Court Opinion

ID: 9363854
Source: CourtListenerOpinion
Date Created: 2023-01-17 21:00:26.301855+00
Date Added: 2024-06-11T17:15:34.578607
License: Public Domain

FOR PUBLICATION

  UNITED STATES COURT OF APPEALS
       FOR THE NINTH CIRCUIT

WASHINGTON STATE HEALTH                 No. 21-70338
CARE AUTHORITY; SWINOMISH
INDIAN TRIBAL COMMUNITY,

               Petitioners,              OPINION

 v.

CENTERS FOR MEDICARE &
MEDICAID SERVICES; U.S.
DEPARTMENT OF HEALTH &
HUMAN SERVICES,

               Respondents.

      On Petition for Review of an Order of the
      Department of Health & Human Services

      Argued and Submitted September 1, 2022
               Seattle, Washington

               Filed January 12, 2023
2                       WASHINGTON V. CMS

     Before: M. Margaret McKeown and Ronald M. Gould,
       Circuit Judges, and Jed S. Rakoff, * District Judge.

                    Opinion by Judge Gould

                          SUMMARY **

                             Medicaid

   The panel granted a petition of review brought by the
Washington State Health Care Authority (“HCA”) and the
Swinomish Indian Tribal Community challenging the Center
of Medicare and Medicaid Services (“CMS”)’s decision
denying Washington’s request to amend Apple Health, the
Washington State Medicaid plan.
    HCA petitioned CMS to amend the State Plan to include
dental health aide therapists (“DHATs”) on the list of
licensed providers who can be reimbursed through
Medicaid. CMS rejected the Amended State Plan on the
basis that it violated the Medicaid free choice of providers
statute and regulation guaranteeing all Medicaid
beneficiaries equal access to qualified healthcare
professionals willing to treat them. See 42 U.S.C. §
1396a(a)(23)(A); 42 C.F.R. § 431.51(b)(1).

*
 The Honorable Jed S. Rakoff, United States District Judge for the
Southern District of New York, sitting by designation.
**
  This summary constitutes no part of the opinion of the court. It has
been prepared by court staff for the convenience of the reader.
                    WASHINGTON V. CMS                     3

    The panel rejected CMS’s reasoning on the ground that
the underlying Washington statute—Wash. Rev. Code §
70.350.020—did not violate Section 1396(a)(23) because it
merely authorized where and how DHATs can practice and
did not in any way restrict Medicaid recipients’ ability to
obtain service from DHATs relative to non-Medicaid
recipients. CMS’s rejection of the Amended State Plan was
“not in accordance with law.”             5 U.S.C. §
706(2)(A). Accordingly, the panel granted the petition for
review and remanded to the agency with instructions to
approve the Amended State Plan.

                       COUNSEL

William T. Stephens (argued), Senior Counsel; Michael
Bradley, Assistant Attorney General; Robert W. Ferguson,
Attorney General; Washington State Attorney General’s
Office; Olympia, Washington; Stephen T. LeCuyer
(argued); Calvin G. Rapada; Office of Tribal Attorney,
Swinomish Indian Tribal Community, La Conner,
Washington; for Petitioners.
Sarah J. Clark (argued); Cynthia A. Barmore, Alisa B. Klein,
and Bridgette Kaiser, Attorneys; Susan Maxson Lyons,
Deputy Associate General Counsel for Litigation; Janice L.
Hoffman, Associate General Counsel; Daniel J. Barry,
Acting General Counsel; Brian M. Boynton, Principal
Deputy Assistant Attorney General; for Respondents.
Carla M. DewBerry and Bart Feedman, K&L Gates LLP,
Seattle Washington, for Amicus Curiae Lummi Indian
Reservation.
4                   WASHINGTON V. CMS

Richard D. Monkman, Sonosky Chambers Sachse Miller &
Monkman LLP, Juneau, Alaska, for Amici Curiae
Northwest Portland Area Indian Health Board and The
Alaska Native Tribal Health Consortium.

