Texas Health and Human Services Commission and Office of Inspector General v. Antoine Dental Center, 06-15-00076-CV

Texas Health and Human Services Commission and Office of Inspector General v. Antoine Dental Center

06-15-00076-CV

| Tex. Crim. App. | Nov 10, 2015

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Case Information

*0 FILED IN 6th COURT OF APPEALS TEXARKANA, TEXAS 11/10/2015 8:06:00 AM DEBBIE AUTREY Clerk

*1 ACCEPTED 06-15-00076-CV SIXTH COURT OF APPEALS TEXARKANA, TEXAS 11/9/2015 4:47:09 PM

DEBBIE AUTREY CLERK No. 06-15-00076-CV In the Court of Appeals for the Sixth Judicial District Texarkana, Texas Texas Health and Human Services Commission, AND Office of Inspector General, Appellants , v. Antoine Dental Center, Appellee . On Appeal from the 200 th Judicial District Court of Travis County, Texas Cause No. D-1-GN-14-002229 Hon. Amy Clark Meachum, Presiding B RIEF OF A PPELLANTS RAYMOND CHARLES WINTER Respectfully submitted, State Bar No. 21791950 Chief, Civil Medicaid Fraud Division

Office of the Attorney General REYNOLDS B. BRISSENDEN CHARLES E. ROY State Bar No. 24056969 First Assistant Attorney General NOAH REINSTEIN JAMES E. DAVIS State Bar No. 24089769 Deputy Attorney General for Civil Litigation

Assistant Attorneys General Office of the Texas Attorney General P.O. Box 12548, Capitol Station MC 056-1 Austin, Texas 78711-2548 Telephone: (512) 936-1709 Facsimile: (512) 370-9477 Raymond.Winter@texasattorneygeneral.gov Attorneys for Texas Health and Human Services Commission and Office of Inspector General

Submitted: November 9, 2015 ORAL ARGUMENT REQUESTED *2 IDENTITY OF PARTIES AND COUNSEL Pursuant to Tex. R. App. P. 38.1(a), appellant presents the following list of all parties and names and addresses of counsel: Appellant/Defendant at District Court : Texas Health and Human Services

Commission and Office of Inspector General

Counsel: Raymond C. Winter Reynolds B. Brissenden Noah Reinstein Office of the Texas Attorney General P.O. Box 12548 Austin, Texas 78711-2548 Telephone: (512) 936-1709 Facsimile: (512) 370-9477

Appellee/Plaintiff at District Court: Antoine Dental Center

Counsel:

Jason Ray

Riggs & Ray, PC 506 W. 14th Street, Suite A Austin, Texas 78701 Telephone: (512) 457-9812 Facsimile: (512) 457-9066

ii *3 TABLE OF CONTENTS IDENTITY OF PARTIES AND COUNSEL ...................................................... ii

..................................................................................... iii

INDEX OF AUTHORITIES

............................................................................... vi

STATEMENT OF THE CASE

............................................................................. 2

STATEMENT REGARDING ORAL ARGUMENT

......................................... 3

ISSUES PRESENTED

........................................................................................... 3

STATEMENT OF FACTS

.................................................................................... 4

I.

The Texas Medicaid program provides health care for the indigent,

including limited orthodontia services.

................................................. 4

A.

Medicaid provides a limited benefit for orthodontics. ........................ 4

B.

Providers must obtain prior authorization by accurately and

honestly representing that their patient has a severe handicapping malocclusion before they may request reimbursement for orthodontic services. ............................................................................... 6

1.

Providers are required to rely on their education and training in making diagnoses, requesting prior authorization, and making claims for Medicaid reimbursement. ................... 7

2.

“Ectopic eruption” is an exceedingly rare condition, and in the TMPPM the term is afforded the meaning generally understood in the practice of dentistry. .................................... 8

II.

HHSC-OIG is responsible for protecting Medicaid from waste, fraud and abuse. OIG is required by law to impose a payment hold based on a credible allegation that a provider has committed Medicaid fraud. .....................................................................................10

III.

Antoine billed Texas Medicaid for more than $8 million in orthodontia services over a three-year period, and OIG placed Antoine on payment hold. ....................................................................14

IV.

Antoine requested a hearing on the payment hold, and, after the

iii

*4 hearing and the ALJs’ recommendation that HHSC order OIG to lift the hold, the EC reversed the PFD and ordered the hold to remain in place. .....................................................................................19

STANDARD OF REVIEW

.................................................................................21

SUMMARY OF THE ARGUMENT

..................................................................24

ARGUMENT

........................................................................................................25

I.

The EC acted within his discretion to correct misapplications of

Medicaid law and policy by the SOAH ALJs.

...................................25

A.

The proper interpretation of Texas Medicaid policy is a question of law to be determined by the EC. The EC properly interpreted Medicaid policy in harmony with the governing statutes and regulations, and Antoine has shown no basis for the Court to deviate from the EC’s correct interpretation. ............................................................................27

B.

The EC’s corrections of the ALJs’ errors in interpreting

Medicaid policy are entitled to respect from the Court.

.......29

II.

The EC did not exceed his authority in entering the AFO and

Antoine cannot establish otherwise.

....................................................32

A.

The ALJs misunderstood and misapplied Texas Medicaid law and policy and the EC corrected the misunderstanding with a proper construction of law and policy. ........................33

1.

The rules of statutory construction govern questions of

agency policy and administrative rules.

..............................37

2.

The ALJs ignored statutes, rules, and evidence and made fundamental errors in interpreting and applying Texas Medicaid policy. The misapplications were properly corrected by the EC. .............................................................38

B.

Substantial evidence exists to show that Antoine committed fraud or made willful misrepresentations necessary to maintain the payment hold. The EC properly corrected the ALJs’ errors, and Antoine cannot establish that the EC exceeded his authority. .............................................................43

1.

Providers have a duty to know and follow law and policy.

iv

*5 .................................................................................................44

2.

Dr. Kanaan’s scoring pattern shows, at a minimum, he acted with conscious disregard or reckless indifference to the truth or falsity of his representations of patient conditions. ..............................................................................45

3.

The ALJs compounded their errors by relying on “experts” who misunderstood and misapplied Texas Medicaid policy. .....................................................................47

III.

Every modification made in the EC’s AFO is supported by

substantial evidence and Antoine cannot establish otherwise.

.........49

A.

Finding of Fact No. 45 ...............................................................49

B.

Finding of Fact No. 46. ..............................................................51

C.

Finding of Fact No. 47. ..............................................................52

D.

