In the last few years, a renewed wave of attacks on abortion rights has captured media attention. One form of attack has been to target public funding for Planned Parenthood -- a provider of a wide range of women's reproductive and other preventive health services that some associate with abortion, despite the fact that abortion only makes up a very small percentage of the services it offers, and that some Planned Parenthood facilities do not offer abortion at all. At the national level, Republicans in the U.S. House of Representatives led an unsuccessful attempt to defund Planned Parenthood, but now states have taken up the fight. Indiana was the first to enact a law prohibiting Planned Parenthood from receiving Medicaid payments or federal funding for disease intervention services, and other states are trying to follow Indiana's lead. A successful challenge to Indiana's law in federal court, however, shows that these defunding attempts likely violate federal law.

In May of this year, Indiana enacted a law prohibiting the state from contracting with entities that perform abortions, but it exempted hospitals and ambulatory surgical centers. Effectively, this meant that the state could exclude Planned Parenthood of Indiana (PPIN) from participating in its Medicaid program, as well as prevent it from receiving other grants administered through the state, such as the Disease Intervention Services grant funded entirely by federal money. A number of plaintiffs, including PPIN, Medicaid beneficiaries, and individual health care providers, challenged the law in Planned Parenthood of Indiana (PPIN) v. Commissioner of Indiana State Department of Health. In June, a federal district court judge enjoined the state from implementing the law, holding that the exclusion from both programs violated federal law. A full hearing on the merits has not occured yet, but the plaintiffs won the preliminary injunction because they were able to prove a likelihood of winning on the merits, a lack of adequate remedy at law, and future irreparable harm if the injunction were not granted. The plaintiffs challenged the exclusions on several grounds, but the court's decision turned on plaintiffs' claim that the Indiana law conflicted with express federal spending conditions that regulated each program, and thus was preempted under the Supremacy Clause of the U.S. Constitution.

Exclusion from the Medicaid Program

Medicaid is a joint federal-state program created to provide health care coverage for the very poor and disabled. Although the program is voluntary for states, every state participates in order to get significant federal funding. As a condition of this funding, states must agree to abide by certain program requirements and beneficiary protections set forth in the federal Medicaid Act. The particular provision at issue in this case is the "freedom of choice" provision (42 U.S.C. Section 1396a(a)(23)); it requires states to ensure 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...." Plaintiffs alleged that Indiana's law excluding PPIN would violate this "freedom of choice" provision by preventing many Medicaid beneficiaries from getting their preventive and other reproductive health services from PPIN, their provider of choice.

The Indiana commissioner argued that this exclusion did not conflict with federal law by pointing to another provision in the Medicaid Act that expressly permits states to exclude providers from the Medicaid program (42 U.S.C. 1396a(p)(1)); this provision says that "in addition to any other authority, a State may exclude any individual or entity [from Medicaid participation] for any reason for which [the federal government] could exclude the individual or entity." In other words, the commissioner argued, states have unfettered authority to exclude providers for any reason as long as it is pursuant to state law, and the recently enacted law deeming providers of abortion services as "unqualified" to participate in the Medicaid program provided this authority.

Thus, the court's decision turned on its reconciliation of these two seemingly inconsistent provisions within the Medicaid Act: the freedom of choice provision for beneficiaries and the apparently broad exclusion authority granted to states. Although the court acknowledged that states have a great deal of discretion in deciding how to structure and administer Medicaid plans, it also noted that this discretion is limited by other statutory protections. The court rejected the state's interpretation that state law is the only check on its power to exclude because this would implicitly render other beneficiary protections in the Medicaid Act, such as the "freedom of choice" provision, essentially meaningless.

The court looked to federal legislative history for guidance in reconciling the two provisions and found that the provision allowing state exclusion of providers was motivated by concerns of protecting the program from fraud and abuse, and protecting beneficiaries from incompetent or inadequate providers. Given the fact that states are the primary regulators of health care quality and essential partners in policing fraud and abuse, it makes sense that state law would be viewed as an important tool for enforcing these protections. Under this interpretation, the fact that PPIN also provided abortions did not make it "unqualified" or a danger to beneficiaries. Moreover, nothing in the legislative history suggested that this provision could be used to regulate the scope of services a provider offers. The court noted that this narrower interpretation of states' exclusion power is more consistent with prior interpretations by the Supreme Court "as giving Medicaid recipients the right to choose among a range of qualified providers, without government interference."

