Court Opinion

ID: 1038227
Source: CourtListenerOpinion
Date Created: 2013-08-23 00:01:12.117526+00
Date Added: 2024-06-11T12:47:06.186621
License: Public Domain

FOR PUBLICATION

  UNITED STATES COURT OF APPEALS
       FOR THE NINTH CIRCUIT

PLANNED PARENTHOOD ARIZONA              No. 12-17558
INCORPORATED; UNKNOWN PARTIES,
named as Jane Doe #1, Jane Doe #2,         D.C. No.
and Jane Doe #3; ERIC REUSS, M.D.,      2:12-cv-01533-
                Plaintiffs-Appellees,       NVW

                 v.

TOM BETLACH, Director, Arizona
Health Care Cost Containment
System; TOM HORNE, Attorney
General,
             Defendants-Appellants.

PLANNED PARENTHOOD ARIZONA              No. 13-15506
INCORPORATED; UNKNOWN PARTIES,
named as Jane Doe #1, Jane Doe #2,         D.C. No.
and Jane Doe #3; ERIC REUSS, M.D.,      2:12-cv-01533-
                Plaintiffs-Appellees,       NVW

                 v.
                                          OPINION
TOM BETLACH, Director, Arizona
Health Care Cost Containment
System; TOM HORNE, Attorney
General,
             Defendants-Appellants.
2             PLANNED PARENTHOOD V. BETLACH

         Appeal from the United States District Court
                  for the District of Arizona
           Neil V. Wake, District Judge, Presiding

                     Argued and Submitted
           June 12, 2013—San Francisco, California

                      Filed August 22, 2013

    Before: Marsha S. Berzon and Jay S. Bybee, Circuit
 Judges, and Consuelo B. Marshall, Senior District Judge.*

                    Opinion by Judge Berzon

                           SUMMARY**

                            Civil Rights

    The panel affirmed the district court’s summary judgment
and permanent injunction, and also dismissed an appeal of the
district court’s preliminary injunction, in this action
challenging an Arizona statute that bars patients eligible for
the state’s Medicaid program from obtaining covered family
planning services through health care providers who perform

    *
    The Honorable Consuelo B. Marshall, Senior District Judge for the
U.S. District Court for the Central District of California, 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.
            PLANNED PARENTHOOD V. BETLACH                    3

abortions in cases other than medical necessity, rape, or
incest. See Ariz. Rev. Stat. § 35-196.05(B).

    The panel held that the Medicaid Act’s free-choice-of-
provider requirement, 42 U.S.C. § 1396a(a)(23), confers a
private right of action under 42 U.S.C. § 1983. The panel
then held that the Arizona statute contravenes the Medicaid
Act’s requirement that states give Medicaid recipients a free
choice of qualified provider. The panel held that the Arizona
law violates this requirement by precluding Medicaid patients
from using medical providers concededly qualified to
perform family planning services to patients in Arizona
generally, solely on the basis that those providers separately
perform privately funded, legal abortions.

   The panel dismissed Arizona’s appeal from the district
court’s preliminary injunction on the grounds that the district
court’s entry of final judgment and a permanent injunction
mooted the appeal.

                         COUNSEL

Logan Johnston, Johnston Law Offices, PLC, Phoenix,
Arizona, for Defendant-Appellant Tom Betlach.

Steven H. Aden (argued) and Catherine Glenn Foster,
Alliance Defending Freedom, Washington, D.C.; Robert
Lawrence Ellman, Arizona Attorney General’s Office,
Phoenix, Arizona, for Defendant-Appellant Tom Horne.
4          PLANNED PARENTHOOD V. BETLACH

Andrew D. Beck and Susan Talcott Camp, American Civil
Liberties Union Foundation, New York, New York; Alice J.
Clapman (argued), Planned Parenthood Federation of
America, Washington, D.C.; Roger Evans, Planned
Parenthood Federation of America, New York, New York;
Kelly Joyce Flood and Daniel J. Pochoda, ACLU Foundation
of Arizona, Phoenix, Arizona; Daniel B. Pasternak and
Laurence J. Rosenfeld, Squire Sanders LLP, Phoenix,
Arizona, for Plaintiffs-Appellees.

Denise Mary Burke, Americans United for Life, Washington,
D.C., for Amicus Curiae 29 Arizona Senators,
Representatives, and Representatives-Elect.

Lawrence John Joseph, Law Office of Lawrence J. Joseph,
Washington, D.C., for Amicus Curiae Eagle Forum
Education & Legal Defense Fund.

Alisa Beth Klein and Mark B. Stern, Appellate Staff, United
States Department of Justice, Civil Division, Washington,
D.C., for Amicus Curiae United States of America.

                        OPINION

BERZON, Circuit Judge:

    An Arizona statute bars patients eligible for the state’s
Medicaid program from obtaining covered family planning
services through health care providers who perform abortions
in cases other than medical necessity, rape, or incest. See
Ariz. Rev. Stat. § 35-196.05(B). Such abortions are already
ineligible for Medicaid coverage and so must be paid for with
private funds. The Arizona law extends the ineligibility to
            PLANNED PARENTHOOD V. BETLACH                     5

non-abortion services such as gynecological exams and
cancer screenings unless the patient’s provider agrees to stop
performing privately funded elective abortions.

    Before the Arizona law could go into effect, Planned
Parenthood of Arizona and several individual plaintiffs filed
this lawsuit challenging the Arizona law as a violation of the
federal Medicaid Act. That Act provides that state Medicaid
programs must allow Medicaid recipients to obtain care from
“any [provider] qualified to perform the service or services
required,” and that enrollment in a Medicaid managed-care
plan “shall not restrict the choice of the qualified [provider]
from whom the individual may receive” “family planning
services.” 42 U.S.C. §§ 1396a(a)(23) & 1396d(a)(4)(C). This
provision is known as the Act’s free-choice-of-provider
requirement. See Planned Parenthood of Ind. v. Comm’r of
the Ind. State Dep’t of Health, 699 F.3d 962, 968 (7th Cir.
2012).

