United States Court of Appeals
`Fifth Circuit
`
`REVISED
`IN THE UNITED STATES COURT OF APPEALS
`FOR THE FIFTH CIRCUIT
`
`FILED
`
`November 23, 2020
`No. 17-50282
`
`Lyle W. Cayce
`
`Clerk
`
`PLANNED PARENTHOOD OF GREATER TEXAS FAMILY PLANNING
`AND PREVENTATIVE HEALTH SERVICES, INCORPORATED; PLANNED
`PARENTHOOD SAN ANTONIO; PLANNED PARENTHOOD CAMERON
`COUNTY; PLANNED PARENTHOOD GULF COAST, INCORPORATED;
`PLANNED PARENTHOOD SOUTH TEXAS SURGICAL CENTER; JANE
`DOE, I; JANE DOE 2; JANE DOE 4; JANE DOE 7;
`JANE DOE 9; JANE DOE 10; JANE DOE 11,
`
`
`Plaintiffs–Appellees,
`
`
`v.
`
`SYLVIA HERNANDEZ KAUFFMAN, in her official capacity as Inspector
`General of HHSC; CECILE ERWIN YOUNG, in her official capacity as
`Executive Commissioner of HHSC,
`
`
`Defendants–Appellants.
`
`
`
`
`
`
`
`
`Appeal from the United States District Court
`for the Western District of Texas
`USDC No. 1:15-CV-1058
`
`
`
`Before OWEN, Chief Judge, and JOLLY, JONES, SMITH, STEWART,
`DENNIS, ELROD, SOUTHWICK, HAYNES, GRAVES, HIGGINSON,
`COSTA, WILLETT, HO, DUNCAN, ENGELHARDT, Circuit Judges.∗
`
`
`
`∗ JUDGE OLDHAM is recused and did not participate in the decision. JUDGE WILSON
`joined the court after this case was submitted and did not participate in the decision.
`
`

`

`No. 17-50282
`PRISCILLA R. OWEN, Chief Judge, joined by JOLLY, JONES, SMITH,
`ELROD, SOUTHWICK, HAYNES, WILLETT, HO, DUNCAN and
`ENGELHARDT, Circuit Judges:∗∗
`
`In this interlocutory appeal of a preliminary injunction, the dispositive
`
`issue is whether 42 U.S.C. § 1396a(a)(23) gives Medicaid patients a right to
`challenge, under 42 U.S.C. § 1983, a State’s determination that a health care
`provider is not “qualified” within the meaning of § 1396a(a)(23). Our decision
`rests primarily on two independent bases: (1) the Supreme Court’s decision in
`O’Bannon v. Town Court Nursing Center,1 and (2) the text and structure of
`§ 1396a(a)(23), which does not unambiguously provide that a Medicaid patient
`may contest a State’s determination that a particular provider is not
`“qualified”; whether a provider is “qualified” within the meaning of
`§ 1396a(a)(23) is a matter to be resolved between the State (or the federal
`government) and the provider. We overrule the decision by a panel of this
`court2 that the district court duly followed in the present case. Accordingly,
`we vacate the preliminary injunction.
`
`I
`Five Medicaid providers were among the plaintiffs in the district court
`and are appellees in this court. They are Planned Parenthood Gulf Coast, Inc.
`(PP Gulf Coast), headquartered in Houston; Planned Parenthood Greater
`Texas, Inc., headquartered in Dallas and providing services in parts of north
`and central Texas; and three providers—Planned Parenthood of Cameron
`County, Planned Parenthood San Antonio, and Planned Parenthood South
`
`
`∗∗ JUDGE HAYNES concurs in the judgment and joins in the reasoning of Sections I, II,
`and V.
`1 447 U.S. 773 (1980).
`2 Planned Parenthood of Gulf Coast, Inc. v. Gee, 862 F.3d 445 (5th Cir. 2017), cert.
`denied, 139 S. Ct. 408 (2018).
`
`2
`
`

