Drugging Medicaid kids and education fraud

By: Tonya Mead, CFE, CHFI, PI, MBA, MA Educational Psychology

It is alleged in a Texas lawsuit that AstraZenca fraudulently marketed Seroqeul,  a potent anti-psychotic drug, for the  unauthorized treatment of kids. As is common practice, many of the patients may have been referred by the child’s school. Further, prescribers may have been affiliated with schools utilizing wrap around services (See National Education Association, NEA document here).

Prior Fraudulent Abuses

The kicker? Bloomberg reports that the complaint claims “that the company fleeced the state’s Medicaid program” even after the drug maker “had already agreed to pay almost $600 million in a pair of settlements over claims related to Seroquel’s marketing.” (para 1, line 1, para 3, line #2).


Evidence can show that the company’s sales representatives and managers,(according to the Texas complaint) “had its sales force pitch Seroquel to child psychiatrists as a treatment for nonbipolar depression even though the U.S. Food and Drug Administration hadn’t approved the drug for either purpose.” (para 5).

Abuse of Medicaid Prescriptions for Impoverished

The Report to Congress on Medicaid and CHIP presents the following disturbing facts (I had to literally copy it verbatim as the information was glaringly alarming– you can’t make this stuff up!):

  1.  “Almost half (48 percent) of children and adults who qualified for Medicaid on the basis of disability used psychotropic medications,”
  2. This figure is significant as those using anti-psychotic drugs accounted for just 10 percent of total number of Medicaid enrollees,
  3. In essence, those prescribed the psychotropic drugs amounted to “more than 50 percent of the psychotropic drug claims and 60 percent of fee-for-service spending on these medications.”
  4. Based upon this bureaucratic system of fraud, conflict of interest, corruption and breach of fiduciary duty, nearly one-quarter (24 percent) of children eligible based on child welfare assistance used a psychotropic medication.

These statistics demonstrate that children receiving Medicaid assistance are five times more likely  to be prescribed these medications, than a kid  who has met the service eligibility but is not disabled and/or is not a recipient of child welfare.

In the education sector, we have seen how the availability and amount of government funding for student financial aid and ‘research and development’ (wink, wink)  impacts tuition costs (they increase).

Similarly these factors influence the decision to prescribe:

  • ease of availability,
  • amount of financial supports (through claims reimbursement and fee for service),
  • depth (includes various diagnosis), and the
  • breadth (spans all ages beginning at age 6 to adulthood) of the Medicaid pool.

How are schools implicated, you might ask?

Wrap-around services

In the 1980s, wrap-around services were introduced as a means for reducing out-of-school time, out-of-state special education, and detention center placement for problem children. To summarize, mental health, physical, dental services wrap-around the student in a school setting (See Fonagy, Cottrell, Phillips, and others, pg 187).

For the treatment of children exhibiting problem behaviors in schools, “the medications often used are stimulants, lithium and antipsychotics…” (ibid, p. 187). Incidentally, the authors observed that “the use of mediation for conduct disorders is more common in the United States than in the United Kingdom.” (ibid, p. 187).

Early Diagnosis Lifelong Problems

The National Institutes of Health reports that early detection of mental disorders “in youth has been linked with a more severe course of illness,” such as “suicide attempts and substance abuse.” Also indicated were “poor academic and job performance, interpersonal conflicts, or legal problems” throughout life. (para 1, line #2)


Can one argue then, that as the federal and state government becomes increasingly involved (through funding and regulation); some how the diagnosis, treatment and use of  psychotropic medication by  kids and adults increase? I wonder, is the population becoming increasingly unhinged as these data show? Or does their socio-economic status make them easy prey for becoming

  • a lifetime mule, whose bodies are used to consume, test the effectiveness of prescriptions,
  • source of infinite income stream for the pharmaceutical company’s financial gain, and
  • first link to second and third generation perpetual chain of poverty because of poor academic and job performance, interpersonal conflicts, or legal problems” throughout life. (para 1, line #2) ?

Related Article

Data Exploits of Vulnerable Children

Tonya J. Mead, CFE, CHFI, PI, MBA, MA, Certified K-12 Administrator and School Psychologist is author of Fraud in Education: Beyond the Wrong Answer and president of Shared Knowledge, LLC https://ishareknowledge.com

Resources (non-hyperlinked)

P. Fonagy, D. Cottrell, J. Phillips, D. Bevington, D. Glaser, and E. Allison. What Works for Whom?: A Critical Review of Treatments for Children and Adolescents. 2nd Edition. Guilford Publications, October , 2014, 639 pages.

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