backSupreme Court Decision Is A Win for Preventative Services Providers
Last week, in a 6-3 decision, the Supreme Court overturned a Fifth Circuit decision holding that HHS-appointed United States Preventative Task Force (USPTF) members are inferior officers that do not need to be approved by the Senate pursuant to the Appointments Clause of the U.S. Constitution. As previously reported, this case has been closely watched by preventative services providers and patients who rely on the Affordable Care Act’s (ACA) mandate that certain preventive services are free for patients. If the Supreme Court had upheld the Fifth Circuit’s decision, it would have jeopardized the USPTF’s rating decisions that qualified certain preventative services, including cancer screenings, cholesterol-lowering drugs, and HIV preventative medications, to be provided with no out-of-pocket cost to patients.
The Supreme Court determined that USPTF officers are inferior officers because HHS directs and supervises their work through at-will removal and the ability to block any USPTF ratings before they take effect. The Court also held that Braidwood’s—the lead plaintiff—argument that because the USPTF members were “independent, and to the extent practicable, not subject to political pressure,” that was not enough to make the USPTF officers superior officers under the Appointments Clause. The Court reasoned that although the language of the statute may create some insulation from the HHS Secretary, the ability of the HHS Secretary to block any recommendations made the officers similar to inferior officers in the Executive Branch that make initial, independent recommendations that can be reviewed by their superiors.
The Court also dismissed the argument that the inability of the HHS Secretary to force the USPTF to give a specific preventative service an “A” or “B” rating was not consistent with the Court’s precedent where superiors could not force the inferior officers to make certain decisions. The Court also found it notable that there was no language in the law providing for cause removal or explicitly providing for Presidential appointment and Senate removal. The Court also dismissed the argument that the use of the word “convene” instead of “appoint” to appoint USPTF officers did not give the Director authority to appoint the USPTF officers, reasoning that that interpretation “would create a bizarre scheme where Congress was entirely indifferent about who would appoint members making legally binding healthcare recommendations.” The Court noted that “Congress need not use magic words to confer appointment authority.”
Reporter, Taylor Whitten, Sacramento, +1 916 321 4815, twhitten@kslaw.com.
Supreme Court Holds Universal Injunctions Exceed Courts’ Statutory Authority
On Friday, June 27, the Supreme Court held that so-called universal injunctions (sometimes called nationwide injunctions) likely exceed federal courts’ equitable authority as granted by the Judiciary Act of 1789. The Court reserved the question of whether Article III of the Constitution prohibits universal relief. It specified that its decision does not address whether the Administrative Procedure Act (“APA”) authorizes federal courts to vacate federal agency action. Litigants seeking broad relief still have options. A class action is the clearest route. An action pursuant to the APA may also allow for broadly applicable relief, although open questions remain.
Federal courts have the power to grant injunctive relief, a form of equitable remedy that controls the conduct of a party. Typically, an injunction prohibits a defendant from taking a particular action. Within the last twenty years, courts have increasingly granted injunctions that prohibited a defendant—usually an officer or arm of the federal government—from taking a particular action with respect to anyone, not only the parties in the litigation. Those injunctions can be preliminary—governing the defendant’s behavior while the litigation is ongoing—or permanent. To obtain preliminary relief, a party must show that it is likely to succeed on the merits of its claim, among other elements. Universal injunctions, both preliminary and permanent, have garnered significant controversy.
The Court’s Opinion
In Trump v. CASA, Inc., Case No. 24A884 (consolidated with Case Nos. 24A885 and 24A886), President Trump and various federal officials filed an emergency application challenging the scope of a federal court’s authority to enjoin federal officials from enforcing a challenged law or policy against non-parties. The plaintiffs in the consolidated cases, which included immigrant-rights organizations, individuals, and states, had filed lawsuits challenging an executive order that restricted the circumstances in which someone born in the United States to non-citizen parents would be recognized as a U.S. citizen. In each case, the district court concluded that the executive order likely violated the Fourteenth Amendment and entered a universal preliminary injunction prohibiting the defendants from applying the policy to anyone in the country while the court considered the merits. The government asked the appellate court in each case to stay the injunction, and each appellate court refused.
The government asked the Supreme Court to restrict the scope of each injunction to only the parties before each court. Because the government sought a stay of the district courts’ orders, it had to show that it was likely to succeed on the merits of its argument that the injunctions exceeded the courts’ authority. It did not have to prove that the executive order was lawful, and the Supreme Court did not reach that issue.