Finally, the court pointed to the fact that the federal regulatory agency charged with Medicaid oversight - the U.S. Department of Health and Human Services (HHS) - denied the state plan amendment submitted by Indiana that contained the defunding provisions. HHS concluded that PPIN's exclusion would violate the "freedom of choice" provision and would negatively impact access to family planning services, which receive special protection in Medicaid. The Medicaid Act requires HHS approval for any significant changes in state plans to ensure compliance with federal law, and therefore it is a critical check on state abuse of discretion. In denying Indiana's amendment, HHS has made clear that it would not allow Medicaid defunding to be used as an ideological weapon against health care providers who provide abortions. In fact, on June 1 of this year, HHS issued an information bulletin for all states to this effect.

Exclusion from the Disease Intervention Services (DIS) Program

The court held that PPIN's exclusion from the DIS program also conflicted with federal law. DIS is entirely federally funded, and the federal government has created a comprehensive funding and eligibility scheme for this program. The law does not authorize states to create additional eligibility criteria, and the court found that the state's attempt to create additional eligibility criteria without federal authorization violates federal law. The court said that its finding that the state law was preempted was consistent with a number of other cases in which state laws that excluded providers from participation in federal programs who would otherwise be eligible under federal law were found invalid under the Supremacy Clause.

Lack of Adequate Remedy at Law & Irreparable Harm

With respect to each exclusion above, the court found that the potential harm to PPIN, the women it served, and Medicaid beneficiaries in Indiana generally would be irreparable and warranted protection. The court also suggested that this harm was not justified by proponents' claims of trying to prevent funding for abortion, especially because federal law already prohibited this. The reality is that only a very small percentage of Planned Parenthood's services involve abortion (around 3%), and these services are paid for through private funding sources only. The overwhelming majority of Planned Parenthood services involve comprehensive reproductive and other preventive health care, such as family planning and birth control, cervical smears, cancer screening, sexually transmitted disease testing, and self-examination instructions. These services help low-income women prevent serious illness, learn healthy behavior, and prevent unwanted pregnancies that often lead to abortion. Defunding PPIN would jeopardize access to these services for the 76,000 patients it serves.

With the passage of the Affordable Care Act, President Obama took a huge step forward to ensure greater health care access. But now he is taking political and legal action that threatens to undermine his promise of expanded access through Medicaid.

Politically, Obama has been criticized for his willingness to accept Medicaid cuts as part of a deal with Republicans to raise the debt ceiling. In order to see how such cuts threaten access, one need only look at recent headlines about the number of states already struggling to balance their budgets, in part through deep cuts to Medicaid programs and provider reimbursement. Cuts that result in the elimination of an entire service category are clearly problematic, but access is also threatened when Medicaid reimbursement becomes so low that providers refuse to accept Medicaid beneficiaries, or to work in emergency rooms in underserved communities that have disproportionate numbers of Medicaid patients. A common complaint by Medicaid beneficiaries is their inability to find a provider willing to accept them.

These cuts have legal implications as well. (Previously I have blogged about the legal implications of this problem in California). States have a lot of discretion in how they run Medicaid, especially with respect to setting provider reimbursement, but this discretion is not absolute. States must comply with a number of conditions of federal funding, and one of the most important mandates, found at 42 U.S.C. Section 1396a(a)(30)(A), is commonly referred to as the "Equal Access Provision" or "30A" requirement. This provision requires states to "assure that provider payments are consistent with efficiency, economy, and quality of care and are sufficient to enlist enough providers so that care and services are available to the general population in the geographic area.” States cannot honestly and reasonably make such assurances without doing some kind of analysis to assess the impact that rates have on access; yet many states do nothing before implementing rate cuts. They cut provider rates solely in response to fiscal concerns, and without any consideration of access.

