Former Texas Medicaid Director Says Xerox Wasn’t Paid to Fully Review Orthodontic Prior Authorizations

Former Texas Medicaid director Billy Millwee testifying before the California Little Hoover Commission
Former Texas Medicaid director Billy Millwee testifying before the California Little Hoover Commission

Last November, former Texas Medicaid director Billy Millwee, now a private consultant, appeared before the Little Hoover Commission in Sacramento, California.

The LHC  is an independent state oversight agency that was created in 1962 with the mission to investigate California “government operations and – through reports, recommendations, and legislative proposals – promote efficiency, economy and improved service.”  The LHC was holding hearings regarding Denti-Cal and how to improve that system which provides dental benefits for both adults and children.

Testified about Texas dental managed care experience

Millwee was in attendance to testify regarding Texas’s transition and experience with Medicaid dental managed care.  Texas moved to managed care in 2012 after dental expenses boomed following the 2007 Frew settlement agreement and after allegations of massive fraud by dentists regarding Medicaid orthodontic treatment.  Over the last few years, these allegations have been debunked.

In 2014, after failing to pin the large spending on the shoulders of Medicaid dentists, the state fired and sued its Medicaid claims administrator Xerox for Medicaid fraud in its apparent misrepresentation of the company’s prior authorization process for orthodontic treatment. While dentists had been told to expect that a “board certified orthodontist” was reviewing and approving each request, in actual fact, Xerox “dental specialists” were mostly individuals who only had high school educations, were working from home and being paid on a piecework basis just to ensure the prior authorization requests submitted by dentists were complete.

“Fiscal agent … had no financial incentive to manage utilization…”

However, Millwee in his written testimony to the LHC, apparently debunks the state’s fraud allegation against the company and bluntly writes that Xerox wasn’t paid to fully scrutinize the prior authoriztion applications.

He wrote:

“A fiscal agent that had no financial incentive to manage utilization, quality, access or member or provider satisfaction managed the program. The fiscal agent was paid simply for volume and not the quality or accuracy of service authorizations. The result was less scrutinized authorizations and that consequently led to overutilization of services. Under FFS, orthodontia spending alone grew from $102 million in FY 2008 to $185 million in FY 2010.”

Quite a bombshell.

The video of Millwee’s live testimony is below.

Written testimony can be downloaded here.

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7 Responses

  • And that is bull regarding Millwee’s response, They certainly were paid to scrutinize because the contract paid for an entire quality control unit at TMHP and that unit has never really done the job. The failure here is that a full time State Audit team was not assigned to the contract, instead they relied on a State contract team that put too much burden on state staff with a ridiculous contract tracking system that never proved to be valuable and was designed and written by state staff.

  • The dentist know wether or not a case is eligible for payment. Most offices that participate bonded up everyone’ that came in. The sign for “free braces” in the metroplex comes to mind. Dentists have ethics problems like all professions. Just look at the numbers in volume and you can tell the good from the bad. Very ashamed of my profession on this subject.

    • I wish TDMR would recognize that just because SOAH did not find fraud the dentists are exonerated. The dentists are not “lily white” in this mess. Xerox created the gaping vulnerability by not doing what they were supposed to be doing and the unscrupulous dentists took advantage of the situation. Let’s not pretend that we don’t really know what happened here by hiding behind a few SOAH hearings that were only used to determine whether “fraud” occurred. Waste and abuse are just as much a threat to Medicaid as fraud is. At a minimum these dentists were wasteful and abusive by submitting prior authorizations to TMHP that they knew were not being looked at. That created the millions of dollars that went out the door.

      • The same tired, flawed arguments. Courts and the federal government don’t find fraud or abuse and yet the dentists must be guilty? Xerox uses high school graduates as “dental specialists” to review orthodontic prior authorization requests and this is known by HHSC for four years, yet it is the fault of the dentists that those requests were approved.

    • Flawed argument. That is why there was a prior authorization process – to ensure medical necessity was met. The state and Xerox ran it the way they wanted for years. Then when it went south they blamed dentists to hide their own culpability. We have over 140 cases where a dentist scored the HLD less than 26, submitted it to TMHP as required and treatment was approved and had to be given.

  • Millwee told US Congressional investigators that Frew was to blame for increased spending even though there was no change in ortho pay rate under Frew. Now he blames FFS arrangement. He is a shill for MCO’s, nothing more.
    Ortho Medicaid fraud was a perfected business practice- call it whatever you would like but many dentists and orthos knew exactly what was going on. Unless these cases get into more detail than the so called special Texas Medicaid definition of ectopic eruption, the providers may have a prayer of getting off the hook. Plenty of blame to go around – Medicaid patients got screwed as usual.

  • Going around the circle. The source of the conflict is provider giving away the right to practice by signing contract with any third parties. Dentist conducting as business people when what we in reality are health professional servers. It was simpler to run a practice when there were not thirds parties as NETS, MCOs , REVIEWS , ADVERTISIG, MARKETING , and all sort of business tools no applicable to a true private dental practice . Now days we have to please everyone and every patient owner to survive as what we are not businesses in contrast to when by being true dentist would give us back our right to practice endorse by our earned dental license. All the effort to obtain licenses to give the right by single signature on a contract with MCOS and/or insurances . Are we dentist still smart people?,

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