Arizona Alliance For Community Health Centers v. Arizona Health Care Cost Containment System

Opinion

1 WO 2 3 4 5 6 IN THE UNITED STATES DISTRICT COURT 7 FOR THE DISTRICT OF ARIZONA

9 Arizona Alliance For Community Health Centers, et al., 10 Plaintiffs, 11 No. CV-19-00517-TUC-JGZ v. 12 ORDER Arizona Health Care Cost Containment 13 System, et al.,

14 Defendants. 15 16 Plaintiffs are federally-qualified health centers (FQHCs) in Arizona and their trade 17 association, Arizona Alliance for Community Health Centers (Arizona Alliance), who 18 allege that Arizona’s Medicaid agency, the Arizona Health Care Cost Containment System 19 (AHCCCS), and its Director violate the Medicaid Act, 42 U.S.C. § 1396a(bb), by failing 20 to reimburse FQHCs 100% of their reasonable and related costs in furnishing services of 21 dentists, podiatrists, optometrists, and chiropractors to Medicaid beneficiaries (the 22 Services). (Doc. 1, ¶¶ 21, 52-53.) 23 Pending before the Court are Defendants’ Motion to Dismiss (Doc. 18) and 24 Plaintiffs’ Motion for Preliminary Injunction.1 (Doc. 9). The parties agree that this action

25 1 On February 18, 2021, Plaintiffs filed a Motion for Leave to Supplement Plaintiffs’ Motion for Preliminary Injunction. (Doc. 48.) Plaintiffs seek to file the Declaration of 26 Shawn Frick, Chief Executive Officer of Arizona Alliance, who opines that FQHCs will experience an increase in demand for the Services after patients, who have been foregoing 27 primary care services due to the risk of COVID-19, become vaccinated. The Court will deny the motion to supplement. Any increase in demand for FQHC services is not material 28 to the question presented by the parties which is whether AHCCCS is required to cover the Services. 1 presents legal issues with no material dispute of fact. (Doc. 18, p. 14; Doc. 9, p. 21.) On 2 September 4, 2020, the Court heard oral argument on the motions. Upon consideration of 3 the parties’ motions, oppositions and replies thereto, oral argument, and the record in this 4 case, the Court will grant in part Defendants’ Motion to Dismiss and deny Plaintiffs’ 5 Motion for Preliminary Injunction. 6 I. Discussion 7 A. Coverage Requirements under Medicaid Act 8 The Medicaid Act requires state Medicaid plans to include: 9 Federally-qualified health center services (as defined in subsection (l)(2))[2] 10 and any other ambulatory services offered by a Federally-qualified health center and which are otherwise included in the [state Medicaid] plan. 11 42 U.S.C. § 1396d(a)(2)(C). “Federally-qualified health center services” include 12 physicians’ services. 42 U.S.C. §§ 1396d(l)(2), 1395x(aa)(1). In California Ass’n of Rural 13 Health Clinics v. Douglas, 738 F.3d 1007 (9th Cir. 2013) (Douglas), the Ninth Circuit held 14 that for purposes of § 1396d(a)(2)(C), the definition of “physician” includes doctors of 15 medicine and osteopathy, dentists, podiatrists, optometrists, and chiropractors. Id. at 1016- 16 17. 17 In Douglas, an association of rural health clinics and a federally qualified health 18 center challenged a 2009 California statute that “eliminat[ed] certain Medi-Cal[3] benefits 19 that the state deemed optional, including adult dental, podiatry, optometry and chiropractic 20 services.” Id. at 1010. The issue in Douglas concerned “which source of law—Medicaid 21 or Medicare—defines ‘physicians’ services’ with respect to” FQHCs and rural health 22 clinics. Id. at 1015. The state argued that services provided by dentists, podiatrists, 23 optometrists and chiropractors were not “physicians’ services” because the Medicaid Act 24 defines “physicians’ services” only as those services provided by doctors of medicine or 25 2 “[S]ubsection (l)(2)” refers to 42 U.S.C. § 1396d(l)(2). Section 1396d(l)(2)(B) 26 defines “Federally qualified health centers” as entities that receive a federal grant under Section 330 of the Public Health Service Act to provide health care and related services to 27 medically underserved areas or populations.

