876 F.3d 699
5th Cir.2017Background
- This is an en banc rehearing petition denial (treated as panel rehearing) regarding whether Medicaid recipients can challenge a state's disqualification of a single provider to obtain care from that provider.
- The court was evenly split 7–7 on rehearing; the petition for rehearing en banc was denied.
- The underlying panel decision (Planned Parenthood of Gulf Coast, Inc. v. Gee) allowed individual Medicaid recipients to sue to obtain services from a provider the State sought to disqualify, and issued a preliminary injunction for individual plaintiffs.
- Dissenters (Elrod, joined by six judges) argue the panel misapplied and failed to follow Supreme Court precedent in O’Bannon, which held § 1396a(a)(23) does not create a substantive property interest for patients to challenge provider decertification.
- The dissent criticizes the panel for permitting a provider to circumvent state administrative exhaustion requirements by relying on joined patient plaintiffs, and for reading extra-textual limits into federal Medicaid statutes.
- Procedural note: Planned Parenthood chose not to exhaust administrative remedies; the injunction was based on individual plaintiffs’ claims rather than the provider’s administrative appeal.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether § 1396a(a)(23) creates a substantive property right allowing patients to challenge a provider’s disqualification | § 1396a(a)(23) confers a private right to receive Medicaid-funded care from a qualified provider; patients can sue to secure that care | § 1396a(a)(23) does not create an individual substantive property interest; patients lack a constitutionally protected right to challenge provider decertification | Panel majority treated the claim as asserting a substantive right permitting suit; dissent says O’Bannon forbids such a substantive right (court denied en banc rehearing) |
| Whether O’Bannon controls and bars collateral attacks by patients on provider decertification | O’Bannon is distinguishable because plaintiffs here assert a substantive right rather than merely due process | O’Bannon controls: no substantive right = no due process right; patients cannot collaterally attack decertification | Panel attempted to distinguish O’Bannon; dissent says that is erroneous and conflicts with Supreme Court precedent |
| Whether patients can bypass state administrative exhaustion by joining federal suits to block provider disqualification | Plaintiffs can seek federal relief through individual plaintiffs without waiting for final administrative decisions | Defendant/state says allowing patients to sue permits providers to evade state administrative remedies and final determinations | Panel’s approach permits such federal suits; dissent warns this undermines state administrative procedures |
| Scope of statutory text in 42 U.S.C. § 1396a and related exclusion provisions | The statute secures patients’ rights to receive care from qualified providers | The statute and exclusionary provisions allow disqualification for many non-safety reasons; it does not create broad private rights for patients to challenge disqualifications | Dissent concludes the panel misreads the statutory scheme; en banc rehearing denied so split remains |
Key Cases Cited
- O’Bannon v. Town Court Nursing Center, 447 U.S. 773 (1980) (held § 1396a(a)(23) does not create a constitutionally protected property interest for patients to challenge facility decertification)
- Planned Parenthood of Gulf Coast, Inc. v. Gee, 862 F.3d 445 (5th Cir. 2017) (panel opinion at issue allowing individual Medicaid recipients to seek services from a provider challenged by the State)
- Does v. Gillespie, 867 F.3d 1034 (8th Cir. 2017) (explaining O’Bannon precludes patients from collaterally attacking a provider’s decertification)