CHICAGO (CBS) — Federal officials are reviewing a new Indiana law that restricts public funding for Planned Parenthood.

It’s a development that could cost the state some of its Medicaid funding, Newsradio 780’s Lisa Fielding reports.

The U.S. Centers for Medicaid and Medicare Services says it also was reviewing situations in other states threatening to withhold funds from abortion providers.

LISTEN: Newsradio 780’s Lisa Fielding Reports

The agency says Medicaid doesn’t allow states to stop beneficiaries from getting needed health care, such as cancer screenings, because their provider also offers other services.

The law recently signed by Gov. Mitch Daniels makes Indiana the first state to deny Medicaid funds for general health care services. It affects more than $1 million in Planned Parenthood funding.

Planned Parenthood is welcoming the federal review.

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