By Jim Forsyth
SAN ANTONIO (Reuters) - Women's health group Planned Parenthood has agreed to pay the state of Texas $1.4 million to settle allegations of fraud in billing to a health program for the poor, Texas Attorney General Greg Abbott said on Wednesday.
But a spokeswoman for Planned Parenthood Gulf Coast strongly denied the allegations and said the group settled to avoid a lengthy battle with Texas.
The settlement is the latest in a series of confrontations between Planned Parenthood and the Republican-led state government of Texas.
It follows one week after Texas approved a new law that will force Texas clinics performing abortions to upgrade facilities to those of outpatient surgery centers, which could cost thousands of dollars for each clinic.
Planned Parenthood, the nation's largest abortion provider operating 13 clinics in Texas which perform abortions, staunchly opposed the new law and has threatened to sue the state.
Texas had previously banned Planned Parenthood facilities in Texas from participating in a state health program for poor women which funds care such as annual exams, cancer screenings and birth control. Planned Parenthood sued the state but ultimately lost in court.
Abbott, a Republican who is running for Texas governor, said on Wednesday that a whistleblower accused Planned Parenthood Gulf Coast of improperly billing Texas for products and services which were never rendered, not medically necessary, or were not covered by Medicaid, the government health program for the poor.
Medicaid is mostly funded by the federal government but administered by the states.
Investigators determined that Planned Parenthood "falsified material information in patients' medical records" in order to support fraudulent reimbursement claims, Abbott said.
Planned Parenthood said the allegations are without merit and the group was settling "as a practical matter."
"Continuing this litigation in the hostile environment for women's health would have ensured a lengthy and costly process that would have distracted our energies and required us to share the private medical information of thousands of women," spokeswoman Rochelle Tafolla said in a statement.
"We are ending this lawsuit in order to devote all of our time and energy to delivering high quality affordable health care."
Abbott, a strong opponent of abortion, is campaigning to succeed longtime Republican Governor Rick Perry in 2014.
Funding for women's health programs has been repeatedly cut by majority Republicans in the Legislature, and last week, Planned Parenthood Gulf Coast announced the closing of three clinics in Texas, one of which performs abortions.
(Editing by Greg McCune and Eric Walsh)