28 3 Medi-Cal is California’s Medicaid program. https://www.dhcs.ca.gov/services/medi-cal/pages/whatismedi-cal.aspx 1 osteopathy. Id. at 1015-16. The plaintiffs argued that the more expansive Medicare 2 definition of “physicians’ services,” which includes doctors of medicine or osteopathy, 3 dentists, podiatrists, optometrists, and chiropractors, should control. Id. at 1015. The Ninth 4 Circuit agreed with the plaintiffs, deciding that the term “physician” must be defined 5 according to the Medicare definition. Id. at 1016-17. Applying Medicare’s definition, 6 Douglas concluded that the physicians’ services for which FQHCs must be reimbursed 7 include services furnished by doctors of medicine and osteopathy, dentists, podiatrists, 8 optometrists, and chiropractors. Id. From this, Douglas held that California’s complete 9 elimination of coverage for adult dental podiatry, optometry, and chiropractic services in 10 FQHCs and rural health clinics violated the Medicaid Act. 11 B. Coverage of the Services under AHCCCS 12 The parties agree that Arizona’s Medicaid plan covers the following dental, 13 podiatry, optometry, and chiropractic services: 14 ● Dental services for children under 21 and limited emergency and non- 15 emergency dental services for elderly and developmentally disabled 16 beneficiaries in long-term care facilities. (Doc. 1, ¶ 27; Doc. 28, ¶ 27; Doc. 17 18, p. 9.) Emergency dental services for adults (such as medically necessary 18 extraction or treatment for an acute infection) up to $1,000 per year. (Doc. 1, 19 ¶¶ 27, 30, 56; Doc. 28, ¶¶ 27, 30, 56; Doc. 18, p. 9.) 20 ● Adult podiatry services if those services are ordered by a primary care 21 provider and the authorization is documented in the medical record. (Doc. 22 1, ¶ 32; Doc. 28, ¶ 32; Doc. 18, p. 9.) 23 ● Optometry services for “[r]outine and medically necessary vision 24 services, including examinations and the provision of prescriptive lenses” for 25 beneficiaries under the age of 21. (Doc. 1, ¶ 33; Doc. 28, ¶ 33.) For adults, 26 examination and treatment of medical conditions of the eye, and prescriptive 27 lenses only when used as the sole prosthetic device following cataract 28 surgery. (Doc. 1, ¶ 33; Doc. 28, ¶ 33; Doc. 18, p. 9.) 1 ● Chiropractic services for children under 21 years of age.4 (Doc. 1, ¶ 2 35; Doc. 28, ¶ 35; Doc. 18, p. 9.) 3 C. Arguments 4 On October 29, 2019, Plaintiffs filed a Motion for Preliminary Injunction. (Doc. 9.) 5 Plaintiffs request that the Court enter “an order compelling AHCCCS to cover all (dental, 6 podiatric, optometric, and chiropractic) services provided” by plaintiffs and non-plaintiff 7 FQHCs to Medicaid beneficiaries. (Id. at p. 22; see also Doc. 9, p. 30; Doc. 45-1, p. 2.) 8 On November 25, 2019, Defendants moved to dismiss Plaintiffs’ Complaint for failure to 9 state a claim as a matter of law. (Doc. 18.) The parties present the same arguments in 10 support of and opposition to the two motions. 11 Citing Douglas, Plaintiffs contend that Arizona’s failure to pay for 100% of the 12 Services violates an unambiguous requirement of 42 U.S.C. § 1396d(a)(2)(C). Plaintiffs 13 argue that the Ninth Circuit’s decision in Douglas is dispositive of their claim for 100% 14 reimbursement because Douglas held that states must pay for these mandatory Services. 15 (Doc. 9, pp. 6-7, 21-23; Doc. 25, pp. 6-7, 12-15; Doc. 33, p. 5.) 16 Defendants argue that section 1396d(a)(2)(C) does not unambiguously require 17 states to reimburse FQHCs for 100% of the Services. Defendants assert that states are only 18 obligated to cover FQHC services that are included in the state Medicaid plan. Defendants 19 point to language in section 1396d(a)(2)(C) requiring states to cover FQHC Services “and 20 any other ambulatory services offered by a [FQHC] and which are otherwise included in 21 the [state Medicaid] plan.” Defendants contend that the phrase “otherwise included in the 22 plan” requires states to cover only those FQHC services that the state chooses to include in 23 the state Medicaid plan. (Doc. 18, pp. 5-6; Doc. 26, pp. 2-4; Doc. 29, pp. 4-5; Doc. 46, p. 24 2.) 25 Defendants also argue that Douglas did not address the issues in this case and that

