MONTGOMERY, Ala. (Legal Newsline) - Alabama Attorney General Troy King's dispute with the federal Medicaid agency isn't moving forward because he doesn't feel his office should bear its own court costs and attorneys fees in a separate action.
King's attorneys wrote Monday that the federal Centers for Medicare and Medicaid Services has offered to provide a document the State sought in a Freedom of Information Act request if both sides pay their own costs and fees.
"Plaintiff has rejected CMS's offer because Plaintiff will not negotiate away its right to seek costs and attorney's fees in order to obtain a document that CMS should have released months before briefing took place on an unnecessary motion for summary judgment," a motion to stay says.
The two sides are arguing over a letter sent by CMS nearly a year ago that outlined changes in the way it would recover funds from settlements and jury awards in Medicaid recovery lawsuits.
A separate lawsuit was filed regarding King's FOIA request. At issue is one partially redacted e-mail among more than 1,700 pages of documents CMS provided King's attorneys.
CMS offered the unredacted version. The motion was unopposed by CMS and the case is stayed until an April 27 status report.
King is upset with the new requirements regarding what amount must be returned the CMS when a state files an action seeking recovery of Medicaid funds, a move popularized in suits against tobacco companies in the 1990s.
His FOIA request sought CMS records related to and considered during the decision to enforce new requirements.
"These new requirements provide that states must 'return' to the Federal Government not only those amounts attributable to the federal share of payments made by a state's Medicaid program, but also a significant portion of amounts attributable to fines and penalties (such as punitive damages) obtained as a result of states' efforts to prosecute those who defraud their respective Medicaid programs, with little or no help from the federal government," King wrote in the first complaint.
"Adding insult to injury, (a letter from CMS to the states) also requires states to make these payments to the Federal Government without regard to whether the state has actually received the amounts in question."
The Oct. 28, 2008, 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 federal law "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."
King has sued more than 70 pharmaceutical companies. Three of those suits resulted in more than $270 million in jury awards, but they were overturned by the state Supreme Court.
Alabama is represented by law firm Proskauer Rose.
From Legal Newsline: Reach John O'Brien by e-mail at email@example.com.