In an unusual step on Tuesday, the Department of Health and Human Services issued a letter to Medicaid directors in all 50 states warning that terminating or curtailing Medicaid funding to Planned Parenthood may be against federal law.
Tuesday’s letter from Vikki Wachino, Director for the Center for Medicaid and CHIP Services at the department, said states cannot cut funding to medical providers on the grounds that they provide abortion services.
“Providing the full range of women’s health services neither disqualifies a provider from participating in the Medicaid program, nor is the provision of such services inconsistent with the best interests of the beneficiary, and shall not be grounds for a state’s action against a provider in the Medicaid program,” Wachino wrote.
Advocates who support de-funding Planned Parenthood called the letter an unprecedented and “alarming step.”
“I don’t know of anything like this,” said Casey Mattox, senior counsel at the Alliance Defending Freedom, a non-profit conservative legal advocacy group.
The warning comes as ten states have taken steps in the past year to cut Medicaid funding to Planned Parenthood. Alabama, Arkansas, Kansas, Louisiana, Oklahoma, and Texas have excluded Planned Parenthood from their states’ Medicaid programs. Arizona, Missouri, and Florida recently passed similar legislation, and Wisconsin reduced Medicaid reimbursement rates for abortion providers.
“The letter clarifies that state actions against providers that restrict beneficiary access – including termination of a provider from the program – are justifiable only if they are based on the provider’s inability to perform the covered medical services or appropriately bill for services,” said Marissa Padilla, a spokesperson for the federal Department of Health and Human Services.
Although the Center for Medicare and Medicaid Services has issued sixteen letters to state Medicaid directors over the past four years, this is the first to proactively address states’ efforts to exclude a provider.
But the issue of whether states can exclude providers who perform abortions has been simmering for years. In 2011, the Center for Medicare and Medicaid Services (CMS) released an informational bulletin stating that Medicaid programs cannot exclude qualified health care providers from the program on the basis of providing abortions.
Both the federal government and individual states regularly exclude health care providers from receiving Medicaid reimbursements. Exclusions can happen for a variety of reasons that range from patient abuse and fraud to a provider’s failure to pay his or her health education loans.
The Department of Health and Human Services (DHHS) maintains a federal list of entities and individuals excluded from federally funded healthcare programs, including Medicaid, and many states maintain their own lists as well.
The federal list of exclusions, which is updated monthly, currently includes more than 64,000 individuals and businesses excluded from receiving reimbursements. Around 1,600 of those have been added in 2016 alone.
Even if the federal government does not exclude a health care provider, states maintain broad authority to do so, for both legal violations and ethical issues. This means that even if patients prefer a certain provider, states can legally exclude that provider over ethical concerns, according to Mattox.
“There is no dispute, even in the CMS letter, that states have the authority to exclude providers in violation of certain laws,” said Mattox. “The dispute is that some states believe that Planned Parenthood is in violation of federal law.”
States that have cut Medicaid funding to Planned Parenthood have done so on the grounds that the organization is under investigation, has committed fiscal fraud, failed to make mandatory reports of minor sexual abuse, or possibly violated federal laws relating to fetal tissue procurement, according to Mattox’s testimony before the Health Subcommittee of the Congressional House Committee of Energy and Commerce in September, 2015.
“States have their own process of credentialing a provider, much like a hospital does, so the state does have authority to determine whether a provider can bill for Medicaid services in a state,” said Dr. Andrew Bindman, Director of the University of California Medicaid Research Institute and senior advisor to the Centers for Medicare and Medicaid Services.
The majority of these state exclusions are “uncontroversial,” said Mattox, who argues that Planned Parenthood is receiving special treatment from DHHS.
Although there are thousands of providers on federal and state exclusions lists, CMS has written to state directors on only Planned Parenthood’s behalf. “There seems to be a different relationship between Planned Parenthood and the federal government than there is between any other provider and the federal government,” said Mattox.
Even if the ten states that have taken steps to cut Medicaid funding to Planned Parenthood ignore Wachino’s letter, a lawsuit from the DHHS is unlikely to follow, said Bindman, since the agency usually tries to resolve Medicaid disputes with states out of court.
“The most typical weapon or way of enforcement is shared payments between the federal government and the state. If there are issues in dispute, the federal government can withhold some of its matching payments to states.”
But signaling the possibility of a federal lawsuit, the Justice Department has filed a statement of interest in federal court in the case between a Planned Parenthood affiliate and the state of Louisiana.