Last Legal Cases of the Great Texas Medicaid Orthodontia Debacle Settled

Byron Harris, WFAA

Almost a decade ago, on May 13, 2011, Byron Harris, famed WFAA investigative reporter, started a large freight train roaring down the track with his first story of a series, “Texas taxpayers pay big for straight teeth.”

False narrative destroyed reputations and practices

That careening train, building momentum story after story, stirred the bitterest of Texas political outrage. There is no worse crime than this state spending more than its accursed enemies New York and California on straightening poor children’s teeth.

“Must be Medicaid fraud” was the legislative and bureaucratic outcry. “We would never approve anything like this,” they said. “Deceitful dentists taking advantage of us,” they said. “Those HLD scores were faked.”

Yada, yada, yada.

Almost a decade later, the narrative has turned around.

Bureaucratic bungling cost Texas its reputation

It was bureaucratic bungling that caused and continued the extraordinary spending on Medicaid orthodontia, not a conspiracy of healthcare professionals. So much has been uncovered over the last decade that proves this.  We’ve written about it extensively.

The vast majority of Medicaid fraud investigations arising from 2011 were settled back in 2015 after former HHSC chief counsel Jack Stick, former OIG Inspector General Doug Wilson and executive commissioner Kyle Janek finally lost their jobs after touting that dental Medicaid fraud was in the hundreds of millions of dollars annually and their inept handling of agency contracts. The new broom swept clean.

Mistake in hindsight to move cases from OIG to OAG in 2014

However, in December of 2014, a number of dentists and their practices had their legal cases moved from under OIG to the OAG before the house cleaning. These dentists wanted to get to trial to prove their innocence. They wanted justice, not the unrelenting wild allegations they had experienced under HHSC and its OIG.

Sadly, the new broom that cleaned house at OIG never got a chance to sweep up at the Civil Medicaid Fraud Unit of the OAG.

SOAH judgments ignored 

Even though several of these dentists and their practices, notably Harlingen Family Dentistry and Antoine Dental Center, were cleared at their payment hold hearings at the State Office of Administrative Hearings, this agency couldn’t let go. OAG even paid $250,000 for some hired guns from private qui tam law firms to run the Antoine Dental Center SOAH case but still lost in spectacular fashion. No lesson learned there.

It’s about the money, stupid, not crime

Not Medicaid fraud: Former HHSC executive Jack Stick’s $2,800 custom leather chair.

While we don’t have all the details on all the final settlements at this time, we do know that the OAG made the cost of going to trial so prohibitive and threatening that they extracted the maximum possible settlements in mediation. There was no admission of wrongdoing by the parties.

However, the prospect of a summary judgment in court like the one that befell Dr. Richard Malouf was a daunting example. The OAG was able to turn a series of $68 billing errors that totaled around $500,000 into a $16 million judgment through TMFPA penalties and interest.

In the Malouf case, there was no finding that the services weren’t delivered. There was no finding that the patients’ HLD scores were falsified or didn’t qualify for Medicaid treatment. There was no evidence of what you might call real fraud. His billing code was incorrectly used for services done by other dentists.

End of an era

Regardless, it is over. We are at the end of an era.

Due process is apparently for those that can afford it.

When a government agency with the unlimited resources of the 9th largest economy in the world bears down on the necks of individual health care providers and their practices, can you really expect justice to prevail?

No, just an expensive, inconvenient settlement for money. Innocence or guilt plays no part in it.

Cui bono? Who benefits?

The same scenario just recently played out when Texas’s vaunted power grid failed four million Texans when they needed it most and charged exorbitant rates to boot. Rather than go after well-connected power companies for their abject failure to winterize their facilities, the lieutenant governor recently blamed Texans who trusted the system and opted for unregulated power rates for their own bad luck in getting high power bills.

It is always the person who can’t afford to fight back that gets the short end of the stick.

At least it’s not a Jack Stick in 2021.

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