The following is the testimony presented last week to the Texas Senate Committee on Health and Human Services by Jason Ray of Riggs Aleshire & Ray in Austin. Ray is an attorney for a number of Medicaid dentists who have been placed under HHSC-OIG payment holds that allege Medicaid fraud.
My name is Jason Ray, and I worked in the Attorney General’s Administrative Law Division for five years representing agencies and prosecuting licensees for fraud and other misconduct. Along with my associated counsel, I now represent providers that have, collectively, been improperly charged with over $250 million in Medicaid fraud. Not billing errors or simple mistakes in overpayment, but fraud. In my opinion, this agency’s actions demonstrate a rejection of the most basic tenets of due process, and a reckless disregard for the rights of both the patients and the providers who serve them.
Here are some examples:
1) In one case, last month I conducted a deposition of the OIG and asked what evidence the agency had to support its fraud claim against a dentist. The OIG witness said that it had no evidence itself, because it relied solely on the opinion of its dental expert in the case. So a week or two later I deposed the OIG’s dental expert, who testified that he had not been asked to determine if there was fraud, he had no opinion regarding whether the dentist had committed fraud, and the expert would not make any determination about whether the dentist’s actions were fraudulent. Meanwhile, the provider has been on 100% payment hold since September 2012, has closed its three locations, and filed for bankruptcy last month.
2) In another case, the OIG conducted an audit of a dentist’s billing and records for the 2007-2012 time frame. The OIG ultimately put the dentist on a 100% payment hold, claiming that the result of its audit revealed a credible allegation of fraud. It nearly put the provider into bankruptcy. Nine months later, the OIG agreed that the provider had not actually committed fraud and settled the case. The provider finally got off of the payment hold by agreeing to release the State from any liability and pay the State 30% of what it had already withheld from the provider as part of the payment hold. The settlement agreement found no fraud and no violation by the provider.
3) That is not uncommon. It is very strange that the OIG levies a payment hold by alleging fraud, but continues to encourage those same businesses to stay in the Medicaid system. In fact, with the exception of one provider I know of, every payment hold that has settled has permitted the provider (originally charged with fraud) to stay in the system, continue to provide services, and continue to get paid by Medicaid. The OIG is quick to report to you how much fraud they have identified, and how many providers the OIG has placed on payment hold under a credible allegation of fraud; but I think you would shocked to learn how few fraud convictions or findings have ever been secured. The fact is, when a law enforcement agency like the OIG alleges that a Medicaid provider is a “fraudster,” then uses a payment hold as leverage to extract money and allows the alleged “fraudster” stay in the Medicaid system, the OIG’s actions begin to look less like law enforcement, and more like a shakedown. If the OIG puts someone on a payment hold for alleged fraud, the overwhelming majority of those providers should end up either convicted of fraud or out of the Medicaid system.
Speaker Straus recently called for a “conversation about the use of taxpayer dollars and the priorities we set as a state.” Thank you, Mr. Chairman and members, for allowing me to be part of that conversation, and point out some work that needs to be done in the OIG. I support the OIG’s efforts to root out and stop fraud. I wish they would actually do it, and stop abusing the system by crying “fraud” when all they really seem to want is money.