Hughes

CHARLESTON -- Chief Deputy Attorney General Fran Hughes has responded to a recent West Virginia Record editorial, seeking to clarify how an $850,000 settlement with a drugmaker was dispersed.

Dey Inc. agreed to settle a case in 2004 filed by Attorney General Darrell McGraw's office for $850,000. He had claimed the company inflated the prices of the prescription drugs it manufactured, thereby defrauding the state's Medicaid program.

Of that settlement money, McGraw's Consumer Protection and Education Fund received $100,000, according to published reports.

"Yes, that $100,000 was used to run our office," Hughes said Thursday.

She said the other $750,000 was given to then-Gov. Bob Wise's office. She said she presumes it then was split among the Public Employees Insurance Agency, the old Workers' Compensation agency and the Department of Health and Human Resources, which administers the Medicaid program in the state.

Hughes said a Dec. 21 editorial (which appeared in the Dec. 24 print edition of The West Virginia Record) didn't fully explain how the settlement money was dispersed.

Last month, the U.S. Centers for Medicare and Medicaid Services (CMMS) notified the state that it will be withholding $634,525 in Medicaid funds in 2008 because it does not believe it was given what it was owed from the Dey lawsuit settlement.

Seventy-three cents of every dollar West Virginia spends on Medicaid is funded by the federal government.

This marked the second time in 2007 that Uncle Sam has demanded a refund from West Virginia due to McGraw's spending of lawsuit settlement proceeds. In August, CMMS told West Virginia it would withhold $4.1 million in Medicaid funding, or its share of the state's $10 million 2001 settlement with Purdue Pharma.

McGraw says his office is appealing both decisions.

In their respective settlement agreements, Dey and Purdue Pharma admitted no wrongdoing.

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