By David Dawson
INDIANAPOLIS (Reuters) - Indiana officials said on Thursday they will continue to follow a new state law that cuts funding to Planned Parenthood, despite notice from the federal government that the plan is illegal.
Indiana Gov. Mitch Daniels last month signed a law banning funding to Planned Parenthood because it provides abortion services.
But in a letter to Indiana's Medicaid director, Medicaid Administrator Donald M. Berwick said the plan will improperly keep Medicaid beneficiaries from receiving services.
The Indiana Family and Social Services Administration said that the agency is seeking guidance from the state's attorney general on how to proceed.
"For now, our lawyers advise us that we must continue to follow the law the Indiana General Assembly passed," said Marcus J. Barlow, spokesman for the Indiana state agency.
Indiana Attorney General spokesman Bryan Corbin said the office is reviewing the letter to determine options for the state, and will continue to defend the statute.
Federal Medicaid funds cannot be spent on abortion except in case of rape or incest.
But the Indiana law, which also is being considered by other states, could cause 9,300 Medicaid patients to lose their preferred provider to receive other services, such as contraceptives, Pap tests and sexually transmitted diseases testing and treatment, according to Planned Parenthood of Indiana.
"Every day a woman is left without birth control increases the chance of an unintended pregnancy," said Betty Cockrum, Planned Parenthood of Indiana president and CEO. "That will have two possible effects for the state, an increase in births paid for by Medicaid and/or an increase in abortions."
The Center for Medicaid, CHIP and Survey & Certification also put out a bulletin Wednesday reminding states that they cannot exclude providers solely on the basis of the range of medical services they provide.
The Indiana law also banned abortions after 20 weeks.
(Writing by Mary Wisniewski; Editing by Greg McCune)