Lawmakers seek to crack down on Medicaid fraud in dental care

Posted Thursday, Apr. 25, 2013  comments  Print Reprints

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AUSTIN -- After the discovery that the state was spending millions of dollars on fraudulent Medicaid dental and orthodontic care, state lawmakers held hearings ahead of the legislative session to identify what went wrong and how to prevent future fraud.

And this session, lawmakers have filed a handful of bills to reform how Texas addresses Medicaid fraud. But the bills aren't progressing as fast as some would like.

"I thought that there was a heightened awareness, but I'm not seeing a lot of movement," said state Rep. Lois Kolkhorst, R-Brenham, the chairwoman of the House Public Health Committee.

In 2010, Texas paid more for Medicaid orthodontic services -- $184 million -- than the other 10 most populous states combined. After WFAA/Channel 8 reported that some corporate-run dental clinics were billing Medicaid for questionable services, the Office of Inspector General of the Health and Human Services Commission ramped up efforts to crack down on fraud and recover millions in overpayments to Medicaid providers.

In response, some providers have closed shop, stopped accepting Medicaid patients and accused the state of denying their due process rights by withholding payments without sufficient evidence of fraud. The Texas State Board of Dental Examiners was also accused of ineptitude, as many advocates argued that the underfunded and understaffed agency did not have enough regulatory power to deter fraudulent providers.

The Legislature is considering bills that would strengthen the power of the inspector general, address the due process rights of accused Medicaid providers and increase regulatory oversight of corporate-run dental clinics by the dental board.

Sen. Jane Nelson, R-Flower Mound, the chairwoman of the Senate Health and Human Services Committee, has filed the most comprehensive Medicaid fraud legislation, Senate Bill 8, which was approved this month by the full Senate.

Kolkhorst said the House Public Health Committee will soon consider the measure. "That's where the focus needs to be right now," she said.

The bill would set up a "data analysis unit" within the state agency to detect overutilization of services and identify other data trends that indicate fraudulent providers. SB 8 also strengthens prohibitions on the direct solicitation of Medicaid clients, even though it's already illegal to solicit patients in most circumstances.

The inspector general's office has completed more than 36 investigations of orthodontic providers, identified more than $303 million in potential overpayments and placed 28 orthodontic providers on payment holds in fiscal year 2012. The office has also identified $154 million in overpayments for other dental services and $31 million in potential overpayments to hospitals in fiscal year 2012.

As a result of the fraud investigations, more than 100 Medicaid providers have had payments withheld. Many of the accused providers argue they've been targeted by the state because they handle a large population of Medicaid clients.

"There's been some very negatively impacted that have had to take out huge loans just to keep their doors open," said state Rep. Bobby Guerra, D-Mission.

Guerra authored House Bill 1536, which would allow some Medicaid providers to appeal a state administrative court decision and seek a new trial in a Travis County district court to determine whether the provider committed fraud.

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