    Finding that plaintiffs were likely to succeed on the merits
of their Medicaid Act claim and would be irreparably harmed
were the statute to become effective, the district court first
entered a preliminary injunction barring implementation of
the Arizona law while this lawsuit was pending. Arizona
appealed that injunction to this court. Meanwhile,
proceedings continued in the district court, with that court
ultimately holding that the Arizona law runs afoul of the
Medicaid Act’s free-choice-of-provider requirement and
granting summary judgment to the plaintiffs. To enforce that
judgment, the district court permanently enjoined Arizona
from enforcing the law against Medicaid providers. Arizona
again appealed.
6           PLANNED PARENTHOOD V. BETLACH

    The district court’s entry of final judgment and a
permanent injunction moots Arizona’s appeal of the
preliminary injunction. See Planned Parenthood of Cent. &
N. Ariz. v. Arizona, 718 F.2d 938, 949–50 (9th Cir. 1983);
SEC v. Mount Vernon Mem’l Park, 664 F.2d 1358, 1361–62
(9th Cir. 1982). We therefore dismiss that appeal (Case No.
12-17558), and consider here only Arizona’s appeal of the
summary judgment order and permanent injunction (Case No.
13-15506).

    For the reasons here summarized and further explained
below, we affirm. First, joining the only two other circuits
that have decided the issue, we hold that the Medicaid Act’s
free-choice-of-provider requirement confers a private right of
action under 42 U.S.C. § 1983. See Planned Parenthood of
Ind., 699 F.3d at 968; Harris v. Olszewski, 442 F.3d 456, 459
(6th Cir. 2006).

    Second, echoing the Seventh Circuit’s recent
determination with regard to a nearly identical Indiana law,
we hold that the Arizona statute contravenes the Medicaid
Act’s requirement that states give Medicaid recipients a free
choice of qualified provider. See 42 U.S.C. § 1396a(a)(23);
Planned Parenthood of Ind., 699 F.3d at 968. The Arizona
law violates this requirement by precluding Medicaid patients
from using medical providers concededly qualified to
perform family planning services to patients in Arizona
generally, solely on the basis that those providers separately
perform privately funded, legal abortions.
            PLANNED PARENTHOOD V. BETLACH                     7

                      BACKGROUND

   A. Medicaid and           the    Free-Choice-of-Provider
      Requirement

    Medicaid is a cooperative federal-state program to help
people of limited financial means obtain health care. Under
the program, the federal government provides funds to the
states, which the states then use (along with state funds) to
provide the care. See Nat’l Fed’n of Indep. Bus. v. Sebelius,
132 S. Ct. 2566, 2581 (2012). Each state designs,
implements, and manages its own Medicaid program, with
discretion as to “the proper mix of amount, scope, and
duration limitations on coverage.” Alexander v. Choate,
469 U.S. 287, 303 (1985). But that discretion has limits: To
receive Medicaid funding, states must comply with federal
criteria governing, among other matters, who is eligible for
care, what services must be provided, how reimbursement is
to be determined, and what range of choice Medicaid
recipients must be afforded in selecting their doctors. See
42 U.S.C. § 1396 et seq.; cf. Sebelius, 132 S. Ct. at 2581. If a
state Medicaid plan fails to conform to the statutory criteria,
the Secretary of Health and Human Services (“HHS”) may
withhold Medicaid funds from the state, either in whole or
part. See 42 U.S.C. § 1396c; cf. Sebelius, 132 S. Ct. at
2607–08 (holding portions of 42 U.S.C. § 1396c
unconstitutional but noting that “[n]othing in our opinion
precludes Congress from . . . requiring that States accepting
such [federal Medicaid] funds comply with the conditions on
their use”).

   At issue here is the provision of the Medicaid Act known
as the free-choice-of-provider requirement. See Planned
Parenthood of Ind., 699 F.3d at 968. That provision imposes
8           PLANNED PARENTHOOD V. BETLACH

two criteria upon state Medicaid plans: First, with some
exceptions, state plans must generally allow Medicaid
recipients to obtain care from any provider who is “qualified
to perform the service or services required” and “who
undertakes to provide . . . such services.” 42 U.S.C.
§ 1396a(a)(23)(A). Second, the provision adds an additional,
more specific layer of protection for patients seeking family
planning services, requiring that “enrollment of an individual
eligible for [Medicaid] in a primary care case-management
system . . . , a medicaid managed care organization, or a
similar entity shall not restrict the choice of the qualified
person from whom the individual may receive services under
section 1396d(a)(4)(C) of this title,” i.e., “family planning
services.” Id. §§ 1396a(a)(23)(B) & 1396d(a)(4)(C). Section
1396a(a)(23)(B) thus carves out and insulates family planning
services from limits that may otherwise apply under approved
state Medicaid plans, assuring covered patients an unfettered
choice of provider for family planning services.

    B. Arizona’s House Bill 2800

   In spring 2012, the Arizona legislature enacted House Bill
2800 (“HB 2800”), which provides:

       [Arizona] or any political subdivision of
       [Arizona] may not enter into a contract with
       or make a grant to any person that performs
       nonfederally qualified abortions or maintains
       or operates a facility where nonfederally
       qualified abortions are performed for the
       provision of family planning services.

2012 Ariz. Leg. Serv. Ch. 288 (H.B. 2800) (West) (codified
at Ariz. Rev. Stat. § 35-196.05(B)). HB 2800 defines a
              PLANNED PARENTHOOD V. BETLACH                            9

“nonfederally qualified abortion” as “an abortion that does
not meet the requirements for federal reimbursement under
title XIX of the social security act,” i.e., the requirements of
the Hyde Amendment, as applied to the Medicaid Act. Id.
§ 35-196.05(F)(4). See generally Harris v. McRae, 448 U.S.
297, 302–03 (1980) (explaining the background of the Hyde
Amendment). Under the Hyde Amendment — actually, a
rider that Congress attaches to each year’s appropriations
legislation — federal funds (including Medicaid funds) may
not be used to pay for abortions except in cases of danger to
the life of the mother, rape, or incest. See Consolidated
Appropriations Act, 2012, Pub. L. No. 112-74, §§ 613–14,
125 Stat. 786, 925–96 (2011).1

     C. Planned Parenthood’s Challenge to HB 2800

    Planned Parenthood of Arizona is a nonprofit network of
13 clinics that offer a range of family planning and
reproductive health services, including annual gynecological
exams, pap smears, testing and treatment for sexually
transmitted diseases, and contraceptive counseling. For those
services, Planned Parenthood has a longstanding provider
agreement with Arizona’s Medicaid program, known as the
Arizona Health Care Cost Containment System or
“AHCCCS” (pronounced “Access”). Together, Planned
Parenthood of Arizona clinics treat about 3,000 Medicaid

 1
  Arizona restricts the use of public funds for abortions except where an
abortion is necessary to save the life or health of the mother. See Ariz.
Rev. Stat. § 35-196.02.
10            PLANNED PARENTHOOD V. BETLACH

patients each year, for which the clinics receive about
$350,000 in payments.2

    In addition to the family planning and reproductive health
services described above, five of the 13 Planned Parenthood
clinics in Arizona also perform abortions. Except under the
narrow circumstances permitted by Arizona and federal law,
Planned Parenthood does not receive any public funds or
reimbursement for the abortions it performs.

