FOR PUBLICATION UNITED STATES COURT OF APPEALS FOR THE NINTH CIRCUIT ARIZONA ALLIANCE FOR No. 21-16262 COMMUNITY HEALTH CENTERS; CANYONLANDS HEALTHCARE; D.C. No. CHIRICAHUA COMMUNITY HEALTH 4:19-cv-00517- CENTERS; DESERT SENITA JGZ COMMUNITY HEALTH CENTER; MARIPOSA COMMUNITY HEALTH CENTER; MARANA HEALTH CENTER; OPINION MOUNTAIN PARK HEALTH CENTER; NATIVE HEALTH; NORTH COUNTRY HEALTHCARE; SUN LIFE FAMILY HEALTH CENTER; SUNSET COMMUNITY HEALTH CENTER; UNITED COMMUNITY HEALTH CENTER-MARIA AUXILIADORA, Plaintiffs-Appellants, v. ARIZONA HEALTH CARE COST CONTAINMENT SYSTEM; JAMI SNYDER, Director, Arizona Health Care Cost Containment System, in her official capacity, Defendants-Appellees. 2 AACHC V. AHCCCS Appeal from the United States District Court for the District of Arizona Jennifer G. Zipps, District Judge, Presiding Argued and Submitted March 10, 2022 Phoenix, Arizona Filed September 2, 2022 Before: Richard A. Paez, Richard R. Clifton, and Paul J. Watford, Circuit Judges. Opinion by Judge Clifton AACHC V. AHCCCS 3 SUMMARY * Civil Rights/Medicaid The panel reversed in part and vacated in part the district court’s grant of defendants’ motion to dismiss, and remanded for further proceedings, in an action in which federally-qualified health centers operating in Arizona and their membership organization alleged that the Arizona Health Care Cost Containment System, which administers Arizona’s Medicaid program, and its director violated 42 U.S.C. § 1396a(bb) and binding Ninth Circuit precedent by failing or refusing to reimburse plaintiffs for the services of dentists, podiatrists, optometrists, and chiropractors. Federally-qualified health centers treat medically underserved areas or populations and may seek mandatory reimbursement from state Medicaid plans under § 1396a(bb) for providing Medicaid recipients with services under the Medicaid Act. Section 1396d(a)(2)(C) requires state Medicaid plans to “cover [FQHC] services (as defined in subsection (l)(2)) and any other ambulatory services offered by a [FQHC] and which are otherwise included in the [state Medicaid] plan.” First, the panel held that this court’s precedent in California Ass’n of Rural Health Clinics v. Douglas (“Douglas”), 738 F.3d 1007 (9th Cir. 2013), established that FQHC services are a mandatory benefit under § 1396d(a)(2)(C) for which plaintiffs have a right to reimbursement under § 1396a(bb) that is enforceable under * This summary constitutes no part of the opinion of the court. It has been prepared by court staff for the convenience of the reader. 4 AACHC V. AHCCCS 42 U.S.C. § 1983. The panel rejected defendants’ interpretation of § 1396d(a)(2)(C)’s phrase “which are otherwise included in the plan” as applying to both the phrases “FQHC services” and “other ambulatory services offered by a [FQHC.]” The panel therefore rejected defendants’ assertion that § 1396d(a)(2)(C) only required states to cover FQHC services that are included in the state Medicaid plan. The panel agreed with the district court that defendants could not rely on § 1396d(a)(2)(C) as a basis for excluding mandatory coverage of FQHC services because the phrase “which are otherwise included in the plan,” modified only the immediately preceding phrase, “and any other ambulatory services offered by a [FQHC.]” Second, the panel recognized that Douglas held that the mandatory benefit of “FQHC services” under § 1396d(a)(2)(C) includes “services …
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