NACHC Amicus Brief CARHC v. Maxwell Jolly FQHC RHC Medicaid Benefit

8/4/2019 NACHC Amicus Brief CARHC v. Maxwell Jolly FQHC RHC Medicaid Benefit

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NOS. 10-17574, 10-17622

United States Court of AppealsFOR THE NINTH CIRCUIT

__________

CALIFORNIA ASSOCIATION OF RURAL HEALTH CLINICS AND

AVENAL COMMUNITY HEALTH CENTER,

Plaintiffs-Appellants,

v.

DAVID MAXWELL-JOLLY, ET AL.,

Defendants-Appellees,

__________

On Appeal from the United States District Court for the

Eastern District of California, Civ. No. 10-00759 (Damrell, J.)

__________

BRIEF OF THE NATIONAL ASSOCIATION OF COMMUNITY

HEALTH CENTERS AS AMICUS CURIAE IN SUPPORT OF

PLAINTIFF-APPELLANTS AND URGING REVERSAL

(All parties have consented to the filing of this brief)

__________

James L. Feldesman

Matthew S. Freedus

Marisa B. Guevara

Feldesman Tucker Leifer Fidell LLP1129 20th Street, N.W., Fourth Floor

Washington, DC 20036

Telephone: (202) 466-8960

August 8, 2011 Attorneys for Amicus Curiae National

Association of Community Health Centers

Case: 10-17574 08/08/2011 ID: 7848382 DktEntry: 25 Page: 1 of 26


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FRAP 26.1 DISCLOSURE

Amicus Curiae, the National Association of Community Health Centers, is a

non-profit charitable corporation that has not issued any shares to the public, and

has no parent company, subsidiary, or affiliate that has issued shares to the public.

Thus, no publicly held corporation can own 10 percent or more of its stock.

STATEMENT OF COMPLIANCE WITH FRAP 29(c)(5)

No counsel for a party authored this brief in whole or in part, and no person

or entity other than amicus or its counsel made a monetary contribution toward the

preparation or submission of this brief.



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TABLE OF CONTENTS

Page

Interest ofAmicus Curiae .......................................................................................1

Statement ................................................................................................................2

Argument................................................................................................................9

A. Congress intended for Medicaid rural health clinic and Federally-

qualified health center services to incorporate Medicares definition

of physician and physicians services..................................................9

B. The district courts decision is wrong................................................15

Conclusion............................................................................................................19

Certificate of Compliance .....................................................................................20

TABLE OF AUTHORITIES

Cases:

Bowsher v. Merck & Co., 460 U.S. 824 (1983) ................................................. 18

Connecticut Nat. Bank v. Germain, 503 U.S. 249 (1992)................................... 14

Duncan v. Walker, 533 U.S. 167 (2001) ............................................................ 18

Florida Dept. of Banking and Finance v. Board of Governors of

Federal Reserve System, 800 F.2d 1534 (11th Cir. 1986) ........................ 10

In re Gould, 401 B.R. 415 (B.A.P. 9th Cir. 2009) .............................................. 10

Ratzlaf v. United States, 510 U.S. 135 (1994).................................................... 18

United States v. Wenner, 351 F.3d 969 (9th Cir. 2003)...................................... 18

Federal Statutes:

Medicare, Medicaid, and SCHIP Benefits Improvement

and Protection Act of 2000, Pub. L. No. 106-554............................................ 5



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Omnibus Budget Reconciliation Act of 1989,

Pub. L. No. 101-239............................................................................ 7, 11, 14

Omnibus Budget Reconciliation Act of 1990,

Pub. L. No. 101-508........................................................................................ 7

The Public Health Service Act:

42 U.S.C. 254b.......................................................................................... 6

The Social Security Act:

42 U.S.C. 1395l(2)(A) ............................................................................... 742 U.S.C. 1395x(aa)............................................................................ 7, 12

42 U.S.C. 1395x(aa)(1)(A) ............................................................... passim

42 U.S.C. 1395x(aa)(1)(B) ............................................................ 7, 12, 13

42 U.S.C. 1395x(aa)(1)(C) ............................................................ 7, 12, 13

42 U.S.C. 1395x(aa)(2)(B) .................................................................. 8, 10

42 U.S.C. 1395x(r) ............................................................................ 10, 16

42 U.S.C. 1395x(r)(1).................................................................. 11, 12, 16

42 U.S.C. 1395x(r)(2)........................................................................ 11, 16

42 U.S.C. 1395x(r)(3)........................................................................ 11, 1642 U.S.C. 1395x(r)(4)........................................................................ 11, 16