26 4 The parties agree that the covered chiropractic services are required as Early and Periodic Screening, Diagnostic, and Treatment (EPSDT) services. (Doc. 1, ¶ 35; Doc. 28, 27 ¶ 35; Doc. 18, p. 9.) EPSDT services are among the mandatory categories of medical assistance. Katie A., ex rel. Ludin v. Los Angeles Cnty., 481 F.3d 1150, 1154 (9th Cir. 28 2007) (citing 42 U.S.C. § 1396d(a)(4)(B)). 1 Arizona does not, as Plaintiffs claim, “categorically exclude” any dental, podiatry, 2 optometry or chiropractic services provided by FQHCs.5 (Doc. 46, p. 2.) Instead, the state 3 covers these services but with limitations. (Id.) 4 The Court does not accept Defendants’ interpretation of § 1396d(a)(2)(C), but the 5 Court agrees with Defendants’ argument that Arizona may cover the Services with limits 6 without violating the Medicaid Act or Douglas. 7 II. Analysis 8 A. Section 1396d(a)(2)(C) does not support dismissal of the Complaint 9 Section 1396a(a)(10)(A) of the Medicaid Act identifies categories of services that 10 states must cover in order to participate in the Medicaid program. 42 U.S.C. § 11 1396a(a)(10)(A). The Medicaid Act also identifies services that states may choose, but are 12 not obligated, to cover (optional services). See 42 U.S.C. §§ 1396a(a)(10)(A), 1396d(a). 13 Among the services that states must cover are “Federally-qualified health center 14 services (as defined in subsection (l)(2)) and any other ambulatory services offered by a 15 Federally-qualified health center and which are otherwise included in the [state Medicaid] 16 plan.” 42 U.S.C. § § 1396a(a)(10)(A), 1396d(a)(2)(C) (emphasis added). The section 17 1396d(a)(2)(C) language is at issue here. 18 Defendants assert that the phrase “which are otherwise included in the plan” 19 modifies both “Federally-qualified health services,“ and “any other ambulatory services 20 offered” by a FQHC, thus requiring states to cover only those FQHC services and 21 ambulatory services that the state choses to include in the state Medicaid plan. Defendants 22 conclude that Medicaid does not require that Arizona cover any of the FQHC Services that 23 are not included in Arizona’s AHCCCS plan. The Court disagrees with Defendants’ 24 reading of the statute. 25 Defendants’ construction of section 1396d(a)(2)(C) would enable a state to 26 categorically exclude all coverage for all FQHC services. This construction is contrary to 27 the plain language and purpose of the statute. The Court must “interpret [a] statut[e] as a

