Planned Parenthood Affiliate to Pay $1.4 Million in Medicaid Fraud Settlement

Last week, Planned Parenthood of the Gulf Coast announced the closure of three clinics in Bryan, Huntsville and Lufkin citing “years of budget cuts to women’s health care services.” But today, the plot got a little thicker.

This morning Texas Attorney General Greg Abbott announced that Planned Parenthood of the Gulf Coast will pay $1.4 million in a settlement for Medicaid fraud.

According to the AG’s press release, the investigations revealed that: “Planned Parenthood Gulf Coast improperly billed the Texas Medicaid program for products and services that were never actually rendered, not medically necessary, and were not covered by the Medicaid program.” Moreover, the attorney general charged that Planned Parenthood Gulf Coast had “falsified material information in patients’ medical records in order to support fraudulent reimbursement claims to the Medicaid program.”

But Planned Parenthood Gulf Coast said in a statement today that the allegations were baseless. The organization said it had chosen to settle for practical reasons.

According to the Planned Parenthood press release: “Continuing this litigation in the hostile environment for women’s health would have ensured a lengthy and costly process that would have distracted our energies and required us to share the private medical information of thousands of women.”

Here’s where the story gets bizarre. The allegations against Planned Parenthood had been made in a whistleblower lawsuit. According to the Texas Medicaid Fraud Prevention Act, the whistleblower is entitled to some of the settlement money.

But who might that whistleblower be? It’s Karen Reynolds, a former Planned Parenthood health care assistant who worked at the Lufkin clinic from from 1999 to 2009. Reynolds said that she witnessed clinic staff falsifying claims and billing documents as well as violating federal rules for Title X family planning funds, among other claims.

In a nearly identical suit, Abby Johnson, the ex-director of a Bryan clinic run by Planned Parenthood Gulf Coast, also filed a claim against the affiliate. But as a previous Observer report found, Johnson doesn’t have the best track record for accuracy. Johnson became an anti-abortion rights celebrity when she wrote a book about her experiences of converting to the “pro-life” cause. She now holds several positions at high profile anti-abortion rights organizations. The conservative Washington Times reported earlier last year that Johnson had filed her suit against Planned Parenthood and that she could receive as much as 30 percent of the final settlement in this lawsuit. In March, the federal judge in the Johnson case moved to dismiss Johnson’s lawsuit because it “alleges the same ‘essential facts’ and ‘material elements’ of fraud” as Reynolds’ suit.

As the whistleblower in this politically-charged case, Reynolds could be in for a tidy sum of money.

Carolyn Jones is a freelance writer based in Austin. Read more of her work at

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Published at 2:06 pm CST