Case: 10-17574

08/08/2011

ID: 7848382

DktEntry: 25

Page: 1 of 26

NOS. 10-17574, 10-17622

United States Court of Appeals

FOR 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 LLP 1129 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: 2 of 26

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.

ii

Case: 10-17574

08/08/2011

ID: 7848382

DktEntry: 25

Page: 3 of 26

TABLE OF CONTENTS Page Interest of Amicus Curiae .......................................................................................1 Statement ................................................................................................................2 Argument................................................................................................................9 A. Congress intended for Medicaid rural health clinic and Federallyqualified 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

iii

Case: 10-17574

08/08/2011

ID: 7848382

DktEntry: 25

Page: 4 of 26

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) ............................................................................... 7 42 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, 16 42 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

iv

Case: 10-17574

08/08/2011

ID: 7848382

DktEntry: 25

Page: 5 of 26

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

Case: 10-17574

08/08/2011

ID: 7848382

DktEntry: 25

Page: 6 of 26

INTEREST of AMICUS CURIAE The district court held that the physicians services component of Medicaid 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 applicable 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 National Association of Community Health Centers (NACHC). NACHC is a nonprofit 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 territories. Each year FQHCs provide medical care to a combined total of several million Medicaid beneficiaries.

Case: 10-17574

08/08/2011

ID: 7848382

DktEntry: 25

Page: 7 of 26

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 subsidize Medicaid, which would decrease the availability of comprehensive and quality medical services to the underserved populations those Section 330 grantees/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 program are carried out by states. By engaging the services of hospitals, clinics, physicians, 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

Case: 10-17574

08/08/2011

ID: 7848382

DktEntry: 25

Page: 8 of 26

(broadly defined to include certain territories) receive federal funds to cover a percentage of the states expenses for the Medicaid program.1 Any state that has elected to participate in the program must submit, for prior 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 current 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.

For states (but not territories denominated as a state in Medicaid law) the minimum Federal Medical Assistance Percentage (FMAP) is fifty percent. 2 The term community was earlier in Section 330 but has since been removed. 3

Case: 10-17574

08/08/2011

ID: 7848382

DktEntry: 25

Page: 9 of 26

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 Administration 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 legislative 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 history, was that neither the Medicaid nor Medicare program had payment requirements 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 require coverage and payment for health center services. Id. In 1989, Congress finally 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 special FQHC payment requirement of reimbursement at 100 percent of costs which are reasonable and related to the cost of furnishing [FQHC services and other ambulatory services]. Omnibus Budget Reconciliation Act (OBRA) of 1989, Pub.

Case: 10-17574

08/08/2011

ID: 7848382

DktEntry: 25

Page: 10 of 26

L. No. 101-239, 6404. Tracking back to Section 330s billing and collection requirements to avoid a subsidy, Congress explained that the purpose of the payment 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 payment methodology to a fixed per-visit rate. Medicare, Medicaid, and SCHIP Benefits 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 reasonable costs and allocate them to Medicaid visits is either Medicare regulations applying to FQHC services under that statute or, to the extent the FQHC Medicare regulations do not apply to the particular FQHC service or services, the same methodology 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).

Case: 10-17574

08/08/2011

ID: 7848382

DktEntry: 25

Page: 11 of 26

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 Medicaid 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

State Medicaid agencies are permitted to use an alternative payment methodology (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 cover (for provider and other services (e.g., laboratory and x-ray)) and allocate that total to all of the FQHCs sources of revenue (Section 330, Medicaid, Medicare, private 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 percent 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. 6

Case: 10-17574

08/08/2011

ID: 7848382

DktEntry: 25

Page: 12 of 26

mentioned health center payment requirement (the original 100 percent cost version) 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 individual 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 practitioner, 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
5

Section 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 (socalled 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 patient. 7

Case: 10-17574

08/08/2011

ID: 7848382

DktEntry: 25

Page: 13 of 26

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) established and periodically reviewed by a physician described in paragraph (2)(B), or (ii) established by a nurse practitioner or physician assistant and periodically reviewed 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 included 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 offered by a licensed practitioner acting within the scope of his or her practice as defined 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 formerly reimbursed RHCs and FQHCs for adult dental, chiropractic, optometric, and podiatric services. In February 2009, however, the state legislature passed a law eliminating certain services (including adult dental, podiatry, optometry, and chiroprac-

Case: 10-17574

08/08/2011

ID: 7848382

DktEntry: 25

Page: 14 of 26

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 Medicaid 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 officials 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 excluded and that 14131.10 is preempted to the extent it conflicts with the requirements of federal law. ARGUMENT A. Congress intended for Medicaid RHC and FQHC services to incorporate 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 physicians 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.

