Planned Parenthood filed a lawsuit Monday challenging a provision in Republicans’ budget reconciliation law that would make the abortion provider ineligible for Medicaid reimbursements for one year.

Federal funding cannot be used for abortion except in rare circumstances, under the annual Hyde amendment rider. But organizations that provide abortions have been eligible for federal Medicaid reimbursements for providing other health services such as contraception or sexually transmitted infection testing.

The sweeping domestic policy and tax law prohibits organizations from being eligible for Medicaid funds if they provide abortions; qualify as an Essential Community Provider, which serves low-income and medically underserved residents; and met a threshold of $800,000 in Medicaid reimbursements in 2023.

Planned Parenthood first hinted at the lawsuit in a statement Thursday following House passage of the bill. President Donald Trump signed the legislation during a July Fourth ceremony.

The lawsuit was filed in federal court in Massachusetts jointly by Planned Parenthood Federation of America, and two of its members, Planned Parenthood League of Massachusetts and Planned Parenthood Association of Utah.

“This case is about making sure that patients who use Medicaid as their insurance to get birth control, cancer screenings, and STI testing and treatment can continue to do so at their local Planned Parenthood health center, and we will make that clear in court,” said Alexis McGill Johnson, CEO of Planned Parenthood Federation of America, who called the defunding provision a “targeted attack” by the administration.

While GOP lawmakers in both chambers had initially angled for a 10-year funding moratorium, the Senate tweaked its language to opt for a one-year ban in the days leading up to the floor vote.

But even a one-year funding prohibition could cripple clinics that serve predominantly low-income patients and rely on Medicaid reimbursements. The organization, which also faces ongoing issues with withholding of Title X reimbursements for covering family planning services, said the inclusion of this provision could lead to the closure of almost 200 Planned Parenthood locations in 24 states.

“The Defund Provision emphatically does not address federal funding for abortion,” the filing states. “The Defund Provision is a naked attempt to leverage the government’s spending power to attack and penalize Planned Parenthood and impermissibly single it out for unfavorable treatment.”

Planned Parenthood estimates that if the provision is not enjoined, it would threaten health care for more than 1 million Medicaid beneficiaries who seek services annually at its clinics, requiring the clinics to lay off staff or close down.

Defunding Planned Parenthood has been a longtime goal of the anti-abortion movement, which had lobbied heavily to include the language in the reconciliation package.

Speaker Mike Johnson, R-La., first announced that the House would seek to defund the organization in its language during remarks at an annual benefit for Susan B. Anthony Pro-Life America in April.

The anti-abortion group’s president, Marjorie Dannenfelser, was in the House Thursday morning awaiting final passage.

“We’re gonna celebrate,” she said Thursday. “We’re gonna have a little party.”

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