The liberal 9th Circuit Court of Appeals dismissed a case yesterday that alleges the Planned Parenthood abortion business defrauded the state of California out of hundreds of millions of dollars by overcharging customers for birth control and improperly asking the state for taxpayer-funded reimbursements.
Former California Planned Parenthood financial official P. Victor Gonzalez is behind the lawsuit. Gonzalez says his own internal audit estimates that Planned Parenthood overcharged California taxpayers for purchasing birth control by at least $180 million.
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 December 2005 but, in November 2008, a federal district court judge dismissed the case and Gonzalez filed an appeal.
Gonzalez won this first appeal in the Ninth Circuit in 2010, which reinstated his whistleblower suit. The district court dismissed the case for a second time in 2012, and Gonzalez, still represented by ACLJ attorneys, appealed once again.
He was the vice president of finance and administration for Planned Parenthood of Los Angeles and, according to a Los Angeles Times report, the overbilling began in the late 1990s.
Now, the liberal federal appeals court has affirmed the district court’s dismissal of the suit:
The three-judge appeals panel found that a series of letters between Planned Parenthood and state officials attached to plaintiff P. Victor Gonzalez’s complaint “fatally undercut” his allegations.
“Stated simply, even if bills sent by Planned Parenthood were false in portraying its costs, one cannot plausibly conclude that there was knowing falsity on the part of Planned Parenthood given the explicit statements addressing this subject made by the State of California through CDHS and the state’s silence after being told what procedures Planned Parenthood was following,” the appeals court ruled.
During oral arguments in the appeal last month, Gonzalez’s attorney Walter Weber of the American Center for Law and Justice argued that because Planned Parenthood was required by law to bill the government only its acquisition cost for the birth control, but actually asked for marked up prices, its overcharging was inherently a false claim.
“If charging the government more than 10 times the amount that is allowed by law is not a false claim, then it is hard to imagine what is a false claim,” he said.
While other public health facilities and private facilities charged the state between $8 and $9 for a cycle of birth control pills, Planned Parenthood often charges almost $12. The Planned Parenthood charge to the California government was several times more than it paid for the drugs originally.
The “explicit statements” all told Planned Parenthood it could not mark up charges. The state never told Planned Parenthood its billing practices were legal or acceptable.
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.
Judge A. Howard Matz dismissed Gonzalez’s suit in October 2008 and he ruled that Gonzalez did not qualify as a whistleblower under federal law because he was not the “original source” of the data exposing the fraud. As a result, he said his court lacked jurisdiction in the suit.
The federal False Claims Act (FCA) forbids government contractors from submitting “false or fraudulent” claims for payment. The FCA also authorizes private individuals to bring suit against the offenders to recover the fraudulently obtained funds.
The allegation in this case is that PP affiliates in California illegally marked up the cost of various birth control drugs when seeking government reimbursement, resulting in tens of millions of dollars of overbilling – at taxpayer expense. State audits in both California and Washington State have found PP affiliates guilty of overbilling.
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 three separate letters at that time pointing out the problems.
A state official said Planned Parenthood was given conflicting information on billing practices. The official said Planned Parenthood does not need to repay the millions it overcharged state taxpayers.