A lawsuit the state filed last summer against the company that processes Louisiana’s Medicaid pharmacy reimbursement claims has turned into a ping-pong ball of sorts, getting bounced back and forth between Baton Rouge state and federal courts.
The state Attorney General’s Office contends the suit should be heard in state court because it contains only state law issues.
The defendants, which include Molina Healthcare Inc. and Molina Medicaid Solutions, argue the case belongs in federal court because there are important federal issues that must be resolved.
The suit alleges Louisiana has paid “grossly excessive amounts” for prescription drugs for more than two decades due to the defendants’ “negligent, false, misleading, unfair, and deceptive acts and practices” in processing Medicaid reimbursements for prescription drugs for the state’s low-income, elderly and disabled residents.
The defendants deny those allegations.
Louisiana’s Medicaid program is a state-run program with federal matching funds.
The Attorney General’s Office filed its suit June 26 in the 19th Judicial District Court, but the defendants filed a notice Aug. 1 seeking to have the case moved to federal district court in Baton Rouge. The state asked that the suit be sent back to Baton Rouge state court.
U.S. District Judge James Brady ruled Dec. 10 that while reference to federal laws and regulations “will certainly be necessary, the claims asserted by the State do not raise any substantial questions of federal law.” The judge remanded the case to state court.
Three months later, on March 23, the defendants filed a second notice to have the suit transferred to federal court. Brady has not ruled on that request, which the state, once again, opposes.
In documents filed April 1 in federal court, Molina subcontractor Unisys Corp. claims the state “changed its story” once the case was sent back to the 19th Judicial District Court.
“The state is now basing its theory of liability on a disputed issue of federal law,” lawyers representing Unisys claim. “Each of the State’s six claims — breach of contract, fraud, negligence ... — hinges on the State’s (erroneous) position that regardless of what Louisiana’s single state Medicaid agency had instructed (Molina) to do, federal law required (Molina) to apply a discount to AWP for all drugs, including multiple-source drugs already subject to other price limits,” Unisys argues.
AWP stands for average wholesale price. Multiple-source drugs are those available under different brand names, or under both brand name and in generic form.
The state counters in federal court documents filed April 10 that the defendants should not be allowed a second bite at the apple. “The Defendants are not entitled to repeatedly attempt removal in the hopes that they can later convince this Court that it wrongly decided the federal question jurisdiction the first time,” the state’s attorneys argue.
The state maintains the defendants have known about the relationship between the state and federal Medicaid agencies since long before the suit was filed.
“The Defendants can point to no newly ascertained facts that create a basis for removal,” the state’s lawyers add. “Instead, like they did before, they argue that the mere mention of the word ‘federal’ must mean federal law is in dispute.”
The suit seeks an unspecified amount of damages, as well as legal fees and penalties.
Molina was scheduled to be replaced as Louisiana’s Medicaid claims processor, but in early 2013, Gov. Bobby Jindal’s administration canceled a multiyear contract with low bidder Client Network Services Inc. after news broke of a federal grand jury probe into the award of the nearly $200 million contract. Nothing came of that investigation, but an East Baton Rouge Parish grand jury has since indicted former state health official and ex-CNSI executive Bruce Greenstein on perjury charges.