Medicaid whistleblowers’ tips led the State of Texas to investigate, revealing that taxpayers were paying for thousands of unnecessary dental procedures.
DALLAS — Xerox Corp. and its former subsidiaries have agreed to a $235.9 million settlement with the State of Texas, justifying efforts by Medicaid whistleblowers, Dr. Christine Ellis, Madelayne Castillo, Yarubi Morales, and others to stop fraudulent billing practices. The Texas Attorney General states that it is the largest single Medicaid fraud-related settlement agreement ever in this state.
The agreement resolves allegations that Xerox and its subsidiaries, (including an acquisition formerly known as Affiliated Computer Services, Inc. (ACS)) engaged in dental Medicaid fraud and the “rubber stamping” of unauthorized dental and orthodontic Medicaid requests for approval.
Dr. Ellis, a professor of orthodontics at the University of Texas Southwestern Medical School in Dallas and client of Waters & Kraus, LLP, testified before a congressional committee in Washington in April 2012. She informed the committee of alleged Medicaid fraud in orthodontic billings by Texas dentists and corporate dental chains. Whistleblower lawsuits were filed by Dr. Ellis and others that same year.
The State of Texas investigated the allegations, revealing that unqualified Xerox employees had improperly approved prior authorization requests for orthodontic services without verifying the medical necessity of the services. This alleged failure to properly manage the prior authorization program violated the company’s contract with the State. Taxpayers thus paid for medically unnecessary dental and orthodontic procedures on thousands of children.
Texas filed its own lawsuit against Xerox and its related companies under the Texas Medicaid Fraud Prevention Act in 2014. The State later intervened in the related whistleblower lawsuits. Texas has acknowledged that the facts underlying its suit are the same as those underlying the whistleblowers’ previous filings. Xerox has admitted no wrongdoing.
“Because of Dr. Ellis and other whistleblowers who brought lawsuits against ACS/ Xerox, the State of Texas ultimately showed how Xerox and ACS, Inc. deeply compromised the integrity of the Texas Medicaid program,” said Charles Siegel, a partner with Waters & Kraus. “They faced vicious legal attacks in their courageous efforts to set the record straight.”
Under the Texas Medicaid Fraud Prevention Act, a whistleblower (also known as a relator) may file a qui tam lawsuit on behalf of the State. According to the Act, whistleblowers are entitled to 15% to 25% of the State’s recovery. However, the State of Texas is challenging the whistleblowers’ rights to a relator reward in this case.
“It is a shame that the State of Texas has failed to properly acknowledge the whistleblowers who brought this dental Medicaid fraud to the State’s attention,” commented Peter Kraus, a co-founder of Waters & Kraus.
Dr. Ellis is represented by Charles S. Siegel and Caitlyn Silhan, of Waters & Kraus in Dallas, Texas; Dan Hargrove, of the Hargrove Law Firm in San Antonio; and James R. Moriarty of the Law Office of James R. Moriarty in Houston. The Texas Attorney General announced the settlement on Tuesday, Feb. 19, 2019. The case is Cause No. D-1-GV-14-000581, The State of Texas v. Xerox Corporation, et al., filed in the 53rd Judicial District of Travis County, Texas.
About Waters & Kraus
Waters & Kraus, LLP is a national plaintiffs’ firm with lawyers litigating complex civil matters. The firm represents plaintiffs in qui tam whistleblower actions and False Claims Act litigation nationwide. Based in Dallas, Texas, the firm has offices in California, Louisiana, and by appointment in Illinois. Our attorneys represent whistleblowers exposing fraud and false claims against the government in a variety of matters including government contractor fraud and procurement fraud, healthcare fraud, assisted living fraud, SEC fraud, and Foreign Corrupt Practices Act (FCPA) violations. Contact us at 800.226.9880 to learn more about our practice and our qui tam attorneys.
Waters Kraus & Paul is the West Coast practice of Waters & Kraus, LLP, a national plaintiffs’ law firm.