McGraw, feds give arguments on Medicaid funds

By John O'Brien | May 18, 2011


RICHMOND, Va. -- West Virginia Attorney General Darrell McGraw and the federal government argued last week over more than $400,000 in Medicaid funds being withheld from the state.

The feds claim McGraw should have given $446,607 from a 2004 settlement with prescription drugmaker Dey LP worth $850,000 to them because the lawsuit alleged harm to the state's Medicaid program, which is funded largely by the federal government. Assistant Attorney General Scott Johnson argued for McGraw's office, and Alisa Beth Klein argued for the federal Department of Health and Human Services.

Klein's family vacation to Utah postponed arguments from March to Thursday. The three judges assigned to the case are Diana Gribbon Motz, Albert Diaz and Clyde Hamilton.

McGraw is appealing a district court ruling against him.

The Centers for Medicare and Medicaid Services, a part of federal Department of Health and Human Services, noted that McGraw and the private attorneys he hired to represent the State estimated that Dey caused more than $950,000 of damage to the state Medicaid program. Dey settled for $850,000.

"West Virginia did not reimburse HHS for the federal share of its Medicaid overpayments or inform HHS of its settlement with Dey," the federal government's attorneys wrote in a brief.

"Instead, the State gave $750,000 to (the Public Employees Insurance Agency) - i.e., roughly five times the State's own damages estimate for PEIA - and gave the remaining $100,000 to the Consumer Protection Fund of the West Virginia Attorney General's Office."

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