The Statesman published a landmark article this morning by reporter Eric Dexheimer regarding the great Texas orthodontic debacle.

Story finally pieced together

Thanks to the state’s fraud suit against Xerox, its former Medicaid claims administrator summarily terminated back in early 2014,  new information has come out and the sordid story has finally been pieced together on how the Texas Health and Human Services Commission let its private contractor run amok for years and years, rubber stamping medical necessity determinations for tens of thousands of Medicaid orthodontic prior authorization requests from dentists.

The repercussions of the scandal have been immense.  Texas taxpayers are now on the hook for $133 million to the federal government for the screw-up.  Thousands of children were thrown out of treatment. Many members of the dental profession implicated in the scandal lost their practices, life savings and reputations.  The entire profession was tainted by being thrown under the bus in 2011 by the state and media ie. WFAA.

Vindicates position of dentists and TDMR

The story and its findings vindicate the position of TDMR since its inception that there was more than meets the eye in this scandal and that due process rights needed to be respected.  At the end of the day, it wasn’t the dentists at fault.

Bureaucratic incompetence

What did this happen?  The obvious is incompetence.

Managers and executives at HHSC and its Office of Inspector General were told in 2007 by the state manager of the ortho program, a dental assistant that had worked under the previous contractor NHIC, that Xerox’s process was out of control.

“By early 2007, [Vivian] LaFuente noticed the number of procedure requests had exploded from a dozen a day to hundreds — and yet Xerox employed only a single full-time dentist.

“My concern were the numbers — that how can a, one, licensed dentist approve this many cases in one day?” she recalled in a December 2016 deposition…

When LaFuente brought her concerns to the attention of her manager, however, she said they came to nothing.

“Well, she appreciated my work and for informing her of what was going on,” LaFuente recalled. “But that was about it.”

Several months later, documents show, LaFuente forwarded her concerns to the state health agency’s inspector general, the unit in charge of watchdogging Texas Medicaid operations. Once again, the warnings apparently went unheeded.

When asked about Lafuente’s alerts, [Billy] Millwee, the program head, said he could not explain why they had not “escalated” up the state’s chain of command. (Now a consultant for a Philadelphia health care company, Millwee did not respond to an interview request.)

It goes on.

In late 2008, an investigator from then-Attorney General Greg Abbott’s office issued yet another warning. Marcus Holley had just interviewed Felkner as part of a Medicaid fraud case. Felkner explained that he trusted the dentists to accurately represent their patients’ need for Medicaid procedures, so he almost never rejected a request.

“We are concerned that TMHP might not be fulfilling its contractual requirements,” Holley wrote to the state Health and Human Services Commission.

It wasn’t until five months later, in May 2009, that Millwee summoned Xerox executives to a meeting. “I told Xerox that I needed assurances that dental professionals were reviewing the requests and that they were not just ‘rubber-stamping’ them,” he recalled in an affidavit.

“They … assured me that Xerox used qualified dental ‘para-professionals,’ ” Millwee continued, adding, “If Xerox had told me the truth about what it was and was not doing … then I would have immediately taken steps.”

States holds Xerox misled HHSC

The state takes the position that Xerox misled HHSC officials.

“There was opportunity after opportunity after opportunity for Xerox to come clean, and they did not,” said [Ray] Winter, the state’s lead lawyer. He said he has identified more than 40 separate instances in which Xerox misled state officials about its dental program:.

“The (state) folks who were assessing this were lied to by people they trusted and worked with,” he said.

Millwee said he was ready to officially declare Xerox had failed to follow the terms of its contract, a step that could have resulted in large fines. Instead, after meeting with company executives, he dropped the matter — essentially choosing to believe what Xerox’s executives said over what government investigators had found — a decision he now regrets.

Criminal activity involved?

Considering the hundreds of millions of dollars involved and the years of inaction after the Xerox process had been red-flagged as potentially fraudulent,  one has to consider the possibility of collusion, that money exchanged hands somewhere.   Back in 2012, Sen. Lois Kolkhorst, then head of the House Public Health Committee, wondered out loud during a committee hearing why HHSC officials were still doing business with Xerox (and she worries now the same about DMOs being under supervised).  It wasn’t until two years later that Xerox was terminated and sued.

Something smells

Look at the saga of Jack Stick, the former enforcer for OIG and HHSC’s top legal counsel.  His campaign to blame dentists for the debacle wreaked havoc for years and he walked away from the 21CT affair only losing his job.  He openly stated in a legislative committee that bankrupting implicated dentists was good so the state would not have to pay back monies to the federal government.  At the end of the day, he complained he was a “whipping boy.”

State actors just walk away unscathed after providers bankrupted and reputations shredded

How can state bureaucrats walk away from such a debacle with absolutely no consequences after their actions and inactions had dentists all but publicly flogged, destroying their reputations, careers and livelihoods?

That is criminal and it should be investigated.