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Indiana could become ground zero for a nasty fight between the federal government and state officials over public funding for Planned Parenthood.
And other groups that provide abortions.
The Hoosier state threw down the gauntlet last month by choking off the money.
Now Washington has responded with a slap of its own.
Correspondent Molly Henneberg tells us what's at stake.
Medicaid administrator doctor Donald Berwick suggests a warning to the state of Indiana should be enough.
We expect Indiana -- -- comply with a federal law and that's that's our position now.
We would hope federal Medicaid dollars I'm not gonna speculate about I think 7% of the loans but Indiana Republican state senator Scott Schneider says the state should not back down the Indiana has spoken and the people of Indiana spoken and so I I think we should challenge in this.
Schneider sponsored the legislation that has the Obama administration bearing down on the Hoosier state.
At issue a new law passed by the state legislature and signed by Republican governor Mitch Daniels and -- -- for that prevents any state agency including the state Medicaid agency from entering into a contract with or making a -- soon.
Planned Parenthood or any health care facility which performs abortions.
Except for hospitals and certain surgical centers.
But Berwick says this state -- goes against federal Medicaid law and illegally -- money from qualified healthcare providers.
He sent a letter to the state saying he is quote -- able to approve changes to the State's Medicaid plan.
The law says that if they wanna give care they're willing provider we can't pay for abortion services but they have to be.
Be able to provide care in -- statement -- -- Indiana Republicans contend that funding given to a clinic which also provides abortions cannot be separated to ensure taxpayer dollars are not spend for those procedures.
A spokesman for Indiana's attorney general says quote we are reviewing the letter but we will continue to defend the statute.
But the White House says CNN the center for Medicare and Medicaid Services has denied nineteen Medicaid amendments from other stays over the past year and a half.
Because they violated the law.
CMS did not impose penalties in any of these matters because the states works to come into compliance.
State senator Schneider contends Indiana is on quote solid legal footing with its use of taxpayer money.
We have as a state of Indiana have the right to.
Identifying decide who.
Who amongst all of the service providers in our state.
Receives that money.
Indiana receives more than four billion dollars a year in federal Medicaid signs that could be stripped if the administration decides to play hardball.
Also Planned Parenthood will be in courts in Indiana on Monday asking a judge to stop the new law.
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