Since the 1970s, Medicaid beneficiaries and providers have brought suits in federal court challenging these kinds of illegal cuts. While these suits have yielded mixed success for plaintiffs, federal courts have halted or delayed cuts in many cases, especially where the violation was egregious. These suits have been an important legal check on state violations that implicate Medicaid access, but beneficiaries and providers may soon lose this tool. As I described in an earlier blog post, the Supreme Court has granted cert in Independent Living Center v. David Maxwell-Jolly , a case that calls this right into question.

Despite Obama's promise to expand Medicaid access, his administration has taken a step that would make it much more difficult to prevent illegal cuts that threaten access: the U.S. Department of Health and Human Services (HHS) has filed an amicus brief in the Independent Living Center case urging the Supreme Court to hold that Medicaid providers and beneficiaries do not have a legal right to sue in federal court to prevent illegal state cuts. Why would a President who fought so hard for health care reform undermine one of the most important legal tools that exist for protecting Medicaid access?

In asserting its position, the Obama administration does not seem to rely on any firm legal precedent. Plaintiffs are challenging California's payment cuts based on the Supremacy Clause, in Article VI of the U.S. Constitution, which is an important and uncontroversial basis for challenging state laws that conflict with federal law. In Independent Living Center, California enacted payment cuts without regard to access, quality, economy or efficiency - factors required to be considered under federal law - clearly undermining and conflicting with the Medicaid Act.

Rather, the crux of HHS's position is that state violations of Medicaid program requirements, like the Equal Access Provision, are different: even if a state law violates this provision, it should be up to the federal government (through HHS), and not individual beneficiaries or providers, to enforce the law. Most of HHS's brief is devoted to justifying this different treatment.

First, the brief highlights the fact that Medicaid is a cooperative program, and argues that program requirements like the Equal Access Provision look more like contract conditions between the federal government and states, as opposed to specific rights created for Medicaid beneficiaries or providers. Based on this model, the Obama administration believes it should be up to HHS (as the other party to the contract) to enforce these funding conditions. Indeed, the Medicaid statute grants authority to HHS to do just that: States must submit state plans and state plan amendments proposing significant changes (like payment cuts) to HHS, and HHS has authority to review and then approve or reject the state plan. Implicitly, Obama is asking us to trust HHS to police the states.

Second, it argues that HHS enforcement, rather than private enforcement through the federal courts, will be a better and fairer approach for states. Specifically, HHS highlights the fact that it, and not federal courts, has the expertise to make health policy decisions and review state rate methodology, given the complexity of the Medicaid statute and the multiple and potentially conflicting goals (access, quality, economy, efficiency) that states must balance in rate setting. HHS also expressed concern about the inconsistency in approaches taken by different federal courts with respect to 30A challenges, and the uncertainty this can create for states trying to deal with difficult and pressing budgetary needs. HHS and states are concerned that such uncertainty can be used by individuals to challenge state decisions that they simply do not like.

Although these arguments reflect important concerns, they do not justify eliminating such an important legal check on illegal state action. First, the concern about inconsistent approaches being applied by federal courts is most significant when there is evidence that courts (and thus individuals) are allowed to second-guess the expertise and value judgments of state and federal health officials with respect to decisions that are purposely left to agency discretion. But the reality is that this is not typically what is happening in these cases. I am currently in the process of reviewing Medicaid payment suits from the 1970s to the present, and so far the overwhelming number of challenges I have reviewed are based on some egregious lack of action or utter failure to use any process to determine access before making 30A assurances. Moreover, I would say there is more consistency than inconsistency in federal courts' approaches: they have consistently held that the Medicaid Act prohibits cuts made for exclusively budgetary reasons, and they tend to step in only in these kind of egregious cases. On the other hand, courts tend to be very deferential to state decisions that are based on some kind of analysis.

