Planned Parenthood settles Medicaid fraud case

Planned Parenthood Gulf Coast has agreed to pay $1.4 million to settle allegations of Medicaid fraud in Texas and Louisiana—although it isn’t admitting guilt.

Texas Attorney General Greg Abbott announced the settlement on Wednesday and said a state investigation determined Planned Parenthood Gulf Coast had “improperly billed the Texas Medicaid program for products and services that were never actually rendered, not medically necessary, and were not covered by the Medicaid program.” In addition, state investigators found that “Planned Parenthood Gulf Coast falsified material information in patients’ medical records.”

The whistleblower who alerted the state to the alleged fraud, Karen Reynolds, is a former employee of a Planned Parenthood affiliate. Reynolds complained Planned Parenthood employees at 12 facilities in Texas and Louisiana falsified Medicaid billing information between 2003 and 2009.

In one example, Reynolds said employees at the abortion provider would regularly hand out brown paper bags with condoms and vaginal film to Medicaid patients, then bill Medicaid $4.20 for the condoms, $12.60 for the film, and $41.05 for “counseling,” even though no counseling was given. According to Reynolds’ complaint, filed in 2011, Planned Parenthood also billed the government for sexually transmitted disease tests that were medically unnecessary.

Planned Parenthood Gulf Coast continues to deny the allegations. A spokeswoman for the organization said it only agreed to the $1.4 million settlement in order to avoid a “lengthy and costly” court battle.

The settlement money will be divided between Texas, Reynolds, and federal coffers.

Abby Johnson, another former Planned Parenthood employee who has a separate Medicaid fraud lawsuit against the Gulf affiliate, called the $1.4 million settlement a “pathetic” figure. “My former affiliate has an endowment of $20 million dollars just sitting in an account. This settlement is simply a slap on the wrist,” she said, according to LifeSiteNews. Johnson’s suit, represented by the Alliance Defending Freedom, alleges Planned Parenthood Gulf Coast (formerly Planned Parenthood of Houston and Southeast Texas) collected $5.7 million in fraudulent reimbursements between 2007 and 2009.

“This is merely the tip of the iceberg,” said Alliance Defending Freedom attorney Michael J. Norton. The legal group said in a report to Congress in February that Planned Parenthood and other abortion providers had committed nearly $100 million in “waste, abuse, and potential fraud,” including Medicaid fraud.