U.S. Supreme Court To Decide Whether Medicaid Recipients Have Right To Choose Provider in Ongoing Court Battle To Restrict Funding To Abortion Clinics

The U.S. Supreme Court agreed to hear South Carolina’s challenge to the Fourth Circuit’s decision blocking South Carolina’s Medicaid program from ending its provider agreement with Planned Parenthood.

The dispute arises from an executive order issued by South Carolina’s Governor Henry D. McMaster in an effort to block funding to Planned Parenthood. The executive order directed the South Carolina Department of Health and Human Services to deem all abortion clinics, including Planned Parenthood clinics, as unqualified providers to prevent them from participating in Medicaid. Earlier this year, the Fourth Circuit upheld a permanent injunction issued by the District Court enjoining South Carolina from terminating Planned Parenthood South Atlantic, located in Charleston, South Carolina, from Medicaid, preserving Planned Parenthood’s ability to accept Medicaid in South Carolina.

South Carolina, represented by the conservative Christian advocacy group Alliance Defending Freedom, asked the high court to consider whether Medicaid “unambiguously confers a private right upon a Medicaid beneficiary to choose a specific provider” and, more broadly, to define “the scope of a Medicaid beneficiary’s alleged right to choose a provider that a state has deemed disqualified.” The Supreme Court declined to address the latter question but agreed to determine whether a Medicaid beneficiary has a privately enforceable right to challenge a state’s determination that a provider is unqualified, as South Carolina has sought to do here.

Federal law prohibits Medicaid from paying for abortions, but the purpose of the executive order was clear: to prevent funding to clinics that provide abortions, regardless of the other services provided by those clinics, calling “payment of taxpayer funds to abortion clinics, for any purpose,” a “subsidy of abortion.” The Fourth Circuit, however, reminded the State in its decision that the case was “not about funding or providing abortions,” rather, it was “and always has been, about whether Congress conferred an individually enforceable right for Medicaid beneficiaries to freely choose their healthcare provider.” The Fourth Circuit went on to emphasize the importance of protecting access to Planned Parenthood and other, similar clinics, because it “means preserving an affordable choice and quality of care for an untold number of mothers and infants in South Carolina,” noting that “if Planned Parenthood clinics in South Carolina were to be shuttered, other Medicaid-funded clinics in the state would be more hard-pressed to meet the demand of family planning care,” a result, it said, that Congress wished to avoid. Planned Parenthood S. Atl. v. Kerr, 95 F.4th 152, 169–70 (4th Cir. 2024).

This is not the first time the Fourth Circuit has addressed South Carolina’s attempts to exclude Planned Parenthood from the Medicaid program, nor is it the first time the Fourth Circuit has addressed the very executive order that is the source of the current dispute. In 2019, the Fourth Circuit affirmed the district court’s issuance of a preliminary injunction enjoining South Carolina from terminating Planned Parenthood South Atlantic’s provider agreement. There, however, the Fourth Circuit addressed an additional, important consideration regarding the intersection of the free-choice-of-provider provision now at issue and 42 U.S.C. § 1396a(p)(1), the provision granting states discretionary authority to exclude individuals or entities from participating in Medicaid programs. In Planned Parenthood S. Atl. v. Baker, 941 F.3d 687 (4th Cir. 2019), the Fourth Circuit rejected South Carolina’s argument that Section 1396a(p)(1) must be read as a broad savings clause, allowing states to exclude providers for essentially any reason. In doing so, it found that Section 1396a(p)(1) and the free-choice-of-provider provisions “operate in pleasant conjunction” with each other, providing states with broad authority to exclude providers for nonmedical reasons, such as fraud, while still conferring upon patients the right to care from a qualified provider of their choosing. In its thorough analysis of this issue, the Fourth Circuit warned that any broader interpretation of Section 1396a(p)(1) would render the free-choice-of-provider provision meaningless, an unacceptable result. In 2020, the Supreme Court rejected South Carolina’s petition for certiorari seeking review of the Fourth Circuit’s decision in Planned Parenthood S. Atl. v. Baker, and South Carolina has not raised this argument in the current case before the high court, putting this issue to rest—at least for now.

Still, the private right of action upheld by the Fourth Circuit, and now before the Supreme Court, remains at issue. This private right of action is the mechanism by which laws restricting access to abortion clinics, such as Planned Parenthood, can be challenged. South Carolina is now asking the Supreme Court to find that a Medicaid beneficiary does not have this right to pave the way for other states to take similar executive or legislative actions without fear of having to defend those actions in court, putting access to reproductive care at risk across the nation.

As new developments arise, we will continue to update our Dobbs Decision Resource Center. In the meantime, please contact one of the lawyers in Shipman’s Health Law practice group if you have questions about this ever-changing legal landscape.