Va. AG returns $8.6M in Medicaid fraud recovery to general fund

Jessica M. Karmasek Aug. 29, 2012, 1:30pm


RICHMOND, Va. (Legal Newsline) - Virginia Attorney General Ken Cuccinelli told lawmakers this week that the state's Medicaid Fraud Control Unit will turn over a check for $8.6 million to the general fund later this month.

That amount represents Virginia's share of proceeds from a global settlement between pharmaceutical maker GlaxoSmithKline, itself, the federal government and other state governments to settle allegations of Medicaid fraud.

"When companies defraud Medicaid to enrich their own pockets, they are not only defrauding Virginia's taxpayers, but because annual Medicaid dollars are limited, they are potentially depriving health care from the poorest citizens of the commonwealth," Cuccinelli said Tuesday.

The investigation conducted by Virginia, the federal government and the other states alleged that GSK violated federal and state laws by:

- Making false and misleading representations to health care providers about the drug Avandia's overall safety for diabetic patients;

- Conducting illegal off-label marketing schemes to promote the sales of Paxil, Wellbutrin, Advair, Lamictal and Zofran;

- Conducting kickback schemes for those five drugs plus four additional drugs (Imitrex, Lotronex, Flovent and Valtrex); and

- Submitting false and inflated "best price" data to the federal Centers for Medicare and Medicaid Services, resulting in underpayment of rebates owed on certain products to the state Medicaid programs.

Virginia, the other states and the federal government alleged that these actions caused false claims for reimbursement to be submitted to government health care programs, including Medicaid.

The settlement with GSK -- reached in June and made public in July -- resolves civil fraud claims arising from four qui tam, or whistleblower, cases filed under the federal False Claims Act and the Virginia Fraud Against Taxpayers Act.

According to Cuccinelli's office, a settlement check in the amount of $8,600,723.17 will be deposited into the general fund's healthcare account for use by the Virginia Department of Medical Assistance Services for the state's Medicaid program.

From Legal Newsline: Reach Jessica Karmasek by email at

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