The government argued that universal injunctions exceed federal courts’ authority under both the Constitution and the Judiciary Act of 1789, which created the system of federal courts and granted federal courts jurisdiction over “all suits … at common law or in equity.” The Supreme Court has previously held that this grant of statutory authority over suits in equity allows courts to grant only the types of equitable relief that were traditionally accorded by courts of equity at the time of the Founding. The government also argued that universal injunctions are undesirable as a matter of policy because, among other reasons, they promote forum-shopping and lack the procedural protections that apply to class actions.
The plaintiffs argued that universal injunctions are an appropriate exercise of courts’ equitable power to provide relief that is both complete and workable. They argued that universal injunctions are analogous to equitable remedies that existed at the time of the Founding and that the increasing frequency of universal injunctions accords with the increasing size and power of the federal government. The plaintiffs contended that universal relief was necessary to ensure uniformity regarding birthright citizenship.
The Supreme Court held that universal injunctions likely exceed federal courts’ statutory authority under the Judiciary Act of 1789 because no equitable remedy available at the time of the Founding extended relief to parties and nonparties alike. The majority acknowledged that some equitable remedies will incidentally benefit non-parties. For example, if a plaintiff sues his neighbor over a noise nuisance and the court orders the defendant to turn down her music, all of the defendants’ neighbors will benefit, not just the plaintiff. But only the plaintiff will have the legal right to enforce the judgment against the defendant. The Court found that because the government was likely to prevail on the merits of its argument that the injunctions were too broad, the government was entitled to stays of the injunctions “only to the extent that the injunctions are broader than necessary to provide complete relief to each plaintiff with standing to sue.”
Justice Barrett authored the opinion of the Court and was joined by Chief Justice Roberts and Justices Thomas, Alito, Gorsuch, and Kavanaugh. Justices Sotomayor, Kagan, and Jackson dissented.
The Limits of the Court’s Opinion
The majority opinion is carefully circumscribed.
First, the majority specified that its decision did not address “the distinct question whether the Administrative Procedure Act authorizes federal courts to vacate federal agency action.” The majority view is that 5 U.S.C. § 706, which states that a court reviewing agency action “shall … hold unlawful and set aside agency action” that is found to violate the APA, authorizes or requires the court to revoke agency action such that the agency cannot apply the challenged action to anyone. Justice Kavanaugh wrote a concurring opinion supporting this view. Some legal scholars and judges, including justices of the Supreme Court—and, in recent years, the government—contend that universal relief is not required or is even not permitted by the APA.
Second, the majority also declined to reach the government’s argument that Article III of the Constitution, which defines the judicial power, does not allow courts to grant relief to non-parties. Justice Thomas wrote a concurring opinion, joined by Justice Gorsuch, in which he stated that universal injunctions raised “serious constitutional questions.”
Third, the majority declined to decide whether, in cases in which an organization has standing to sue based on its members, a court can grant relief to members of the organization who are not named in the complaint.
Potential Implications
CASA limits the ability of plaintiffs to obtain wide-ranging relief, whether preliminary or permanent. However, avenues to broad relief remain open. In the next several years, parties and courts will likely explore the questions that the opinion left unresolved.
The most fundamental open question is whether the Constitution limits courts’ authority to issue relief that extends beyond the parties to the litigation. Whether relief awarded to an organization can extend to members of that organization who would not be able to sue in their own right is a related issue.
Another critical question is the scope of relief available under the APA. The APA authorizes preliminary relief as well as permanent relief. Whether either or both of those forms of relief is limited to the parties is unsettled. Litigants should be mindful of circuit-court precedent regarding the availability and nature of APA relief.
A class action for injunctive relief is the clearest route for obtaining broad relief. Indeed, within hours of the Court’s opinion, the plaintiffs in several of the underlying lawsuits had already filed amended complaints on behalf of putative nationwide classes and had moved for preliminary relief on behalf of everyone who would be affected by the executive order.
In litigation by an organization based on injuries suffered by its members, naming the affected members may help to ensure that they enjoy the benefits of any relief obtained.
Reporter, Caroline Freeman, Washington D.C., +1 202 626 8971, cfreeman@kslaw.com
Supreme Court Holds Medicaid Participants Lack Standing to Enforce “Any-Qualified-Provider” Clause
On June 26, 2025, the Supreme Court ruled that Medicaid providers and beneficiaries lack the ability to enforce the Medicaid Act’s “any‑qualified‑provider” clause in federal court. In Medina v. Planned Parenthood, the Court considered whether Medicaid beneficiaries—or providers like Planned Parenthood—have a right under § 1983 to directly sue states that disqualify them from their Medicaid provider network on the basis that it violates Title XIX. The Supreme Court confirmed that the sole remedy for alleged violations of this Medicaid statute (and, conceivably, most Medicaid statutes) was the withdrawal of federal funds, not private enforcement, leaving providers with limited recourse against state actors.
