APPEAL FROM THE UNITED STATES DISTRICT COURT FOR THE WESTERN DISTRICT OF PENNSYLVANIA (D.C. Civil No. 73-846).
Kalodner, Van Dusen and Gibbons, Circuit Judges. Reargued en banc. Seitz, Chief Judge, and Kalodner, Van Dusen, Aldisert, Adams, Gibbons, Rosenn, Hunter and Garth, Circuit Judges. Kalodner, Circuit Judge, dissenting. Judge Gibbons joins in this dissenting opinion except as to Part III. Adams, Circuit Judge, dissenting.
VAN DUSEN, Circuit Judge.
Before us are appeals both by plaintiffs and by the defendants from an order of a three-judge district court entered May 28, 1974, pursuant to an opinion which was filed by the district court on May 3, 1974. Doe v. Wohlgemuth, 376 F. Supp. 173 (W.D. Pa. 1974).*fn1 The case was argued before a panel of this court on October 24, 1974. The panel's opinion and judgment were filed on December 10, 1974. On December 24, 1974, the plaintiffs (appellees and cross-appellants) petitioned the court to rehear the case en banc. On January 31, 1975, we vacated the panel's December 10, 1974, judgment and ordered the case to be reheard en banc. The case was reargued en banc on May 8, 1975.
The facts appear in the district court's opinion. Doe v. Wohlgemuth, supra at 175-78. Briefly stated, the plaintiffs are women who are eligible for benefits under the Pennsylvania Medical Assistance Program (PMAP).*fn2 The defendants are "the Pennsylvania Department of Public Welfare (Department) and certain of its Officers and/or Administrative Representatives." Id. at 175. The plaintiffs challenge certain procedural requirements (hereinafter referred to as "procedures" or "regulations") which the Department has adopted to restrict PMAP payments for abortions.*fn3 The district court found that, under these procedures, abortions would only be performed under PMAP in the following situations:
"'1. There is documented medical evidence that continuance of the pregnancy may threaten the health or life of the mother;
2. There is documented medical evidence that the infant may be born with incapacitating physical deformity or mental deficiency; or
3. There is documented medical evidence that a continuance of a pregnancy resulting from legally established statutory or forcible rape or incest, may constitute a threat to the mental or physical health of a patient;
4. Two other physicians chosen because of their recognized professional competency have examined the patient and have concurred in writing; and
5. The procedure is performed in a hospital accredited by the Joint Commission on Accreditation of Hospitals.'"
Id. at 175. See also id. at 175 n.1.*fn4 In effect, these requirements define a compensable "therapeutic" abortion, and exclude payment for non-therapeutic, or "elective," abortions. The district court found that PMAP also covers the costs of prenatal care, childbirth, and post-partum treatment when the woman chooses to bear the child. Id. at 187.
The plaintiffs attack the Department's regulations both on the statutory ground that they are inconsistent with Title XIX (commonly called "Medicaid") of the Social Security Act (hereinafter sometimes referred to as "the Act"), 42 U.S.C.A. § 1396, et seq. (1974),*fn5 and also on the constitutional ground that they are inconsistent with the Equal Protection Clause of the Fourteenth Amendment. In Hagans v. Lavine, 415 U.S. 528, 39 L. Ed. 2d 577, 94 S. Ct. 1372 (1974), the Supreme Court reversed the dismissal of a suit which challenged certain New York regulations under the Aid to Families with Dependent Children (AFDC) provisions of the Social Security Act, 42 U.S.C.A. § 601, et seq. (1974). Like Medicaid, AFDC is a voluntary participation program. See Hagans v. Lavine, supra at 530 n. 1. Like the plaintiffs in the case now before us, the plaintiffs in Hagans v. Lavine challenged the New York regulations both on the ground that they were inconsistent with the Act and also on the ground that they violated the Equal Protection Clause of the Constitution. Id. at 530-31. The Court held that the constitutional claim was sufficient to confer jurisdiction on the district court under 28 U.S.C. § 1343(3),*fn6 but required the district court on remand