Another $89M for King and feds to fight over

John O'Brien May 27, 2009, 5:32pm


MONTGOMERY, Ala. (Legal Newsline) - Six more defendants have settled Medicaid fraud charges with Alabama Attorney General Troy King, currently in a fight with the Federal Government over to whom part of the money is owed.

The recent settlements total $89 million, putting the amount of money recovered by King's lawsuits at $123,750,000 with 45 defendants remaining. Abbot Laboratories, Aventis Pharmaceutical, Aventis Behring, ZLB Behring and Sanofi-Synthelabo are the recent settlement defendants.

King's lawsuit allege overcharges to the state's Medicaid system, which, like other states, is heavily funded by federal money. Pharmaceutical companies misreported and inflated prices for drugs, King alleged in 2005.

"These suits were not then - and will never be - about taking legal action to generate money to run state government," King said.

"That would be an abuse of the legal system. Still, four years later, there are things occurring in our state that cannot be ignored."

King has also secured verdicts in the amount of more than $352 million, but those are under appeal to the state Supreme Court and the State has not received any funds.

At issue in a lawsuit by King against the federal Centers for Medicaid and Medicare Services is an Oct. 28 letter sent by CMS to the states. King alleges it allows the CMS to grab portions of settlements and awards that haven't been collected yet by the State.

The Oct. 28 letter from the CMS to the states says they are not allowed to segregate portions of their recovery as out of the Federal Government's reach.

"The (Heath and Human Services) Departmental Appeals Board has long recognized the Federal Government's entitlement to its proportionate share of civil penalties assessed by states against providers or other entities," the CMS letter states.

It adds that recently enacted federal legislation "provides that the full amount of any State (False Claims Act) recovery serve as the basis for measuring the federal share."

In fiscal year 2008, the Federal Government provided nearly 68 cents of every dollar spent on Medicaid in Alabama. King wrote that the new requirements "will have a devastating impact on the State of Alabama and the low-income and disabled individuals served by the State's Medicaid program."

The trial of Watson Pharmaceuticals is scheduled to begin June 22, and Mylan Pharmaceuticals is set to begin Sept. 21.

From Legal Newsline: Reach John O'Brien by e-mail at

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Alabama Attorney General
501 Washington Ave
Montgomery, AL 36104

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