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DES MOINES, Iowa – One of Planned Parenthood’s former clinic managers has turned whistle blower, claiming that the abortion provider’s Heartland branch has scammed American taxpayers by filing nearly 500,000 fraudulent Medicaid claims over 10 years, netting the organization an illicit $28 million.

Sue Thayer, former manager of Iowa’s Storm Lake and LeMars Planned Parenthood clinics, has sued the organization under both federal and Iowa False Claims Acts, alleging that Planned Parenthood knowingly committed Medicaid fraud from 2002 to 2009 by seeking improper and even illegal reimbursements from Iowa Medicaid Enterprise and the Iowa Family Planning Network.

According to the lawsuit, originally filed in March of last year but made public just this week, Planned Parenthood submitted “repeated false, fraudulent, and/or ineligible claims for reimbursements” to Medicaid.

Thayer’s attorneys claim that if she prevails in the lawsuit, Planned Parenthood could be ordered to pay the United States and Iowa as much as $5.5 billion in False Claims Act damages and penalties.

“Americans really deserve to know if their hard-earned tax dollars are being funneled to groups that are misusing [them],” said Senior Counsel Michael J. Norton, a former United States attorney working with Alliance Defending Freedom to represent Thayer. “People may disagree on their views about abortion, but everyone can agree that Planned Parenthood must play by the same rules as everyone else. It is not entitled to any public funds, especially if it is defrauding Medicaid and the American taxpayer.”

The lawsuit claims that Planned Parenthood’s “C-Mail” scam began by automatically sending a year’s supply of birth control pills to women who came into one of the organization’s clinics. The pills were usually sent without a physician’s order, often dispensed to women “at levels not medically reasonable or necessary … constituting ‘abuse or overuse’” and were even shipped without the patient’s consent or foreknowledge.

Planned Parenthood then billed Medicaid to the tune of $26.32 for each month’s worth of pills, the lawsuit claims, even though the cost to the clinics was only $2.98.

Thayer claims the scam proved to be so profitable Planned Parenthood even held competitions among its clinics to see which of them could enroll the most women in the “C-Mail” program.

Furthermore, the lawsuit claims, the U.S. Postal Service sometimes returned the packages to Planned Parenthood, but instead of crediting Medicaid or destroying the returned pills, the clinics resold the same birth control pills and billed Medicaid twice for the same medication.

A second claim within the lawsuit alleges that though both Iowa and federal law bar taxpayer funds from reimbursing abortion services, Planned Parenthood found a way to sidestep the restriction.

The lawsuit claims rather than billing Medicaid for abortions directly – a clear violation of the law – Planned Parenthood “fragmented” the patients’ bills so it could charge Medicaid for everything the clinic did around and related to the abortion: “including, without limitation, office visits, ultrasounds, Rh factor tests, lab work, general counseling and abortion aftercare, all of which were, when provided, integral to and/or related to surgical and medical abortion procedures.”

Thayer says then Planned Parenthood – its profit margin bolstered by the Medicaid payments for procedures surrounding abortions – reduced the cost of abortions to its patients.

“As a result,” the lawsuit concludes, “abortions provided by Planned Parenthood were subsidized by public funds.”

Yet a third claim in the lawsuit alleges that Planned Parenthood asked its Medicaid patients to “donate” to the organization half the cost of their bill, a request with which many patients complied. But then, the lawsuit says, Planned Parenthood reported the money as a “voluntary donation” and still billed Medicaid for the full amount of the patient’s care.

“In effect,” Thayer’s attorneys summarize, “Planned Parenthood both falsely billed Medicaid and took money from low-income women by getting them to pay for services Medicaid was intended to cover in full.”

Planned Parenthood of the Heartland President Jill June released a statement calling the lawsuit part of a “pattern of harassment” and boasting that neither U.S. Attorney General Eric Holder nor Iowa Attorney General Tom Miller – both Democrats – have decided to prosecute the case.

“The extreme organization that former employee Sue Thayer has partnered with has a mission to take down Planned Parenthood,” June said of Alliance Defending Freedom. “Planned Parenthood has various safe guards and confidential resources in place for all employees with questions or concerns. It wasn’t until employment was ended that Thayer partnered with this extreme group against Planned Parenthood, that she began releasing mistruths about our organization.”

Thayer, however, has said publicly that she views her lawsuit as “an important piece in the nationwide effort to shed light on the darkness and deception surrounding America’s largest abortion provider, Planned Parenthood. It seems that God can use all those years that I spent working at Planned Parenthood for His good.”

The lawsuit Thayer v. Planned Parenthood of the Heartland is pending in the U.S. District Court for the Southern District of Iowa. Des Moines attorney J. Russell Hixson, an allied attorney with Alliance Defending Freedom, is assisting with the case.

Alliance Defending Freedom, formerly known as the Alliance Defense Fund, is a coalition of 300 organizations and 2,200 attorneys that explains its mission is to “to keep the door open for the spread of the gospel by transforming the legal system and advocating for religious liberty, the sanctity of life, and marriage and family.”

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