the Court's holdings articulated above are dispositive of Plaintiffs' Motion for Temporary Restraining Order and Preliminary Injunction. See Karsten v. Kaiser Found. Health Plan of Mid-Atl. States, Inc. ,
V. CONCLUSION
Wherefore, based on the foregoing discussion and analysis, it is the judgment of the Court Plaintiffs' Motion for Temporary Restraining Order and Preliminary Injunction is GRANTED . Defendant and his employees, agents, successors in office, and all others acting in concert with him in his official capacity as Director of the South Carolina Department of Health and Human Services are hereby enjoined from terminating the Medicaid enrollment agreement of Planned Parenthood South Atlantic during the pendency of this action. Plaintiffs are directed to post security in the amount of $1,000 with the Clerk of Court for the District of South Carolina by Tuesday, September 4, 2018.
IT IS SO ORDERED.