Planned Parenthood in Texas at risk of bankruptcy due to ongoing lawsuit

A federal court in Texas heard a lawsuit on Tuesday that could potentially result in Planned Parenthood being forced to pay over $1 billion in Medicaid payments and fines to the state and an anonymous whistleblower. The organization has warned that a ruling in favor of the state would financially cripple its Texas affiliates, leading to the closure of the remaining Planned Parenthood clinics in the state. Planned Parenthood accused the lawsuit of being a deliberate attempt to shut down their operations.

The lawsuit stems from Texas’ long-standing effort to remove Planned Parenthood from its Medicaid program. The case was filed in Amarillo, a city without a Planned Parenthood clinic, strategically ensuring that it would be heard by District Judge Matthew Kacsmaryk, an appointee of former President Trump. Kacsmaryk previously invalidated the approval of the abortion pill mifepristone and blocked a federal family planning program allowing minors to receive birth control without parental consent.

The anonymous whistleblower who filed the lawsuit is associated with the anti-abortion group Center for Medical Progress, known for releasing an edited and debunked video in 2015, alleging that Planned Parenthood illegally sold aborted fetal tissue for medical research. Texas Attorney General Ken Paxton supports the lawsuit, which accuses Planned Parenthood of Medicaid fraud for billing the state during a period when it was fighting to maintain its access to Medicaid funding.

The lawsuit, brought under the federal False Claims Act, seeks to recover $17 million in Medicaid payments from Planned Parenthood, along with over $1 billion in additional penalties and punitive damages. The False Claims Act allows for fines for each fraudulent payment and enables a private citizen, known as a “relator,” to sue on behalf of the United States and receive a portion of any recovered funds from the defendant.

All parties involved presented their arguments for summary judgment during the oral hearings on Tuesday. The ruling by Judge Kacsmaryk is pending. It’s worth noting that Paxton, who supports the lawsuit, is currently suspended from office and facing an impeachment trial next month due to allegations of bribery and abuse of office.

President of Planned Parenthood Federation of America, Alexis McGill Johnson, dismissed the lawsuit as baseless and described it as an existential threat to the funding of Planned Parenthood’s Texas affiliates. McGill Johnson emphasized that a ruling against the organization would jeopardize access to vital healthcare services provided by Planned Parenthood clinics.

The roots of the lawsuit trace back to December 2016 when Texas notified Planned Parenthood of its intention to remove the organization from the Medicaid program, citing the aforementioned video as evidence. Planned Parenthood appealed to a federal court, securing an injunction that allowed them to continue operating and billing Medicaid normally. However, in 2020, the U.S. Court of Appeals for the 5th Circuit overturned the injunction, ruling that Planned Parenthood did not have the right to challenge Texas’ decision. The decision was subsequently upheld in 2021, resulting in Planned Parenthood’s exclusion from the Texas Medicaid program.

In the current complaint, Texas argues that Planned Parenthood should have filed an administrative appeal instead of a legal one in 2016. Texas Attorney General Paxton claimed that it was “unthinkable” for Planned Parenthood to continue receiving funding when they were aware they were not entitled to it. Planned Parenthood’s Texas affiliates countered that they provided services in accordance with court orders and were reimbursed like any other healthcare provider. They argue that there was no guidance from the state or federal government indicating that the payments they received could retroactively be considered overpayments.

Texas is suing with the objective of recouping payments made to Planned Parenthood and potentially imposing substantial penalties and damages on the organization. This lawsuit has significant implications for Planned Parenthood’s affiliates in Texas and the individuals who rely on their clinics for essential healthcare services such as cancer screenings and birth control.

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