Over the past two weeks, it has been a major story that Attorney General Ken Paxton took a $100,000 donation for his personal legal fees from a friend whose company was accused of Medicaid fraud. The company just settled the allegations for $3.5 million and no admission of guilt. Press outlets have called for Paxton to return the money, and have further labeled Paxton’s taking of the funds as inexcusable.
Settlements aren’t necessarily an admission of guilt
TDMR knows as much as anyone that such a settlement is not necessarily an admission of guilt—it is often a simple business decision. One need only look to the facts of the state’s settlements with Carousel Medical of Austin or Smile Magic of Dallas.
Those cases were handled by a now disgraced former state Inspector General that was using heavy handed payment hold tactics to extract settlement dollars using dubious claims and manufactured statistical extrapolation.
The case against Preferred Imaging, owned by Paxton’s benefactor James Webb, is different in one very important way. It was being investigated and prosecuted by the feds and not the state.
Feds get involved when case is strong
It is our observation that the Federal HHS-OIG (Health and Human Services Office of Inspector General) rarely gets involved in cases in which the evidence of guilt is not strong enough to go to court and obtain a conviction. All of the cases that we have seen in which Medicaid providers have been convicted of Medicaid fraud in Texas are federal cases, not state cases.
Dental practices still under the gun from 2011 despite favorable rulings
There is one dental case, involving six different practice groups, still being prosecuted by the Office of Attorney General over allegations of Medicaid fraud. It has no federal involvement and its history now goes back five years.
These practice groups were sent there at the end of 2014 in the hopes of getting them due process and a trial because they were the longest outstanding cases under the disgraced former HHSC-OIG. Two of the defendants, Antoine Dental and Harlingen Family Dentistry, had already been found not guilty of such allegations by administrative judges in lengthy trials.
However, that dream died because whatever virus had infected HHSC-OIG before the appointment of new Inspector General Stuart Bowen Jr. who sterilized it had been caught by the Civil Medicaid Fraud division of OAG. Those cases languish today because the OAG refuses to take the same route as the new Inspector General who appears to work conscientiously towards settling outstanding cases for the state while questioning possibly unjust investigations.
It is particularly galling that the person who signed off on the Preferred Imaging case for the Texas Attorney General, Ray Winter, head of the Civil Medicaid Fraud division, is the one still pursuing the dentists.
Attorney General reputation compromised
The Paxton donation is appalling for several reasons despite the incredible fact that state bribery laws don’t outright prohibit it.
1. It is not credible that Paxton had no knowledge that his patron’s company was under investigation for Medicaid fraud.
2. It is not credible for the OAG to say they weren’t involved in the investigation.
3. Paxton’s office has other problems such paying off fired staff not to talk using “emergency leave” which is against state rules. There are new allegations regarding mishandling a contract with Accenture.
4. Paxton and even Gov. Greg Abbott have referred to the criminal charges against Paxton for securities violations as “political.” This incredible assertion by Texas’ top officials throws the workings of their own criminal justice system which is supposed to be based on dispassionate interpretation of the law into disrepute. What should other Texans think who are under criminal indictment?
Public trust needs to be maintained in the justice system
In earlier times, politicians who were accused of improprieties (much less criminal charges) would resign until they were cleared of such accusations to maintain the public trust.
It appears to be opposite in Texas.