Judge rejects Planned Parenthood's bid to stay in Medicaid, affecting thousands of low-income Texans

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Low-income patients will no longer be able to use Medicaid to get nonabortion health services at Planned Parenthood, after a Wednesday court decision said Texas can move forward with kicking the health provider out of its Medicaid program.

The decision takes effect Thursday, and leaves thousands of patients with "few places to turn," Planned Parenthood said.

The decision is the latest in Texas officials’ yearslong effort to cut off Medicaid funding to Planned Parenthood. The 5th U.S. Circuit Court of Appeals sided with the state last year and health officials told Planned Parenthood's Medicaid patients they had until early February to find new doctors. But the health provider filed an emergency lawsuit saying the state had not followed the proper procedures.

A state district judge granted a temporary restraining order on Feb. 3, delaying the state from kicking Planned Parenthood out of Medicaid. That was extended in late-February, after a winter storm and crippling power outages slowed court proceedings. Medicaid is the joint federal-state health insurance program for the poor. Planned Parenthood provided health services like contraceptives, cancer screenings and treatments for sexually transmitted infections to more than 8,000 patients in the program in 2019.

At a Feb. 24 hearing, the central question was whether Texas officials gave Planned Parenthood a notice of termination after the 5th Circuit’s ruling — which would open the door for Planned Parenthood to protest and appeal the decision. Lawyers for the health provider said they got another notice and want to avail themselves of their right to contest the termination in an administrative hearing.

But a lawyer for the state said Planned Parenthood was given a notice of termination back in 2016 and that there’s only been more informal communication — meant just to discuss next steps — this year. Planned Parenthood could have asked to appeal the termination in an administrative hearing back then but instead decided to fight it out in court.

“The law says you have 15 days to request an administrative hearing. Their 15 days came and went. They did not request [an] administrative hearing,” said Benjamin Walton, a lawyer representing the state. “So as a matter of law, their termination was effective. There is no law requiring a re-notice, a reissuance of notice at any point in time.”

Judge Lora Livingston sided with the state Wednesday, saying evidence did not support the notion that the state had withdrawn or abandoned its previous termination notice. Planned Parenthood turned to the federal courts to "contest the merits of their claims, and they are now not able to revive their administrative remedies as the deadline to seek that relief has long since passed," Livingston wrote. "The merits of their claims must be determined by the federal courts."

But she said the "facts underlying the termination in this case give me great pause" and that the "motives and merits of the termination of essential health services are hotly contested."

The allegations "could not be more serious," she wrote. "For example, it is alleged that the state sought the terminations for purely political motives and without regard for the health and safety of the patients served by these medical providers.”

The state’s Medicaid program has among the lowest income requirements nationwide, excluding nearly all Texas adults except those who are pregnant, have a disability or are parents living below the poverty line. A single woman with two kids would have to make $230 a month or less to qualify.

Planned Parenthood has said it plays a large role in serving Medicaid patients, many of whom are Black or Latino — groups that have been disproportionately killed by the virus. It and other health providers have saidthere is a shortage of doctors who take Medicaid, due in part to the low reimbursement rates.

Jeffrey Hons, the head of Planned Parenthood South Texas, said the network of Medicaid providers is “not robust.” Medicaid dollars has made up about 10% of the South Texas clinics’ revenue and patients, and the effect of losing that would be a blow to the organization’s operations and deprive patients of seeing doctors with whom they’d developed long standing relationships, he said.

Texas “doesn’t care about what happens to the low-income folks, the folks who cannot afford to go to other places, that don’t have insurance, that need to have this kind of care,” Thomas Watkins, a lawyer representing the Planned Parenthood clinics, said at the hearing.

The 2016 notice of termination never took effect, he said; Planned Parenthood has continued to treat Medicaid patients.

State officials have long sought to remove Planned Parenthood as a Medicaid provider in Texas, citing an undercover video that suggested abortion providers at Planned Parenthood illegally sold fetal tissue for profit. Investigations of the video were unable to verify its claims, but state Attorney General Ken Paxton has asserted the conduct amounted to “morally bankrupt and unlawful” behavior. Planned Parenthood has donated fetal tissue for research, which is legal.

A lower court blocked the state from cutting off Medicaid funding to Planned Parenthood in 2017. But the politically conservative 5th Circuit ruled that people enrolled in Medicaid don’t have the right to contest how states determine what providers are qualified to be in the program.

Livingston, in her Wednesday decision, said Texas' justification for booting Planned Parenthood has been "attacked and there is some evidence that the justification is faulty as it is apparently based solely on a series of discredited and debunked videos." That issue was not before her in state court, she wrote.

Abbott, in a tweet deemed “false” by Politifact, has said “innocent lives will be saved” by ending taxpayer funding of Planned Parenthood. Proponents of cutting off the Medicaid funds have suggested the money indirectly supports abortion.

Medical providers like Planned Parenthood cannot use federal dollars to pay for abortions, except in the limited cases of rape, incest or life endangerment. Of 40 Planned Parenthood clinics in Texas, nine are licensed to perform abortions and virtually all of those were paid for by patients or third parties last year, according to PolitiFact.

Planned Parenthood has said it uses Medicaid funds to pay for services like contraception, breast and cervical cancer screenings and sexually transmitted disease testing.

In a statement after the decision was released, Dyana Limon-Mercado, executive director of Planned Parenthood Texas Votes, said "Gov. Abbott is focused on taking away health care access for the most vulnerable Texans."

"The 8,000 Planned Parenthood patients who rely on Medicaid should be able to access care at the provider they know and trust. Without access to the comprehensive sexual and reproductive health care Planned Parenthood provides, thousands of lives are now at even greater risk," she said.

Disclosure: Planned Parenthood has been a financial supporter of The Texas Tribune, a nonprofit, nonpartisan news organization that is funded in part by donations from members, foundations and corporate sponsors. Financial supporters play no role in the Tribune's journalism. Find a complete list of them here.