Planned Parenthood of Indiana v. Carter, No. 49A02-0505-CV-469.

• Docket Nº: No. 49A02-0505-CV-469.
• Citation: 854 N.E.2d 853
• Case Date: September 22, 2006
• Court: Court of Appeals of Indiana

854 N.E.2d 853 PLANNED PARENTHOOD OF INDIANA, Appellant-Plaintiff,
v.
Steve CARTER, in his official capacity as Attorney General of the State of Indiana, and Allen K. Pope, in his official capacity as Director, Indiana Medicaid Fraud Control Unit, Appellees-Defendants. No. 49A02-0505-CV-469. Court of Appeals of Indiana. September 22, 2006.

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Kenneth J. Falk, ACLU of Indiana, Indianapolis, IN, Roger K. Evans, Mimi Liu, Planned Parenthood Federation of America, Inc., New York, NY, Attorneys for Appellant.

Steve Carter, Attorney General of Indiana, Thomas M. Fisher, Solicitor General, Indianapolis, IN, Attorneys for Appellees.

OPINION

CRONE, Judge.

Case Summary

The Indiana Medicaid Fraud Control Unit ("IMFCU") is investigating a complaint that Planned Parenthood of Indiana ("PPI") neglected seventy-three of its minor patients by allegedly failing to report child sexual abuse as required by Indiana law. PPI asked the trial court to enjoin IMFCU's demand for unlimited access to its minor patients' medical records, claiming that IMFCU's demand is both unlawful and unconstitutional. The trial court denied PPI's motion for preliminary injunction, and PPI appealed.

In this appeal, we must answer the following questions: (1) whether granting PPI's request to enjoin IMFCU's investigation would violate the separation of

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powers doctrine; (2) whether IMFCU is authorized by statute to investigate a complaint of patient neglect in a health care facility based on an alleged failure to report child sexual abuse as required by Indiana law; (3) whether IMFCU's demand for unlimited access to PPI's minor patients' medical records violates PPI's Fourth Amendment right against unreasonable searches and seizures; (4) whether PPI has standing to raise a Fourteenth Amendment informational privacy claim on behalf of its minor patients; (5) if so, whether those patients have a constitutional right to privacy in the information contained in their medical records; (6) and, if so, we must balance that right against IMFCU's interest in investigating complaints of patient neglect to determine whether PPI has a reasonable likelihood of proving at trial that granting IMFCU's demand for unlimited access to its minor patients' medical records would violate the patients' constitutional privacy rights.

We answer those questions as follows: (1) enjoining IMFCU's investigation would not violate the separation of powers doctrine; (2) IMFCU is authorized by statute to conduct its investigation; (3) PPI's Fourth Amendment claim is therefore unsuccessful; (4) PPI has standing to raise a Fourteenth Amendment informational privacy claim on behalf of its minor patients; (5) those patients have a limited constitutional right to privacy in their medical records; and (6) in balancing that right against IMFCU's interest in investigating complaints of patient neglect, we conclude that PPI has demonstrated a reasonable likelihood of proving at trial that granting IMFCU's demand for unlimited access to the medical records of PPI's minor patients would violate the patients' constitutional privacy rights. We acknowledge the significant public interest in investigating complaints of patient neglect and allegations of child sexual abuse, but granting IMFCU's demand for unlimited access to PPI's minor patients' medical records is neither the only, nor the most effective, nor the least intrusive means of serving those interests. We therefore reverse the trial court's denial of PPI's motion for preliminary injunction and remand for further proceedings.

On remand, the trial court shall immediately enter a preliminary injunction in favor of PPI against IMFCU's demand for unlimited access to its patients' medical records, and IMFCU shall immediately deliver any medical records currently in its possession to the trial court under seal pending resolution of the trial on the merits of PPI's informational privacy claim. Notwithstanding the preliminary injunction, IMFCU may still refer the neglect complaint to an appropriate criminal investigative or prosecutive authority pursuant to federal law.¹ Likewise, the attorney general and an IMFCU investigator may issue a subpoena for the medical records pursuant to Indiana law.² This subpoena process would allow for judicial review of the requested medical records prior to disclosure, thereby allowing IMFCU to pursue its neglect investigation while safeguarding the privacy rights of PPI's minor patients.³

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Issue

The dispositive issue is whether the trial court abused its discretion in denying PPI's motion for preliminary injunction against Steve Carter, in his official capacity as Attorney General of the State of Indiana, and Allen K. Pope, in his official capacity as IMFCU's director (collectively, "Appellees"), for the purpose of denying IMFCU unlimited access to the medical records of PPI's minor patients.

