A former employee of Planned Parenthood Gulf Coast has filed a whistleblower’s complaint with both the Texas and United States Attorneys General alleging her management engaged in massive Medicaid fraud.

Karen Reynolds, who worked as a “health care assistant” from 1999 to 2009 at the Lufkin, Texas, branch of the affiliate formerly known as Planned Parenthood of Houston and Southeast Texas, has submitted company memos and emails to support her charge that PPGC has engaged in a systemwide scheme to bilk Medicaid, Title XX, and the Women’s Health Program of tens of millions of dollars over the course of at least a decade.

Reynolds alleges bosses trained employees to bill government agencies for medical and family planning services not rendered, for services no reasonable medical personnel would provide, and – the biggest bombshell – for abortion-related services fudged to appear as if they were not.

PPGC operates 10 clinics in Texas – including, at seven stories and 78,000 sq ft,  the largest abortion clinic in the U.S., located in Houston (pictured left, with PPGC CEO Peter Durkin in the foreground) – and two in Louisiana.

PPGC’s bilking scheme was elaborate and, frankly, fascinating. It allegedly involved several corporate officers, including Durkin (also pictured right with Planned Parenthood Federation of America CEO Cecile Richards in 2009) as well as board members, clinic directors, assistant clinic directors, health care assistants, and nurse practitioners.

According to the complaint, each clinic was given annual, monthly, and daily government revenue goals.

In conjunction, monthly staff meetings that included PowerPoint presentations were held at all clinics to train how to maximize government revenue.

PPGC went so far as to send employees from “under-performing” clinics to “higher-performing” clinics to learn how to increase revenue, which included double-billing.

One-size-fits-all billing

According to the complaint:

The scheme included the express policy of billing these government health care programs for a predetermined list of reimbursable services for every eligible patient who visited the clinic, regardless of whether those services were medically necessary or ever actually provided to the patient….

PPGC policy regarding which medical services to provide and bill for depended in large part on who was paying the bill…. [S]elf-pay patients were provided services based on medical necessity. WHP, Medicaid, and Title XX patients, however, were provided a series of predetermined services based on what those programs would pay for with the result that patients covered by government health programs were often provided services on an “across the board” basis even when such services were not medically necessary. The medical testing services most commonly provided to Medicaid and Title XX patients on an “across the board” basis… are:

a) Gonorrhea testing (Codes 87590 and 87591);
b) Chlamydia testing (Codes 87490 and 87491);
c) HIV testing;
d) Syphilis testing;
e) urinalysis (Codes 81002 and 81015);
f) hemoglobin blood count testing (Code 85018); and,
g) pregnancy testing

Because Medicaid guidelines allow for reimbursement for counseling on primary birth control and back-up bc, each Medicaid/WHP-eligible patient was also billed for both for every visit, although such counseling was not necessary and not given.

Another trick was to hand every contracepting patient a bag of condoms and vaginal film on her way out the door, despite the fact they were not needed or requested. This allowed PPGC to bill the government for, according to the complaint:

a. Condoms $4.20
b. Vaginal film $12.60
c. Method counseling $30.60 (Primary method, plus film and condoms as ‘back-up’ $10.20 X 3)
d. Problem counseling $10.45 (Under PPGC procedures, handing out condoms justified billing the government for ‘problem counseling’ because condoms are also used to prevent STD’s) (Code 99402 + Modifier FP [$10.45])

Isn’t it illegal to bill the government for abortions?

The biggest bombshell in the complaint comes on page 15, which describes how PPGC falsified charts of aborting or post-abortive patients to appear as if their visit was for another reason. It is illegal under the Hyde Amendment for federal taxpayer dollars to fund abortions unless for rape, incest, or life of the mother. But PPGC found ways around this. Quoting from one PPGC memo listed in the complaint:

We must work these clients in! This visit is self-pay. Quote the self-pay price then ask if she needs any other services such as birth control. If she is interested, screen for WHP or Title XX and offer the WWE [Well Woman Exam]. If the client is getting on birth control make this the focus of the visit and put a note in the chief complaints that the client had a surgical or medical abortion “x” weeks ago.

To pro-lifers, this information is the proverbial smoking gun, showing more than that the line of demarcation between federal funds and abortion is fungible, but that at least this Planned Parenthood worked the system to illegally obtain taxpayer dollars for abortion-related services.

Super billing

In addition, patient records were double-checked after visits against a “super bill” inserted into each chart that listed all possible government-reimbursable services. If more charges could be eked out, they were, regardless of whether or not the services were performed. In those cases charts were returned to nurses for back-charting, to add those services in the record.

In all, Reynolds is alleging six counts against PPGC for violating the Federal False Claims Act and the Texas Medicaid Fraud Prevention Act.

Status of case

On October 18 United States District Judge Ron Clark, a GWB appointee, denied PPGC’s request to stop the discovery process.

I spoke with attorney Frank Manion today, of the American Center for Law and Justice, which is handling Reynolds’ case. Manion told me they have just started to receive relevant documents from PPGC.

If PPGC is indeed found to have committed fraud, it will lose all government funding. In fact, the entire nationwide Planned Parenthood chain will be at risk for defunding.

Reynolds is the third whistleblower to accuse her former Planned Parenthood employer of fraud against the government.

Former Planned Parenthood of Los Angeles CFO P. Victor Gonzalez has a case in federal court accusing his employer of similar activity.

And the IRS is investigating charges brought by an unnamed employee of the now defunct Planned Parenthood Golden Gate.

Meanwhile, Americans United for Life reports that government audits have uncovered similar fraud at Planned Parenthoods in New Jersey, New York, and Washington state.

On September 15 Republican Congressman Cliff Stearns, Chairman of the House Subcommittee on Oversight and Investigations, launched an investigation of Planned Parenthood Federation and its 83 affiliates. He can add this information to the pile.

[Photo of Durkin/Houston PP via the Houston Chronicle; photo of Richards/Durkin via 2onthebeat]

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