Disgraced Former Texas Medicaid Contractor Xerox Pays No Tax On $547 Million Profit, Texas Still Holding the Bag on $133 Million

USA Today reported last week that 27 corporations listed in the Standard & Poor’s 500 paid no income tax for 2015 despite having pre-tax profits.  The corporate giants include General Motors, Hewlett Packard, United Continental, News Corp, Weyerhauser amongst others.

Xerox had a profit of $547 million but paid no tax

Of special interest to Texas is the fact that on that list is Xerox, the state’s former Medicaid claims administrator which the state is suing for alleged Medicaid fraud.  Xerox in 2015 reported a pre-tax profit of $547 million, over half a billion dollars, but a negative income tax expense of $23 million.  So it paid no income tax whatsoever.   When News 10 from Rochester, New York, this week contacted the company for comment, its spokesperson simply said Xerox is in compliance with all tax laws.

State still suing Xerox for alleged Medicaid fraud in orthodontic prior authorizations that led to $1.1 billion spent on program

The state terminated Xerox’s contract back in 2014 and filed suit against the company alleging Medicaid fraud and breach of contract over the company’s deficient Medicaid orthodontic prior authorization process that devastated many Texas dentists who were wrongly targeted for the fraud instead of the company.

Xerox “dental specialists” worked from home, had no dental education, rubber stamped just about everything

Per the Texas lawsuit, Xerox employed individuals  with no dental training to be “dental specialists” who worked from home and evaluated the medical records submitted by Texas dentists to obtain approval for orthodontic treatment for Medicaid-eligible children.  These “specialists” essentially rubber stamped approval for the requests which should have been reviewed by qualified dentists.

Dentists had no idea of this perfidy and, in fact, were told by the Health and Human Services Commission that they should consider that each request was reviewed by a board certified orthodontist – a professional fraud of major proportions.

As a result, from 2004 to 2011, the state spent $1.1 billion on Medicaid orthodontia with almost every treatment request apparently approved by Xerox as meeting the criteria for medical necessity on behalf of the state.

Texas has to repay feds $133 million for failed program overspending

The state last year was tagged by the feds to repay $133 million to Medicaid as a result of an earlier federal audit of the Medicaid orthodontic prior authorization program.  That audit found Texas responsible for the approvals not meeting Medicaid medical necessity despite the deficiencies of Xerox which the state was aware of as far back as 2008 yet did nothing effective to correct.

Texans have to pay, not Xerox 

So while Texas taxpayers have to dig deep for another $133 million, the company that let them down is paying nothing yet.