Texas Has Spent Over 50,000 Lawyer Hours So Far on Xerox Case

Back in October 2015, TDMR filed an open records request with the Office of the Attorney General seeking to find out how much legal manpower had been used to pursue questionable Medicaid cases against Texas dentists involved in the multi-million dollar Xerox orthodontic prior authorization debacle that had consumed Texas for several years.  At that time, newly minted Inspector General Stuart Bowen was settling similar outstanding cases under his purview but the OAG Civil Medicaid fraud division wasn’t.  Today, those cases are still outstanding as far as we know.

The open record request showed that the state had spent 4712.1 lawyer hours on the Xerox case at that time (it is nice to know the state tracks its lawyer’s time to the 10th of an hour).

New request filed for hours spent since 2012

TDMR filed the same request a few weeks ago.  Surprisingly, the open records request this time, instead of taking months to compile the information, was readily available and was received back a week ago.

34 lawyers, 50,082 hours spent against Xerox

While the OAG continues to piddle with and keep open cases against the dentists involved, it has moved against Xerox, now having turned loose some 34 lawyers who have spent 50,082 hours on the case.  If we consider a lawyer’s time to a Medicaid provider at $400 per hour, that is some $20 million spent on the Xerox case.  Back in October 2015, only 4,712 hours of 19 attorneys had been used although the lawsuit against the company was filed in May 2014.

Fraud case not going well

According to those familiar with the case, the state is between a rock and a hard place on the Xerox case.

It appears the company had been quite forthcoming in its communication with the Health and Human Services Commission from 2007 to 2012 about the nature of its Medicaid orthodontic prior authorization process ie. treatment requests from dentists were being rubber stamped by unqualified, at-home workers getting paid piece work to tally up the HLD scoring sheets and make sure the paperwork was in order.   Consequently, the OAG will have a hard time proving in court that the company committed fraud against the Medicaid program which was the substance of its pleadings against the company.  TDMR has reported on this before so it is not even new news.

Breach of contract would have been a winner, but statute of limitations has run out

It has been posited that if the OAG had filed a breach of contract lawsuit against the company, it would have won that case hands down.  The company was required by state law to have qualified dental staff review the orthodontic prior authorization applications, not untrained administrative staff working from home.

Oh, Texas taxpayers, unfortunately, the statute of limitations on a breach of contract cause of action against the company apparently ran out in 2016.  In Texas, it’s four years from the date the breach occurred.

HHSC knew the process was a sham then blamed dentists

The review process was an entire sham and one can only wonder why HHSC never took any action to correct it and paid the company millions of dollars to do it.  Naturally, when the bullets started to fly from the media and the legislature about the spending on the program, the bureaucracy had to point their fingers at the providers.

Force a settlement the only road left

So the only thing the state is left to do is expend its unlimited taxpayer-provided resources ie. manpower to keep the case moving forward to force the company into a settlement.

Xerox may buckle.  Maybe it won’t.