                        OPINION

GOULD, Circuit Judge:

    The Washington State Health Care Authority (“HCA”)
and the Swinomish Indian Tribal Community petition for
review of a Center for Medicare and Medicaid Services
(“CMS”) decision denying Washington’s request to amend
Apple Health, the Washington State Medicaid plan (the
“State Plan”).
    HCA petitioned CMS to amend the State Plan to include
dental health aide therapists (“DHATs”) on the list of
licensed providers who can be reimbursed through
Medicaid. CMS rejected the Amended State Plan on the
basis that it violates the Medicaid free choice of providers
statute and regulation guaranteeing all Medicaid
beneficiaries equal access to qualified healthcare
professionals willing to treat them.        See 42 U.S.C.
§ 1396a(a)(23)(A); 42 C.F.R. § 431.51(b)(1). Petitioners
challenge this denial.
    We reject CMS’s reasoning on the ground that the
underlying Washington statute does not violate Section
1396a(a)(23) because it merely authorizes where and how
DHATs can practice and does not in any way restrict
Medicaid recipients’ ability to obtain services from DHATs
relative to non-Medicaid recipients.
                     WASHINGTON V. CMS                       5

 I.   Background
 A. Medicaid Free Choice of Provider Provision
    To receive federal funds for their Medicaid programs,
states must submit a state plan that meets federal statutory
and regulatory requirements. See 42 U.S.C. § 1396a(a); 42
C.F.R. §§ 430.10, .12., .15(a). A state must amend its state
plan to reflect “[m]aterial changes in State law.” 42 C.F.R.
§ 430.12(c)(1)(ii). CMS must approve state plans and plan
amendments that meet the governing statutory and
regulatory requirements. See 42 U.S.C. § 1396a(b); 42
C.F.R. § 430.15(a). The Medicaid free choice of provider
provision is one such statutory and regulatory requirement.
See 42 U.S.C. § 1396a(a)(23); 42 C.F.R. § 431.51(b).
     Under the free choice of providers provision, a state plan
must provide that “a beneficiary may obtain Medicaid
services from any institution, agency, pharmacy, person, or
organization that is (i) Qualified to furnish the services; and
(ii) Willing to furnish them to that particular beneficiary.”
42 CFR § 431.51(b)(1); 42 U.S.C. § 1396a(a)(23) (“[A]ny
individual eligible for medical assistance . . . may obtain
such assistance from any institution, agency, community
pharmacy, or person, qualified to perform the service or
services required . . . who undertakes to provide him such
services.”). Under this provision, Medicaid beneficiaries
have “the right to choose among a range of qualified
providers, without government interference.” O’Bannon v.
Town Ct. Nursing Ctr., 447 U.S. 773, 785 (1980) (emphasis
in original). We have further clarified that “the free-choice-
of-provider provision unambiguously requires that states
participating in the Medicaid program allow covered
patients to choose among the [] medical practitioners they
could use were they paying out of their own pockets.”
Planned Parenthood Ariz. Inc. v. Betlach, 727 F.3d 960, 971
6                    WASHINGTON V. CMS

(9th Cir. 2013).
    B. DHATs under IHS and Washington state law
    In order to address serious unmet health care and dental
care needs for Native Americans, Congress authorized the
Indian Health Service (“IHS”) to provide certification and
training to certain mid-level health care providers through
the Community Health Aid Program (“CHAP”). In Alaska,
the    CHAP       includes     DHATs—mid-level          dental
professionals. In the lower 48, tribes can elect to establish a
DHAT program if “the use of dental health aide therapist
services or midlevel dental health provider services is
authorized under State law” and the tribe provides the
DHAT “services in accordance with State law.” 25 U.S.C.
§ 1616l(d)(3)(A).
     Prior to 2017, Washington law did not authorize mid-
level dental health providers.        In 2017, Washington
authorized a limited scope of practice for DHATs.
Specifically, under Washington law, DHATs can only
provide services “[i]n a practice setting within the exterior
boundaries of a tribal reservation and operated by an Indian
health program.” Wash. Rev. Code § 70.350.020(1)(b)(i).
In addition, DHATs may only treat members of federally
recognized tribes or individuals who are “otherwise eligible
for services under Indian health service criteria.” Id.
§ 70.350.020(1)(b)(iv). Washington requires that the DHAT
be certified by either a tribe or a CHAP certification board.
Id. (a).
    The Swinomish Tribe in Washington elected to establish
a DHAT program. The Tribe has adopted comprehensive
licensing standards, which incorporate the Alaska DHAT
program standards. The Tribe, which receives Medicaid
funds for other health services it provides, cannot currently
                      WASHINGTON V. CMS                       7