`

`No. 17-50282
`Texas Surgical Center—that the district court described as operating “under
`the umbrella of Planned Parenthood South Texas.” We will refer to the
`Medicaid providers collectively as the Providers. Seven individuals, to whom
`we will refer collectively as the Individual Plaintiffs, received or sought
`services from one or more of the Providers. The two defendants in the district
`court and the appellants in this court are the Executive Commissioner of the
`Texas Health and Human Services Commission, and that Commission’s
`Inspector General (OIG), in their respective official capacities. We will refer to
`the defendants collectively as HHSC.
`The Providers provide family planning and other health services to
`approximately 12,500 Medicaid patients at thirty health centers each year.
`Their services include examinations, cancer screenings, testing and treatment
`for sexually transmitted diseases, as well as basic healthcare for both men and
`women. Each of the Providers is a member of Planned Parenthood Federation
`of America (Planned Parenthood); they must adhere to certain medical and
`organizational standards to operate under the name “Planned Parenthood.”
`As participants in the Texas Medicaid program, the Providers entered
`into Medicaid provider agreements under which they are required to comply
`with all Texas Medicaid policies and applicable state and federal regulations.
`The OIG oversees compliance with state Medicaid policies. Texas law
`authorizes the OIG to conduct investigations and to terminate Medicaid
`provider agreements for noncompliance.3 The OIG may terminate a Medicaid
`provider agreement when “prima facie evidence” establishes that a provider
`has committed a “program violation” or is “affiliated with a person who
`
`
`3 1 TEX. ADMIN. CODE §§ 371.3, 371.1703(c) (2020).
`3
`
`

`

`No. 17-50282
`commits a program violation.”4 A “program violation” includes any violation
`of federal law, state law, or the Texas Medicaid program policies.
`In 2015, the Center for Medical Progress (CMP), a pro-life organization,
`released video recordings of conversations that occurred at PP Gulf Coast
`headquarters.
` The CMP videos depict two
`individuals posing as
`representatives from a fetal tissue procurement company discussing the
`possibility of a research partnership with PP Gulf Coast. The release of these
`videos prompted congressional investigations.
` The Senate Judiciary
`Committee released a report,5 as did a House Select Investigative Panel of the
`Committee on Energy and Commerce.6 An alternative report to the House
`Committee’s report was issued by committee members in the minority.7
`In October 2015, the OIG sent each Provider a Notice of Termination of
`its respective Medicaid provider agreement, stating that each was “no longer
`capable of performing medical services in a professionally competent, safe,
`legal, and ethical manner.” The Notice listed the bases for termination and
`stated that, unless the Providers responded within thirty days, a Final Notice
`of Termination would issue.
`The Providers and Individual Plaintiffs sued in federal court to block the
`terminations. They asserted that the terminations violated rights conferred
`
`
`4 Id. §§ 371.1703(c), (c)(6)-(7).
`5 MAJORITY STAFF OF S. COMM. ON THE JUDICIARY, 114TH CONG., MAJORITY REPORT
`ON HUMAN FETAL TISSUE RESEARCH: CONTEXT AND CONTROVERSY (Comm. Print 2016),
`https://www.grassley.senate.gov/sites/default/files/judiciary/upload/22920%20-%20FTR.pdf.
`6 SELECT INVESTIGATIVE PANEL OF THE ENERGY & COM. COMM., 114TH CONG., FINAL
`REPORT xviii-xix
`(Comm. Print 2017), https://www.govinfo.gov/content/pkg/CPRT-
`114HPRT24553/pdf/CPRT-114HPRT24553.pdf.
`7 DEMOCRATIC MEMBERS, SELECT INVESTIGATIVE PANEL OF THE ENERGY & COM.
`COMM., 114TH CONG., SETTING THE RECORD STRAIGHT: THE UNJUSTIFIABLE ATTACK ON
`WOMEN’S HEALTH CARE & LIFE-SAVING RESEARCH
`(Comm. Print
`2016),
`https://www.stemexpress.com/wp/wp-content/uploads/2018/01/20161228-Full-Dem-
`Report.pdf.
`
`4
`
`