42 U.S.C. 1395x(r)(5)........................................................................ 11, 16

42 U.S.C. 1396.......................................................................................... 2

42 U.S.C. 1396a ........................................................................................ 3

42 U.S.C. 1396a(a)(10)(A) ............................................................... passim

42 U.S.C. 1396a(bb).............................................................................. 2, 5

42 U.S.C. 1396d(a)(2)(B) .............................................................. 6, 17, 18

42 U.S.C. 1396d(a)(2)(C) .................................................................. 1, 6, 7

42 U.S.C. 1396d(a)(5) ................................................................. 16, 17, 18

42 U.S.C. 1396d(l)(1)....................................................................... passim

42 U.S.C. 1396d(l)(2)(A) ................................................................. passim

42 U.S.C. 1396d(l)(2)(B)......................................................................... 17

Federal Regulations:

42 C.F.R. 405.2401......................................................................................... 11



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42 C.F.R. 405.2411......................................................................................... 11

42 C.F.R. 405.2412......................................................................................... 11

42 C.F.R. Part 430 ............................................................................................... 3

42 C.F.R. 430.15(a) .......................................................................................... 3

Federal Legislative Materials:

S. Rep. No. 107-83 (2001), reprinted in 2002 U.S.C.C.A.N. 1033 ....................... 3

H.R. Rep. No. 101-247 (1989), reprinted in 1989 U.S.C.C.A.N. 2118........... 5, 15

H.R. Rep. No. 101-386 (1989) (Conf. Rep.), reprinted in

1989 U.S.C.C.A.N. 3052 .............................................................................. 15

State Statutes:

California Welfare & Institutions Code 14131.10 ............................................. 9

Other Authorities:

61 Fed.Reg. 14640 (April 3, 1996).13

Fed. R. App. P. 26.1.............................................................................................ii

Fed. R. App. P. 29................................................................................................ii

1A Norman J. Singer & J.D. Shambie Singer, Sutherland Statutory

Construction (7th ed. 2009)............................................................................ 10



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INTEREST ofAMICUS CURIAE

The district court held that the physicians services component of Medi-

caid rural health clinic [RHC] services and Federally-qualified health center

[FQHC] services is subject to the definition of such services in the Medicaid

Act, which includes only doctors of medicine and osteopathy, despite the fact that

RHC services and FQHC services are defined by reference to sections in the

Medicare statute that utilize a broader definition of physicians services. Those

services, among others (with certain limitations in the service description not ap-

plicable to the issue to be resolved in this case), are those of dentists, podiatrists,

optometrists, and chiropractors. 42 U.S.C. 1396d(a)(2)(C), 1396d(l)(2)(A),

1395x(aa)(1)(A)-(C).

The meaning and scope of RHC services and FQHC services is an issue

of substantial significance and considerable importance to the members of the Na-

tional Association of Community Health Centers (NACHC). NACHC is a non-

profit corporation whose primary goal is to further through education, training,

and advocacy the mission and purpose of its health center members (which as a

general matter are FQHCs). Those centers provide primary and other health care

services to medically underserved populations throughout the nation and its territo-

ries. Each year FQHCs provide medical care to a combined total of several million

Medicaid beneficiaries.



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It is NACHCs view that the district courts decision is contrary to federal

law and, if permitted to stand, would frustrate the objectives of the provisions of

federal law governing FQHC services and payment, 42 U.S.C. 1396a(bb)(1)-

(5), 1396d(a)(1)(C), 1396d(l)(2)(A), and Section 330 of the Public Health Service

(PHS) Act. Not only would the decision deny FQHCs payment for bona fide

Medicaid services to bona fide Medicaid beneficiaries, but it would force centers to

use their federal grant funds (awarded under Section 330 of the PHS Act) to subsi-

dize Medicaid, which would decrease the availability of comprehensive and quality

medical services to the underserved populations those Section 330 grant-

ees/FQHCs serve.

