Tex. Dep't of State Health Servs. v. Balquinta

• Decision Date: 09 April 2014
• Docket Number: No. 03–13–00063–CV.,03–13–00063–CV.
• Citation: 429 S.W.3d 726
• Court: Texas Court of Appeals
• Parties: TEXAS DEPARTMENT OF STATE HEALTH SERVICES; and Kyle Janek, in his Official Capacity as Executive Commissioner of the Texas Health & Human Services Commission, Appellants v. Marcela BALQUINTA; Planned Parenthood of Greater Texas Family Planning and Preventative Health Services, Inc.; Planned Parenthood Association of Hidalgo County Texas, Inc.; Planned Parenthood Association of Lubbock, Inc.; Planned Parenthood Association of Cameron and Willacy Counties; Family Planning Associates of San Antonio; Planned Parenthood Gulf Coast, Inc.; and Planned Parenthood of West Texas, Inc., Appellees.

429 S.W.3d 726

TEXAS DEPARTMENT OF STATE HEALTH SERVICES; and Kyle Janek, in his Official Capacity as Executive Commissioner of the Texas Health & Human Services Commission, Appellants

v.Marcela BALQUINTA; Planned Parenthood of Greater Texas Family Planning and Preventative Health Services, Inc.; Planned Parenthood Association of Hidalgo County Texas, Inc.; Planned Parenthood Association of Lubbock, Inc.; Planned Parenthood Association of Cameron and Willacy Counties; Family Planning Associates of San Antonio; Planned Parenthood Gulf Coast, Inc.; and Planned Parenthood of West Texas, Inc., Appellees.

No. 03–13–00063–CV.

Court of Appeals of Texas, Austin.

April 9, 2014.

Kristofer S. Monson, Assistant Solicitor General, Office of the Attorney General, Austin, TX, for Appellants.

P.M. Schenkkan, John J. McKetta, III, Michael J. Whellan, William W. Dibrell, Susan G. Conway, Graves, Dougherty, Hearon & Moody, P.C., Austin, TX, for Appellees.

Before Chief Justice JONES, Justices PEMBERTON and FIELD.

OPINION

BOB PEMBERTON, Justice.

Although this appeal may stem from some broader controversies that have vexed both government and our larger society, our disposition of it ultimately turns on some comparatively narrow questions of judicial jurisdiction and procedure. More specifically, we must consider whether entities that formerly contracted with the State to provide services under a publicly funded health-care program but were subsequently excluded from participating in it and a successor program have constitutional standing—a jurisdictional prerequisite—to challenge their exclusion in the district court. Assuming the entities have standing, we must also consider whether the district court has jurisdiction to decide the particular claims for relief they assert—declaratory-judgment claims under both the Administrative Procedure Act (APA) and the Uniform Declaratory Judgments Act (UDJA), plus claims for related injunctive relief. We conclude that the district court has jurisdiction of all of the claims except for those asserted under the UDJA.

BACKGROUND

At the center of this appeal is a State of Texas-funded health benefits program (or succession of programs, to be more precise) commonly known as the “Women's Health Program” (WHP). Under the WHP programs, simply described, participating health care providers have been reimbursed with public funds for furnishing certain reproductive-health and family-planning services to eligible low-income women. But since the WHP's inception in 2005, a key concern of Texas policymakers—and one not unprecedented in regard to the use of public funds for health care-related services at both the state and national levels, nor without controversy—has been to ensure that the program's funds are not used to subsidize elective abortions or the “promotion” of such procedures. Citing this policy goal, in very recent years Texas policymakers have implemented various measures effectively barring from WHP participation several entities, heretofore among the program's largest providers, who are affiliated with the Planned Parenthood Federation of America, operate under “Planned Parenthood” branding, or both. The fallout from these measures has included changes in the way WHP is structured and funded—and the present litigation.

The “Medicaid WHP”

The WHP originated as an expansion of Texas's Medicaid program mandated by the Seventy–Ninth (2005) Texas Legislature through its enactment of a new section 32.0248 of the Human Resources Code.¹ Under Medicaid, created by Title XIX of the Social Security Act, the federal government provides substantial matching funds to states that agree to provide certain specified medical services on behalf of low-income persons, and Texas has participated in the program since 1967.² However, because the WHP would entail coverage of services and clients beyond those for which the federal government normally would provide Medicaid matching funds, the Legislature contemplated that WHP would be operated as a five-year “demonstration project” under 42 U.S.C. § 1315, which permits the U.S. Secretary of Health and Human Services to waive Medicaid's standard parameters—and thereby authorize federal funding—for state-implemented “demonstration projects” employing innovative means to achieve overall Medicaid program objectives.³ Consistent with that intent, the Legislature made section 32.0248 effective only until September 1, 2011 ⁴ and directed the Health and Human Services Commission (HHSC), the state agency that administers Texas's Medicaid program,⁵ to obtain the required waiver from federal authorities.⁶ The HHS Secretary's delegee, the federal Centers for Medicare and Medicaid Services (CMS), granted Texas the requested waiver for a five-year period beginning effective January 1, 2007, and the “Medicaid WHP” went into operation.

