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Texas Contractor Wastes $133 Million Of Medicaid Money

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Ethan Barton Managing Editor
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Texas wasted $133 million of federal Medicaid money on medically unnecessary orthodontic treatment on kids, and then denied that it was responsible, according to a government watchdog.

A contractor didn’t ensure that dental service requests met qualifications for Medicaid funding, the department of Health and Human Services inspector general reported Thursday.

Also, Texas didn’t provide subsequent oversight of the contractor’s rulings before shelling out tax dollars, according to the report.

“As a result, Texas made erroneous payments to providers of at least $133 million over almost three years,” the report said.

Although the state agreed to repay the government and take action against the contractor, Texas Medicaid & Healthcare Partnership, Texas officials denied responsibility.

“However, the state agency disagreed that the contractor deficiencies were due to a lack of state agency oversight,” said Eugena Newton, a senior auditor in the Office of Inspector General in a podcast.

The inspector general initiated the audit after noticing “that payments for Medicaid orthodontic services in Texas increased by more than 3,000 percent – from $6.5 million in 2003 to a whopping $220.5 million in 2010,” Newton said.

Only 17 of the 106 requests reviewed from 2008 to 2011 were appropriate for Medicaid payment, auditors found. Of the 89 remaining, 78 didn’t qualify for orthodontic services, while the other 11 were missing essential documents used to determine eligibility.

The contractor’s “analysts did not make medical determinations regarding a beneficiary’s need for orthodontic services,” the report said.

Also, Texas didn’t make sure that the Healthcare Partnership was doing its job.

“The state agency did not ensure that the contractor properly reviewed each prior-authorization to make sure it was both medically necessary and that the beneficiary qualified for orthodontic services,” Newton said.

Prior-authorization is the process Texas requires to determine if requested services are medically necessary.

“These authorizations can prevent unnecessary procedures, which can undermine the well-being of the children in Medicaid,” Newton said. “Also, they prevent taxpayers from having to foot the bill for services kids don’t need.”

Texas terminated its contract with Healthcare Partnership, and filed suit against Xerox, the contractor’s parent company, to repay taxpayers the $133 million.

However, Texas “may challenge the methodology and findings of this audit” if “judicial or administrative proceedings determine that the services were properly paid, it may challenge the methodology and findings of this audit,” the report said.

The Daily Caller News Foundation reported last month that nearly 500 dentists in just four states billed Medicaid for almost $175 million for likely fake or unnecessary work on kids.

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