There is a rumor circulating that the Texas Health and Human Services Commission is putting together a new request for proposals (RFP) for dental managed care organizations for Texas Medicaid. While this may or may not be the case as we could not get a confirmation from HHSC officials, it caused us to look at how Medicaid dental managed care came to Texas.
Dental managed care first rolled out in March 2012, apparently in response to the media reports of massive increases in dental and orthodontic spending and allegations of fraud, that started in May of 2011.
However, research into the history of dental managed care shows this to be otherwise.
RFP came out one month after the start of the 2011 legislative session
Billy Millwee, former Texas Medicaid director who held the position from 2009 to August of 2012, in his written testimony to California’s Little Hoover Commission last November stated that the impetus for HHSC looking into dental managed care was a direction from the 2011 Texas Legislature. However, that legislative session started on January 11, 2011, and the request for proposal for dental managed care was issued formally by HHSC on February 22, 2011, just over a month later. Heaven knows HHSC doesn’t work that fast.
Curiously, on the same day that HHSC issued the RFP, Millwee and his then-boss Thomas Suehs were making a presentation to the Senate Finance Committee about Medicaid cost saving initiatives. They presented dental managed care for Medicaid as one of those ideas. Slide 19 of the presentation shows:
Create a statewide Dental Managed Care Model for Medicaid
Effective date: March 2012
Process: Competitive Procurement
General revenue impact: $101.6 million
So apparently the legislature didn’t find out about managed care until the same day the RFP was issued.
No funding approved until July 2011
Another oddity is that the enabling state legislation to fund the expansion – SB 1 – wasn’t signed by Governor Perry until July 19, 2011. Yet the initiative was already well in motion at that time.
So it seems Suehs and Millwee started the whole process without the legislature and much earlier than February 2011.
Feds didn’t approve until December 2011
A further interesting fact is that the federal government did not approve the expansion of managed care in Texas which included dental managed care until December 12, 2011, 10 months after the RFP had been issued and two months after the successful bidders -MCNA, Dentaquest and Delta Dental – were chosen on September 12, 2011.
The addition of managed dental care was done under the auspices of the Texas Healthcare Transformation and Quality Improvement Program 1115 Waiver. The waiver “is designed to expand the existing Medicaid managed care programs (STAR and STAR+PLUS) statewide and to use savings from the expansion of managed care and the discontinuation of supplemental provider payments to finance a new safety net care pool to assist hospitals and other providers with uncompensated care costs and to promote health system transformation in preparation for new coverage demands that began in 2014.”
This waiver is a demonstration project to show cost savings which was supposed to end September 30, 2016, but received an extension from CMS last May until December 31, 2017.
The expansion of dental managed care is outlined in only a few paragraphs within the December 12, 668-page approval document [excerpt]:
CHILDREN’S DENTAL PROGRAM
40. Implementation of the Children’s Dental Program.
As of March 2012 (subject to the CMS readiness review, as discussed in STC [Special Terms and Conditions] 18), children’s primary and preventive Medicaid dental services shall be delivered through a capitated statewide dental services program (the Children’s Dental Program). Contracting dental maintenance organizations (DMOs) will develop networks of Main Dental Home providers, consisting of general dentists and pediatric dentists. The dental home framework under this statewide program shall be informed by the improved dental outcomes evidenced under the “First Dental Home Initiative” in the State. Services provided through the Children’s Dental Program are separate from the medical services provided by the STAR and STAR+PLUS managed care organizations, and are available to persons listed in Table 2 who are under age 21, with the exception of the groups listed in (b) below. The Children’s Dental Program must conform to all applicable regulations governing prepaid ambulatory health plans (PAHPs), as specified in 42 C.F.R. 438.
a. The following Medicaid recipients are excluded from the Children’s Dental Program, and will continue to receive their Medicaid dental services outside of the Demonstration:
Medicaid recipients age 21 and over; all Medicaid recipients, regardless of age, residing in Medicaid-paid facilities such as nursing homes, state supported living centers, or Intermediate Care Facilities for Mentally Retarded Persons (ICF/MR); and STAR Health Program recipients.
b. Implementation of the Children’s Dental Program is subject to the State demonstrating sufficient network adequacy, in accordance with the requirements and deliverables provided in paragraph 22(b) of these STCs, except that subparagraph 22(b)(iv) does not apply, and (to the extent that it cross-references requirements relating to primary care providers and pharmacy services in STC 24(e)) subparagraph 22(b)(v) does not apply. In addition, for purposes of this paragraph 40(b), references to the STAR and STAR+PLUS programs in paragraphs 22(b) and 24(e) are replaced with the Children’s Dental Program. CMS acknowledges that the State already has submitted the readiness review deliverables due November 3, 2011.
c. The State will continue to hold quarterly meetings with dental stakeholders, including dental care providers, as required under the Frew consent decree. The State will collect relevant data from each DMO to comply with CMS-416 reporting requirements.
