Huge Medicaid Fraud Case Against Planned Parenthood Continues

State   |   Steven Ertelt   |   Jul 27, 2012   |   12:26PM   |   Sacramento, CA

A huge lawsuit filed by a former top officially with Planned Parenthood’s California affiliate is continuing as the law firm representing him and his case concerning its massive Medicaid fraud is heading to an appeals court.

In 2010, the United States Court of Appeals for the Ninth Circuit reinstated the lawsuit filed by a former vice president of a Planned Parenthood abortion business affiliate in California. The case details allegations of massive fraud where the abortion giant overbilled state officials.

P. Victor Gonzalez says the abortion business fired him because he raised concerns about illegal practices of overcharging the state hundreds of millions of dollars on birth control. The former Planned Parenthood official filed a lawsuit in March 2008 but, in January 2009, a federal district court judge dismissed the case and Gonzalez filed an appeal. Represented by the American Center for Law and Justice, Gonzalez is now considered a federal whistleblower and

Gonzalez says his own internal audit estimates that Planned Parenthood overcharged California taxpayers for purchasing birth control by at least $180 million. He was the vice president of finance and administration for Planned Parenthood of Los Angles and, according to a Los Angeles Times report, the overbilling began in the late 1990s.

Jay Sekulow, the chief counsel for the ACLJ, said the pro-life legal group filed an appeal on Monday in the case alleging that Planned Parenthood affiliates in California cheated the state and federal government out of hundreds of millions of dollars by illegally overcharging for birth control drugs and devices.

Following the 2010 decision, Federal District Court Judge A. Howard Matz rejected the lawsuit, ruling that Planned Parenthood’s alleged illegal overbilling was not a “false” claim. Judge Matz dismissed the case in late June and entered a final judgment for Planned Parenthood on July 18.

But, with the appeal, the case now goes to the U.S. Court of Appeals for the Ninth Circuit, where ACLJ attorneys will ask the appeals court to reverse Judge Matz’s ruling and reinstate the lawsuit.

“Our position is clear: the False Claims Act was adopted precisely because private entities were cheating the federal government by submitting inflated invoices,” Sekulow says. “That’s exactly what this lawsuit is about. The notion that submitting false dollar amounts for government reimbursement is not a “false” claim is absurd. We’re confident the Ninth Circuit will overturn Judge Matz’s dismissal of this case.”

“Judge Matz had dismissed the case previously, in 2008, on the grounds that the suit was not brought by a proper party, but after an ACLJ appeal, a Ninth Circuit panel unanimously reversed that ruling and sent the case back to the district court. This time the district court dismissed the case on different grounds. The ACLJ hopes again to have the case reinstated,” Sekulow continued.

Sekulow says the Planned Parenthood affiliates are being represented for free by a large Los Angeles law firm, Skadden Arps Slate Meagher & Flom, LLP.

“Adding insult to injury, after the case was dismissed last month, Planned Parenthood’s attorneys asked the judge to order the whistleblower to pay more than $100,000 to Planned Parenthood’s attorneys. The ACLJ has opposed that request, and the matter is set for a hearing in district court on August 6,” he explained.

“Planned Parenthood has a lot at stake and is not about to roll over,” Sekulow concluded. “A whistleblower could not possibly fight and win a case like this without major legal assistance. This is a very complicated, time-consuming case that requires legal expertise and strategic sophistication. The bottom line is this: We know that this will continue to be a lengthy legal battle, and we remain committed to pursuing Planned Parenthood in this case.”

While other public health facilities and private facilities charged the state between $8 and $9 for a cycle of birth control pills, Planned Parenthood charged almost $12. The Planned Parenthood charge to the California government was several times more than it paid for the drugs originally.

Gonzalez alleges that other California-based Planned Parenthood affiliates and Planned Parenthood Affiliates of California knowingly engaged in a scheme to defraud state and federal taxpayers by deliberately over-billing the Medi-Cal program.

According to the Los Angeles Times, Planned Parenthood overbilling occurred until state Sen. Hannah-Beth Jackson of Santa Barbara sponsored legislation allowing Planned Parenthood to charge more based on concerns the abortion business presented her that it would suffer financial problems without it.

However, altering the statute didn’t address the billing practices prior to it and a 2003 state audit found at least $5.2 million in overbilling in 2003 alone from just one of the nine California Planned Parenthood affiliates.



Medi-Cal officials first noticed the problems in 1997 and Planned Parenthood received two separate letters at that time pointing out the problems.

State officials now say Planned Parenthood was given conflicting information on billing practices. They say Planned Parenthood does not need to repay the millions it overcharged state taxpayers. Still, Gonzalez wants the abortion business to be held accountable for firing him abruptly on March 9, 2004 for doing his job and pointing out that it was breaking the law.

In its legal papers, ACLJ notes a California Department of Health Services audit in 2004 found more than $5 million in egregious over-billing in two years by the San Diego/Riverside Planned Parenthood affiliate.