Why is Texas HHSC Office of the Inspector General Spending up to $250,000 on Outside Lawyers to Litigate Dental Medicaid Case?

Texas Dentists for Medicaid Reform questions why Texas taxpayers will pay up to $500 an hour to Dallas law firm Waters & Kraus when legislators have already approved monies for OIG staff expansion; a trend if applied to all cases would cost Texas another estimated $50 million .

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It appears that OIG doesn't trust its own legal team any longer... The problem is that there's already been one finding in in the State Office of Administrative Hearings that Texas Medicaid's orthodontic spending was not due to any fraud...

Austin, TX (PRWEB) May 14, 2013

The Office of the Inspector General (“OIG”) has replaced their own legal staff with outside counsel for an upcoming administrative law court proceeding according to a recent court filing. With the approval of the Texas Attorney General's office, along with Health and Human Services Commissioner Kyle Janek, the documents show that OIG has hired a Dallas law firm to litigate a single case at the State Office of Administrative Hearings (SOAH docket number: 529-13097) against a Texas dentist under a payment hold based on a “credible allegation of fraud” (“CAF hold”). Depositions in the payment hold case against Dr. Behzad Nazari and his Antoine Dental Centers have already been completed, but, according to the court documents, the agency will now pay the law firm of Waters & Kraus up to $250,000 to represent it in further litigation.

"It appears that OIG doesn't trust its own legal team any longer," said Chuck Young, Director of Communications for Texas Dentists for Medicaid Reform (“TDMR”). "Things haven't been going well at OIG. The problem is that there's already been one finding in the State Office of Administrative Hearings” (“SOAH”) “that Texas Medicaid's orthodontic spending was not due to any fraud on the part of the dentist, but due to the vagueness of the Medicaid policy manual (SOAH docket 529-12-3180). That same court also found OIG expert witnesses 'not credible.' On top of that, whistleblowers have come forward about troubling practices within OIG. It appears the agency wants to bring in some expensive hired guns to try to save face for them."

Waters & Kraus maintain the texasdentalfraudlawyer.com website and actively recruit “whistleblowers”, formally known as “qui tam relators.” Most prominently in the dental Medicaid fraud arena, they represent Dr. Christine Ellis against the All Smiles dental chain (Travis County District Court Cause D-1-GV-12-000863). That suit could be worth as much as $40 million to Dr. Ellis and her attorneys.

The documents show that the Attorney General did not receive the OIG request for hiring outside counsel until May 6th but the filing made Waters & Kraus’ Dan Hargrove lead counsel as of May 1st. Under the OIG agreement included as exhibits in the court filing, Waters & Kraus will be paid:

  •     $500 an hour for senior litigator and Waters and Kraus partner Charles Siegel;
  •     $350 an hour for Waters and Kraus litigator Dan Hargrove ;
  •     $350-$500 an hour for other litigators;
  •     $175 an hour for travel time for Dan Hargrove; and
  •     Up to $200 a day for accommodation for Waters and Kraus attorneys.

"There are two phases of litigation - payment hold hearings and overpayment hearings. There are apparently about 100 Medicaid providers currently under payment hold in Texas. At these prices, the price tag could run as high as $50 million,” said Young. “Is OIG prepared to fork over $50 million of taxpayer dollars to Waters & Kraus for litigating all these cases?"

A recent bill, HB 1536, was aimed at providing due process rights to Medicaid providers put on payment hold. OIG helped prepare a fiscal note on the bill which attached costs to the guarantee of these rights.

"OIG cries poverty whenever we seek some sort of due process, yet they've asked for -- and will doubtless receive -- millions of dollars from the Texas legislature to expand their operations,” Young said. “Now they've hired an expensive outside firm to replace their own legal staff. Apparently they can't get the job done with their own people.”

"The truth is that those in charge at OIG are finding it hard to come to grips with the fact that the vast majority of alleged dental Medicaid fraud probably isn't there. If they lose another case in SOAH court it's going to be embarrassing to a lot of people. Apparently, OIG's leadership feels this must be prevented at all costs," concluded Young.


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