A federal appeals court has ruled that Indiana can't cut off funding for Planned Parenthood just because the organization provides abortions.

The 7th U.S. Circuit Court of Appeals in Chicago on Tuesday upheld the core portion of a lower court order that said Indiana cannot enforce a state law that barred abortion providers from collecting Medicaid funds for any medical services.

Indiana's Republican Gov. Mitch Daniels signed a law in May 2011 that made Indiana the first state to deny the organization Medicaid funds for general health services including cancer screenings.