Feds Block Indiana Planned Parenthood Law State law cutting Medicaid funds is illegal, White House decides By Rob Quinn, Newser Staff Posted Jun 2, 2011 1:39 AM CDT 6 comments Comments Planned Parenthood Indiana supporters hold up signs and cheer during the organization's "Rally to Protect our Patients" on the south steps of the Indiana Statehouse. (AP Photo/The Indianapolis Star, Charlie Nye) (Newser) – The White House has—as promised—moved to block an Indiana law that strips Planned Parenthood of Medicaid funds. State officials have been notified that the law, which cuts off funding to Planned Parenthood because some clinics perform abortion services, violates Medicaid rules because states aren't allowed to choose where recipients receive health care services, reports the New York Times. State officials say they plan to continue enforcing the law, which was signed by Republican Gov. Mitch Daniels last month. The federal government's move is "a strong rebuke to Indiana” that should serve as a warning to other states seeking to defund Planned Parenthood," the president of Planned Parenthood Federation of America tells the Indianapolis Star. Medicaid officials have signaled that the state could lose $4 billion in federal funding if it refuses to comply with the administration's decision.