TDMR has written extensively on how the provisions of the Texas Medicaid Prevention Act may be used by apparently unscrupulous relators to seemingly blackmail honest dentists into hefty monetary settlements to avoid costly and lengthy litigation.
Problems with TMFPA
The gambit is for the relator to have some tangential relation to the dentist, accuse them of Medicaid fraud without personal knowledge of any actual crime but clamoring enough so that the OAG lets it proceed, then force lengthy and costly discoveries to wear down the defense so they will do practically anything to get on with their lives.
Due process becomes too expensive. There is no certain recourse to a trial, no finding of fraud or innocence. The provider is defeated. It appears as a remunerative shakedown for the state, the relator and their legal team.
That’s why the House Committee on Judiciary & Civil Jurisprudence unanimously approved a bill to fix the TMFPA back in 2021. It unfortunately went nowhere.
For clarification, we are not generalizing about every qui tam lawsuit brought against a dental practice. Just the ones we have written about.
Malouf case highlights similar problems
We bring this up because there are echoes of this in the summary judgment obtained against Dr. Richard Malouf that are highlighted in his legal team’s petition to the Supreme Court and have caused the Court to hear arguments this coming January about letting the case go to trial.
After news of the Court’s decision to hear the case, TDMR obtained a copy of Dr. Malouf’s petition from the high court’s website. In it, his legal team challenges the State’s construction of the TMFPA, arguing that it does not require a connection to actual fraud or unauthorized benefits to establish liability. The petition suggests that the Act should be interpreted in a manner that targets actual fraud rather than penalizing regulatory non-compliance that does not result in financial harm to the Medicaid program.
Doesn’t that seem right? The TMFPA should punish actual fraud, not provide a convenient circumvention that allows the State to severely punish a provider without proving fraud was committed.
In Dr. Malouf’s particular case, there are other important arguments.
1. Dispute Over Knowledge and Intent: The petition argues that there were genuine issues of material fact regarding his knowledge and intent, which should have prevented a summary judgment. Specifically, it contends that Dr. Malouf was generally unaware of 1,842 reimbursement claims erroneously identifying him as the actual treating provider. It notes two exceptions where he was aware: when he supervised the actual treating dentist and when his identification number was used due to a Medicaid computer glitch, both allegedly permitted by Medicaid administration.
To be guilty of Medicaid fraud, one has to have had intent or scienter, the legal term meaning “a mental state in which one has knowledge that one’s action, statement, etc., is wrong, deceptive, or illegal.”
2. Arguments Against Summary Judgment as Conclusory: The petition disputes the characterization of Dr. Malouf’s testimony and evidence as “conclusory,” a term used in legal contexts to describe statements that are asserted without supporting evidence. It maintains that his statements provide factual details that directly counter the State’s claims. It emphasizes that his lack of knowledge about certain submissions of claims is a substantial point of contention, arguing that this factor should be given proper consideration in evaluating the appropriateness of a summary judgment in this case.
3. No-Evidence Motion for Summary Judgment: The petition argues that the motion for a summary judgment on no-evidence grounds should have succeeded, as the claims did not incorrectly indicate the license type of the treating dentist.
4. Statutory Construction: The petition questions the lower court’s broad interpretation of the TMFPA, especially regarding the requirements for identifying the actual service provider’s license type and Medicaid number.
Case needs to go to trial
The high court’s decision on whether or not to allow this case to go to trial will be a significant one.
TDMR advocates due process for all Medicaid providers and getting one’s innocence or guilt determined in a trial before one’s peers.
A trial is a necessity.
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