Read the CMS letter seeking Oklahoma opioid settlement money

Thursday, June 27, 2019

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CMS — The Centers for Medicare and Medicaid Services has sent the state of Oklahoma a letter claiming it is "entitled" to a portion of a recent settlement with Purdue Pharma. (Screenshot)

Oklahoma’s controversial settlement with opioid manufacturer Purdue Pharma made national headlines again today, as the Washington Post reported that the Centers for Medicare and Medicaid Services has requested a portion of the $270 million agreement.

In a June 12 letter provided to NonDoc by the Oklahoma Health Care Authority, a CMS administrator named Bill Brooks requested Medicaid claim data provided by OHCA to Oklahoma Attorney General Mike Hunter. Brooks also referenced federal statute and Oklahoma’s settlement agreement with Purdue, writing that “the federal government is entitled to a portion of that amount.”

Brooks referenced Section 1903 (d)(3)(A) of the Social Security Act, which reads: “The pro rata share to which the United States is equitably entitled, as determined by the Secretary, of the net amount recovered during any quarter by the State or any political subdivision thereof with respect to medical assistance furnished under the State plan shall be considered an overpayment to be adjusted under this subsection.”

The statute goes on to specifically exempt monies recovered in the 1998 Tobacco Master Settlement Agreement from being considered an “overpayment.”

Medicaid is a health insurance program for children and lower-income adults funded jointly by the federal and state governments. OHCA administers Oklahoma’s Medicaid program, called SoonerCare.

Attorney General’s Office reviewing request

Hunter’s office said Thursday that it is reviewing the situation.

“We are aware of the letter and are reviewing it,” said Hunter’s director of communications, Alex Gerszewski said. “We’ve been given an additional 90 days to respond. This will not affect state revenue.”

What CMS’s determination could affect, however, is the amount of money directed to what is supposed to be a new “national” research institution. Hunter’s settlement with Purdue directed $177.5 million toward a new foundation supporting Oklahoma State University’s Center for Wellness and Recovery, a division of the university’s medical center created in 2017 for researching and treating addiction. The settlement also included $20 million worth of Purdue’s extended-release opioid maintenance medications.

OHCS director Rebecca Pasternik-Ikard responded to Brooks’ letter on June 24, requesting the 90-day extension of what was originally a July 12 deadline for response.

“As I believe you aware, the OHCA is not a party to the litigation and was not part of the settlement process,” Pasternik-Ikard wrote. “Therefore, much of the information requested by CMS, including any documentation that demonstrates the amount of Medicaid funds expended and discovery documentation, is contained within the Attorney General’s Office.”

She noted that Hunter and the state are still in an ongoing trial with Johnson & Johnson, another opioid manufacturer. The state has also reached a settlement with Teva Pharmaceuticals, though the June 12 CMS letter did not mention that settlement.

Both letters can be read below. Pasternik-Ikard’s letter notes that CMS sent its original hard copy letter to an old address for OHCA.

Rep. Mark McBride (R-Moore) has attended multiple days of the state’s opioid trial against Johnson & Johnson, and he said Thursday that he’s not sure the federal government is “entitled to a dime of the money.”

“I understand legal staff believes there are flaws in the CMS claims,” McBride said. “However, CMS does control federal health care monies that the state will receive in the future. The Oklahoma Health Care Authority has requested an extension on providing requested info because of pending trial.”