Xerox Corporation and its former subsidiary, Conduent, agreed Tuesday to a record $235.9 million settlement with the State of Texas, according to the Texas Attorney General's Office.
It was the largest single Medicaid fraud-related settlement in a case filed by the Texas Attorney General.
The settlement comes after a three-year WFAA investigation that uncovered millions of dollars in alleged overbilling by Texas dentists targeting low-income children for unnecessary and often harmful dental and orthodontic work.
The investigative series, entitled “Denticaid,” prompted new state laws, passed in June 2013, aimed at curbing Medicaid dental abuses, including changes in state policy for evaluating Medicaid claims.
The series began in 2011 when WFAA began airing more than two dozen reports on Medicaid dental abuse in Texas. The investigation revealed Texas spent $500 million dollars on children’s braces under Medicaid over four years -- as much as many of the most populous states combined.
The series found some dentists were making millions in the program and used the money for chateaus and corporate jets. Dental chains, WFAA reported, used bounty hunters to find patients for the dentists, who often provided unneeded, low quality care.
The Texas Attorney General’s Office determined that employees of Xerox and former subsidiaries, “rubber stamped orthodontic prior authorization requests without assuring the required review of each request by qualified clinical personnel, which violated its responsibilities,” according to a news release from the Texas Attorney General's Office.
Texas Attorney General Ken Paxton said expensive, taxpayer-funded orthodontic work was performed on thousands of children who either didn’t meet the Medicaid standard for braces or didn’t require treatment.
“Misconduct by employees of Xerox and its related companies compromised the integrity of the Medicaid program – the very program Texas hired the Xerox defendants to safeguard through the administration of a proper prior authorization review,” Paxton said.
Xerox officials, however, in a statement to WFAA, dispute any responsibility for any possible direct misconduct.
"Xerox was not responsible for performing services under the contract and was not involved in the management of the contract or the services provided to the State [of Texas]," Xerox spokeswoman Caroline Gransee-Linsey said in a statement.
"The parties have now agreed to a settlement whereby Conduent will pay the State over $235.9M," Gransee-Linsey said. "Xerox will not make any payment as part of the settlement."
Conduent officials, however, deny "any improper actions."
"We are pleased to put this legacy issue behind us," said Ashok Vemuri, CEO of Conduent, in a statement. "This settlement provides clarity on the financial impact and we have sufficient liquidity to addres it. Texas remains an important client for us and we are focused on continuing to bring value to our client and its citizens."
Paxton said his office still has pending litigation against dental and orthodontic providers who allegedly bilked Texas Medicaid for questionable or possibly unnecessary orthodontic services.
The investigative series by now-retired senior investigative reporter Byron Harris received in 2015 an Alfred I. duPont-Columbia University Award, the broadcast equivalent of print journalism’s Pulitzer Prize.