So HHSC had the train to dental managed care well down the track in 2011, not just starting up.
Of course, this makes sense as an undertaking that large – moving all Medicaid dental from fee-for-service to managed care – would need time. But they were well ahead of both state and federal approval.
Road to dental managed care started way before public knowledge of orthodontic spending
The main point is that the change to dental managed care was decided upon and being implemented well before any legislative action and the huge media dustups over allegations of massive dental and orthodontic fraud in Texas Medicaid. The first such report of the latter started with WFAA in May of 2011, three months after HHSC announced the dental managed care RFP.
This story of out of control dental costs influencing the managed care adoption is carried forward by such groups as the Texas Association of Health Plans. On their webpage on dental managed care, they state:
After several years of explosive costs in the dental Medicaid program in Texas—due primarily to dramatic overutilization of orthodontia services—the Legislature and HHSC sought to address the cost crisis by initiating a shift from the traditional fee-for-service model (FFS) to the managed care model to better manage costs and increase access to and quality of care. Since this shift began in 2012, the use of dental managed care for Texas Medicaid dental services has significantly reduced costs for taxpayers while improving access to timely, quality, preventive care for Texas children enrolled in Medicaid.
They also promote the fact that dental MCOs in Texas are now outperforming other states in treating children.
Well, that is a good thing.
HHSC also commissioned a report on the change to dental managed care which was published in February 2013. This was a requirement of the 2011 Legislature. Here is a table of the findings, comparing 2011 (fee for service) and 2012 (managed care) dental expenditures.
Note total Medicaid dental spending dropped 30% with orthodontic spending dropping 72%.
Table II: Summary and Variances of Utilization and Payments by Service Category,
March to August 2011 and March to August 2012
| Category of Dental Services |
2011 Utilization (Paid FFS Units of Service) |
2011 FFS Payments to Providers |
2012 Utilization (Paid Units of Service Reported by DMOs) |
2012 Payments to Providers Reported by DMOs |
Utilization Variance |
Payment Variance |
| All Other | 3,631,029 | $353,638,377 | 2,353,350 | $224,868,634 | ‐35% | ‐36% |
| Diagnostic | 4,351,407 | $149,137,426 | 3,655,625 | $127,931,719 | ‐16% | ‐14% |
| Orthodontics | 1,436,902 | $130,202,259 | 401,362 | $25,068,122 | ‐72% | ‐81% |
| Preventive | 4,783,464 | $137,318,468 | 3,570,485 | $100,775,354 | ‐25% | ‐27% |
| Total | 14,202,802 | $770,296,529 | 9,980,822 | $478,643,829 | ‐30% | ‐38% |
Okay, spending went down. Sure. They cut the level of service in orthodontic treatment. They couldn’t do that before?
Why couldn’t HHSC fix fee-for-service spending before 2011?
One of the questions that has haunted anyone who has looked at this dental Medicaid fiasco is why didn’t HHSC fix TMHP/Xerox and fee-for-service? They were aware of problems as early as 2008 but did nothing effective to control the spending if they didn’t want to put braces on that many kids’ teeth. They even went to the extent of misleading dentists on the orthodontic prior authorization approvals.
So why could they not control fee-for-service and also move to managed care? It doesn’t make sense.
Blamed dentists when they knew it was an HHSC management problem
When the levels of dental Medicaid spending finally drew media attention and criticism in mid-2011, HHSC and its OIG blamed dentists for the problem, ie conspiring en masse to “game” the system.
Yet they were well aware that it was a problem with fee-for-service for whatever reason and were already bringing in managed care.
But they told politicians it was the dentists. Here is an exchange between state Rep. Garnet Coleman and Thomas Suehs from a January 2012 House Public Health Committee meeting.
Rep. Coleman: “… I’m just asking you to remember that these are small businesses. There are people who, I’ll say, game the system and quite frankly steal and those folks should be put into jail and we do that. But in terms of those, you know, who have in good faith, moved forward to try to provide the service, I just hope as we go through this, that we are careful about separating the wheat from the chaff… But there is, unless someone has committed fraud or abuse, no retroactive penalty to a dentist who follows the policy that they were told to follow?”
Mr. Suehs, Executive Commissioner of Texas Health and Human Services: “That’s what I am saying … There’s clearly policies, we should have had tighter policies in some areas. We believe in some areas our contractors did not follow the existing policies and in some areas people gamed the policies we did have. And those are all being looked at.”
Suehs and company obviously knew about the spending problems back in 2010 when they really decided to bring in managed care.
Why did they have to step on the backs of a lot of innocent dentists rather than just fix the problem they were responsible for?