`

`No. 17-50282
`by 42 U.S.C. § 1396a(a)(23) and sought relief under § 1983. They also
`contended that the OIG’s actions violated their Fourteenth Amendment Equal
`Protection rights.
`The OIG sought a stay of proceedings, which the district court granted,
`pending the issuance of a Final Notice of Termination. The OIG then sent the
`Final Notice. The Final Notice stated that the Inspector General had
`determined that the Providers were “not qualified to provide medical services
`in a professionally competent, safe, legal[,] and ethical manner under the
`relevant provisions of state and federal law pertaining to Medicaid providers.”
`The OIG based this conclusion on the CMP videos, evidence provided by the
`United States House of Representatives’ Select Investigative Panel, and the
`OIG’s consultation with its Chief Medical Officer. The Final Notice stated that
`“numerous violations of generally accepted standards of medical practice” had
`occurred and asserted that PP Gulf Coast had engaged in misrepresentations.
`The Notice also stated that under the OIG’s regulations, affiliates of a
`terminated entity are subject to termination.8 The Providers and Individual
`Plaintiffs thereafter filed an amended complaint and a new motion for a
`preliminary injunction.
`The district court conducted a three-day evidentiary hearing, during
`which it reviewed the CMP videos and heard testimony from medical and
`ethics experts. The OIG introduced evidence that, it asserts, shows PP Gulf
`Coast violated federal regulations relating to fetal tissue research by altering
`abortion procedures for research purposes or allowing the researchers
`themselves to be involved in performing abortions.9
`
`8 See 1 TEX. ADMIN. CODE § 371.1703(c)(7).
`9 See 42 U.S.C. § 289g-1(b)(2)(A)(ii) (requiring researchers to certify that “no alteration
`of the timing, method, or procedures used to terminate the pregnancy was made solely for
`the purposes of obtaining the tissue”); id. § 289g-1(c)(4) (requiring researchers to certify that
`5
`
`

`

`No. 17-50282
`Following the hearing, the district court issued a memorandum and
`order granting the Providers and Individual Plaintiffs’ motion for a
`preliminary injunction and prohibiting the termination of the Providers’
`Medicaid provider agreements.10 The district court held that § 1396a(a)(23)
`granted rights to the Individual Plaintiffs upon which a § 1983 action
`challenging the OIG’s termination decision could be based.11 The district court
`concluded from the evidence adduced at the preliminary injunction hearing
`that the Individual Plaintiffs were likely to succeed on the merits of their
`§ 1983 claim because the OIG “did not have prima facie . . . evidence, or even a
`scintilla of evidence, to conclude the bases of termination set forth in the Final
`Notice merited finding the . . . Providers were not qualified.”12 This appeal
`ensued.
`A three-judge panel of this court held, based on Planned Parenthood of
`Gulf Coast, Inc. v. Gee,13 that the Individual Plaintiffs could maintain a § 1983
`suit.14 The panel also held that the district court abused its discretion by
`reviewing the agency’s decision de novo rather than applying the arbitrary and
`capricious standard and by considering factual matters beyond those contained
`
`
`they “had no part in any decisions as to the timing, method, or procedures used to terminate
`the pregnancy made solely for the purposes of the research”); 45 C.F.R. § 46.204(i) (requiring
`that “[i]ndividuals engaged” in research involving “[p]regnant women or fetuses” “have no
`part in any decisions as to the timing, method, or procedures used to terminate a pregnancy”).
`10 Planned Parenthood of Greater Tex. Family Plan. & Preventative Health Servs., Inc.
`v. Smith, 236 F. Supp. 3d 974, 1000 (W.D. Tex. 2017).
`11 Id. at 988.
`12 Id. at 998.
`13 862 F.3d 445 (5th Cir. 2017), cert. denied, 139 S. Ct. 408 (2018).
`14 See Planned Parenthood of Greater Tex. Family Plan. & Preventative Health Servs.,
`Inc. v. Smith, 913 F.3d 551, 554, 559-62 (5th Cir. 2019).
`6
`
`

