NEWS 8 INVESTIGATES
Until last year, the Texas Medicaid Dental Orthodontic program was spending money like a Christmas shopper on Black Friday. Between 2008 and 2011, Texas spent $705 million on Medicaid orthodontics, which experts say many children don't even need. That's because the state was paying the bills without adding them up, or even seeing if the money was well spent.
It was what Doug Wilson, the Inspector General of Texas Health and Human Services, calls a "pay and chase" environment. Texas now is earnestly in the "chase" mode. It has between 300 and 400 open investigations. Wilson took over the Office of Inspector General in 2011, and after a series of WFAA stories exposing questionable Medicaid payments, the state is beefing up its investigation of Medicaid fraud.
"Texas is a huge state. There are a lot of kids out there," Wilson told News 8 in a lengthy interview last month. "Some of the things we're seeing are just errors and other things that we're seeing are more intentional. And we're taking appropriate actions and making referrals as necessary."
The state now is holding payments back from 91 Medicaid providers for Credible Allegations of Fraud. Dozens are dentists and orthodontists.
The first signs of trouble were in 2008. That's when an audit by the OIG revealed problems.
"The volume of prior authorizations (for spending on braces) was extremely high," Wilson says.
The OIG warned the state that applications for braces (orthodontics) were not being inspected carefully enough, and that the state should consider beefing up its staff.
"We thought things were going to get better," Wilson says. "As we now know, they didn't necessarily get better. The volume of orthodontia in our state was extremely high. We warned them, and I think they tried to act but they didn't go far enough."
In 2011, News 8 began asking for Medicaid records under the Freedom of Information Act (FOIA) and the Texas Public Information Act (TPIA) to see how much Texas was paying to put braces on kids under Medicaid, and how it compared to the rest of the nation.
Data obtained by News 8 from TDHHS showed that Texas spent $184 million on orthodontics for Medicaid kids in 2010. News 8 had to pay for this data because the state did not compile them on its own. TDHHS has now adjusted the total upward to $200 million.
To get a national picture, News 8 obtained total spending figures from the federal Medicaid Statistical Information System (MSIS). These numbers, which took weeks to obtain, had never been compiled until News 8 asked for them. The most recent totals available were, and still are, from 2009. The entire nation spent $355,550,331 in 2009.
Texas alone spent about 70 percent of the rest of the nation combined.
Coming up with how Texas stacked up to the rest of the nation for 2010 was difficult, even though by that time 2011 was already drawing to a close. To estimate the 2010 figures we took the 2009 totals and added the Texas increases to them to estimate what the entire nation spent. That indicated Texas spent about as much as the rest of the nation combined.
We also wrote to the nine largest states besides Texas to obtain an overview of how Texas stacked up. The state paid out three times as much as New York and nine times as much as California.
Not all states are alike when it comes to Medicaid. Some pay for services others do not. In Texas, Medicaid was never intended to put braces on huge numbers of children, only on kids who suffer such severe alignment problems that their health is threatened.
Yet in 2010, News 8 found Texas put braces on 80,000 children. More than 18,000 of them, state records show, were kids under twelve, who usually don't have their permanent teeth yet. The spending continued to increase. In 2011 Medicaid orthodontic payments rose another $49 million to a crest of $249 million.
The Department of Health and Human Services does not compare Texas spending to other states, saying programs differ. But now the Public Health Committee of the Texas House has mounted an effort to contact each state individually to determine how much each state spent on orthodontics under Medicaid in 2010. Thirty states have responded so far.
"Instead of doing the pay and then the chase," says committee chair Lois Kolkhorst (R-Brenham), "we're looking at trying to get markers that indicate there could be fraud activity before you pay."
The OIG is buying computer software to analyze claims in real time.
Just as important, the state changed the way it manages the Medicaid dental in March of last year. Private companies now oversee the program in a way similar to how HMO's manage medical care. Some dentists who've treated Medicaid patients for years, often at financial sacrifice, complain of holdups.
But now Texas is guaranteed somebody is looking at the state's Medicaid dental Mastercard bills before they're paid.