Texas Supreme Court Finds Xerox, Not Dentists, Responsible For Fraudulent Medicaid Dental Payments

Posted by donna@healthlawcenterplc.com in Jul, 2018

  The Texas Supreme Court recently upheld a Texas Court of Appeals ruling that Xerox was responsible for the $1 billion in fraudulent Medicaid dental payments.  The state found that Texas Medicaid and Healthcare Partnership, a subsidiary of Xerox, allowed workers with limited expertise to approve dental claims for the state’s Medicaid program. Xerox, which was responsible for pre-authorizing dental and orthodontic treatment for children between 2004 and 2012, when Medicaid spending on the procedures soared. A 2014 federal audit found that between 2003 and 2010, Texas Medicaid payments for orthodontic services grew by more than 3,000 percent — from $6.5 million to $220.5 million — while program enrollment only grew 33 percent. By 2012, federal and state auditors found that the contractor’s actions had opened the door to a “massive Medicaid fraud scheme” that cost taxpayers hundreds of millions of dollars.

The Texas  attorney general alleged that Xerox failed to act as a reliable gatekeeper for prepayment requests.  Xerox sought to share some of the cost with the dentists and orthodontists, claiming they knowingly gamed the system. The dentists and orthodontics had contended that it was Xerox’s and the state’s fault for automatically approving their requests and payments for orthodontic work for children and not making them aware something was wrong.

From 2011 to 2013, Texas paid Texas Medicaid and Healthcare Partnership $527 million to process Medicaid claims, despite concerns as early as 2008 that it was not properly reviewing dental claims. A state audit in 2008 found that Texas Medicaid and Healthcare Partnership had only one dentist who reviewed roughly 10 percent of orthodontic claims. Texas Medicaid and Healthcare Partnership employees without dental licenses reviewed the remaining claims, which the audit suggested was problematic. The contractor said in the 2008 audit that its contract did not require routine orthodontic claims to be reviewed by a licensed dental professional.

Read the Texas Supreme Court Opinion In Full