- Associated Press - Thursday, July 14, 2016

PHOENIX (AP) - Arizona’s Planned Parenthood affiliate and the American Civil Liberties Union sued the state of Arizona Thursday over a just-signed law they say is a thinly-veiled attempt to illegally cut off Medicaid funding from abortion providers.

The lawsuit filed in federal court in Phoenix on behalf of Planned Parenthood and doctors who provide abortions and deliver babies says the law is illegal because it will prevent women from choosing services from otherwise qualified providers just because they also provide abortion services. They said that violates the “free choice of provider” provision in federal Medicaid law and also violates the Constitution’s due process and equal protection clauses.

The law signed by Republican Gov. Doug Ducey in May allows the state to cut off all funding to providers if they don’t fully segregate money they get for non-abortion services from non-government cash that pays for abortions. The law goes into effect on Aug. 6 and the lawsuit seeks an injunction permanently preventing enforcement.

Backers said they crafted the law to ensure that federal and state law barring public funding for abortions is being followed. Ducey spokeswoman Annie Dockendorff called the law “a common-sense reform consistent with the governor’s track record of supporting legislation that protects taxpayers.

“Further, the bill is consistent with long-standing public policy at the state and federal level that prohibits taxpayer dollars from being used to subsidize abortions,” Dockendorff said in a written statement. “This policy has strong support from the public, which does not want to see their hard-earned dollars being spent on elective abortions.”

House Bill 2599 also required funding cutoffs and license revocations for providers that violate medical waste rules or submit a claim for abortion-related procedures.

Rep. Justin Olson, R-Mesa, who sponsored the legislation, disputed that it arbitrarily cuts off abortion providers. He said it only provides an enforcement mechanism if a provider breaks current law banning state or federal funding of abortions.

“The bill does not bar any participant from being a Medicaid provider unless they don’t comply with federal law,” he said Thursday. “Most of what is enacted in this law is in federal law - that they do not use taxpayer dollars to fund abortion. That’s a longstanding federal law.”

Planned Parenthood Arizona has said it meticulously separates its billings so that no taxpayer money pays for non-covered abortions. But the group is concerned the law requiring abortion providers to allocate their overhead costs seems to be a setup. They called its provisions “complicated and vague.”

A 2012 Arizona law that explicitly cut off Medicaid funding to abortion providers was thrown out by a federal judge who cited the free choice of provider provision.

“There is an eerie déjà vu to this law,” Alessandra Soler, executive director of the ACLU of Arizona, said in a statement. “The state is trying again, this time with a more complicated version of the previous law, to use taxpayer dollars to play politics with medicine.”

The director of the federal Medicaid program warned states as the bill was being considered in April that it was against the law to cut off funding to medical providers just because they might also provide abortion services.

“Providing the full range of women’s health services neither disqualifies a provider from participating in the Medicaid program, nor is the provision of such services inconsistent with the best interests of the beneficiary, and shall not be grounds for a state’s action against a provider in the Medicaid program,” Vikki Wachino wrote in the letter to state Medicaid directors.

Planned Parenthood Arizona says Arizona is among at least 24 states that have tried to cut off funding for legal services in the past year.

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