PsychRights Dismisses Watson v. King-Vassel, Medicaid Fraud Case


Counsel for ex rel Watson v. King-Vassel – Psychrights’ latest effort to show that prescribing medication for children that is not supported by scientific evidence constitutes fraud when submitted for Medicaid reimbursement – has chosen to settle the case rather than proceed. This decision came in light of the judge’s indication that he was planning to issue rulings that would prevent the case from prevailing. and that he would impose sanctions if counsel chose to go forward with the case.

Dr. Watson’s statement → 

Statement by Dr. Toby Watson:

False Claim Medicaid Fraud Lawsuit Settled

Statement by Dr. Toby Tyler Watson

December 6, 2013


Yesterday the parties in United States and the State of Wisconsin ex rel. Dr. Toby Watson v. Jennifer King-Vassel , Case No. 2:11-cv-00236-JPS, U. S. District Court for the Eastern District of Wisconsin, gave notice to the court that they have settled the qui tam or “whistleblower” lawsuit against a psychiatrist defendant who wrote psychiatric prescriptions to a Medicaid child that were not for the legally defined ‘medically accepted indications’.  According to the United States 7th Circuit Court of Appeals which upheld the complaint’s understanding of the federal law, when a prescription is written to a Medicaid patient and submitted to the state Medicaid program, it is a claim submitted to the federal government and it is a false claim if that prescription is not for a use approved by the FDA or supported by one of the drug references known as compendia that are incorporated into the Medicaid statute.

Although I hoped to proceed to an actual trial in order to help children stay off of these harmful drugs, recapture funds for the State and Federal Medicaid program, and improve the quality of care for the Medicaid program, due to the judge’s confrontation to my counsel, it became clear to me there was a serious threat of sanctions and fees being wrongly put forth in the hopes we would dismiss the lawsuit.  I have therefore decided to dismiss the suit and continue the pursuit legislatively.

One of the gross concerns was that prior to the settlement, the Wisconsin Department of Health Services (DHS) issued an affidavit in the case stating that prescriptions written by the Defendant that were not for a medically accepted indication and submitted to Medicaid for payment were not false claims.  This is of concern because on November 5, 2013, nearly the same time, the Wisconsin Attorney General J.B. Van Hollen’s office publically announced on their website that the State of Wisconsin was going to recapture 7.2 million dollars for the off-label promotion of one of the drugs actually listed in Watson’s qui tam lawsuit (Risperdal).  The Attorney General’s office statement indicated “The manufacturers’ alleged unlawful conductcaused false and/or fraudulent claims to be submitted to or caused purchases by government funded health care programs, including the state Medicaid programs.” (italics added). .  The way the off-label marketing causes the false claims is by getting doctors to prescribe drugs for such uses, which then get paid by Medicaid.

In the Risperdal case, the Federal Department of Justice also issued a news release on November 4, 2009, stating the total fines and fees against the makers of Risperdal would be 1.72 billion dollars because “The conduct at issue in this case jeopardized the health and safety of patients and damaged the public trust” by marketing their drug to “elderly nursing home residents, children and individuals with mental disabilities.  The government alleges that J&J and Janssen caused false claims to be submitted to the federal health care programs by promoting Risperdal for off-label uses that the federal health care programs did not cover…”

In an earlier case, the Federal Department of Justice issued a news release on September 2, 2009, indicating Pfizer has agreed to pay 1 billion to resolve allegations under the civil False Claims Act.  This was for partially for the promotion of Geodon, another anti-psychotic drug, for a non medically accepted indication, whereby they “caused false claims to be submitted to the government health care programs for uses that were not medically accepted indications and therefore not covered by those programs.

