Talking with R.I. Attorney General Peter Neronha

By Richard Asinof, ConvergenceRI.com

R.I. Attorney General Peter Neronha was in a talkative mood when he sat down for an interview with ConvergenceRI on Tuesday afternoon, Nov. 26, at his offices on South Main Street in Providence.

In the course of the conversation, Neronha, in lawyerly fashion, often responded by rephrasing the questions and then answering, and, as appropriate, asking a follow-up question.

In the course of 40 minutes, Neronha covered a broad range of legal topics and public health concerns, and weighed in on how he has sought to make changes in priorities as Attorney General – strengthening environmental enforcement, expanding how the consumer division engages with the community, pursuing legislative changes around felony charges for simple possession of narcotics, and attempting to increase the resources his office has to pursue potential anti-trust analyses into proposed health system mergers.

Here is the ConvergenceRI interview with R.I. Attorney General Peter Neronha, who made clear his intention not to have his office function with a bunker mentality, isolated from the community.

ConvergenceRI: There are a number of lawsuits that have been filed against drug manufacturing companies and drug distribution firms, by cities and towns and states. Can you talk about the goals of your lawsuit by the state?

NERONHA: We have filed one lawsuit, but several companies are named. The goals are two-fold. One is to hold the companies, and in the case of the Sackler family, individuals, civilly, not criminally, accountable for the conduct which helped to fuel this opioid crisis.

Two is to ensure that [Rhode Island receives] the maximum recovery for the people of this state, to address the damages caused by the crisis.

I don’t think, at the end of the day, there will ever be enough money to fully compensate the state for the fallout from this crisis. So, it is a matter of maximizing the return.

Let’s say, for example, and the Sacklers are a good example, it’s one of the reasons why I did not agree, as some other Attorneys General did, to a settlement constructed with the bankruptcy court. [Purdue Pharma filed for bankruptcy protection this fall as a result of all the pending lawsuits.]

Because a dollar figure, even if it were to reflect on a [programmatic] level of damages, without being able to put that in context, [in terms of] the overall profits from the crisis, wouldn’t necessarily in my mind, be doing justice.

So, the two goals are interlinked: holding people accountable, and obtaining the maximum possible recovery for the state.

ConvergenceRI: One of the things about Rhode Island, depending on which corporate entity you want to talk about, Purdue Pharma or a more recent corporate spinoffs, is that Coventry is home to a Purdue facility that manufactures roughly 750 tons a year of the raw ingredient used in the firm’s prescription painkillers. [See link below to the ConvergenceRI story, “What you do not know may kill you, when it comes to painkillers.”]

Could the ownership of that manufacturing facility become part a potential settlement?

NERONHA: That’s a fair question. That’s a question about how do you satisfy damages.

Let’s say we were to go to trial, and we were to win the case on liability, and the damages were, pick a number: say “x” billion.

The Sacklers could choose to satisfy that “x” billion, the corporations or the individuals or both, could choose to satisfy that “x” billion figure, to satisfy the verdict in any way they wanted. They could sell the property to do it. They could sell stock to do it. They could use bars of gold from some hidden vault to do it. It’s not a matter of seizing a particular asset; it is making sure that they pay the judgment.

Now, if they didn’t pay the judgment, you could seek assets to satisfy the judgment, but that [remains] several steps down the road. The immediate step is to establish liability. Or, in the instance of a settlement, to make sure that it is a fair settlement.

Let’s leave the Sacklers and Purdue out of it, because who knows where that is going to go. Presumably, as part of the settlement, the [defendants] have assets to satisfy the judgment. In terms of seizing a particular asset….

ConvergenceRI: Or, shutting it down?

NERONHA: The question is, did oxycodone, or its ingredients, ever serve as a useful medical purpose. I think most people would tell you it does, in the right circumstances. The problem here is that it was used in instances where it served no medical purpose.

I don’t know that shutting down a facility, necessarily, at this point, either from a public health perspective, or from a satisfying a judgment perspective,

[is the best remedy]

. It is way premature for that.

ConvergenceRI: Although you are pursuing the case civilly, are there criminal liabilities that you could pursue?

NERONHA: Let me put in this way, without getting into the facts of litigation that are ongoing. If there were room to make a criminal case against anybody, we’d make it.

If I thought the law supported the facts, I would do it. I think other Attorneys General around the country would do the same thing.

Maura Healey [the Mass. Attorney General] has not brought a criminal case. Tish [Letitia] James, [the N.Y Attorney General], hasn’t brought one. Xavier Becerra, [the Calif. Attorney General], hasn’t brought one. They are the ones, I would argue, that have been aggressive as anyone.

