Our Views: Medicaid False Claims Act Needs Renewal in Legislature

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The Centralia School District learned an expensive lesson in 2014. 

Following The Chronicle’s reporting on the district’s use of the Medicaid Match Program, the district was forced to settle with the state’s Health Care Authority to the tune of $372,000.

An investigation by the state Attorney General’s Office had found Centralia Middle School made false claims from March 2011 to June 2013. 

The district learned from the ordeal, and has since reinstated the program with stronger controls under the command of new Superintendent Mark Davalos. 

This isn’t about the past though. It’s about the future. 

Without renewal of the state’s Medicaid False Claims Act in the fast-approaching legislative session, Washington will face a “significant financial hit,” according to the state Attorney General’s Office. 

It will also risk rampant misuse of funds such as that seen in certain quarters of the Centralia School District. 

“According to a joint legislative audit report, since the Medicaid False Claims Act has been in effect, the state has had a 28 percent increase in civil fraud recoveries, at least $2.8 million of which would not have come back to the state without the act,” according to a release from the state Attorney General’s Office. 



There have been two fine examples of the act in action over the past week.

Attorney General Bob Ferguson announced Nov. 24 that Millennium Health Laboratories will pay back $426,000 to Washington as part of a $256 million overall settlement. The company had been engaged in a kickback scheme that designed to increase the number of tests conducted in its laboratories, thereby increasing its reimbursement from Medicaid. 

Just days earlier, the state learned it would receive a portion of $1.2 million in reimbursement for a similar scheme uncovered at Novartis Pharmaceuticals, which used illegal practices to promote its drug, Exjade. 

“Between 2007 and 2012, Novartis paid kickbacks to three large national specialty pharmacies — BioScrip, Accredo, and US Bioservices,” according to a press release. “These payments incentivized the pharmacies to exaggerate the dangers to patients of curtailing Exjade use and to downplay Exjade’s serious side effects.”

Ferguson and his office are doing incredible work in holding recipients of the Medicaid Match Program funds accountable.

If the Legislature fails to act in January, the Attorney General’s Office will lose an important tool when the Medicaid False Claims Act expires in June. 

It’s an issue that should unite the interest of both parties in Olympia, and we encourage lawmakers to act swiftly when they arrive at the capital.