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Unnecessary orthodontic payments reach $191 million in Texas

OIG tells state to return $133 million to feds after it failed to meet prior authorization requirements

It's been a difficult year for the Texas Health and Human Services Commission (HHSC), and it doesn't look like it's getting any easier.

Already, the agency's top officials resigned amid a months-long scandal involving a $110 million no-bid contract awarded to 21CT to detect Medicaid fraud. Now the Texas HHSC is under fire for unallowed Medicaid payments for orthodontic services totaling at least $191.4 million over a four year period, according to an Office of Inspector General report.

Medicaid only pays for orthodontic services that are medically necessary, requiring claims to undergo a prior authorization process. The HHSC contracted that process to the Texas Medicaid and Healthcare Partnership (TMHP). An OIG review found that, of 106 sampled prior authorization requests for orthodontic services, only 17 were approved according to state regulations. Of the remaining 89 that were improperly approved, 78 did not qualify for orthodontic services and 11 did not have proper documentation.

By extrapolating this sample size, the OIG estimated that Medicaid payments for unnecessary orthodontic services reached $191 million--$133 million of which belonged to the federal government. The OIG recommended that Texas refund that money to the feds and determine any additional improper payments distributed through the prior authorization program.

A spokeswoman from the Texas HHSC told the Houston Chronicle that the agency would not repay the funds until it had resolved a lawsuit against Xerox, which had been contracted to approve orthodontic services.

Unnecessary dental services have been a hotspot for potential abuse in Texas for more than a decade. Between 2003 and 2010, Medicaid payments for orthodontic services spiked from $6.5 million to $2250.5 million even though enrollment grew just 33 percent.

Last year, in an exclusive interview with FierceHealthPayer: AntiFraud, Assistant U.S. Attorney for the District of Columbia, Ted Radway, said that unnecessary dental services, particularly among children, are a growing concern across the country. Just last month, OIG auditors revealed troubling Medicaid billing practices among dentists in California in which 8 percent of providers were paid nearly $117.5 million in 2012.

For more:
- here's the OIG report
- read the Houston Chronicle article

Related Articles:
OIG auditors find troubling billing practices among Caifornia dentists
Texas state audit reveals "operational defects" led to 21CT deal
Top Texas officials resign following fraud detection contract scrutiny
Medicaid contractors need better oversight
Assistant U.S. Attorney Ted Radway on fighting Medicaid fraud