Planned Parenthood of Kan. v. Andersen

• Decision Date: 21 February 2018
• Docket Number: No. 16-3249,16-3249
• Citation: 882 F.3d 1205
• Parties: PLANNED PARENTHOOD OF KANSAS and Mid-Missouri; Planned Parenthood of St. Louis Region; Jane Doe #1, on her behalf and on behalf of all others similarly situated; Jane Doe #2, on her behalf and on behalf of all others similarly situated; Jane Doe #3, on her behalf and on behalf of all others similarly situated, Plaintiffs-Appellees, v. Jeff ANDERSEN, Acting Secretary, Kansas Department of Health and Environment, in his official capacity, Defendant-Appellant. Center for Reproductive Rights ; IPAS; National Center for Lesbian Rights; National Family Planning & Reproductive Health Association ; National Health Law Program; National Latina Institute for Reproductive Health ; National Women's Law Center; Sexuality Information and Education Council of the U.S. (SIECUS); American Public Health Association, Amici Curiae.
• Court: U.S. Court of Appeals — Tenth Circuit

882 F.3d 1205

PLANNED PARENTHOOD OF KANSAS and Mid-Missouri; Planned Parenthood of St. Louis Region; Jane Doe #1, on her behalf and on behalf of all others similarly situated; Jane Doe #2, on her behalf and on behalf of all others similarly situated; Jane Doe #3, on her behalf and on behalf of all others similarly situated, Plaintiffs-Appellees,

v.Jeff ANDERSEN, Acting Secretary, Kansas Department of Health and Environment, in his official capacity,^* Defendant-Appellant.

Center for Reproductive Rights ; IPAS; National Center for Lesbian Rights; National Family Planning & Reproductive Health Association ; National Health Law Program; National Latina Institute for Reproductive Health ; National Women's Law Center; Sexuality Information and Education Council of the U.S. (SIECUS); American Public Health Association, Amici Curiae.

No. 16-3249

United States Court of Appeals, Tenth Circuit.

Filed February 21, 2018

Patrick Strawbridge, Consovoy McCarthy Park, PLLC, Boston, Massachusetts (Michael H. Park, Consovoy McCarthy Park, PLLC, New York, New York, Darian P. Dernovish, Kansas Department of Health and Environment, Topeka, Kansas, with him on the briefs), for Defendant-Appellant.

Diana Salgado, Planned Parenthood Federation of America, Washington, D.C. (Erwin Chemerinsky, University of California, Irvine School of Law, Irvine, California, Arthur A. Benson and Jamie Kathryn Lansford, Kansas City, Missouri, and Douglas N. Ghertner, Slagle, Bernard and Gorman, P.C., Kansas City, Missouri, with her on the brief), for Plaintiffs-Appellees.

Martha Jane Perkins, National Health Law Program, Carrboro, North Carolina, filed an amici curiae brief in support of Plaintiffs-Appellees.

Before BACHARACH, PHILLIPS, and McHUGH, Circuit Judges.

PHILLIPS, Circuit Judge.

Medicaid's free-choice-of-provider provision grants Medicaid patients the right to choose for their medical care any qualified and willing provider. 42 U.S.C. § 1396a(a)(23). On May 3, 2016, Kansas sent notices of decisions to terminate (effective May 10) its Medicaid contracts with two Planned Parenthood affiliates, Planned Parenthood of Kansas and Mid-Missouri ("PPGP"), and Planned Parenthood of the St. Louis Region ("PPSLR").¹ The notices cited concerns about the level of PPGP's cooperation in solid-waste inspections, both Providers' billing practices, and an anti-abortion group's allegations that Planned Parenthood of America ("PPFA") executives had been video-recorded negotiating the sale of fetal tissue and body parts. Together, the Providers and three individual Jane Does ("the Patients") immediately sued Susan Mosier, Secretary of the Kansas Department of Health and Environment ("KDHE"), under 42 U.S.C. § 1983, alleging violations of 42 U.S.C. § 1396a(a)(23) and the Equal Protection Clause of the Fourteenth Amendment. The Plaintiffs sought a preliminary injunction enjoining Kansas from terminating the Providers from the state's Medicaid program.

States have broad authority to ensure that Medicaid healthcare providers are qualified to provide medical services—meaning that they are competent to provide medical services and do so ethically. But this power has limits. States may not terminate providers from their Medicaid program for any reason they see fit, especially when that reason is unrelated to the provider's competence and the quality of the healthcare it provides. We join four of five of our sister circuits that have addressed this same provision and affirm the district court's injunction prohibiting Kansas from terminating its Medicaid contract with PPGP. But we vacate the district court's injunction as it pertains to PPSLR and remand for further proceedings on that issue. Though the Plaintiffs have provided affidavits from three Jane Does concerning their past and expected medical care from PPGP, the Plaintiffs have not provided affidavits from any persons receiving or expecting to receive medical care at PPSLR. Hence the Plaintiffs have failed to establish any injury they will suffer from the termination of PPSLR, meaning they have failed to establish standing to challenge that termination. But on this record, we cannot determine whether PPSLR itself can establish standing, an issue the district court declined to decide but now must decide on remand.² Though Kansas has not raised this standing issue, we have an independent duty to assure ourselves of the district court's subject-matter jurisdiction. See City of Colo. Springs v. Climax Molybdenum Co. , 587 F.3d 1071, 1078–79 (10th Cir. 2009).