I think to speculate about what might be a criminal case would be speculating in a way that is irresponsible. I think the avenue to hold these companies accountable is through the civil process. That process is ongoing, and we’ll see where it takes us.

ConvergenceRI: Shifting gears, there is apparently an ongoing investigation into the way that Medicaid funds went to a doctor in Cranston…

NERONHA: It is not an investigation being done by this office.

ConvergenceRI: From what I understand, there were subpoenas issued…

NERONHA: By the United States Attorney’s office, according to public reports.

ConvergenceRI: Is your office involved at all?

NERONHA: No, I am not involved at all in their investigation. And they were not Medicaid dollars. In fact, those funds were not funded by Medicaid. Those were state funds that the R.I. General Assembly authorized to go to this person.

ConvergenceRI: But my understanding is that they were paid through the Medicaid budget.

NERONHA: But they were not Medicaid funds.

ConvergenceRI: Originally, I believe, they were. They were taken out and then put back in as state funds, as I understand it.

NERONHA: Put back in as state funds, Richard.

No, those are not federal funds. They are not funds allocated through the state Medicaid program. In fact, they were denied on that basis. And that’s the rub. The rub here is that state general funds were used to fund treatment that is not qualified under Medicaid or Medicare as an appropriate treatment.

So, the question is: whether monies distributed by the General Assembly were appropriate or not as a policy matter. You can’t steal what is given to you voluntarily.

Let’s just be clear about what it is we are talking about. The state allocated state money to this person. That is a policy decision made by the General Assembly, whether to do that or not.

Vis-a-vis what we are doing, or not doing, the question for me is: was a crime committed? There is not an allegation of someone stealing money; that’s money that should not have been appropriated in the first place. That is, if I may say so, a political and a policy question, not a criminal justice question.

ConvergenceRI: I had been using that example as an introduction to another question I had. One problematic issue is the way that Medicaid sets its rates, particularly with the new state law which gives parity for mental health and behavior health care.

I keep hearing anecdotal stories that there is a real crisis, according to recovery community advocates, about how low Medicaid reimbursement rates have crippled the ability of people to be seen by providers, because either the providers do not take Medicaid or the rates are so low that providers refuse to do so, even though there are now parity laws on the books.

I am not sure whether that is a legislative matter. But I would ask that if you have a law on the books that says you must have parity, but the Medicaid rates being charged are so low that it prevents people from being able to gain access to services, is that a legal matter?

NERONHA: Yes. It is something I am concerned about, that my office is looking at. I’m not prepared to say more than that right now. Because, look, it’s a complicated issue, as all health care matters are. So, we are evaluating it. Where it will end up I don’t know.

I’m sensitive to the question, not only because it comes up in the context of this office but because my wife is a primary care physician. And so, this issue of parity and reimbursements is something that comes up in her practice as well. It’s too soon to weigh in heavily on that, but it is a concern to me. All of health care is.

I think there is, in Rhode Island, generally, a sense, not so much on this issue, but that this office has a bigger role to play in health care than I believe it should. I don’t think anybody wants lawyers determining what our health care policy should be.

I think we have a role to play, under the Hospital Conversion Act, for example, in terms of evaluating conflicts of interest, in terms of whether to go into a deal or not, and the disposition of charitable assets. But ultimately, whether or not two hospitals should merge or two systems should merge, for purposes of quality, accessibility, affordability, I don’t think we should be making that decision.

And, yet, there seems to be a narrative, in some quarters, that we should be, and that concerns me, because I do not believe, as I said a minute ago, I don’t believe that lawyers should be driving our health care decisions. I think that is something that another part of the executive branch ought to be doing. I am thinking strategically.

ConvergenceRI: To be clear, my name is not Ed Achorn [editorial editor of The Providence Journal], and I am not pushing that agenda.

NERONHA: It’s not just Ed Achorn. It comes up a lot, people saying, for instance, in the context of St. Joe’s, how can

[former R.I. Attorney General]

Peter Kilmartin have possibly signed off on this without making sure the pensions were OK.

I am not defending that decision or criticizing it; I’m saying that there is nothing in the Hospital Conversion Act that says anything about the Attorney General understanding whether a pension system is where it ought to be, and if it is not where it ought to be, turning down an attempted conversion.

ConvergenceRI: Are there changes in the law, or access to different tools that you would like to see, as health care becomes more consolidated?

NERONHA: Sure. We are going to have to do anti-trust reviews at some point. Let’s play out the two most common scenarios.

The first scenario was that Partners gobbles up Care New England and Lifespan. And that, on its face, did not require anti-trust analysis. We did one internally, frankly, in the course of beginning to look at that.