On December 20th, 2010, the state of Wisconsin’s Attorney General’s office publically stated on its website that it was recovering millions for the off-label promotion of an epileptic drug, stating it was for “damages and penalties to compensate Medicaid, a joint funded state and federal program, and various federal healthcare programs for harm suffered as a result of its conduct.”  “The government contends that Elan…improperly marketed Zonegran for uses not approved by the FDA, thereby causing the submission of false claims to state Medicaid programs and to other federally funded health care programs.”  This marketing was also for variety of psychiatric conditions.

Clearly the Department of Health Services and the Attorney General’s office of Wisconsin are giving different interpretations of the federal law that I was able to get very clear interpretation upon by the 7th District Federal Court.  I brought forth this case for several reasons, foremost being that children should not be subjected to harmful brain altering drugs that have not been found to meet the  already very relaxed FDA intended use safety standard and/or the also minimal Medicaid program safety and efficacy standard.  These psychiatric drugs were promoted directly to doctors when the manufacture knew they were harmful and there could be much less costly alternatives used.  A prescription of Risperdal might cost around $400, whereas another prescription that could be used in generic form might cost only $20.  We are talking about billions of dollars spent unnecessarily and illegally and the State of Wisconsin Department of Health Services and state Medicaid program helped stop this whistleblower lawsuit.  I agree with the Attorney General in that we need to hold both drug companies and doctors accountable for their behavior, and certainly hope in the coming weeks I will receive a return call from the Attorney General, someone who refused to allow me an appointment and talk to me this past week.

To understand why this is not only a financial problem, according to a study late in 2009 from Rutgers and Columbia universities, children covered by Medicaid are given powerful antipsychotic medicines at a rate four times higher than children whose parents have private insurance.  In 2008, the most recent year for which complete data are available, Medicaid spent $3.6 billion on antipsychotic medications, up from $1.65 billion in 1999, according to Mathematica Policy Research, a Washington firm that crunches Medicaid data for HHS. The growth came even as pharmacy benefits for millions of Medicaid recipients shifted to Medicare in 2006. We are talking about tens of thousands of children, as young as 5 months old according to the government report, being given expensive and dangerous drugs that are being supported to doctors by misleading and biased drug company researchers.


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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. No human rights struggle has been easy, and this is no exception. We have to keep in mind that it took the US Supreme Court 60 years to get away from “separate but equal” and it took 100 year after the end of the American Civil War to have the 1964 Civil Rights Act passed.

    It was very courageous for Toby Watson to push for the case and it was a great victory that United States 7th Circuit Court of Appeals sided with our side.

    So, thank you both for fighting on this very important issue!

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  2. I survived the awful effects of off label anti psychotics, the worst had to be the withdrawal reactions getting me labelled “schizoaffective” after going to the E.R with anxiety, insomnia and looking for the medical reason for the nausea and vomiting part of the withdrawal reaction. I was treated as nothing but non compliant mental patient and got that treatment wile my medical concerns were ignored.

    This was several years ago, now of course searching a psychiatric drug name and withdrawal causes 1000 posts by desperate sick people looking for answers to come up in the results.

    Anyway the medicaid children are being prescribed these drugs in part because of the aggressive push by NAMI: National Alliance on Mental Illness to prescribe them off label for “aggression” and so called “oppositional defiance disorder”.

    The NAMI webpage on “Disruptive Behavior Disorders” States:

    “Antipsychotic medications and mood stabilizers have been proven to be effective in treating oppositional defiant disorder and conduct disorder.”

    Proven to be effective by who ? NAMI itself ???

    I remember a friends nephew almost got labelled and drugged over “oppositional defiance disorder” about 7 years ago. There was nothing wrong with this kid besides his mother being a nut and fighting with the school and making things worse for the kid.

    Here is a link to the NAMI home page on the web archive back when they were even bolder about pushing anti psychotics on kids as chemical straight jackets.

    “Risperidone for Adolescent Aggression”

    How do these NAMI pharma funded drug pushers always get off the hook when there sponsors are caught doing illegal marketing ?

    I call for a lawsuit targeting the NAMI marketing machine.

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