28 5 At oral argument, Defendants agreed that states cannot categorically exclude mandatory services. 1 whole, giving effect to each word and making every effort not to interpret a provision in a 2 manner that renders other provisions of the same statute inconsistent, meaningless or 3 superfluous.” United States v. Neal, 776 F.3d 645, 652 (9th Cir. 2015) (internal quotation 4 marks and citation omitted). “Additionally, [p]articular phrases must be construed in light 5 of the overall purpose and structure of the whole statutory scheme. Id. (internal quotation 6 marks and citation omitted). 7 The Medicaid Act specifically mandates services that states must cover. Under 42 8 U.S.C. § 1396a(a)(10)(A) of the statute, a state plan must provide for “making medical 9 assistance available, including at least the care and services listed in paragraphs (1) through 10 (5), . . . of section 1396d(a) of this title . . . .” Section 1396d(a)(2)(C) lists two types of 11 services: (1) “Federally-qualified health center services” and (2) any other ambulatory 12 services offered by a FQHC. If the phrase “which are otherwise included in the plan” 13 modified both services listed in section 1396d(a)(2)(C), neither service would be mandated 14 for state coverage, unless the state opted to provide coverage of the services in its plan. 15 This would render meaningless the specific listing of section 1396d(a)(2)(C) under the list 16 of services a state must provide in its plan pursuant to 42 U.S.C. § 1396a(a)(10)(A). Under 17 Defendants’ interpretation of section 1396d(a)(2)(C), the provision would not require a 18 state to cover any FQHC services. Interpreting the phrase, “which are otherwise included 19 in the plan,” to modify only the phrase “and any other ambulatory services offered by a 20 Federally-qualified health center,” would not defeat section 1396a(a)(10)(A)’s reference 21 to section 1396d(a)(2)(C) as a mandatory service that a state is required to include in its 22 plan.6 23 In addition, Congress did provide a list of optional services that States could cover. 24 That list is contained at section 1396d(a)(6)-(16), (18)-(20), (22)-(27). See 42 U.S.C. § 25 1396a(a)(10)(A). If Congress had intended to make coverage of FQHC services optional, 26 6 While this Court is not presented with the complete elimination of FQHC 27 physicians’ services as was the case in Douglas, it is noteworthy that the Douglas court concluded section 1396a(bb)(1) “imposes a mandatory obligation, stating that the plan 28 ‘shall provide for payment for services’” described in section 1396d(a)(2)(C) furnished by a FQHC. 738 F.3d at 1013 (emphasis in original). 1 it could have included that category of provider services in the list of optional coverage. 2 The statute would need only identify FQHC services among the listed optional services. 3 Congress did not do so, instead specifically listing FQHC services under those services a 4 state plan for medical assistance must provide for. 42 U.S.C. § 1396a(a)(10)(A). 5 Finally, reading the phrase “which are otherwise included in the plan” to modify 6 only the phrase “and any other ambulatory services” gives effect to the phrase. It is 7 undisputed that Medicaid does not provide for mandatory coverage for all FQHC services, 8 including ambulatory services. Because FQHCs may provide both mandatory and optional 9 services, the phrase “and which are otherwise included in the plan,” is necessary to modify 10 the phrase “and any other ambulatory services offered by a Federally-qualified health 11 center.” Read in this manner, the phrase clarifies that a state need not reimburse FQHC’s 12 costs in furnishing optional services which are not otherwise covered by the state’s plan. 13 As Plaintiffs explain in their Opposition, (doc. 25, p. 15), there are a number of optional 14 services that may be provided by a FQHC that fall outside the scope of mandatory FQHC 15 services defined in § 1396d(l)(2). In fact, “ambulatory services” covers a broad category 16 of outpatient services. 17 For the foregoing reasons, the Court concludes that the phrase “which are otherwise 18 included in the plan,” modifies only the immediately preceding phrase, “and any other 19 ambulatory services offered by a Federally-qualified health center.” Thus, Defendants 20 cannot rely on section 1396d(a)(2)(C) as a basis for excluding mandatory coverage of 21 FQHC Services. 22 B. Plaintiffs fail to state a claim for relief in Count I 23 In Count I, Plaintiffs claim that Defendants violate § 1396a(bb) of the Medicaid Act 24 and binding Ninth Circuit precedent in Douglas by failing to reimburse FQHCs 100% of 25 their reasonable and related costs in furnishing the Services. (Doc. 1, ¶¶ 50-53.) Plaintiffs 26 argue that Arizona is violating the Medicaid Act by excluding coverage for the categories 27 of service that Douglas requires states to provide. (See Doc. 9, pp. 7, 20.) Plaintiffs request 28 that the Court issue an order compelling AHCCCS to reimburse FQHCs pursuant to 42 1 U.S.C. § 1396a(bb) for their “physicians’ services,” which include the services of dentists, 2 podiatrists, optometrist, and chiropractors furnished by a FQHC to a Medicaid beneficiary 3 as a patient of the FQHC. (Doc. 9, p. 30.)7 4 Accepting Plaintiffs’ allegations as true, as the Court must on a motion to dismiss, 5 the Court concludes that Plaintiffs fail to allege facts sufficient to establish that Arizona’s 6 plan, on its face, violates the Medicaid Act. The Douglas court’s holding is not as broad 7 as Plaintiffs contend. In Douglas, it was undisputed that California completely eliminated 8 coverage of the Services, believing under the Medicaid definition of “physicians’ services” 9 that the Services were optional. The Douglas court disagreed with California’s definition 10 of physicians’ services and held that the more expansive definition in the Medicaid Act 11 applied. 12 Here, unlike Douglas, Arizona has not completely excluded coverage of the 13 Services. Arizona’s plan provides limited adult dental and optometry services. 14 Additionally, podiatry services are available to Medicaid recipients upon authorization by 15 a primary care provider. The only category of physicians’ service which Arizona does not 16 cover is adult chiropractic.8 But there is no indication that Arizona, like California in