And now, you have Lifespan, and Care New England. Well, we clearly would have to do an anti-trust review there. I’m not saying [such a merger] would violate the anti-trust laws, either state or federal, but we would have to do an analysis. You’ve got the two largest players in the state combining [into one academic medical system].

Let’s assume that that happens, and it passes anti-trust muster, then you’ve got Partners coming in and possibly taking up that entity. Maybe that is yet another anti-trust issue.

So, we are going to have to do an anti-trust analysis at some point down the road.

But here’s the rub. So, why I am bringing that up? Because when we do a Hospital Conversion Act [review], we are not, internally, in this office, qualified to do an in-depth, health care conversion analysis without outside help.

We have to hire experts to be able to do that. So, under the Hospital Conversion Act, we can hire experts to assist us, but [the cost is] paid for by the merging parties, or consolidating parties, or converting parties. They pay for the experts and help us do that critical analysis.

They don’t pay for that analysis in the context of anti-trust.

So, if I have to do an anti-trust analysis today; let’s say, Lifespan and Care New England had come together, and I had to do an anti-trust analysis, which I am absolutely convinced I would have to do, I have no means of paying for those experts. I can’t afford them out of my budget.

Last year, at the end of [the legislative session], the [R.I. General Assembly] reduced my budget, with about two weeks to go, by about $800,000. And I had to close that gap; I believe I closed it to about $23,000 in the end.

So, there is no money in my budget to hire experts to do an anti-trust analysis. What do I need? I need legislation that will fund experts when I need to do an anti-trust; otherwise I can’t do it.

Here’s how I would have paid for it, though. How would I have done it? Here’s a question that you haven’t asked, but I will ask and answer it. How would I have done it? How would I have done it without this legislative change? Given my record on legislative changes up there, I’m not so confident I’m going to get it.

Here’s what I would have done. We had $6 million in consumer funds in our accounts from the Wells Fargo [settlement] and other consumer-related recoveries.

I would have used that money, because I believe that health care is a consumer issue. I would have used that money to fund the experts. But the Legislature took that $6 million out of my budget at the end of the year.

I had a proposal whereby they could take a portion of that and return lawyers to me to be able to do the kind of work that we need to do in this office. They didn’t give us the lawyers; they took the money. So, the money that I would have used to do the anti-trust analysis is now gone.

That’s a real problem in terms of health care, in not having the expert ability to do the kind of anti-trust analysis we’re going to have to do at some point.

ConvergenceRI: Switching gears, could you talk about your legislative proposals to change felony drug offenses for simple possession?

NERONHA: We proposed legislation last year, which you may be familiar with, which would reclassify possession of a small amount of narcotics of any kind for personal use from a felony to a misdemeanor. If you were dealing drugs, this would not impact you.

But if you had any kind of narcotic that is for personal use, that would be a misdemeanor rather than a felony.

[Currently], it’s a felony to possess three grams, five grams, or 10 grams of cocaine for personal use. I think it is a three-year felony.

I just think that is over-felonizing conduct. Why is that a problem? It’s a problem when someone is no longer using, and trying to take those steps back, back into the workforce if they’ve been out of it, back into housing, even public housing, if they need a place to live.

If you have a felony conviction, it makes all of that much more difficult. It is putting another roadblock on the path to full recovery. I think that is a mistake.

I think it is particularly a mistake when there is no need to felonize the conduct in the first place. I don’t think it is right as a matter of justice, as a matter of social policy.

We should be reserving our felony jurisdiction for people who, under some circumstances, ought to be going to jail.

If you are committing a homicide, or if you’re committing serious bodily assault, or armed home invasions, or armed robberies, or you are assaulting children, or if you are committing sexual assaults, sexual assaults of children, child molestations.

When we are talking about felony misconduct, we ought to be talking about jail as a real possibility.

I don’t believe anybody who simply possesses drugs for personal use should ever be in jail. And, the facts back that up, that nobody else thinks that, either.

Because we analyzed all of the cases involving simple possession of fentanyl, which, I think, all would agree, is the most dangerous drug out there.

Of the 40 cases we found, over I think a four- or five-year period, of simple possession of fentanyl, one person went to jail for 30 days because they were a probation violator.

Some other people were [probation] violators; they didn’t go to jail at all.

So, if you take that one person who went to jail for 30 days as an outlier, I don’t know why that person went [to jail], maybe they frustrated the judge at that point, maybe they had been given 10 chances at treatment and just ignored them … I don’t know the circumstances. Put that aside as an outlier.

The other 39 never went to jail at all. They went to diversion. They went to drug court. They were given a suspended sentence or probation.

