Xerox Ortho Staff Worked from Home, Didn’t Review Material and HHSC Knew in 2008

Texas Medicaid fraudAs reported in May, the Office of the Attorney General of Texas filed suit against Xerox as the state’s lead contractor in the Texas Medicaid and Healthcare Partnership.  The state is seeking to recover fraudulent Medicaid payments for orthodontic and dental services that were improperly approved by Xerox from 2003 forward.

The Texas Health and Human Services Commission also terminated Xerox’s contract in TMHP at the same time.

Starting in 2006, Xerox Prior Approval (PA) Dental Specialists worked from home

One of the allegations made by the OAG in the lawsuit is that around August of 2006, Xerox implemented cost saving measures including launching its Activity Based Compensation (ABC now called Achievement Based Compensation) scheme at TMHP.  ABC is a system whereby employees are paid by how much they accomplish based on certain metrics, not an hourly rate.

The state alleges that Xerox, as part of the ABC program, directed TMHP dental specialists, who were responsible for all orthodontic pre-approvals in the state, to work from home as well as get paid on a piece-work basis!

Home-bond PA staff had no access to any submitted medical documentation sent in by dentists

Not only that, but these home-based dental specialists did not have access to the medical documentation submitted by dental Medicaid providers!

HHSC-OIG auditors find out in 2008

Worse, as part of the 2008 audit of the TMHP PA process by the HHSC Office of the Inspector General, the HHSC-OIG auditors observed the Xerox clerical personnel APPROVING orthodontic pre-approval requests “without any review of submitted medical documentation”!

HHSC-OIG must have found out this had already been the condition for at least two years and that these staff were working from home.  Yet it was not mentioned in their audit.

They did note that these Xerox home-based workers from September 2007 to February 2008 had approved $52.6 million in Medicaid orthodontic pre-approvals.

HHSC-OIG lamely questions Xerox and does nothing

The OAG suits notes that HHSC-OIG staff, in response to their discovery, “questioned whether this process met Xerox’s contractual obligations.  Xerox management vigorously contested the issue.”

The formal recommendation of the auditors was only that “Xerox should sample the orthodontic PA requests to ensure the PA requests meet the criteria for Texas Medicaid benefits.”

This is Texas taxpayer dollars at work at HHSC.


The document is on the OAG website, Page 9 and 10.

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