A family dentist in deep southern Texas is suing to pare back the state Health and Human Services Commission's power to withhold and freeze Medicaid payments for program violations.
In September 2011, the Harlingen Family Dentistry, in the coastal county of Cameron, had its Medicaid payments frozen by the Health and Human Services Commission (HHSC) Inspector General, over a "credible allegation of fraud," according to the lawsuit.
Appealing the charges, the Harlingen Family Dentistry, run by CEO Juan Villarreal, ended up having perhaps the first payment hold hearing of its kind with HHSC, an umbrella agency created in 1991.
The administrative law judge found "no evidence that was credible, reliable or verifying" to suggest that the dentistry had engaged in fraud, and wrote a decision allowing the HHSC to keep only up to 9 percent of the withheld payments, based on the allegations of fraud.
The HHSC adopted that decision as a rule in October 2012, and it became final in February 2013. But, according to lawyers for Harlingen Family Dentistry, administrative rules subsequently published let the HHSC retain funds that have been withheld, "even if a subsequent payment hold hearing finds that the payment hold was not supported by law or fact."
The dentistry wants the Travis County District Court to invalidate that provision, along with the rule establishing HHSC's authority to withhold payments for any of more than 50 possible program violations, from documentation maintenance errors to wrongful billing practices.
Federal law requires Medicaid payments to be withheld when there's evidence or a credible suspicion of fraud. The rules written by HHSC reach beyond that standard, the lawsuit argues, and the Texas legislature's requirement for evidence of "fraud or willful misrepresentation" as "a prerequisite for imposing the 'remedy' of a pre-hearing payment hold."
The HHSC is in effect trying to redefine standards for a payment hold, argues the dentistry's attorney, Jason Ray,
"These two rules are the main instruments that the HHSC is now using to extract settlements from Medicaid providers," Ray said in a media release by the group Texas Dentists for Medicaid Reform.
"We are seeing the OIG implement payment holds on providers and claim that a provider did not record the patient's vital signs, or didn't document an extraction procedure, or referenced the wrong tooth in a clinical note. Payment holds are supposed to be used to immediately stop obvious criminal activity from occurring while the State quickly brings a case where the outcome is largely a foregone conclusion."
The Texas Health and Human Services Commission has not commented on the case yet.
Tooth photo from Shutterstock.com.