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W. Va Attorney General Improperly Withheld Funds, 4th Circuit Says

By Tanya Roth, Esq. on July 08, 2011 | Last updated on March 21, 2019

A three-judge panel of the Fourth Circuit Court of Appeals ruled this week that the federal government was correct in withholding Medicaid money from the State of West Virginia. In the simplest words -- the Fourth Circuit Court of Appeals found that the State's Attorney General had misapplied funds owed the government from a pharmaceutical lawsuit settlement.

The ruling came out on Wednesday and held in favor of the Centers for Medicare and Medicaid Services, reports Legal Newsline.

The Fourth Circuit opinion affirmed prior decisions from federal district court and from the Department Appeals Board, which said that the federal government had the right to withhold funds. The Fourth Circuit Court of Appeals applied the Medicaid Act in a “straightforward application” to come to its decision. The Centers for Medicaid Services has alleged that West Virginia Attorney General Darrell McGraw owed the centers over $400,000 from a 2004 pharmaceutical company lawsuit settlement.

The federal government run centers claim that they were a proper party to the lawsuit and are owed the money collected, when the pharmaceutical company Dey settled in 2004 for $850,000. Instead of giving the money to the federal centers, McGraw used the money to pay the private attorneys on the case, to pay to the Public Employees Insurance Agency and sent the remaining amount to the Consumer Protection fund of the West Virginia Attorney General’s Office.

In another case, the federal government is alleging that $2.7 million of a $10 million settlement should have gone to them. Instead, McGraw once again paid his attorneys a whopping $3 million, and the rest of the money went to state programs.

McGraw has announced that he will run for a sixth term.

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