Finding of Fact No. 48. ..............................................................54

E.

Finding of Fact No. 49. ..............................................................56

F.

Finding of Fact No. 50. ..............................................................57

G.

Conclusion of Law No. 13. ........................................................58

CERTIFICATE OF COMPLIANCE

.................................................................61

CERTIFICATE OF SERVICE

...........................................................................61

INDEX OF APPENDIX

.......................................................................................62

v *6 INDEX OF AUTHORITIES Cases Akin v. Tex. State Bd. of Dental Exam’rs , No. 03-14-00390-CV, 2015 WL1611803, (Tex. App.—Austin Apr. 9, 2015, no pet.hist.)......................... 24, 25, 26, 28, 43, 59

Atascosa Cnty. v. Atascosa Cnty. Appraisal Dist.,

990 S.W. 2d 255 (Tex.1999)... 29

Bd. of Law Exam’rs v. Stevens

, 868 S.W.2d 773 (Tex. 1994), cert. denied, Stevens

v. Bd. of Law Exam’rs

, 512 U.S. 1206, 114 S.Ct. 2676 (1994)…………............... 22

Bd. of Trs. of the Emps. Ret. Sys. v. Benge

, 942 S.W.2d 742 (Tex. App.—Austin

1997, writ denied)....................................................................................................

Boswell v. Brazos Electric Power

, 910 S.W.2d 593 (Tex. App.—Fort Worth 1995,

writ denied)........................................................................................................

37, 42

Bridgestone/Firestone, Inc. v. Glyn-Jones

, 878 S.W.2d 132 (Tex.1994)……. 38, 40

City of El Paso v. Pub. Util. Comm’n

, 883 S.W.2d 179 (Tex. 1994).......... 22, 23, 32

City of Waco v. Tex. Comm’n Envtl. Quality

, 346 S.W.3d 781(Tex. App. —Austin

2011,

rev’d on other grounds 413 S.W.3d 409 (Tex. 2013))….............................. 32

Cont’l Cas. Ins. Co. v. Functional Restoration Assocs.

,19 S.W.3d 393 (Tex.

2000)........................................................................................................................

Employees Ret. Sys. of Texas v. Garcia

, 454 S.W.3d 121 (Tex. App.—Austin

2014), pet. denied (Sept. 4, 2015)………………...…….......…………………

21, 32

Exxon Corp. v. R.R. Comm'n

, 993 S.W.2d 704 (Tex. App.—Austin 1999, no

pet.)..........................................................................................................................

Fitzgerald v. Advanced Spine Fixation Sys., Inc.,

996 S.W.2d 864 (Tex. 1999)..... 37

Flores v. Emps. Ret. Sys. of Tex.

, 74 S.W.3d 532 (Tex. App.—Austin 2002, pet.

denied).....................................................................................................................

Froemming v. Tex. State Bd. of Dental Exam’rs

, 380 S.W.3d 787 (Tex. App.—

Austin 2012, no pet.)...................................................................................

24, 26, 28

vi

*7 Gomez v. Tex. Educ. Agency , 354 S.W.3d 905 (Tex. App.—Austin 2011, pet. denied)..................................................................................................................... 29

Graff Chevrolet Co. v. Tex. Motor Vehicle Bd.,

60 S.W.3d 154 (Tex. App.—Austin

2001, pet. denied).........................................................................................

22-23, 24

Granek v. Texas State Bd. of Med. Exam'rs

, 172 S.W.3d 761 (Tex. App.—Austin

2005, no pet.)...........................................................................................................

Gulf States Utils. Co. v. Pub. Util. Comm’n

,841 S.W.2d 459 (Tex. App.—Austin

1992, writ denied)....................................................................................................

Harlingen Family Dentistry v. Tex. Health & Human Servs. Comm’n

, 452 S.W.3d

479 (Tex. App.—Austin 2014, pet. filed)................................................................

Heckler v. Community Health Servs.,

467 U.S. 51(1984).................................. 43-44

Heritage on the San Gabriel v. Tex. Comm’n on Envt’l Quality

, 393S.W.3d

417(Tex. App.—Austin 2012, pet. denied).......................................................

32, 49

In re: E.I. DuPont de Nemours & Co.

, 136 S.W.3d 218 (Tex. 2004)..................... 13

Levy v. Tex. State Bd. of Medical Exam’rs

, 966 S.W.2d 813 (Tex. App.–Austin

1998, no pet.)...........................................................................................................

Lewis v. Southmore Savings Ass’n,

480 S.W.2d 180 (Tex. 1972)........................... 23

Liberty Mut. Ins. Co. v. Garrison Contractors, Inc.

, 966 S.W.2d 482

(Tex. 1998)……...……………………………………………………………......

Locklear v. Tex. Dep’t of Ins.

, 30 S.W.3d 595 (Tex. App.—Austin 2000, no

pet.)………………………………………………………………………………..

N. Mem’l Med. Ctr. v. Gomez

, 59 F. 3d 735 (8th Cir. 1995)................................... 45

Personal Care Products, Inc. v. Hawkins

, 635 F. 3d 155 (5th Cir. 2001).............. 44

Pierce v. Tex. Racing Comm’n

, 212 S.W.3d 745 (Tex. App.—Austin 2006, pet.

denied)…………………………....... …………………………...……………

49, 59

R.R. Comm’n of Tex. v. Tex. Citizens for a Safe Future & Clean Water

, 336 S.W.

3d 619 (Tex. 2011)…..…................................................................

28, 29, 32, 37, 38

vii

*8 Rehak Creative Servs. v. Witt , 404 S.W.3d 716 (Tex. App.—Houston [l4th Dist.] 2013, pet. denied).................................................................................................... 55

Sanchez v. Tex. State Bd. of Med. Exam’rs

, 229 S.W.3d 498 (Tex. App.—Austin

2007, no pet.)...............................................................................................

24, 27, 50

Smith v. Montemayor

, 03-02-00466-CV, 2003 WL 21401591 (Tex. App.—Austin

June 19, 2003, no pet.)...........................................................................

26, 27, 28, 50

State v. Pub. Util. Comm’n

, 883 S.W.2d 190(Tex. 1994)........................... 21, 22, 32

State v. Terrell

, 588 S.W.2d 784 (Tex.1979)..................................................... 37-38

State v. Mid-South Pavers, Inc.,

246 S.W.3d 711(Tex. App.–Austin 2007, pet.

denied).....................................................................................................................

Sw. Pharm. Solutions, Inc., v. Tex. Health & Human Servs. Comm’n

, 408 S.W.3d

549 (Tex. App.—Austin 2013, pet. denied).........................

