Planned Parenthood Aims to Challenge US Whistleblower Fraud Law

Planned Parenthood is taking on a long-standing law that permits whistleblowers to file fraud lawsuits on behalf of the government in an effort to counter a $1.8 billion lawsuit brought by an anonymous anti-abortion activist and the state of Texas. They aim to recover funds they allege Planned Parenthood unlawfully obtained from Medicaid.

In a filing made in the federal court of Amarillo, Texas, on Friday, Planned Parenthood contended that the so-called "qui tam" provision of the federal False Claims Act (FCA) allows private citizens to assume the role of government officials responsible for enforcing the law. This, they argue, violates the U.S. Constitution's requirement that such officials should be appointed by the president and confirmed by the Senate.

Planned Parenthood stated, "In reality, FCA relators are not 'appointed' to their positions by anyone other than themselves," asserting that the case should be dismissed.

In Friday's submission, Planned Parenthood referenced a dissent by U.S. Supreme Court Justice Clarence Thomas and partial concurrences by Justices Brett Kavanaugh and Amy Coney Barrett in a separate FCA-related case decided in June. These three conservative justices suggested that the court should assess the constitutionality of the whistleblower provision.

A spokesperson for the U.S. Department of Justice declined to comment, and attempts to reach the whistleblower's attorney were unsuccessful.

The lawsuit, filed in 2021, was initiated by an anonymous plaintiff who claimed to be the person responsible for releasing undercover video footage in 2015. The videos purported to show Planned Parenthood staff discussing the sale of fetal tissue. Following the release of these videos, Texas and Louisiana announced their intentions to terminate Planned Parenthood from their Medicaid programs. However, Planned Parenthood secured court orders that postponed the terminations for several years.

The whistleblower alleges that Planned Parenthood defrauded state Medicaid programs by continuing to bill them during this interim period and failing to refund them once the terminations became official in 2021 and 2022.

The case involves claims under the FCA as well as similar Louisiana and Texas laws. Only Texas has intervened in the lawsuit, and Planned Parenthood contends that if they win, the state's demand for back payments, along with legal penalties, would total $1.8 billion.

Planned Parenthood disputes these claims, asserting that the states had agreed to the payments and had never requested refunds.

U.S. District Judge Matthew Kacsmaryk, presiding over the case, is likely to uphold the precedent set by the 5th U.S. Circuit Court of Appeals, affirming the constitutionality of the FCA's whistleblower provision. Nevertheless, Planned Parenthood may seek to persuade the 5th Circuit to reconsider its stance on appeal or ultimately elevate the issue to the Supreme Court.

Requests for comment from the offices of the states' attorneys general were unanswered.

If Planned Parenthood's argument challenging the FCA prevails, it could have a significant impact on federal fraud enforcement under the law, particularly in the healthcare sector. According to Justice Department data, whistleblower cases have resulted in recoveries of nearly $50.4 billion under the FCA from 1987 through 2022, compared to just under $22.2 billion from FCA cases brought by the government without whistleblowers.

Notably, at least one other defendant, orthopedic implant maker Exactech, has advanced a similar argument since the Supreme Court dissents.

The case is United States ex rel Doe v. Planned Parenthood Federation of America Inc, U.S. District Court for the Northern District of Texas, No. 2:21-cv-00022.