Appeals court hands Texas victory in Planned Parenthood case

A federal appeals court Thursday overturned an Austin judge’s injunction that blocked Texas from ousting Planned Parenthood as a Medicaid health care provider.

READ: Planned Parenthood remains in Texas Medicaid, for now

The ruling by the 5th U.S. Circuit Court of Appeals said U.S. District Judge Sam Sparks applied the wrong legal standard when he ruled in February 2017 that Texas officials acted "without cause" to remove a qualified organization from the federal-state program that provides health care to low-income people.

The appeals court returned the case to Austin for a new analysis that gives greater deference to the reasons that state officials gave for ousting Planned Parenthood from Medicaid.

"Under this deferential standard, an agency’s finding may only be overturned if it fails to satisfy ‘minimum standards of rationality,’” Judge Edith Jones wrote on behalf of the 5th Circuit's three-judge panel.

The case before Sparks focused on whether an undercover video shot in 2015 by abortion opponents at a Planned Parenthood facility in Houston offered sufficient evidence of medical and ethical violations to justify removing all 30 Planned Parenthood health clinics from Texas Medicaid.

During a three-day hearing last year, Stuart Bowen Jr., then the Texas Health and Human Services Commission's inspector general, testified that he moved to oust Planned Parenthood because the video showed that clinic officials were willing to change how abortions were performed to better obtain fetal organs and tissue for use in medical research.

Such changes would violate federal law and accepted medical practices while putting women at greater risk, Bowen said.

But Sparks said the video, shot by abortion opponents posing as specialists in tissue procurement for medical research, featured "unclear and ambiguous dialogue" from a research director who had no personal knowledge of abortion procedures and who repeatedly referred specific questions to Planned Parenthood's abortion doctors.

"Most significantly, the inspector general admitted he had no evidence any (Planned Parenthood) doctor altered the medical procedure of an abortion, for research purposes or for any other reason, when he issued the final notice — nor did he have such evidence at the hearing," Sparks wrote.

Sparks also dismissed Bowen's allegation that the video showed a willingness to profit from procuring fetal tissue, a violation of federal law that allows only direct expenses to be reimbursed.

Bowen had no evidence Planned Parenthood "ever profited, or even sought to profit," from fetal tissue, Sparks said.

"Specifically, the inspector general could not point to a single payment (Planned Parenthood) ever received that exceeded its expenses incurred," he wrote.

In Thursday's ruling, however, the federal appeals court said Sparks improperly considered evidence presented by Planned Parenthood during the three-day trial.

A state agency’s decision to terminate a Medicaid provider as unqualified should be reviewed only on the record that was presented to state officials who made the decision, Jones wrote.

What's more, Jones said, that decision can be overturned only if a district judge determines that it was arbitrary and capricious — a standard that would be difficult for Planned Parenthood to meet, the judge added.

Abortion opponents in Texas have long sought to halt all state payments to Planned Parenthood, the largest provider of abortions in the state.

In 2016, Planned Parenthood affiliates in Texas received a combined $3.5 million in Medicaid reimbursements for providing contraceptives and other health care — but not abortions — to about 12,500 low-income Texans. Ninety percent of the Medicaid money came from the federal government, with the rest provided by Texas.

Texas Attorney General Ken Paxton said he was confident that Texas will prevail when the case returns to Austin federal court.

“Planned Parenthood’s reprehensible conduct, captured in undercover videos, proves that it is not a ‘qualified’ provider under the Medicaid Act," he said.