(Submission is based on a recently written article for publication)

I am compelled to write this article for The Progressive Orthodontist because of my involvement in the Texas Medicaid scandal which was featured last year in the article “Medicaid: Texas in Turmoil.”

Why me? Well, my practice was the 17th largest billing practice in Texas for orthodontia in 2011 and, yes, we have been under a “credible allegation of fraud” payment hold by the Office of the Inspector General HHSC that started in September 2011. Rather than being anonymous, as the author of that article was, I do want you to know who I am because what has occurred is quite outrageous.

But I am getting ahead of myself. Let me give you some personal background first.

In 1983, I started my practice in Harlingen after graduating from the University of Texas Health Science Center at San Antonio dental school. I was one of the first dentists in the Rio Grande Valley to take Medicaid orthodontic patients. The reimbursement rates were so low. But I wanted to give back to my community. Through wise management and excellent dental services, I grew my practice to what it is today – Harlingen Family Dentistry, which has 13 dentists and 130 staff. Medicaid-eligible children comprised 40 percent of my patients at one time. But not today.

Fortunately, the practice was not totally dependent on Medicaid. Otherwise we would not have survived nor been able to properly defend ourselves from the allegations that were hurled at us.

For my part, I am no stranger to public life. In 2001, I was appointed by Governor Perry to the Board of Dental Examiners which I served until 2007. I am a Past President of the Hispanic Dental Association, the Harlingen Consolidated Independent School District School Trustees and the City of Harlingen Economic Development Board. I also founded and funded Narconon South Texas a drug rehab center
Providing effective drug-free withdrawal and rehabilitation. I am proud to serve my community.

With this background outlined, I can now put a new face on the dentists who have had their practices run into the ground by unproven allegations of Medicaid fraud.

I can now say with some certainty that what has occurred over the last two years, of which the article “Medicaid: Texas in Turmoil” represents the common wisdom, has more to do with the politics surrounding Medicaid than actual fraud or dentistry.

How so? Let me enumerate the points simply:

1. There were no complaints that brought OIG knocking on my door. The complaint was the Dallas news stories and the fact that I was simply a high volume Medicaid provider.

2. In relation to the credible allegation of fraud and its payment hold, a private practice orthodontist was OIG’s expert witness. He had never taken a Medicaid patient during his entire 40 year career and had never before scored an HLD sheet. Yet, he decided that 84 out of 85 cases he reviewed did not qualify for Medicaid.

3. Being assured that we had done nothing wrong, I took the matter to the State Office of Administrative Hearings. After hearings last April, the decision came out in September and was upheld again this January. OIG wanted to rehear the matter because the judgement wasn’t favorable to their case but that motion was denied.

The administrative court judges ruled:

a. NO evidence of fraud or misrepresentation by the two HFD orthodontists, one board certified, and our general dentist practicing orthodontia.

b. OIG’s expert witnesses were found not credible.

c. the large variance in HLD scoring between our dentists and the OIG expert, the error rate, was ruled to be the vagueness of the HHSC policy manual and in particular the definition of “ectopic eruption” which was found to be entirely subjective.

Hadn’t heard of this? Not surprising. It doesn’t fit the party line of outrageous dental provider fraud still being voiced by HHSC and OIG executives.

The topper is that the same week in October when the HHSC judge agreed on the SOAH judge ruling in our favor, OIG investigators again came into my practice and took away 12 feet of files dealing with our pediatric and general dentistry practice. They also interviewed 20 employees and even asked for private pay patient records. They still have the records today.

Has this negative decision for OIG changed them at all? The answer to that is unfortunately no.

Douglas Wilson, the Inspector General himself, has been recently testifying before various committees in the Texas Legislature and, among other things, has stated that OIG “won” the decision.

Wilson told Senator Hinojosa before the Senate Finance Committee on the 30th of January that:

“I think you’re talking about a dental case. And the process you’re talking about was not about the merits of our case, in terms of whether or not there’s a credible allegation of fraud or not. That particular case was around whether or not my office had the authority to even place the hold on to begin with. The answer is yes, we do have that authority. And there was some comment around how much we proposed based on what we had. But we haven’t lost that case yet because it’s gone to SOHA regarding the merits of our case on whether or not we do have somebody that we placed on CAF hold that shouldn’t be on one. We have not lost one of those yet.”

In fact, the judge ruled that OIG did not have the authority to maintain a credible allegation of fraud hold against HFD because there was no evidence of fraud or misrepresentation.