Within the enabling statute, specifically subsection (h) of Human Resources Code section 32.0248, the Legislature imposed the following prohibition against the use of WHP funds to subsidize the provision or “promotion” of elective abortions:

The department shall ensure the money spent under the demonstration project, regardless of the funding source, is not used to perform or promote elective abortions. The department, for the purpose of the demonstration project, may not contract with entities that perform or promote elective abortions or are affiliates of entities that perform or promote elective abortions.⁷

However, HHSC did not enforce these limitations during WHP's initial years beyond requiring compliance with guidelines that had been fashioned in a settlement of prior litigation concerning efforts by the State of Texas to withhold federal funds under Title X of the Social Security Act (as opposed to Medicaid) from Planned Parenthood organizations that performed abortions (the Sanchez settlement).⁸ To summarize these guidelines, they permitted Planned Parenthood affiliates to access the Title X funds provided they were structured as entities separate from the organization's affiliates that provided abortions. Consequently, a number of entities who were affiliated with the Planned Parenthood organization, operated under “Planned Parenthood” branding, or both—including the entities who are appellees here ⁹—were able to participate as providers under the WHP if they were otherwise qualified, did not perform abortions themselves, and were structurally separate from the Planned Parenthood affiliates that did. In fact, these Planned Parenthood entities would become some of the WHP's largest providers, with tens of thousands of WHP-subsidized client visits each year, yielding them millions of dollars in WHP reimbursements.

As the expiration of the five-year “demonstration project” drew near, the Eighty–Second (2011) Legislature allowed section 32.0248 of the Human Resources Code to expire by its terms on September 1, 2011, but appropriated funding for the upcoming 2012–13 biennium (September 1, 2011–August 31, 2013) to continue the Medicaid WHP, contingent on CMS's renewal of the Section 1315 waiver.¹⁰ Accordingly, HHSC applied with CMS for a renewed waiver, although the proposed parameters of the program included some services beyond those provided in the original.

In addition to making this contingent appropriation of funds, the Eighty–Second Legislature added a new section 32.024(c–1) to the Human Resources Code imposing restrictions against the subsidization of elective abortions or “promotion” thereof under any continuation of the “demonstration project” or “similar successor program”:

The department shall ensure that money spent for purposes of the demonstration project for women's health care services under former Section 32.0248, Human Resources Code, or a similar successor program is not used to perform or promote elective abortions, or to contract with entities that perform or promote elective abortions or affiliate with entities that perform or promote elective abortions.¹¹

Meanwhile, the Attorney General, upon request of one of the Senators who co-authored the bill that included the new section 32.024(c–1), had issued an opinion determining that Sanchez had not limited the State's power to enforce the similar limitations contained in subsection (h) of Human Resources Code section 32.0248.¹²

On the same day, responding to a request from the HHSC's Executive Commissioner,¹³ then Thomas Suehs, the Attorney General had also opined that the agency possessed statutory authority to promulgate a rule construing “affiliate” as used in the same statute.¹⁴ Against this backdrop, in late August 2011 HHSC proposed, ¹⁵ and ultimately adopted effective in March 2012,¹⁶ new administrative rules that defined “promote” and “affiliate” as used in the new section 32.024(c–1) and required all WHP providers to certify compliance or be excluded from participating in the program. It is undisputed that these new rules had the effect of excluding all of the Planned Parenthood entities from continuing to participate as WHP providers.

Facing lost revenues and lost clients who could no longer obtain WHP-subsidized services at their facilities, the Planned Parenthood entities brought suit first in federal court, then in state court, challenging their exclusion from the Medicaid WHP on both constitutional and statutory grounds. ¹⁷ They found allies, directly or indirectly, in the federal government, as CMS threatened not to renew the Section 1315 waiver in the professed view that HHSC's new rules were inconsistent with federal law governing disbursement of Medicaid funds. Despite the threat of losing federal Medicaid funding for WHP, the State did not yield in its enforcement of the new provider rules, and CMS announced in March 2012 that it was denying renewal of Texas's waiver. However, CMS permitted federal funding to continue under the prior waiver through the end of 2012, at which time the waiver (and with it, the original Medicaid WHP) terminated...