Despite transparency and privacy concerns, anti-abortion group continues to receive taxpayer dollars

Fiscal watchdogs and reproductive rights advocates in Harrisburg are again sounding the alarm over an anti-abortion organization that is set to receive $3.6 million in state funding in the 2020-2021 stopgap budget.

At issue is whether Harrisburg-based Real Alternatives, which bills itself as “empowering women for life,” when it comes to their reproductive choices, has shared protected medical information and misused taxpayer money to expand its operations in two other states. 

“We strongly believe that not only should these names not be part of public records but also that they should never have left the centers in the first place.” Mary Alice Carter, a senior advisor at the reproductive rights group Equity Forward, which pursued the records’ release, told the Capital-Star. “People’s health, sexual, and medical history should always remain highly confidential and this is a major violation of trust.”

The renewed debate comes just two weeks after the state Office of Open Records (OOR) reversed a previous decision, and ordered Real Alternatives, which received $30.2 million from Pennsylvania taxpayers between 2012 and 2017, to open its books to scrutiny. 

In the 2017 Commonwealth Court fight that preceded that reversal, Real Alternatives argued that the information requested was “not directly related to RA’s performance of a governmental function on behalf of the Department [of Human Services],” but could not explain to the court how the information wasn’t related to the performance of its duties.

Real Alternatives is 99 percent funded with state taxpayer dollars, leaving just 1 percent of the organization’s monetary needs to be fundraised. 

And that’s why, Carter says Real Alternatives financial records should be made public. 

But transparency isn’t the only issue, Carter, a former Planned Parenthood official and a long-time reproductive rights activist, told the Capital-Star after reviewing the recently released documents.

Findings

According to its most recent contract with DHS, Real Alternatives contracts with 28 anti-abortion service providers (90 sites) located in 33 counties across Pennsylvania. These sites consist of 42 social service agencies, 33 pregnancy centers, 11 maternity residences, and four adoption agencies.

But the data and information acquired at these sites, doesn’t appear to stay at the site of service, according to Carter who reviewed the OOR’s written decision. 

On page 6 of the ruling, the agency says, “the Service Provider Monthly Invoices also include the names of individual clients receiving counseling services under RA’s agreement with the Department.” 

 “I was legit shocked and surprised,” Carter said. 

Carter said the data were surprising because Equity Forward did not request this information. It appears, Carter said, that Real Alternatives receives this information from its subcontractors as part of its standard operating procedures. 

Because the services provided by Real Alternatives are deemed “medical services,” according to the court ruling, Carter argues that there’s a presumed level of privacy by clients for the provider to follow medical privacy standards, such as the Health Insurance Portability and Accountability (HIPAA) law. 

Cindy Haines, a lawyer with Post & Schell in Harrisburg and former HIPAA privacy officer for health-related state agencies, said the nonprofit could be exempt from HIPAA policy based on the legal definitions of a “covered entity.”

According to the U.S. Department of Health and Human Services, covered entities are defined in the HIPAA rules as “health plans, health care clearinghouses, and health care providers who electronically transmit any health information in connection with transactions for which HHS has adopted standards.”

“Healthcare providers have, in the past, gotten away with not considering themselves covered entities because they have not billed Medicare and Medicaid,” Haines said.

Faith-based organizations, which some anti-abortion groups identify with, tend not to be covered entities, she said, adding that doctors and nurses employed by Real Alternatives would still be subject to HIPAA law.

“However they define themselves, they should still be protecting the privacy of the people that they serve,” Haines said. “That’s always my advice to even quasi-healthcare providers.”

If Real Alternatives were a covered entity, then the data included in the documents would be a violation of HIPAA, Haines confirmed. 

Real Alternatives said in an email to the Capital-Star that the Office of Open Records erroneously reported in its decision that client data was included and that it has since filed a reconsideration request to have the information corrected in the OOR’s final decision. 

“Contrary to the OOR’s description of a Real Alternatives document, Real Alternatives absolutely does not include ‘the client name’ in its records. Strict confidentiality is a hallmark of the Pennsylvania Pregnancy and Parenting Support Services Program. Client identities are never disclosed.  Real Alternatives therefore looks forward [to] the OOR’s correction of this error,” the email reads.

The Office of Open Records could not be reached for comment by press time.

If clients’ names and the services they received were included in the documents, Haines said it could be a violation of the organization’s privacy policy, if it has one. 

Real Alternatives pointed to its website when asked about its client privacy policy for this article. There is no specific privacy policy for clients available for viewing on its website. 

However, Real Alternatives does say on its website that it views the confidentiality policy of its service providers before it does business with them. 

Error or not, if the information was included and made public, it could potentially result in a class-action lawsuit by any of the named clients, Haines said.

In 2016 and 2017, three of the organization’s male-majority leadership team—President and CEO Kevin Bagatta, Vice President of Operations Thomas A. Lang, and Vice President of Administration Clifford McKeown—all reported six-figure salaries along with additional income to cover health insurance premiums, on the released documents. 

In an IRS form 990 from 2017, Real Alternatives lists its Pennsylvania program as having provided services over 76,768 visits to 18,388 clients, spending $5.9 million and generating nearly $6 million in revenue, making Pennsylvania the largest of Real Alternatives three-state operations. 