    In summer 2012, Planned Parenthood received a letter,
sent by AHCCCS to all Arizona Medicaid providers,
concerning the implementation of HB 2800. The letter asked
Planned Parenthood to return a signed form attesting that, as
of August 2, 2012, it “[would] not perform any abortions . . .
or maintain or operate a facility where any abortion is
performed” except in cases of rape, incest, or medical
necessity. If Planned Parenthood did not return the signed
attestation by the deadline, the letter explained, AHCCCS
would “terminate [its] provider participation agreement” and
would no longer “reimburse [Planned Parenthood] for ANY
medical services.”

    Rather than sign and return the form, Planned Parenthood
and several individual plaintiffs filed suit to block HB 2800
from going into effect. The individual plaintiffs are three
Arizona women who, through Medicaid, receive family
planning services at the Planned Parenthood clinics in Yuma
and Flagstaff, and Dr. Eric Reuss, an obstetrician-

 2
   Planned Parenthood estimates that those reimbursements cover 55% of
the costs it incurs in providing Medicaid services. Arizona disputes this
estimate but does not provide an estimate of its own. This factual dispute
is not material to any of the legal issues in this case.
             PLANNED PARENTHOOD V. BETLACH                          11

gynecologist in private practice in Scottsdale, who, like
Planned Parenthood, has a Medicaid provider agreement with
AHCCCS.3 The initial complaint alleged that HB 2800
violates the Medicaid Act free-choice-of-provider
requirement as well as several constitutional provisions.
Finding that Planned Parenthood was likely to succeed on its
Medicaid Act claim, the district court granted a preliminary
injunction barring Arizona from implementing HB 2800
while the lawsuit was pending. Arizona timely appealed the
preliminary injunction to this court.

    Meanwhile, Planned Parenthood moved for summary
judgment solely on the Medicaid Act claim, which it
stipulated would fully resolve the case. In February 2013, the
district court granted summary judgment for Planned
Parenthood, holding that HB 2800 violates the Medicaid
Act’s free-choice-of-provider requirement. Under that
requirement, the district court explained, Arizona
unambiguously “lacks [the] authority” to “limit the range of
qualified Medicaid providers for reasons unrelated to a
provider’s ability to deliver Medicaid services.” Based on its
legal ruling, the district court permanently enjoined Arizona
from enforcing HB 2800 against plaintiffs, from
“disqualifying otherwise qualified providers from receiving
Medicaid reimbursement for medical services covered by
Medicaid on the basis that these providers provide otherwise
legal abortions,” and from “requiring providers to sign the
attestation form issued by [AHCCCS] in furtherance of [HB
2800] . . . [or] enforcing any previously signed attestation

  3
   We refer to the plaintiffs collectively as “Planned Parenthood.” The
named defendants are Tom Betlach, AHCCCS Director, and Tom Horne,
Arizona Attorney General. We refer to the defendants collectively as
“Arizona.”
12            PLANNED PARENTHOOD V. BETLACH

forms.” Arizona timely appealed to this court. We
consolidated the new appeal with Arizona’s already pending
preliminary injunction appeal.

                           DISCUSSION

      A. § 1396a(a)(23) Confers a § 1983 Right of Action

    There is an issue to be addressed at the threshold; whether
Planned Parenthood has pleaded a viable cause of action.
Planned Parenthood asserts a right of action for enforcement
of the Medicaid Act’s free-choice-of-provider requirement
under § 1983. Arizona objects, maintaining that the free-
choice-of-provider provision does not satisfy the requisites
for a § 1983 claim. Joining two of our sister circuits, we hold
that § 1396a(a)(23) may be enforced through individual
§ 1983 lawsuits. See Planned Parenthood of Ind., 699 F.3d at
968; Harris, 442 F.3d at 459.4

    Section 1983 creates a federal remedy against anyone
who, under color of state law, deprives “any citizen of the
United States . . . of any rights, privileges, or immunities
secured by the Constitution and laws.” 42 U.S.C. § 1983.
Section 1983 thus authorizes lawsuits “to enforce individual
rights under federal statutes,” not “‘the broader or vaguer
“benefits” or “interests”’” a federal statute may implicate.
City of Rancho Palos Verdes v. Abrams, 544 U.S. 113,

  4
    In addition, the Eleventh Circuit, in the course of deciding that the
Medicaid free-choice-of-provider provision does not create a private right
“enforceable by health care providers” on their own behalf, indicated that
“Medicaid recipients . . . have enforceable rights under [that provision].”
Silver v. Baggiano, 804 F.2d 1211, 1216–18 (11th Cir. 1986) (emphasis
added), abrogated on other grounds by Lapides v. Bd. of Regents of Univ.
Sys. of Ga., 535 U.S. 613 (2002).
            PLANNED PARENTHOOD V. BETLACH                    13

119–20 (2005) (emphasis added) (quoting Gonzaga Univ. v.
Doe, 536 U.S. 273, 283 (2002)).

    To determine whether a federal statutory provision creates
a private right enforceable under § 1983, we consider three
factors: First, “Congress must have intended that the
provision in question benefit the plaintiff”; second, the
plaintiff must have “demonstrate[d] that the right assertedly
protected . . . is not so ‘vague and amorphous’ that its
enforcement would strain judicial competence”; and third,
“the provision giving rise to the asserted right” must be
“couched in mandatory, rather than precatory, terms.”
Blessing v. Freestone, 520 U.S. 329, 340–41 (1997) (internal
citation and quotation marks omitted). If all three prongs are
satisfied, “the right is presumptively enforceable” through
§ 1983. Gonzaga, 536 U.S. at 284. The defendant may
overcome the presumption by demonstrating that Congress
foreclosed private enforcement expressly “or impliedly, by
creating a comprehensive enforcement scheme that is
incompatible with” individual private lawsuits. Id. at 284 n.4
(quoting Blessing, 520 U.S. at 341).

