Straightening out Texas Medicaid's dental program

Anywhere there's public money to be had, there are people ready to take advantage -- especially when state regulators aren't doing their jobs properly.

That appears to be what happened when Texas allocated additional money for dental services for poor children. Some orthodontists saw a chance to get rich off Medicaid by putting braces on kids who didn't really need them.

Now, the Texas attorney general's office is investigating 31 dentists for possible fraud, and two others are awaiting trial on federal charges, according to testimony presented Tuesday before the House Public Health Committee.

The Texas Health and Human Services Commission has tightened both the rules and oversight for taxpayer-funded orthodontic work.

And federal officials are auditing the Texas Medicaid orthodontic program, an examination expected to take six months to a year to complete.

But when will taxpayers get their refunds for services improperly rendered?

Abuses came to light last summer when Dallas' WFAA/Channel 8, in a series called "Crooked Teeth," reported that from 2008 to 2010 Texas spent more than $400 million on braces for Medicaid-eligible kids.

No doubt some of those children desperately needed their teeth fixed. Children with serious dental problems miss millions of hours of school each year because their parents can't afford treatment. One reason the state increased its Medicaid payments for dental work was to comply with the settlement of a lawsuit that was brought because preventive medical services and dental checkups for the poor were underfunded.

But opportunists quickly learned to game the system. And it was lucrative for some operations that reaped multiple millions in public funds.

Orthodontists got paid for each time they tinkered with a child's mouth, and the contractor hired by the state to process dentists' claims for reimbursement got paid by the amount of paperwork it pushed. The forms weren't checked to make sure braces were justified, only to make sure the blanks were filled out right.

State records showed that taxpayers spent $100 million on braces in 2008, $140 million in 2009 and $184 million in 2010, WFAA reported. Want a comparison? California in 2010 spent $19.5 million.

But the rules don't allow Medicaid to pay for cosmetic braces. The rules require special approval for braces on children younger than 12 because they usually don't have their permanent teeth. Even so, almost 19,000 under-12s got Medicaid-funded braces in 2010. The contractor's dental director, who would have had to approve every one of those cases, was replaced last year after the glaring flaws in oversight came to light.

The TV reports also led to other changes.

Orthodontists hired by the state now have to review cases before Medicaid pays for them, and only work that's medically necessary will be covered. Providers must submit full-cast dental molds of patients' teeth along with other documentation. And starting in March only children at least 13 can get braces, with limited exceptions. Payments to dentists also will be bundled, rather than made per visit, to remove the incentive for excessive office visits.

But rules are only as good as their enforcement. State officials must be vigilant.

Health and Human Services Commission officials have said they'll seek repayment from the contractor for reimbursements it shouldn't have approved, and any suspected fraud will be referred to the attorney general's office.

Federal authorities in 2010 brought Medicaid fraud charges against Carlos Armin Morales-Ryan and Nelia Patricia Garcia-Morales, a husband and wife who ran a Laredo orthodontics center. From 2005 to 2008, the pair billed Medicaid for about $800,000 in services they couldn't have provided because they were in Dallas, Florida, the Virgin Islands or elsewhere at the time, according to the indictment.

Charges against other providers most likely are warranted. So is a substantial amount of restitution.

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