28, 29, 30-31, 32, 42, 48

Tex. Ass’n of Psychological Assocs. v. Tex. State Bd. of Exam’rs of Psychologists

439 S.W.3d 597602 (Tex. App.—Austin 2014, no pet.).........................................

Tex. Emp’t Comm’n v. Hays

, 360 S.W.2d 525 (Tex. 1962)............................... 21-22

Tex. Health Facilities Comm’n. v. Charter Med.-Dallas, Inc.

, 665 S.W.2d 446

(Tex.1984)...............................................................................................................

Tex. State Bd. of Med. Exam’rs v. Birenbaum

, 891 S.W.2d 333 (Tex. App.—Austin

1995, writ denied)....................................................................................................

Tex. State Bd. of Med. Exam’rs v. Dunn

, 03-03-00180-CV, 2003 WL 22721659

(Tex. App.—Austin Nov. 20, 2003, no pet.)..........................................

26-27, 49, 50

Tex. State Bd. of Dental Exam’rs v. Sizemore,

759 S.W.2d 114 (Tex. 1988)......... 22

Tex. Tech Univ. Health Scis. Ctr. v. Apodaca

, 876 S.W.2d 402 (Tex. App.—El

Paso 1994, writ denied)...........................................................................................

TGS-NOPEC Geophysical Co. v. Combs,

340 S.W.3d 432 (Tex. 2011)…............ 40

United States v. Carbajal

, 290 F.3d 277 (5th Cir. 2002)........................................ 12

viii

*9 United States v. Floyd

, 343 F.3d 363 (3d Cir. 2003)...............................................

Wood v. Tex. Comm’n Envtl. Quality

, No. 13-13-00189-CV, 2015 WL 1089492

(Tex. App.—Corpus Christi, Mar. 5, 2015, no pet.).........................................

26, 48

Zimmer US, Inc. v. Combs

, 368 S.W.3d 579 (Tex. App.—Austin 2012, no pet).... 30

Federal Regulations/Statutes

42 C.F.R. § 455.2............................................................................................... 12, 46 42 C.F.R. § 455.23............................................................................. 2, 11, 12, 18, 58

42 C.F.R. § 455.23(a)(1)....................................................................................

11-12

42 U.S.C. §1395........................................................................................................

42 U.S.C. §1396..................................................................................................

4, 11

State Regulations

1 Tex. Admin. Code § 155.507(c)(1)...................................................................... 19 1 Tex. Admin. Code § 357.483(a)(1)-(2)................................................................ 20

1 Tex. Admin. Code § 357.488(b)...........................................................................

1 Tex. Admin. Code § 357.497...............................................................................

1 Tex. Admin. Code § 357.497(e)...........................................................................

1 Tex. Admin. Code § 371.1...................................................................................

1 Tex. Admin. Code § 371.1605.............................................................................

1 Tex. Admin. Code § 371.1617(a)(1)(A)-(C)........................................................

1 Tex. Admin. Code § 371.1617(a)(3)....................................................................

1 Tex. Admin. Code § 371.1617(5)(B)...................................................................

1 Tex. Admin. Code § 371.1617(1)(A)...................................................................

1 Tex. Admin. Code § 371.1617(1)(B)...................................................................

1 Tex. Admin. Code § 371.1617(1)(I).....................................................................

1 Tex. Admin. Code § 371.1617(1)(K)...................................................................

1 Tex. Admin. Code § 371.1617(2)(A)...................................................................

1 Tex. Admin. Code § 371.1703(b)(3)....................................................................

25 Tex. Admin. Code § 33.71....................................................

4-5, 6, 34, 36, 39, 41

State Statutes

Tex. Gov’t Code § 311.002(4)................................................................................. 37 Tex. Gov’t Code § 311.011(a)........................................................................... 38, 39

Tex. Gov’t Code § 311.011(b)...........................................................................

38, 41

Tex. Gov’t Code § 311.021(2) .........................................................................

38, 41

ix

*10 Tex. Gov’t Code § 311.021(3)........................................................................... 38, 41 Tex. Gov’t Code § 311.021(4)........................................................................... 38, 41

Tex. Gov’t Code § 311.021(5)...........................................................................

38, 41

Tex. Gov’t Code § 311.023(1)..........................................................................

.38, 41

Tex. Gov’t Code § 311.023(5)...........................................................................

38, 41

Tex. Gov’t Code § 311.023(6).....................................................................

29, 38, 41

Tex. Gov’t Code § 312.005.....................................................................................

Tex. Gov’t Code § 531.001................................................................................

10-11

Tex. Gov’t Code § 531.0055(b)(1)............................................................................

Tex. Gov’t Code § 531.1011(1)...............................................................................

Tex. Gov’t Code § 531.102.....................................................................................

Tex. Gov’t Code § 531.102(a).................................................................................

Tex. Gov’t Code § 531.102(g).................................................................................

Tex. Gov’t Code § 531.102(g)(2)............................................................

2, 11, 18, 47

Tex. Gov’t Code § 2001.058(e)...................................................................

26, 27, 59

Tex. Gov’t Code § 2001.058(e)(1)....................................................................

24, 26

Tex. Gov’t Code § 2001.062(b)...............................................................................

Tex. Gov’t Code § 2001.174...................................................................................

Tex. Gov’t Code § 2001.174(1)...............................................................................

Tex. Gov’t Code § 2001.174(2)...............................................................................

Tex. Gov’t Code § 2001.175(e)...............................................................................

Tex. Hum. Res. Code § 32.0291(b).............................................................

13, 18, 19

Tex. Hum. Res. Code § 32.0291(c).....................................................................

2, 13

Tex. Hum. Res. Code § 32.032(b)(1)......................................................................

Tex. Hum. Res. Code § 32.091(c)...........................................................................

Tex. Hum. Res. Code § 36.0011(a).......................................................

11, 53, 55, 56

Tex. Hum. Res. Code § 36.0011(b)...................................................................

53, 56

Secondary Sources

F. Scott McCown & Monica Leo, When Can an Agency Change the Findings of Conclusions of an ALJ?: Part Two , 51 Baylor L. Rev. 63, 69-70

(1999)………………………………………………...……….……….

