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CMS Rejects Ind. Medicaid Changes; Warns That State Law Improperly Restricts Patient Access to Providers

CMS Rejects Ind. Medicaid Changes; Warns That State Law Improperly Restricts Patient Access to Providers

June 2, 2011 — The Obama administration on Wednesday notified Indiana that a recently enacted law banning the state's Medicaid program from contracting with organizations that offer abortion is illegal, Politico reports. Indiana officials said they will continue enforcing the law for now and seek guidance from the state attorney general on how to proceed going forward, a move that could jeopardize the state's federal Medicaid funding (Kliff, Politico, 6/1).

The Obama administration previously indicated that it would not approve changes to Indiana's Medicaid program needed to comply with the law, which effectively prohibits Medicaid reimbursements for services provided in clinics affiliated with Planned Parenthood of Indiana. For years, federal law has prohibited the use of federal Medicaid funds to pay for abortion services. Prior to enactment of the law, PPIN could receive reimbursement from Medicaid for the non-abortion related services it provides. The state began enforcing its law on May 10.

Meanwhile, PPIN and the American Civil Liberties Union of Indiana filed suit against the law. U.S. District Judge Tanya Walton Pratt rejected the organizations' request to issue an immediate injunction to block enforcement of the measure, and the funding ban went into effect immediately. The judge will hold a hearing on PPIN's request for a permanent injunction on June 6 and is expected to decide by July 1 whether to continue allowing enforcement while she considers the case (Women's Health Policy Report, 5/31).

Federal law dictates that Medicaid beneficiaries may seek care at any qualified provider. In a letter to Patricia Cassanova, director of Indiana's Office of Medicaid Policy and Planning, CMS Administrator Don Berwick wrote, "Medicaid programs may not exclude qualified health care providers from providing services that are funded under the program because of a provider's scope of practice." He continued, "Such a restriction would have a particular effect on beneficiaries' ability to access family planning providers" (Jackson, AP/Miami Herald, 6/1). The law "would eliminate the ability of Medicaid beneficiaries to receive services from specific providers for reasons not related to their qualifications to provide such services," the letter said (Pear, New York Times, 6/1). Berwick added, "We assume this decision is not unexpected" (McCarthy, National Journal, 6/1).

The letter said Indiana should change the law to comply with federal regulations. It grants the state 60 days to appeal the decision.

Bryan Corbin, spokesperson for Indiana Attorney General Greg Zoeller (R), said the letter is being reviewed. In the meantime, the state "will continue to defend the statute," he said (AP/Miami Herald, 6/1). Marcus Barlow, communications director at the Indiana Family and Social Services Administration, said the agency's "lawyers advise us that we must continue to follow the law that the Indiana General Assembly passed," adding that FSSA is seeking guidance from Zoeller (Politico, 6/1).

CMS Memo Warns States About Choosing Medicaid Providers

Separately on Wednesday, Cindy Mann, director of the CMS Center for Medicaid, CHIP and Survey & Certification, issued a memo reminding states that they cannot bar providers from Medicaid "because they separately provide abortion services" (New York Times, 6/1). Last week, 30 Senate Democrats sent a letter to HHS Secretary Kathleen Sebelius requesting that department officials warn state Medicaid directors against implementing measures to block Medicaid or Title X family planning funds from clinics that provide abortion services (Women's Health Policy Report, 5/31).

Reaction To CMS Letter

PPIN CEO and President Betty Cockrum said Berwick's letter is "gratifying," adding, "It is right that the federal government take action against Indiana and set an example for other states seeking to adopt this type of harmful legislation. ... This new law is already preventing Planned Parenthood of Indiana Medicaid patients from receiving some services" (AP/Miami Herald, 6/1). Planned Parenthood Federation of America President and CEO Cecile Richards said the "letter is a strong rebuke to Indiana and serves as a warning to other states" considering similar measures that will "violate Medicaid law."

Sen. Richard Blumenthal (D-Conn.) said the "step is a powerful, prompt rebuke to Indiana -- and a strong warning to other states considering similar ill-advised and illegal action denying essential health care to women." He added, "I hope other state legislatures considering similarly misguided attempts to block women, teens and families from the health care and family planning services they need and deserve will reconsider these dangerous proposals."

Abortion-rights opponents were quick to criticize the decision. Rep. Joe Pitts (R-Pa.) said the letter is "another example of the Obama administration forcing its social agenda on the states," adding that the decision goes against the wishes of Indiana residents and lawmakers. Marjorie Dannenfelser, president of the Susan B. Anthony List, encouraged states to continue "working boldly" to block federal funds for Planned Parenthood (Ethridge, CQ Today, 6/1).