Opinion ID: 810673
Heading Depth: 2
Heading Rank: 1

Heading: Indiana House Enrolled Act 1210, the Abortion-

Text: Provider Defunding Law In the spring of 2011, the Indiana General Assembly adopted a law prohibiting abortion providers from receiving any state contracts and grants, including those involving state-administered federal funds. More specifically, the defunding law provides that state agencies “may not[] enter into a contract with[] or make a grant to[] any entity that performs abortions or maintains or operates a facility where abortions are performed.” IND. C ODE § 5-22-17-5.5(b). The new law, known as House Enrolled Act 1210, also cancelled existing contracts with abortion providers. See id. § 5-22-17-5.5(c), (d). The defunding law does not apply to hospitals and am- bulatory surgical centers. See id. § 5-22-17-5.5(a). Act 1210 fills a gap in Indiana law regarding public funding of abortion. The Hyde Amendment prohibits the No. 11-2464 7 use of federal funds to pay for nontherapeutic abortions except in the case of pregnancies resulting from rape or incest.3 Indiana law contains similar restrictions on the use of state funds. See id. §§ 12-15-5-1(17), 16-34-1-2; 405 IND. A DMIN. C ODE 5-28-7; Humphreys v. Clinic for Women, Inc., 796 N.E.2d 247, 250-51 (Ind. 2003). Act 1210 aims to prevent the indirect subsidization of abortion by stopping the flow of all state-administered funds to abortion providers. Governor Mitch Daniels signed Act 1210 into law on May 10, 2011. On May 13 Indiana notified CMS of the change in its law and sought approval for an amend- ment to its Medicaid plan to exclude any provider (not including hospitals and ambulatory surgical centers) that offers abortion services. After consulting with the HHS Secretary, see 42 C.F.R. § 430.15(c), the CMS Administrator rejected the proposed plan amendment citing § 1396a(a)(23), the free-choice-of-provider rule. In a letter to Indiana’s Director of Medicaid Policy & Planning, the Administrator noted that “federal Medicaid funding of abortion services is not permitted under federal law except in extraordinary circumstances (such as in cases of rape or incest).” “At the same time,” the Administrator continued, “Medicaid programs may not exclude qualified health care 3 The Hyde Amendment is actually a rider Congress attaches to appropriations legislation each year. See Consolidated Appropriations Act, 2012, Pub. L. No. 112-74, §§ 506-507, 125 Stat. 786, 1111-12 (2011). 8 No. 11-2464 providers from providing services that are funded under the program because of a provider’s scope of practice.” Because Indiana’s proposed amendment excluded abortion providers from participation in Medicaid for a reason unrelated to provider qualifications, the Administrator refused to approve it. Indiana petitioned for reconsideration of the Administrator’s decision. See 42 U.S.C. § 1316(a)(2); 42 C.F.R. § 430.18. This initiated an administrative appeal process that included a hearing, see 42 C.F.R. §§ 430.76(a), 430.83, and the right to seek judicial review of the final decision, see 42 U.S.C. § 1316(a)(3); 42 C.F.R. § 430.38. The hearing was held on December 15, 2011, and on June 20, 2012, the hearing officer sent the Administrator his recommended findings and a proposed decision upholding the initial determination. See 42 C.F.R. § 430.102. Under 42 C.F.R. § 430.102(b)(2), the parties have an opportunity to file objections before final action on the recommendation is taken. To our knowledge, a final agency decision has not yet been issued. B. Planned Parenthood’s Legal Challenge to Act 1210 Planned Parenthood is a nonprofit healthcare provider offering reproductive healthcare and family-planning services in Indiana, including preventive primary-care services such as medical examinations, cancer screenings, testing for sexually transmitted diseases, and various birthcontrol services. The organization operates 28 health clinics in Indiana and has more than 75,000 patients. Planned Parenthood is an enrolled provider in Indiana’s No. 11-2464 9 Medicaid program. In 2010 the organization offered Medicaid services to more than 9,300 patients and received $1,360,437 in Medicaid reimbursement. Planned Parenthood also receives grants from Indiana state agencies, including some funded with federal money. Among those in effect when Act 1210 was adopted were two grants totaling $150,000 from Indiana’s federal Disease Intervention Services block-grant money received under § 247c(c), which authorizes grants for programs that diagnose and monitor sexually transmitted diseases. Planned Parenthood also performs abortions. The organization uses private funding to support its abortion services and takes steps to ensure that public and private funds are not commingled. As an abortion provider, Planned Parenthood is barred by Act 1210 from receiving any state-administered funds, including Medicaid reimbursement and funding from state and federal grants for services unrelated to abortion. The organization estimates that full implementation of the defunding law would require it to close a quarter of its health clinics, lay off approximately 37 employees, and cease serving an unknown number of patients. Because of the effect of the defunding law on its statewide operations, Planned Parenthood did not wait for the outcome of the CMS administrative process. On May 10, 2011—the same day that Governor Daniels signed Act 1210 into law—Planned Parenthood went to court in the Southern District of Indiana seeking to block the new law. Its lawsuit challenges Act 1210 on several grounds. First, Planned Parenthood alleges that the law 10 No. 11-2464 violates § 1396a(a)(23), the Medicaid free-choice-of-provider requirement. The complaint also asserts a preemption claim based on several federal block-grant programs. Finally, Planned Parenthood alleges that the defunding law imposes an unconstitutional condition on its receipt of public funds by forcing it to choose between performing abortions and receiving nonabortion-related public funding. The complaint seeks declaratory and injunctive relief under § 1983. Planned Parenthood immediately moved for a temporary restraining order (“TRO”) and a preliminary injunction.4 The district court denied the motion for a TRO, but after full briefing granted Planned Parenthood’s motion for a preliminary injunction. Planned Parenthood of Ind., Inc. v. Comm’r of the Ind. State Dep’t of Health, 794 F. Supp. 2d 892 (S.D. Ind. 2011). As relevant here, the court held that § 1396a(a)(23) creates individual rights enforceable under § 1983 and that Planned Parenthood was likely to succeed on its claim that the defunding law violates § 1396a(a)(23). On the preemption claim, the court focused solely on the Disease Intervention Services blockgrant program under § 247c(c). The court held that although § 247c(c) does not confer an individual right, 4 Planned Parenthood also challenges two provisions in Act 1210 that amended Indiana’s informed-consent statute to require abortion practitioners to inform patients that “human physical life begins when a human ovum is fertilized by a human sperm” and that “objective scientific information shows that a fetus can feel pain at or before twenty (20) weeks of postfertilization age.” I ND . C ODE § 16-34-2-1.1(a)(1)(E), (G). These aspects of the case are not at issue in this appeal. No. 11-2464 11 Planned Parenthood could bring its preemption claim directly under the Supremacy Clause. Having found a right of action, the court concluded that Planned Parenthood was likely to succeed on its claim that § 247c(c) preempts Act 1210. The court then assessed the balance of harms and the public interest, ultimately concluding that preliminary injunctive relief was warranted. The court enjoined “[a]ll attempts to stop current or future funding contracted for or due” Planned Parenthood and ordered Indiana to “take all steps to insure that all monies are paid.” Id. at 921. Having awarded all the preliminary relief Planned Parenthood had requested, the court did not address the unconstitutional-conditions claim.