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After Sound And Fury, Planned Parenthood Still Funded In Texas

Tamir Kalifa
Texas Tribune
On Oct. 21, Planned Parenthood affiliates in Texas received a “notice of termination” from the state Health and Human Services Commission.";s:

Almost two months after Texas Republican leaders announced they would kick Planned Parenthood out of Medicaid, it hasn't happened.

The organization is still receiving federal and state funds to provide health care for about 13,500 low-income women a yearand the state officials who called for a cutoff, including Gov. Greg Abbott, have fallen silent on why the funding continues. 

But the state's hesitance to pull the trigger reflects a recent pattern in its dealings with an organization that is a lightning rod for any political debate that even remotely touches on abortion. Repeatedly, raising claims of fraud or wrongdoing, conservative Texas politicians have vowed to fine or punish the organization.

And repeatedly, when the smoke cleared there was no fire.

The latest chapter began when abortion foes released undercover videos of Planned Parenthood officials purportedly showing that the organization improperly harvested aborted fetal tissue for researchers. The group has vehemently denied those claims.

While the group's abortion services are separate from its health care programs, the flare-up propelled Republican leaders to call for defunding Planned Parenthood entirely, including the $3.1 million it receives through Medicaid in Texas to help low-income women access family planning and well-woman services.

On Oct. 21, Planned Parenthood affiliates in Texas received a “notice of termination” from the state Health and Human Services Commission announcing it was axing the organization’s Medicaid contract, citing the videos and unspecified allegations of Medicaid fraud.

The agency's inspector general, the letter said, had “reliable information indicating a pattern of illegal billing practices” that would disqualify Planned Parenthood from participating in Medicaid. 

The commission’s chief fraud investigator, Stuart Bowen, gave Planned Parenthood 30 days to respond and request an “informal resolution meeting” with health commission attorneys. If it didn't, the state said it would issue a “final notice of termination” formally booting Planned Parenthood from Medicaid — an order that would go into effect 15 days after the organization received it.

Worried they would be cut from the Medicaid program as early as Dec. 8, Planned Parenthood affiliates in November filed a federal lawsuit seeking to block Texas’ efforts. In it, Planned Parenthood argued that terminating its Medicaid contract would prevent low-income women, including 10 unnamed patients that signed on to the case, from obtaining services from a “qualified, willing provider” as required by law.

But when U.S. District Judge Sam Sparks considered the organization's request for a restraining order on Dec. 8, a curious fact emerged. Despite its claims that it had proof of misconduct, state health officials never delivered the final legal notice to defund the organization. 

Lacking a final notice of termination, Sparks canceled the hearing.

"Planned Parenthood has not received official notice from the state for termination of our health centers' continued participation in Medicaid so our court case is delayed," said Sarah Wheat, a vice president for Planned Parenthood of Greater Texas.

The state's efforts to nix the Medicaid dollars have been "political from the start," Wheat said.

A spokesman for the health commission’s inspector general declined to comment on the canceled hearing and the delayed final notice, citing the pending litigation.

“All matters related to the notices of termination are pending,” said spokesman Chris Cutrone.

The governor's office did not respond to a request for comment.

The apparent hesitation is the latest in a series of instances in which the state raised hefty allegations against Planned Parenthood misconduct that have ended with a whimper. 

The state has alleged fraud at Planned Parenthood’s women's health clinics before. In his recent termination letter, Bowen cited $4.3 million that Planned Parenthood paid the state to settle allegations of billing fraud committed between 2003 and 2009.

But since then, the state has pursued other claims of fraud against the organization and come up empty, a Texas Tribune analysis shows.

The state health agency's inspector general has audited the women’s health clinics six times over the last five years. Those investigations, obtained by the Tribune through the Texas Public Information Act, show that Texas claimed Planned Parenthood had wrongly billed the state nearly $1.7 million.

But the state never collected any of that money.

The state alleged, among other things, that Planned Parenthood had served women who were ineligible for government-subsidized services and provided services that were unnecessary. Many of the allegations were based on extrapolations, in which investigators alleged isolated incidents of improper billing and then, using a statistical model, assumed there must be others — inflating the dollar amount as much as 31 times the original.

For example, investigators claimed a Planned Parenthood clinic in Austin had wrongly billed the state for mistakes worth $842, such as recording a woman’s annual exam with the wrong billing code. Investigators then asked for an “extrapolated” refund of more than $25,200.

In another case, investigators apparently claimed that the Planned Parenthood Association of Hidalgo County had given a patient more condoms than were "medically necessary." At that affiliate, in fiscal year 2011, investigators alleged a total of $6,932 in improper payments, which they extrapolated to more than $126,000.

Planned Parenthood disputed most of the state’s findings in the audit reports. The Hidalgo County affiliate has since cut ties with Planned Parenthood.

The state also demanded that Planned Parenthood West Texas refund more than $627,000 — the affiliate’s entire Medicaid payment in fiscal year 2011 — alleging that the women’s health clinics had “inadequate separation,” including a shared lobby, from the affiliate’s abortion clinic. (Planned Parenthood clinics that provide abortions are barred from receiving Texas Medicaid funds for any services.)

Planned Parenthood West Texas did not respond to the allegations; its clinics had closed months before the state completed its audit in March 2014.

Cutrone, the spokesman for the Office of Inspector General, which investigates Medicaid fraud, said those cases were “pending.” But Planned Parenthood says it hasn’t heard from the state since appealing those findings, with some sitting idle for more than three years.

"We’ve had those things on appeal now for three years or more, without anything happening on them. I haven’t heard a word since," said Mark Chouteau, the lawyer representing Planned Parenthood in the appeals.

"The OIG came in here, obviously, in my mind, with a mandate," he added. But without any response from the state on the appeals, Chouteau said, "it may very well be that they didn't want to defend those audits."

While those old audits languish on appeal, the state’s current investigation into Planned Parenthood seems to have hit road bumps of its own as observers have raised questions about the timeline of the investigation.

State officials announced they would kick Planned Parenthood out of the Medicaid program on Oct. 19. Three days later, investigators visited Planned Parenthood facilities in San Antonio, Houston, Dallas and Brownsville to deliver extensive requests for Medicaid records, billing information and other materials that could seemingly back up their claims.

In a previous interview with the Tribune, Bowen emphasized that the “notice of termination” sent to Planned Parenthood in October was the start of a civil enforcement process — not a final determination of the organization’s status as a Medicaid provider.

“We did not terminate them,” he said. “We began a process ... inclusive of the development of evidence.”

Bowen’s explanation appeared at odds with the wording of the notice sent to Planned Parenthood and public statements made by Abbott and other top state officials indicating that Planned Parenthood would indeed be ousted from the program.

It remains unclear why Planned Parenthood has yet to receive the final notice, and the Office of Inspector General has declined to provide any details about its investigation into the organization.

The delay in the Planned Parenthood lawsuit in Texas comes more than a week after Alabama abandoned similar efforts to end the organization’s Medicaid contract there. Meanwhile, Louisiana's efforts were put on hold by federal judge with the state expected to appeal.

Should Texas' final notice arrive, Planned Parenthood officials have vowed to fight back.

“When the state issues an official notice to terminate our health centers from the Medicaid program, Planned Parenthood is ready to continue to stand up for our patients in court,” Wheat said.

Disclosure: Planned Parenthood was a corporate sponsor of The Texas Tribune in 2011. A complete list of Tribune donors and sponsors can be viewed here.

The Texas Tribune provided this story.