    That Congress intended the free-choice-of-provider
requirement to create an individual right is evident; Arizona
does not contend otherwise. The statutory language
unambiguously confers such a right upon Medicaid-eligible
patients, mandating that all state Medicaid plans provide that
“any 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.” 42 U.S.C. § 1396a(a)(23) (emphasis
added). “While express use of the term ‘individuals’ (or
‘persons’ or similar terms) is not essential to finding a right
for § 1983 purposes, usually such use is sufficient for that
14              PLANNED PARENTHOOD V. BETLACH

purpose.” Ball v. Rodgers, 492 F.3d 1094, 1108 (9th Cir.
2007); see also Gonzaga, 536 U.S. at 284 (pointing to
similarly individually focused language in Title VI of the
Civil Rights Act of 1964, 42 U.S.C. § 2000d, and Title IX of
the Education Amendments of 1972, 20 U.S.C. § 1681(a), as
prototypical examples of rights-creating language). The two
other federal circuits that have directly considered the
Medicaid free-choice-of-provider provision under the
Blessing/Gonzaga framework have agreed that it contains
rights-creating language sufficient to establish the first
Gonzaga requisite for a right enforceable under § 1983. See
Planned Parenthood of Ind., 699 F.3d at 974; Harris,
442 F.3d at 461.5

    Nor does Arizona question whether the statute is
“couched in mandatory, rather than precatory, terms,”
Blessing, 520 U.S. at 347, as it indubitably is. See 42 U.S.C.
§ 1396a(a) (“A State plan for medical assistance must—”).

    Arizona’s § 1983 challenge centers, instead, on the
“vague and amorphous” prong of the Blessing/Gonzaga
standard. See Blessing, 520 U.S. at 340–41. The concern
underlying this factor is that some statutory rights do not give
courts “meaningful instruction” for the resolution of
particular cases. Watson v. Weeks, 436 F.3d 1152, 1162 (9th
Cir. 2006). Where a provision “suppl[ies] concrete and
objective standards for enforcement,” that concern does not
arise. Id. at 1161. In the Medicaid Act context, a provision
will satisfy this prong of the Blessing/Gonzaga “right”
requirement if a state’s compliance with the provision can be
ascertained by reviewing “sources such as a state’s Medicaid

 5
     Harris was cited with approval by this court in Ball, 492 F.3d at 1109.
            PLANNED PARENTHOOD V. BETLACH                     15

plan, agency records and documents, and the testimony of
Medicaid recipients and providers.” Ball, 492 F.3d at 1115.

    The free-choice-of-provider requirement does “supply
concrete and objective standards for enforcement.” Watson,
436 F.3d at 1161. The provision specifies that any individual
Medicaid recipient is free to choose any provider so long as
two criteria are met: (1) the provider is “qualified to perform
the service or services required,” and (2) the provider
“undertakes to provide [the recipient] such services.”
42 U.S.C. § 1396a(23)(A). These are objective criteria, well
within judicial competence to apply. The second criterion
raises a simple factual question no different from those courts
decide every day. For example, a doctor could establish that
requisite by submitting a declaration or sworn testimony that
she is willing to provide Medicaid patients with the service in
question. The first criterion, whether the doctor is qualified to
do so, may require more factual development or expert input,
but still falls well within the range of judicial competence.
The requirement could be established, for example, by a
combination of evidence as to the medical licenses the doctor
holds and evidence as to the licenses necessary under state
law to perform family planning services. Together, the two
criteria do not require courts to engage in any balancing of
competing concerns or subjective policy judgments, but only
to answer factual, yes-or-no questions: Was an individual
denied the choice of a (1) qualified and (2) willing provider?
The answer to these questions is “likely to be readily
apparent.” Harris, 442 F.3d at 462.

    Arizona contends otherwise, seizing on the statutory term
“qualified” as “too vague for the court to enforce.” We
disagree.
16            PLANNED PARENTHOOD V. BETLACH

    Watson held that a provision requiring states to set
“reasonable [eligibility] standards” was too vague for judicial
enforcement because the provision did not tie
“reasonableness” to any objective standard. 436 F.3d at 1162
(citation and quotation marks omitted) (emphasis added). By
contrast, the statutory term here, “qualified,” is tethered to an
objective benchmark: “qualified to perform the service or
services required.” 42 U.S.C. § 1396a(a)(23)(A) (emphasis
added). A court can readily determine whether a particular
health care provider is qualified to perform a particular
medical service, drawing on evidence such as descriptions of
the service required; state licensing requirements; the
provider’s credentials, licenses, and experience; and expert
testimony regarding the appropriate credentials for providing
the service. This standard is not subjective or amorphous, and
requires no balancing.6 It is no different from the sorts of
qualification or expertise assessments that courts routinely
make in various contexts.

     6
     Arizona also argues that the right is too vague to be judicially
enforceable because “it would be a usurpation of [Arizona’s] delegated
power [to define provider qualifications under state law] for a court to
second-guess Arizona’s determination.” This argument is inapposite to the
second Blessing prong, which asks only whether the provision in question
provides adequate guidance for judicial application, not whether the right
that the provision confers impinges upon any other concerns,
constitutional or otherwise. Whether the Medicaid Act’s free-choice-of-
provider provision impermissibly interferes with state police powers goes
to the merits of an action brought under the provision, not whether the
provision supports a right of action under § 1983. In any event, Arizona’s
argument lacks merit. A court applying the free-choice-of-provider
provision in a § 1983 case does not usurp a state’s authority to set medical
qualifications; instead, it defers to and applies the state’s own
determination of appropriate qualifications for the services provided.
              PLANNED PARENTHOOD V. BETLACH                          17

    In light of the foregoing analysis, we hold that Medicaid
beneficiaries enjoy an unambiguously conferred individual
right to a free choice of provider under § 1396a(a)(23).
Arizona makes no attempt to demonstrate that Congress has
expressly or impliedly foreclosed § 1983 remedies for this
right, nor would any such attempt succeed. See Ball, 492 F.3d
at 1116–17. Medicaid’s free-choice-of-provider requirement
therefore creates a right that may be enforced under § 1983.