to consider the statutory claim first as a matter of pendant jurisdiction. Hagans v. Lavine, supra, at 536, 539-43. The Supreme Court has recently made it clear that in the Title XIX setting it also desires the statutory claim to be carefully considered before constitutional questions are reached. In Westby v. Doe, 420 U.S. 968, 95 S. Ct. 1385, 43 L. Ed. 2d 648, 43 U.S.L.W. 3499 (1975), vacating Doe v. Westby, 383 F. Supp. 1143 (D.S.D. 1974), a policy of the Social Services Department of the State of South Dakota, which limited payment under Title XIX for abortions, was under review. The district court had reached the question of the policy's constitutionality without any consideration of the policy's consistency with Title XIX, and the Supreme Court summarily vacated and remanded for reconsideration in the light of Hagans v. Lavine.*fn7
In the case before us, the district court considered the statutory claim, but decided that the Pennsylvania procedures were consistent with the Social Security Act. See Doe v. Wohlgemuth, supra at 182-86. Turning to the allegations of unconstitutionality, the court declared the procedures to be in violation of the Equal Protection Clause. See id. at 186-92.*fn8
Both arguments are renewed in this appeal. Because we believe that the principle of Hagans v. Lavine applies to the courts of appeals as well as to the district courts, we will consider first whether the Pennsylvania procedures are consistent with the Social Security Act. See Alma Motor Co. v. Timkin-Detroit Axle Co., 329 U.S. 129, 136-37, 91 L. Ed. 128, 67 S. Ct. 231 (1947); United States v. Schiavo, 504 F.2d 1, 6-7 & n. 11 (3d Cir. 1974).
II. SUPREME COURT PRECEDENT ON THE SCOPE OF STATE PREROGATIVE UNDER THE SOCIAL SECURITY ACT
The district court reasoned that the Social Security Act was designed to give the states great latitude in establishing eligibility for, and levels of, benefits. Doe v. Wohlgemuth, supra at 184-86. The court relied principally on Dandridge v. Williams, 397 U.S. 471, 25 L. Ed. 2d 491, 90 S. Ct. 1153 (1970), in which the Supreme Court held that the Social Security Act allowed the states to place a ceiling on the amount of benefits available to recipients of AFDC. See also New York Dept. of Social Services v. Dublino, 413 U.S. 405, 37 L. Ed. 2d 688, 93 S. Ct. 2507 (1973) (a work incentive program added to the AFDC provisions of the Act does not pre-empt state work incentive programs); Jefferson v. Hackney, 406 U.S. 535, 32 L. Ed. 2d 285, 92 S. Ct. 1724 (1972) (Texas' method of computation of AFDC benefits held consistent with the Act).
The Supreme Court has recognized an important qualification to the Dandridge v. Williams principle. In King v. Smith, 392 U.S. 309, 20 L. Ed. 2d 1118, 88 S. Ct. 2128 (1968), the Court held invalid Alabama regulations which prevented AFDC benefits from flowing to the children of women cohabiting out of wedlock. The Court found the regulations to be inconsistent with congressional policy regarding AFDC recipients. Similarly, in Rosado v. Wyman, 397 U.S. 397, 25 L. Ed. 2d 442, 90 S. Ct. 1207 (1970), the Court held invalid a New York law which lowered the "standard of need" for AFDC benefits, finding the law to be inconsistent with what the Court "fathom[ed] to be the Congressional purpose" in enacting § 402(a)(23) of the Social Security Act, 42 U.S.C.A. § 602(a)(23) (1974). 397 U.S. at 414-15. King and Rosado demonstrate that, although the AFDC program is a "scheme of cooperative federalism," King, supra 392 U.S. at 316, it is not a scheme of unlimited state discretion. Instead, Congress defined an area of state prerogative, the boundaries of which are defined by the congressional policies - both explicit and implicit*fn9 - found in the Social Security Act. The King v. Smith principle was reaffirmed by an eight-Justice majority in Van Lare v. Hurley, 421 U.S. 338, 95 S. Ct. 1741, 44 L. Ed. 2d 208, 43 U.S.L.W. 4592 (1975) (finding New York's "lodger" regulations inconsistent with the Social Security Act). See also Townsend v. Swank, 404 U.S. 282, 30 L. Ed. 2d 448, 92 S. Ct. 502 (1971); Lewis v. Martin, 397 U.S. 552, 25 L. Ed. 2d 561, 90 S. Ct. 1282 (1970).
