In May of 2011, Dallas media started a series of stories about their investigation into Texas Medicaid spending for orthodontia and the alleged excesses of several dental chains and their owners which were heretofore unknown to the Health and Human Services Committee and their Medicaid fraud watchdog, the Office of the Inspector General.  The allegations received large coverage across Texas becoming the subject of legislative hearings in both Washington and Austin during 2012.  The public has been told repeatedly  that orthodontic Medicaid fraud is rampant in Texas.

These allegations have not panned out.  Why?

Basically, because they were never true.  They were a series of half-truths that were built into a towering edifice that has been blown over.  This has been realized by the press and in the courts.

Texas is not beset with a large number of bad actors in the dental field – there are undoubtedly some as with any profession.  There is no vast conspiracy to take advantage of Medicaid.

Here are the facts.

1. Texas Medicaid reimbursement rates increased
Texas increased Medicaid reimbursement rates for dental services in 2007 in response to a lawsuit brought by parents over a decade before alleging that the state was not living up to its obligations to provide such care. The purpose of the rate increase was to attract more providers to care for the over 2 million children who were Medicaid eligible.

2. Medicaid orthodontic expenditures grew at a slower rate than other dental services
Dental expenditures not including orthodontia increased 300% from roughly $297 million in 2006 to nearly $1.2 billion in 2011.  Expenditures on orthodontia increased at a slower rate of 200% from almost $73 million in 2006 to $249 million over the same time period.

3. All orthodontic cases were pre-approved by Medicaid contractor Texas Medicaid and Health Partnership
That every case for Medicaid orthodontic treatment was submitted to the state’s contractor, Texas Medicaid and Health Partnership, for pre-approval with all appropriate documentation required – x-rays, radiographs and a special scoring sheet filled out by the attending dentist called an HLD Scoring index (Handicapping Labio-lingual Deviation). It is the scoring of this HLD sheet which has been the crux of the problem. A score of 26 was supposed to mean that the case was a medical necessity and thereby covered by Medicaid.

4. Unknown to dentists, TMHP lacked trained dental staff to review approvals
TMHP was found to have inadequate dental technical staff to actually evaluate each case and ended up approving all submitted cases with the proper paperwork.

5. TMHP staffing situation was known by HHSC in 2008
These deficiencies were known by the Health and Human Services Commission in 2008 because their Office of the Inspector General did an audit of TMHP at that time and uncovered them. Nothing was done.

6. Differences in provider and OIG HLD scoring of orthodontic difficulties based on subjective nature of the scoring, not on fraud or misrepresentation
Besides that fact, there is a subjective element to the scoring of the HLD sheet. This was highlighted by a State Office of Administrative Hearings Judge and she found that the term “ectopic eruption” was subjective, leading to variances between professionals. The judge found in the case of Harlingen Family Dentistry that there was no evidence of fraud or misrepresentation as alleged by OIG that 84 out of 85 cases did not qualify for Medicaid.

7. OIG expert witnesses not credible
As summarized in a recent ruling by HHSC Administrative Judge Susan Nash Fekerty, OIG expert witnesses in the case of Harlingen Family Dentistry were not credible.

The Judge wrote: “The SOAH ALJ analyzed the evidence from the hearing, including testimony from experts from both sides, and concluded that Respondent’s experts lacked credibility when compared to Harlingen’s witnesses. One of OlG’s experts had not treated Medicaid patients, and had no familiarity with the score sheet used to determine whether a patient had an ectopic eruption. Another OIG expert, not an orthodontist, did not know how TMHP had interpreted “ectopic eruption.” A third OIG witness, the current Medicaid director, asserted he was not an expert on the issue. He also could not explain why, in 2012, after this case arose, the rule on “ectopic eruption” had been changed. The SOAH ALJ determined that OIG expert testimony carried less weight than that of Harlingen’s expert, who was the former director of the Medicaid dental program for nine years.”

8. OIG investigations not based on evidence of wrongdoing but only on dollar value of billings
The primary criteria for a dental clinic to be investigated is that they are a top biller for Medicaid. This is the sole criteria as outlined by Deputy Director for Enforcement OIG Jack Stick. In a webinar last March for the National Conference of State Legislatures entitled Containing Medicaid Costs: State Strategies to Fight Medicaid Fraud and Abuse, Stick said that he just went after the top 50 orthodontic providers because “that’s where the money is.”

9. OIG Director For Enforcement arrested for DWI
Dentists have not been the only ones under a cloud of suspicion. Jack Stick himself, the head law enforcement individual of OIG, a former city judge and House Representative, and the person outlining their Medicaid fraud strategy, was arrested last September for DWI by the Austin police.

1. Web article: “Providers Push Back on Medicaid Inquiries,” New York Times, November 15, 2012
2. Web article: “Committee chief says Texas government spent more through Medicaid on orthodontia than other states combined,” Poltifact website.
3. Performance Audit Report: Texas Medicaid Healthcare Partnership, Prior Authorization Audit, August 29, 2008, Office of Inspector General, HHSC.
4. SOAH Case: Final Decision, Docket No. 529-12-3180; Harlingen Family Dentistry v. Texas Health and Human Service Commission, Office of Inspector General
5. File: Photographs of patient teeth and the relative scoring by attending dentist and expert witnesses.
6. Webinar & transcript: “Containing Medicaid Costs: State Strategies to Fight Medicaid Fraud and Abuse,” Jack Stick
7. Web article: “HHSC Deputy Inspector General Arrested on DWI Charge,” Texas Tribune, October 18, 2012