      B. HB 2800 Violates § 1396a(a)(23)

    We now turn to the merits of the case: whether HB 2800,
as applied in the context of Arizona’s Medicaid program,
violates the Medicaid Act’s free-choice-of-provider
requirement.7

    1. We begin, as always, with the “cardinal canon” of
statutory construction: Congress “says in a statute what it
means and means in a statute what it says there.” Conn. Nat’l
Bank v. Germain, 503 U.S. 249, 253–54 (1992). “In
determining the scope of a statute,” we “giv[e] the words
used their ordinary meaning,” Moskal v. United States,
498 U.S. 103, 108 (1990) (internal quotation marks and
citation omitted), unless Congress has directed us to do
otherwise.

  7
     This case only concerns HB 2800’s application in the context of
withholding Medicaid reimbursement. We express no opinion on HB
2800’s validity as applied in the context of state programs not governed
by the Medicaid Act.
18          PLANNED PARENTHOOD V. BETLACH

     The relevant Medicaid provision states:

        A State plan for medical assistance must . . .
        provide that (A) any 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,
        and (B) an enrollment of an individual eligible
        for medical assistance in a primary care case-
        management system . . . , a medicaid managed
        care organization, or a similar entity shall not
        restrict the choice of the qualified person from
        whom the individual may receive [family
        planning services] . . . .

42 U.S.C. §§ 1396a(a)(23) (emphasis added). “‘[A]ny means
all” except to the extent that “Congress . . . add[s] language
limiting the breadth of that word.” Merritt v. Dillard Paper
Co., 120 F.3d 1181, 1186 (11th Cir. 1997) (internal quotation
marks and citation omitted). So a state Medicaid plan must
allow any given Medicaid recipient to seek family planning
care from any and all providers, subject only to two
limitations: (1) the provider is “qualified to perform the
service or services required” and (2) the provider “undertakes
to provide [the patient] such services.” We agree with the
Seventh Circuit that “[r]ead in context, the term ‘qualified’ as
used in § 1396a(a)(23) unambiguously relates to a provider’s
. . . . capab[ility] of performing the needed medical services
in a professionally competent, safe, legal, and ethical
manner.” Planned Parenthood of Ind., 699 F.3d at 978. Our
reasons for so concluding are several.
            PLANNED PARENTHOOD V. BETLACH                    19

     First, the term “qualified” is not specially defined within
the Medicaid Act. We therefore read that term, as it appears
in § 1396a(a)(23), as conveying its ordinary meaning, which
is: “having an officially recognized qualification to practice
as a member of a particular profession; fit, competent.”
Oxford English Dictionary (3d ed. 2007); see also Black’s
Law Dictionary (9th ed. 2009) (“[p]ossessing the necessary
qualifications; capable or competent”). And, as the overall
context of the Medicaid Act is the provision of medical
services, the pertinent professions which providers must be
“qualified” to practice are the various medical professions.

      Second, were there any doubt as to how we should read
the word “qualified” in § 1396a(a)(23), Congress removed it
by adding the further specification “qualified to perform the
service or services required.” 42 U.S.C. § 1396a(a)(23)(A)
(emphasis added). We must “give effect, if possible, to every
. . . word of a statute.” United States v. Menasche, 348 U.S.
528, 538–39 (1955) (internal quotation marks omitted). Here,
the words “to perform the service or services required”
modify the adjective “qualified,” telling us that Congress
meant for that adjective not to refer to a Medicaid Act-
specific authorization, but to denote the capability to carry
out a particular activity — “perform[ing] the [medical]
service” that a given Medicaid recipient requires. The
provision thus indexes the relevant “qualifications” not to any
Medicaid-specific criteria (whether imposed by the federal
government or the states), but to factors external to the
Medicaid program; the provider’s competency and
professional standing as a medical provider generally. The
verb “perform” here is key: It confirms that the relevant
question is not whether the provider is qualified in some
sense specific to Medicaid patients, but simply whether the
provider is qualified in a general sense to perform, i.e., carry
20          PLANNED PARENTHOOD V. BETLACH

out, the service in question, whether for Medicaid patients or
for any other patients. See “perform,” Oxford English
Dictionary (9th ed. 2009) (I.1.a: “to carry out in action,
execute, or fulfil”; I.2.b: “To do, carry out, execute, or
accomplish . . . an action, operation, process, function . . .”).

    Arizona urges us to read § 1396a(a)(23) as having the
opposite meaning from the one we ascribe to it: Rather than
guaranteeing patient choice, Arizona contends in its briefs,
the provision empowers states to restrict patient choice to a
limited list of providers “for any reason supplied by State
law.” Arizona’s argument hinges on construing the statutory
term “qualified” not according to its ordinary meaning, but
instead as a Medicaid-specific term of art conferring upon the
states plenary authority to withhold Medicaid funds on any
policy grounds they prefer to pursue. Under Arizona’s
reading, states can determine for any reason that a provider is
not qualified for Medicaid purposes, even if the provider is
otherwise legally qualified, through training and licensure, to
provide the requisite medical services within the state.

    There are three fatal flaws with Arizona’s reading of the
statute. The first, to restate the obvious, is that “[i]n
determining the scope of a statute,” we do “giv[e] the words
used their ordinary meaning,” Moskal, 498 U.S. at 108
(internal citation and quotation marks omitted), unless the
statute directs us to do otherwise. As a court, “we are not
vested with the power to rewrite” the Medicaid Act, “but
rather must construe what Congress has written.” See Ariz.
State Bd. of Educ. for Charter Sch. v. U.S. Dep’t of Educ.,
464 F.3d 1003, 1007 (9th Cir. 2006) (internal quotation marks
omitted). Nowhere in the Medicaid Act has Congress given
a special definition to “qualified,” much less indicated that
            PLANNED PARENTHOOD V. BETLACH                   21

each state is free to define this term for purposes of its own
Medicaid program however it sees fit.

