This past week State Office of Administrative Hearings (SOAH) Judge Roy G. Scudday ruled that Christine Ellis and her qui tam lawyers had no standing to appear in a hearing regarding an HHSC-Office of Inspector General payment hold placed on National Orthodontix LLC, out of El Paso. National Orthodontix, otherwise known as Sun Orthodontix, had its Medicaid payments put under hold in February of 2012.
The State had fought hard to keep Ellis and her qui tam lawyers in the case, arguing that the OIG needed the extra resources that Ellis’ attorneys would bring to the State’s case. The State had also admitted that if the State eventually prevailed on even one of its claims, it would require that National pay for Ellis’ attorneys’ fees. That would certainly have been hundreds of thousands of dollars. National argued that having Ellis and her attorneys in the case was senseless because there was nothing that Ellis could recover in a payment hold hearing besides her own attorney fees. As a result, having Ellis’ attorneys in the case would only increase the time and costs for everyone in the case, since National would have to fight the OIG’s attorneys and Ellis’ attorneys at every turn.
The Judge wrote, “Inasmuch as Respondent (OIG) has conceded that the recovery of overpayments and administrative penalties are not the subject of the instant proceeding, and the Relator (Ellis) has no rights in a payment hold proceeding under subchapter C, the ALJ concludes that Relator has no standing to participate as a party in this payment hold proceeding.”
The result is of Judge Scudday’s ruling is that Ellis and her attorneys will not be permitted to participate in the case and National will not be in danger of paying for the State’s attorney fees or the Relator Ellis’ attorney fees in the payment hold hearing. This is a blow to the State, who had hoped to use Ellis’ personal injury lawyers as a type of outside counsel to strengthen their case and supplement their trial team.