INDIANAPOLIS (AP) — Indiana stepped between women and their physicians when it enacted a law that blocked Medicaid funds for Planned Parenthood just because the organization provides abortions, a federal appeals court ruled Tuesday.

The ruling by the 7th U.S. Circuit Court of Appeals in Chicago effectively upheld decisions by a district judge and a Medicaid review panel that found the 2011 law denied patients the right to choose their own health care provider.

“This is not about an abortion case. This is a case about Medicaid services — non-abortion-related services — and the attempt by the state of Indiana to punish Planned Parenthood and its clients from receiving non-abortion health services merely because Planned Parenthood, without any sort of state or federal money or any Medicaid funds, also provides abortions,” Ken Falk, legal director of the American Civil Liberties Union of Indiana, said at a news conference in Indianapolis following Tuesday’s decision. The ACLU argued the case on behalf of Planned Parenthood.

The ruling will likely have little impact on Planned Parenthood’s operations in Indiana as funding to its clinics has been largely uninterrupted since Republican Gov. Mitch Daniels signed a law attempting to cut the organization off in May 2011. Gov. Daniels’ spokeswoman did not respond to phone requests for comment Tuesday.

The 2011 law made Indiana the first state to deny Planned Parenthood the Medicaid funds for general health services including cancer screenings. The family planning organization immediately challenged the law with help from the ACLU. District Judge Tanya Walton Pratt blocked the state from enforcing the law in June 2011.

The state appealed that order, arguing that federal law says Medicaid cannot be used to cover abortions in most circumstances and that the program indirectly funds the procedures by providing money to Planned Parenthood.

On Tuesday, the 7th U.S. Circuit Court of Appeals in Chicago upheld the core portion of Judge Pratt’s order, saying the Indiana law effectively intrudes on a person’s right to choose their doctors.

“The defunding law excludes Planned Parenthood from Medicaid for a reason unrelated to its fitness to provide medical services, violating its patients’ statutory right to obtain medical care from the qualified provider of their choice,” the ruling said.

Bryan Corbin, a spokesman for the Indiana attorney general’s office, said the state was reviewing the appeals court opinion. The state can either ask the full court to review the panel’s ruling or appeal directly to the Supreme Court.

The Indiana law affected about $1 million in Medicaid funds out of Planned Parenthood’s state budget of $15 million, said Betty Cockrum, the group’s state president. The appeals court said Judge Pratt also needed to modify other sections of her order that affected about $150,000 in revenue sources other than Medicaid. Cockrum and Falk said that federal grant for sexually transmitted disease testing in 22 counties was set to expire at the end of this year.

Tuesday’s ruling sends the case back to Judge Pratt’s court, where she will decide whether to make the injunction blocking the law permanent. Indiana also is awaiting a final decision on a bureaucratic appeal by the agency that regulates Medicaid. A federal panel previously found the law violated Medicaid regulations.

A federal judge in Phoenix last week blocked Arizona from applying a similar law to Planned Parenthood. A similar law in Texas also is the focus of a court fight.

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