Indiana can't block Medicaid money for Planned Parenthood, feds say

An Indiana law that prevents Medicaid dollars from going to Planned Parenthood, an abortion provider, runs afoul of Medicaid law, the Obama administration says. A long legal battle could be ahead, with other states watching to see if they can follow suit.

Federal authorities on Thursday rejected Indiana’s bid to block Medicaid recipients from receiving care at Planned Parenthood. If Indiana lawmakers do not abolish a recent state law that eliminates the group’s funding, officials say, the state may lose nearly $8 billion it receives in Medicaid dollars.

The admonition could be a deterrent for other states that may have similar designs to withhold funding from the organization, which is the largest provider of abortions in the US and has become a lightning rod for conservatives. Republicans pushed hard but failed to eliminate federal funding for Planned Parenthood in the 2011 budget.

A letter sent Wednesday to the Indiana Office of Medicaid Policy and Planning said the law violates federal Medicaid law because states are prohibited to pick and choose which groups receive Medicaid dollars.

“As you know, federal Medicaid funding of abortion services is not permitted under federal law except in extraordinary circumstances … at the same time, Medicaid programs may not exclude qualified health care providers from providing services that are funded under the program because of a provider’s scope of practice,” wrote Donald Berwick, an administrator with the US Department of Health and Human Services.

Indiana Gov. Mitch Daniels (R) signed the bill, which took effect May 10, to deny the group about $2 million in federal dollars, which is disbursed by state authorities. Besides eliminating the group’s funding, the law includes other requirements meant to restrict abortions in the state, including a ban on the procedure following the 20th week of pregnancy unless the woman’s life is in jeopardy and a requirement that abortion providers tell women seeking abortions that life begins at conception, that the procedure is linked to infertility, and that fetuses can feel pain at 20 weeks or earlier.

Court battle likely

For now, the state “will continue to defend the statute,” Bryan Corbin, a spokesman for Indiana Attorney General Greg Zoeller, told the Indianapolis Star Thursday.

A prolonged court battle appears in the works. Planned Parenthood is challenging the law in federal court, and a hearing is scheduled Monday in Indianapolis.

On the day the bill became law, the Indiana chapter of the American Civil Liberties Union filed a request on behalf of Planned Parenthood for a temporary restraining order against the law on grounds it violates the constitutional rights of health-care providers and endangers patients. US District Judge Tanya Walton Pratt blocked the request the following day, saying the new law did not have an “immediate effect” on the organization and so did not require an injunction.

Planned Parenthood announced last week that it could continue providing health-care services to Medicaid patients through June 15 due to over $100,000 in donations sent to the organization in response to the law’s passage.

Betty Cockrum, president of the organization’s Indiana chapter, said it was “gratifying” that federal authorities confirmed her state violated Medicaid law. “It is right that the federal government take action against Indiana and set an example for other states seeking to adopt this type of harmful legislation,” she said in a statement.

Republican lawmakers who pushed for the law’s passage are framing Mr. Berwick’s letter as an example of federal authorities trying to trump state rights. “It’s another example of the federal government trying to tell states what to do. I think states are very capable of deciding their own fate and running their own ship,” state Rep. Eric Turner (R) told the Indianapolis Star Thursday.

Governor Daniels silent

Conspicuously silent on the matter since Wednesday is Governor Daniels. In signing the bill, the perception grew that he was trying to confirm his conservative credentials in the weeks before a possible announcement he would run as a presidential candidate. That did not happen, which makes some believe Daniels, who is largely seen as a social moderate, will leave the issue up to the courts.

“He still wants to be a mover and a shaker in the Republican Party,” says Brian Vargus, a political scientist at Indiana University-Purdue University in Indianapolis. “He has nothing to gain to talk about this because it doesn’t talk to fiscal issues, which is his strength, and to conservatives he can say that he did sign it. And if [the courts] shut the law down he can say ‘this is a case of federal government meddling in Indiana.' "

Planned Parenthood operates 28 clinics in Indiana. Four provide abortions. The organization is eligible for Medicaid funding because it provides a variety of health-care services.

In 2010, abortions accounted about 4 percent of procedures given to women Planned Parenthood, according to the organization's data. The group says it offers health-care services primarily to low-income women and teens.