Statement from Attorney General Troy King:

(MONTGOMERY)-- For the last twenty years, states that administer Medicaid programs have been compelled to follow reimbursement formulas that exist within guidelines established by the Centers for Medicare and Medicaid Services or CMS. The states have lacked the information and the flexibility to adequately audit or control those expenditures. As a result, those systems have been abused and manipulated at a cost to the states’ programs of hundreds of millions of dollars.

In Alabama, we acted to do something about the fiduciary duty we owe to those who depend upon Medicaid and its scarce resources for their medicines and treatments. On January 26, 2005, Alabama commenced litigation against 79 pharmaceutical companies for stealing these funds through the systemic abuse we have seen uncovered in trial after trial. Now, CMS shamelessly seeks to take the funds that would have made Alabama whole from the very neediest and most vulnerable of all our citizens – our poor, our disabled, our children, and our elderly. They have laid claim, through illegitimate and heavy-handed bureaucratic processes, to funds they did not seek to recover in the first place. CMS’s Deputy Administrator, Herb Kuhn, in a “Dear State Health Official” letter dated six days ago, took the incredible and ridiculous position that his agency demanded payment of the federal share of any amounts won by the State of Alabama in its average wholesale price litigation within 60 days of the entry of a finding of liability – trying to now confiscate monies that are being contested on appeal and of which Alabama has yet to receive even one dime itself.

The State of Alabama filed suit in federal court here in Montgomery this morning to stop the federal government’s grab for money that, if successful, would leave those for whom CMS was created to serve, Alabama’s Medicaid patients, without health care and would bankrupt the State of Alabama’s budget. Their attempt to do so flies in the face of the United States Constitution and well settled federal law. Their attempt to do so must be met, contested, and defeated. That is what this litigation is designed to do. We will not allow the government of our citizens to do them harm.

We also are calling on President Bush to put an immediate stop to this power grab by the Federal Government. In addition we are asking for the assistance of our two U.S. Senators, Richard Shelby and Jeff Sessions, and all of our Congressional delegation, as well as Governor Bob Riley, in our battle to protect Alabama taxpayers. This is a battle that affects every Alabamian.