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Planned Parenthood Gulf Coast settles whistle-blower suit for $4.3M

Posted On: Aug. 19, 2013 12:00 AM CST

Houston-based Planned Parenthood Gulf Coast Inc. has paid $4.3 million to settle a whistle-blower suit in which it was charged with billing government programs for unnecessary care, said the U.S. Department of Justice.

Under terms of the agreement announced Friday, former employee Karen Reynolds will receive $1.3 million, which will come from the federal government's total of $3.6 million; and Texas will receive $705,000, the Justice Department said.

The settlement resolves a False Claims Act suit filed in federal district court in Lubbock, Texas. The Justice Department on Friday said it had charged that Planned Parenthood Gulf Coast billed various state and federal government programs between 2003 and 2009 for items related to birth control counseling, sexually transmitted disease testing and contraceptives when these items and services were either not medically necessary, not medically indicated or not actually provided.

There has been no admission of liability. Planned Parenthood Gulf Coast said in a statement that the lawsuit was baseless and that it had made a “practical decision” to end the case.

“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 John M. Bales, U.S. attorney for the Eastern district of Texas, in a statement.

“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 whistle-blower for bringing the matter to our attention,” Mr. Bales said.

“The allegations in this complaint are baseless and this settlement is not an admission of guilt. Planned Parenthood Gulf Coast made the practical decision to end this case,” Planned Parenthood Gulf Coast said in a statement issued July 30.

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“The enormous cost in 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 from providing tens of thousands of women with the basic, preventive health care they need. We are ending this lawsuit in order to devote all of our time and energy to delivering high-quality, affordable health care.

“Planned Parenthood Gulf Coast prioritizes preventive health care and adheres to the highest professional standards. … For example, this complaint attacked the practice of offering birth control patients information and services regarding sexually transmitted infections. Planned Parenthood Gulf Coast will continue to use best practices and provide high quality services for women, men and teens in Texas.”

Ms. Reynolds was represented in the litigation by the Washington-based American Center for Law & Justice, a pro-life public interest law firm.

An American Center spokesman said in a statement that it and Ms. Reynolds “are bound by a confidentiality clause in this settlement agreement which prohibits us from discussing any of the details regarding the settlement in this case.”