This past Friday, the Texas Supreme Court dismissed a petition from the Texas Office of Attorney General to review a 3rd Court of Appeal decision preventing the Health and Human Services Commission Office of Inspector General from placing payment holds on Medicaid providers for only allegations of program violations. State and federal law only provide for payment holds on Medicaid providers when there are “credible allegations” of fraud.
Another legal victory for dentists
The decision to dismiss the petition by the Supreme Court marks another victory for Medicaid dentists over the state in the now four-year running dispute over payments for Medicaid orthodontic services between 2007 and 2011.
The Harlingen Family Dentistry dental practice initially brought the action against the state and was later joined by Trueblood Dental Associates.
HHSC-OIG used self-created “rule” to justify program violation payment holds against Medicaid providers
Back in 2011, HFD [HFD case and further articles] had been placed under 100% payment hold for its Medicaid orthodontic billings by HHSC-OIG for “credible allegations” of Medicaid fraud under both state and federal law. However, when HFD in 2012 was cleared of these allegations by judges of the State Office of Administrative Hearings and HHSC, HHSC-OIG continued a 9% payment hold against HFD based on allegations of Medicaid “program violations” despite the fact that no state or federal law allows for such a payment hold. HHSC justified the action by creating a self-styled “rule” with no legislative backing to do so.
“Rule” struck down by court
It was this rule that was struck down by the 3rd Court of Appeal in a decision earlier this year.
In fact, per the ruling from the 3rd Court of Appeal, HHSC’s “program violation hold” rules created an absurd result – payment holds for fraud receive due process review through an expedited administrative hearing while payment holds for minor program violations receive no review.
The attitude of the state in trying to maintain the “rule” was summarized by HFD’s attorneys in its response to the petition from the Office of Attorney General:
We are the OIG. Through our self-created administrative rules, which do not track our Legislative authority, we can keep any money you earned treating patients at State request. We can do this even after we have forced you to successfully show that there is no credible evidence you did anything fraudulent or purposefully wrong. We will continue to hold all your funds when we suspect you might have committed some minor technical violation of any of the other labyrinthine regulations we have created, or that you might commit such a violation in the future. Even though we will give you a hearing when we take your money for allegations of fraud (because we have to under the statute), you get no such hearing for unintentional program violations. Moreover, as long as we suspect there might be some minor program violation relating to even a pittance of the held funds, we will hold all your funds as long as we damn well please (our investigations usually take decades, and we have never in twenty years actually had a merits hearing about program violations), and there is nothing you can do about it until we get around to it.
Monies returned to dental practice
As a result of the Supreme Court dismissing the review, HFD is receiving back the remaining several hundred thousand dollars that had been withheld from the practice. The amount initially withheld was some $1.3 million, the majority returned last December after Jack Stick resigned from the Health and Human Services Commission as chief counsel as well as Doug Wilson as Inspector General.
The Supreme Court notice – PETITION FOR REVIEW
OAG Petition – HHSC’s Petition for Review
HFD’s Response to the petition – HFD’s Response to Petition for Review 14-1088-brief only