`

`No. 17-50282
`in the administrative record that was before the HHSC.15 We granted en banc
`review.16
`The preliminary injunction issued by the district court was based solely
`on the claims of the Individual Plaintiffs. The district court did not consider
`whether the Providers were entitled to a preliminary injunction.17 The
`question before us is whether the Individual Plaintiffs may bring a § 1983 suit
`to contest the State’s determination that the Providers were not “qualified”
`providers within the meaning of 42 U.S.C. § 1396a(a)(23). We hold that they
`may not. We accordingly vacate the preliminary injunction.
`Because the district court did not consider the Providers’ claims, no
`aspect of those claims is before us in this interlocutory appeal. Accordingly,
`we do not reach an issue addressed by JUDGE HIGGINSON’s opinion concurring
`in part and dissenting in part, which is whether the Medicaid agreements of
`entities affiliated with PP Gulf Coast were properly terminated.18
`
`
`
`15 Id. at 569.
`16 Planned Parenthood of Greater Tex. Family Plan. & Preventative Health Servs., Inc.
`v. Smith, 914 F.3d 994, 996 (5th Cir. 2019) (mem.).
`17 Planned Parenthood of Greater Tex. Family Plan. & Preventative Health Servs., Inc.
`v. Smith, 236 F. Supp. 3d 974, 988 (W.D. Tex. 2017) (“The Court need not conclude all
`Plaintiffs have a substantial likelihood of prevailing on the Medicaid Act claim for a
`preliminary injunction to issue at this time. If Plaintiffs satisfy the elements needed to show
`a substantial likelihood of success on the Individual Plaintiffs’ § 1396a(a)(23) claim only, so
`long as the other factors are met, a preliminary injunction is appropriate. Accordingly,
`because this Court [hold]s the Individual Plaintiffs have a right of action, it need not decide
`whether the Provider Plaintiffs also have such a right, either on their own behalf or on the
`behalf of their patients.” (citations omitted)).
`18 See HIGGINSON, J., concurring in part and dissenting in part, post at 65.
`7
`
`

`

`No. 17-50282
`II
`is an
`
`injunction
`
`‘extraordinary remedy’ . . . .”19
`
` “A preliminary
`Applicants must show:
`(1) a substantial likelihood of success on the merits, (2) a
`substantial threat of irreparable injury if the injunction is not
`issued, (3) that the threatened injury if the injunction is denied
`outweighs any harm that will result if the injunction is granted,
`and (4) that the grant of an injunction will not disserve the public
`interest.20
`“We review a preliminary injunction for abuse of discretion, reviewing findings
`of fact for clear error and conclusions of law de novo.”21 When a district court
`applies incorrect legal principles, it abuses its discretion.22
`We first consider whether the Individual Plaintiffs have a right under
`§ 1396a(a)(23) to challenge a determination that a Medicaid provider is not
`“qualified.” If they do not have such a right, then our inquiry is at an end
`because without a right that can be vindicated by a § 1983 action, the
`Individual Plaintiffs cannot bring this suit.
`Section 1983 supplies remedies for “the deprivation of any rights,
`privileges, or immunities secured by the Constitution and laws.”23 The
`Supreme Court’s seminal decision in Gonzaga University v. Doe24 explained,
`repeatedly, that “[s]ection 1983 provides a remedy only for the deprivation of
`
`
`19 Texans for Free Enter. v. Tex. Ethics Comm’n, 732 F.3d 535, 536 (5th Cir. 2013)
`(quoting Byrum v. Landreth, 566 F.3d 442, 445 (5th Cir. 2009)).
`20 Id. at 537 (quoting Byrum, 566 F.3d at 445).
`21 Id. (emphasis omitted) (citing Janvey v. Alguire, 647 F.3d 585, 595 (5th Cir. 2011)).
`22 See Atchafalaya Basinkeeper v. U.S. Army Corps of Eng’rs, 894 F.3d 692, 696 (5th
`Cir. 2018).
`23 42 U.S.C. § 1983.
`24 536 U.S. 273 (2002).
`
`8
`
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`

