Plnd Prnthd of Gulf Coast, Inc v. Rebekah G , 876 F.3d 699 ( 2017 )

IN THE UNITED STATES COURT OF APPEALS
FOR THE FIFTH CIRCUIT
No. 15-30987
PLANNED PARENTHOOD OF GULF COAST, INCORPORATED; JANE
DOE #1; JANE DOE #2; JANE DOE #3,
Plaintiffs - Appellees
v.
REBEKAH GEE, Secretary, Louisiana Department of Health and Hospitals,
Defendant - Appellant
Appeal from the United States District Court
for the Middle District of Louisiana
(862 F.3d 445, June 29, 2017)
ON PETITION FOR REHEARING EN BANC
Before WIENER, PRADO, and OWEN, Circuit Judges.
PER CURIAM:
Treating the Petition for Rehearing En Banc as a Petition for Panel
Rehearing, the Petition for Panel Rehearing is DENIED. The court having
been polled at the request of one of the members of the court and a majority of
the judges who are in regular active service and not disqualified not having
voted in favor (FED. R. APP. P. and 5TH CIR. R. 35), the Petition for Rehearing
En Banc is DENIED.
No. 15-30987
In the poll, 7 judges vote in favor of rehearing en banc, and 7 vote against.
Voting in favor are Judges Jolly, Jones, Smith, Clement, Owen, Elrod, and
Southwick. Voting against are Chief Judge Stewart, and Judges Dennis,
Prado, Haynes, Graves, Higginson, and Costa.
ENTERED FOR THE COURT:
/s/ Jacques L. Wiener, Jr.
United States Circuit Judge
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No. 15-30987
JENNIFER WALKER ELROD, Circuit Judge, joined by JOLLY, JONES,
SMITH, CLEMENT, OWEN, and SOUTHWICK, Circuit Judges, dissenting
from the denial of rehearing en banc:
Today, an equally-divided court denies en banc rehearing of a divided
panel opinion and deepens the division in the courts of appeals on an issue of
great importance: whether a recipient of care can block a state’s
disqualification of a single health care provider for the purposes of Medicaid.
The discord is the result of our disregard for the Supreme Court’s binding
precedent in O’Bannon v. Town Court Nursing Center, 447 U.S. 773 (1980).
Louisiana, along with fifteen amici states, urged us to reconsider our decision
because of the significant detrimental impact it would have on the states’
abilities to administer their own Medicaid plans. Our decision in equipoise to
deny en banc rehearing is more than dismaying; it is a departure from our
duty. In the ever-expanding Medicaid world in which we live, it is important
that we get this decision right.
The panel majority opinion disregards both O’Bannon’s discussion of
whether 42 U.S.C. § 1396a(a)(23) confers a substantive property right and its
ultimate decision that there is no process due where there is no property right
to secure. O’Bannon addresses the question of “whether the patients have an
interest in receiving benefits for care in a particular facility that entitles them,
as a matter of constitutional law, to a hearing before the Government can
decertify that facility.” Id. at 784. Decidedly, the answer is no, with the Court
“hold[ing] that the enforcement by HEW and DPW of their valid regulations
did not directly affect the patients’ legal rights or deprive them of any
constitutionally protected interest in life, liberty, or property.” Id. at 790.
Section 1396a(a)(23) does not create a substantive right because, as the Court
explains, “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
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No. 15-30987
continued benefits to pay for care in an institution that has been determined
to be unqualified.” Id. at 786.
In its attempt to distinguish O’Bannon, the panel majority opinion
determines that O’Bannon is inapplicable because the O’Bannon plaintiffs only
asserted a violation of a due process right whereas the plaintiffs here “assert
the violation of a substantive right.” Planned Parenthood of Gulf Coast, Inc. v.
Gee, 862 F.3d 445, 460 (5th Cir. 2017). This is directly at odds with the
Supreme Court’s holding in O’Bannon that § 1396a(a)(23) does not confer on
an individual patient a constitutionally protected substantive property interest
in receiving care from a disqualified Medicaid provider. 447 U.S. at 784–85.
As Judge Owen’s careful dissenting opinion explains, this attempt to
distinguish O’Bannon “reflect[s] a failure to appreciate that there is no right
to due process unless there is a substantive right that may be vindicated if
adequate process is afforded.” Id. at 475 (Owen, J. dissenting); accord Doe v.
Gillespie, 867 F.3d 1034, 1046–49 (8th Cir. 2017) (Shepard, J. concurring)
(explaining that a patient cannot collaterally attack a provider’s decertification
because O’Bannon holds there is no substantive right to receive care from a
decertified provider). The dissenting opinion is simply textbook reasoning. See
Erwin Chemerinsky, Constitutional Law: Principles and Policies, 588 (Erwin
Chemerinsky et al. eds., 5th ed. 2015) (“. . . in O’Bannon v. Town Court Nursing
Center, the Supreme Court held that residents in a nursing home had no
property interest and thus no right to due process before a government agency
revoked their home’s certification to receive payments from the government.”).
