Court rejects Planned Parenthood's appeal, clearing way for Medicaid fraud lawsuit seeking up to $1.8 billion

A federal appeals court on Wednesday rejected Planned Parenthood's attempt to block a lawsuit alleging fraud against Medicaid, so the case returns to the lower court, where the organization faces potential damages of nearly $2 billion, LifeNews reported.

The full panel of the Fifth Circuit Court of Appeals ruled that it lacked jurisdiction to hear the interlocutory appeal filed by Planned Parenthood Federation of America. The decision returns the case to the Northern District of Texas, where Judge Matthew Kacsmaryk had already rejected the organization's attorneys' claim of immunity.

Whistleblower's lawsuit

The lawsuit was filed by a whistleblower identified as "Alex Doe" under the False Claims Act, the federal law that allows individuals to report fraud involving public funds. According to his complaint, three Planned Parenthood affiliates continued to submit bills to Medicaid years after Texas and Louisiana had revoked their authorization to participate in the program in 2015.

According to LifeNews, that exclusion followed the release of recordings by the Center for Medical Progress in which organization officials discussed the procurement and potential sale of tissue from aborted fetuses. Despite the decision by both states and the ongoing litigation, the affiliates reportedly continued to receive payments from the taxpayer-funded system.

Potential damages of up to $1.8 billion

The False Claims Act allows for the recovery of three times the amount improperly billed, in addition to additional fines. Estimates place the potential liability between $1.8 billion and nearly $2 billion.

The full Fifth Circuit vacated a previous ruling by a three-judge panel that had ruled in favor of Planned Parenthood on the issue of immunity. In its Aug. 12 ruling, the court found that an immediate appeal was not warranted, reasoning that resolving the immunity issue neither definitively settled a separable legal question nor significantly advanced the proceedings.

The case now returns to district court. If the plaintiff prevails, Planned Parenthood could be forced to repay the Medicaid reimbursements it received after the states declared it ineligible.