17 7 At oral argument, Plaintiffs argued that Arizona virtually imposes a blanket exclusion of adult preventive services by dentists, podiatrists, optometrists, and 18 chiropractors. “Preventive services” means services recommended by a physician or other 19 licensed practitioner of the healing arts acting within the scope of authorized practice under State law to— 20 (1) Prevent disease, disability, and other health conditions of their progression; 21 (2) Prolong life; and (3) Promote physical and mental health and efficiency. 22 42 C.F.R. § 440.130(c). “The preventive aspects of some services (such as outpatient hospital services, clinic services, and dental services) are specifically included in the 23 definition of those services in Medicaid regulations.” Centers for Medicare and Medicaid Services, The State Medicaid Manual, Ch. 4, p. 4385, https://www.cms.gov/Regulations- 24 and-Guidance/Guidance/Manuals/Paper-Based-Manuals-Items/CMS021927 (last visited March 19, 2021). “In addition to including preventive care as an integral part of other 25 covered services, each State has the option of covering preventive care as a separate benefit under its Medicaid program, as authorized by sections [1396d(a)(13) and 1396a(a)(10)].” 26 Id.; see also 42 C.F.R. § 440.225 (defining optional services).

27 8 Medicare’s definition of physicians’ services (which Medicaid imports) does not encompass every chiropractic service; it includes chiropractors “but . . . only with respect 28 to treatment by means of manual manipulation of the spine (to correct a sublaxation).” 42 U.S.C. § 1395x(r)(5). 1 Douglas, excludes coverage of adult chiropractic services solely because Arizona does not 2 consider chiropractic services to be covered FQHC physicians’ services. Moreover, 3 Arizona’s lack of coverage of one of the four types of covered physicians’ services does 4 not constitute a complete exclusion of FQHC “physicians’ services” like that addressed by 5 the Douglas court. Notably, Douglas did not delineate the precise scope of the Services 6 that states must cover. Indeed, when discussing the framework of the Medicaid statute, the 7 Douglas court stated: “Each state has discretion to create reasonable standards for 8 determining eligibility for medical services and the extent of those services, provided those 9 standards comply with federal law.” 738 F.3d. at 1010 (citing Schweiker v. Gray Panthers, 10 453 U.S. 34, 36-37 (1981)). Thus, the fact that Arizona does not cover specific kinds of 11 services, for example preventive services, cannot, in and of itself, be said to be a violation 12 of Douglas. 13 In fact, the parties agree that states may place limitations on the Services based on 14 criteria such as medical necessity or on utilization control procedures, with certain 15 exceptions.9 At oral argument, Plaintiffs stated that they are not challenging Arizona’s 16 ability to place limitations on the Services and this case is not about application of 17 utilization controls. The essence of Plaintiffs’ claim is that Arizona is broadly excluding

