ACS State Healthcare and Conduent State Healthcare LLC have filed an appeal with the Texas Supreme Court, hoping to prevent a trial in which it must defend its flawed Medicaid prior authorization process, which rubber-stamped hundreds of millions of dollars in orthodontic treatment without proper review to the detriment of dentists who relied on their approvals. The petition was filed with the court on October 30.
In August, the 3rd Court of Appeals ruled that the case brought by M&M Orthodontics, PA, Dr. Scott Malone, DDS, and Dr. Diana Malone, DDS, of San Antonio, should go to trial.
Appeal will determine $20 million worth of lawsuits
In the appeal motion, the company states, “while this case has only three plaintiffs seeking $2 million, there are ~35 plaintiffs in five different lawsuits seeking more than $20 million. A decision by this Court will resolve a dispositive issue of subject matter jurisdiction for all the lawsuits and avoid what could otherwise be a tremendous waste of judicial resources.”
Argues state law protects it from lawsuit
Although the state fired the company in 2014 from its position as the state’s Medicaid administrator over its handling of the prior authorization process and sued it for Medicaid fraud, obtaining a $236 million settlement, the company continues to argue that it operated as an agent of the state and should not be sued directly under Texas law, claiming protection under sovereign immunity. Sovereign immunity is a legal doctrine that shields government entities and contractors from lawsuits.
Appeals court decided in favor of dentists
The 3rd Court of Appeals ruled against Conduent, stating that it wasn’t clear if the company was truly acting as an agent of the state. This uncertainty meant that the company wasn’t automatically protected by the legal doctrines it invoked.
Considering that even the dissenting opinion in the case by a member of the Court was against the company, it is entirely possible the Supreme Court will decline to hear the case.
Day in court may be soon
Then dentists will get their day in court against this company, which used high school grads, former janitors, etc., to add up HLD scores and approve millions of dollars of services for the state that the state then alleged were not medically necessary — that caused irreparable financial and reputational harm to their practices.
Conduent problems in Delaware insurance fraud case
This past week the Delaware Supreme Court started hearing arguments from AIG Specialty Insurance in its case against Conduent. AIG alleges that Conduent committed insurance fraud by persuading the Texas Office of the Attorney General to amend its Medicaid fraud lawsuit. According to AIG, this amendment strategically included non-fraud allegations to compel AIG, as Conduent’s insurer, to fund a settlement with the Texas government. Initially, a jury found Conduent guilty of fraud, but the judge later set aside this verdict and granted a retrial, prompting AIG to escalate the matter to the Supreme Court.
A lawyer for AIG told the court that “this suit was steeped in fraud. It was brought under Medicaid fraud statutes. Negligence was tacked on at the end, we think, to gain coverage.”
HHSC had again hired Conduent for the Medicaid program but terminated the company earlier this year after the Delaware Supreme Court agreed to hear the case.
Fascinating Article.