WASHINGTON – The Health and Human Services Department rejected changes in Indianas Medicaid plan Wednesday, saying it illegally bans funding for Planned Parenthood.
And the federal government sought to make clear that a similar fate awaits other states that pass legislation barring any qualified health care provider.
State officials signaled they would not accept HHS decision.
In a letter sent to Indianas Medicaid director, Medicaid Administrator Donald M. Berwick said Indianas plan will improperly bar beneficiaries from receiving services. Federal law requires Medicaid beneficiaries to be able to obtain services from any qualified provider.
Medicaid programs may not exclude qualified health care providers from providing services that are funded under the program because of a providers scope of practice, Berwick wrote to Patricia Cassanova, director of Indianas office of Medicaid Policy and Planning.
Indianas law bars Planned Parenthood offices in the state from receiving federal money because the organization provides abortions, among other services.
Marcus Barlow, a spokesman for Indianas Family and Social Services Administration, said the states attorneys have told his department it must comply with the state law.
We will seek guidance from the Indiana attorney general on how to proceed forward, he said.
Bryan Corbin, a spokesman for Indiana Attorney General Greg Zoeller, said the letter was being reviewed, but we will continue to defend the statute.
Berwick writes in his letter that Indiana should change its plan to conform with federal law, noting that the state has 60 days to appeal.
The letter does not state it explicitly, but Indiana could face penalties if it does not comply. In the past, though, states have changed Medicaid plans that did not conform to federal law before HHS enforced any penalties.
HHS also posted a notice on Wednesday to other interested parties to make clear that the department would take a dim view of similar efforts to ban specific providers from federal funds.
Indiana Republicans who pushed the ban were quick to denounce HHS decision.
Indianas on solid legal ground, said state Sen. Scott Schneider, an Indianapolis Republican who sponsored the Planned Parenthood measure. Theres no reason for us to change course at this time. Its up to them to prove that this is not legal.