The crux of the issue is whether states can exclude certain medical providers from receiving Medicaid funding or if the Medicaid Act’s "any-qualified-provider” provision explicitly grants individual beneficiaries the right to choose a specific provider. Currently, the U.S. Circuit Courts of Appeals are divided 5-2 with the majority in favor of funding Planned Parenthood by interpreting the Medicaid Act provides a right to choose a specific qualified provider. However, the Fifth and Eighth Circuits found that the Medicaid Act does not give beneficiaries a federal right to choose any qualified provider nor does it confer the right to sue states that exclude Planned Parenthood from its Medicaid program.

In South Carolina, state law prohibits the use of taxpayer dollars to pay for abortions. Kerrarose after Governor Henry McMaster signed an executive order in 2018 deeming abortion clinics unqualified to receive state Medicaid funding under the state law. According to the state’s SCOTUS petition, Gov. McMaster’s order stated that South Carolina "has a strong culture and longstanding tradition of protecting and defending the life and liberty of unborn children.” The order directed state health officials to "deem abortion clinics unqualified” to receive funding for abortion-related services. Shortly thereafter, Planned Parenthood South Atlantic and one of its Medicaid clients challenged the executive order claiming it violated federal law under Medicaid’s "any qualified provider” language.

The Fourth Circuit became the fifth circuit court to side with Medicaid beneficiaries ruling that the federal Medicaid law creates "an individual right” to choose a provider, and ruled the law "bars states from excluding providers for reasons unrelated to professional competency.” The Appeals Court affirmed a lower court’s permanent injunction that keeps Planned Parenthood as a "qualified” medical provider in the state.

However, now that South Carolina has appealed to SCOTUS, it is not the first time the High Court has weighed in on this case. In June 2023, SCOTUS provided clear guidance for statutory interpretation when it ruled in Health and Hospital Corporation of Marion County v. Tavelski, a non-abortion case dealing with similar issues. In that case, SCOTUS determined that statutes must "unambiguously confer individual federal rights” for them to be enforceable as such. Using this ruling, SCOTUS vacated the Fourth Circuit’s ruling in Kerr directing the Appeals Court to reconsider its decision. Yet, the Fourth Circuit did not alter its ruling and now SCOTUS will fully review the case at some point in the Spring with a ruling expected in late June 2025.

Contributing to the circuit court split, the Fifth Circuit ruled in 2020 that Texas and Louisiana can defund Planned Parenthood. Texas Attorney General Ken Paxton cited the reason for Texas defunding the abortion giant was the undercover investigation by Sandra Merritt and David Daleiden that produced videos of Planned Parenthood trafficking human baby body parts.

AG Paxton noted that Planned Parenthood is not a "qualified” provider under the Medicaid Act due to the practice of selling the body parts of aborted babies being "morally bankrupt and unlawful conduct.

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