Purdue Pharma settlement

Attorney General Mike Hunter walks into the courtroom before the start of the opioid litigation in Cleveland County this week. Federal Medicaid officials say the federal government may be owed a portion of a $270 million settlement with one of the case’s original defendants, Purdue Pharma. CHRIS LANDSBERGER/The Oklahoman

The federal government thinks it is owed a portion of a $270 million settlement the state reached with an opioid manufacturer earlier this year.

The state originally charged Medicaid fraud in the case it brought against opioid manufacturers and used years of Medicaid costs to figure much of the state’s potential damages. The federal government pays roughly two-thirds of the state’s Medicaid costs, so it could reasonably claim a big part of the settlement and other proceeds the state gets from its opioid litigation.

On the other hand, the state took 100% of the risk in the litigation and Attorney General Mike Hunter dropped the Medicaid fraud charges before the settlement with Purdue Pharma was completed.

The federal government has the upper hand in any dispute. If federal and state Medicaid officials can’t agree who gets what, the feds could withhold future Medicaid money until they feel reimbursed. The state would have to either try to block the move in court — a risky and expensive proposition — or find a way to make up the lost money to keep existing Medicaid services in operation.

The issue has intensified some legislators’ irritation with Hunter’s Purdue Pharma settlement. The vast majority of the money is going to a wellness and recovery program at Oklahoma State University’s Center for Health Sciences in Tulsa. The settlement bypassed the legislative appropriations process, which irked lawmakers, who complained they were kept in the dark about what was going to happen. Some legislators have made it clear they expect any lost Medicaid to be made up out of the OSU program’s end, not state appropriations, but that may be complicated by the terms of the settlement. Hunter has said Purdue Pharma insisted that all of its money go toward stemming the drug crisis.

Hunter has said little since the Medicaid question arose, except that he was aware of it and that it won’t affect state revenue.

We hope that proves right. That said, the issue gives ammunition to those who say the settlement was incompletely considered and ill-advised. If the state ends up taking a big hit on what was supposed to be a health care windfall, they might be right.

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