Lawsuit Filed Against Planned Parenthood Affiliates For Allegedly Overcharging California For Contraceptives

Main Category: Women's Health / Gynecology
Also Included In: Sexual Health / STDs;  Litigation / Medical Malpractice
Article Date: 12 Mar 2008 - 9:00 PDT

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A lawsuit recently made public alleges that Planned Parenthood affiliates in California overcharged the government for oral contraceptives, the Los Angeles Times reports. At issue are government reimbursement rules for pharmaceutical products made available at public health programs through a federal program that allows health centers to purchase common drugs from manufacturers at reduced prices. In return for the discounts, clinics must follow specific rules for seeking reimbursement. 

California health officials said that they do not believe Planned Parenthood acted improperly because the organization was given contradictory guidance on billing from the state. At issue is whether Planned Parenthood affiliates were required to bill “at cost” or could charge higher “usual and customary” fees that take into account the cost of storing the drugs and dispending them, according to the Times.  An official at the state Department of Health Care Services said the organization does not need to repay any funds already reimbursed by the state because the state's own rules were unclear. The lawsuit was originally filed in 2005 by Victor Gonzalez, former vice president of finance and administration of Planned Parenthood Los Angeles. Gonzalez said he was fired in March 2004 after raising concerns about the "illegal accounting, billing and donations practices of Planned Parenthood," the Times reports. Gonzalez alleges that Planned Parenthood overcharged the state and federal governments by $180 million for birth control pills. According to letters provided to the Times by Gonzalez's attorney Jack Schuler, questions about billing practices were raised as early as 1997 by an unnamed Medi-Cal official. According to Schuler, the alleged overbillings continued until the Legislature changed the law in 2004 to clarify billing and reimbursement rules for dispensing contraception.

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Gonzalez said he attempted to raise the issue of "overbilling" with top Planned Parenthood officials internally. Schuler said Gonzalez plans to rely on internal Planned Parenthood communications showing that officials worked to lobby state health officials to adopt the organization's point of view. Planned Parenthood Affiliates of California spokesperson Ana Sandoval declined to comment Friday, saying the organization has not seen the lawsuit (Ornstein, Los Angeles Times, 3/8).

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