Wednesday, January 30, 2013

Senate Finance Interrogates OIG on Fraud Investigations

  • Members of the Senate Finance Committee raised serious concerns about the state’s Medicaid fraud investigation tactics on Wednesday during testimony from Doug Wilson, the Health and Human Services Commission's inspector general. Some lawmakers accused HHSC's investigators of depriving accused Medicaid providers due process rights and forcing them out of business in the process.

    “You paint with a broad brush and use the word fraud very loosely, I’ve seen some of the cases myself,” said Sen. Juan "Chuy" Hinojosa, D-McAllen. “As a state we have a lot of power and [must be] careful not to abuse that power.”

    Sen. Bob Deuell, R-Greenville, gave an example of one provider who was put on a payment hold for 11 months before finally being exonerated. “It essentially bankrupt their practice,” he said, adding that the Legislature should consider ways to improve the investigative process or increase the OIG’s resources to speed up investigations.

    Wilson defended the agency’s actions, saying there is a “robust internal review process prior to placing a [payment] hold” on providers. The number of completed investigations jumped from a dozen in Fiscal Year 2011 to 108 in Fiscal Year 2012, he said, adding that the length of investigations had shortened drastically.

    Sen. Jane Nelson, R-Flower Mound, who has filed SB-8 to curb Medicaid fraud, also defended the OIG’s work, pointing out that it’s not just about saving money. She said there are many instances of providers harming young children. In her questioning of Wilson, she said that fraudulent providers are often performing multiple root canals and crowns on baby teeth in children younger than two.

    “I want to give people due process. I also think there are people who may be manipulating some of us that aren’t lawyers… to delay investigations and payments,” she said.

    But Hinojosa accused the OIG of refusing providers’ requests for informal hearings to dispute evidence of fraud and insisting that providers hand over client files dating back 10 years, even though legally, providers are only required to keep client files for five years. He said the investigations drag on for months and are ruining innocent providers’ reputations and businesses.

    As of the end of 2012, the OIG had put payment holds on nearly 100 providers, including 36 orthodontists, according to Wilson’s testimony.

    The Texas Medical Association, which has stood by providers the organization believes have wrongfully been accused of fraud, is asking lawmakers to set up a panel of physicians to review cases before the OIG issues a payment hold.

    “This physician panel review is similar to reforms instituted at the Texas Medical Board to aid their investigations,” Rocky Wilcox, vice president and general counsel for the TMA, said in an email to the Tribune. “Physicians are concerned that administrative errors are recast as fraud, when in actuality they are a consequence of an overly complex Medicaid payment system.”

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    This article originally appeared in The Texas Tribune at

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