From the decision:
Conclusion of Law 10. HHSC-OIG lacks authority to maintain the payment hold against HFD for alleged fraud or misrepresentation. TEX. GOVT CODE § 531.102(g)(2); 42 C.F.R. § 455.23; TEX. HUM.

Wilson also keeps telling anyone who will listen that the error rate in orthodontic cases OIG has reviewed is still 93%.

Before the Senate Finance Committee, January 30th:

“After they get to the end of their review and we get the report that tells us what they found in most cases, we’ve seen very high error rates on average. I think the average rate’s around 93% or higher. Some are as high as 99%.”

Before the House Public Health Committee, February 13th:

“We hire consultants to work with us in those cases, identified overutilization ranges from 39% to 100%, with an average error rate of around 93%.”

Before the House Government Efficiency and Reform Committee, February 19th:

“Average error rate in our cases is averaging about 93%.”

The worst part is that Wilson’s deputy of enforcement, Jack Stick, has told legislators that it is in Texas’ best interests to bankrupt those dentists under a credible allegation of fraud hold.


Yes, in a perverse view of justice, as soon as OIG puts on a credible allegation of fraud hold, the dentist is assumed guilty so OIG believes that they have to pay back the federal government its 50% share of the Medicaid “fraud” within one year (although the feds haven’t asked for it). How to get Texas taxpayers off this hook? Bankrupt the provider, of course!

Stick told Rep. Perry before the House Appropriation Committee on February 4th:
Rep. Perry: I want to clarify: if we don’t recoup, but if we do determine fraud, we still have to write that check to the feds. Is that a good statement? We don’t actually get the money back from the provider. We still owe the fed for the FMAT part. Is that correct?
Stick: Yes, unless the provider goes out of business. … we’ve had significant and expensive discussions with CMS about that. We’re continuing to talk with elected officials on Capitol Hill about that very issue because essentially there is a built in disincentive for states to be effective. Texas right now is the national leader in identifying waste, fraud and abuse. And consequently, we’re taking the lead on this because we have the most to lose. The answer is we’ve not yet had CMS say we’re going to claw back any money, partially because we’ve got this bolus of cases that are working through the system and we haven’t reached a critical point yet.
But secondarily, the providers who are large – we had one provider in the 48 million dollar – 50 million dollar range – they’re in bankruptcy court. So when they’re in bankruptcy court, it wipes the obligation out altogether. Or if they go out of business, even if they don’t declare bankruptcy it wipes the obligation that we have.

There is a lot more but a huge point that has been neglected is the role of TMHP, the Texas Medicaid and Health Partnership, HHSC’s private sector contractor which is in reality the Xerox-owned ACS STATE HEALTHCARE, LLC. They approved every orthodontic Medicaid service in Texas over the time period in question. They had radiographs and x-rays and could have at any time, turned down a pre-approval not unlike the managed care organizations today. They were contractually obliged to do so but didn’t.

In fact, I know one provider whose orthodontist marked over 60 HLD scores as 0 yet ACS approved all the cases for Medicaid.

The “Medicaid: Texas in Turmoil” article stated that ACS’s role in this all wasn’t known before 2011. This is patently not true. It came out in my hearings that OIG had conducted an audit of TMHP/ACS in 2008 and had found and reported the very problems in their handling of ortho cases that were reported in 2011. The dental director only reviewed 10% of the cases submitted and the rest were reviewed by clerks. ACS paid their clerks by volume called “activity based compensation” and the clerks were rewarded for expediting cases. Approving cases was the path of least resistance. As providers, we had no clue this was occurring. The contract between HHSC and TMHP/ASC was explicit that adequate professional medical staff must research, analyze, and evaluate all prior authorization decisions and ensure all medical facts are considered and documented prior to determination. HHSC did nothing after the audit to correct matters and at the time ortho spending was about $55 million.

The odd part of this is that no media organization or government agency has even made public how much money ACS made out of this contract. Maybe it is because ACS has had up to 18 lobbyists in Austin and donated $150,000 to Governor Perry’s political campaign.

Providers have been easy to focus on. They are relatively small and disorganized as a group without political connections. That is why I started Texas Dentists for Medicaid Reform. When Medicaid providers are in constant fear of their practices, the whole system is in danger of collapse. And the patients that we started to treat because we wanted to give back to the community, get left behind.

Providers who have committed Medicaid fraud deserve to go to jail. But Medicaid providers deserve to have due process so the guilty can be weeded out from the innocent. This is not what is happening now. But we are supporting legislation that will hopefully make the system better by enshrining these due process rights.