I don't mean to suggest that there is no inconsistency - there is. I have described the different approaches federal courts have taken elsewhere. But to the extent inconsistency does exist, there is a much easier and less radical fix: HHS can simply promulgate regulations that provide greater guidance for states and the federal courts that hear such challenges. States have asked for such guidance; federal courts are typically very deferential to federal regulations; and HHS has just recently issued a proposed rule to give states better guidance for compliance. This approach would answer the legitimate concerns that HHS and states have about consistency and certainty, while preserving beneficiaries' and providers' rights to sue to prevent blatantly illegal action that threatens health care access.

This brings me to the third and final reason why the Obama administration's concerns do not justify eliminating access to the courts. To the extent that there is inconsistency and uncertainty with respect to 30A requirements, HHS is to blame. The primary reason for state violations and inconsistent approaches by federal courts, is the lack of regulatory guidance by HHS. It is hard to trust HHS to police states given its long history of passivity and its own deliberate disregard of Equal Access protections. A review of challenges to Medicaid payment cuts nationwide and as far back as the 1970s reveals that HHS has been largely absent in these disputes. Private enforcement is important precisely because of a lack of meaningful federal oversight.

To be fair, under President Obama HHS has been more vigilant and active than it has in a long time. Since 2008 HHS has done more searching inquiries before approving requests for rate cuts. Moreover, as noted above, for the first time HHS proposed a regulatory framework for states to help ensure their compliance with the Equal Access Provision. But the enforcement power of an agency depends on the political will and agenda of the Executive, and Obama will not be in office forever. Even under Obama, it is not clear how meaningful this new regulatory guidance for states will be in its final form or in practice. For example, HHS repeatedly emphasizes state discretion and flexibility in its proposed rule on 30A compliance, and it expressly resists establishing a uniform standard for measuring access. Moreover, HHS says it has only rejected two state requests for rate cuts based on access concerns despite finding pervasive examples of state noncompliance. For example, it notes that despite state assurances that cuts would have no impact on access, "only a few States indicated that they relied upon actual data to make the determination," and of those using data "most did not ask the right questions" to determine impact on access. The jury is definitely still out on whether we will be able to trust HHS to effectively police the states in the future.

Federal courts have no desire to become Medicaid administrators or second-guess health officials' judgment. But when government agencies abdicate their clear statutory mandates and oversight duties in ways that harm polticially and economically vulnerable people, this is when access to federal courts is critical. Illegal payment cuts that threaten access to vulnerable populations is due to precisely the kind of regulatory void and pubic law failure that demands federal court intervention. It is perverse for the HHS to use the inconsistency that has resulted from its own regulatory failures to justify barring Medicaid beneficiaries' and providers' from seeking relief in federal court.

The Obama administration wants to eliminate this judicial last resort, even as it entertains significant federal funding cuts to Medicaid that will surely exacerbate states’ existing budget crises by shifting more of the cost of Medicaid to states. Together, the loss of federal funding and enforcement rights will almost certainly result in more illegal Medicaid cuts that undermine health care access. The Affordable Care Act may have been an important step forward, but in the latest political and legal battle surrounding Medicaid cuts, Obama has taken two unfortunate steps backwards.

For more about ILC v. Maxwell-Jolly, the case that will be heard by the Supreme Court next term, click here. To get copies of the lower court opinions and amicus briefs filed in the case, click here.

Today, July 21st, the National Women's Law Center is hosting the "Birth Control: We've Got You Covered" Blog Carnival to discuss the Institute of Medicine (IOM)'s recent recommendations on women's preventive health services. Click here to join the Blog Carnival.

The Affordable Care Act requires plans to provide preventive health services for men and women without cost-sharing. In light of the existing gap in women's preventive health care, the U.S. Department of Health and Human Services charged the IOM with reviewing and making recommendations about what preventive services are important to women's health and well-being. On Tuesday, July 19, the IOM issued a report recommending that women's preventive services include:

- a fuller range of contraceptive education, counseling, methods, and services so that women can better avoid unwanted pregnancies and space their pregnancies to promote optimal birth outcomes;

- improved screening for cervical cancer, counseling for sexually transmitted infections, and counseling and screening for HIV;

- services for pregnant women including screening for gestational diabetes and lactation counseling and equipment to help women who choose to breastfeed do so successfully;

- at least one well-woman preventive care visit annually for women to receive comprehensive services; and

- screening and counseling for all women and adolescent girls for interpersonal and domestic violence in a culturally sensitive and supportive manner.

