Lawsuit Claims Planned Parenthood Overbilled California, U.S.
A federal lawsuit made public this week alleges that Planned Parenthood affiliates in California overcharged the state and the federal government by at least $180 million for birth control pills, the Los Angeles Times reports.
Victor Gonzalez, who filed the whistle-blower lawsuit under seal in 2005, said he was fired in March 2004 as vice president of finance and administration at the Los Angles Planned Parenthood affiliate after voicing concerns about the "illegal accounting, billing and donations practices of Planned Parenthood."
Jack Schuler, Gonzalez's lawyer, said the overbillings began in the late 1990s and continued until the state passed a law in 2004 to allow Planned Parenthood to continue billing at a higher rate for oral contraceptives.
The lawsuit alleges that Planned Parenthood billed the government several times more than it paid for the drugs by charging a "usual and customary" fee that takes into account the costs of storing and dispensing the drugs.
According to the Times, the suit centers on a rule that permits public health care programs administered by state and federal governments to buy medications at a discount from pharmaceutical firms.
The lawsuit maintains that clinics that purchase the discounted drugs must comply with specific reimbursement rules.
For example, the billing manual for the state Family Planning, Access, Care and Treatment program requires health care providers to bill "at cost" for oral contraceptives, the Times reports.
A report commissioned by the state in 2004 found that California paid Planned Parenthood clinics more for oral contraceptives on average than it paid other public and private providers.
However, despite the report's findings, state health officials say they do not believe the group acted improperly because it was given contradictory guidance on billing from the state (Ornstein, Los Angeles Times, 3/8).