Bruce Truitt,, BA, MPA, MA, MA
by Bruce Truitt, BA, MPA, MA, MA
Who cares? You do. Trust me, as the following history and “so whats” for all dental professionals, claims administrators, and auditors clearly reveal.
On June 22, the Texas Supreme Court ruled that the Texas Medicaid and Healthcare Partnership (TMHP) and, more notably, its owner – the Xerox Corporation – owes the State of Texas $1 billion (that’s “billion” with a “B”) in fraudulent, not merely improper, Medicaid payments made while overseeing prior authorizations for Texas Medicaid patients’ dental work.
The History
While the Texas Tribune announcement of the $1B decision rightly references a 2008 Texas Health and Human Services Commission’s Office of Inspector General (HHSC-OIG) audit, prior authorization was already boiling on the stove when I became the HHSC-OIG Director of Quality Assurance, Risk Management, and Policy in December 2005. In fact, prior authorizations was the first substantive issue with which I dealt as policy chief.
“Prior auth,” as it is often called, was a clear and present concern in multiple Medicaid areas in and before 2005. Though HHSC-OIG had a seat at the policy table, its Program Integrity outcries were generally ignored. The focus was on serving beneficiaries, with a (largely hypothetical) threat of provider withdrawal from the program tipping the balance.
Prior authorizations was especially acute in dentistry, and the historically weak Texas State Board of Dental Examiners (TSBDE) provided little external compliance pressure. See, for example, a Texas State Auditor’s Office report – a catalog of chronic and material TSBDE deficiencies.
Amid this limp enforcement environment, HHSC-OIG performed its 2008 audit, the quantitative procedures for which I helped design, to find that TMHP was not properly reviewing dental claims, that one dentist reviewed roughly 10 percent of orthodontic claims, and that unlicensed and unqualified employees reviewed the remainder. See the TMHP Prior Authorization Final Report. A 2012 HHSC-OIG follow-up audit found things were even worse and noted issues with the Handicapping Labio-Lingual Deviation (HLD) scoresheet used for orthodontic prior authorizations.
And, HHSC-OIG naturally audited individual ortho providers to find nearly $300,000,000 in improper payments directly arising from faulty HLD form use. Having participated in the internal and external vetting of these amounts, both I and lots of folks now knew exactly where the target was – ortho authorization and the related, required HLD form. The rhythm soon picked up:
- HHSC-OIG started taking individual providers to court;
- 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.
- A 2014 Federal OIG audit found that between 2003 and 2010, Texas Medicaid ortho payments grew over 3,000 percent — $6.5 million to $220.5 million — while enrollment grew just 33 percent.
- A 2015 Federal OIG audit found results virtually identical to those of State OIG and demanded that Texas repay CMS the $133,370,225 Federal share of the $191,410,707 they found in unallowable orthodontic services.
To avoid refunding hundreds of millions of dollars and to place accountability where it belonged (TMHP and Xerox), in May 2014 the State of Texas cancelled the contract with and sued Xerox. Then, everybody began suing everybody. The providers sued because they were on the hook for payments that State knew it should not make but did make; Xerox sued the providers for filing false claims for which Texas was tapping Xerox; Xerox sued the State for poor oversight; and so on. It’s like Bobby Cannavale in “Boardwalk Empire” – “I got a gun. He’s got a gun. He’s got a gun…Everybody got guns!” Substitute “lawyer” for “gun,” and you get the picture.
Ultimately, after losing at the lower levels, Xerox sought but was denied a Texas Supreme Court mandamus writ for appellate court reconsideration. All other lawsuits likely were (or will be) either settled or, more likely, evaporate…we do not know the details. But, it is crystal clear that Xerox is left on the hook for a billion bucks, as they should be.
The “So Whats”
Why should you care about this decision, as summarized below?
“Xerox failed to properly review prior-authorization requests and instead simply rubber-stamped them and, thereby, committed numerous independent frauds by submitting false prior-authorization and payment requests, seeking payments for services never rendered, misrepresenting the qualifications of those who provided orthodontic services, and, in some cases, accepting illegal kickbacks.”
Here’s what it means for anyone involved in dentistry:
- Use champs, not chumps, for handling prior authorizations, especially when the criteria are binary (yes-no) and clear-cut or involve a scored form (like the HLD);
- Do not rubber-stamp anything – pay attention, especially when it is significant or material;
- Support your authorization assertion with sufficient and appropriate documentation;
- Know when this documentation requires x-rays or actual examinations and what those x-rays or examinations must look like;
- If the service is not authorized, don’t deliver it!
- Proving civil fraud does not involve proving intent. Under the civil False Claims Act (FCA) no specific intent to defraud is required. The civil FCA defines “knowing” to include not only actual knowledge but also instances in which the person acted in deliberate ignorance or reckless disregard of the truth or falsity of the information. That is clearly the case here. So, put that “intent” security blankie in the closet.
- Repeated non-compliance soon comes to resemble “knowing” under the FCA.
Finally, listen to your practice…listen as in “audit.” Do NOT get into the “John will take care of it” or “Mary handles that” mode. This can easily lead to someone “handling” you. Get it right, as the Texas Supreme Court did with Xerox.
About the author:
For nearly 30 years, Bruce Truitt has managed, designed and executed audit, attestation and advisory engagements in all major operational areas of numerous entities, agencies, and enterprises, primarily in health and human services. His extensive background in statistical auditing has led to his crafting of hundreds of articles, curricula, modules, methods and tools on auditing and applied statistics.
Mr. Truitt’s present focus is litigation support and advancing the quantitative skills auditors need to pursue healthcare fraud, waste and abuse. His methods and techniques have been recognized by such entities as the Harvard School of Business and the National Association of State Auditors, Comptrollers and Treasurers, are used in all 50 States and 33 foreign countries, and have facilitated the recovery of hundreds of millions of healthcare dollars. He is on the faculty of the US Government Audit Training Institute and the US Department of Justice’s Medicaid Integrity Institute and, among other engagements, serves as Chief Statistician on the nationwide Medicare Supplemental Medical Review Project and is a member of the nationwide Medicare Statistical User’s Group. His thorough understanding of the legal, regulatory and professional standards and practices of auditing, sampling, and applied statistics makes him truly unique in the industry.
