Two shots in the arm for Georgia Medicaid

Print Friendly and PDF By: Andy Miller Published: May 8, 2012

Georgia’s Medicaid program has received a double dose of good financial news, according to two separate announcements Monday.

First, technology giant HP said in a news release that federal officials have recently certified Georgia’s Medicaid information system. The accreditation by the Centers for Medicare and Medicaid Services ensures that Georgia will receive maximum federal funding for the system’s implementation and operations.

Extra funding is available retroactively, to the HP system’s first day of operation in November 2010. Georgia is expected to get an additional $15 million under that scenario, plus an increased amount from the federal certification date onward.

Since its launch, the Medicaid information system has processed more than 80 million claims worth about $6.5 billion from Georgia’s health care providers.

The Medicaid program is jointly financed by the federal government and the states.

HP originally announced a seven-year, $391 million contract with the state when it received the award in 2008. The California-based company serves as the fiscal agent or principal IT provider for Medicaid in 21 states.

Also Monday, state Attorney General Sam Olens announced that Georgia has joined with other states and the federal government to reach an agreement with Abbott Laboratories to settle civil and criminal allegations that the company illegally marketed the anti-seizure drug Depakote.
The $1.6 billion settlement is the second-largest recovery from a pharmaceutical company in a single civil and criminal global resolution, after Pfizer’s $2.3 billion settlement in 2009, the Justice Department said.

Georgia Medicaid will receive $12.6 million in state and federal dollars; the state portion of that amount is $5.2 million.

Abbott agreed to plead guilty to one misdemeanor violation of the Food, Drug and Cosmetic Act for “misbranding” Depakote by promoting its use to treat agitation and aggression in elderly dementia patients, and to treat schizophrenia, the Wall Street Journal reported.

These are so-called “off-label” uses — not among those approved by the FDA. The medication is approved to treat epilepsy and bipolar disorder and to prevent migraines, the Journal article said.

Though individual physicians have some latitude to prescribe drugs for off-label uses, pharmaceutical companies are generally barred from actively promoting the drugs for these purposes.

The government investigations were based partly on lawsuits filed in federal court by former Abbott sales reps who made allegations about Depakote marketing.

One of the lawsuits was filed in 2007 by Meredith McCoyd, who worked as an Abbott Labs sales rep from 1998 until 2007 in Atlanta and surrounding areas, the Journal reported. She alleged Abbott promoted Depakote for treating dementia in nursing home patients and other uses.

She also alleged that Abbott paid kickbacks to doctors and long-term care pharmacists to promote the use of Depakote, and misrepresented the drug’s safety and efficacy profile, the Journal reported.

A state team appointed by the National Association of Medicaid Fraud Control Units participated in the investigation and conducted the settlement negotiations with Abbott on behalf of the participating states. Team members include representatives from the Offices of the Attorneys General for the states of California, Illinois, Massachusetts, Maryland, South Carolina, Ohio and Virginia, as well as Georgia.

Abbott Laboratories will pay the states and the federal government a total of $800 million in civil damages and penalties to compensate Medicaid, Medicare and various federal health care programs. In addition to the civil settlement, Abbott agreed to pay a criminal fine and forfeiture of $700 million. Bloomberg News reported that Abbott said it is also paying $100 million to the states to resolve consumer protection matters.

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