    Second, as a court, we have a “duty to give effect, if
possible, to every . . . word of a statute.” Menasche, 348 U.S.
at 538–39 (internal quotation marks omitted); see also United
States v. LKAV, 712 F.3d 436, 440 (9th Cir. 2013). “It is for
us to ascertain — neither to add nor to subtract, neither to
delete nor to distort.” Ariz. State Bd., 464 F.3d at 1007
(quoting 62 Cases, More or Less, Each Containing Six Jars
of Jam v. United States, 340 U.S. 593, 596 (1951)). Arizona’s
reading detaches the word “qualified” from the phrase in
which it is embedded; “qualified to perform the service or
services required” (and from the overall context of the
Medicaid statute, which governs medical services).

     Additionally, “[w]e must avoid an interpretation that
would produce absurd results.” LKAV, 712 F.3d at 444
(internal quotation marks omitted). Read as Arizona suggests,
the free-choice-of-provider requirement would be self-
eviscerating. “If the states are free to set any qualifications
they want — no matter how unrelated to the provider’s fitness
to treat Medicaid patients — then the free-choice-of-provider
requirement could be easily undermined by simply labeling
any exclusionary rule as a ‘qualification.’” Planned
Parenthood of Ind., 699 F.3d at 978.

    For instance, were Arizona free to define “qualified” for
§ 1396a(a)(23) purposes to mean doctors who do not perform
elective abortions, then another state might be equally free to
extend Medicaid funds only to doctors who do perform such
abortions. If a state wished to interpret “qualified” to mean
only osteopaths (or only M.D.’s), or only non-smokers (or
only smokers), or only affiliates of the state university
22          PLANNED PARENTHOOD V. BETLACH

medical school, on the grounds that only doctors within that
category are worthy of receiving Medicaid funds, then, on
Arizona’s reading of § 1396a(a)(23), it would be free to do
so. Giving the word “qualified” such an expansive meaning
would deprive the provision within which it appears of any
legal force. Moreover, that interpretation would permit states
freely to erect barriers to Medicaid patients’ access to family
planning medical providers others in the state are free to use.
Such a result would eliminate “the broad access to medical
care that § 1396a(a)(23) is meant to preserve.” Planned
Parenthood of Ind., 699 F.3d at 978. “When a natural reading
of [a statute] leads to a rational, common-sense result, an
alteration of meaning is not only unnecessary, but also
extrajudicial.” Ariz. State Bd., 464 F.3d at 1008.

     Finally, the free-choice-of-provider provision appears in
a list of mandatory requirements that apply to all state
Medicaid plans. On Arizona’s reading, however, the free-
choice-of-provider provision does not set any requirement at
all for state plans. Instead, it permits states self-referentially
to impose for Medicaid purposes whatever standards for
provider participation it wishes.

    For all these reasons, the free-choice-of-provider
provision unambiguously requires that states participating in
the Medicaid program allow covered patients to choose
among the family planning medical practitioners they could
use were they paying out of their own pockets.

    2. While we could perhaps stop there, we recognize that
“a section of a statute should not be read in isolation from the
context of the whole Act.” Richards v. United States,
369 U.S. 1, 11 (1962). Taking that broader approach, we
conclude that our reading of § 1396a(a)(23) is bolstered
            PLANNED PARENTHOOD V. BETLACH                   23

rather than undermined by considering its statutory context.
Even if the word “qualified” within the free-choice-of-
provider requirement were ambiguous in isolation — which,
for all the reasons we have surveyed, it is not — it would lose
all trappings of ambiguity when considered within the
Medicaid Act as a whole.

     Elsewhere in the Act, Congress has enumerated specific
circumstances under which the HHS Secretary may waive a
state’s compliance with the free-choice-of-provider
requirement enunciated in § 1396a(a)(23). For example,
§ 1396n(b) authorizes the HHS Secretary to grant “[w]aivers
to promote cost-effectiveness and efficiency.” Under that
subsection, the Secretary may waive the free-choice-of-
provider requirement so that a state may implement a
managed-care system, 42 U.S.C. § 1396n(b)(1), or limit
Medicaid recipients’ choice of providers to those “who meet,
accept, and comply with [state] reimbursement, quality, and
utilization standards,” id. § 1396n(b)(4). As another example,
§ 1315 authorizes the Secretary to waive the free-choice-of-
provider requirement to the extent necessary for a state to
carry out an approved “demonstration project.” Id.
§§ 1315(a)–(a)(1).

    If Arizona’s reading of § 1323a(a)(23) were correct, these
waiver provisions would be unnecessary. After all, it is
Arizona’s position that states can preclude Medicaid
beneficiaries from choosing otherwise appropriate service
providers by defining certain classes of providers as
“unqualified,” for § 1323a(a)(23) purposes, “for any reason
supplied by State law.” If that were so, then states would not
need to go to the trouble of requesting waivers of
§ 1323a(a)(23) from HHS to implement managed-care
systems or hold providers to state efficiency standards. They
24            PLANNED PARENTHOOD V. BETLACH

could simply define all non-preferred providers as
“unqualified” for the purposes of § 1323a(a)(23).

    Arizona agrees that we must read § 1396a(a)(23) within
its statutory context, but points instead to a different
provision of the Medicaid Act, the authority-to-exclude
provision at § 1396a(p)(1). That component of the Act
provides:

        In addition to any other authority, a State may
        exclude any individual or entity for purposes
        of participating under the State plan . . . for
        any reason for which the Secretary could
        exclude the individual or entity . . . under
        section 1320a-7, 1320a-7a, or 1395cc(b)(2) of
        this title.

42 U.S.C. § 1396a(p)(1). Arizona reads the phrase “[i]n
addition to any other authority” to mean that states have
plenary authority to exclude providers from their Medicaid
plans. Just as Indiana did in defending its similar law,
Arizona “reads the phrase for more than it’s worth.” Planned
Parenthood of Ind., 699 F.3d at 979. This standard savings
clause “signals only that what follows is a non-exclusive list”
and “does not imply that the states have an unlimited
authority to exclude providers for any reason whatsoever.”
Id.8

  8
    Arizona also cites the regulation implementing § 1396a(p)(1). That
regulation provides, “Nothing contained in this part should be construed
to limit a State’s own authority to exclude an individual or entity from
Medicaid for any reason or period authorized by State law.” 42 C.F.R.
§ 1002.2 (emphasis added). That provision is only a limitation on
interpretation of the referenced “part” of the regulations — Title 42,
Chapter V, Subchapter B, Part 1002 — which does not encompass the
              PLANNED PARENTHOOD V. BETLACH                            25

    Moreover, to the extent that § 1396a(p)(1) sheds light on
§ 1396a(a)(23), it does so in a way that undermines, rather
than aids, Arizona’s argument. The language refers to “any
other authority” (emphasis added), followed by a provision
providing states with authority to exclude providers on
specified grounds. This sequence indicates that the Medicaid
Act itself must provide that “other” authority, just as it
supplies the “authority” covered by the rest of the subsection.
Were it otherwise — were states free to exclude providers as
they see fit — then the bulk of § 1396a(p)(1) itself would be
unnecessary, as the “authority” it supplies would be
superfluous.

