August 22, 2017 - Posts

States Increasingly Look to Medicaid Fraud Statutes in Efforts to Combat Opioid Crisis

Earlier this month, the State of New Hampshire filed suit against Purdue Pharma, LP, based on allegations that the company improperly and illegally marketed the opioid painkiller OxyContin.  In filing this lawsuit, New Hampshire joins a growing list of states—including Mississippi, Missouri, Oklahoma, and Ohio—to pursue legal action against some of the county’s biggest opioid manufacturers.

We have written before about how the opioid crisis is costing not just lives, but taxpayer dollars, and it is encouraging to see more and more states step up and take action.

While these lawsuits have generally been framed first and foremost as consumer protection actions, certain states—including New Hampshire—have an additional weapon in their arsenal: fraud allegations under the state’s False Claims Act.  These state statutes, which are typically modeled after the federal False Claims Act, give states a powerful tool in fighting Medicaid fraud and recovering public money.  Among other things, these statutes generally provide for significant monetary recoveries, such as treble damages and civil penalties, that are not available under the common law or most consumer protection statutes.

State governments have historically been far less aggressive than the federal government in bringing their own False Claims Act lawsuits—though certain states, such as Texas and California, have been notable exceptions.  More recently, though, increasing numbers of states have starting devoting real resources to civil fraud litigation, and in many cases the opioid crisis was a motivating factor—though certainly not the only one.

Unfortunately, not every state has its own False Claims Act statute, which limits the options those states have in combating public health crises such as the current opioid epidemic.  Hopefully, as more and more states find success pursuing Medicaid fraud and recovering taxpayer money, that will encourage those states that have refused to pass False Claims Act statutes to rethink that decision.

For more on the New Hampshire lawsuit, click here.

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