INDIANAPOLIS (CBS) — Planned Parenthood now says it will have to turn away 9,300 Medicaid patients at its clinics in Indiana, since state lawmakers have voted to eliminate all of the group’s public funding.

On Wednesday, a federal judge refused to block a law signed by Republican Gov. Mitch Daniels, which bars the state from entering into contracts with any organizations that perform abortions.

The group says on its Web site that it is “deeply disappointed” in the decision by U.S. District Judge Tanya Walton Pratt not to grant a temporary restraining order to block the law. The American Civil Liberties Union had filed for the order on the group’s behalf.

“The ruling means that Hoosiers who rely on federal funding have lost access to their crucial and lifesaving preventive health care at Planned Parenthood of Indiana,” Planned Parenthood of Indiana chief executive officer Betty Cockrum said in a news release.

Planned Parenthood says the law will cost it $1.4 million, forcing it to lay off 52 people and close 13 clinics.

Indiana Gov. Mitch Daniels had called previously for a “truce” on social issues, but was called on by former U.S. Senator and potential 2012 presidential candidate Rick Santorum to sign the bill, CBS News reported last month.

Speaking to CBS News political analyst John Dickerson last month, Santorum characterized Planned Parenthood as “an organization that has a very sordid history and founding and one that I still think focuses in on activities that a lot of people have moral objections to.”

Planned Parenthood became the object of conservative ire after the agency was targeted by an undercover sting operation by anti-abortion activist Lila Rose. The edited videos showed people posing as sex traffickers about getting abortions and contraception for underage sex slaves, and allegedly getting advice on it from Planned Parenthood.

Planned Parenthood said they reported what they believed to be real sex traffickers to federal authorities, but Rose claimed the sting proved that the organization was protecting sex traffickers involved with underage girls.

The U.S. House of Representatives ended up passing a bill banning federal funding for Planned Parenthood, although the demand was dropped to avert a government shutdown.

Several other states are also mulling eliminating funding to Planned Parenthood.

The decision Wednesday is not the end of litigation in Indiana. The two sides will meet again June 6 for an injunction hearing, as the ACLU continues to fight the law on behalf of Planned Parenthood.

On a related issue, Indiana lawmakers are also working toward passing a law that would dramatically restrict abortion rights in the state. The bill would ban abortions after the 20th week of pregnancy unless there is a substantial threat to the woman’s life or health, and would force abortion providers to tell women undergoing abortions that life begins at conception.

Indiana State Rep. Eric Turner (R-Cicero), a sponsor of the bill, told The Associated Press last month that he hopes the bill would make Indiana one of the “most pro-life states in the country” and would achieve the goal of having “less abortion in the state.”

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