For those of you still following this 15 year orthodontic debacle, in a long-awaited decision, the Fifteenth Court of Appeals has reversed a trial court’s ruling and held that Alexandra Alvarez, Joshua LaFountain, and Christine Ellis, DDS, are not entitled to a share of the state’s final $212.3 million Medicaid settlement with Xerox. Their award was to cost Texas $37.1 million.
The court found that the core allegations against Xerox had already been publicly disclosed years earlier, including through the WFAA investigative reporting that launched the entire Medicaid orthodontic controversy.
Already in the public domain
That was the key. Because the information was already in the public domain, the relators’ claims were barred under the statute. The court also found that none of the relators qualified as “original sources,” noting a lack of direct, firsthand knowledge of Xerox’s internal conduct.
In short, no new information, no entitlement to a payout.
Opportunistic appearance
From TDMR’s perspective, these claims have always appeared opportunistic, having been filed in 2012, well after the orthodontic controversy had erupted. The court, in its ruling, points to numerous WFAA reports starting in May 2011 that the state cited as evidence of prior public disclosure.
Victory for taxpayers
After years of litigation and a potential $37 million award hanging over taxpayers, the result is simple: no payment.
Such an award would have been a travesty and undeserved.
Begs the question why the state didn’t do anything actionable about it if this had been “known about for so long”… They talked about it, sure, but not one person did anything to put a stop to it continuing for years until the whistleblowers came forward and suddenly the state intervened in the case.
The assertion is not true at all. Whistleblowers had little to do with the state moving or not moving against Xerox. The situation became public when WFAA began reporting in May of 2011, well before the relator qui tam actions were filed in 2012. The state did not fire Xerox as the state’s claims administrator and file suit against the company until early 2014, two years after those filings. Various excuses have been given for HHSC’s inaction before the WFAA expose, but the real reason(s) remain unknown. When the issue became public, HHSC bureaucrats told legislators they had tried to pin the problem on dentists, but the legislative uproar ultimately forced executive commissioner Thomas Suehs into retirement and Medicaid director Billy Millwee out. When dentists prevailed in SOAH payment hold hearings against the accusations, all eyes turned to ACS/Xerox, as they had authorized all treatments on behalf of the state.