OKLAHOMA CITY — The federal government says it is entitled to a portion of a $270 million settlement the state reached with Purdue Pharma to end an opioid lawsuit.
Based on a preliminary review, “the federal government is entitled to a portion of that amount,” Bill Brooks of the Centers for Medicaid and CHIP Services said in a June 12 letter to Becky Pasternik-Ikard, Oklahoma Health Care Authority chief executive officer.
The Washington Post first reported the story.
The federal government subsidizes a significant portion of the state’s Medicaid program, and the Oklahoma Health Care Authority administers the program. According to the agency’s fiscal year 2018 annual report, total Medicaid program expenditures were slightly more than $5.2 billion, of which slightly more than $3 billion was the federal share.
Brooks requested information from the agency, including “an explanation of what Oklahoma believes to be Medicaid’s portion of the settlement,” by July 12.
The information requested includes documentation of the amount of Medicaid funds spent pursuant to the settlement to purchase opioids; to treat Medicaid recipients for opioid or substance use disorder; to pay for diversion programs; and for any associated Medicaid administrative or other costs.
“Please note that failure to return federal funds may result in administrative actions including, but not limited to, a disallowance,” according to the letter.
The OHCA sought and obtained an extension until Oct. 12, saying much of the information is in the office of Oklahoma Attorney General Mike Hunter.
Hunter is involved in litigation in Cleveland County District Court against Johnson & Johnson and its subsidiaries, alleging that the company created a public nuisance and contributed to the state’s opioid addiction problems with a false marketing campaign.
Hunter reached a settlement for $85 million with another company, Teva Pharmaceutical Industries. The letter did not address the Teva settlement.
“We are aware of the letter and are reviewing it,” said Alex Gerszewski, a Hunter spokesman. “We have been given an additional 90 days to respond. This will not affect state revenue.”
Gov. Kevin Stitt said he disagrees with the federal government’s position, but he declined to comment further, citing the ongoing litigation in Cleveland County.
In the settlement with Purdue, some $197.5 million is to go to a wellness and recovery program at Oklahoma State University’s Center for Health Sciences in Tulsa.
Senate Appropriations Chairman Roger Thompson, R-Okemah, said Thursday that if the state is required to share the Purdue settlement with the federal government, he believes it will have to come from the amount given to the OSU program.
“OSU Center for Health Sciences understands this matter has been referred to the Attorney General Mike Hunter for an opinion,” according to a statement from the school. “We have not seen any correspondence on the issue from the federal government or the Oklahoma Healthcare Authority. In good faith, we intend to follow the direction of the attorney general and state leadership in this matter.”
Thompson said he assumes that if the federal government is looking at one settlement, it probably is looking at other settlements, too.
Some lawmakers were upset with Hunter for not putting the Purdue settlement money into the state’s general revenue fund as opposed to a particular program. As a result, they changed state law to clarify where such funds must go in the future.