Former HHSC Chief Counsel Jack Stick’s $87 OIG badges
Four firms provided “proof of concept” demonstrations of their Medicaid fraud detection software to the Texas Health and Human Services Commission and its Office of Inspector General back in 2011.
These proof of concept projects allowed the firms to access Medicaid claims data to evaluate it for fund diversion to fraud.
In the case of Reflective Medical (RMIS), as already reported in the press and by TDMR, they were able to look at three years of Texas Medicaid data and found inexplicable claims being paid such as for men giving birth, nine-year old girls receiving tubal ligations and 198-year old women getting testicular biopsies all paid for by the program.
RMIS Identified 6,470 fraud suspects, but HHSC already had a list of 8,000
David Gibson, CEO of Reflective Medical, told TDMR that after his group had conducted their review, they identified 6,470 suspect vendors.
However, when RMIS presented these results to HHSC, HHSC officials told Gibson and his team of highly regarded retired FBI special agents that HHSC already had a list of some 8,000 known or suspected fraudulent providers that included the RMIS targets.
HHSC was still paying them to the tune of $104 million over two years
Worse, RMIS found that HHSC was still paying these suspect providers and had paid out $103.9-million to them between 2008 and January 2010.
Gibson said he and his team were shocked that HHSC maintained such a list and continued to pay the suspected providers without further investigation or action over a period of multiple years.
They were surprised that the agency would be so lax in its handling of these cases since Texas would be on the hook to the federal government for any monies misspent and be open to significant penalties and reimbursement requirements.
Couldn’t understand why
RMIS, per Gibson, advised HHSC senior management that “a viable Medicaid program, managed by competent officials, would have immediately suspended all payments to those targeted providers and prioritized their investigations and prosecutions to eliminate the continued hemorrhaging of public funds.” Inexplicably, HHSC apparently chose to keep paying money to these entities for years.
In addition, Gibson said RMIS could not determine what criteria was used by HHSC to include the 8,000+ individuals and businesses on their list and why investigations were not initiated when there were apparently credible indications for contracted providers being included on the target list.
Agency goes berserk
“Initially we had great cooperation from the HHSC staff,” Gibson said. “But as we uncovered more and more evidence of inadequate program-administrative oversight, tempers started to flare at the senior management level and our welcome wore thin. Senior management’s threat to sue our company if we ever revealed the contents of our report to the legislature or the governor’s office was the final development that ended our interest in Texas. You simply cannot help an organization that actively resists assistance.”
“I believe no one wanted to take responsibility for how bad the problems were at HHSC. Candidly, we were surprised how bad it was too. ”
HHSC didn’t request “proof of concept,” the Governor’s Office did
TDMR was told by RMIS, which is a California based data mining company, that initially the firm did not seek a business relationship with the State of Texas.
Rather, it was invited by Governor Perry’s office to come to Texas and provide an independent evaluation of the management competency and magnitude of Medicaid funding diversion to fraud within the HHSC.
As a result, RMIS agreed to perform an analysis without charge to the state.
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