An appeals board says the federal government wants to take too big a bite out of West Virginia’s settlement of a 2001 lawsuit against drug maker Purdue Pharma.

The federal government concluded that the state wrongly failed to share proceeds from the $10 million settlement. The government wants to withhold more than $4.1 million from West Virginia’s Medicaid program.

Attorney General Darrell McGraw said Friday that a U.S. Department of Health and Human Services appeals board has upheld the federal government’s right to a share in the settlement’s proceeds. But the appeals board determined that $4.1 million is unreasonable.

McGraw said that the case has been sent back to the U.S. Centers for Medicare & Medicaid Services with instructions to give the state an opportunity to submit arguments and additional evidence.