Obama Administration Rejects Indiana’s Ban on Medicaid Funds For Planned Parenthood

Jun 1, 2011 5:13pm

The Obama Administration today rejected Indiana’s proposal to ban the use of Medicaid funds at Planned Parenthood clinics.

In a letter to Patricia Casanova, director of the state Office of Medicaid Policy and Planning, Dr. Donald Berwick, the administrator of the Centers for Medicare and Medicaid Services, said that Indiana’s ban violated a provision of the law allowing that “beneficiaries may obtain covered services from any qualified provider that undertakes to provide such services.”

In May, GOP Gov. Mitch Daniels signed a law banning Medicaid funds from going to "any entity that performs abortions or maintains or operates a facility where abortions are performed."

Daniels said that “any organization affected by this provision can resume receiving taxpayer dollars immediately by ceasing or separating its operations that perform abortions.”

Those who oppose abortion have long argued that even if federal funds don’t directly go to fund abortions in groups such as Planned Parenthood, allowing such clinics to receive funding for other services frees up private funds to be spent on abortions.

Planned Parenthood of Indiana says that 96% of its work is preventative, with only 4% abortion-related. Four out of the 28 Planned Parenthood clinics in Indiana perform abortions. A spokesperson for Planned Parenthood of Indiana has said that 20% of its annual budget comes from  federal funding.

Noting that “federal Medicaid funding of abortion services is not permitted under federal law except in extraordinary circumstances (such as in cases of rape or incest),” Berwick wrote that “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.”

Between January 2010 and May 31, 2011, CMS had formally denied 19 state plan amendments, though not for the same reason. An Obama administration official says that CMS did not impose penalties in any of these matters, the state ended up complying with the CMS ruling.

Officials from the Indiana Office of Medicaid Policy and Planning could not be reached for comment.

-Jake Tapper (@jaketapper) and Mary Bruce

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