Court to Indiana: You Can't Defund Planned Parenthood State had tried to withhold Medicare funds from abortion providers By Newser Editors and Wire Services Posted Oct 23, 2012 12:05 PM CDT 70 comments Comments Planned Parenthood supporters demonstrate outside of Hofstra University the site of the presidential debate, Oct. 16, 2012, Hempstead, NY. (AP Photo/Mary Altaffer) (Newser) – A federal appeals court has ruled that Indiana can't cut off funding for Planned Parenthood just because the organization provides abortions. The 7th US Circuit Court of Appeals in Chicago today 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.