The Challenged Actions
In 2018, South Carolina excluded Planned Parenthood South Atlantic (“Planned Parenthood”) from its Medicaid provider network on the basis that, in its view, such participation would result in public funds being used for abortion services (in purported violation of state law). The Plaintiff contended that such restrictions violated the “any‑qualified‑provider” clause of the Medicaid Act (§ 1396a(a)(23)(A)), which requires states to grant Medicaid beneficiaries access to “any provider” who is “qualified to perform” the services sought by the beneficiary and who “undertakes to provide” it.
The Plaintiff patient argued that the “any-qualified-provider” clause conferred a tangible, private right for the Plaintiff to see any provider she chose. She proceeded under 42 U.S.C. § 1983 (commonly referred to as § 1983), that authorizes individuals (such as a patient or a provider) to sue anyone who, “under color of state law,” deprives the individual of “rights, privileges, or immunities secured by the Constitution and laws” of the United States. The Plaintiff patient sought to use § 1983 to enforce the federal Medicaid law against South Carolina and thus require South Carolina to permit Planned Parenthood access to its Medicaid network. The District Court and the Fourth Circuit both agreed with the Plaintiff.
Writing for a five-justice majority, Justice Neil Gorsuch resolved a split among the federal Courts of Appeals as to whether the “any-qualified provider” clause of § 1396a(a)(23)(A) gives Medicaid beneficiaries and providers the right to enforce its provisions against state recipients of federal Medicaid funding.
Section 1983 &The Spending Clause
As noted, 42 U.S.C. § 1983 permits private plaintiffs to sue individuals who deprive any citizen “of any rights, privileges, or immunities secured by the Constitution and laws.” Justice Gorsuch’s majority opinion emphasized that not all federal statutes confer a private right of action under § 1983; instead, § 1983 rights attach only to those provisions with “clear and unambiguous” rights-creating language. As such, § 1983 provides a cause of action “only for the deprivation of ‘rights, privileges, or immunities,’ not ‘benefits’ or ‘interests.”’
Moreover, the Court expressed heightened scrutiny to the question of whether § 1983 applies to laws premised on the Constitution’s Spending Clause (like Medicaid). According to the Court, Congressional authority under the Spending Clause—unlike express Constitutional provisions authorizing Congressional actions (like to regulate commerce or combat piracy)—is not explicit. Instead, it is inferred through the Constitutional grant of authority to “provide for the common Defense and general Welfare.”
Analogizing the relationship between states and the federal government as akin to a contractual one when the spending powers are exercised, the Court reasoned that the Spending Clause allows Congress to offer funds to states that agree to certain conditions. The Court determined that those conditions must be clear: when the state accepts those funds, it must be aware of, and intend to, “answer private §1983 enforcement suits.” Continuing the contractual analogy, when there is a breach of a statutory requirement under legislation adopted pursuant to the Spending Clause, the typical remedy is “not a private suit . . . but rather action by the Federal Government to terminate funds to the State.” Therefore, the Court emphasized that spending-power legislation cannot provide the basis for a § 1983 action unless Congress “speaks with a clear voice, and manifests an unambiguous intent to confer individual rights.”
The “Any-Qualified Provider” Statute
Proceeding under this backdrop, the Court looked for an express “right” in the “any-qualified-provider” portion of the Medicaid law such that it would put a state that accepts Medicaid funds on notice that violation of its provisions would open itself up to private suit for Medicaid violations. First, the Court looked to its 2023 decision in Health & Hospital Corp. of Marion County v. Talevski, 143 S. Ct. 1444 (2023) as supplying the “only reliable yardstick against which to measure whether spending-power legislation confers a privately enforceable right.”
Talevski looked at the Federal Nursing Home Reform Act (FNHRA), which obliged nursing-home facilities to protect residents’ “right to be free from” unnecessary “physical or chemical restraints.” 42 U. S. C. §1396r(c)(1)(A)(ii) (emphasis added). Thus, because the FNHRA statute referred (and arguably, conferred) to a “right” to nursing home residents, those residents could utilize § 1983 to enforce that right.
