Indiana: Medicaid patients' choice not unlimited

June 24, 2011 - 2:15 PM

INDIANAPOLIS (AP) — The state of Indiana on Friday defended its new law cutting off funding to Planned Parenthood in part by saying Medicaid recipients don't have unlimited rights to choose their health care providers.

The state was responding to a June 16 brief in which the U.S. Justice Department sided with Planned Parenthood in its request for a court order blocking as unconstitutional a tough new Indiana abortion law that disqualifies Planned Parenthood of Indiana from the Medicaid program because it provides the procedure.

Justice Department attorneys have said U.S. District Judge Tanya Walton Pratt should grant Planned Parenthood's request for an injunction because the law restricts Medicaid recipients' freedom to choose their health care provider.

In its 17-page response, Indiana argued states have the same power to deny Medicaid payments to providers as the federal government. It also said the law mirrors federal restrictions on abortion funding in most cases.

"HEA 1210 . . . is not targeted at managed care organizations, nor is it directed at family planning choice. It is targeted at preventing indirect subsidy of abortions, which Congress expressly excludes as a form of 'family planning' payable by Medicaid," the state's brief said.

While the federal government had said patients' choice could only be limited for reasons related to billing or the availability of care, the state cited cases in which the U.S. Centers for Medicaid and Medicare Services had approved restrictions for other reasons. One of them was an Indiana case in which CMS allowed the state to refuse to qualify additional beds in nursing facilities for Medicaid in certain circumstances.

"It is hard to understand why Indiana can restrict recipient choice for the sake of limiting nursing home capacity but not for the sake of preventing indirect Medicaid subsidy of such non-Medicaid services as abortion," the state said.

But Ken Falk, an American Civil Liberties Union of Indiana attorney who is representing Planned Parenthood, said allowing states to regulate choice would "turn Medicaid on its head."

"You could have free choice only in the providers the state said you could choose. Which does not sound like free choice," he said. If the state wanted to limit Medicaid patients to a single provider, it could do so under its argument, he said.

Planned Parenthood of Indiana has been without Medicaid funding since the law took effect May 10. The group stopped seeing Medicaid patients this week after private donations that had paid those patients' bills ran out.

The Indiana attorney general's office said the state submitted a request Thursday for a rehearing by the U.S. Department of Health and Human Services to appeal a federal opinion that the new law violated Medicaid rules. Medicaid Administrator Donald Berwick sent a letter to his Indiana counterpart on June 1 saying federal law says beneficiaries can obtain general health services from any qualified provider and the mere fact that Planned Parenthood performs abortions does not disqualify it.

Planned Parenthood chose not to file a legal response Friday.

"We are the biggest provider of reproductive health care in the state, and abortions are legal," Planned Parenthood of Indiana President Betty Cockrum said. She said the group takes abortion seriously and offers adoption counseling at its abortion clinics.

Pratt has said she intends to rule by July 1. Cockrum said with the clock ticking on the group's Medicaid services, she hoped for a ruling "sooner rather than later."