This brief is authorized by FRAP 29. All parties have consented to its filing.

STATEMENT

1. The Medicaid Program

In 1965, the Medicaid program was established with the passage of Title

XIX of the Social Security Act, 42 U.S.C. 1396 et seq. Activities under the pro-

gram are carried out by states. By engaging the services of hospitals, clinics, phy-

sicians, and other providers, a states Medicaid agency makes health care available

to the programs beneficiaries. State participation in Medicaid is voluntary, but

once a state elects to do so it must comply with all federal requirements. The states



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(broadly defined to include certain territories) receive federal funds to cover a per-

centage of the states expenses for the Medicaid program.1

Any state that has elected to participate in the program must submit, for pri-

or federal approval, a Medicaid state plan. The plan contains provisions regarding

eligibility conditions, medical care and services, payment, and compliance with

program requirements. See, generally, 42 U.S.C. 1396a(a)(1)-(65) and 42 C.F.R.

430 et seq. The Secretary of the U.S. Department of Health and Human Services

(HHS) reviews and approves (directly or by failing to disapprove) each plan. 42

U.S.C. 1396a; 42 C.F.R. 430.15(a).

2. The Role of FQHCs as Safety Net Providers

For over thirty-five years, health centers have received federal grants under

Section 330 of the PHS Act (or predecessor sections now consolidated in the cur-

rent Section 330) to provide primary and other health care services to medically

underserved populations without regard to a patients ability to pay. See S. Rep.

No. 107-83, at 7 (2001), reprinted in 2002 U.S.C.C.A.N. 1033, 1038 (summarizing

history of the community health center program).2

Such funds are to be used for

costs of services to poor patients who lack health insurance and thus cannot afford

to obtain care from private sector physicians or clinics.

1For states (but not territories denominated as a state in Medicaid law) the mini-

mum Federal Medical Assistance Percentage (FMAP) is fifty percent.2

The term community was earlier in Section 330 but has since been removed.



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Section 330 grant funds are not to be used as a subsidy to public or private

insurers. In 1975, the year Section 330 came into existence, the Ford Administra-

tion raised objections to the new law, claiming that other federal programs already

included the coverage the new law would provide and that Section 330 would only

have the effect of subsidizing these programs. As explained in accompanying leg-

islative history, Congress answered the subsidy criticism by requiring grantees

(named community health centers) to charge and collect payments from all such

programs and private insurers to the greatest extent possible. S. Rep. No. 94-29, at

4 (1975).

The problem with that charge and collect solution, as noted in the same his-

tory, was that neither the Medicaid nor Medicare program had payment require-

ments corresponding to what the centers would be required to charge. It would

therefore be up to later Congresses to amend Medicaid and Medicare laws to re-

quire coverage and payment for health center services. Id. In 1989, Congress final-

ly dealt with the subsidy problem by amending the Medicaid statute to establish a

new provider type Federally-qualified health center or FQHC, - defining the

services such an FQHC would provide (at 1396d(l)(2)(A)), and including a spe-

cial FQHC payment requirement of reimbursement at 100 percent of costs which

are reasonable and related to the cost of furnishing [FQHC services and other am-

bulatory services]. Omnibus Budget Reconciliation Act (OBRA) of 1989, Pub.



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L. No. 101-239, 6404. Tracking back to Section 330s billing and collection re-

quirements to avoid a subsidy, Congress explained that the purpose of the pay-

ment requirement was to ensure that Federal PHS Act grant funds are not used to

subsidize health center or program services to Medicaid beneficiaries. H.R. Rep.

No. 101-247, at 392-93, reprinted in 1989 U.S.C.C.A.N. 2118-19.

From 1989 until 2000, the Medicaid FQHC payment provision remained at

100 percent of reasonable costs. In December 2000, Congress changed the pay-

ment methodology to a fixed per-visit rate. Medicare, Medicaid, and SCHIP Bene-

fits Improvement and Protection Act of 2000 (BIPA), codified at 42 U.S.C.

1396a(bb). For existing FQHCs, the per-visit rate was equal to 100 percent of the

centers average reasonable costs incurred during 1999 and 2000. 42 U.S.C.