    Further, the bases for excluding a provider from a state
Medicaid plan cross-referenced by § 1396a(p)(1) all refer to
“various forms of malfeasance such as fraud, drug crimes,
and failure to disclose necessary information to regulators.”
Planned Parenthood of Ind., 699 F.3d at 979. Read in
context, the § 1396a(p)(1) savings clause empowers states to
exclude individual providers on such grounds directly,
without waiting for the Secretary to act, while also
reaffirming state authority to exclude individual providers
pursuant to analogous state law provisions relating to fraud or
misconduct. It does not suggest that states may categorically
exclude a class of providers on grounds unrelated to medical
competency or legal and ethical propriety.

   3. Both § 1396a(a)(23) itself and other provisions of the
Medicaid Act admit of some exceptions to the free-choice-of-
provider rule, but none apply to this case.

free-choice-of-provider requirement. See 42 C.F.R. § 1002.1 (listing
statutory provisions providing authority for the regulations in Part 1002).
26          PLANNED PARENTHOOD V. BETLACH

    First, various provisions of the Medicaid Act allow states,
as Arizona has done, to seek permission from HHS to limit
recipients’ choice to the extent necessary to implement cost-
effectiveness standards or a demonstration project, see, e.g.,
42 U.S.C. § 1315 (describing waivers for demonstration
projects); § 1396n(b) (describing waivers for efficiency), or,
without a waiver, to exercise a statutory option to implement
a managed-care system for Medicaid recipients, see id.
§ 1396u-2(a). These exceptions have no bearing on this case.
Even if a state otherwise exercises its option to implement a
managed-care system, § 1396a(a)(23)(B) makes clear that as
to family planning services, state Medicaid plans must afford
recipients the full range of free choice of provider. Similarly,
efficiency waivers provided under § 1396n may never be
used to “restrict the choice of the individual in receiving
[family planning services].” Id. §§ 1396n(b), 1396d(a)(4)(C).
And while Arizona’s waiver is pursuant to § 1315, for
demonstration projects — a type of waiver that can perhaps
extend to family planning services if the Secretary so
provides — the Secretary has not so provided for Arizona.
Rather, as the district court determined, Arizona’s waiver
extends to the general free choice guarantee in
§ 1396a(a)(23)(A) only to the extent necessary to enroll
recipients in managed care, and does not extend at all to the
family planning services guarantee in § 1396a(a)(23)(B).

    Second, § 1396a(a)(23) itself enumerates several
exceptions to its scope. For example, it does not apply in
Puerto Rico, Guam, or the Virgin Islands, nor does it interfere
with states’ separate statutory authority to subject new
providers to a temporary moratorium under § 1396a(kk)(4).
See id. § 1396a(a)(23)(B). The provision also specifies that it
shall not be construed to require states to allow persons or
entities “convicted of a felony . . . for an offense . . .
            PLANNED PARENTHOOD V. BETLACH                     27

inconsistent with the best interests of beneficiaries” to
participate in their Medicaid programs. Id. Again, none of
these exceptions apply here; Arizona is not a territory exempt
from the requirement, plaintiffs are not new providers being
excluded pursuant to a temporary moratorium, and Arizona
does not contend that any of the plaintiffs have been
convicted of felonies.

    Finally, several provisions of the Medicaid Act in
addition to § 1396a(p)(1) recognize both federal and state
authority to exclude individual providers from public health
care programs on grounds related to fraud, patient abuse,
criminal activity, improper billing or record-keeping, and the
like. The Secretary is required to exclude providers convicted
of certain crimes related to health care fraud, patient abuse, or
controlled substances, see 42 U.S.C. § 1320a-7(a), and is also
permitted to exclude providers for certain other enumerated
reasons, including certain types of convictions, license
revocations, failures to disclose, false representations, and
defaults on loans, see id. § 1320a-7(b); see also id.
§ 1395cc(b)(2) (listing grounds on which Secretary may
refuse to enter into or terminate a provider agreement).
Another provision, the authority-to-exclude provision
mentioned above, empowers states to exclude providers on
any of these same grounds. Id. § 1396a(p)(1). Again, these
exceptions do not apply here. HB 2800 does not set out
grounds for excluding individual providers from Arizona’s
Medicaid program demonstrated to have engaged in some
type of criminal, fraudulent, abusive, or otherwise improper
behavior. Rather, it preemptively bars a class of providers on
the ground that their scope of practice includes certain
perfectly legal medical procedures.
28          PLANNED PARENTHOOD V. BETLACH

    For the same reason, none of the cases cited by Arizona
in which courts have upheld the exclusion of particular
providers from state Medicaid programs supports the
proposition that states may exclude classes of providers from
their Medicaid programs because of legislative disapproval of
those providers’ scope of services.

    Guzman v. Shewry, 552 F.3d 941 (9th Cir. 2009),
affirmed the denial of a preliminary injunction to a physician
suspended from California’s Medicaid program because he
was the subject of a fraud investigation, pursuant to a state
law requiring the temporary suspension of any provider under
such an investigation. Id. at 950 (citing Cal. Welf. & Inst.
Code § 14043.36(a)). In affirming the district court’s denial
of the injunction, Guzman held only that the Medicaid Act
does not preempt state laws providing for suspension of
providers in cases of possible fraud or abuse, as well as for
other reasons having to do with “professional competence,
professional performance, or financial integrity.” Id. at 949
(quoting 42 U.S.C. § 1320a-7(b)(5)). Guzman did not address
the free-choice-of-provider provision, and its holding is fully
consistent with ours, as the Arizona statute here challenged
restricts provider participation on none of the bases
mentioned in Guzman.

