Planned Parenthood settles in Lufkin whistleblower case

Published: Aug. 16, 2013 at 1:05 PM CDT|Updated: Aug. 16, 2013 at 5:04 PM CDT
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LUFKIN, TX (KTRE) - In a lawsuit which alleges workers at a Lufkin Planned Parenthood clinic frauded Medicaid for millions of dollars over a six year-period, the company has agreed to pay $4.3 million to the government as part of a settlement.

Planned Parenthood Gulf Coast will also pay a whistleblower $1,247,000.

The whistleblower, Karen Reynolds, worked at the Lufkin clinic from 1999 to 2009 and, according to the complaint filed by her attorney Mike Love, was fired for refusing to help cover up the company's liability for the distribution of pharmaceuticals to a patient by an unauthorized employee.

The complaint alleges PPGC billed and was paid by Texas Medicaid, Title XX and the Women's Health Program for certain items and services which were not necessary, like birth control counselling, STD testing and contraceptives when they were not necessary.

The complaint also alleges workers were instructed to hide literature relating to abortion procedures and abortion counselling during audit inspections conducted by federal regulators who were verifying compliance with Title X funding.

Title X funding is a grant available to organizations for family planning. However, the grant does not include funding for abortions.

The Lufkin clinic closed at the end of July after the Texas Legislature passed a bill which put heavier restrictions on abortions. The clinic was not used for abortions. However, employees there referred clients to Bryan for abortions.

PPGC has six locations between Louisiana and Texas.

An attorney representing PPGC did not immediately return a call for comment.

"We are very pleased to settle this matter for an amount of money that addresses what was, in the Government's view, an abuse of programs that are extremely important to the well-being of many American women," said U.S. Attorney Malcolm Bales.  "We will remain ever vigilant to protect the interests of American taxpayers and the integrity of the Medicare and Medicaid health programs.  I am particularly grateful to the whistleblower for bringing the matter to our attention."

Of the $4.3 million settlement, the federal government will receive $3,594,604 and the State of Texas will receive $705,396.

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