McGraw has other withhold challenge in court

John O'Brien Jan. 22, 2010, 2:00pm


CHARLESTON, W.Va. (Legal Newsline) - West Virginia Attorney General Darrell McGraw is also challenging a ruling that withheld almost $500,000 from the state's Medicaid program.

The withhold came as a result of McGraw's handling of an $850,000 settlement with Dey Pharmaceuticals. The federal Centers for Medicare and Medicaid Services felt it was owed a portion of the settlement because it funds nearly 70 percent of the state's Medicaid program, which McGraw alleged was harmed in the case.

McGraw is also challenging a Departmental Appeals Board ruling that withheld more than $2.7 million. That issue started with McGraw's handling of a 2004 settlement with OxyContin-maker Purdue Pharma.

McGraw's challenge to the Dey withhold was filed in July. The two challenges make similar arguments.

"It is fundamentally unfair to require (the state Department of Health and Human Resources) to credit the federal government when DHHR and the state Medicaid agency (the Bureau of Medical Services) received none of the settlement proceeds," says the complaint, filed in a West Virginia federal court.

Of the $850,000 gained from the settlement, $100,000 went to McGraw's Consumer Protection Fund and the rest was given to the governor's office.

McGraw's lawsuit against Dey was filed against other pharmaceutical companies. The defendants prevailed at trial.

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

More News