My point is, if we’re not sending them to jail anyway, why are we treating this as a felony. We should treat it as a misdemeanor. Treat it as the public health issue that it is.

[We should] use the misdemeanor system to encourage people to get into treatment, to give them court-ordered services, to give them a plan of action over a period of time.

And eventually, [in our legislation proposal], we went from a one-year misdemeanor to a two-year misdemeanor.

In part, [we did this] to try to address opposition to the bill, because we were facing an uphill battle, but also to give a longer glide path to somebody who is in recovery, or trying to get into recovery, or complete recovery.

We did not get that bill through the legislature last year. I thought that it was relatively well received by the legislature, certainly by rank and file members. I think there was a lot of support for it, on both sides of the aisle.

Ultimately, it didn’t get there. There was some pushback from law enforcement. I respect law enforcement, particularly the police chiefs’ association and many of their members, whom I have worked with for a long period of time.

I think there are things we can do this year to make the bill more palatable to them, to perhaps get it across the finish line. I think that would make a big difference.

All that said, there is another way to skin this cat. And, that is, to send people to felony diversion. What felony diversion does, it’s still a felony, but they go to our diversion program, and if they complete all of the steps that they need in the context of that diversion program, then, at the end of the day, their case is dismissed.

In a sense, assuming that they can get through diversion, they fare better on the other side, because their case is getting dismissed in its entirety. There’s no felony; there is no misdemeanor.

The question I get asked sometimes is: Why not put everybody into diversion? The answer: because not everybody makes it through diversion.

I think [the legislation changing simple possession from a felony to a misdemeanor] is a good option. We’ll see. We’ll see where it goes next year. The legislature is always a bit of a wild card in terms of how your bills are going to do. But I hope to come back with a bill that will have the police chiefs’ association’s support. We’ll see whether that happens and whether that will improve the odds.

ConvergenceRI: Once again, switching gears, let’s talk about environmental crime. There are a series of environmental threats that have been identified, and it is unclear how the laws are being enforced, such as the problems with polycyclic aromatic hydrocarbons alleged to be coming from Sprague facilty located off Allens Avenueue.

There are also continuing reported problems with the firm that is doing metal recycling. Is there an opportunity for you to be more aggressive in prosecuting these firms and bringing them into legal compliance, including criminal charges?

NERONHA: When I was a prosecutor here the first time, in the criminal division, we filed a solid waste case against a trucking company that had dumped a bunch of dirty fill on a piece of property.

Right now, we don’t have in this state, and I think it’s a problem not yet resolved, we don’t have the criminal investigative capacity to do environmental criminal enforcement.

DEM used to have an office of criminal inspection. That division doesn’t exist any more at DEM.

The first question is, if you are going to [pursue] a criminal case, in particular, you need investigators, you need someone to go out and take statements, you need someone to go out and serve subpoenas, you need someone to go out there and not be afraid, frankly, to walk onto a piece of property and perhaps get confronted, because sometimes, let’s put it this way, these are businesses that sometimes can be a little rough and tumble.

ConvergenceRI: I’m shocked, I’m shocked…

NERONHA: So, you need that investigative capacity, and DEM doesn’t have it any longer.

ConvergenceRI: Is that a role that you could take on, if you had the resources?

NERONHA: We could. One of the things that we’ve done here with our investigative unit is to try and hire investigators who can do other missions.

I have brought on an investigator who’s helping us to do more wage theft. I felt I needed an investigator who could help us with white-collar crime and, quite frankly, corruption investigations.

In a perfect world, if I had the bandwidth, I would hire someone who could do environmental work. But the reality is, we also need DEM there [to serve] as a partner to help us analyze what that work means.

Where conduct is particularly egregious, I think criminal

[prosecution]

is something that I would consider.

All that said, there is plenty of work we can do civilly, and we are doing it. We are doing it in respect to a number of entities here in the Port of Providence. Frankly, as I say that, I don’t know how much of that is public and how much isn’t.

But I will tell you that we are engaged with a number of entities in the Port and outside the Port to bring them into compliance with the applicable state, and in one instance, federal laws, and we are doing that without a heckuva lot of help from our federal partners. It’s not really a surprise, but we are stepping into the breach there.

I don’t know that right now, I can share any results. But we are very close, I can think of at least two separate entities where we are very close to putting in place legal obligations that did not exist before, and should exist.

And, we are making progress on Rhode Island Recycled Metals, because that sub is out of the water and being cut up. And that was the first step to getting to things that are behind the sub that need to be taken out of the water and cut up.

That has been a slow, painful process, but at least it’s moving. I have also hired a new chief of the environmental unit, she’s been here since April, and she’s terrific.

