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Reporters’ digging reveals one of the largest scandals in Texas Medicaid program Date: 07/15/15

The tip about troubles in Texas’ Medicaid dental system was part of a routine conversation. But it was enough to make Byron Harris start digging.

He and his colleagues at WFAA-Dallas spent nine months scrutinizing data, wearing out shoe leather, following up on leads and trying to get people to talk.

Their 11-part investigative series aired in 2011. The “Crooked Teeth” stories raised profoundly troubling questions about oversight of the Medicaid dental program in Texas; the millions upon millions spent on orthodontic services for beneficiaries; the suspect billing practices of many providers. The project uncovered the largest Medicaid scandals in the history of Texas. Government audits, reform efforts, lawsuits followed in its wake.

Harris continues reporting on the issue. He recently filed another story after federal officials concluded that the state owes $133 million for unnecessary dental work. “Texas paid $191,410,707 for unallowable orthodontic services from 2008 through 2010, according to a federal investigation,” Harris told viewers on June 3. “And officials say the federal government now wants a large portion of that money back.”

In this “How I Did It” post, Harris takes us back to the very beginning of “Crooked Teeth.” He explains how the project began, and how it unfolded. He also shares some wisdom on how to use data to follow up on a tip.

– Mary Otto

Byron Harris

By Byron Harris

I was in my dentist’s chair. He knows I’m an investigative reporter and we usually talk about what I’m working on in general terms. He said there was a buzz among dental professionals over the huge growth of Medicaid orthodontics. Orthodontics is basically prohibited under Texas Medicaid rules because crooked teeth are not a life-threatening condition. We had done a dental investigation of South Texas Dental a few years earlier when a young man died of over-sedation after being treated there. We became interested in other parts of that company’s practice and had some expertise in obtaining Medicaid expenditure data. The issue then was pulpotomies (root canals) on children and steel crowns. Also, my producer Mark Smith had conducted a dental investigation while at the Houston Chronicle and had some good dental sources. We made a very large data request from the Texas Department of Health and Human Services, which administers Medicaid in Texas, asking for the top 200 billers in Texas for the dental codes which cover the most common orthodontic procedures.

Finding the relationships

This data takes a long time to acquire and often involves a fee. All told, we probably spent about $1500 just for the data – but it was worth it. Another challenge is understanding how to interpret the data. Billing data is sometimes filed under the dentist’s and other times by an affiliated corporate entity, and the corporate relationships of the top billers are not always immediately evident.

Some affiliations could be determined by searching the Internet, but not always. Some billings that were identified by dentist were really chains. Some billings were identified by a group ID number and some by individual dentist’s billing numbers. Figuring out the connections sometimes required us to drive around to various office addresses shown in the data, then checking branding on the offices to see who was related to whom.

With millions of dollars flowing to the top providers, we ended up with story so stunning that the data propelled it. We were able to document a disturbing trend in which Texas was paying for work essentially not allowed under its own rules, increasing from about $6 million in 2003 to $200 million in 2010. One interesting note was that some of the dental chains involved in these high billings were owned by hedge funds.

Recruiting children on the street

We were able to get some orthodontists who were concerned about what was happening to agree to on-camera interviews, which always can be a difficult process. There is always worry about speaking out about other professionals in any field. Some professionals contacted us. We were led to others once we proved to the first responders that we were legitimate.

We later received tips on the lavish lifestyles of some of the dentists who were the highest billers: big mansions, luxury cars and private jets. These stories gave impetus for others to call us, leading to follow-up stories on aggressive patient recruitment effort by certain dentists. Some were actually paying for patients and even picking up kids off the street and treating them without their parents’ consent. This intense recruiting is still taking place, incidentally.

On a parallel track, the question of policing and enforcement arose. Why wasn’t the state doing anything about this? Both the Texas Legislature and Congress held hearings. It was discovered that the state knew about some of these problems as early as 2008, but did nothing about it. There also were huge holes in the approval process that allowed dentists to bill for orthodontic procedures. We discovered there was only one dentist with the job of examining roughly 80,000 Medicaid claims each year.

Photo: WFAA

Results in legislature, courts

The legislature eventually called for strengthening dental licensing, as well as increasing enforcement by the Office of Inspector General of the Department of Health and Human Services (OIG). There was a move by OIG to cease paying orthodontists whose billings were questionable.

Meanwhile, those dentists whose payments were cut and whose ethics were being questioned formed their own political organization called Texas Dentists for Medicaid Reform. It launched a website, which largely focused on refuting our stories.

The state eventually cut off payments to 39 dentists and dental groups in the state. Many of those dentists fought back in court, challenging the state’s right to cut their payments.

A number of whistleblower (Qui Tam) lawsuits sprang up against the dentists. The state also initiated legal action against Xerox. Xerox is the parent company of Affiliated Computer Systems, the private partner of the state of Texas, which was supposed to oversee the approval of orthodontic dental claims. The claimed damages in this case are estimated by some to be more than $1 billion.

Because of the large dollar amounts involved, the Xerox case is progressing slowly. Xerox claims the state of Texas is at fault for its claim approval process. At the same time, a scandal within the OIG appears to have deflated the whistleblower litigation the state was taking. All this is not unusual. It is rare for state and federal governments to recoup losses in Medicaid and Medicare fraud. Perpetrators spend their proceeds as they acquire them. I have seen the same outcome in for-profit schools, which are also funded primarily with federal money.

Orthodontic Medicaid fraud has dried up in Texas, largely because the approval process has been taken out of the hands of the state and placed in the hands of dental HMO’s starting in 2012.

Although prosecutors continually say detection systems are improving, the data indicates they are not. There are moves to limit new companies providing health and dental care.

My advice to reporters looking at this issue in their states: start with the data. Follow any tip with solid data. Defining the data you need will not be easy, and will involve trial and error.

But Medicaid and Medicare fraud are crimes of our time, in my opinion. State and federal governments simply cannot detect fraud as it is occurring, and when the money is gone, it’s gone.