`No. 17-50282
`rights” and that “it is rights, not the broader or vaguer benefits or interests,
`that may be enforced under the authority of that section.”25
`The Individual Plaintiffs rely upon 42 U.S.C. § 1396a(a)(23) as the source
`of their right to challenge the termination of the Providers’ Medicaid
`agreements. This provision is sometimes referred to as the “any-qualified-
`provider” or “free-choice-of-provider” provision.
` Under subpart 23(A) of the statute, a State Medicaid plan must permit
`an individual eligible for medical assistance to obtain that assistance from any
`“qualified” provider who undertakes to provide such services:
`(a) Contents
`A State plan for medical assistance must—
`. . . .
`(23) provide that (A) any individual eligible for medical
`assistance (including drugs) may obtain such assistance
`from any institution, agency, community pharmacy, or
`person, qualified to perform the service or services required
`(including an organization which provides such services, or
`arranges for their availability, on a prepayment basis), who
`undertakes to provide him such services . . . .26
`
`
`The statute provides in subpart 23(B) that a State’s Medicaid plan must
`also provide that an individual eligible for medical assistance who is enrolled
`in certain managed care systems or organizations cannot be restricted from
`obtaining “family planning services and supplies”27 from the “qualified person”
`of his or her choice:
`
`
`25 Id. at 283 (emphasis in original) (internal quotation marks omitted); see also id. at
`285 (explaining that the inquiry “is to determine whether . . . a statute ‘confer[s] rights on a
`particular class of persons’” (alteration in original) (quoting California v. Sierra Club, 451
`U.S. 287, 294 (1981))).
`26 42 U.S.C. § 1396a(a)(23)(A).
`27 Id. at § 1396d(a)(4)(C) (defining eligible costs and services to include “family
`planning services and supplies furnished (directly or under arrangements with others) to
`9
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`

`

`No. 17-50282
`
`(a) Contents
`A State plan for medical assistance must—
`. . . .
`(23) provide that . . . (B) an enrollment of an individual
`eligible for medical assistance in a primary care case-
`management system (described in section 1396n(b)(1) of this
`title), a medicaid managed care organization, or a similar
`entity shall not restrict the choice of the qualified person
`from whom the individual may receive services under section
`1396d(a)(4)(C) of this title, except as provided in subsection
`(g), in section 1396n of this title, and in section 1396u-2(a) of
`this title, except that this paragraph shall not apply in the
`case of Puerto Rico, the Virgin Islands, and Guam, and
`except that nothing in this paragraph shall be construed as
`requiring a State to provide medical assistance for such
`services furnished by a person or entity convicted of a felony
`under Federal or State law for an offense which the State
`agency determines is inconsistent with the best interests of
`beneficiaries under the State plan or by a provider or
`supplier to which a moratorium under subsection (kk)(4) is
`applied during the period of such moratorium . . . .28
`
`Both subparts (A) and (B) use the term “qualified” as a modifier in
`describing a provider from whom a person eligible for Medicaid assistance may
`obtain care or supplies. In O’Bannon v. Town Court Nursing Center,29 the
`Supreme Court determined that individuals who are Medicaid beneficiaries do
`not have a right under 42 U.S.C. § 1396a(a)(23) to contest a state or federal
`agency’s determination that a Medicaid provider is not “qualified.”30
`The question addressed by the Supreme Court in O’Bannon was whether
`Medicaid beneficiaries residing in a nursing home “have a constitutional right
`
`
`individuals of child-bearing age (including minors who can be considered to be sexually
`active) who are eligible under the State plan and who desire such services and supplies”).
`28 Id. at § 1396a(a)(23)(B).
`29 447 U.S. 773 (1980).
`30 Id. at 785-86.
`
`10
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`