BACKGROUND

I. The Medicaid Act and Kansas Regulations

The Medicaid Act's free-choice-of-provider provision states that "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." 42 U.S.C. § 1396a(a)(23). This provision "guarantees that Medicaid beneficiaries will be able to obtain medical care from the qualified and willing medical provider of their choice." Planned Parenthood of Gulf Coast, Inc. v. Gee , 862 F.3d 445, 450 (5th Cir. 2017). Because the Medicaid Act is mostly administered by the states, the Act empowers states to determine whether entities are medical providers "qualified to perform the service or services required." States may exclude Medicaid providers—that is, withhold reimbursements for medical services provided to patients—"for any reason for which the [federal] Secretary [of Health and Human Services] could exclude the individual or entity from participation in a program under" specified statutes. 42 U.S.C. § 1396a(p)(1) ; 42 C.F.R. § 1002.3(a)–(b). As grounds for excluding the Providers from its Medicaid plan, Kansas has raised 42 U.S.C. § 1320a-7(b)(5)(B), (b)(12)(B).

Kansas, like all states, issues regulations to administer its Medicaid program. These regulations govern when, why, and how Kansas may terminate contracts between its Medicaid program and healthcare providers. Kan. Admin. Regs. § 30-5-60(a). If Kansas decides that a provider is no longer competent to provide medical services, it must send written notification to the provider of its intent to terminate the provider and its reasons for doing so. Kan. Admin. Regs. § 30-5-60(c). This notification must also inform the provider that it has a right to appear before the KDHE between five and fifteen days from the date the notice is mailed or served on the provider. Id.

If the state decides to terminate the provider, the provider may request a hearing from Kansas's Office of Administrative Hearings ("OAH") within thirty-three days after receiving notice of termination. Kan. Admin. Regs. §§ 30-7-67 – 68. According to Kansas, this decision to terminate "becomes final only after the time for a formal administrative hearing has passed." Appellant's Opening Br. at 6 (citing Kan. Admin. Regs. § 30-7-64 – 104 ). If the provider is dissatisfied with the results of this hearing, it may request a rehearing. Id. If, after that, it is still dissatisfied, the provider may appeal to state court. See Kan. Stat. Ann. § 77-601 –31.

II. Planned Parenthood's Alleged Wrongdoing

Planned Parenthood affiliates, many of which are located in areas with shortages of primary-care providers, deliver essential services to Medicaid recipients. PPGP has two health centers in Kansas and three in Missouri, and PPSLR has one health center in Missouri that also serves Kansas Medicaid patients. The Providers' services include annual health exams; different types of contraception along with contraceptive counseling; breast- and cervical-cancer screening

; cervical-cancer treatment; screening and treatment for sexually transmitted infections; human papillomavirus vaccinations ; pregnancy testing and counseling; and other health services.³ Though some Planned Parenthood clinics also perform abortions, Medicaid seldom pays for abortions. See, e.g. , Harris v. McRae , 448 U.S. 297, 302–03, 100 S.Ct. 2671, 65 L.Ed.2d 784 (1980) (explaining that the Hyde Amendment prohibits using federal Medicaid funds to reimburse the cost of abortions except in limited circumstances such as rape or incest). The Patients chose Planned Parenthood for reproductive-healthcare services for many reasons, including the quality and availability of the services and expertise in reproductive healthcare.

In July 2015, the anti-abortion group Center for Medical Progress ("CMP") released on YouTube a series of edited videos purportedly depicting PPFA executives negotiating with undercover journalists for the sale of fetal tissue and body parts. Kansas alleges that the videos demonstrate that "Planned Parenthood manipulates abortions to harvest organs with the highest market demand" and that PPFA executives are willing to negotiate fetal-tissue prices to obtain profits. Appellant's Opening Br. at 7. According to Kansas, this evidence matters because "PPFA controls its ‘affiliate’ organizations, including [PPGP] and PPSLR." Id. Neither PPGP nor PPSLR is the subject of the videos and it is undisputed that neither participates in fetal-tissue donation or sale.

To prove PPFA's control over and affiliation with the Providers, Kansas claims that (1) "PPFA and its affiliates make no apparent effort to keep their finances separate"; (2) PPFA compiles a yearly " ‘combined balance sheet,’ " which "aggregate[s] ‘revenue and expenses’ " for the entire Planned Parenthood organization; (3) according to its 2014 tax return, PPFA transferred over $50 million to its affiliates; (4) PPFA drafts rules of procedure and operation for its affiliates and trains its affiliates' officers and employees in "management and medical practices"; and (5) PPFA's legal counsel represented PPGP and PPSLR in their meeting with the KDHE. Id. at 7–8 (quoting Appellant's App. at 479–82).

Based on CMP's videos of the PPFA executives, Kansas began investigating the Providers. In August 2015, Kansas's Board of Healing Arts ("BOHA"...