Indiana Right to Life Legislative Director Sue Swayze said there was no basis for that argument.
“There's been no discussion of contraception or birth control,” Swayze said.
Tuesday's ruling will likely have little impact on Planned Parenthood's operations in Indiana as funding to its clinics has been largely uninterrupted since Republican Gov. Mitch Daniels signed a law attempting to cut the organization off in May 2011. Daniels' spokeswoman said the governor's office would have no comment on the ruling.
Planned Parenthood immediately challenged the law with help from the ACLU. District Judge Tanya Walton Pratt blocked the state from enforcing the law in June 2011.
The state appealed that order, arguing that federal law says Medicaid cannot be used to cover abortions in most circumstances and that the program indirectly funds the procedures by providing money for Planned Parenthood.
On Tuesday, the 7th U.S. Circuit Court of Appeals in Chicago upheld the core portion of Pratt's order, saying the Indiana law effectively stamps on a person's right to choose their doctors.
“The defunding law excludes Planned Parenthood from Medicaid for a reason unrelated to its fitness to provide medical services, violating its patients' statutory right to obtain medical care from the qualified provider of their choice,” the ruling said.
Bryan Corbin, a spokesman for the Indiana attorney general's office, said the state was reviewing the appeals court opinion. The state can either ask the full court to review the panel's ruling or appeal directly to the Supreme Court.
“We think they should take it all the way to the Supreme Court,” Swayze said.
Tuesday's ruling sends the case back to Pratt's court, where she will decide whether to make the injunction blocking the law permanent. Indiana also is awaiting a final decision on a bureaucratic appeal by the agency that regulates Medicaid. A federal panel previously found the law violated Medicaid regulations.