The case grew out of a whistleblower lawsuit by a former employee at Planned Parenthood Gulf Coast.
The Attorney General’s office in Texas then launched its own investigation.
Jerry Strickland is a spokesman for the AG’s office.
He says Planned Parenthood was fraudulently overbilling the Medicaid program. He says the overbilling involved counseling and tests for sexually transmitted diseases.
“Those tests were administered much more often than they should have been. The Medicaid system will pay for a test for sexually transmitted diseases once a year. Every time after that that somebody is tested, that is not an allowable reimbursable expense but Planned Parenthood was still continuing to bill for those tests in the Medicaid system.”
Planned Parenthood responded in a written statement by saying the allegations are baseless, but the organization has agreed to settle the suit for $1.4 million.
The organization wants to end the costly litigation and also avoid sharing private medical records of patients, which fighting the lawsuit would have required.
Patricia Gray of the University of Houston Health Law & Policy Institute says Medicaid fraud is often uncovered by algorithms and audits, but this case grew out of a whistle-blowing employee, who will receive more than $200,000 from the settlement.
“The press release was intriguing for what it didn’t say more than anything else.”
Gray says she thinks more will be revealed about this story, because of the politics surrounding Planned Parenthood.
Others familiar with the lawsuit said the settlement was still being finalized, so the announcement from the Attorney General’s office was unexpected.