Back last August, the Department of Health and Human Services Office of Inspector General released an audit report that the Texas Health and Human Services Commission was responsible for the conduct of its Medicaid claims administrator for the hundreds of millions of dollars of increased spending on Medicaid orthodontia from 2008 to 2011.
HHSC and Xerox found responsible for extent of Medicaid orthodontic spending last year
The state and agency were blaming the contractor Xerox/ACS alone for its allegedly fraudulent orthodontic prior authorization program that utilized unqualified administrative personnel who worked from home and just rubber stamped the requests from dentists. The federal agency found that HHSC was aware of the deficiencies as early as 2008 yet did nothing to remedy them.
New report says Texas owes $133 million back to Washington
That first audit promised a second report to detail the amount of money that Texas would owe back to the federal government for their lack of oversight.
That report has just been released and found that, based on the extrapolation of 106 cases, Texas owes $133 million.
Irony: “Extrapolation” cuts both ways
“Extrapolation” is that wonderful statistical exercise of looking at a small number of cases to draw conclusions about all cases. So for Texas, 106 cases represents probably tens of thousands of Medicaid orthodontic cases.
It is bitter sweet irony that Texas providers have felt that sting -50 cases out of thousands used to claim that the provider owes back millions of dollars. So extrapolation is now cutting both ways.
Responsibility for Medicaid Orthodontic spending laid at feet of HHSC and Xerox, not dentists
The HHS-OIG also did a podcast about the results of the audit which summarizes the findings of the 20-page report.
Key to Texas Medicaid dentists is that the federal auditor who wrote the report did not blame Medicaid dental providers. The responsibility was firmly put at the feet of HHSC and its contractor Xerox for their lax management of the Medicaid orthodontic prior authorization program.
From the podcast (Matt Moore is an audit manager in Dallas and Eugena Newton, is the senior auditor who did the audit):
[Matt Moore] Do we know why these problems occurred?
[Eugena Newton] Two reasons. First, the State agency did not ensure that the contractor properly reviewed each prior-authorization to make sure it was both medically necessary and that the beneficiary qualified for orthodontic services. Second, the State agency did not ensure the contractor’s dental director followed State Medicaid policies and procedures for determining medical necessity, and if a beneficiary qualified for orthodontic services.
[Matt Moore] What did you recommend to the State agency to address the results of this review?
[Eugena Newton] We recommended several things. First, we asked the State agency to refund $133 million dollars to the Federal Government. Second, the State agency should improve its oversight of the orthodontic prior-authorization process to ensure medical necessity and ensure that people making the prior-authorization decisions follow State Medicaid policies and procedures. Third, we asked the State agency to refund the Federal share of any additional amounts related to orthodontic prior authorizations that the State agency improperly claimed after our audit period. Finally, we recommended that the State agency monitor the orthodontic program to ensure that it’s in compliance with State Medicaid guidelines.
State not arguing the findings
The state of Texas rather than fighting the findings as in the last report, apparently agreed.
[Matt Moore] How did the State agency respond to your findings and recommendations?
[Eugena Newton] The State agency mostly agreed, and described what it’s already done, as well as its future plans to address these issues. However, the State agency disagreed that the contractor deficiencies were due to a lack of State agency oversight. Because the State agency is responsible for contractor compliance, we maintain that the deficiencies were due to a lack of State agency oversight.
Legislative session is over
Legislative session is over. The timing of the release of the report seemed to coincide with that.
What will legislators say and do?