ConvergenceRI: Switching gears again, let me ask about an issue that has to do with protecting the health of students and teachers, given the reported conditions in many schools that are “sick” buildings and are alleged to be causing illnesses.

The first step to determine the extent of the health problems would be to do an audit of what the actual threat is to teachers and children attending classes in the schools. Such an audit has apparently never been undertaken by RIDE; all they would have to do is to ask the R.I. Department of Health to do an audit.

Is that a legal area that you, as Attorney General, could consider becoming involved by suggesting an audit of school buildings in the state to determine what the public health threats to children and teachers are?

NERONHA: In our capacity as an environmental advocate?

ConvergenceRI: In whatever capacity you may deem appropriate in protecting the citizens of the state.

NERONHA:  From a health perspective, obviously, you have already identified the entity that should be doing that, if that is a threat.

Frankly, I had not heard that, and so we’ll have to go back and find out what that the basis of that is, because no complaints have been brought to this office.

ConvergenceRI: Would it be in your capacity to ask Dr. Nicole Alexander-Scott, the director of the R.I. Department of Health, to conduct a health audit of public school buildings in Providence? My understanding is that she cannot act on her own; someone has to ask her and her department to do an audit.

NERONHA: I find it stunning that the director of the Department of Health… The Governor can’t ask her to do it?

ConvergenceRI: The Governor could; the R.I. Department of Education could, but no one has asked.

KRISTY DosREIS

[communications director for Attorney General Neronha]

: Did the Governor not do that as part of her bond issue?

ConvergenceRI: No, not that I am aware of. No one knows, for instance, if you went into Hope High School, what the exact health threats are. All of which could be determined by an audit by the Department of Health. The capability is there, but I have been told that the agency cannot conduct an audit without being asked to do so.

NERONHA: I’ll talk to our environmental unit about it.

ConvergenceRI: A health audit of the school buildings would move it from anecdotal evidence into data and evidence assessing the potential health threats.

NERONHA: I don’t disagree with you at all that this is information worth knowing.

I have to analyze what I am going to do within the context of what my authority is to do it. I am not the Governor. I can’t pick up the phone and tell Dr. Nicole Alexander-Scott to do anything. I can’t order her to do anything.

ConvergenceRI: As I always ask at the end of every interview: What haven’t I talked about,  should I have talked about, that you would like to talk about?

NERONHA: If I were to lay out what I consider to be things that we are doing here that haven’t been done before, there are some things that have not been done before or that we’re doing differently.

What are we doing that we haven’t been doing before? Well, there was no real environmental enforcement going on at all when I arrived here [10 months ago]. There wasn’t anyone really charged with doing it.

I haven’t sent out a lot of news releases about what that is, but I am confident that we are headed in the right direction, we are doing real things that will impact people’s health in the state in a very positive way.

That is one significant thing.

There is an underground economy in the state of Rhode Island, people are misclassified as independent contractors when they are really employees. That’s cheating workers and it’s cheating the state’s taxpayers. Because we’re not getting the kind of payroll taxes we should be getting. [Before me], we were doing none of that work. No one could point to a case that we’d done, I want to say ever, maybe there had been, but certainly not in recent memory.

Now, that’s changed; we’ve charged one case, we have others in the hopper. It’s really important, we only have to charge a certain number, and we’ll have the deterrence effect.

Also, the way we are engaging the community around us.

It is critical, absolutely critical, that this office, in my view, cannot be in a bunker. We have to get out into the community and we have to impact the community, in a positive way.

The best way to do that is not through our criminal justice enforcement; it’s through using our consumer enforcement powers to help people who don’t get access to our consumer unit, unless we take it to them.

Our consumer unit is doing a phenomenal job, helping Rhode Islanders $25 at a time. [They are taking on average 700 phone calls a month.]

And, I know what they are doing, because every time they help a consumer, I write a letter to that consumer, telling them exactly what we did for them, and who is their point of contact if there is any additional problem going forward.

I see the credit reports that are incorrect; I see the extra $50 on the utility bills I see the person that gets a Miracle Ear and doesn’t need one, and then is charged $2,300 for a hearing device they don’t need. Time after time, I see that.

We are helping Rhode Islanders get economic justice that they can’t get otherwise. And, we are now taking that work into the community; we are [conducting] office hours on Broad Street.

To read the story in its entirety, go to: http://newsletter.convergenceri.com/stories/asked-and-answered,5382

Richard Asinof is the founder and editor of ConvergenceRI, an online subscription newsletter offering news and analysis at the convergence of health, science, technology and innovation in Rhode Island.