1396a(bb)(1)-(5). The approach that 1396a(bb)(2) employs to compute reasona-

ble costs and allocate them to Medicaid visits is either Medicare regulations apply-

ing to FQHC services under that statute or, to the extent the FQHC Medicare regu-

lations do not apply to the particular FQHC service or services, the same method-

ology used in regulations applicable to Medicare FQHCs. Since January 1, 2001,

states have been required to pay FQHCs that per-visit rate, which is adjusted for

inflation and any changes in the scope of services furnished by a center. Id. at

1396a(bb)(3)(B).



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Thus, under the current Medicaid FQHC payment provision, state Medicaid

agencies are required to pay FQHCs their per-visit rate3

for each visit of a Medi-

caid beneficiary.4

3. FQHC Services and Payment in the Medicaid Program

The Medicaid statute requires that certain services be provided by a State as

a condition of its participation in the Medicaid program. 42 U.S.C.

1396a(a)(10)(A). Included among the required (i.e., mandatory) services are

those of Section 330 PHS Act (42 U.S.C. 254b) grantee health centers. 42 U.S.C.

1396a(a)(10)(A) and 1396d(a)(2)(C); see also id. at 1396d(a)(2)(B) (including

rural health clinic services as mandatory). That requirement and the previously

3State Medicaid agencies are permitted to use an alternative payment methodolo-

gy (APM) so long as the FQHC agrees and the alternative results in payments

not less than the amount the FQHC would otherwise receive under the statutory

PPS approach. 42 U.S.C. 1396a(bb)(6).4

The general formula for establishing the per-visit rate is to take the average of the

total of each centers reasonable costs for 1999/2000 and divide by the average of

its total visits for those years (i.e., total costs / total visits = PPS rate). This was the

method employed to pay the FQHC its reasonable costs of Medicaid services. The

idea is to compute all of the centers costs in a prior year that Medicaid would cov-er (for provider and other services (e.g., laboratory and x-ray)) and allocate that to-

tal to all of the FQHCs sources of revenue (Section 330, Medicaid, Medicare, pri-

vate insurance, patient fees, etc.) by the number of visits paid or covered by such

source. If Medicaid had fifty percent of all such visits, it paid the FQHC fifty per-

cent of the total. That per visit cost has become the rate (plus inflation) to which

the FQHC is entitled. The per-visit rate is often misunderstood as being the cost or

charge just for that visit. As the forgoing shows, it is instead a means of paying the

FQHC for all of the costs of its services and administration.



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mentioned health center payment requirement (the original 100 percent cost ver-

sion) were added to the Medicaid statute by OBRA 1989.

The services of Section 330 health centers, to which all individuals who

qualify for Medicaid benefits are entitled, are defined as Federally-qualified

health center [FQHC] services and any other ambulatory services offered by a

Federally-qualified health center and which are otherwise included in the plan. 42

U.S.C. 1396d(a)(2)(C), 1396a(a)(10)(A), 1396d(l)(2)(A).

The Medicaid statute defines the first component, Federally-qualified

health center services, to mean services of the type described in subparagraphs

(A) through (C) of section 1395x(aa)(1) of this title when furnished to an individu-

al as an [sic]5

patient of a Federally-qualified health center 42 U.S.C.

1396d(l)(2)(A). Subparagraphs (A) through (C) of section 1395x(aa)(1) include:

(1) physicians services and services furnished as an incident to a physicians

professional service; (2) services furnished by a physician assistant, nurse practi-

tioner, clinical psychologist, clinical social worker; and (3) in the case of a rural

health clinic located in an area in which there exists a shortage of home health

agencies, part-time or intermittent nursing care and related medical supplies (other

5Section 4704(c) of the Omnibus Reconciliation Act of 1990 amended section

1395(l)(2)(A) by substituting the word patient for outpatient to clarify that

FQHC providers could furnish services at locations other than the center itself (so-

called offsite services), and get reimbursed at its PPS per visit rate. In making this

change Congress simply neglected to substitute the word a for an before pa-

tient.



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than drugs and biologicals) furnished by a registered professional nurse or licensed

practical nurse to a homebound individual under a written plan of treatment (i) es-

tablished and periodically reviewed by a physician described in paragraph (2)(B),

or (ii) established by a nurse practitioner or physician assistant and periodically re-

viewed and approved by a physician . . . 42 U.S.C. 1395x(aa)(1)(A) (C).

