PPH Medicaid Fraud Case, Part 4: Fraudulent Tallying of Patients

The final installment in a long and sordid tale. What does the future hold?

This article is the fourth and final in my series discussing the specifics of the Planned Parenthood of the Heartland (PPH) Medicaid fraud suit brought by former manager Susan Thayer against her employer of 17 years (during her time, it was called Planned Parenthood of Greater Iowa and has since merged with three other states and three counties in Illinois to become PPH). If you’ve not done so, please begin here.

The third and final group of fraud charges claimed in the suit is “Fraudulent Certification of Compliance with Title X Program Requirements and Federal and State Law.” This claim group is the most general of the three, with the first group of fraud charges being patient-specific, involving their safety, privacy, and the fraudulent billing to the state and federal governments on those patients’ behalf. The second group involves “unbundling,” which is abortion-specific and involves increasing revenue through tax money by billing for services connected to abortions and/or to subsidize the cost of abortions while selectively removing the abortion itself from the bill. As PPH knows that state and federal laws expressly prohibit funding or subsidizing of abortion, this fudging of billing allows PPH to seem to be adhering to the law, thus maintaining funding. This last group is Medicaid-specific and involves over-billing the government to make money off each and every appointment by classifying all of them as Medicaid-billable “encounters,” even when such appointments were for abortion or abortion-related services. (It is prohibited by law to claim an abortion-linked appointment as a tax-funded encounter.)

Thayer’s claim states, “In spite of aforementioned prohibitions, as is known by [Thayer] by virtue of her former positions with Planned Parenthood, [PPH] has, on a regular basis and at all times relevant […], fraudulently ‘tallied’ every patient who was treated at or otherwise visited a Planned Parenthood clinic as a non-abortion patient and thus as an ‘encounter’ for Title X grant purposes, even though many such patients received abortions and abortion-related services at such [PPH] clinics. In this manner, [PPH …] fraudulently obtained Title X and State of Iowa funds from the Family Planning Council of Iowa and others to which it was not legally entitled.”

It continues, “In addition to the foregoing, Federal law requires that, if [PPH] commingles its abortion operations with its non-abortion operations, it must be able to demonstrate that its abortion operations are financially self-sufficient and are operated sufficiently separately from services funded with Title X funds to avoid the use of Title X funds in its abortion operations.

“[PPH’s] internal financial records reflect that its abortion operations have […] operated at a deficit and [their] other non-abortion operations, including its Title XIX-Medicaid operations, have, during this same period of time, operated at a profit. As is known to Relator […], Planned Parenthood commingles its abortion operations with its non-abortion operations by utilizing the same personnel, facilities, supplies, utilities, and other resources in providing abortion services as it does for its other services at most, if not all, of its clinics where abortion services are provided, thus, at least in part, subsidizing its abortion operations with Title XIX and Title X funds. [Therefore], due to [PPH’s] operational deficit for its abortion services and contrary to federal and state laws and regulations, [PPH’s] abortion operations have been, in fact, subsidized and supported by revenues it derived, at least in part, from reimbursements of [Medicaid] funds.”

Perhaps the most powerful and summarily damning wording in the entire 35-page suit is contained in its final pages, which itemize the judgments sought to be brought against the organization for its “wholesale disregard” for Medicaid laws. The document concludes:

WHEREFORE, Relator Susan Thayer respectfully requests that this Honorable Court enter judgment against Defendant Planned Parenthood, as follows:

  • (a) That defendant Planned Parenthood cease and desist from violating 31 U.S.C. § 3729 et seq. and IOWA CODE ANN.  § 685.1(1)(a)-(c) and (g).
  • (b) That the Court enter judgment against Defendant Planned Parenthood in an amount equal to three times the amount of damages the United States has sustained as a result of Defendant’s actions, as well as civil penalties of $11,000 for each violation of 31 U.S.C. § 3729.
  • (c) That the State of Iowa be awarded the amount paid by the State of Iowa as a result of Defendant’s violation of IOWA CODE ANN. § 685.2(1)(a)(c), including interest and a civil penalty equal to not less than $5,000 and not more than $10,000 for each violation, as well as the fees, costs, and expenses incurred in obtaining the injunctive relief and civil remedies including court costs, attorney’s fees, witness fees, and deposition fees.
  • (d) That, in consideration of [PPH’s] wholesale disregard of its Title X grant, [PPH] be required to disgorge all Title X monies paid to [PPH] during the grant years 2002 through 2009, the precise amount of which, upon information and belief, based on [PPH’s] self-reported annual grant income, is $7,243,326.
  • (e) That Relator Susan Thayer be awarded the maximum amounts allowed pursuant to 31 U.S.C. § 3730(d) and IOWA CODE ANN. § 685.3(4).
  • (f) That Relator be awarded all costs and expenses of this action, including her attorney’s fees.
  • (g) That this Court award such other and further relief to the United States of America and/or to the State of Iowa and/or to Relator Susan Thayer as it deems just and proper.


