AUSTIN, TX, July 24, 2013 (LifeSiteNews.com) – Planned Parenthood must reimburse the State of Texas Medicaid program $1.4 million in erroneous and fraudulent billing, under the terms of a settlement announced today. That includes funds that, according to the whistleblower who exposed the chapter, were used to finance abortion-related services.

A thorough investigation found that Planned Parenthood Gulf Coast (PPGC) “improperly billed the Texas Medicaid program for products and services that were never actually rendered, not medically necessary, and were not covered by the Medicaid program – and were therefore not eligible for reimbursement,” Texas Attorney General Greg Abbott announced today.

“For example, state investigators determined that Planned Parenthood Gulf Coast falsified material information in patients’ medical records in order to support fraudulent reimbursement claims to the Medicaid program,” he said.

The announcement comes after Karen Reynolds, a decade-long employee at PPGC, filed a lawsuit stating that the Houston-based chapter of Planned Parenthood gave each of its 12 offices in Texas and Louisiana regular revenue goals and instructed them to bilk the state through deceptive billing.

Reynolds – who worked as a “health care assistant” at Planned Parenthood in Lufkin, Texas, 1999-2009 – stated that, in addition to seeking reimbursement for services not rendered, or that weren't medically necessary, they also charged for abortion-related services. 

According to Reynolds, when post-abortive women came in for a follow-up visit, PPGC told its employees to “ask if she needs any other services such as birth control," thus allowing them to make it appear as if the purpose of the visit was for a reason other than abortion-related care. "If she is interested, screen for” the state Women's Health Program or Medicaid, they instructed. “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.”

Every post-abortive woman was given a bag of contraceptives, so the offices could put in a request for reimbursement in the form of state family planning funds.

Pro-life activists have long alleged that Planned Parenthood uses public funds to underwrite its abortion business, in violation of the Hyde Amendment.

After the news of the settlement broke today, PPGC dismissed the charges as “baseless” and said that it chose to end “this case as a practical matter.”

“Planned Parenthood Gulf Coast is proud of the high quality health care we provide, and more than 50,000 Texans rely on us every year for essential, high quality prevention services,” the group said in a press release. “A lengthy and costly process that would have distracted our energies and required us to share the private medical information of thousands of women.”

The abortion giant called the state of Texas a “hostile environment for women’s health.”

While many pro-life activists welcomed the news that the attorney general's investigation had implicated Planned Parenthood, former PPGC manager Abby Johnson, who has her own lawsuit pending against the affiliate alleging fraud, said that ultimately the settlement will do little harm to the abortion giant.

“My former affiliate has an endowment of $20 million dollars just sitting in an account. This settlement is simply a slap on the wrist,” she wrote. “This is NO victory.”

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According to a a 23-page report produced by the Alliance Defending Freedom (ADF) in 2012, Planned Parenthood has committed between $88 and $99 in fraud and abuse.

Steven Aden, ADF senior counsel, told LifeSiteNews.com that only seven of the nation’s 79 Planned Parenthood affiliates had been officially investigated at the time, as far as he knew. However, 38 HHS Office of Inspector General audits between 1995 and 2009 had uncovered between $88-99 million “in waste, abuse, and potential waste, and fraud,” Aden said.

Governor Rick Perry founded the Texas Women’s Health Program (TWHP) to deny state family planning funds to Planned Parenthood, as well as other abortion providers.

Perry had to form TWHP as an entirely state-funded female health alternative after President Obama pulled federal funding – which accounted for 90 percent of the previous, $40 million Women's Health Program – because Texas had decided to withhold state funds from abortion providers.

However, President Obama's Department of Health and Human Services (HHS) did an end-run around the statue, giving $13 million in federal Title X money to abortion providers instead of funding the state. The HHS directly funded the Women’s Health and Family Planning Association of Texas (WHFPT), a coalition of women’s health care offices that includes Planned Parenthood.

Under the terms of the fraud settlement, Planned Parenthood's settlement will be divided between the state of Texas, the federal Medicaid program, and the whistleblower who exposed the fraud – in this case, Karen Reynolds.

For his part, Abbott is seeking the Republican nomination for governor to replace Rick Perry, who is retiring in 2014. National pro-life leaders continue to lobby Abbott to file charges against – or at least investigate – Houston late-term abortionist Douglas Karpen.

The case is but one of several alleging that Planned Parenthood – which received 45.2 percent of its $1.2 billion annual budget from taxpayers last year – is guilty of unethical practices.

Johnson said the case had nothing to do with her own lawsuit, which she promised will go forward.

“I have absolutely no intention of settling with my former affiliate,” Johnson said on Wednesday. “Second, if I did settle, I would never settle for an amount this pathetic.”

“I am out to close down the abortion business...not give them a reprimand,” she wrote.