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Supreme Court of the United States

$28 Million Planned Parenthood Fraud Suit: Everything You Need To Know

October 17, 2017

By Michael Norton

United States and the State of Iowa ex rel. Susan Thayer v. Planned Parenthood of the Heartland, Inc.

Sue Thayer, a 17-year employee of Planned Parenthood of the Heartland, Inc., alleges in a qui tam “whistleblower” law suit unsealed in Iowa Federal Court on July 5, 2012, that Planned Parenthood committed Medicaid fraud from 2002-2009 by filing nearly half a million false claims with Medicaid from which Planned Parenthood received and retained nearly $28,000,000. During her employment with Planned Parenthood, Thayer was a clinic director in Planned Parenthood’s Storm Lake, IA, clinic and Planned Parenthood’s LeMars, IA clinic.

If Thayer prevails, Planned Parenthood could be ordered to pay the United States and Iowa as much as $5,500,000,000 in False Claims Act damages and penalties.

Thayer’s complaint alleges that Planned Parenthood management, observing that at least 50 percent of female clients do not renew their original three-month supply of birth control prescriptions, implemented a mandatory birth control pill distribution program called the “C-Mail” program.  Prior to the C-Mail program, clients had been issued a three-month supply of birth control pills. Clients were then required to return to the Planned Parenthood clinic for a follow-up examination in order to be prescribed additional birth control pills.

Planned Parenthood, in violation of the standards of medical care, eliminated this follow-up examination and mailed a one-year supply of birth control pills to clients who had only been seen once at a Planned Parenthood clinic. The result was that thousands of unrequested and unused birth control pills were mailed to clients, often without their knowledge and consent, and then billed to the Medicaid program.

In many cases, Planned Parenthood dispensed birth control pills to clients who were not ever seen by a doctor or other qualified healthcare practitioner. Instead, sometimes days after the client had visited the Planned Parenthood clinic and been given birth control pills by an unqualified staff person—which is in violation of the standards of medical care and Iowa law—a healthcare practitioner who had never seen the client would sign off on the prescription.

Planned Parenthood took advantage of the complex, but not closely managed Medicaid program by buying birth control pills for $2.98 for a 28-day supply and was reimbursed $26.32 per 28-day supply by the Medicaid program.  In addition, Planned Parenthood ignored complaints from local doctors that it was over-prescribing birth control pills without a doctor’s oversight.

Once Planned Parenthood began to mail a three-month supply of birth control pills to clients, Planned Parenthood continued to mail additional three-month supplies of birth control pills to clients for more than one full year without any follow-up examinations.  Often, clients had moved and left no forwarding address and the birth control pills were returned to Planned Parenthood by the Postal Service.  Nevertheless, Planned Parenthood billed the Medicaid program for each shipment that was returned and, without crediting the Medicaid program for the amount already billed, resold the birth control pills to another client and billed the Medicaid program for the same pills.

In violation of Medicaid rules, Planned Parenthood often coerced money (which Planned Parenthood called “voluntary donations”) from eligible Medicaid clients through these unwarranted solicitations. Moreover, Planned Parenthood then billed Medicaid for the same services, which is in violation of its legal duty to reduce its billings to Medicaid, and accepted funds coerced from clients in full satisfaction of the services rendered. In effect, Planned Parenthood both falsely billed Medicaid and took money from low-income women by getting them to pay for services Medicaid already covered in full.

Other allegations of Thayer’s complaint are that:

  • Planned Parenthood, in violation of the Hyde Amendment (applicable to Medicaid-Title XIX), fraudulently billed Medicaid for services provided in connection with non-reimbursable abortions.
  • Planned Parenthood abused women by proactively steering women to abortions in Planned Parenthood facilities in violation of Title X’s prohibition from using abortion as method of family planning and requiring Planned Parenthood to provide neutral, factual information and non-directive counseling.
  • Planned Parenthood used Title X funds to subsidize abortions by failing to properly and adequately separate abortion activities from its federally- funded “options counseling” program.

Susan (“Sue”) Thayer, our client, lives in Lakeside, Iowa.  She is a single mother of six children – two biological children, three adopted children, and one foster child (and fostered many other children over the years).

From 1991 to December 2008, she was the center manager of the Storm Lake, Iowa, Planned Parenthood clinic.  From approximately 1993 until 1997, she also managed the LeMars, Iowa Planned Parenthood clinic.

When, in 2008, Planned Parenthood leadership told Sue Thayer and other clinic managers that all clinics would soon be required to provide “Telemed” abortions (abortions through week nine), Thayer voiced her concerns, particularly about the health of clients being provided “Telemed” abortions. Due to her outspoken opposition to abortion and, in particular, “Telemed” abortion, Planned Parenthood fired Sue in December 2008 - just before the Storm Lake clinic went live with “Telemed” abortions.

Key talking points:

  • Americans deserve to know if their hard-earned tax money is being funneled to groups that are misusing it.
  • No matter where you stand on abortion, we should all agree that Planned Parenthood has to play by the same rules everyone else does.  It certainly is not entitled to a penny of public funds, especially if it is committing Medicaid fraud.
  • Compliance with the law should not be sacrificed for the sake of Planned Parenthood’s bottom line.
  • Ms. Thayer’s complaint is more proof that Planned Parenthood does not care about women, only money.
  • Planned Parenthood appears to treat the law the same way it treats human life – with utter disregard.
  • Planned Parenthood has deceived women and girls, and cheated the American taxpayer, for too long.  It is time the abortion giant is held accountable.

Alliance Defending Freedom (formerly Alliance Defense Fund) is an alliance-building legal ministry that advocates for the right of people to freely live out their faith.

Alliance Defending Freedom

Alliance Defending Freedom

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Alliance Defending Freedom advocates for your right to freely live out your faith

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