Ind. Asks CMS for Rehearing on Rejected Medicaid Proposal

June 28, 2011 — The Indiana solicitor general's office on Monday requested a rehearing through the federal administrative appeals process on CMS' rejection of the state's plan to bar family planning contracts and grants to Planned Parenthood of Indiana because it offers abortion services, CQ HealthBeat reports. CMS said the Indiana law violated federal Medicaid regulations because states cannot exclude providers from the program solely based on the range of services they provide. On Friday, U.S. District Judge Tanya Walton Pratt also said Indiana could not move forward with the law and granted a preliminary injunction blocking the measure. The ruling allowed PPIN to resume serving Medicaid patients.

The solicitor general's office said the state will appeal Pratt's decision to the Seventh U.S. Circuit Court of Appeals if CMS denies its rehearing request. "The state contends that the administrative appeals process the federal government set up is where the dispute over Medicaid funding should be decided -- and not in a lawsuit filed by a private provider in federal district court," the office wrote in a statement. In a brief, Indiana Solicitor General Thomas Fisher wrote that the law "is not targeted at managed care organizations, nor is it directed at family planning choice." The brief continued, "It is targeted at preventing indirect subsidy of abortions, which Congress expressly excludes as a form of 'family planning' payable by Medicaid."

CMS is closely monitoring the state's actions. According to CQ HealthBeat, the final decision could have national implications because other states have proposed similar measures (Norman, CQ HealthBeat, 6/27).