Last November, former Texas Medicaid director Billy Millwee, now a private consultant, appeared before the Little Hoover Commission in Sacramento, California.
The LHC is an independent state oversight agency that was created in 1962 with the mission to investigate California “government operations and – through reports, recommendations, and legislative proposals – promote efficiency, economy and improved service.” The LHC was holding hearings regarding Denti-Cal and how to improve that system which provides dental benefits for both adults and children.
Testified about Texas dental managed care experience
Millwee was in attendance to testify regarding Texas’s transition and experience with Medicaid dental managed care. Texas moved to managed care in 2012 after dental expenses boomed following the 2007 Frew settlement agreement and after allegations of massive fraud by dentists regarding Medicaid orthodontic treatment. Over the last few years, these allegations have been debunked.
In 2014, after failing to pin the large spending on the shoulders of Medicaid dentists, the state fired and sued its Medicaid claims administrator Xerox for Medicaid fraud in its apparent misrepresentation of the company’s prior authorization process for orthodontic treatment. While dentists had been told to expect that a “board certified orthodontist” was reviewing and approving each request, in actual fact, Xerox “dental specialists” were mostly individuals who only had high school educations, were working from home and being paid on a piecework basis just to ensure the prior authorization requests submitted by dentists were complete.
“Fiscal agent … had no financial incentive to manage utilization…”
However, Millwee in his written testimony to the LHC, apparently debunks the state’s fraud allegation against the company and bluntly writes that Xerox wasn’t paid to fully scrutinize the prior authoriztion applications.
“A fiscal agent that had no ﬁnancial incentive to manage utilization, quality, access or member or provider satisfaction managed the program. The ﬁscal agent was paid simply for volume and not the quality or accuracy of service authorizations. The result was less scrutinized authorizations and that consequently led to overutilization of services. Under FFS, orthodontia spending alone grew from $102 million in FY 2008 to $185 million in FY 2010.”
Quite a bombshell.
The video of Millwee’s live testimony is below.
Written testimony can be downloaded here.millweenov2015