Texas lawsuit could bankrupt Planned Parenthood in the state

A lawsuit argued in a federal court in Texas on Tuesday could force Planned Parenthood to give the state — and an anonymous whistleblower — more than $1 billion in Medicaid payments and fines.

The organization has said a decision in favor of the state would bankrupt every Texas affiliate, forcing the state’s remaining Planned Parenthood clinics to close.

“This lawsuit was brought with the sole goal of shutting down Planned Parenthood,” the group said in a statement.

The lawsuit stems from a longtime effort by the state to remove Planned Parenthood from its Medicaid program. It was filed in Amarillo, a city that does not have a Planned Parenthood clinic, but doing so ensured it would be heard by District Judge Matthew Kacsmaryk.

Kacsmaryk, appointed by former President Trump, invalidated the approval of the abortion pill mifepristone earlier this year. Last year, he blocked a federal family planning program that allowed minors to receive birth control without their parents’ consent.

The current lawsuit was brought by an anonymous whistleblower who is part of the anti-abortion group Center for Medical Progress, which in 2015 released an edited and subsequently debunked video alleging Planned Parenthood providers illegally sold aborted fetal tissue for medical research.

The suit is backed by Texas Attorney General Ken Paxton (R) and alleges Planned Parenthood engaged in Medicaid fraud by continuing to bill the state for health services administered during a period when the organization was fighting an attempt by Texas to cut it off from the state’s Medicaid funds.

Texas is suing under the federal False Claims Act to claw back about $17 million in Medicaid payments, plus more than $1 billion in additional penalties and punitive damages.

The False Claims Act allows for fines for every fraudulent payment and also allows a private citizen, known as a “relator,” to sue on behalf of the United States in exchange for receiving a portion of any money recovered from the defendant.

Tuesday’s oral arguments were made on motions for summary judgment filed by all sides — Texas, Planned Parenthood for America, its Texas affiliates and the anonymous realtor. It’s not clear when Kacsmaryk will issue a ruling.

Paxton is currently suspended from office ahead of an impeachment trial next month over allegations of bribery and abuse of office.

Alexis McGill Johnson, president of Planned Parenthood Federation of America, called the lawsuit baseless, and said the case is an “existential threat” to the funding of its Texas affiliates.

“This is a political charge to try to bankrupt health care in the state of Texas,” McGill Johnson said during a small Capitol Hill briefing with reporters last month.

If Kacsmaryk rules against the organization, it would jeopardize access to care for Texans who rely on Planned Parenthood clinics for services including cancer screenings, birth control and other essential health care, she said.

The roots of the lawsuit date back to December 2016, when Texas filed a final notice to remove  Planned Parenthood from the Medicaid program, citing as evidence the video from the anti-abortion advocates.

Planned Parenthood appealed to a federal court, which blocked Texas from moving forward and allowed the organization to continue operating and billing Medicaid as normal.

Then in 2020, the U.S. Court of Appeals for the 5th Circuit reversed that decision, ruling that Planned Parenthood did not have the right to challenge Texas’s reasoning for removing it.

The 5th Circuit’s decision was eventually upheld in 2021, and Planned Parenthood is no longer a participant in the Texas Medicaid program.

In the complaint heard Tuesday, Texas alleged that Planned Parenthood should have filed an administrative appeal in 2016, rather than a legal one. By declining to file an appeal, Paxton argued Planned Parenthood gave up its right to continue operating and billing Medicaid.

Last year, Paxton said in a statement that it was “unthinkable that Planned Parenthood would continue to take advantage of funding knowing they were not entitled to keep it.”

But Planned Parenthood’s Texas affiliates argue that all services were legally allowed to be billed because of court orders.

Texas knew the affiliates were providing the services, reimbursed them just like any other health provider and never asked for a repayment until filing the lawsuit, they argued.

“There is no authoritative guidance — indeed, no guidance whatsoever — from either of the States or the federal government that suggests, let alone clearly states, that payments, lawful when received, could retroactively become overpayments,” Planned Parenthood wrote in an earlier court briefing.

There are three Planned Parenthood affiliates in Texas, operating only about 35 clinics statewide.

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