$500,000 Spent on Hearings Worthless if HHSC Can Just Overturn the Decision

Dr. Behzad Nazari of Houston testified before the House Human Services Committee on September 3rd on SB 1803 and due process rights for Medicaid providers.

Nazari’s Antoine Dental clinics was put under a 100% payment hold for their Medicaid orthodontic billings and went to a payment hold hearing at the State Office of Administrative Hearings in 2013. The hearing lasted four days before two administrative judges. The state brought in private law firms Waters and Kraus and Moriarty Leyndecker at a cost of $250,000 to Texas taxpayers to beef up lawyers from the Attorney General’s Office and OIG. The SOAH judges found no evidence of fraud or abuse and found the state’s case unconvincing. They ruled that the payment hold should be removed.

As the system is currently arranged, all such SOAH decisions go back to HHSC for approval. HHSC simply overturned it and kept the payment hold in place.  Nazari incurred $500,000 in legal fees.

His testimony is below and the video is on YouTube.

Hello Representatives and thank you for the giving me the opportunity to speak to you today.

My name is Behzad Nazari. I am a general dentist and the owner of Antoine Dental Center In Houston, Texas. I moved to the United States in 1984 and have lived in Texas since. Having lived in another country, I have a great appreciation for America and the many freedoms and opportunities available here.

You have heard my testimony in the past. I would like to give a brief update on my case and the impact of SB 1803 upon it.

After being placed on Payment hold in April 2012, I first tried to settle my case, and then requested an expedited hearing. My SOAH hearing was scheduled for May of 2013. I faced state attorneys both OIG and AG and some hired by the state from the private sector as well. Our case was the second Orthodontic case heard at SOAH. OIG lost its first case in SOAH, against Harlingen Family Dentistry.

There were two SOAH judges assigned to my case. The Judges found NO evidence of fraud. They held that the few technical violations they did find did not warrant any payment hold.

The Agency ignored the findings of fact and law made by two SOAH judges based on four days of hearing, reversed the decision, and wrote its own ruling.

We are appealing HHSC’s final decision, but that will take at least a year – maybe two years. Maybe more. To date, the whole process has cost me more than $500,000 in attorney fees, on top of my two million dollar payment hold. This has forced me to sell two of my three dental offices. I am no longer a Medicaid provider.

In Senate Bill 1803 that passed last session, the Legislature set out the procedures for a provider to request and participate in a SOAH Hearing to challenge a payment hold. I followed all the procedures and paid a large amount of money for my hearing and I prevailed. Yet I am still being required to fight my payment hold because the HHSC simply ignored the SOAH hearing findings and overruled them.

If the agency is not going to follow the findings of independent judges, then perhaps the SOAH decision – one that we pay tens of thousands of dollars for – should be final and binding on HHSC with HHSC given the right to appeal it to the District Courts if they disagree.

I understand that this is the situation already with decisions of the Medical Board.

It is just a waste of money if HHSC can be the investigator, prosecutor, judge, and appellate court.

Thus, when considering a follow-up to SB 1803 I believe the legislature should look at the due process considerations of how SOAH orders are denied or appealed by the HHSC.

Thank you again for your time.

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