Attorney General Dustin McDaniel said Thursday that he will ask the Arkansas Supreme Court to reconsider its ruling that struck down a $1.2 billion Medicaid fraud fine against Johnson & Johnson and a subsidiary.
McDaniel said he planned to challenge the court’s finding that the version of the Medicaid-fraud statute codified in the state’s law books differed from the one passed by the Legislature, because the matter was raised for the first time during oral arguments and was the “dominant issue” in the court’s opinion.
The court found that the Medicaid-fraud statute did not apply in the Johnson & Johnson case because it only applies to health-care facilities seeking certification of a “nursing home or similar facility,” Justice Karen Baker wrote for the unanimous panel.
The attorney general said the difference between the laws - and the Code Revision Commission’s role in substantially changing the act for the state’s law books - was raised for the first time by Justice Jo Hart during oral arguments. McDaniel said that violates the court’s precedents against raising points for the first time on appeal or for the court to raise points without prompting by either party.
“A lot of things were raised throughout this litigation. Never at any time did anyone mention the Code Revision Commission, and never at any time did anyone ever suggest that the act as codified in some way or another did not reflect what was passed by the General Assembly,” McDaniel told the commission.
The court’s March 20 ruling reversed and dismissed a decision by Pulaski County Circuit Judge Tim Fox, which fined the company - through its Janssen Pharmaceuticals subsidiary - $5,000 for each of the 238,874 prescriptions filled for the anti-psychotic drug Risperdal that were reimbursed by the state Medicaid program.
The state had argued that the company put patients in danger by improperly exposing them to side effects of the drug.
Baker wrote in the court’s opinion that the Code Revision Commission “substantially altered” the language passed by the Legislature when it was prepared for the state’s law books. The commission altered the act “in a manner that rendered its meaning ambiguous by calling into question” whether they were stand-alone provisions, she wrote.
The court interpreted the act as the controlling statute and found that the state had incorrectly applied the law in the company’s case.
McDaniel said in an interview that he wanted the commission’s approval to have its staff members assist his office in showing how the 1993 law was codified by the commission into the state’s law books.
The commission voted unanimously to allow commission staff members to assist the attorney general’s office.
Carolyn Magrans, legal-editor supervisor for the statutory review section of the Bureau of Legislative Research, told the commission that she evaluated the statute in a sentence diagram and found no difference between the codified version and the act passed by the Legislature.
“I looked at it, and I examined the sentence structures and the syntax … Except for the addition of the subdivision lettering ‘a’ and ‘b’ and a few minor changes in punctuation, there is no difference,” Magrans said.
McDaniel said he may include other arguments in his appeal, such as the applicability of the statute for other providers besides nursing homes. The filing is due Monday.
“We’re considering everything. We have only a 10-page limit so we will really have to drill down on what legal arguments are the most compelling and even valid arguments may have to be left by the wayside,” McDaniel said.
Robyn Frenze, a spokesman for Janssen Pharmaceuticals, said in a written statement that the company did not violate the Medicaid Fraud False Claims Act or the state’s Deceptive Trade Practices Act and that “we were gratified to have our position validated by the court’s decision.”
“We continue to firmly believe Janssen did not violate the Arkansas Medicaid Fraud False Claims Act or the Arkansas consumer fraud statute and remain strongly committed to ethical business practices,” Frenze said.
Arkansas, Pages 11 on 04/04/2014