Attorney Ken Falk and Planned Parenthood of Indiana CEO Betty Cockrum (WIBC.com photo: Mike Corbin)

Planned Parenthood of Indiana celebrated a victory Tuesday.

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The 7th Circuit Court of Appeals has upheld a move that prevents the state from cutting off the organization's Medicaid funding. The ruling upholds a 2011 order by U.S. District Court Judge Tanya Walton Pratt. The appeals court states Planned Parenthood was likely to succeed with its claim that the state lacked the authority to block its funding only because it provides abortion services.

This follows legislation backed by Governor Mitch Daniels that prevented state agencies from contracting with organizations that perform abortions. The American Civil Liberties Union represents Planned Parenthood in the case. Attorney Ken Falk says this case is not about abortion, but rather non-abortion related, Medicaid services that were in jeopardy. Falk says the state was attempting to punish Planned Parenthood because abortion is among the services that the orgranization provides.

Planned Parenthood CEO Betty Cockrum says Medicaid funding makes up about $1 million of her group's annual $15 million budget. She says the decision allows the organization to continue to deliver needed medical care to thousands of Indiana residents.

However, Cockrum says the ruling is less clear on the status of another provision that would block two federal grants for disease intervention specialists in Indiana. The specialists conduct public outreach and prevention services related to sexually transmitted diseases in 22 counties. Officials say the grants amount to about $150,000.

Meantime, Attorney General Greg Zoeller says state lawmakers decided they didn't want taxpayer money to indirectly support abortion services so they acted against it. Zoeller says he'll continue to defend state law.