OIG Payment Hold Ending 40-Year Dental Career in Financial Ruin

After a 40-year career, Dr. Paul Dunn is now on the verge of bankruptcy because he helped Medicaid children.

In 2012, HHSC-OIG placed Dunn’s practice in Levelland under a 100% “credible allegation of fraud” payment hold for his orthodontic Medicaid billings.  He was told by Jack Stick, OIG’s Deputy Inspector General for Enforcement, at an informal resolution meeting that Stick didn’t think Dunn had committed fraud. Despite this incredible admission, OIG continued the payment hold at a 51% level, a level at which Dunn, a dentist in a basically single practice, could not continue to support himself.  Medicaid patients had been over 50% of his practice.  Worse, he could not afford to defend himself from OIG’s revised allegations that he had overbilled the state of Texas.

Earlier this year, in support of a bill on due process rights for Medicaid providers, Dunn testified before the House Human Services Committee about his experience and financial hardship.  He felt he had nothing to lose. Stick was at the hearing and verified to the committee members that he had indeed told Dunn he didn’t think he had committed fraud. Yet, Stick went on the offensive and said that Dunn had instead overbilled Texas Medicaid for over $2 million in orthodontic billings that didn’t qualify and he wanted to collect.  Stick wasn’t concerned that all Dunn’s billings had been pre-approved by the state’s contractor, the Texas Medicaid and Health Partnership, and there was already an administrative court ruling that attributed state orthodontic approvals to the vagueness of Texas Medicaid policy. There are now two such decisions.

Dunn recently wrote a letter to the chair of the House Human Services Committee, Rep. Richard Peña Raymond, about his now dire circumstances.

Dr. Dunn has kindly given us a copy and is allowing us to make it available online and for download. It is reprinted below. Rep. Raymond also had no objection to the letter being made public.


Rep. Richard Peña Raymond
District 42
Room 1W.4, Capitol P.O. Box 2910
Austin, Texas 78768

Dear Rep. Raymond:

I have decided to write to you at this time because very shortly my financial resources will be entirely gone and at the end of my 40 year career as a dentist, I will find myself pretty much destitute thanks to the continuing Office of Inspector General investigation into my orthodontic dental practice. By January 1, 2014, I will have exhausted all savings, extra income streams and I am planning on closing my practice because I do not have the resources to continue or defend myself. This whole situation has been very hard on myself and my wife who is now my receptionist. She is 67 years old and under the care of Arrington Cancer Center in Lubbock for breast cancer.

We had hoped for a wonderful retirement together but that dream has been shattered.

As you may remember, I testified before your committee earlier this year. I decided to come forward because I couldn’t see how the situation could get any worse. I talked about the fact that I was under a 51% payment hold from 01G, reduced from 100% (still didn’t’ get any money for over 3 months), despite the fact that Jack Stick of OIG has told me in an informal meeting that I had not committed fraud. Mr. Stick then stood before your committee and despite that, said that I owed over $2 million that needed to be paid back to the State.

This 49% that I do receive from the state has not been enough to run my practice which has been mostly Medicaid patients and I have not been able to afford an attorney any further.

In fact, due to the lack of cash flow, I have not been able to make my IRS regular payments and I owe the IRS as of October 15, 2013, $64,000. Since I haven’t paid that, on or about the 15th of December the IRS will place liens on my bank accounts and all holdings.

I have not committed fraud, so why am I being driven into bankruptcy? If Jack Stick wants me to pay back “overpayments” why is he destroying my source of income to pay back funds to the state.

I have spent a lifetime working with Medicaid kids. I accepted a lower fee and knew that going into the Medicaid system. The State of Texas repays my helping poor kids by destroying a 40 year dental practice along with my life and retirement.