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Thursday, May 23, 2024 | Back issues
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PsychRights Defends Its Whistle-Blower Status

SEATTLE (CN) - A mental health advocacy group urged the 9th Circuit to revive its whistle-blower suit alleging improper Medicaid payments for psychiatric drugs prescribed to minors.

The Law Project for Psychiatric Rights, known as PsychRights, sued various Alaskan psychiatrists, mental health agencies, pharmacies and state officials under the False Claims Act, saying the groups submitted fraudulent Medicaid claims for "off label" prescriptions for children and youth that were not reimbursable. Dispensing prescription drugs for conditions not approved by the Food and Drug Administration is known as off-label use, ineligible for Medicaid reimbursement unless it is a medically accepted indication.

PsychRights claimed certain members of the Alaska mental healthcare community were involved in the "scheme" to defraud Medicaid and filed two complaints under the False Claims Act. The federal law allows a private person, or whistle-blower, to bring an action on behalf of the United States against persons and companies that defraud the government. If the claim results in damages, the whistle-blower can recoup a portion of that award.

The public disclosure bar in the act prevents filing a claim based on previously publicly disclosed information, unless the plaintiff is the original source of the information.

U.S. District Judge Timothy Burgess consolidated the claims and dismissed the case, finding "prior public disclosures provided the government with more than sufficient information to investigate the allegations," and cited previous state cases filed by PsychRights, various media reports and other cases alleging the same type of fraud.

James Gottstein, representing PsychRights, argued before the three-judge panel last Wednesday that the group did "ferret out" original information for the False Claims Act by matching doctor's names to prescription data that they obtained under a Freedom of Information Act request.

"You can't expect the government to pore through literally millions of claims," Gottstein said.

Eric Berlin, representing the health care defendants, disagreed, saying that the government already had access to the Medicaid claims data, including the patient, doctor and drugs prescribed.

"What we have is an advocacy group run by plaintiff's counsel with no insider information seeking to accomplish, through the False Claims Act, what he was unable to accomplish through his more direct state court case, which is to stop the use of psychiatric drugs in adults and children," Berlin said.

Chief Judge Alex Kozinski asked Gottstein if this was just a "policy dispute" because it didn't involve actual fraud.

"This is not a case where they prescribed the drugs and the drugs weren't provided and somebody collected on the Medicaid cost," Kozinski said. "This is just a disagreement between your group and the defendants as to what is proper medical care."

Gottstein replied that it was not just an argument about medical care.

"It's a question of enforcing congress's limitation on Medicaid coverage to medically accepted indications and there are very good reasons for that," he said.

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