`No. 17-50282
`to a hearing before a state or federal agency may revoke the home’s authority
`to provide them with nursing care at government expense.”31 The Department
`of Health, Education and Welfare had notified the nursing home that it “no
`longer met the statutory and regulatory standards for skilled nursing facilities
`and that, consequently, its Medicare provider agreement would not be
`renewed.”32 A state agency followed suit.33 The nursing home and residents
`who were Medicaid beneficiaries brought an action in federal court contending
`that, under the Due Process Clause, they “were entitled to an evidentiary
`hearing on the merits of the decertification decision before the Medicaid
`payments were discontinued.”34 In addressing this claim, the Supreme Court
`confirmed that the Due Process Clause does not confer a “right to a hearing”
`in the abstract; rather, it does so only as a prerequisite to a deprivation of “life,
`liberty, or property.”35 Accordingly, for the O’Bannon beneficiaries to prevail
`on their due process claim, they had to show that the termination of the
`nursing home’s Medicaid agreement “amount[ed] to a deprivation of an[]
`interest in life, liberty, or property.”36
`
`
`31 Id. at 775; see also id. at 784 (explaining that the “question is whether the patients
`have an interest in receiving benefits for care in [the nursing home] that entitles them, as a
`matter of constitutional law, to a hearing before the Government can decertify that facility”).
`32 Id. at 776.
`33 Id.
`34 Id. at 777; see Brief for Respondents at 26, O’Bannon v. Town Ct. Nursing Ctr., 447
`U.S. 773 (1980) (No. 78-1318) (“The Patients’ right to pre-termination process is based upon
`their right not to be deprived of ‘life, liberty, or property, without due process of law . . .’ as
`guaranteed by the Fifth and Fourteenth Amendments to the United States Constitution.”
`(alteration in original)).
`35 O’Bannon v. Town Ct. Nursing Ctr., 447 U.S. 773, 788, 790 (1980); see U.S. CONST.
`amend. XIV, § 1.
`36 O’Bannon, 447 U.S. at 787; see also Ky. Dep’t of Corrs. v. Thompson, 490 U.S. 454,
`460 (1989) (“We examine procedural due process questions in two steps: the first asks
`whether there exists a liberty or property interest which has been interfered with by the
`State; the second examines whether the procedures attendant upon that deprivation were
`constitutionally sufficient.” (citations omitted) (first citing Bd. of Regents of State Colls. v.
`Roth, 408 U.S. 564, 571 (1972); and then citing Hewitt v. Helms, 459 U.S. 460, 472 (1983))).
`11
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`

`No. 17-50282
`The O’Bannon Medicaid beneficiaries contended that because 42 U.S.C.
`§ 1396a(a)(23) granted them the right to obtain services from any qualified
`provider, they had a property right to remain in the home of their choice and,
`therefore, they had a right to a hearing to challenge whether cause existed for
`the termination of their preferred providers’ Medicaid agreements.37
`The Supreme Court rejected the beneficiaries’ argument.38 The Court
`held that “the Court of Appeals failed to give proper weight to the contours of
`the right conferred by the statutes and regulations.”39 The Court specifically
`identified the any-qualified-provider provision, § 1396a(a)(23), holding that
`“while a patient has a right to continued benefits to pay for care in the qualified
`institution of his choice, he has no enforceable expectation of continued benefits
`to pay for care in an institution that has been determined to be unqualified.”40
`Therefore the patients did not have the right to question a state or federal
`agency’s determination that an institution was unqualified. The any-qualified-
`provider provision, the Court explained, was among statutes and regulations
`that “involve[] the Government’s attempt to confer an indirect benefit on
`Medicaid patients by imposing and enforcing minimum standards of care on
`facilities like” the nursing home.41 The Court reasoned that “[w]hen
`enforcement of those standards requires decertification of a facility, there may
`be an immediate, adverse impact on some residents. But surely that impact,
`
`
`37 O’Bannon, 447 U.S. at 779, 779 n.8, 784 (explaining that the Court of Appeals had
`identified Medicaid provisions, including 42 U.S.C. § 1396a(a)(23), that gave “Medicaid
`recipients the right to obtain services from any qualified facility,” and that the nursing home
`patients contended these provisions “g[a]ve them a property right to remain in the home of
`their choice absent good cause for transfer and therefore entitle[d] them to a hearing on
`whether such cause exist[ed]”).
`38 Id. at 785.
`39 Id. at 786.
`40 Id.
`41 Id. at 787.
`
`12
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`