The second component of Section 330 services, the any other ambulatory

services offered by a Federally-qualified health center and which are otherwise in-

cluded in the plan, captures the other mandatory services listed in paragraphs

(1) through (5), (17), (21), and (28) of section 1396d(a), 42 U.S.C.

1396a(a)(10)(A), and any optional service included in the states plan. Optional

services commonly provided for in state plans include medical or remedial care of-

fered by a licensed practitioner acting within the scope of his or her practice as de-

fined by State law, home health services, clinic services, dental services, physical

therapy services, case management services, and preventive/rehabilitative services.

42 U.S.C. 1396d(a).

4. California Legislation

Under the California State Medicaid Plan, the state Medicaid agency former-

ly reimbursed RHCs and FQHCs for adult dental, chiropractic, optometric, and po-

diatric services. In February 2009, however, the state legislature passed a law elim-

inating certain services (including adult dental, podiatry, optometry, and chiroprac-



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tic services) to the extent that they are optional under federal law. Cal. Welf. &

Inst. Code 14131.10 ( 14131.10) (effective July 1, 2009).

Anticipating the elimination, in June 2009, citing 14131.10, the State Med-

icaid agency amended the RHC/FQHC section of its provider manual to exclude

the various optional benefits covered by the February 2009 law.

In March 2010, plaintiffs-appellants filed a federal action against state offi-

cials and the state Medicaid agency seeking declaratory and injunctive relief. The

action alleges that federal law requires the state to reimburse RHCs and FQHCs for

the dental, podiatry, and chiropractic services the State Medicaid agency had ex-

cluded and that 14131.10 is preempted to the extent it conflicts with the require-

ments of federal law.

ARGUMENT

A. Congress intended for Medicaid RHC and FQHC services to in-

corporate Medicares definition of physician and physicians

services

The plain language of the Medicaid statute (at 42 U.S.C. 1396d(l)(1) and

(2)(A)) reflects a clear and unambiguous congressional intent to incorporate phy-

sicians services as defined in Medicare which includes the services of doctors,

osteopaths, dentists, podiatrists, optometrists, and chiropractors into Medicaids

definition of covered RHC and FQHC services. Id.



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With respect to RHC services, 1396d(l)(1) states unequivocally that, for

purposes of Medicaid, rural health clinic services and rural health clinic have

the meanings given such terms in section 1395x(aa), with two exceptions (neither

of which alters the meaning of physician or physicians services in

1395x(aa)(1)(A)). The language of 1396d(l)(1) could not be any clearer in incor-

porating those Medicare services into Medicaid along with the meanings (or defini-

tions) of those services in Medicare.

The meanings given to the physicians services component of RHC ser-

vices in 1395x(aa)(1)(A) unquestionably come from 1395x(r), and include the

full range of physicians described thereunder.6

To distinguish between the different

provider types defined as physicians, the Medicare statute specifically indicates

when the term physician is as described in or as defined in and thus limited

to only one of the specific provider types otherwise defined as physicians in sub-

sections under 1395x(r). E.g., 42 U.S.C. 1395x(aa)(1)(C) and (2)(B). Other-

wise, the use of the physician means the full list of providers under subsection

(r). Id. at 1395x(aa)(1)(A).

6 It is a principle of statutory construction that where a term is defined in the defi-

nitional section of a statute, that definition controls the meaning of the defined

term throughout the statute. 1A Norman J. Singer & J.D. Shambie Singer, Suther-

land Statutory Construction, 20:8 (7th

ed. 2009), citing Florida Dept. of Banking

and Finance v. Board of Governors of Federal Reserve System, 800 F.2d 1534

(11th Cir. 1986) and In re Gould, 401 B.R. 415 (B.A.P. 9th Cir. 2009), affd, 603

F.3d 1100 (9th Cir. 2010), cert. denied, 131 S. Ct. 577 (Nov. 8, 2010).



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That is the reason why all parties and the court below acknowledge that

physicians services, as defined in 1395x(aa)(1)(A), means the services of the

full cast of providers under 1395x(r): doctors, osteopaths, dentists, optometrists,

podiatrists, and chiropractors. 42 U.S.C. 1395x(r)(1)-(5). The issue in dispute is

whether Congress intended for the meanings of the terms physician and physi-

cians services, as defined in 1395x(aa), to be changed by virtue of their incor-

poration into Medicaid RHC and FQHC services.