26, 27, 50

x

*11 No. 06-15-00076-CV In the Court of Appeals for the Sixth Judicial District Texarkana, Texas Texas Health and Human Services Commission, AND Office of Inspector General,

Appellants

, v. Antoine Dental Center, Appellee . On Appeal from the 200 th Judicial District Court of Travis County, Texas Cause No. D-1-GN-14-002229 Hon. Amy Clark Meachum, Presiding TO THE HONORABLE SIXTH COURT OF APPEALS: The Texas Health and Human Services Commission (“HHSC”), and the Office of Inspector General (“OIG”) (collectively “State”) respectfully request that this Court reverse the district court’s decision, which reversed HHSC’s entry of an Amended Final Order (“AFO”) sustaining a payment hold against Antoine Dental Center (“Antoine”) for violations of Texas law and regulations related to the Medicaid program.

HHSC Executive Commissioner Dr. Kyle Janek (“EC”) acted within his authority in entering the AFO, which is supported by substantial evidence. The district court erred in reaching its decision that the AFO should be reversed because the AFO is reasonably supported by substantial evidence and because the EC acted

1 *12 within its statutory authority in entering the AFO. At the district court, Antoine failed to meet its burden to show otherwise. Therefore, the AFO should be affirmed by this Court.

STATEMENT OF THE CASE The EC, on behalf of HHSC, issued the AFO, affirming a payment hold imposed by HHSC-OIG on Antoine. Tex Hum. Res. Code § 32.0291(c); Tex. Gov’t Code § 531.102(g)(2); 42 C.F.R. § 455.23. See Appendix A , HHSC’s AFO, dated May 2, 2014 (copy also at A.R. 1743-85). 1

Antoine filed a suit for judicial review appealing the AFO. The district court reversed the AFO without giving any explanation for its reversal. Aggrieved by the district court order, the State timely filed this appeal.

1 The pleadings and copies of the hearing transcript, contained within HHSC’s Administrative Record (“A.R.”), are labeled with the Bates prefix “00001” through “2795.” The A.R. was admitted as Exhibits 1 and 2 in the district court and is part of the clerk’s record.

2 *13 STATEMENT REGARDING ORAL ARGUMENT Pursuant to Tex. R. App. P. 38.1(e), the State respectfully requests oral argument. Antoine’s position, if accepted, would severely undermine the State’s efforts to punish and deter fraud in the Medicaid program, which comprises a quarter of the State’s budget. An adverse decision would likely impede the State’s efforts to enforce numerous other public-welfare statutes that expressly authorize the State to sue wrongdoers in the health and medical fields. The State believes that oral argument will assist the Court’s decisional process; and the importance of the matter and the intricacies of the relevant statutes and Medicaid policies warrant oral argument.

ISSUES PRESENTED I. The EC acted within his discretion to correct misapplications of Medicaid law and policy by the SOAH ALJs. II. The EC did not exceed his authority in entering the AFO and Antoine cannot establish otherwise. III. Every modification made in the EC ’ s AFO is supported by substantial evidence and Antoine cannot establish otherwise. 3 *14 STATEMENT OF FACTS I. The Texas Medicaid program provides health care for the indigent, including limited orthodontia services. The federal government enacted the Medicaid program in 1965 to help the states provide healthcare for the indigent. Medicaid is funded jointly by federal and state government, as mandated by federal law. 42 U.S.C. § 1396. In Texas, the agency responsible for administering Medicaid is HHSC. Tex. Gov’t Code § 531.0055(b)(1). 2

A. Medicaid provides a limited benefit for orthodontics. Texas Medicaid provides coverage for orthodontic services to qualifying children on a very limited basis. 3 The law restricts when Texas Medicaid will pay for orthodontic services: Orthodontic services for cosmetic reasons only are not a covered Medicaid service. Orthodontic services must be prior authorized and are limited to treatment of severe handicapping malocclusion

and other related conditions as

described and measured by the procedures and standards published in the TMPPM [(“Texas Medicaid Provider Procedures Manual”)].

2 Currently more

than 4.5 million Texans are enrolled

in Medicaid. See

http://www.medicaid.gov/Medicaid-CHIP-Program-Information/By-State/texas.html,

Appendix B

. In 2013, Medicaid comprised about 26.2 percent of the Texas state budget, amounting to

approximately $25.6 billion dollars.

See

Pink Book, 1-1, Appendix C . 3 HHSC administers the Medicaid program pursuant to Texas’s “Medicaid state plan.” The state plan, is reviewed and approved by the federal Centers for Medicare & Medicaid Services. Tex. Gov’t Code § 531.097.

4 *15 25 Tex. Admin. Code § 33.71 (emphasis added). Since 2003, the Texas Medicaid orthodontia benefit policy has covered orthodontic services under limited scenarios. Relevant to this matter is coverage for children between the ages of 12 and 20 who have dysfunction and a severe handicapping malocclusion which is defined by an accurate and honest Handicapping Labio-lingual Deviation (“HLD”) score of 26 points or greater. Texas Medicaid does not pay, nor has it ever paid, for cosmetic orthodontics. See, e.g. , TMPPM (2011) (Ex. R-17), Vol. 2, § 4.2.24, copy at

Appendix D

; TMPPM (2010) (Ex. R-16),Vol. 2, § 5.3.24 (same), copy at Appendix E

; TMPPM (2009), Vol. 2, § 19.19 (Ex. R-15) (same), copy at

Appendix F ; 4 TMPPM (2008), Vol. 2 § 19.18 (Ex. R-14), copy at Appendix G . See also 25 Tex. Admin. Code § 33.71 (same). In all qualifying cases, comprehensive orthodontic treatment (i.e. “full banding” or “full braces,”) is only available for children twelve years of age to twenty (at the time of prior authorization) who have lost their baby teeth. See Ex. R-15 at § 19.19.6; App. F . 4 The TMPPM states:

19.19 Orthodontic Services (THSteps):

Orthodontic services for cosmetic purposes only are not a benefit of Texas Medicaid. Orthodontic services are limited to the treatment of children who are 12 years of age and older with severe handicapping malocclusion… 19.19.1 Benefits and Limitations: Orthodontic services include the following: Correction of severe handicapping malocclusion as measured on the Handicapping Labiolingual Deviation (HLD) Index…A minimum score of 26 points is required for full banding approval (only permanent dentition cases are considered)… Orthodontic services for cosmetic purposes only are not a benefit of Texas Medicaid or THSteps.

5 *16 B. Providers must obtain prior authorization by accurately and honestly representing that their patient has a severe handicapping malocclusion before they may request reimbursement for orthodontic services.

Providers must submit a prior authorization request, and receive approval, before seeking reimbursement for orthodontic services. See 25 Tex. Admin. Code §

33.71;

see also Ex. R-15 at § 19.19.2; App. F . “Prior authorization is a condition for reimbursement; it is not a guarantee of payment.”

