The Texas Health and Human Services Commission Office of Inspector General reached a $3.75 million settlement with Carousel Pediatrics, a primary care provider for over 25,000 children, for billing errors. But for some providers treating Texas Medicaid patients, the case raised concerns about how the government distinguishes fraud from human error, according to The New York Times.
Carousel double billed Medicaid and claimed payment for levels of care not substantiated by medical records, The Times reported. "We've said all along Carousel may have made billing errors but they were not intentional or for the purpose of overbilling Medicaid," Carousel's attorney Dan Gattis said in the settlement announcement.
The final settlement was below the state's initial demand of $17.9 million and a $4 million penalty, The Times noted.
Medicaid covers about 3 million children in Texas, as FierceHealthcare reported. The Texas Medical Association said the settlement could convince a shrinking number of practitioners who participate with Medicaid that the risks of doing so are prohibitively high, The Times noted. John Holcomb, M.D., chairman of the association's committee on Medicaid and access to care, criticized the inspector general's recovery tactics. Holcomb expressed concerns that the state can suspend provider payments with less evidence than it requires to prosecute providers for fraud, The Times reported.
"The law requires us to put a payment hold in place when we find evidence of an overpayment, and we did that in this case," Texas Inspector General Douglas Wilson stated in the announcement. "But that's not the end of our review. We continued to gather information and look at all the facts. Carousel came to the table to correct the overpayment and make changes in its billing practices to comply with state rules. The process the Legislature outlined worked."
The Texas inspector general's office told The Times it must withhold reimbursement from providers with suspicious billing patterns since the federal government could seek restitution from the state if officials failed to act and evidence of health insurance fraud appeared later.