    Similarly, Plaza Health Laboratories, Inc. v. Perales,
878 F.2d 577 (2d Cir. 1989), affirmed the denial of a
preliminary injunction to a medical laboratory challenging its
suspension from the New York Medicaid program because it
was subject to a felony indictment in New Jersey for dumping
hazardous waste. A New York state law authorized the
suspension of any provider indicted for “an act which would
be a felony under the laws of New York.” Id. at 579 (quoting
N.Y. Comp. Codes R. & Regs. tit. 18, § 515.7(b) (1988)).
              PLANNED PARENTHOOD V. BETLACH                             29

Arizona reads Plaza Health to mean that states have “plenary
. . . authority” to disqualify providers from Medicaid “for
many reasons that advance State law and policy,” such as a
state policy against “engaging in industrial pollution.” But the
medical lab in Plaza Health was not categorically disqualified
from New York’s Medicaid program because of a generic
policy disfavoring pollution; it was individually excluded
because it had been indicted for a felony. No one questions
Arizona’s authority to exclude individual providers from its
Medicaid program on the basis of criminal or fraudulent
activity. Rather, Arizona seeks with HB 2800 to bar a class of
providers from Medicaid not because of misconduct by
particular providers, but because of blanket disapproval of
those providers’ legal scope of services.9

 9
   Arizona also relies on First Medical Health Plan, Inc. v. Vega-Ramos,
479 F.3d 46, 53 (1st Cir. 2007), which upheld the exclusion of a provider
from Puerto Rico’s Medicaid program on the basis of a Puerto Rico law
against self-dealing. Puerto Rico is exempt from the free-choice-of-
provider requirement, see 42 U.S.C. § 1396a(a)(23)(B), so Vega-Ramos
has no bearing on the Medicaid Act’s applicability in states subject to that
requirement.

     In addition, Arizona invokes Kelly Kare, Ltd. v. O’Rourke, 930 F.2d
170 (2d Cir. 1991). Kelly Kare held that the free-choice-of-provider
requirement does not give individual Medicaid recipients a liberty or
property interest in continued care from a particular provider, so that a
provider can therefore be excluded without due process for the recipients.
Id. at 177–78. Here, the question is not the procedures due patients but the
substantive protections provided by the statute. Cf. Planned Parenthood
of Ind., 699 F.3d at 977.

    Finally, Arizona cites Triant v. Perales, 112 A.D.2d 548, 548 (N.Y.
App. Div. 1985), in which an intermediate New York state court upheld
a physician’s exclusion from the New York Medicaid program because of
“completely and utterly deficient” record-keeping, pursuant to a state
regulation requiring Medicaid providers to maintain adequate records.
30            PLANNED PARENTHOOD V. BETLACH

    4. Arizona makes three final arguments in defense of HB
2800. First, Arizona contends that HB 2800 “does not offend”
the free-choice-of-provider requirement because Planned
Parenthood “remains able to create a separate entity to
provide nonfederally qualified abortion services . . . and
thereby remain eligible to provide Medicaid family planning
services.” Even assuming Arizona’s separate entity
interpretation of HB 2800 is viable — which is far from clear
to us10 — the separate entity argument is irrelevant. The
Medicaid Act’s free-choice-of-provider requirement does not
include an exception allowing states to violate it so long as
providers can spin off affiliates.

    Second, Arizona argues that “implementation of [HB
2800] would result only in an incidental loss of family
planning services” because Arizona has “approximately 2,000
Medicaid providers” of family planning services in addition
to Planned Parenthood. Even if true — which Planned
Parenthood contests — this fact is immaterial to whether HB
2800 violates the free-choice-of-provider requirement. As the
Seventh Circuit noted in rejecting a similar argument made
by Indiana, the free-choice-of-provider requirement “does not
simply bar the states from ending all choice of providers, it
guarantees to every Medicaid beneficiary the right to choose
any qualified provider.” Planned Parenthood of Ind.,
699 F.3d at 979. There is no exception to the free-choice-of-

Triant rested solely on New York state law and did not consider its
interaction with the federal Medicaid Act.
  10
     The most natural reading of the Arizona statute precludes Planned
Parenthood from providing Medicaid-covered family planning services in
clinics it “maintains or operates” if abortions are provided there, whether
by itself or by separate entities. See Ariz. Rev. Stat. § 35-196.05(B).
            PLANNED PARENTHOOD V. BETLACH                    31

provider requirement for “incidental” burdens on patient
choice.

    Finally, Arizona invokes the Tenth Amendment, urging
this court to respect its “sovereign police power authority to
regulate the health and welfare of its citizens.” Whatever the
scope of Arizona’s Tenth Amendment powers to regulate
health care, this case does not implicate them. Nothing in
either the Medicaid Act’s free-choice-of-provider
requirement or the district court’s order casts any doubt on
Arizona’s authority to regulate the practice of medicine
within its borders. HB 2800 is a public funding statute,
conditioning the receipt of state monies on the range of
services that a health care provider offers; it does not have
any effect on whether a provider is authorized to practice
medicine in Arizona.

    To the contrary, HB 2800’s purpose is to exclude
concededly qualified medical providers from eligibility for
public funds unless they decline to perform elective
abortions. Arizona has never claimed that Planned
Parenthood’s staff doctors are unqualified to perform
gynecological exams or STD testing. Quite the opposite; the
HB 2800 implementation letter made clear that if Planned
Parenthood agreed to stop performing privately funded,
elective abortions, it could continue providing all of its other
services at public expense.

    5. The parties have directed the court’s attention to
various agency interpretations of § 1396a(a)(23). Because
“the term ‘qualified’ as used in § 1396a(a)(23)
unambiguously refers to the provider’s fitness to render the
medical services required,” Planned Parenthood of Ind.,
699 F.3d at 980, we need not and do not consider those
32          PLANNED PARENTHOOD V. BETLACH

interpretations. “If the intent of Congress is clear, that is the
end of the matter; for the court, as well as the agency, must
give effect to the unambiguously expressed intent of
Congress.” Chevron, U.S.A., Inc. v. Natural Res. Def.
Council, Inc., 467 U.S. 837, 842–43 (1984).

                       CONCLUSION

    For the reasons explained above, the district court’s
summary judgment order and permanent injunction (Case No.
13-15506) are AFFIRMED. Arizona’s appeal of the
preliminary injunction (Case No. 12-17558) is DISMISSED
as moot.