Skip to main content

CMS Rescinds Medicaid Memo That Protected Abortion Providers

News  |  By Steven Porter  
   January 19, 2018

Officials said states need flexibility to establish qualifications for Medicaid providers. Others see an attack on Planned Parenthood.

In a letter to state Medicaid directors across the country, the Centers for Medicare and Medicaid Services rescinded a memo Friday that had barred state programs from taking action against abortion providers without evidence of wrongdoing.

The short letter, which was signed by Center for Medicaid and CHIP Services (CMCS) Director Brian Neale and Center for Program Integrity Director Alex Alexander, cited concerns that the Obama-era guidance could run afoul of the Administrative Procedure Act. It also suggested states should have more flexibility in setting standards for Medicaid providers.

“We may provide further guidance in the future,” the letter concluded.

The rescinded memo, which was sent to state Medicaid directors exactly 21 months ago, had argued that states cannot take action against a provider without evidence of fraud, criminal conduct, substantive noncompliance with state requirements, or some other “material issues” affecting the provider’s fitness to perform covered services.

“Providing the full range of women’s health services neither disqualifies a provider from participating in the Medicaid program, nor is the provision of such services inconsistent with the best interests of the beneficiary, and shall not be grounds for a state’s action against a provider in the Medicaid program,” the 2016 memo, signed by CMCS’s then-Director Vikki Wachino, stated.

The guidance had noted that federal law prohibits federal Medicaid dollars from funding abortion services, except in extraordinary cases, such as rape, incest, or when the woman’s life is in danger. It was issued as at least two dozen states cut funding to Planned Parenthood facilities following the 2015 release of under-cover videos by anti-abortion activists that purported to show clinic officials negotiating the sale of tissue from aborted fetuses, as Reuters reported.

Republicans in the House spent more than a year looking into the matter with a select investigative panel that released a 471-page report in late 2016, with no charges. Nearly a year after that, the fiery investigation appeared to be finding new oxygen, as evidenced by a letter to the Senate Judiciary Committee last month from Assistant Attorney General for Legislative Affairs Stephen E. Boyd, as The New York Times reported.

"Reinstating the pre-2016 standards frees up states to once again decide for themselves what reasonable standards they use to protect Medicaid programs and their beneficiaries," said Charmaine Yoest, Health and Human Services assistant secretary for public affairs and former president of Americans United for Life, during a call Friday with reporters, as The Hill reported.

In a statement to HealthLeaders Media, Planned Parenthood denounced the Trump administration's move.

"They are laser-focused on using their power to control women’s bodies and lives," said Dawn Laguens, executive vice president for Planned Parenthood Action Fund. "Their latest action encourages states to try to block access to care at Planned Parenthood and control where women can go for health care."

Disputed legal interpretation

Wachino’s 2016 letter had cited a section of the Social Security Act that says eligible individuals may obtain medical assistance “from any institution, agency, community pharmacy, or person, qualified to perform the service or services required.”

If a state lacks evidence to support its finding that a provider fell short of the state’s standards, then the provider remains qualified, Wachino wrote.

In announcing Friday that the Obama-era guidance had been rescinded, HHS said CMS is “concerned that the 2016 letter may have gone beyond merely interpreting what the statute and current regulations require.”

The announcement coincided with President Donald Trump’s appearance at the annual anti-abortion March for Life rally in Washington, D.C., where he listed rescinding the 2016 memo as among his administration’s accomplishments, as Reuters reported.

Spokespeople for HHS and CMS did not immediately respond Friday to requests for comment.

This story has been updated to include a comment from Planned Parenthood.

Steven Porter is an associate content manager and Strategy editor for HealthLeaders, a Simplify Compliance brand.

Get the latest on healthcare leadership in your inbox.