Section 1396d(l)(1) and (2) incorporate RHC and FQHC services into Medi-

caid. The incorporation begins at (l)(1), stating that [t]he terms rural health clinic

services and rural health clinic have the meanings given such terms in section

1395x(aa) (followed by exceptions that have no significance for the issue in dis-

pute). Those meanings given in section 1395x(aa) are made crystal clear in RHC

Medicare regulations describing and defining RHC and RHC services covered by

the Medicare program, at 42 C.F.R. Subpart X, 405.2400 et seq. Those regula-

tions, which had been in effect for a number of years prior to the OBRA 1989 and

1990 amendments that added FQHC services to the Medicaid and Medicare pro-

grams, at 405.2411, described the scope of RHC services that were reimbursable,

referring (among others) to the physicians services specified in 405.2412. They

are professional services performed by a physician at the clinic or elsewhere, de-

pending on the physicians agreement with the RHC. The earlier version of these



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regulations, in 405.2401, defined a Physician the same way as it was defined in

1395x(r):

(1) A doctor of medicine or osteopathy legally authorized to practice

medicine and surgery by the State in which the function is performed.

(2) Within limitations as to the specific services furnished, a doctor of

dentistry or dental or oral surgery, a doctor of optometry, a doctor of

podiatry or surgical chiropody or a chiropractor.

Section 1396d(l)(2), applying to FQHCs, incorporates subparagraphs (A)

through (C) of 1395x(aa)(1). Subparagraphs (A) and (B) either specify or relate

to physicians services, while physician supervision and guidance is described in

subparagraphs (C) and (2)(B). Congress limited the supervision and guidance

functions associated with intermittent nursing care and non-physician directed

clinic care to a full-fledged doctor by expressly referencing the definition of phy-

sician in 1395x(r)(1). 42 U.S.C. 1395x(aa)(1)(C) and (2)(B); see also 42

U.S.C. 1396d(l)(2)(A) (utilizing Medicare method to define physician). By

contrast, when it comes to the services (as opposed to supervision) performed by a

physician namely the physicians services described in 1395x(aa)(1)(A) the

term physician is not accompanied by any of the telltale words of limitation,

which as previously explained, distinguish between applying the general definition

of physician and limiting the definition to a specific provider type listed in that

general definition.



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When incorporating the services of the type described in subparagraphs (A)

through (C) of section 1395x(aa)(1), (in 1396d(l)(2)(A)), Medicaid makes those

exclusively RHC services applicable to FQHCs by deem[ing] any reference to an

RHC to be a reference to a Federally-qualified health center. 42 U.S.C.

1396d(l)(2)(A). Accordingly, the directive that RHC services have the meanings

given [to them] in section 1395x(aa), applies as well to Medicaid FQHC services.

HHS in 1996 explained that this virtually identical language in the Medicare

definition of FQHC services meant that [w]hen the Congress created the FQHC

[Medicare] benefit, it envisioned that FQHC services would be provided under the

same conditions as RHCs services are furnished . . . As a result, the services of

FQHCs are to be identical to those of RHCs. 61 Fed.Reg. 14641 (April 3, 1996).

Whether viewed as a matter of common sense or through cardinal principles

of statutory construction, when, as is the situation here, a statute incorporates pro-

visions from one statute into another, the incorporated provisions necessarily carry

the meaning given to them in their statute of origin, absent an expression of intent

otherwise. Here, not only is there no indication whatsoever that Congress intended

to change the meanings given to the term physician and physicians services in

subparagraphs (A) through (C) of 1395x(aa)(1), Congress left no room for ambi-

guity by explicitly stating that those services have the meanings given to them

in section 1395x(aa) and are of the type described in subparagraphs (A)



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through (C) of section 1395x(aa)(1). The language of 1396d(l)(1) and (2)(A)

could not be any clearer that Congress intended for the incorporated services to re-

tain the meanings given to them in Medicare.