III. TITLE XIX AS A "SCHEME OF COOPERATIVE FEDERALISM"
A. Areas of state discretion
Both parties agree with the district court that Title XIX, like AFDC, is a system of "cooperative federalism." Doe v. Wohlgemuth, supra at 184. The congressional desire to give the states considerable latitude in the administration of Title XIX is apparent throughout the statute. Funds are appropriated "for the purpose of enabling each State, as far as practicable under the conditions in such State," to furnish medical assistance and other services. 42 U.S.C.A. § 1396 (1974) (emphasis added). The states are free to choose whether they will participate at all; a participating state's program can cover only the "categorically needy," § 1396a(a)(10); 45 C.F.R. 249.10(a)(1) (Rev. Ed., Oct. 1, 1973); or it can be extended to include the "medically needy" as well. Section 1396a(a)(10)(C); 45 C.F.R. § 249.10(a)(1).*fn10 If a state extends coverage to the medically needy, it can either give the types of care and services listed in clauses (1) through (5) of § 1396d(a) or give any seven of the types of care and services described in clauses (1) through (16) of § 1396d(a).*fn11 Section 1396a(a)(13)(C). The statute literally abounds with other options which are open to the participating states, all of which should help to tailor the state's program to the needs and conditions in that state, as contemplated in the appropriations section quoted above.
B. Explicit statutory limitations on state discretion
The story does not end with the litany of state discretion in A above. Many other provisions of the statute are designed to channel the state's program in directions which are consistent with the basic congressional objective of furnishing "medical assistance on behalf of families . . . whose income and resources are insufficient to meet the costs of necessary medical services." § 1396.
Although the states were given a choice of services to provide to the medically needy, Congress requires the participating states to provide services (1) through (5) in § 1396d(a) to the categorically needy. § 1396a(a)(13)(B). Those services are the following:
"(1) inpatient hospital services; (2) outpatient hospital services; (3) other laboratory and X-ray services; (4) skilled nursing facility services, screening and diagnosis of children, family planning services and supplies furnished to individuals of child bearing age; and (5) physicians' services furnished by a physician whether in the office, patient's home, hospital or elsewhere."
Doe v. Wohlgemuth, supra at 183.
Another section of the Act requires the assistance made available to the categorically needy to be equitably distributed, and to be equal to the assistance made available to the medically needy:
"(a) A State plan for medical assistance must -
(A) for making medical assistance available to all individuals receiving aid or assistance under any plan of the State approved under subchapter I, X, XIV, or XVI, or part A of subchapter IV of this chapter, or with respect to whom supplemental security income benefits are being paid under subchapter XVI of this chapter;
(B) that the medical assistance made available to any individual described in clause (A) -
(i) shall not be less in amount, duration, or scope than the medical assistance made available to any other such individual, and
(ii) shall not be less in amount, duration, or scope than the medical assistance made available to individuals not described in clause A; and
(C) if medical assistance is included for any group of individuals who are not described in clause (A) and who do not meet the income and resources requirements of the appropriate State plan, or the supplemental security income program under subchapter XVI of this chapter, as the case may be, as determined in accordance with standards prescribed by the Secretary -
(i) for making medical assistance available to all individuals who would, except for income and resources, be eligible for aid or assistance under any such State plan or to have paid with respect to them supplemental security income benefits under subchapter XVI of this chapter, and who have insufficient (as determined in accordance with comparable standards) income and resources to meet the costs of necessary medical and remedial care and services, and
(ii) that the medical assistance made available to all individuals not described in clause (A) shall be equal in amount, duration, and scope ; . . . ."
Section 1396a(a)(10) (emphasis added).
