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Accounting and the War on Women

anti-PP groups claim non-profit engages in fraud

By Jordan Smith, 12:34PM, Wed. Aug. 15, 2012

Accounting and the War on Women
Illlustration by Jason Stout

A federal judge in East Texas has given the go-ahead for a lawsuit filed by a former employee against Planned Parenthood of the Gulf Coast, which includes the claim that the state's largest PP falsified patient records in order to bilk the government.

The suit, filed by Karen Reynolds who was a clinic assistant in PPGC's Lufkin clinic, alleges that during the nearly 10 years she worked there PPGC's "corporate directors" regularly instructed clinic employees to "maximize" revenues by billing government programs – including the Women's Health Program – for services that were either not provided or that were medically unnecessary. The suit alleges that PPGC clinics would falsify patient records to cover their tracks.

In an order filed Aug. 10, federal district Judge Ron Clark concluded that Reynolds' claims made under federal law may proceed, but that claims based on Texas statutes must be dismissed because Reynolds, as an individual, does not have the right to bring the suit on behalf of the state. Notably, neither Texas nor the federal government have intervened to take over the case. Nonetheless, Clark ruled that Reynolds' claims contain enough specificity to satisfy federal law – she alleges that all 12 PGCC clinics "submitted false claims and falsified records to Medicaid on a regular if not daily basis," and has provided names of "numerous" PGCC employees allegedly involved in the fraud. Notably, Reynolds is claiming not only that the government be reimbursed the money, but that she is entitled to part of any monetary award.

PGCC has denied all of the charges.

This is not the first such lawsuit filed against PP generally – or against PGCC in specific. Abby Johnson, the gregarious former Byran clinic director turned darling of the national pro-lifers, in 2010 filed a nearly identical suit against PGCC, claiming that PGCC employes "combined, conspired, and agreed together and with each other to defraud" the feds and the state of Texas by "knowingly submitting and causing to be submitted" to the government "false, fraudulent and/or ineligible claims for reimbursement." In addition to the millions the suit alleges PPGC should have to return to the government, Johnson too is seeking financial redress. As with Reynolds' suit, neither the feds nor Texas have intervened in the suit, though the Texas attorney general's office has filed paperwork with the court to say that it will monitor the proceedings.

PGCC has also denied the allegations made in Johnson's suit. Unlike in the Reynolds suit, the court has not yet ruled on whether Johnson's suit will go forward. In a July filing that argues the suit to be dismissed, PGCC's lawyers note that Johnson has so far failed to provide "any detail of any of the alleged fraudulent schemes – not even the specifics of a single representative visit, service, or test that was allegedly fraudulently billed."

Although Austin's PP affiliate has not been named in any similar suit, Sarah Wheat, the local interim co-CEO, says that these lawsuits are simply another tactic by anti-PP groups to tie up the non-profit's time and resources. Indeed, she notes that PP clinics each year undergo a series of stringent audits – not only for quality of care and pharmacy operations, but also in conjunction with every government dollar it is given or that it bills for. "For any kind of [government] finances, an audit comes with that," she says. But she's not surprised by the suits: "There is nothing more staff intensive in terms of time and resources" that responding to a federal suit claiming tens of thousands counts of fraud, she says. "This is definitely something [anti-PP groups seem] to be making a priority."

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