PHOENIX — Arizona cannot cut Planned Parenthood out of its Medicaid program simply because the organization also provides abortions with other funds, a federal appeals court ruled Thursday.
The 9th U.S. Circuit Court of Appeals said Arizona lawmakers acted illegally last year in tying the Medicaid dollars for family planning services to a requirement for Planned Parenthood to stop doing abortions. The judges, in a 32-page ruling, said legislators acted contrary to federal law.
Thursday's ruling affirms a trial court's earlier decision. Attorney Steven Aden of the Alliance Defending Freedom, which asked the court to uphold the law on behalf of the state, said his organization is weighing future legal options.
In the meantime, Planned Parenthood continues to receive federal and state funds.
State and federal laws already bar public funds from being used for elective abortions. Instead, Planned Parenthood gets Medicaid dollars — about 90 percent of that from the federal government — to cover everything from gynecological exams to contraceptive counseling.
But Rep. Justin Olson, R-Mesa, contended any funds Planned Parenthood receives for those services underwrite the fixed costs of keeping the doors open. And that, he argued, effectively has state dollars subsidizing abortions.
His legislation, approved last year and signed by Gov. Jan Brewer, spells out that any organization which provides abortions is ineligible for Medicaid dollars. Planned Parenthood responded to HB 2800 by filing suit.
Judge Marsha Berzon, writing for the unanimous three-judge panel, did not address the question of whether or not Medicaid dollars were subsidizing abortions.
Instead, she said, the issue comes down to a simple fact: Federal law allows those enrolled in Medicaid — and that includes the Arizona Health Care Cost Containment System — to get the services from any qualified provider.
Aden and attorneys for the state conceded that point, but they argued that lawmakers are free to decide who is “qualified.”
More to the point, they said legislators are free to conclude that Planned Parenthood is not “qualified” to provide family planning services because it also provides abortions.
Berzon said that contention has “fatal flaws.”
Perhaps the most glaring is that the claim ignores the rest of the words in federal law which says that Medicaid recipients can get care from any provider “qualified to perform the service or services required.” And Berzon said the state is not making that argument.
“Arizona has never claimed that Planned Parenthood staff doctors are unqualified to perform gynecological exams or STD testing,” she wrote. In fact, Berzon pointed out, HB 2800 “made clear that if Planned Parenthood agreed to stop performing privately funded elective abortions, it could continue providing all of its other services at public expense.”
Aden said all that ignores what he said is the legitimate desire of lawmakers to ensure tax dollars are not used to terminate pregnancies.
“The court failed to pay proper regard to the state's responsibility and authority to craft a Medicaid program that avoids subsidizing elective abortion as the will of the majority of Arizona citizens desire,” he said.
But Berzon derided Aden's contention it states are free to define who is “qualified.”
She said if the court were to accept Arizona's argument that abortion providers are not qualified, then another state could contend that only doctors who do perform abortions are entitled to Medicaid funding. Similarly, it would open the door to letting states decide that Medicaid services could be provided only by osteopaths, non-smokers or affiliates of the state's medical school “on the grounds that only doctors within that category are worth of receiving Medicaid funds.”
Berzon said there are areas where an otherwise medically qualified physician or health care provider can be determined to be unqualified. But she said that is limited to things like fraud, patient abuse, criminal activity or improper billing.
Finally, the court was not impressed with the provision in HB 2800 allowing Planned Parenthood to continue in the Medicaid program if it created a separate entity to perform abortions.
“The Medicaid Act's free-choice-of-provider requirement does not include an exception allowing states to violate it so long as providers can spin off affiliates,” Berzon wrote.