Pursuant to F.R.C.P 38, Relator Susan Thayer hereby demands trial by jury of all issues so triable.

DATED: This 21st day of March, 2011.

As I stated in the first article of this series, PPH currently faces a penalty of up to $5.5 billion if found guilty on all charges within this lawsuit if forced to pay the maximum penalties. As this suit deals only with activities witnessed by Thayer at the Iowa clinics she was involved with, it suggests that these fraudulent acts are a mere tip of the iceberg. As all Planned Parenthood clinics operate under the national umbrella of Planned Parenthood Federation of America, Inc., it can be reasonably assumed that these billing practices and other illegal acts are present at all clinics, with all management answering to (and getting their instructions from) the same central body.

Fortunately, it doesn’t have to be assumed, as Thayer is not the only one to invoke whistle-blower laws against the organization. This summer, Planned Parenthood of Illinois paid a settlement of over $367,000 in a Medicaid fraud suit for over-billing made by its own medical director, Dr. Caroline Hoke. Hoke was investigated by the inspector general of the DHFS, who threatened termination of her position since 2010, when she was suspected of fraudulent billing to the state. Hoke was the fourth-highest billing physician in Illinois’ Medicaid program in 2009-2011, receiving nearly $4 million, despite not having received payment for much of 2010 and all of 2011. An individual clinic paid an additional $20,000 to settle the dispute involving over-billing by Dr. Hoke in 2006-2007, when she worked for Planned Parenthood of Illinois at two of their clinics. (Apparently, when you commit fraud while working as a physician for Planned Parenthood, they not only allow you to stay employed, but promote you to their state medical director.) Planned Parenthood of Illinois’ CEO Carole Brite (who hired Hoke) denied any wrongdoing and called the inquiry a “routine review,” according to (This was before the settlement.)

The Illinois governor’s administration stated this May that they were clamping down on Medicaid fraud in the state. Now faced with this settlement, ignoring other fraud by Planned Parenthood would make the administration appear to be failing on their promise or intentionally singling out the organization for an exemption, while launching a robust investigation is likely to anger the administration’s fellow Democrats and pro-choicers who could see it as an attack on an organization they seek to protect. Political consultant Thom Serafin commented on the situation Governor Quinn’s administration finds itself in, saying, “Because of the national debate [on abortion and Planned Parenthood] and the acrimony on the national level, you want to be sure of everything you do. You know everyone is watching.”

And they will be watching: cases in California and Texas are also underway, with former employees coming forward, just as Thayer has, to engage in a David-vs.-Goliath legal battle. A judge ruled this month that a fraud case in Texas will continue, despite Planned Parenthood’s attempts to have it dismissed. Whistle-blower Karen Reynolds, who launched the suit, which involves one of Texas’ biggest Planned Parenthood affiliates (Austin), has claimed that the government has been defrauded of hundreds of millions of dollars in her state. Abby Johnson (former Planned Parenthood clinic director and current Live Action partner) launched another suit, totaling nearly $1 billion in potential damages, also in Texas (Houston).

Perhaps it’s only the massive sums of money owed to the government by an organization many of their officials support that propel the government to finally pursue the abortion giant. Perhaps it’s anxiety that comes from knowing you’re being watched by a nation of people tired of cronyism and poverty, who are starting to see where their money is really going. Perhaps inside David’s sling, amongst the collecting stones of evidence, is a bit of irony. Whatever it is, we’ll take it. It might just be pro-choice Democrats who end up joining us in bringing Goliath down.

After all, the Lord works in mysterious ways.

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