Where, as here, the language of the statute is clear and does not lead to an

absurd result, then the statutory language is the beginning and end point of the

analysis. Connecticut Nat. Bank v. Germain, 503 U.S. 249, 253-54 (1992) (We

have stated time and again that courts must presume that a legislature says in a

statute what it means and means in a statute what it says there. When the words of

a statute are unambiguous, then, this first canon is also the last: the judicial inquiry

is complete.) (citations and internal quotation marks omitted). Neither the de-

fendants nor the court below suggest that it is absurd for RHCs or FQHCs to be

able to provide (and get reimbursed for) Medicares broader (than Medicaids)

range of physicians services.

Indeed, in 1989, when Congress established FQHCs as a new provider type

in Medicaid, defined their services, and created their special payment requirement

of reimbursement at 100 percent of costs, OBRA 1989, Pub. L. No. 101-239,

6404, Congress recognized that services offered by a health center may be broader

in scope than outpatient services offered by other classes of providers and that

States would nevertheless be required to cover that broader range of services when

provided by a health center.



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The Committee bill would require States, under their Medicaid pro-

grams, to cover ambulatory services offered to pregnant women or

children under 18 by a health center or program receiving funds (inwhole or in part, directly or by subgrants) under section 329, 330, or

340 of the PHS Act. The Committee intends that the term ambulatory

services be construed to include any outpatient service which the

center is authorized to provide under section 329, 330, or 340 of the

PHS Act. The Committee recognizes that, in some States, ambulatory

services offered by a health center or program may be broader in

scope than outpatient services offered by other classes of providers;

nonetheless, the State would still be required to cover the broader

range of services when provided by a health center or program . For

example, if a center provides home visitation services for high-riskpregnant women or infants, the State would have to pay for those ser-

vices even if the State does not cover home visitation services fur-

nished by any other class of provider, such as physicians, nurses, or

nurse practitioners.

H.R. Rep. No. 101-247, at 392-93, reprinted in 1989 U.S.C.C.A.N. 2118-19

(emphasis added).

The conference agreement follows the House bill with a modification

requiring States to include in their Medicaid benefit package Federally-

qualified health center services and any other ambulatory services of-

fered by a Federally-qualified health center and which are otherwise

included in the plan. These services would be available to all program

beneficiaries, not just pregnant women and children.

H.R. Rep. No. 101-386 (Conf. Rep.), accompanying H.R. 3299, reprinted in

1989 U.S.C.C.A.N. 3052.

B. The district court decision is wrong

While the district court acknowledged that Medicaid RHC and FQHC

services expressly incorporate 1395x(aa)(1)(A)s physicians services and

that Medicare expressly defines those services to include the services of dentists,



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podiatrists, optometrists, and chiropractors, it inexplicably concluded that nothing

in the applicable statutes indicates that the Medicare definition of physician

contained in 1395x(r)(1) (5) applies to the definition of FQHC services and

that Medicaids plain and unambiguous definition of physicians services con-

trols the scope of RHC/FQHC services required under federal Medicaid law. ER

26-28.7

The district courts decision is incorrect and suffers from several flaws. First,

the court completely passes over, without explanation, the Medicaid statutes une-

quivocal (at 1396d(l)(1) and (2)(A)) incorporation of Medicare services as those

services are defined and described in section 1395x(aa). Had the court perceived

or observed this clear directive, it would not have been able to embrace, as it did,

defendant-appellees assertion that the narrower definition of physicians ser-

vices in 1396d(a)(5) should apply for purposes of any Medicaid requirement

unless the statute expressly requires otherwise. ER 25-26.

While it is true that 1396d(a)(5)s physicians services provision is ex-

pressly limited by 1395x(r)(1), which refers to doctors of medicine and osteopa-

thy only, there is no indication that Congress intended to apply that limited defini-

tion to 1396d(a)(2)(C)s FQHC services provision, which is a separate and dis-

tinct mandatory service, and certainly no indication that could conceivably over-

7References to the Excerpts of Record appear herein as ER ___.