18 9 The regulations authorize States to “place appropriate limits on a service based on such criteria as medical necessity or on utilization control procedures,” so long as they do 19 not arbitrarily deny or reduce the amount, duration, or scope of a required service under §§ 440.210 and 440.220 to an otherwise eligible beneficiary solely because of the diagnosis, 20 type of illness, or condition. 42 C.F.R. § 440.230(c), (d). Courts have upheld various state limitations on Medicaid services, finding that the limitations complied with federal law. 21 See e.g., Detgen v. Janek, 752 F.3d 627, 631 (5th Cir. 2014) (upholding state’s “categorical exclusion” of ceiling lifts as assistive medical equipment based on the availability of cost- 22 effective alternatives); Mendocino Cmty. Health Clinic v. State Dep’t of Health Care Servs., 155 Cal.Rptr.3d 923 (Ct. App. 2013) (holding that “[f]ederal law does not prohibit 23 a state’s application of utilization controls to psychology services rendered at an FQHC.”). The Court notes that while Plaintiffs assert that Arizona must pay for “medically 24 necessary” mandatory services, (see doc. 25, p. 16), Plaintiffs do not allege that the broad range of services for which they seek 100% reimbursement are all medically necessary. 25 The Supreme Court has stated that while “serious statutory questions might be presented if a state Medicaid plan excluded necessary medical treatment from its coverage, it is hardly 26 inconsistent with the objectives of the Act for a State to refuse to fund unnecessary though perhaps desirable medical services.” Beal v. Doe, 432 U.S. 438, 444-45 (1977). “Nothing 27 in the [Medicaid] statute suggests that participating States are required to fund every medical procedure that falls within the delineated [mandatory] categories of medical care.” 28 Id. at 441. 1 categories of services that Douglas requires states to provide. The Court does not agree. 2 As noted above, Arizona provides for some coverage of the Services. Because Plaintiffs 3 agree that mandatory Services can be limited, the Court cannot conclude that Arizona 4 impermissibly categorically excludes FQHC Services in violation of the Medicaid Act and 5 Douglas, as alleged by Plaintiffs in their Complaint. Accordingly, the Court finds that 6 Plaintiffs fail to state a claim for relief in Count I.10 7 C. Plaintiffs state a claim for relief in Count II, but are not entitled to a 8 preliminary injunction 9 In Count II, Plaintiffs allege that Arizona’s $1,000 limit on adult emergency dental 10 services is an arbitrary and capricious infringement on FQHCs’ payment rights under § 11 1396a(bb) for services “immediately required due to an unforeseen illness, injury, or 12 condition.” (Doc. 1, ¶ 55 (quoting 42 U.S.C. § 1396b(m)(2)(A)(vii).) Plaintiffs allege that 13 the limitation is arbitrary and capricious because it is not based on any degree or 14 consideration of medical necessity and functions to limit costs and deny coverage without 15 exception.11 16 Defendants move to dismiss the Complaint, but Defendants’ Motion makes no 17 argument specific to Plaintiffs’ allegations in Count II.12 In their proposed form of order, 18 Defendants request that the Court consider Count II as subsumed in Plaintiffs’ general 19 request for declaratory and injunctive relief because Plaintiffs request no relief specific to 20 the challenged limitation. (Doc. 46, p. 5 n. 3.) Defendants point out in their proposed form 21 10 Because the Court agrees with Defendants that Plaintiffs fail to state a claim, the 22 Court does not address Defendants’ alternative arguments that Medicaid’s comparability requirement and the approval of Arizona’s Medicaid plan by the Centers for Medicare and 23 Medicaid Services (CMS) support dismissal of Count I.

24 11 Plaintiffs’ proposed form of order does not specifically address Count II. At oral argument, Plaintiffs’ counsel stated that Count II was not addressed separately in the 25 pending motions and that it is “sort of a subset” of Count I. Plaintiffs’ counsel also stated that the Court “can do a thumbs up or a thumbs down decision” on whether Plaintiffs have 26 met their burden to show the limit is arbitrary.