Id.

Providers are required to submit truthful and complete information when seeking prior authorization. 5

The prior authorization application includes the provider’s certification that a child has a severe handicapping malocclusion and the treatment is necessary to correct it. To support a finding that a child has a severe handicapping malocclusion, a provider must, inter alia , submit an HLD scoresheet accurately evaluating the

patient. See Ex. R-15 at § 19.19.2 (2009);

App. F . A prior authorization request is generally approved if the child has a severe handicapping malocclusion, as indicated by an honest score of 26 or more on the HLD. See id. 6 5 Specifically, providers are required to submit:

•

An orthodontic treatment plan, which “should incorporate only the minimal number of appliances required to properly treat the case”; • “[c]ephalometric radiograph with tracing models”;

•

“[c]ompleted and scored HLD score sheet with diagnosis of Angle class (26 points

required for approval of non-cleft palate cases.”); • Facial photographs;

•

Full series of radiographs or a panoramic radiograph; diagnostic films are required.

Id.

, at App. F . 6 For a patient for whom the provider scores less than 26, the provider may submit a written narrative to qualify for benefits. This did not occur with the patients in this case

6 *17 1. Providers are required to rely on their education and training in making diagnoses, requesting prior authorization, and making claims for Medicaid reimbursement.

The HLD allows providers to score nine specific dental conditions in a patient’s mouth. The conditions identified on the HLD scoresheet are conditions that are generally recognized in dentistry, including but not limited to: ectopic eruption, cleft palate, overjet, overbite, and mandibular protrusion (“underbite”). The condition most relevant in this case is ectopic eruption.

The TMPPM instructs providers how to score using the HLD scoresheet. The instructions include a description of ectopic eruption. See, e.g., Ex. R-15 at § 19.21 (2009), at App. F . The TMPPM does not define ectopic eruption for the purposes Texas Medicaid. HHSC’s policy expert Dr. Altenhoff testified that the terms in the ectopic eruption instruction are not defined, but, rather, are accorded their plain and ordinary meaning in the English language. Vol. 1 at 103:8-12, A.R. at 1914; see also R-88, Proffer of Rebuttal Testimony from Dr. Linda Altenhoff (Medicaid did not intend, at any time, for the term “‘ectopic eruption’ to have a different meaning when used in the evaluation of Medicaid patients than is generally understood in the practice of dentistry” and “dentists [were] expected to employ the training and education they received as dentists in applying the terms used in the Provider Manual”), Appendix J ; and Vol. 3 at 241:5-11 (where Deputy Inspector General for Enforcement testified to the same proposition), A.R. at 2528.

7

*18 2. “Ectopic eruption” is an exceedingly rare condition, and in the TMPPM the term is afforded the meaning generally understood in the practice of dentistry.

“Ectopic eruption” is a rare dental condition – occurring in only 1.5 to 9 percent of the population 7 – primarily affecting the first molars, upper and lower canines. 8 Scientific literature describes the low frequency of ectopic eruption occurring even once per patient. See R-51, (ectopic eruption only occurring in 1.5- 1.6% of a sample population), at App. H . The frequency of the same rare condition occurring multiple times and/or bilaterally in the same patient is “infinitesimally smaller.” 9 The chance of 100% of the patients in a sample having not only one

instance of a rare condition, but always at least 6 instances, and always two or more

bilateral instances, is “zero. It’s not possible.” 10

OIG’s orthodontic expert, Dr. Larry Tadlock, described that ectopic eruption,

as explained in Dr. William Proffit’s textbook

Contemporary Orthodontics , means a tooth that erupts in the wrong place. 11 The Proffit textbook, a leading orthodontic

textbook, explains that ectopic eruption is caused by malposition of a permanent

7 Vol. 1 at 173:3-6, A.R. at 1984; see also R-51 at 8 (Thilander article describing ectopic eruption as an “anomaly” occurring in only 1.5-1.6% of a sample population of 4724 patients),

Appendix

.

8 Vol. 1 at 153:22-24, A.R. at 1964. 9 Vol. 1 at 174:16-17, A.R. at 1985. 10 Id. at 174:1, A.R. at 1985; R-49, Tadlock summary, at A.R. 1097-98, Appendix I . 11 Id. at 114:18-23, A.R. at 1925.

8

*19 tooth bud and most commonly occurs in the maxillary first molars. 12 “Ectopic eruption of other teeth is rare, but can result in transposition.” 13 The following

photographs provide examples of ectopic eruption:

R-31A (showing upper and lower ectopically-erupted canines (images of non- Antoine patients provided by Dr. Tadlock)), at A.R. 1031. 14 See

R-31L (showing an ectopically-erupted upper left central incisor (image of non-

Antoine patient provided by Dr. Tadlock)). 15 All of the scientific literature surveyed by Dr. Tadlock describe ectopically erupted teeth as teeth that erupt “in the wrong 12 Id. at 143:17-18, 144:13-15, A.R. at 1954. 13 Id. at 145:8-10, A.R. at 1956. 14 See Vol. 1 at 149 for Dr. Tadlock’s description of this non-Antoine patient’s condition, at

A.R. 1960.

Compare photos of Antoine patients, included infra at p. 18. 15 Id. at 150 for Dr. Tadlock’s description of this image, at A.R. 1961. Compare photos of

Antoine patients, included

infra at p. 18.

9

*20 place.” 16 Teeth can ectopically erupt in sinus cavities, or through the side of the face. 17 Based upon the well-known dental term, the vast majority of teeth that Antoine represented to Medicaid as being ectopic eruptions were not ectopic eruptions.

II. HHSC-OIG is responsible for protecting Medicaid from waste, fraud and abuse. OIG is required by law to impose a payment hold based on a credible allegation that a provider has committed Medicaid fraud.

OIG is an independent oversight agency, administratively attached to HHSC. OIG is responsible for investigating instances of waste, fraud and abuse in health care services provided by HHSC, including Medicaid, and for enforcing state laws relating to the provision of those services. Tex. Gov’t Code § 531.102; see also 1 Tex. Admin. Code § 371.1. Chapter 32 of the Human Resources Code authorizes the OIG to recover damages and penalties from a person who presents or causes to be presented to the department a claim that “contains a statement or representation the person knows or should know to be false.” Tex. Hum. Res. Code § 32.032(b)(1).

The statutory authority for the rules governing OIG includes both chapters 32 and 36 of the Human Resources Code, and OIG may take administrative enforcement measures against a person based upon a violation of either chapter. See 16 Id. at 153, at A.R. 1964. 17 Id. at 146:3-8, at A.R. 1957.