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ride the unequivocal directives in 1396d(l)(1) and (2)(A) to incorporate the RHC

services as defined in Medicare.8

Second, the district courts reading that the definition of physicians ser-

vices in 1396d(a)(5) controls the scope of FQHC services renders superflu-

ous the bulk of what is being incorporated by 1396d(l)(1) and (2)(A)s reference

to the services defined in subparagraph (A) of 1395x(aa)(1). Under the courts

decision, the only physicians services that would be incorporated doctors and

osteopaths are already captured by 1396d(a)(2)(B) and (C)s other ambulato-

ry services included in the plan. Stated another way, the courts decision excludes

the very types of physicians services in 1395x(aa)(1)(C) that make that sec-

tion distinct (i.e., services of dentists, podiatrists, optometrists, and chiropractors)

from services already covered in Medicaid (i.e., services of doctors and osteo-

paths). Virtually no purpose would be served by incorporating 1395x(aa)(1)(A)s

physicians services into Medicaids FQHC services if, in doing so, Congress

were to strip away (as the district court has done) the Medicare statutes broader

definition of physician, leaving only what is already covered by Medicaid.

8A statute of general applicability, cannot be considered controlling as to

1396d(l)(1) & (2)(B), a statute of specific applicability, unless the former expresses

a clear intention to have that effect. See, e.g., United States v. Novak, 476 F.3d

1041, 1054 (9th Cir. 2007) ([w]here there is no clear intention otherwise, a specif-

ic statute will not be controlled or nullified by a general one) (internal quotation

marks and citations omitted).



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Not only is the district courts construction contrary to the plain language of

the statutes, but it runs afoul of cardinal principles of statutory construction: a

statute should not be construed so as to render any of its provisions mere surplus-

age, United States v. Wenner, 351 F.3d 969, 975 (9th Cir. 2003); see also Ratzlaf

v. United States, 510 U.S. 135, 140-41 (1994); Bowsher v. Merck & Co., 460 U.S.

824, 833 (1983); a statute ought, upon the whole, to be so construed that, if it can

be prevented, no clause, sentence, or word shall be superfluous, void, or insignifi-

cant. Duncan v. Walker, 533 U.S. 167, 174 (2001) (internal quotations omitted).

Third, by finding that the definition of physician in 1396d(a)(5) applies to

the RHC and FQHC services provisions, 1396d(a)(2)(B), (a)(2)(C), (l)(1), and

(l)(2)(A), the district court ignored the directives mentioned above and effectively

reversed the operative definition of physicians services applicable to statutory

provisions of Medicare carried into Medicaid for RHC and FQHC services. There

is no principled basis to change the definitions of physician and physicians ser-

vices applicable to the incorporated Medicare sections or the definitions of RHC,

FQHC, RHC services, and FQHC services in Medicare regulations applicable to

those same incorporated sections.



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CONCLUSION

The district courts judgment should be reversed.

Respectfully submitted,

s/Matthew S. Freedus

James L. Feldesman

Matthew S. Freedus

Marisa B. Guevara

Feldesman Tucker Leifer Fidell LLP

1129 20th Street, N.W., Fourth FloorWashington, DC 20036

Telephone: (202) 466-8960

Email: [email protected]

Attorneys for Amicus Curiae National

Association of Community Health

Date: August 8, 2011 Centers



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CERTIFICATE OF COMPLIANCE

This brief complies with the type-volume limitation of Fed. R. App. P.

32(a)(7)(B) because it contains 4329 words, excluding the parts of the brief ex-

empted by Fed. R. App. P. 32(a)(7)(B)(iii). This brief complies with the typeface

requirements of Fed. R. App. P. 32(a)(5) and the type style requirements of Fed. R.

App. P. 32(a)(6) because it has been prepared in a proportionally spaced typeface

using Microsoft Word 2002 in Times New Roman typeface, 14-point font.

Date: August 8, 2011 /s Matthew S. Freedus



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CERTIFICATE OF SERVICE

I certify that I have, this 8th day of August, 2011, electronically filed the

foregoing with the Clerk of the Court of the United States Court of Appeals for the

Ninth Circuit by using the appellate CM/ECF system. I certify that all participants

in the case are registered CM/ECF users and that service will be accomplished by

the appellate CM/ECF system.

/s Matthew S. Freedus

Matthew S. Freedus

Feldesman Tucker Leifer Fidell LLP

1129 20th Street, N.W., Fourth Floor

Washington, DC 20036

Telephone: (202) 466-8960

Email: [email protected]

Attorneys for Amicus Curiae National

Association of Community Health

Date: August 8, 2011 Centers


Documents

NACHC Amicus Brief CARHC v. Maxwell Jolly FQHC RHC Medicaid Benefit