For immediate release: Dec 15, 2011
Posted by: [Attorney General]
Contact: Bryan Corbin
Phone: 317.233.3970

State's administrative appeal argued in abortion provider law case

Zoeller: Administrative hearing is proper place to decide Medicaid funding dispute

INDIANAPOLIS - Today a federal agency heard Indiana's administrative appeal concerning the impact of a new state law that disqualifies abortion providers such as Planned Parenthood from receiving Medicaid funding. The federal agency last June rejected Indiana's amendment to its plan to provide Medicaid services. The State, represented by the Indiana Attorney General's Office, appealed and asked the federal agency, the Centers for Medicare and Medicaid Services (CMS), to reconsider its earlier ruling. The administrative appeal was heard today by the CMS regional office in Chicago, where lawyers for the State and federal governments presented arguments and expert witness testimony.

"This is the appropriate forum for the dispute between Indiana and the federal government over whether our State's plan can prevent indirect Medicaid funding for abortion procedures by precluding Medicaid funds from going to abortion providers. We contend the State was fully within its authority to set provider qualifications for Medicaid funding, so we are asking the federal agency to reverse its earlier decision and approve Indiana's Medicaid plan amendment," Indiana Attorney General Greg Zoeller said.

Earlier this year the Legislature passed and the Governor signed into law House Enrolled Act 1210, which precludes the State from entering into contracts or grant agreements with abortion providers, except for hospitals and ambulatory surgical centers. The State immediately proposed an amendment to its Medicaid plan to take account of the new statute. Federal law already prohibits Medicaid funding of abortion procedures in most circumstances, and the new state statute was tailored to also prohibit the indirect subsidization of abortion procedures through Medicaid reimbursements to other services of the medical provider. On June 1, however, a CMS official had disapproved Indiana's Medicaid plan.

The Attorney General's Office, representing the Family and Social Services Administration and the FSSA's Office of Medicaid Policy and Planning, filed an administrative appeal of the CMS decision. Arguing the State's case today in Chicago was Indiana Solicitor General Thomas M. Fisher.

Separately, Planned Parenthood of Indiana filed a legal challenge in May to House Enrolled Act 1210 shortly after it took effect. On June 24, U.S. District Court Judge Tanya Walton Pratt entered a preliminary injunction preventing the State from enforcing the new law. The State then filed an interlocutory appeal in the U.S. 7th Circuit Court of Appeals that was argued to the three-judge panel October 20. The 7th Circuit took the case under advisement and has not ruled yet.

By law the Attorney General's Office defends state statutes from legal challenges. Though his office is defending HEA 1210 from the Planned Parenthood lawsuit now in the 7th Circuit, Zoeller reiterated that the dispute over Medicaid funding more properly should be heard and decided as an appeal through an administrative hearing process at the CMS regional office - and only from there appealed to the federal courts.

A panel of hearing officers at the CMS regional office took today's oral arguments under advisement and will issue a ruling at a later date. Zoeller noted that the State's legal work has been performed in-house by the Attorney General's Office; and no outside counsel has been used.


NOTE: The State's brief in support of its Petition for Rehearing, filed October 18 as part of an administrative appeal to the Center for Medicare and Medicaid Services Regional Office, is at this link:
http://www.in.gov/attorneygeneral/files/10_18_11_States_Brief_Petition_for_Reconsideration_CMS_Administrative_Appeal.pdf

An audio sound bite of Attorney General Zoeller's comment on the case is at this link.

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