For more on the impact of these recommendations, you can see my earlier blog post "Birth Control Coverage is a Critical Win for Women's Health."

Health and women's advocates are praising the Institute of Medicine (IOM)'s recent recommendations to include prescription birth control among the preventive health services that insurance companies must cover without a co-pay under the Affordable Care Act. This is important because cost can be a significant barrier to the consistent, effective use of birth control. For decades, birth control has been excluded from many health plans, but even when it is covered, cost-sharing keeps some women from getting it or using it consistently. A 2010 survey reveals that more than a third of women voters struggle with the cost of birth control, and the IOM report notes that women are consistently more likely than men to delay or forego health care because of cost.

The consequences of cost-related barriers to birth control are signficant: According to the Guttmacher Institute, women who do not use contraceptives or use them inconsistently account for 95% of the three million unintended pregnancies that occur every year. Unintended pregnancies can have harmful physical and emotional health effects for women, especially those who sufffer from chronic medical conditions or are at risk for health complications resulting from pregnancy. The IOM's recommendation to provide birth control as part of preventive health services is an important step toward improving the health and well-being for insured women.

As we celebrate this achievement, however, we must remember that for many women the fight for reproductive and sexual health care continues. Even with private insurance expansion under the Affordable Care Act, many women will be uninsured or covered by Medicaid. Currently, the uninsured and many Medicaid beneficiaries rely on clinics that provide free or low-cost reproductive health care, including birth control, and these clinics depend heavily on federal and state funding. Cuts in funding for family planning services, and the more radical defunding attacks that target providers of free and low-cost birth control are threatening reproductive health access and the well-being of our most vulnerable women.

Planned Parenthood has been the most visible target of these attacks on women's preventive health services. After Republicans in the U.S. House of Representatives led an unsuccessful attempt to defund Planned Parenthood, states took up the fight. Indiana was the first to enact a law prohibiting Planned Parenthood from receiving Medicaid payments or federal funding for disease intervention services. The good news is that, so far, the U.S. Department of Health and Human Services (HHS) and a federal court are preventing implementation of the Indiana law on the grounds that it violates federal law and would jeopardize critical health care access for women. The bad news is that neither this court decision, nor HHS's threat that such action would jeopardize Indiana's Medicaid funding, has deterred other states from similar attacks. In New Hampshire, for example, the State's Executive Council essentially ignored its own legislature when it voted to cancel the state's contract with Planned Parenthood. Other defunding attempts are underway in Kansas, North Carolina, Texas and Oklahoma.

This war on Planned Parenthood is purportedly driven by anti-abortion sentiment, but abortion is only a small portion of the services it provides (less than 3% in one case). Moreover, it is already prohibited from using government funding for abortion-related services. The overwhelming amount of services provided by Planned Parenthood involves free or low cost birth control, screening and treatment for sexually transmitted diseases, breast and cervical cancer testing, prenatal care, and contraceptive counseling - precisely the preventive health services that the IOM report just found to be critical to women's health.

In fact, family planning services in general are vulnerable to federal and state cuts in funding. For example, in February the House voted to eliminate Title X funding which helps to pay for the preventive reproductive health services recommended by the IOM; according to the Guttmacher Institute, about 4.7 million Americans get health care from clinics funded by Title X money. And in New Jersey, the Governor reportedly cut $7.5 million for clinics specializing in women's reproductive health, "effectively eliminating any public funding for family planning services."

In addition to urging HHS to adopt the IOM recommendations with respect to insurance coverage, we must make sure that this report has implications beyond private insurance reform. We must use it to prevent federal and state lawmakers from making public funding decisions that threaten access to birth control and other preventive health services for the uninsured and Medicaid beneficiaries.



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