27 12 The Court notes that Defendants’ Reply distinguishes a case Plaintiffs cite in their response to Defendants’ Motion when generally discussing Arizona’s limits on dental care. 28 (Doc. 26, pp. 7-8.) 1 of order that CMS approved Arizona’s limitation on emergency dental benefits. (Id. at p. 2 5.) 3 Unlike Count I’s allegations that Arizona imposes a blanket exclusion of the 4 Services, Count II does challenge a specific limitation on an alleged covered, medically 5 necessary service. Defendants’ Motion to Dismiss does not address whether Plaintiffs have 6 failed to allege a claim based on an arbitrary and capricious cap.13 Accordingly, the Court 7 will deny Defendants’ Motion to Dismiss Count II. 8 The Court will deny Plaintiffs’ Motion for Preliminary Injunction on Count II. At 9 oral argument, Plaintiffs stated that the Court could determine as a legal matter whether 10 Plaintiffs have met their burden of showing that the cap is arbitrary. However, Plaintiffs’ 11 Motion for Preliminary Injunction does not specifically address Count II. Accordingly, on 12 the instant record, the Court cannot determine that Plaintiffs make the required showings 13 for preliminary injunction and are likely to prevail on Count II. 14 III. Conclusion 15 When granting a motion to dismiss, the district court is generally required to grant 16 a plaintiff leave to amend, even if no request to amend the pleading was made, unless 17 amendment would be futile. See Cook, Perkiss, & Liehe, Inc. v. N. Cal. Collection Serv. 18 Inc., 911 F.2d 242, 246-47 (9th Cir. 1990). Because the Court cannot conclude that 19 amendment would be futile, the Court will dismiss Count I with leave to amend. 20 Accordingly, for the foregoing reasons,

21 13 The Court is not persuaded that CMS’s approval of Arizona’s plan precludes Plaintiffs’ challenge to the limitation. Defendants’ argument that CMS’s approval of 22 Arizona’s plan is entitled to deference on the issue whether states may limit the Services in accordance with other provisions of the Medicaid Act, (see Doc. 18, pp. 10-14), is not 23 relevant to whether Plaintiffs state a claim in Count II. Plaintiffs’ claim is not about whether states may limit Medicaid services, it is about whether Arizona’s limitation on 24 emergency dental services is arbitrary and capricious in violation of the Medicaid Act. The Court is also unpersuaded that the comparability requirement prevents 25 Plaintiffs’ challenge to the limitation. Medicaid’s comparability provision requires that “medical assistance made available to any individual . . . shall not be less in amount, 26 duration, or scope than the medical assistance made available to any other such individual.” 42 U.S.C. § 1396a(a)(10)(B)(i); see also 42 C.F.R. § 440.240. Defendants do not discuss 27 the comparability requirement with specific regard to Count II. Further, the Court does not see how the comparability requirement is at issue. A determination that the limitation is 28 arbitrary and capricious in violation of the Medicaid Act would necessarily invalidate the limitation regardless to whom it applied. 1 IT IS ORDERED: 2 1. Defendants’ Motion to Dismiss (Doc. 18) is GRANTED IN PART and DENIED 3 IN PART. Defendants’ Motion is granted as to Count I. Defendants’ Motion is 4 denied as to Count II. 5 2. Plaintiffs are GRANTED leave to amend the complaint consistent with this 6 Order within thirty (30) days of the filing date of the Order. 7 3. Plaintiffs’ Motion for Preliminary Injunction (Doc. 9) is DENIED. 8 4. Plaintiffs’ Motion for Leave to Supplement Plaintiffs’ Motion for Preliminary 9 Injunction (Doc. 48) is DENIED. 10 Dated this 19th day of March, 2021. 11 12 □ 13 fot Sopp 4 ; Honorable Jennife VY Z#pps United States District Judge 15 16 17 18 19 20 21 22 23 24 25 26 27 28

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