What should Darrell McGraw do now?

sodbuster wrote:
As to the so-called option 3 I think we all know if Judge McGraw had violated any law the Chamber and other rightwing cronies would spare no expense to see it was prosecuted.

DEPARTMENTAL APPEALS BOARD
Appellate Division
DATE: July 14, 2008

Department of Health and Human Services
SUBJECT: West Virginia Department of
Health and Human Resources
Docket No. A-07-135
Decision No. 2185
DECISION
On September 5, 2007, the West Virginia Department of Health and Human Resources (DHHR) appealed a decision by the Centers for Medicare & Medicaid Services (CMS) to disallow $4,143,075 in federal financial participation (FFP) for West Virginia’s Medicaid program. The disallowance stems from a lawsuit filed by the state of West Virginia (State) against companies that manufacture and market the drug OxyContin. The lawsuit was settled before trial, with the defendants agreeing to pay $10million to the Consumer Protection Fund of the Office of the West Virginia Attorney General. CMS found that because the lawsuit had alleged harm to West Virginia’s Medicaid program, the costs of which are borne in part by the federal government, a portion of the settlement proceeds should have been shared with the federal government. Accordingly, CMS issued the challenged disallowance decision in order to recoup what it believed is the federal government's rightful share of the OxyContin settlement proceeds.


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The State Journal requested from the Attorney General's Office a copy of the current annual budget for the Consumer Protection Fund, including a list of all disbursements made from the fund between 2002 and 2008 along with an itemized list of how the office distributed the $10 million settlement with Purdue Pharma relating to OxyContin. The request was made Sept. 26, but the newspaper has yet to receive documents detailing the dollars and cents.

"There's just not a print out of who it was paid to," said Attorney General's Office Comptroller Joe Clay, about the budgetary request. "I'm having to go through books and books of information to get what you're asking for, and it takes time to pull out, copy and put back.

"There's six months that for whatever reason somebody's misplaced."

A final criticism over the attorney general's handling over the OxyContin case is whom exactly his office was supposed to be representing.

Look at the paperwork, and the answer would seem to be obvious at first glance. McGraw brought the lawsuit on the behalf of three state agencies: the Department of Health and Human Resources, the Public Employees Insurance Agency and the Workers' Compensation Commission.

But when the time came to settle the lawsuit, the three agencies were not at the bargaining table. They didn't receive any of the settlement money, with the exception of $250,000 going to the DHHR.

To put it in perspective, it would be like a driver hiring an attorney to represent her in a lawsuit against the person who struck her car, then the attorney reaching a settlement with the defendant without consulting her and not giving her any money from the agreement.

The Attorney General's Office says it's not that simple because there is a fourth client it was representing: West Virginia citizens who became addicted to OxyContin. Those citizens were found to incur the vast majority of the damages, with three agencies incurring only a small amount of damages in comparison.

The fund was established to help citizens by supporting programs that would fight substance abuse and provide treatment to addicts.

"Our office did not keep one cent" of the settlement, Hughes said.

However, it turns out there also is a fifth client that believes it is entitled to some of the settlement money.

The federal Centers of Medicare and Medicaid Services, or CMS, found out in 2007 that the state had alleged harm to the state's Medicaid program in its OxyContin lawsuit. CMS administrators wanted to know why Medicaid had not been reimbursed, and they threatened to withhold more than $4.1 million in Medicaid payments to the state to make up what they believed was the program's share of the settlement.

The state DHHR appealed CMS's decision to the U.S. Department of Health and Human Resources Appeals Board, which earlier this year ruled that CMS didn't adequately justify why it is entitled to $4.1 million when there are three other plaintiffs in the case.

The Attorney General's Office issued a news release shortly afterward, hailing the appeals board's decision as a victory for the state. However, the office downplayed the most substantial part of the ruling: The board found that CMS was entitled to part of the settlement because the state had argued harm to its Medicaid program in making its case for the lawsuit.

In other words, the appeals board wasn't questioning that CMS should recover money, just the amount it was asking for.

The appeals board also noted that the Attorney General's Office was aware the federal government may be entitled to a share of the settlement, yet it had purposely attempted to skirt the issue without consulting CMS.

"In spending those funds, the State assumed a calculated risk that CMS would reject its legal position and successfully pursue a disallowance," the board stated in its ruling. "We see nothing unfair about allowing the State to bear the consequences of running that risk."
Those "consequences" could ultimately amount to a few million dollars, although both sides are currently working on what that amount may be. The Attorney General's Office hasn't spelled out where exactly the money would come from given that a large part of the settlement money already has been spent.