Facts and Procedural History⁴

The relevant facts are undisputed. To put them in context, we begin with an overview of the relevant portions of the Medicaid regulatory scheme as set forth in Title XIX of the Social Security Act and Indiana law.

Title XIX of the Social Security Act, enacted in 1965, authorizes Federal grants to States for medical assistance to low-income persons who are age 65 or over, blind, disabled, or members of families with dependent children or qualified pregnant women or children. The program is jointly financed by the Federal and State governments and administered by States. Within broad Federal rules, each State decides eligible groups, types and range of services, payment levels for services, and administrative and operating procedures. Payments for services are made directly by the State to the individuals or entities that furnish the services.

42 C.F.R. § 430.0. "Although the program is voluntary, once a state chooses to participate, it must comply with all federal Medicaid laws and regulations." Indiana Family & Soc. Servs. Admin. v. Hospitality House of Bedford, 704 N.E.2d 1050, 1053 (Ind.Ct.App.1998).

The Office of Medicaid Planning and Policy ("OMPP"), a subdivision of the Indiana Family and Social Services Administration ("IFSSA"), administers the Medicaid program in Indiana. Ind.Code § 12-15-1-1. "As a participating state, Indiana is required to submit a state plan to the U.S. Department of Health and Human Services to qualify for matching funds." Gomolisky v. Davis, 716 N.E.2d 970, 972 (Ind.Ct.App.1999) (citing 42 U.S.C. § 1396(a)), trans. denied (2000). The plan must demonstrate that the state operates a Medicaid fraud control unit, which must be "separate and distinct" from the state agency that administers the Medicaid program. See 42 U.S.C. § 1396a(a)(61); 42 U.S.C. § 1396b(q)(2).

The function of a Medicaid fraud control unit is to conduct

a statewide program for the investigation and prosecution of violations of all applicable State laws regarding any and all aspects of fraud in connection with (A) any aspect of the provision of medical assistance and the activities of providers of such assistance under the State plan under this subchapter; and (B) upon the approval of the Inspector General of the relevant Federal agency, any aspect of the provision of health care services and activities of providers of such services under any Federal health care program ..., if the suspected fraud or violation of law in such case or investigation is primarily related to the State plan under this subchapter.

42 U.S.C. § 1396b(q)(3). A Medicaid fraud control unit must have "procedures

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for reviewing complaints of abuse or neglect of patients in health care facilities" that receive Medicaid payments and "procedures for acting upon such complaints under the criminal laws of the State or for referring such complaints to other State agencies for action." 42 U.S.C. § 1396b(q)(4)(A). The U.S. Secretary of Health and Human Services may exclude an entity from participation in the Medicaid program if it "fails to grant immediate access, upon reasonable request[,]" to a state Medicaid fraud control unit "for the purpose of conducting activities described in [42 U.S.C. § 1396b(q)]." 42 U.S.C. § 1320a-7(b)(12).

42 C.F.R. § 1007.11 describes the duties and responsibilities of a state Medicaid fraud control unit in greater detail:

(a) The unit will conduct a Statewide program for investigating and prosecuting (or referring for prosecution) violations of all applicable State laws pertaining to fraud in the administration of the Medicaid program, the provision of medical assistance, or the activities of providers of medical assistance under the State Medicaid plan.

(b)(1) The unit will also review complaints alleging abuse or neglect of patients in health care facilities receiving payments under the State Medicaid plan and may review complaints of the misappropriation of patient's [sic] private funds in such facilities.

(2) If the initial review indicates substantial potential for criminal prosecution, the unit will investigate the complaint or refer it to an appropriate criminal investigative or prosecutive authority.

(3) If the initial review does not indicate a substantial potential for criminal prosecution, the unit will refer the complaint to an appropriate state agency.

....

(f) The unit will safeguard the privacy rights of all individuals and will provide safeguards to prevent the misuse of information under the unit's control.

Pursuant to federal law, IMFCU is a unit of the state attorney general's office. 42 U.S.C. § 1396b(q)(1)(A). Under Indiana law, IMFCU has the authority to "investigate, in accordance with federal law (42 U.S.C. 1396 et seq.): (A) Medicaid fraud; (B) misappropriation of a Medicaid patient's private funds; (C) abuse of Medicaid patients; and (D) neglect of Medicaid patients[.]" Ind.Code § 4-6-10-1.5(1). During an investigation or a prosecution of an...