`No. 17-50282
`which is an indirect and incidental result of the Government’s enforcement
`action, does not amount to a deprivation of any interest in life, liberty, or
`property.”42 Consequently, the patients had no right under § 1396a(a)(23)(A)
`to challenge the decertification decision.43
`In O’Bannon, the Court explained that § 1396a(a)(23) “gives [Medicaid]
`recipients the right to choose among a range of qualified providers, without
`government interference” and “[b]y implication, . . . also confers an absolute
`right to be free from government interference with the choice to remain in a
`home that continues to be qualified.”44 The Court juxtaposed these granted
`rights with those that § 1396a(a)(23) “clearly does not confer,” beginning with
`the right “to enter an unqualified home and demand a hearing to certify it.”45
`Most relevant here, the Court explicitly stated that § 1396a(a)(23) does not
`grant Medicaid beneficiaries the right “to continue to receive benefits for care
`in a home that has been decertified.”46 In reaching this conclusion, the Court
`noted that “decertification does not reduce or terminate a patient’s financial
`assistance, but merely requires him to use it for care at a different facility.”47
`The O’Bannon beneficiaries also argued that being transferred to
`another nursing home “may have such severe physical or emotional side effects
`that it is tantamount to a deprivation of life or liberty.”48 The Court rejected
`this argument as well. The Court compared Medicaid beneficiaries whose
`preferred provider has been decertified to patients without Medicaid whose
`preferred provider’s license has been revoked, reasoning that, while “[b]oth
`
`
`
`42 Id.
`43 Id. at 775, 785.
`44 Id. at 785 (emphasis in original).
`45 Id.
`46 Id.
`47 Id. at 785-86.
`48 Id. at 784.
`
`13
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`No. 17-50282
`may be injured by the closing of a [provider] due to revocation of [the provider’s]
`state
`license
`or
`[the provider’s] decertification as a Medicaid
`provider[,] . . . [neither patient] would have any claim against the responsible
`governmental authorities for the deprivation of an interest in life, liberty, or
`property.”49
`Having concluded that the termination of the nursing home’s Medicaid
`provider agreement “did not directly affect the patients’ legal rights or deprive
`them of any constitutionally protected interest in life, liberty, or property,”50
`the Court determined that the Medicaid beneficiaries did not have a due
`process right to a hearing on whether the federal and state agencies were
`justified in terminating the nursing home’s Medicaid provider agreement.51
`The Supreme Court’s decision in O’Bannon resolves this case.52 It
`establishes that § 1396a(a)(23) does not give Medicaid beneficiaries a right to
`question a State’s determination that a provider is unqualified. Medicaid
`beneficiaries have an “absolute right” under § 1396a(a)(23) to receive services
`from a provider whom the State has determined is “qualified,” but beneficiaries
`have no right under the statute to challenge a State’s determination that a
`provider is unqualified.
`Because the Individual Plaintiffs do not have a right to continued
`benefits to pay for care from the Providers, they are not likely to prevail on the
`merits of their § 1983 claims and, as a result, are not entitled to a preliminary
`
`
`
`49 Id. at 787.
`50 Id. at 790.
`51 Id. at 775, 785.
`52 Accord Does v. Gillespie, 867 F.3d 1034, 1047 (8th Cir. 2017) (SHEPHERD, J.,
`concurring) (“O’Bannon controls the outcome of this case. The plaintiffs are asserting a
`right—the absolute right to a particular provider of their choosing—that § 23(A) does not
`grant them.”).
`
`14
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`No. 17-50282
`injunction.53 Accordingly, the injunction issued by the district court, which
`was based entirely on the § 1983 claims of the Individual Plaintiffs,54 must be
`vacated.
`
`III
`Even absent O’Bannon’s holding, the text of § 1396a(a)(23) does not
`unambiguously grant Medicaid patients the right to be involved in or to contest
`a state agency’s determination that a provider is not “qualified.” The any-
`qualified-provider provision expressly contemplates that the chosen provider
`is both “qualified” and willing to provide the services sought.55 The two
`requirements cannot be divorced from one another. It is a chicken-and-egg
`proposition. A provider is not eligible to be chosen unless both conditions are
`met—that it is qualified and willing to provide services.
