Fraud Case Still Hangs Over Planned Parenthood
HOUSTON (CN) - Planned Parenthood must face claims that it defrauded Medicaid with regard to blood tests performed on Texas teens, a federal judge ruled.
Patricia Carroll brought the complaint in late 2012 after serving as the accounts receivable manager for Houston-based Planned Parenthood Gulf Coast Inc. for five years. In March of that year, she had allegedly noticed that a Planned Parenthood clinic in Huntsville experienced a revenue increase of more than 300 percent.
Carroll investigated and claimed to have found that Planned Parenthood was billing Medicaid for STD and HIV blood tests performed by a nonphysician on teens at a private charter school, using billing codes to give the appearance the tests were done at its Huntsville clinic by a doctor.
The tests were allegedly performed on Medicaid-eligible youths at the Gulf Coast Trades Center, which contracts with Texas to provide job training for teens sent to the school under court order.
Carroll resigned that October and then filed a sealed qui tam action, an avenue for whistle-blowers with knowledge of fraud against the government to file a lawsuit on the government's behalf and receive a cut of any settlement.
Neither the United States nor Texas intervened in the action against Planned Parenthood, however, leaving Carroll as the sole plaintiff alleging violations of the False Claims Act and the Texas Medicaid Fraud Prevention Act.
The Houston resident filed her first amended complaint Monday after a partial dismissal from U.S. District Judge Sim Lake last week.
Planned Parenthood had alleged that Carroll failed to state a claim and that her fraud claims were not specific enough. It also argued that Carroll's claims were barred by the statute of limitations.
Since the Trades Center teens were eligible Medicaid recipients, Planned Parenthood said there was nothing illegal about it billing Medicaid for testing services it actually provided.
But Carroll countered that Planned Parenthood acted illegally when it created charts to give the appearance that the teens had visited its Huntsville clinic, and billed Medicaid using a code indicating the blood tests were done at Planned Parenthood's "office."
Carroll further contended that only doctors are eligible to use the billing codes Planned Parenthood used.
Acknowledging that Carroll's allegations require deference at this stage of the case, Lake said Wednesday "that Carroll has adequately pleaded factual content that allows the court to draw the reasonable inference that Planned Parenthood knowingly filed false claims."
Lake also found that Carroll's claims were not barred by the False Claims Act's six-year statute of limitations because the Wartime Suspension of Limitations Act "applies in civil FCA cases to suspend the statute of limitations when the United States is at war."
In reserving decision on Carroll's claims under the Texas Medicaid Fraud Prevention Act, the judge found that he need not decide her state-law claims at this time since Carroll had adequately pleaded False Claims Act allegations.
Lake had ordered Carroll to amend her action to clarify her allegations that Planned Parenthood also defrauded Medicaid by not reporting or returning overpayments.
Carroll's attorney Kurt Arbuckle told Courthouse News that the United States' decision not to intervene in the case doesn't imply that it lacks merit. He said Carroll is still bringing the case on the government's behalf and will get a percentage of any recovery.
Planned Parenthood's attorney did not immediately respond to a request for comment.