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Seventh Circuit Blocks Indiana Law Defunding Planned Parenthood

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By Robyn Hagan Cain on October 23, 2012 4:03 PM

The Seventh Circuit Court of Appeals ruled on Tuesday that Indiana cannot cut Medicaid funding to abortion providers, reports The Wall Street Journal.

In 2011 Indiana adopted a law prohibiting state agencies from providing state or federal funds to "any entity that performs abortions or maintains or operates a facility where abortions are performed."

That law made Indiana the first state to deny the Planned Parenthood Medicaid funds for general health services including cancer screenings, The Associated Press reports.

While the Hyde Amendment already forbids states from using federal funds to pay for most nontherapeutic abortions -- and Indiana has a similar ban on the use of state funds -- the new law went a step further by prohibiting abortion providers from receiving any state-administered funds, even if the money is earmarked for other services. The point was to eliminate the indirect subsidization of abortion.

Immediately after the defunding law was enacted, Planned Parenthood of Indiana sued to block its implementation.

As an enrolled Medicaid provider that provides reimbursable medical services to low-income patients, Planned Parenthood claimed that the defunding law violated the Medicaid Act's "free choice of provider" provision. The provision requires state Medicaid plans to allow patients to choose their own medical provider from "any institution, agency, community pharmacy, or person, qualified to perform the service or services required."

This week, the Seventh Circuit Court of Appeals agreed, finding that Planned Parenthood was indisputably a qualified Medicaid services provider. Seventh Circuit Judge Diane Sykes, a George W. Bush appointee, wrote the opinion for the court.

Judge Sykes noted, "The defunding law excludes Planned Parenthood from Medicaid for a reason unrelated to its fitness to provide medical services, violating its patients' statutory right to obtain medical care from the qualified provider of their choice."

The state has not yet indicated if it will appeal the ruling.

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