10

*21 Tex. Gov’t Code § 531.001

et seq

.; 1 Tex. Admin. Code § 371.1605 (2005); 1 Tex. Admin. Code § 371.1617(5)(B) (2005) (which references and incorporates the Texas Medicaid Fraud Prevention Act (“TMFPA”)). Therefore, the standard in the TMFPA for determining whether a person acts with the requisite scienter to commit an unlawful act is applicable in an enforcement action brought by the OIG, including a payment hold proceeding. See Tex. Hum. Res. Code § 36.0011(a) (defining Culpable Mental State). 18

OIG is required by law to impose a payment hold “on receipt of reliable evidence that the circumstances giving rise to the hold on payment involve fraud or willful misrepresentation under the state Medicaid program in accordance with 42 C.F.R. Section 455.23.” 19 Tex. Gov’t Code § 531.102(g)(2) (2011). “The State

Medicaid agency

must suspend all Medicaid payments to a provider after the agency determines there is a credible allegation of fraud for which an investigation is pending under the Medicaid program against an individual or entity.” 42 C.F.R. § 18 For purposes of this chapter, a person acts “knowingly” with respect to information if the person: (1)has knowledge of the information; (2) acts with conscious indifference to the truth or falsity of the information; or (3) acts in reckless disregard of the truth or falsity of the information. Proof of the person's specific intent to commit an unlawful act under Section 36.002 is not required in a civil or administrative proceeding to show that a person acted “knowingly” with respect to information under this chapter. Id. 19 The mandatory payment-hold framework was introduced through provisions of the Affordable Care Act, which amended the Social Security Act. Section 1862(o) broadly requires suspension of payments pending an investigation of credible allegations of fraud. 42 U.S.C. § 1396b(i)(2)(c). Section 1903(2)(c) provides for withholding of federal funds where the State fails to implement section 1862(o). 42 U.S.C. § 1395y(o)

11 *22 455.23(a)(1) (emphasis added). Fraud is defined in the Government Code as “an intentional deception or misrepresentation made by a person with the knowledge that the deception could result in some unauthorized benefit to the person or to another person, and includes

any act that constitutes fraud under applicable

federal or state law .” Tex. Gov’t Code § 531.1011(1) 20 (emphasis added). The definition incorporates unlawful acts under the TMFPA.

A credible allegation of fraud “may be an allegation, which has been verified by the State, from any source, including but not limited to the following: . . . claims data mining [,] . . . patterns identified through provider audits [or] law enforcement investigations.” 42 C.F.R. § 455.2. An allegation is credible if it has “indicia of reliability and the State Medicaid agency has reviewed all allegations, facts, and evidence carefully and acts judicially on a case-by-case basis.” Id.

Evidence is presumed to have indicia of reliability and may be adopted by a court “without further inquiry if the defendant fails to demonstrate by competent rebuttal evidence that the information is materially untrue, inaccurate or unreliable.” United States v. Floyd , 343 F.3d 363, 372-73 (3rd Cir. 2003) (citing

United States v. Carbajal

, 290 F.3d 277, 287 (5th Cir. 2002)). 20 In 2015, the legislative amended this statute to delete the italicized language. The amendment did not take effect until September 2015; therefore, it is not applicable to this case.

12 *23 OIG has additional authority to impose a payment hold if there is “reliable

evidence” a provider “committed fraud or willful misrepresentation regarding a

claim for reimbursement.” Tex. Hum. Res. Code § 32.0291(b) (2003). 21 The authority in Human Resources Code chapter 32 is duplicative of the authority in Government Code chapter 531. However, § 32.0291(c) includes the standard for maintaining the payment hold: “The department shall discontinue the hold unless the department makes a prima facie showing at the hearing that the evidence relied on by the department in imposing the hold is relevant, credible and material to the issue of fraud or willful misrepresentation.” Tex. Hum. Res. Code § 32.0291(c) (emphasis added). 22

This means in a payment hold hearing, the OIG must present prima facie evidence that is relevant, credible and material, that the provider acted with: (1) knowledge of the truth or falsity of its representations; (2) conscious indifference to the truth or falsity of its representations; or (3) reckless disregard of the truth or falsity of its representations. Tex. Hum. Res. Code §§ 32.0291(c), 36.011.

(emphasis added).

21 Effective September 1, 2013 section 32.0291(b) of the Human Resources Code was amended. A new subsection (c) was added to the statute. The changes are prospective and do not apply to this case, which was heard in May 2013. 22 See In re E.I. DuPont de Nemours & Co. , 136 S.W.3d 218, 223 (Tex. 2004) (“The prima facie standard requires only the ‘minimum quantum of evidence necessary to support a rational inference that the allegation of fact is true.’ Tex. Tech Univ. Health Scis. Ctr. v. Apodaca, 876 S.W.2d 402, 407 (Tex. App.—El Paso 1994, writ denied). ”).

13 *24 III. Antoine billed Texas Medicaid for more than $8 million in orthodontia services over a three-year period, and OIG placed Antoine on payment hold.

Between November 1, 2008 and August 1, 2011, Medicaid paid Antoine over $8,104,875.00, FoF 3, App. A at p. 3, at A.R. 1748. OIG initiated an investigation of Antoine in 2011. Vol. 3, 195:1, A.R. at 2482. During the time period of the investigation, Antoine treated approximately 6,550 Medicaid patients. Vol. 3 at 200:12, A.R. at 2487. During its investigation, OIG collected a statistically valid random sample 23 of 63 of Antoine ’ s Medicaid patient files. Vol. 3 at 200:20-208:7, A.R. at 2787.

The 63 patient files, which included diagnostic materials (x-rays, color photographs, three-dimensional models, etc.) were independently reviewed by two orthodontic experts: Dr. Charles Evans and Dr. Larry Tadlock. Based on the expert review of the 63-patient sample, OIG instituted a 100% payment hold on Antoine ’ s claims for reimbursement. 24

FoF 32,

App. A

at p. 13, at A.R.1756. Both orthodontic experts relied upon their education and training in 23 OIG’s statistically valid sampling methodology was not at issue in the payment hold hearing. The only evidence regarding the validity of OIG’s sampling and extrapolation procedure is uncontroverted. See testimony of Deputy Inspector General for Enforcement, Vol 3, at 201-209,

A.R. at 2488-96.

24 Dr. Tadlock reviewed the sample after the payment hold was instituted, for purposes of testifying at the payment hold hearing regarding the patient files.