Similarly dismaying is the panel majority opinion’s attempt to
distinguish O’Bannon because the plaintiffs here are not challenging a
decertification decision. There is, in fact, a decertification decision in this case,
but the panel majority opinion just determined on the merits that none of the
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No. 15-30987
reasons for decertification were valid. See Planned Parenthood, 862 F.3d at
478 (Owen, J. dissenting) (noting the majority opinion’s circular reasoning,
which concludes “that since the Individual Plaintiffs will likely prevail on their
contention that [Planned Parenthood] is a qualified provider, the Individual
Plaintiffs have the right to sue to obtain Medicaid services from that qualified
provider”). The panel majority opinion’s determination that O’Bannon only
bars an individual plaintiff from challenging a disqualification decision related
to health and safety regulation enforcement that affects the provider’s ability
to provide care to the general public does not fare any better. This limitation
finds no support in O’Bannon’s text or record. As the dissenting opinion
precisely states: “Whether the nursing home facility in O’Bannon was required
to cease operations had no bearing on the Supreme Court’s holding that 42
U.S.C. § 1396a(a)(23) is not a font of substantive rights flowing to Medicaid
patients that permits them to sue to set aside the termination of a provider’s
Medicaid or Medicare agreements on the basis that the provider failed to
comply with certain statutory or regulatory requirements.” Id. at 482–83
(Owen, J. dissenting). The panel majority opinion here makes the very same
error that the Court saw fit to correct in O’Bannon: “In holding that
[§ 1396a(a)(23)] create[s] a substantive right” it “fails to give proper weight to
the contours of the right conferred by the statutes and regulations.” See 447
U.S. at 786.
Importantly, the panel majority opinion’s reasoning is not only at odds
with O’Bannon but also with the entirety of the statutory framework in 42
U.S.C. § 1396a. Under the exclusionary provision in § 1396a(p)(1), a Medicaid
provider can be disqualified for reasons unrelated to health and safety that
would require the provider to cease dispensing care to the general public. See
42 U.S.C. § 1396a(p)(1). Among the grounds for exclusion from Medicaid
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No. 15-30987
participation are medically unnecessary charges and false claims for services
that were not provided. Id. § 1396a(p)(1) (referencing 42 U.S.C. § 1320a-7 and
§ 1320a-7a). Nowhere does the statute require that the disqualification of a
Medicaid provider can occur only if the provider is deemed unfit to provide care
for the general public, as the panel majority opinion holds. Moreover, to the
extent § 1396a(a)(23) can be interpreted to secure any private right of action,
such a right is surely limited to “qualified” providers and does not include
providers who voluntarily choose not to contest their disqualification. 1 Thus,
even if O’Bannon did not control, and § 1396a(a)(23) were a blank statutory
slate, the panel majority opinion’s interpretation would still be incorrect
because it reads extratextual requirements into the statute and relies on an
overbroad interpretation of the term “qualified.”
This disjointed reasoning of the panel majority opinion brings us to the
procedural elephant in the case: Planned Parenthood Gulf Coast chose to
forego its administrative remedies prior to filing this lawsuit. Compounding
this procedural irregularity, the preliminary injunction below was issued on
the claims of the individual Doe plaintiffs, not on Planned Parenthood’s claims.
As a result of the majority opinion’s holding, a Medicaid provider can now make
an end run around the administrative exhaustion requirements in a state’s
statutory scheme. 2 Disqualified providers can now circumvent state law
1 Whether § 1396a(a)(23) even confers any private right of action under the framework
in Gonzaga University v. Doe, 536 U.S. 273 (2002), makes the panel majority opinion further
problematic. See Doe v. Gillespie, 867 F.3d 1034, 1046 (8th Cir. 2017) (holding that Congress
did not unambiguously confer a right in § 1396a(a)(23) that could be enforced by an individual
patient under 42 U.S.C. § 1983). Fifteen amici states filed a brief urging the en banc court
to consider the issue of whether there was any private right of action in the statute. As
Justice Scalia, writing for the Court, deftly put it, “Congress . . . does not . . . hide elephants
in mouseholes.” Whitman v. Am. Trucking. Ass’n, 531 U.S. 457, 468 (2001).
2Here, under Louisiana law, a party seeking to appeal a termination decision by the
Louisiana Department of Health and Hospitals has fifteen days from receipt of notice to
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No. 15-30987
because the panel majority opinion deems it unnecessary to have a final
administrative determination so long as there are patients to join a lawsuit
filed in federal court.
The fact that this case is still at the preliminary injunction stage does
not excuse our decision to deny en banc rehearing. The panel majority opinion
is binding precedent that will guide the development of the law in our circuit.
Moreover, at least two other cases are already pending within the circuit and
will be immediately impacted by the majority’s holding in this case—a holding
that cannot be squared with Supreme Court precedent or the statutory text.
The ability to correct our deviation from the Supreme Court’s precedent in time
to prevent further damage remains a distant hope. Accordingly, I respectfully
dissent from our denial of rehearing en banc.
request an informal hearing. La. Admin. Code § 50:4203. Following notice of the result of
the informal hearing, the provider has thirty days to seek an appeal before the Division of
Administrative Law. La. Admin. Code § 50:4211(B).
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