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Medicating Children: A “Whistleblowerʼs”

Lawsuit Raises a Novel Legal Question
By Robert Whitaker
Created Jun 2 2010 - 1:08pm

In the past few years, a number of pharmaceutical companies have admitted to federal
charges that they illegally marketed psychiatric medications for non-approved uses, with
the companies paying large sums to settle the cases. Now, a legal complaint filed by the
Law Project for Psychiatric Rights in an Alaskan federal court is raising a related
question. When healthcare providers bill Medicaid for prescriptions of psychiatric drugs to
children for non-approved uses, are they committing Medicaid fraud?

The case, United States ex-rel Law Project for Psychiatric Rights v. Matsutani, was
unsealed earlier this year, and legal papers were recently filed that have brought this novel
question -- which obviously has profound implications for the prescribing of psychiatric
medications to poor children and adolescents -- into sharp focus.

The Law Project for Psychiatric Rights (PsychRights), which is headed by Alaskan
attorney James Gottstein, filed its whistleblower complaint in April 2009. Known as a qui
tam lawsuit, PsychRights sued on behalf of the federal government under the False
Claims Act, which allows private individuals to pursue legal complaints against individuals
or companies that are allegedly defrauding the government. In December, the federal
government declined to join PsychRights in the case.

PsychRights named Alaskan state officials, hospitals, mental health agencies,

psychiatrists, and pharmacies as defendants. In its complaint, PsychRights argues that the
federal government has agreed to provide Medicaid reimbursement only for those
outpatient drugs that are prescribed for an FDA-approved use or for a use supported by a
medical compendium (such as the DRUGDEX Information System.) PsychRights
maintains that the defendants defrauded the federal government when they billed
Medicaid (or the federal Children's Health Insurance Program) for outpatient drugs that
didn't meet this standard.

As part of its complaint, PsychRights identified 16 commonly prescribed psychiatric

medications that have no "medically accepted indication" for youth under 18 years old,
and it also identified the limited number of "medically accepted indications" that exist for
32 other psychiatric drugs. PsychRights compiled this list of "approved" uses by
methodically going through the drug compendiums, and it serves as the evidential heart of
the complaint, for it reveals that psychiatric medications are regularly prescribed to poor
children for non-approved uses. PsychRights is asking the federal court to stop this
practice (which it argues is harmful), and to pay hefty financial penalties for the fraudulent
claims made to date.

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In early April, the defendants petitioned the court to dismiss the complaint, arguing that it
was "fatally flawed" for a number of reasons, including several technical ones. For
example, the defendants maintain that PsychRights has not "disclosed" private information
that is required of "whistleblowers" in qui tam suits. But the defendants also argued --and
this goes to the core legal issue of interest to healthcare providers -- that PsychRights has
misinterpreted the applicable Medicaid law. Medicaid is a joint state-federal program, with
each state establishing a Medicaid plan that must be approved by the federal government,
and the defendants argue that a state may in fact choose to provide Medicaid
reimbursement for outpatient drugs that are not FDA approved or "medically indicated" by
drug compendia. The defendants argue that Alaska implicitly made that choice in regard to
off-label use of psychiatric medications in children, and thus no fraud was committed.

The U.S. District Court in Alaska will likely take months to rule on the defendants' motions
to dismiss the complaints. If the court rules on the central issue, it will help define whether
Medicaid law supports off-label, non-compendia-approved use of psychiatric medications
in children, or deems this commonplace practice to be medically unjustified.

Source URL: http://www.psychologytoday.com/node/43537

Links:
[1] http://psychrights.org/index.htm

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