In contrast, the Court reasoned that the “any-qualified-provider” statute lacked such right-conferring language. Specifically, its language requires state Medicaid programs to “provide that . . . any individual eligible for medical assistance (including drugs) may obtain such assistance from any institution, agency, community pharmacy, or person, qualified to perform the service or services required . . . who undertakes to provide him such services.” The Court reasoned that this language spoke only to a state’s requirements for participation in Medicaid, not any rights of Medicaid beneficiaries. Thus, there was no “clear and unambiguous ‘rights-creating language’” in the statute, and so § 1983 enforcement remained unavailable.
Justice Thomas provided a concurring opinion, advocating for further scrutiny of the scope of § 1983. In dissent, Justices Sotomayor, Kagan, and Jackson argued that the “any-qualified-provider” statute protected patient rights, and therefore a denial of standing could lead to “tangible harm to real people.”
Conclusion
The Court’s decision thus curtails a beneficiary’s (or provider’s) ability to take direct actions to enforce the “any-qualified-provider” statute (and, by extension, other Medicaid requirements), leaving private parties to rely on the federal executive branch to employ the remedy of withdrawal of federal funds in appropriate cases. The Court’s decision weakens the ability of beneficiaries and providers to challenge what they see as a state’s dereliction of its statutory obligations for the receipt of Medicaid funds.
The Court’s opinion can be found here.
Reporter, K. Tyler Dysart, Atlanta, GA, +1 404 572 3532, tdysart@kslaw.com
District Court Orders CVS Caremark to Pay U.S. Government $95 Million
On June 25, 2025, Chief Judge Mitchell S. Goldberg of the U.S. District Court for the Eastern District of Pennsylvania issued a ruling in the case of U.S. ex rel. Sarah Behnke v. CVS Caremark Corp. et al., ordering CVS Caremark to pay the U.S. government $95 million. Relator Sarah Behnke brought a qui tam action in February 2014 under the False Claims Act against CVS Caremark Corporation and related entities. The relator alleged that Caremark caused certain health insurers to misrepresent to the government the amount they paid for prescription drugs on behalf of Medicare beneficiaries. The relator claimed that Caremark, a pharmacy benefits manager (PBM), contracted with pharmacies to pay a fixed average price for prescription drugs to pharmacies but caused higher prices to be reported by insurers. The ruling followed an eight-day bench trial in March 2025 that took place after the court ruled on the parties’ cross motions for summary judgment.
The court ruled that CVS Caremark violated the FCA by knowingly causing health insurers, such as Aetna, to submit claims for prescription drugs at inflated prices to Medicare Part D. Caremark was found to have reported higher maximum allowable cost prices to insurers which were then submitted to CMS while paying discounted average prices to pharmacies like Walgreens and Rite Aid, which “resulted in the overpayment of tens of millions of dollars.” Behnke, 2:14-cv-00824-MSG, at 57. The court determined that the relator satisfied her burden with regard to her presentment and false statement claims, but did not meet her burden on the reverse false claim cause of action.
The government did not intervene in this action but filed a statement of interest during summary judgment briefing explaining, in part, that “the United States has a strong interest in ensuring that the Part D program does not pay inflated drug prices and that the information that Plan Sponsors and their PBMs report to CMS reflects the true costs of the program.” Id. (quoting government’s Statement of Interest).
The $95 million award from the court is a partial judgment, with the court noting that the parties have not yet briefed the issue of treble damages or statutory penalties.
Reporter, Kasey Ashford, Washington D.C., +1 202 626 2906, kashford@kslaw.com
ALSO IN THE NEWS
CMS Launches New Model to Target Allegedly Wasteful Services for Medicare Beneficiaries
CMS is partnering with various technology companies, particularly AI companies, to expedite prior authorization processes for Medicare recipients by identifying items and services that have been identified as being vulnerable to fraud, waste, and abuse, and thereby avoiding allegedly unnecessary or inappropriate care.
The Wasteful and Inappropriate Service Reduction (“WISeR”) Model targets services that allegedly “provide little to no clinical benefit, not only increase costs, but also put patients at risk.” According to the Medicare Payment Advisory Commission, $5.8 billion in Medicare spending in 2022 was spent on services with “minimal benefit.”
According to CMS, services and items targeted include skin and tissue substitutes, electrical nerve stimulator implants, and knee arthroscopy for knee osteoarthritis.
The WISeR Model will pay participants based on their ability to reduce “inappropriate utilization” and lower Medicare spending. The program will not include inpatient-only services, emergency services, and services that would pose a substantial risk to patients if significantly delayed. The program will also not change Medicare coverage or payment criteria.
A fact sheet containing more information about the WISeR program can be accessed here.
Editors: Chris Kenny and Ahsin Azim
Issue Editors: Taylor Whitten and Will Mavity