14 *25 reviewing the patient files to evaluate the patients’ conditions, and each expert individually followed the TMPPM criteria for the corresponding years of service (2008-2011). Both experts independently concluded Antoine inflated HLD scores submitted to Medicaid. Vol. 3 at 289:23-290:3, 295:22-296:2, A.R. at 2576-77, 2582-83. OIG presented the following evidence, based on the experts’ review of the 63 patients:

• Of the 63 patients, Antoine scored 61 (96.8%) as having severe handicapping malocclusions, i.e., extreme deviations from the norm. See R-49, at A.R. 1097-98, App. I.

•

Antoine certified that 61 patients had six or more ectopically-erupted teeth.

Ex. P-64.01 through P-64.63; R-49, at A.R. 1097-98,

App. I.

•

Antoine scored at least 50% of the allowable teeth as ectopic on each and every HLD scoresheet Antoine submitted for authorization. See R-49, at A.R. 1097-98, App. I.

•

No patient in the sample was eligible for Medicaid-covered comprehensive orthodontics without Antoine’s scoring for ectopic eruption; further, Antoine did not submit any narratives for any of the 61 patients, even if services could be justified on other bases. Ex. P- 64.01 through P-64.63; Vol. 4 at 70:13-19, A.R. at 2698.

• Dr. Kanaan scored 27 of the 63 patients’ HLDs. Of those 27 patients, he scored 23 (85%) with the same eight teeth ectopic. Vol. 3 at 43-70, A.R. at 2330-57. Ex. P-64.01 through P- 64.63; R-49, at A.R. 1097-98, App. I .

•

Antoine submitted prior authorization requests for comprehensive orthodontics under the code D8080 for 61 of the 63 patients. Ex. P- 64.01 through P-64.63; Vol. 1, 176:14-20, 177:1-16, A.R. at 1987-88.

Dr. Larry Tadlock, D.D.S., 25 testified: 25 Dr. Tadlock is a board-certified orthodontist. He is an Assistant Clinical Professor of

15

*26 • Antoine’s HLD scoresheets were false and misrepresented the condition of the patient’s teeth. Vol. 1 at 176:14- 20, 177:1-16, A.R. at 1987-88. • 61 of 63 HLD scoresheets were incomprehensible because ectopic eruption is a rare condition. Only 1.5-9% of the population has even one ectopic tooth. Vol. 1 at 173:3-6, A.R. at 1984; see also R-51 at 8 (Thilander article describing ectopic eruption as an “anomaly” that occurs in only 1.5-1.6% of a sample population of 4724 patients), App. H .

• For ectopic eruption to occur more than once in the same patient is “infinitesimally smaller.” Vol. 1 at 174:16-18, A.R. at 1985. See also R-31L, supra , at p. 9.

•

Because ectopic eruption is rare, occurring in between 1.5-9% of the population, the chances of 61 patients in the 63-patient sample having 6 or more ectopic anterior teeth is “not possible.” Vol. 1 at 173:3-6, 175:1, A.R. at 1984, 1986.

• The chance of 100% of patients in a sample having always at least six instances of ectopic eruption, and always two or more bilateral instances, is “zero. It’s not possible.” Vol. 1 at 175:1, 176:23, A.R. at 1986-87; R-49, Tadlock summary, at A.R. 1097-98, App. I .

The following shows Antoine’s scoring of patients in the 63-patient sample:

Patient 1

Pre-treatment intra-oral photos of Antoine Patient 1, P-01-0001: 26 Orthodontics at Baylor College of Dentistry, responsible for supervising patient care, teaching orthodontic residents, and performing research on orthodontics. He is one of only eight directors of the American Board of Orthodontics (“ABO”) in the United States. As an ABO Director, Dr. Tadlock is responsible for creating, writing, and administering board certification exam for orthodontists. Specific to his experience with Medicaid, Dr. Tadlock has treated Medicaid patients who were accepted and treated at Baylor. He estimates he has assessed “several hundred” HLD scoresheets for potential Medicaid patients while at Baylor. Vol. 1 at 146-48, A.R. at 1957-59. 26 Dr. Tadlock concluded “[t]his patient’s occlusion is near perfect. . . . it might qualify as passing the certification process from the American Board of Orthodonti[cs]. Vol. 1 at 158:18- 23. Compare photos of true ectopic eruptions, included supra at p. 9.

16

*27 Antoine’s HLD scoresheet representing that Patient 1 has 8 ectopic teeth. P 01- 0013: Patient 6

:

Pre-treatment intra-oral photos of Antoine Patient 6. P-06-0003: 27 06-0001 27 This patient does not have a single ectopic tooth according to Dr. Tadlock, and does not have a severe handicapping malocclusion. Vol. 1 at 160:14-24, A.R.at 1971.

17 *28 Patient 59

:

Pre-treatment intra-oral photos of Antoine Patient 59, P-59-0018: Antoine’s HLD scoresheet representing that Patient 59 has 10 ectopic

teeth. P-59-0017:

OIG based its decision to impose the payment hold on prima facie evidence that Antoine fraudulently or willfully misrepresented HLD scores in prior authorization requests, in violation of Tex. Gov’t Code § 531.102(a), and 1 Tex. Admin. Code §§ 371.1617(1)(A), (B), (I). 28 28 OIG also found that Antoine billed for services not reimbursable, in violation of 1 Tex. Admin. Code § 371.1617(1)(K); and failed to maintain and provide required records, in violation of 1 Tex. Admin. Code § 371.1617(2)(A). As a result, Antoine failed to comply with Medicaid program requirements, and a payment hold was authorized under the Inspector General’s discretionary authority. However, the Inspector General’s authority to impose discretionary payment holds was challenged and then struck in Harlingen Family Dentistry v. Tex. Health & Human Servs. Comm’n , 452 S.W.3d 479 (Tex. App.—Austin 2014, pet. filed). Therefore, the State confines its arguments to the mandatory payment hold under the credible allegation of fraud standard as codified in 42 C.F.R. § 455.23, Tex. Gov’t Code § 531.102(g)(2) (2011), and Tex. Hum. Res. Code § 32.0291(b).

18

*29 IV. Antoine requested a hearing on the payment hold, and, after the hearing and the ALJs’ recommendation that HHSC order OIG to lift the hold, the EC reversed the PFD and ordered the hold to remain in place.

Antoine requested a hearing to appeal the payment hold. SOAH ALJs Howard Seitzman and Catherine Egan conducted a hearing in May 2013. The issue was whether OIG presented prima facie evidence that was relevant, credible and material that Antoine committed fraud or willful misrepresentations. Tex. Hum. Res. Code § 32.0291(b).

