WASHINGTON — "It took a reporter to unlock the mystery that Texas is spending more on braces than the rest of the country put together?"
That was the half-humorous question Rep. Trey Gowdy (R-South Carolina) asked his fellow members of the House Oversight and Government Reform subcommittee in Washington on Wednesday.
Looking at Medicaid fraud, the committee talked to whistle-blowers and lawyers from Minnesota and New York, all of whom discussed scandals in their home states.
But the witness at the heart of this hearing was from Texas.
Dr. Christine Ellis, a North Texas orthodontist, credited News 8 with revealing a "flagrancy of fraud that is truly unbelievable."
News 8 spent thousands of dollars to acquire Medicaid records from the State of Texas and discovered that the state paid out $424 million to put braces on poor kids' teeth from 2008 to 2010.
News 8 also obtained spending totals on orthodontics from other states individually, after the federal government said it did not compile them.
"As they say, everything is bigger in Texas," Dr. Ellis told the panel. "Thanks to the investigative reporting of WFAA's Byron Harris, we now know that orthodontic Medicaid fraud is no exception."
After News 8 broadcast the stories, Ellis said she was contacted by the Office of Inspector General at Texas Medicaid and asked to review the records of dozens of dentists.
Some panel members seemed surprised by the News 8 findings.
"Either people are gaming the system, or there is some genetic malady that people in Texas have that makes them have more crooked teeth than the rest of the country put together," Rep. Gowdy said.
Rep. Paul Gosar (R-Arizona) questioned the vigor of the Texas Dental Board in taking action against corporations practicing dentistry, which was outlined in News 8's investigations.
Gosar — a dentist himself — said Arizona's dental board strongly polices the profession.
Although it is illegal for corporations to practice dentistry in Texas, the Texas Dental Board says it does not have the tools to enforce the law.
Dr. Ellis said she complained to the Texas Dental Board about All Smiles, a chain of clinics majority-owned by a venture capital firm. All Smiles collected more than $10 million from Texas Medicaid for orthodontic work in 2010.
After complaining, however, Ellis was told by the Dental Board it could not take the case.
Ellis says that although she has spoken with the Texas Office of Inspector General (OIF) for Medicaid and with the Texas Attorney General's office, she has not heard from the U.S. Department of Justice.
Rep. Michael Burgess (R-Denton) was concerned about the lack of action against Texas dentists thus far, and the fact that few misspent taxpayer dollars have yet been recovered.
"Dollars have been flying out the door, and children have actually been put in danger," Burgess told News 8 after Wednesday's hearing.
Jim Moriarty, a Houston attorney who has represented patients in actions against corporate dentists, said Texas regulators are "a toothless dog."
"There's clearly criminal behavior here, and no dentist has been prosecuted," Moriarty said.
Sen. Charles Grassley (R-Iowa) made a special trip to the hearing to voice his own concerns about Medicaid fraud. He was one of several speakers who mentioned inside deals between Medicaid-managed care providers and the state of Minnesota.
Democrats on the committee said Minnesota delivers quality care to Medicaid recipients. Texas adopted managed care for Medicaid dental services in March.
Grassley told the committee the U.S. will spend $7 trillion on Medicaid in the next decade.