The Texas Attorney General filed a lawsuit on Friday against Xerox, alleging that one of the company’s subsidiaries allowed dentists to over-bill for, potentially, hundreds of millions in questionable Medicaid dental work.
Also Friday, the Texas Heath and Human Services Commission (HHSC) cancelled its Medicaid contract with Xerox.
“Xerox failed to perform the medical reviews that our contract required and taxpayers deserved,” Kyle Janek, Texas Health and Human Services executive commissioner, said in a prepared statement.
From 2004 through early 2012, according to the lawsuit, Xerox “permitted an unprecedented loss of Medicaid funds to predatory and unscrupulous dental providers.” Claims for services not performed and orthodontic benefits not authorized amounted to “hundreds of millions of dollars.”
In a statement, Xerox said it has “never engaged in fraudulent activity” and has “always operated with complete transparency.”
“Unfortunately, this misdirected lawsuit focuses on Xerox rather than on the dentists who took advantage of the program,” the company said.
In an investigation that began running in 2011, WFAA-TV (Channel 8) found that in the previous few years, Texas paid more in Medicaid orthodontic claims than the nine other most populous states combined.
Under state law, the attorney general’s office said, orthodontic services are not generally eligible for Medicaid coverage except when disfigurement presents a health risk, such as when the alignment of teeth makes it difficult for a child to eat or breathe.
In its statement, Xerox said Medicaid’s orthodontia program provides low-income children access to critical procedures, including braces.
The Medicaid contract was awarded to Dallas-based Affiliated Computer Services Inc. in 2003, effective Jan. 1, 2004. Xerox, based in Connecticut, acquired ACS in 2010.
Accenture, now the largest subcontractor to Xerox, will take over the Xerox work beginning in August. In fiscal 2013, Xerox received $168 million from the Health and Human Services Commission for the services, the agency said.
“The agency absolutely made the right call to hold this contractor accountable and recover these taxpayer dollars,” said state Sen. Jane Nelson. “We entrusted the contractor to be responsible stewards of our taxpayer dollars. That trust has been broken, and we want our money back.”