Texas Addresses Rampant Orthodontic Medicaid Fraud

June 11, 2012 — After months of news coverage, state and federal investigations, and Senate hearings on the problem of rampant dental Medicaid fraud, eleven Texas dental practices have been suspended from making dental claims against Medicaid or receiving any state funds based on credible allegations of dental fraud against the Texas Medicaid Orthodontics program.

Texas is hub for orthodontics Medicaid fraud

Based on information uncovered by a local news station, this is just the tip of the iceberg. It appears that Texas spends more Medicaid funds on braces than all other states of the union combined. In fact, tens of thousands of Texas children received braces paid for by Medicaid—despite the fact that Medicaid does not pay for cosmetic orthodontia.

Texas spent $424 million on the Medicaid Orthodontics program from 2008 to 2010. Yes, Texas is a big state, but something else seems to be going on here. Texas Senator Jane Nelson seemed to understand that something was wrong, anyhow. She called for a legislative hearing to look into the problem.

It’s hard to see how this many children end up receiving dental treatment that they don’t need. Apparently, according to the local news investigation, dental recruiters have been found trolling the parking lots outside food stamp offices, offering mothers free gift cards to have their children seen by certain dentists, who then bill Medicaid for their treatment.

New policies to address orthodontic Medicaid fraud

The Texas Medicaid program has worked to address the problem of dental Medicaid fraud by developing procedures to identify Medicaid fraud and to make it less profitable. State Medicaid Director Billy Millwee reports that the new managed dental care process uses health maintenance organizations (HMOs) to oversee treatment of individual children.

In addition, the Texas Medicaid program has recently adopted a policy of reimbursing dentists per patient rather than per procedure. This change should prevent many instances of “stacking” procedures, where a patient who needs a single procedure, such as a filling, will also receive a root canal, crown, or additional procedures that they don’t need. The old policy of paying by procedure under Medicaid also led dentists to see their patients nearly twice as often as private dentists, presumably for financial rather than medical reasons.

Another problem seems to have been staffing for the review of Medicaid claims. The Texas Medicaid and Healthcare Partnership (TMHP) had only one dentist reviewing claims from all over the state. In addition, dentists must now submit a mold of the patient’s mouth along with their claim to Medicaid.

The state’s investigation has found that as many as 90 percent of dental claims made to the Texas Medicaid program are false claims. The evidence submitted simply doesn’t support the dentist’s or orthodontist’s diagnosis.

What Can the State Do When Dental Medical Fraud Is Discovered?

There are three ways the state can respond when it finds that dentists have filed false claims against the Medicaid program:

  • Seek remuneration from the TMHP for claims that were improperly approved;
  • Seek repayment from the dentists for false claims that were paid; or
  • Take criminal action and civil action under the False Claims Act against dentists who engage in dental Medicaid fraud.

Significantly, approval by the TMHP does not protect dentists who submit false claims to the Medicaid program because dentists have a professional duty to provide only those dental services that are medically necessary and in the best interests of their patients.

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