Judges Find Another Texas Orthodontic Practice Innocent of Medicaid Fraud and Misrepresentation

The Texas Health and Human Services Commission Office of Inspector General fails to provide evidence of fraud and misrepresentation regarding the orthodontic Medicaid billings of Antoine Dental Center of Houston and Judges discontinue payment hold: Texas Dentists for Medicaid Reform

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OIG is an agency out of control," commented ADC's lead attorney Tony Canales of the Corpus Christi law firm Canales & Simonson. "These allegations of massive Medicaid fraud by orthodontists in Texas are a chimera.

Austin, Tx (PRWEB) November 06, 2013

Two administrative law judges with the Texas State Office of Administrative Hearings (SOAH) have issued their proposal for decision in the case of Antoine Dental Center of Houston (ADC) SOAH Docket No. 529-13-0997. ADC had been placed under a 100% payment hold in April of 2012 by the Texas Health and Human Services Commission Office of Inspector General (OIG) for "credible allegations of fraud" and willful misrepresentation in their orthodontic billings from 2008 to 2011. ADC had been one of the top 25 billers of Medicaid for orthodontic services in the state. The judges, in their decision, found that ADC had not committed fraud or any willful misrepresentation and ordered the payment hold discontinued.

"I am extremely relieved and happy with this decision," stated Dr. Behzad Nazari, the owner of ADC. "We had been crippled to the point of near bankruptcy by this payment hold and the allegations that had been swirling around the practice. I have been saying for a long time that we weren't guilty and I am thankful that the judges recognized that fact. There is something wrong with the way these cases have been prosecuted by the state."

Judges Howard S. Seitzman and Catherine C. Egan wrote in their decision that "the prima facie evidence failed to support a credible allegation of fraud or willful misrepresentation and failed to show that ADC filed claims for non-reimbursable services. The few non-fraudulent record retention violations that ADC committed were technical violations that do not warrant a payment hold."

A review of court cases shows that the ADC case is only the second to get to the payment hold hearing stage after the state started to allege hundreds of millions of dollars of Medicaid fraud in orthodontic billings after Dallas TV station WFAA aired a series of investigative news reports on Medicaid orthodontia in 2011.

Per transcripts of legislative hearings, HHSC Inspector General Douglas Wilson had testified (Senate Finance Committee, January 30th) before various legislative committees earlier this year that dental Medicaid fraud was in the region of $450 million and that his department had placed payment holds on over 28 large dental practices (see HHSC-OIG presentation slides to House Committee on Government Efficiency and Reform, February 18th). As indicated in the slides, he further told legislators that his investigators and experts had found that dentists had error rates in assessing orthodontic cases that averaged around 93% and had been inflating the severity of cases to get Medicaid payments. Per a transcript of the February 4th hearing before the House Appropriations Committee, his deputy for enforcement, Jack Stick, told legislators (House Appropriations Committee, February 4th) that bankrupting dentists would absolve Texas from paying any Medicaid monies that would be owed to the federal government based on OIG's multi-million dollar "credible allegations of fraud" that are now being found unsupportable by judges.

However, in the two cases that have made it to a SOAH court to contest the OIG payment holds based on "credible allegations of fraud," the first with Harlingen Family Dentistry (SOAH Docket No. 529-13-3180) last year and now ADC, court documents show that the ALJs could not find any evidence of fraud or misrepresentation. Further the courts found that OIG expert witnesses were either not credible or their testimony was unhelpful.

In the ADC case, the state also hired Dallas law firm Waters and Kraus at a cost to taxpayers of $250,000. Court documents show that attorneys Dan Hargrove and Jim Moriarty lead the case while at the same time having a financial interest in the outcome by also representing orthodontist Dr. Christine Ellis in her qui tam actions against numerous orthodontic Medicaid providers. Lawyers from the Attorney General's office also participated in the ADC hearings.

"OIG is an agency out of control," commented ADC's lead attorney Tony Canales of the Corpus Christi law firm Canales & Simonson. "These allegations of massive Medicaid fraud by orthodontists in Texas are a chimera. They don't exist except in the minds of OIG and HHSC because they would like to be able to blame providers for their own inept policy bungling. The problem for them is such allegations aren't true and in the courts, eventually the truth comes out. The judges were not fooled."

The court records show that OIG based the allegations of fraud on only 63 cases that were meant to represent 6,500 total cases ADC had submitted for payment from 2009 to 2011. Each and every case had been pre-approved before any treatment began by the HHSC's private contractor, the Texas Health and Medicaid Partnership (TMHP) which is ACS Healthcare, a division of Xerox. The court was told by former Deputy Commissioner Billy Millwee that TMHP was supposed to "review clinical information to arrive at a decision about whether or not to authorize services for that particular client."

Yet, the state had conducted an audit of TMHP's handling of the prior approval process in 2008 and the court noted that HHSC had found "that TMHP's prior authorization team failed to review the support documentation submitted by providers ... that TMHP's staff did not have the dental credentials necessary to evaluate whether the additional documentation supported the [application]... TMHP's staff only referred about 10% of the orthodontic prior authorization requests to the TMHP dental director for review. Because of its findings, HHSC-OIG recommended that TMHP increase its training for its preauthorization staff. According to Mr. Milwee, TMHP took no corrective action until September 2011, when it terminated its dental director." The state apparently did nothing to enforce any corrective action either.

"Dental Medicaid providers were unaware of any deficiencies in the TMHP pre-approval process," stated Jason Ray of the Austin firm of Riggs Aleshire & Ray. "They assumed TMHP was doing their job and the job that HHSC wanted them to do. The door to orthodontic Medicaid spending was left open because HHSC never monitored or followed up on the corrections they recommended of TMHP or, more to the point, monitored their own policy regarding orthodontic Medicaid approvals and how that affected their Medicaid spending. It is wrong to blame the providers after they have done the work."

Texas Dentists for Medicaid Reform have been following the ADC case with great interest as a number of other similar cases are on the horizon. TDMR worked over the last Texas legislative session to inform members of the both the Texas House and Senate on the problems dental Medicaid providers were having with OIG investigations and payment holds, as there were no due process rights for Medicaid providers in legislation. As a result, with the input of other groups such as the Texas Medical Association, Senate Bill 1803 was passed and signed by Gov. Perry last June. It came into force September 1st and gives all Medicaid providers due process rights when under HHSC-OIG investigation.

"No one wants fraud in the Medicaid system," comments Greg Ewing, President of TDMR. "But we don't want health care professionals just accused of Medicaid fraud and their reputations and careers destroyed before they even get to a court of law. We want to see the system work in the best interests of all."