Case: 10-17574

08/08/2011

ID: 7848382

DktEntry: 25

Page: 15 of 26

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 incorporating those Medicare services into Medicaid along with the meanings (or definitions) of those services in Medicare. The meanings given to the physicians services component of RHC services 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 subsections under 1395x(r). E.g., 42 U.S.C. 1395x(aa)(1)(C) and (2)(B). Otherwise, the use of the physician means the full list of providers under subsection (r). Id. at 1395x(aa)(1)(A).

It is a principle of statutory construction that where a term is defined in the definitional section of a statute, that definition controls the meaning of the defined term throughout the statute. 1A Norman J. Singer & J.D. Shambie Singer, Sutherland 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). 10

Case: 10-17574

08/08/2011

ID: 7848382

DktEntry: 25

Page: 16 of 26

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 physicians services, as defined in 1395x(aa), to be changed by virtue of their incorporation into Medicaid RHC and FQHC services. Section 1396d(l)(1) and (2) incorporate RHC and FQHC services into Medicaid. 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 dispute). 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 regulations, 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 programs, 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, depending on the physicians agreement with the RHC. The earlier version of these

11

Case: 10-17574

08/08/2011

ID: 7848382

DktEntry: 25

Page: 17 of 26

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 physician 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.

12

Case: 10-17574

08/08/2011

ID: 7848382

DktEntry: 25

Page: 18 of 26

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 provisions 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 ambiguity 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)

13

Case: 10-17574

08/08/2011

ID: 7848382

DktEntry: 25

Page: 19 of 26

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 retain 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 defendants 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.

14

Case: 10-17574

08/08/2011

ID: 7848382

DktEntry: 25

Page: 20 of 26

The Committee bill would require States, under their Medicaid programs, to cover ambulatory services offered to pregnant women or children under 18 by a health center or program receiving funds (in whole 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-risk pregnant women or infants, the State would have to pay for those services even if the State does not cover home visitation services furnished 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 Federallyqualified health center services and any other ambulatory services offered 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, 15

Case: 10-17574

08/08/2011

ID: 7848382

DktEntry: 25

Page: 21 of 26

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 controls 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 unequivocal (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 services 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 expressly limited by 1395x(r)(1), which refers to doctors of medicine and osteopathy only, there is no indication that Congress intended to apply that limited definition to 1396d(a)(2)(C)s FQHC services provision, which is a separate and distinct mandatory service, and certainly no indication that could conceivably over-

References to the Excerpts of Record appear herein as ER ___. 16

Case: 10-17574

08/08/2011

ID: 7848382

DktEntry: 25

Page: 22 of 26

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 services in 1396d(a)(5) controls the scope of FQHC services renders superfluous 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 ambulatory 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 section distinct (i.e., services of dentists, podiatrists, optometrists, and chiropractors) from services already covered in Medicaid (i.e., services of doctors and osteopaths). 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.

A 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 specific statute will not be controlled or nullified by a general one) (internal quotation marks and citations omitted). 17

Case: 10-17574

08/08/2011

ID: 7848382

DktEntry: 25

Page: 23 of 26

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 surplusage, 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 insignificant. 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 services 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.

18

Case: 10-17574

08/08/2011

ID: 7848382

DktEntry: 25

Page: 24 of 26

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 Floor Washington, DC 20036 Telephone: (202) 466-8960 Email: mfreedus@ftlf.com Attorneys for Amicus Curiae National Association of Community Health Centers

Date: August 8, 2011

19

Case: 10-17574

08/08/2011

ID: 7848382

DktEntry: 25

Page: 25 of 26

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 exempted 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

20

Case: 10-17574

08/08/2011

ID: 7848382

DktEntry: 25

Page: 26 of 26

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: mfreedus@ftlf.com Attorneys for Amicus Curiae National Association of Community Health Centers

Date: August 8, 2011

21