C. General limitations on state discretion
In addition to the above express limitations on state prerogatives, the Act and its history include more general statements of purpose. These also are binding upon the participating states. Section 1396a(a)(17)(A) requires state-adopted standards for the receipt of benefits to be "consistent with the objectives of this subchapter [Title XIX]." See also King v. Smith and Rosado v. Wyman, supra.
Section 1396a(a)(30) requires the states to take such steps "as may be necessary to safeguard against unnecessary utilization of . . . care and services." This same emphasis upon payment for "necessary" medical services is reflected in § 1396, the appropriations section, which states that the purpose of the Act is "to furnish (1) medical assistance on behalf of families . . . whose income and resources are insufficient to meet the costs of necessary medical services." Similar language appears in the definition in § 1396a(a)(10)(C)(i) of the medically needy.*fn12 Limiting payments to those services which are "necessary" is also supported by recent amendments to Title XIX, which evidence a strong congressional interest in economy.*fn13
2. Physicians' discretion
It is also apparent that Congress intended to place the primary authority for determining what treatment a particular recipient requires in the hands of the attending physician. The Senate Committee on Finance, which in 1965 reported favorably on the amendments to the Social Security Act that included the creation of Title XIX, wrote:
"3. GENERAL PROVISIONS RELATING TO THE BASIC AND VOLUNTARY SUPPLEMENTARY PLANS
"(a) Conditions and limitations on payment for services
"The committee's bill provides that the physician is to be the key figure in determining utilization of health services - and provides that it is a physician who is to decide upon admission to a hospital, order tests, drugs and treatments, and determine the length of stay."
S. Rep. No. 404, 89th Cong., 1st Sess., 1965 U.S. Code Cong. & Admin. News 1943, 1986. Although these remarks referred to the amendments to Medicare (Title XVIII), Congress understood Medicaid (Title XIX) as an expansion of the Medicare concept. The same Committee wrote:
"The committee bill is designed to liberalize the Federal law under which States operate their medical assistance programs so as to make medical services for the needy more generally available. To accomplish this objective, the committee bill would establish, effective January 1, 1966, a new title in the Social Security Act - 'Title XIX: Grants to the States for Medical Assistance Programs.'"
Id. at 2014. Thus, in Roe v. Norton, 380 F. Supp. 726 (D. Conn. 1974), the court discerned "the basic philosophy of both the Medicare and Medicaid provisions, which emphasizes the wide discretion to be accorded physicians in treating their patients." Id. at 729.*fn14
We must conclude that although Title XIX involves a system of "cooperative federalism," the congressional hand has been rather heavy in circumscribing the area of state prerogative.
IV. THE PENNSYLVANIA REGULATIONS' CONSISTENCY WITH TITLE XIX
Pennsylvania argues that its abortion regulations pursue congressional objectives. The state relies on the congressional mandate, noted above, to provide only necessary services, arguing that its regulations restrict payments for abortions to those which are "necessary," excluding those which are "elective." The argument proves too much. It is undoubtedly true that at the time a woman chooses to have a non-therapeutic abortion there is a greater quantum of personal freedom than at the time she has a therapeutic abortion or goes into labor. But there is also greater freedom of choice involved when one decides to have a tooth cavity filled than when one is forced to have the tooth extracted after it has abscessed. The state could not require Title XIX beneficiaries to await the abscess and undergo the extraction*fn15 without damaging the broad purposes of Title XIX. And it is inconsistent with § 1396a(a)(10)(B) and (C), which requires equality among beneficiaries, to force pregnant women to use the least voluntary method of treatment, while not imposing a similar requirement on other persons who qualify for aid.
The plaintiffs, on the other hand, place their reliance on the sections of the statute which require Pennsylvania to furnish them physicians' services, inpatient hospital services, outpatient services, and family planning services.*fn16 Because Pennsylvania has chosen to extend coverage to the medically needy, and has chosen not to exercise its option under § 1396a(a)(13)(C)(ii) subsection (13)(C)(i) requires Pennsylvania to extend the services listed in the text to those plaintiffs who are on Public Assistance. For this reason, the plaintiffs are correct in arguing ...