Bobby Jindal's fight with Planned Parenthood is quickly becoming a showdown with the Obama administration — and the White House has a possible nuclear option at its disposal.
Earlier this month, Jindal terminated the Louisiana Medicaid program's contract with Planned Parenthood, saying the group didn't adhere to the state's value "in regards to respecting human life." Planned Parenthood has challenged that decision in court, and on Monday the White House decided to step into the fray.
The Department of Justice filed a 23-page "statement of interest" Monday, supporting Planned Parenthood.
"Terminating [Planned Parenthood] from the Medicaid program without providing any justification ... would violate Louisiana's obligations under the Medicaid statue by denying Medicaid beneficiaries of their right to obtain medical care from the qualified providers of their choice," the Obama administration's brief argues.
The White House strongly supports Medicaid funding for Planned Parenthood. And if this fight escalates, it could exercise what is arguably the nuclear option: ordering Louisiana to contract with Planned Parenthood, or defund the Medicaid program entirely.
Why Louisiana thinks it can defund Planned Parenthood
Louisiana started taking action against Planned Parenthood in the wake of widely viewed sting videos from the anti-abortion Center for Medical Progress. The group alleges to show that Planned Parenthood clinics procure fetal tissue for profit. Some of the footage in those tapes was shot at a Planned Parenthood clinic in New Orleans:
Louisiana began an investigation into Planned Parenthood on July 15, sending the four clinics in the state a letter with 11 questions it requested answered by July 24. This included questions like "Do any Planned Parenthood Gulf Coast facilities, or any affiliates, subsidiaries or associates thereof, sell or donate any unborn baby organs or body parts?"
On August 3, Jindal gave Planned Parenthood 30 days' notice that it would no longer contract with Planned Parenthood "because Planned Parenthood does not represent the values of the State of Louisiana in regards to respecting human life."
Louisiana has acknowledged that federal law requires Medicaid to contract with any qualified providers that want to serve Medicaid programs. But in an August 31 legal brief, the state argued that it had the right to deem Planned Parenthood not to be a qualified provider in light of the tapes and investigation.
"The term [qualified] could be interpreted by the State to mean that the provider conforms to the ethical standards shared by the State in which it seeks to operate," Louisiana wrote in a brief defending the defunding decision.
The White House could try to block this
The White House has already proved itself a strong defender of Planned Parenthood in cases like these, especially in a similar fight with Indiana.
In 2011, Indiana passed a law barring Medicaid from contracting with any health-care facilitates that provided abortions. This would necessarily cut Planned Parenthood out of the Medicaid network for the other services it provides, such as STD screening or birth control prescriptions.
The Obama administration followed up with a harsh threat: It said the Indiana law violated federal Medicaid regulations, and if Indiana followed through, the White House would pull all federal funding from the public insurance program.
This was, in effect, the nuclear option. The White House wasn't just threatening to take away family planning dollars; it promised to revoke the $4 billion in federal Medicaid funds that Indiana received annually. That covered about two-thirds of the program's overall costs. There would be no way for Indiana to fill that budget hole.
Indiana challenged the White House's threat in court, but the Obama administration ultimately won: Courts found that the federal government did have legal authority to pull all of Indiana's Medicaid funding if it did not comply with Medicaid rules. Indiana relented, and Planned Parenthood clinics there are currently part of the Medicaid program.
Will the White House go nuclear again?
The Obama administration has already had initial conversations about the possibility of withholding funds from Louisiana — but has not yet taken steps to actually stop funding. Here's how the state described it in an August 31 legal document:
LDHH [Louisiana Department of Health and Hygiene] has had two telephone conferences with CMS [Center for Medicare and Medicaid Services] in regards to the conduct before this Court. In those conversations, CMS did advise LDHH that it has the power to withhold Medicaid funds or seek injunctive relief for failure to comply with the Medicaid Act, of which Plaintiffs are well aware. As of the date of the filing of this Memorandum, CMS has not taken any action against LDHH for terminating the four provider agreements of PPGC.
Cutting off federal funding to Louisiana's Medicaid program would be a huge deal. The state received more than $5 billion in federal Medicaid funding in 2012, covering more than two-thirds of the program's $7.3 billion budget. It's hard to see how the state could make up the funding shortfall on its own.
The most likely scenario here is that the federal government will wait to see how the court case plays out. If the court rules in Planned Parenthood's favor, there won't be need for the White House to intervene. But if the court rules for Louisiana, that could set up a showdown in which the Obama administration has a huge weapon at its disposal.