receive Medicaid funds for its DHAT program because
DHAT providers are not yet included as covered
professionals under the State Plan.
 C. Washington State Plan Amendment
    Washington submitted an Amended State Plan to CMS
that reflected the change in state law by adding DHATs to
the list of providers who can receive Medicaid
reimbursement in Washington. CMS rejected the Amended
State Plan because, as relevant to this appeal, CMS found
that it violated the Medicaid free choice of providers
provision by restricting “access to services provided by
Dental Health Aide Therapists (DHATs) to a limited group
of beneficiaries, and . . . prevent[ing] beneficiaries from
receiving DHAT services from similarly qualified dental
services providers that provide services outside the
boundaries of a tribal reservation or that are not Indian health
programs.” Washington requested reconsideration of the
decision. CMS appointed a presiding officer and held a
hearing to reconsider the CMS decision. After the hearing,
the CMS Presiding Officer recommended that the CMS
Administrator approve the Amended State Plan because it
did not violate the free choice of provider provision. The
CMS Administrator, however, rejected the recommendation
of the Presiding Officer and instead found that the Amended
State Plan violated the free choice of provider provision,
reasoning that the amendment “restricts access to DHAT
services for some Medicaid beneficiaries for reasons
unrelated to whether DHATs are ‘qualified’ to provide
services to those beneficiaries.” Washington appealed.
 II. Standard of Review
  We have jurisdiction under 42 U.S.C. § 1316(a)(3), and
we review CMS’s decision under the Administrative
8                    WASHINGTON V. CMS

Procedure Act (“APA”), which directs us to set aside agency
actions if they are “arbitrary, capricious, an abuse of
discretion, or otherwise not in accordance with law.” 5
U.S.C. § 706(2)(A).
    III. Analysis
    In interpreting the free choice of provider provision, we
previously held that states cannot limit Medicaid
beneficiaries’ ability “to choose among the . . . medical
practitioners they could use were they paying out of their
own pockets.” Betlach, 727 F.3d at 971. Under Washington
law, DHATs are only authorized to treat tribal members and
others eligible for IHS benefits, regardless of whether the
individuals receive Medicaid or not. See Wash. Rev. Code
§ 70.350.020(1)(b)(iv). In keeping with our reasoning in
Betlach, we hold that Washington’s licensing law defining
the scope of DHATs’ practice does not violate the free
choice of provider provision. Thus, CMS’s rejection of the
Amended State Plan on those grounds was not in accordance
with the law.
    Under the Medicaid Act, states have the “authority to
regulate the practice of medicine within [their] borders,”
which includes setting out state licensing standards and
scope of practice requirements. See Betlach, 727 F.3d at
975. Under the Medicaid free choice of provider provision,
however, states cannot create separate licensing and scope
of practice criteria based on whether a medical professional
serves Medicaid beneficiaries or not. Id. at 969. In Betlach,
we held that an Arizona statute barring Medicaid
beneficiaries from receiving covered gynecological and non-
abortion family planning services from providers who also
performed abortions violated the free choice of provider
provision. Id. at 962, 964. The Arizona law explicitly
                    WASHINGTON V. CMS                     9

prevented Medicaid patients from receiving services from
providers “qualified” to offer those services who also
provided abortion services, while non-Medicaid
beneficiaries could receive services from these providers.
Id. at 968–75. The issue in Betlach of whether a provider
was qualified under the Medicaid free choice of provider
statute turned on “whether the provider [was] qualified in a
general sense to perform, i.e., carry out, the service in
question, whether for Medicaid patients or for any other
patients.” Id. at 969 (emphasis in original). We held that
state licensure and scope of practice standards must be tied
to “factors external to the Medicaid program.” Id.
    Wash. Rev. Code § 70.350.020 authorizes DHATs to
practice within limited scope based on factors external to
Medicaid. The Washington statute authorizes DHATs to
practice within limited scope under a tribe’s licensure
requirements, regardless of whether the patients are
Medicaid beneficiaries or not. This statute does not limit a
Medicaid beneficiary’s choice. A non-tribal member may
not receive treatment from a DHAT, regardless of whether
that person pays out of pocket or is a Medicaid beneficiary.
Likewise, a tribal member may receive treatment from a
DHAT regardless of that person’s status as a Medicaid
beneficiary. Thus, Wash. Rev. Code § 70.350.020 does not
prevent “any individual eligible for medical assistance”
through Medicaid from “obtain[ing] such assistance from
any [provider] . . . qualified to perform the service or
services required . . . who undertakes to provide him such
services.” 42 U.S.C. § 1396a(a)(23)(A).
10                 WASHINGTON V. CMS

    We hold that the Amended State Plan does not violate
the Medicaid free choice statute because Wash. Rev. Code
§ 70.350.020 does not distinguish between Medicaid and
non-Medicaid recipients. See 42 C.F.R. § 431.51(b)(1).
CMS’s rejection of the Amended State Plan was “not in
accordance with law.” 5 U.S.C. § 706(2)(A). We grant the
petition for review and remand to the agency with
instructions to approve the Amended State Plan.
    We GRANT the petition, and REMAND to CMS with
instructions to approve Petitioners’ Amended State Plan.
The parties shall bear their own costs on appeal.