Overbilling Claims Against Planned Parenthood Rejected

Planned Parenthood of Los Angeles beat back a whistleblower claim by its one-time chief financial officer that the family planning group over billed the state and federal government for contraceptives for low-income people.

The 9th U.S. Circuit Court of Appeals rejected the appeal of Victor Gonzalez, the CFO for two years until he was fired in 2004.  He claimed the group did not charge the government the “at cost” rate for contraceptives, but something higher, the opinion states.

His assertion that Planned Parenthood groups in California knowingly submitted false claims for reimbursement “is compellingly contradicted by a series of letters he attached to his complaint,” wrote Judge Ronald Gould.

Under a program known as Family Planning, Access, Care and Treatment (FamilyPACT), the state Medicaid program provides family planning drugs and services to low income individuals.  The program has been jointly funded by the state and federal governments since 1999.

The provider must agree to charge the “at cost” rate for the drugs.  Planned Parenthood has agreements with manufacturers to buy discounted contraceptives and from 1997 to 2004 it billed the state at the “usual and customary rate” to patients rather than its cost to buy the drugs.

The state investigated and in 2004 declined to seek reimbursement of $5.2 million in alleged over billing because the definition of “at cost” was conflicting or ambiguous.

After he was fired in 2004, Gonzalez filed a whistleblower lawsuit asking the U.S. Attorney to investigate alleged fraudulent billing by Planned Parenthood.  But the U.S. declined in 2005.

Gonzalez filed three various amended complaints in an effort o pursue the investigation. Each was dismissed.  He appealed the third dismissal.

The appeals court noted that in the letters attached to his complaint, the state Department of Health Services expressed concern in 1997 and 1998 over the group’s billing, but remained silent when Planned Parenthood described the billing and its rationale.

In 2004, when the state released its audit of billing, it also acknowledged in a letter to Planned Parenthood that “no specific definition of ‘at cost’ is contained in the billing manual” and DHS became concerned that the definition was conflicting, unclear or ambiguous misrepresentations were made to providers.  The state did not pursue any reimbursement for the disputed $5.2 million.

Case:  Gonzalez v. Planned Parenthood of Los Angeles, No. 12-56352

 

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