Texas health officials have decided to terminate contracts with Xerox Corp. as their Medicaid processor, after discovering the document management company's alleged involvement in fraudulent dental and orthodontic claims.
In a lawsuit filed on Friday, Texas Health and Human Services Commissioner Kyle Janek wrote that Xerox approved dental requests to put braces on children even if those transactions failed to meet proper standards. To date, Medicaid has spent more than $1 billion as payment for orthodontic claims, but did not detail how much of that was fraudulent.
"Xerox failed to perform the medical reviews that our contract required and taxpayers deserved," said Commissioner Janek in a statement quoted by the Houston Chronicle. "I want to thank Attorney General Greg Abbott for the months of hard work his staff has devoted to holding the company accountable."
Abbott said that the state will work to recover the costs of fraudulent request payments, which might reach hundreds of millions of dollars.
Xerox quickly denied the allegations and argued that they were compliant with the standards set by Texas. They described the lawsuit as "misdirected" because they were only used by the dentists who took advantage of the program.
"Unfortunately, this misdirected lawsuit focuses on Xerox rather than on the dentists who took advantage of the program," the company's statement reads, as quoted by the Associated Press. "We have never engaged in fraudulent activity and always operated with complete transparency."
Medicaid opened the investigation after noticing a sudden spike on the number of requests for braces in 2010 that "weren't medically necessary." The social health care program only covers teeth alignment for a child when the dental issue causes problems eating or breathing.
Xerox has been with Texas Medicaid for almost 10 years, and its contract is set to expire in 2017. Texas named Accenture LLP as a temporary replacement for Xerox while preparing to open a bid for other contractors.
