Medicaid Dentists Accuse HHSC and Xerox of Conspiracy, Negligence and Seek Damages

xerox -hhscLawyers for a number of Medicaid dentists have filed their response to a revised suit filed by the state in the wake of the Sunset Advisory Commission hearings last December.

Nonsuited administrative cases a victory for due process rights

Prior to Christmas, the state nonsuited (dismissed) its ongoing administrative actions against a number of dental practices that had been accused of “credible allegations of fraud” for their Medicaid orthodontic billings.  The cases had been going on since 2011 and none had gotten to the stage of an overpayment hearing.  The affected practices include Antoine Dental Center, M&M Orthodontic, Harlingen Family Dentistry, Herrscher, National Orthodontix and RGV Smiles.

Now before Travis County District Court instead of HHSC kangaroo court

While the dismissal of the administrative cases was welcomed by the dental practices, the Office of the Attorney General immediately filed a new civil lawsuit against the dentists to be heard before Travis County District Court and a jury – a victory for due process rights for those providers as they had been slated to go before the HHSC Appeals court.   The fact that any of the administrative cases would have been heard by an HHSC administrative judge represented a dubious conflict of interest in that a judge in that court had already overturned a finding of “no evidence of fraud” by a pair of SOAH judges in the payment hold case of Antoine Dental Center.  A copy of the new petition is available – State v. Dentists.

The dentist’s response to this new lawsuit makes a number of hard hitting allegations:

HHSC and Xerox were negligent

1. Both the HHSC and Xerox committed negligence and gross negligence of their fiduciary duty in not properly reviewing the Medicaid orthodontic prior authorizations on which the dentists relied, and the state now says shouldn’t have been approved.

“Xerox’s and the State’s actions constitute negligence and gross negligence. Xerox was required to render medical diagnoses. To that end, Xerox had a duty to employ a licensed dentist to render a diagnosis supporting or denying medical necessity. Xerox had a duty to assure that the personnel had appropriate education, training and experience to render such a finding. Xerox had a duty to review the supporting prior authorization documentation (such as x-rays and photos) to determine whether the requested services were medically necessary… The State permitted Xerox to process as many prior authorizations as possible without the required clinical dental review and without using medically knowledgeable personnel. The State conspired with Xerox to allow Xerox to violate the law. The State and Xerox created a scheme to rubber stamp and/or allow no legitimate review of prior authorizations submitted by the defendants. “

HHSC and Xerox knowingly let faulty prior authorizations continue for years

2.  HHSC knowingly let Xerox continue issuing orthodontic prior authorizations long after it knew that Xerox was not conducting a proper medical review of each request but simply rubber stamping them.

“The State conspired with Xerox to review and approve Defendants’ prior authorization forms and corresponding Handicapping Labio-lingual Deviation (“HLD”) score sheets, which the State now claims should not have been approved. This led defendants to believe they were applying the correct standards. Defendants actually and justifiably relied on the State’s prior authorization approvals, and the record of approvals for similar orthodontic work to correct similar dental conditions year-after-year.”

HHSC and Xerox sought to shift blame from themselves to the dentists

3. HHSC conspired with Xerox to shift blame for Medicaid orthodontic spending from themselves  to the dentists.

“The conspiracy was committed with the intent to shift blame from the State and its agent, improperly blame the defendants, and enrich the State and Xerox. By recouping money from providers that were not actually to blame, the State and Xerox hoped to limit their own liability in the event of a Federal clawback action, and/or respond to unflattering news reports of Texas’ payments for Medicaid braces.”

Medicaid dentists seeking damages for harm to practices and reputation

As a result of this conspiracy and the damage that continues to this day, both financial and to their reputations, the dentists are seeking actual and exemplary damages from the state.

“Defendants suffered and continue to suffer significant damage. Xerox’s and the State actions, independently and in collusion, caused injury to defendants. As a result of Xerox’s and the State’s actions, defendants submitted requests for payment and Xerox actually paid for those services, some defendants were placed on payment hold, defendants were forced to defend themselves in an administrative payment hold hearing, and defendants faced administrative claims by HHSC for repayment (including claims for treble damages and attorney fees). Defendants’ reputations and businesses have suffered severe injury. Defendants seek recovery of actual and exemplary damages, interest, court costs, and attorney fees.”

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