By comparison, the Michigan program is listed as having served 2,126 clients over 7,413 visits. It reported $584,439 in expenses, and $594,324 in revenue. 

The Indiana program reported 38,482 services provided to 16,679 clients. It reported $2.4 million in expenses, and a little more than $2.4 million in revenue. 

Troubled past

From 2015-2017, Real Alternatives was the subject of an investigation and report by Auditor General Eugene DePasquale’s office which concluded that the nonprofit had been siphoning funds acquired in Pennsylvania to fund expansions in such states as Michigan and Indiana. 

The 24-page audit report revealed that between fiscal year 2012-2013 and 2014-2015, Real Alternatives collected $497,368 from subcontractors through a 3 percent fee.

The “program development fee,” as it is called on 2015-2016 IRS form 990, suddenly changed names in the 2017-2018 form, following the audit, where it is known as “program defense and advancement.”

In response to being audited by the Office of the Auditor General, Real Alternatives countersued, arguing that the funds transferred between the service providers and Real Alternatives were private, and not open for review by DHS or the auditor general. 

In a statement to the Capital-Star applauding part of the OOR’s June decision, Real Alternatives maintained its position that non-governmental contracting information and documentation is not subject to Pennsylvania’s Right to Know Law, but did not mention OOR’s mandate that Real Alternatives turn over its financial documentation.

“All corporations that do or which are considering doing business with the Commonwealth of Pennsylvania should heartily applaud this important decision.  What a chilling effect there would be on commerce and the economy in our state if corporations seeking to conduct business with the state government chose to go elsewhere with their business for fear that all of their non-governmental contracting information and documentation was subject to Pennsylvania’s Right to Know Law.”

At the time, DePasquale concluded that the Department of Human Services, the state agency that oversees Real Alternatives, and ensures that they receive the allocated state funds, should recoup the funds, arguing that they were “not spent in accordance with the agreement.”

However, it soon became clear to DHS that recouping the funds from the organization was going to be more difficult than simply rewriting the contract with Real Alternatives to include more frequent and better oversight of the nonprofit’s use of taxpayer dollars. 

Where, exactly, in the new contract the provisions for more frequent and better oversight lie is a point of contention for Equity Forward.

The new contract simply states that Real Alternatives must pay its subcontractors “without any deduction.”

While DHS did not respond to our request for comment by press time, IRS forms from 2018 appear to show that those deductions continued, just under the new “program defense and advancement” moniker. 

However, the rebranded fee could have been used in the months before the new contract was negotiated and therefore, not a violation of the new contract. 

In 2019, Michigan opted to defund Real Alternatives due to questions about how the program was operating in the state, removing $700,000 from the nonprofit’s coffers. 

Pennsylvania, however, continues to fund the program despite the 2017 report and an admission from Real Alternatives in court that funds acquired in Pennsylvania were being used in other states. 

Calling the lack of response from the Legislature regarding Real Alternatives’ push to hide its financial records, a “deafening silence,” Carter questioned why the Legislature would choose to give the nonprofit more money, adding that it’s continued support from the General Assembly was “really concerning.”

“This is a program that deserves far more scrutiny than it receives,” Carter said. It’s “pretty beloved by anti-abortion folks in your Legislature.”

Legislative action

Since 1997, Real Alternatives has been almost fully funded by the state with money from taxpayers. 

According to state Rep. Dan Frankel, D-Allegheny, who has served in the House since 1999, making him well-versed in Real Alternative’s history, the funding for the abortion-alternatives program was concocted as a compromise for funding Planned Parenthood and other parenting agencies that are included in the state budget.

“The deal was we were going to give the same amount of money to alternatives to abortion,” Frankel, one of the House’s most outspoken defenders of abortion rights, told the Capital-Star, “even though none of the funds provided by the state fund abortions at Planned Parenthood clinics across the state.”

The compromise has remained in place ever since, Frankel said.

“Within the Legislature there has been a consistent anti-choice voice since I walked in 22 years ago,” Frankel said of the organization’s support in the General Assembly.

“It’s outrageous that an organization that is receiving millions of dollars year-after-year demands that its records be held privately,” Frankel said, “… especially at this time of financial insecurity in the state, regardless of how people feel on the issue, I would hope that the question of how money is being spent is of great importance.” 

Frankel hopes the Office of Open Records’ decision to reverse their previous ruling and demand Real Alternatives share their financial records will raise questions among his colleagues about the organization’s legitimacy. 

“Clearly, I’m gratified that they reversed their position and believe that it’s a legitimate case,” Frankel told the Capital-Star. “My personal view is that RA is a scam to begin with. This is one step in exposing what is really going on here. They’re really only concerned about limiting access to abortion care.” 

As far as the allegations and lawsuits against Real Alternatives, Frankel said, “These are serious concerns,” adding that defunding the program and a referral for investigation by the attorney general would all be potential consequences, if they proved to be true. 

Frankel fears the Republican-controlled Legislature means Real Alternatives won’t face the scrutiny it deserves, despite the mounting evidence of misconduct—a double standard, according to the Allegheny County Democrat. 

“I think if it were Planned Parenthood they would be down there in a bat’s eyelash trying to prosecute.” Frankel said. 

State Rep. Kathy Rapp, a Warren County Republican and co-chair of the House’s Pro-Life Caucus, would not comment on Real Alternatives for this article.