Texas Attorney General Civil Medicaid Fraud Unit Spent Over $6 Million And Used Up To 21 Lawyers Per Case On Questionable Medicaid Dental Cases


A document received from an open records request filed in early September shows that the Civil Medicaid Fraud division of the Office of Attorney General (OAG) has expended some 20,953 staff legal hours against 16 dentists and dental practices accused of Medicaid fraud from as far back as early 2012.

TDMR filed the request because the Civil Medicaid Fraud unit is at odds with the current initiative of the new Inspector General of the Health and Human Services Commission (HHSC) Stuart Bowen to settle questionable cases of alleged Medicaid overpayment.  An Austin lawyer with knowledge of many of the outstanding cases with the Civil Medicaid Fraud unit has called them “frivolous.”

The open records request asked for the following:

How many lawyers and how many hours have the OAG Civil Medicaid Fraud division devoted to such cases [involving dental Medicaid fraud and abuse, with or without involvement of the HHSC-OIG], by case, since January 1, 2012 to the present.

The original document received is available for download as well as a spreadsheet analysis of its content.

Lack Of Movement On Cases Despite High Hours Spent

While abbreviations in the document do not clearly delineate all practice names and the type of litigation involved, per the analysis, all of the cases remain apparently unresolved except that of Dr. Rachel Trueblood who settled a$16 million overpayment claim for $39,000 and Dr. Michael Goodwin who plead guilty to one count of health care fraud back in 2013.

If the average hourly rate for an attorney is estimated at $300 per hour, this means the OAG has spent some $6.285 million on the cases for those 20,953 hours.

For some of those cases that have not seen a court room, tremendous resources in Civil Medicaid Fraud unit staff time have been used over the last three years. M&M Orthodontics of San Antonio has taken some 4,529 legal staff hours and employed up to 21 staff lawyers – an estimated cost to taxpayers of $1.35 million.  The litigation against Dr. Richard Malouf of Dallas has expended some 6,292 hours and also up to 21 staff lawyers – an estimated cost of $1.88 million.

In comparison, the document shows the agency has spent some 4,712 lawyer hours and allocated up to 19 lawyers so far in its massive lawsuit against Xerox – a cost of $1.41 million.

Hired External Lawyers, In Addition To 18 Lawyers Of Its Own, And Spent An Estimated $750,000 In Losing Cause Against Antoine Dental

The Civil Medicaid Fraud division did make it into the courtroom against Antoine Dental Clinic of Houston.

In fact, the Civil Medicaid Fraud unit took the case over from the Health and Human Services Commission Office of Inspector General when it went before the State Office of Administrative Hearings (SOAH) on Antoine’s payment hold hearing in 2013.  The OAG was responsible for hiring outside lawyers who represent whistleblower Dr. Christine Ellis, Dan Hargrove of Waters and Kraus and Jim Moriarty, to run the case for $250,000.

The released open records document shows that the Civil Medicaid Fraud unit also used up to 18 of its own lawyers against Antoine and spent some 1,841 hours on the litigation–an estimated $550,000.

Antoine prevailed at its SOAH hearing with the administrative judges dismissing the arguments of Hargrove and Moriarty and finding Antoine innocent of allegations of Medicaid fraud, waste and abuse.

Antoine also prevailed recently in Travis County District Court to overturn the “capricious” decision of former HHSC Executive Commissioner Kyle Janek which reversed Antoine’s SOAH decision.  The OAG was involved in defending Janek’s decision and its methodology – that HHSC could simply overturn an administrative law decision it didn’t like.

Defended Odious Practice That Allowed HHSC To Overturn Administrative Court Decisions

The practice of HHSC being able to overturn an unfavorable administrative decision by SOAH was so odious that the Texas legislature ended it with the unanimous passing and enactment of SB 207 – the Sunset legislation dealing with changes to HHSC and its OIG.

It seems counter-intuitive that the Office of Attorney General charged with upholding justice in Texas would not only defend this dubious practice but attempted to protect it.

So in a losing cause against a dental practice that has been found innocent of Medicaid fraud, the Civil Medicaid Fraud unit is estimated to have spent over $750,000 and continues to spend more as it is appealing the district court decision.

Impartial, External review needed

What possible rationale could the Civil Medicaid Fraud unit have for continuing to litigate against a practice that has been found innocent of Medicaid fraud, waste and abuse by two separate courts?   This smacks of double or even triple jeopardy and a seeming implacable prejudice.

Such actions lead to the inescapable conclusion that this division of the Office of Attorney General has been contaminated by the same disease that inflicted Doug Wilson’s and Jack Stick’s OIG –  a lack of respect for due process, an inability to recognize when it doesn’t have a case despite all the evidence and court judgements to the contrary, and an inability to reform.

Medicaid providers should expect a timely handling of the serious allegations against them that destroy their practices and cripple their reputations, not years of costly delay to both themselves and the taxpayers of the state.

An external, impartial review of these outstanding cases with the OAG’s Civil Medicaid Fraud unit is needed.