A federal appeals court has allowed a lawsuit accusing Planned Parenthood of Medicaid fraud to proceed, potentially forcing the organization to repay nearly $2 billion.
The case centers on Planned Parenthood’s use of Medicaid funds in Texas and Louisiana. A full panel of judges at the U.S. Court of Appeals for the 5th Circuit heard oral arguments this week.
Jennie Bradley Lichter, president of March for Life, stated that “Planned Parenthood is facing a repayment obligation of close to $2 billion because it continued to fill its coffers with taxpayers’ money even after two states had already disqualified it.”
The lawsuit followed actions by Texas and Louisiana, which revoked Planned Parenthood affiliates’ Medicaid qualifications in response to activist David Daleiden releasing video footage showing staff discussing the sale of aborted fetal tissue. Daleiden faced legal proceedings for illegally recording the staff, but his actions intensified pro-life efforts targeting the nonprofit.
Planned Parenthood initially sued Texas and Louisiana and won an injunction permitting it to receive Medicaid reimbursements. However, that decision was reversed on appeal years later.
An anonymous litigant then filed a lawsuit on behalf of the two states seeking repayment for millions in Medicaid funds collected during the injunction period. Court documents indicate the potential debt could reach $1.8 billion, including original amounts and various multipliers. The exact figure will be determined by a jury in a lower court.
The key legal issue centers on whether Planned Parenthood had immunity when it collected Medicaid payments. Planned Parenthood argued that its counsel advised it to collect funds during the injunction period. However, the appeals court ruled that the issue of attorney immunity cannot be addressed at this stage because resolving it would not conclusively determine a separable legal issue in a way that meaningfully advances the litigation.
The court also overturned a 2025 panel ruling that had sided with Planned Parenthood on the issue of attorney immunity. The full Fifth Circuit had previously voted to rehear the case, leading to today’s decision.
The lower court ruling at issue was authored by Judge Matthew Kacsmaryk, a Trump appointee.