`The most natural reading of § 1396a(a)(23) is that it is up to the provider
`to establish that it is both “qualified” and willing to provide the services. A
`Medicaid patient is not involved in a provider’s willingness to accept Medicaid
`procedures, regulations, and reimbursement rates. Additionally, whether a
`provider is “qualified” is largely a factual determination with the facts more
`readily available to the provider, not the Medicaid patient. If a state agency
`or actor determines that a particular provider is not qualified, in most if not
`all cases, it is the provider who has the most incentive to contest such a finding
`and to seek a resolution. It requires a strained reading of § 1396a(a)(23) to
`conclude that a Medicaid patient has the independent right to have a particular
`provider declared “qualified” when the provider itself does not challenge a
`
`53 See Tex. Med. Providers Performing Abortion Servs. v. Lakey, 667 F.3d 570, 574 (5th
`Cir. 2012) (quoting Bluefield Water Ass’n, Inc. v. City of Starkville, Miss., 577 F.3d 250, 252
`(5th Cir. 2009)).
`54 See Planned Parenthood of Greater Tex. Family Plan. & Preventative Health Servs.,
`Inc. v. Smith, 236 F. Supp. 3d 974, 987-88 (W.D. Tex. 2017).
`55 See 42 U.S.C. § 1396a(a)(23)(A).
`
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`finding that it is not qualified. It requires an equally strained reading of
`§ 1396a(a)(23) to conclude that it is only when a provider itself contests a
`finding that it is not “qualified” that a Medicaid patient has the right to have
`that particular provider declared “qualified” in the face of the contrary finding.
`Where is the language in § 1396a(a)(23) that grants a right to a Medicaid
`patient, either independent of the provider’s right or exercised in tandem with
`the provider, to have a particular provider declared “qualified”? It is not
`there,56 and that is why the Supreme Court held as it did in O’Bannon. A
`Medicaid patient may choose among qualified and willing providers but has no
`right to insist that a particular provider is “qualified” when the State has
`determined otherwise.
`In Gonzaga University, the Supreme Court “reject[ed] the notion that
`[its] cases permit anything short of an unambiguously conferred right to
`support a cause of action brought under § 1983.”57 The Court explained that
`“[a] court’s role in discerning whether personal rights exist in the § 1983
`context should . . . not differ from its role in discerning whether personal rights
`exist in the implied right of action context.”58 In determining “whether
`Congress intended to create a federal right” the Supreme Court has held that
`“the question . . . is definitively answered in the negative whe[n] a statute by
`its terms grants no private rights to any identifiable class.”59 The inquiry when
`determining if a statute grants a right “is to determine whether or not a statute
`‘confer[s] rights on a particular class of persons.’”60 “Accordingly, whe[n] the
`
`
`
`56 See id.
`57 Gonzaga Univ. v. Doe, 536 U.S. 273, 283 (2002).
`58 Id. at 285.
`59 Id. at 283-84 (emphasis in original) (internal brackets and quotation marks omitted)
`(quoting Touche Ross & Co. v. Redington, 442 U.S. 560, 576 (1979)).
`60 See id. at 285 (“[T]he initial inquiry—determining whether a statute confers any
`right at all—is no different from the initial inquiry in an implied right of action case, the
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`text and structure of a statute provide no indication that Congress intends to
`create new individual rights, there is no basis for a private suit, whether under
`§ 1983 or under an implied right of action.”61
`The Gonzaga decision also re-emphasized “that it is only violations of
`rights, not laws, which give rise to § 1983 actions.”62 The Court explained,
`to “seek redress through § 1983, . . . a plaintiff must assert the violation of a
`federal right, not merely a violation of federal law.”63
`The Supreme Court’s opinion in Armstrong v. Exceptional Child Center,
`Inc.64 also supports the conclusion that Congress did not intend to create a
`right under § 1396a(a)(23) such that Medicaid patients could contest a State’s
`determination that a particular provider is not “qualified.” While the statute
`unambiguously provides that a Medicaid beneficiary has the right to obtain
`services from the qualified provider of her choice, § 1396a(a)(23) does not
`unambiguously say that a beneficiary may contest or otherwise challenge a
`determination that the provider of her