OIG Originally Demanded $3.2 Million, Now Owes Medicaid Dentist $380,000

SOAH judges blamed amount of alleged errors on lack of oversight of Medicaid program by Xerox and HHSC

The front-page of the Austin American Statesman Sunday morning carried the full story of the unprecedented ruling by the State Office of Administrative Hearings (SOAH) to award a Medicaid dentist back some $380,000 in legal fees from the Health and Human Service Commission Office of Inspector General (OIG) on a Medicaid payment hold case.

TDMR has obtained a copy of the SOAH proposal for decision.

Facts of the case

Here are the basics of the Rhoden Group case:

From 2006 to 2011 (the years at issue), the Rhoden Group had three offices in Corpus Christi, but only one which was a pediatric dentistry office.  There was only one dentist there who was also a board-certified pediatric dentist.  Per the evidence, 70-75% of Medicaid patients were seen at that location and by that dentist until she left in 2011 to start her own office.  Of the 87 cases OIG reviewed, 99% of the alleged violations came from that one office and doctor.

A 100% Medicaid payment hold was initially placed against Rhoden in September of 2012 but was reduced to 50% then 40%.  OIG reduced it because the pediatric dentist was no longer working for Rhoden (she had left the year before) and Rhoden had to promise not to declare bankruptcy. OIG was demanding back some $3.2 million and collected some $300,000 from  Rhoden plus a further $374,000 from the pediatric dentist in her new practice.

Had to spend $380,000 to get to payment hold hearing

Rhoden had to put up $19,000 to get the SOAH payment hold hearing and had spent some $360,000 in legal fees to defend itself since the payment hold was placed.  The judges found the legal costs reasonable.

Never about fraud. Payment hold for program violations not valid

The OIG case was so flawed and outrageous that the SOAH judges awarded legal costs to Rhoden for several reasons

First of all, the payment hold had been placed because of alleged program violations, a total of $26,000 worth, not any “credible allegations of fraud” as authorized by the Affordable Care Act.  There were never any allegations of fraud.  Yet OIG had persisted in the case although the Texas Appeals Court last December had overturned OIG rules that it could impose a payment hold on program violations.

The judges ruled that, as far as fraud was concerned, “the evidence does not remotely support this claim”

Xerox and HHSC negligent and should have alerted Rhoden about alleged billing inaccuracies

The judges found that HHSC and OIG knew for years, the same years as the alleged violations (2006-2011), that TMHP (Texas Medicaid and Health Partnership overseen by Xerox) was not overseeing the Medicaid dental program properly and not correcting providers on their billing. If Xerox had been doing this, the alleged $26,000 in errors would have been less because Rhoden would have been informed about the errors and corrected matters sooner.

OIG extrapolation based on fired OIG actuary Brad Nelson’s calculations

The OIG extrapolation of the $26,000 into some $3.2 million was done by former OIG chief actuary Brad Nelson, who has been long fired and accused of “fudging” such extrapolations.  It was Nelson and his calculations that caused OIG to settle a $16 million overpayment demand in the case of dentist Dr. Rachel Trueblood for $39,000.  Testimony showed in this case that Nelson had used an Excel spreadsheet to calculate “random samples” which the software is known to do poorly and are statistically inaccurate.  Per the decision, OIG did not dispute this.

Only $26,000 of services over four years in dispute

The judges ruled that the payment hold imposed by OIG was out of all proportion to the violations that OIG had alleged.  OIG had stipulated that the total in dispute was only $26,000 in services.  Yet OIG had withheld some $670,000 from the Rhoden Group and the former dentist that had done the work, many times more than the amount in question.

Continued payment hold even after dentist left

Another factor in the awarding of legal costs was that OIG had continued the payment hold against Rhoden even after their primary Medicaid dentist left in 2011 and started her own practice. The dentist had been responsible for 99% of the cases OIG was disputing.  OIG, while maintaining the payment hold against Rhoden, then started a 100% payment hold against the dentist in her new practice too.

Dentists continue to be exonerated

In the last three years, only three dentists have gone before a SOAH court on allegations of Medicaid fraud, waste and abuse despite former HHSC and OIG executives Jack Stick and Doug Wilson testifying last legislative session that there was some $500 million of dental Medicaid fraud in Texas.  All three cases found the dentists innocent of such allegations.


One Response

  • All this makes me wish that I’d taken Linda Altenhoff’s courses on the costs of waste, fraud, and abuse in Texas Medicaid a couple of weeks ago at the TDA meeting. Almost the first message I got from TDMR was about her being appointed chief dental advisor to the OIG. Soon after she because the head of the dental division of Texas Medicaid, a complaint was lodged by a child’s mother against me. Rather than contact me for my side of the story, which I understand is the standard protocol, Linda sent it immediately to the State Board of Dental Examiners. So, the first I knew of it was when I got the complaint notification from the Board. After I sent a letter of response to them with my side of things, it was immediately thrown out. I continue to wonder how Medicaid can continue to lament the greed of Texas dentists in not signing up to be providers when this is the kind of treatment that is apparently standard on their part.

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