Appeals Court States Psychiatrists May Commit Medicaid Fraud by Prescribing Drugs Off-Label


The Seventh Circuit Court of Appeals yesterday rejected a lower court’s dismissal of  Watson v. King-Vassel, saying that a jury is in fact sufficiently able to understand the facts of the case without the need for an expert witness. The ruling supports PsychRight’s argument that Medicaid cannot reimburse drugs prescribed for uses that are “not a medically accepted indication.” “The government has gone after and recovered billions of dollars from the drug companies for illegally pushing these drugs for use on children who are upset and acting out,” says Jim Gottstein, the attorney who handled the appeal, “but the psychiatrists are still prescribing these extremely harmful drugs to children.” The case now goes back to the lower court for trial.

Ruling from the 7th Circuit →

Of further interest:
Seventh Circuit Rules Psychiatrists Commit Medicaid Fraud By Prescribing Psychiatric Drugs Off-Label to Children (Psychrights)
PsychRights’ Medicaid Fraud Initiative Against Psychiatric Drugging of Children & Youth

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Kermit Cole
Kermit Cole, MFT, founding editor of Mad in America, works in Santa Fe, New Mexico as a couples and family therapist. Inspired by Open Dialogue, he works as part of a team and consults with couples and families that have members identified as patients. His work in residential treatment — largely with severely traumatized and/or "psychotic" clients — led to an appreciation of the power and beauty of systemic philosophy and practice, as the alternative to the prevailing focus on individual pathology. A former film-maker, he has undergraduate and master's degrees in psychology from Harvard University, as well as an MFT degree from the Council for Relationships in Philadelphia. He is a doctoral candidate with the Taos Institute and the Free University of Brussels. You can reach him at [email protected].


  1. If Toby Watson prevails (and, given the money involved for psychiatry, doctors in general and for PhARMA, this could go to the Supreme Court), it could be a great way to control the prescription of all kinds of off label psych drugs to foster children. Congratulations to Toby, who has worked for years to bring sanity to the psych drug picture.

    I love the court’s slap at Toby and his attorney for what it calls the “quasi-fraudulent” means of obtaining the child’s medical record. Patients should have access to their records – period – for whatever use they want to make of them. The court’s characterization is especially jarring considering the “quasi-fraudulent” way PhARMA and the medical establishment so frequently behaves.

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    • There’s nothing “quasi” at all about the truly fraudulent behavior of both! But they get away with it, most of the time. Hopefully, this is the beginning of holding their feet to the flames and making them stop the drugging of people, especially children.

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  2. I don’t see the patient’s mother’s obtaining her child’s record as fraudulent at all. If I were in her position, I would be very worried about the doctor’s possibly “doctoring” the records to avoid liability. That doctor tried to condition release of the patient’s own records to the patient him/herself on not using those records for the purpose of exercising the patients legal rights – that would make me distrust what would happen if the doctor knew litigation might follow.

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    • I didn’t explain myself very well. I too do not see what the mother did as being fradulent at all. I was referring to the medical establishment and Big Pharma and their tactics as being totally fradulent.

      The mother has every right to those records when she’s worried that her child was the object of faulty treatment. More power to her and everyone else in the same situation.

      Sorry I wasn’t more clear about who’s behavior I was targeting with my comment.

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