Fraud in Texas’ Medicaid dental program followed spending boom

Texas has yet to get a handle on millions of dollars in fraud, an unintended consequence of a fourfold increase in spending on dental services provided by the state’s Medicaid program.

The state Department of Health and Human Services has denied $8.2 million in Medicaid claims made by 26 dentists and orthodontists across the state under suspicion of fraudulent billing for procedures like cosmetic braces not normally covered by Medicaid or unnecessary root canals, the Wall Street Journal reports.

An audit of the 600 reimbursement requests done at the state’s request by Christine Ellis, a Dallas orthodontist, found in more than 90 percent of the cases the dental work was not covered by Medicaid.

“The fraud is statewide,” Ellis told the Journal, “and has reached the hundreds of millions of dollars.”

The crackdown on reimbursement and fraud, however, has caused some dental practices to stop taking Medicaid patients, while other dental practices have closed up altogether, the story says.

In January the state Attorney General began an investigation into the billing practices of 31 orthodontists in the state. In June the state sued All Smiles Dental Professionals P.C., alleging the company billed Medicaid for dental work that was not necessary and, in some cases, not done. The state clampdown follows an extensive investigation by WFAA News 8 in Dallas.

All Smiles has since closed 13 orthodontic offices in the Dallas area, the Journal says.

The explosion of fraud grew out of the settlement in 2007 of a 14-year-old class action lawsuit filed by parents who said the state was negligent in providing preventative dental care for children enrolled in Medicaid.

In that year the Legislature approved spending $1.8 billion to expand Medicaid dental services for children. Payments to orthodontists and dentists have since increased by four times, to $1.4 billion in 2011, more than any other state in the country.

In 2007 1.1 million or 38.5 percent of Texas children on Medicaid got dental service through the program. By 2010 that number jumped to 1.6 million or 51.6 percent of all children on Medicaid, according to a report given in January to the state House Committee on Public Health by Health and Human Services. (Please see pages 24-31 of the report here.)

Orthodontic care claims alone increased from $102 million to $185 million between 2008 and 2010, the report says.

The problem with fraud in Texas has made its way into a report in April by the U.S. House of Representatives Committee on Oversight and Government Reform. (Please see pages 16-19, here.)

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Contact Mark Lisheron at 512-299-2318 or mark@texaswatchdog.org or on Twitter at @marktxwatchdog.

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Photo of teeth by flickr user Phoenix Dark-Knight, used via a Creative Commons license.