State regulators in Texas last week agreed to settle allegations of Medicaid fraud against Trueblood Dental Associates, P.A. Brace yourself for the numbers: The state agreed to recover just $39,211 out of a $16,209,289 projected overpayment for dental claims in a case where the government supposedly had slam-dunk evidence of fraud. The settlement was a "stunning reversal" of the state's position, according to the advocacy group Texas Dentists for Medicaid Reform.
In its final notice of overpayment (.pdf) to Trueblood, the Texas Office of Inspector General ticked off the scathing audit findings:
One pediatric patient received 16 stainless steel crowns and seven therapeutic pulpotomies (or "baby root canals") on or around the same service date with a likely result of injury. From 2007 through 2012, Trueblood claimed payment for unnecessary invasive treatments not corroborated by radiographs, for teeth extractions and restorations without justification and treatment for which documentation conflicted. The audit also found that Trueblood administered local anesthesia, nitrous oxide or both without noting recipient weight. The provider allegedly billed inflated procedure codes, and overall documentation of claimed services was inadequate or missing.
But all this, it turns out, didn't make for an airtight case, and the government settled for pennies on the dollar.
The provider insisted the audit findings were biased, mistaken and an insufficient basis to withhold Medicaid payments due to credible allegations of fraud, the Austin American-Statesman reported. Resulting cash flow problems caused the practice to close. That left thousands of poor children without dental providers in an area where dwindling numbers of them accept new Medicaid patients.
Trueblood was the dental arm of Carousel Pediatrics, which reached a $3.75 million settlement with the Texas OIG in March for billing errors in a case that raised the question of how the government distinguishes fraud from human error.
There's clearly no winner in the Trueblood fraud settlement - not the government, not the provider, not the politicians who took sides in the case and certainly not the kids.
The settlement won't cover the state's investigative costs. News of its skimpiness in relation to the assessed overpayment will spread far and fast, telling would-be criminals that fraud pays and that it's hard for the government to prove. This case also sends the message that the government will back down if providers make their complaints public. These messages fly in the face of promises that healthcare fraud won't be tolerated.
Was the state overzealous in pursuing this case given the tens of millions allegedly lost to fraud in the Texas Medicaid program? State regulators need to step back and do a post-mortem. They should figure out what caused the case to collapse and why they couldn't stand firm when they thought they had the tiger by the tail. To the extent possible, they should work to prevent similar investigative outcomes in the future.
On the provider side, Trueblood agreed as part of the settlement agreement (.pdf) never to participate in Medicaid again. Yet they didn't admit any wrongdoing. This case raises important questions for healthcare providers doing business with the government: How do they file claims accurately and compliantly? How do they document services in anticipation of a government audit? And when does their interpretation of regulatory requirements put them at risk for false claims?
While settlements are an important means of recouping dollars lost to fraud, the outcome of this case was a Texas-sized mess. - Jane (@HealthPayer)