The burden was not on the OIG to actually prove fraud or willful misrepresentations; rather, the question was only whether OIG brought forward prima facie evidence sufficient to maintain the payment hold. 29

After the hearing, ALJs Seitzman and Egan issued a PFD recommending that HHSC order OIG to lift the payment hold. PFD, dated Nov. 4, 2013, A.R. at 1193-1238. OIG timely filed Exceptions to the PFD. Tex. Gov’t Code § 2001.062(b); 1 Tex. Admin. Code §§ 155.507(c)(1), 357.497. See Exceptions, dated Nov. 22, 2013, A.R. at 1257-1344. Antoine filed a Response to OIG’s Exceptions, and the ALJs issued a letter recommending an insignificant modification to their PFD. See Letter, dated Jan. 16, 2014, A.R. at 1375-76.

29 The substantive allegations of Medicaid fraud against Antoine are pending in a separate lawsuit

brought by the State against Antoine and five other groups of provider defendants.

State of Texas

v. Nazari

, Cause No. D-1-GN-14-005380 (53rd Dist. Ct., Travis County, Texas).

19

*30 HHSC issued a Final Order, adopting the OIG’s Exceptions and maintaining the

payment hold.

See Order, dated Feb. 27, 2013, A.R. at 1387-1422. HHSC’s Final Order was issued by HHSC ALJ Rick Gilpin, who the EC designated to review the PFD and issue the final agency decision. See 1 Tex. Admin Code §

371.1617(a)(3); 1 Tex. Admin Code § 357.483(a)(1)-(2). Subsequently, OIG filed

a motion for rehearing. Mot., dated Apr. 2, 2014, A.R. at 1552-1650. 30 After

reviewing the record, the EC issued the AFO.

See Am. Final Order, dated, May 2,

2014, at

App. A , and A.R. at 1744-85.

Antoine filed a motion for rehearing, which HHSC overruled. A.R. at 1787- 1810. Antoine then filed for judicial review in district court. After briefing and argument, but without the submission of any evidence other than the administrative record, the district court entered a judgment stating that the EC ’ s AFO is reversed. The district court gave no explanation for the reversal. This appeal followed.

30 Antoine also filed a motion for rehearing, erroneously with SOAH instead of with HHSC

Appeals Division. Mot., dated Mar. 17, 2014, A.R. at 1423-65;

see also Tex. Gov’t Code § 2001.146 (motions for rehearing procedures); 1 Tex. Admin. Code § 357.488(b) (Filing and Serving of Documents (“Documents are considered filed only when received by the HHSC Appeals Division. . .”); 1 Tex. Admin. Code § 357.497(e) (“When the judge issues a proposal for decision, the referring agency’s rules govern final orders and motions for rehearing.”). Because Antoine filed the motion for rehearing in the wrong forum, the motion was a nullity, and the EC was free to disregard it.

20 *31 STANDARD OF REVIEW The test for review of an agency action is not whether the agency reached the correct conclusion, but whether some reasonable basis for the agency’s action exists in the record. State v. Pub. Util. Comm’n , 883 S.W.2d 190, 203 (Tex. 1994) (citing

R.R. Comm’n v. Pend Oreille Oil & Gas Co.

, 817 S.W.2d 36, 41 (Tex. 1991)).

The district court reviewed HHSC’s AFO under the substantial evidence rule. Tex. Gov’t Code § 2001.174. The Administrative Procedure Act (“APA”) provides that the district court “may not substitute its judgment for the judgment of the state agency on the weight of the evidence on questions committed to agency discretion but . . . may affirm the agency decision in whole or in part” if the order is supported by substantial evidence. Tex. Gov’t Code § 2001.174(1). The district court’s review was limited to the administrative record. Tex. Gov’t Code § 2001.175(e). This Court also reviews the AFO under the substantial evidence rule, without deference to the judgment of the district court. Tex. Dep’t. of Pub. Safety v. Alfred , 209 S.W.3d 101,

103 (Tex. 2006) (per curiam).

Employees Ret. Sys. of Texas v. Garcia , 454 S.W.3d 121, 132 (Tex. App.—Austin 2014 pet. denied).

The Court may affirm the AFO on any grounds that would support the decision, and is not “bound by the reasons given by an agency in its order, provided there is a valid basis for the action taken by the agency.” Tex. Health Facilities

Comm’n. v. Charter Med.-Dallas, Inc.

, 665 S.W.2d 446, 452 (Tex. 1984); see also

21

*32 Tex. Emp’t Comm’n v. Hays , 360 S.W.2d 525, 527 (Tex. 1962). The Court may uphold the AFO based on any legal basis shown in the record. Bd. of Trs. of the

Emps. Ret. Sys. v. Benge

, 942 S.W.2d 742, 744 (Tex. App.—Austin 1997, writ denied). If reasonable minds could have reached the conclusion that the EC reached on the record presented, the AFO must be upheld. Bd. of Law Exam’rs v.

Stevens

, 868 S.W.2d 773, 777-788 (Tex. 1994), cert. denied, Stevens v. Bd. of Law

Exam’rs

, 512 U.S. 1206, 114 S. Ct. 2676 (1994); Tex. State Bd. of Med. Exam’rs

v. Birenbaum

, 891 S.W.2d 333, 337 (Tex. App.— Austin 1995, writ denied).

In applying the substantial evidence standard to the AFO, the Court may not substitute its judgment for that of the EC as to the weight of the evidence on questions committed to his discretion. Stevens , 868 S.W.2d at 778; Gulf States

Utils. Co. v. Pub. Util. Comm’n

, 841 S.W.2d 459, 474 (Tex. App.—Austin 1992,

writ denied). Although substantial evidence is more than a mere scintilla

, the evidence may actually preponderate against the agency decision and yet still amount to substantial evidence

supporting the result reached by the agency.

State v. Pub. Util. Comm’n

, 883 S.W.2d at 204;

City of El Paso v. Pub. Util. Comm’n ,

883 S.W.2d 179, 185 (Tex. 1994);

see also Tex. State Bd. of Dental Exam’rs v.

Sizemore,

759 S.W.2d 114, 116 (Tex. 1988).

The Court presumes that substantial evidence supports the AFO, and the burden is on Antoine to overcome this presumption . Graff Chevrolet Co. v. Tex.

22

*33 Motor Vehicle Bd., 60 S.W.3d 154, 159 (Tex. App.—Austin 2001, pet. denied); Lewis v. Southmore Savings Ass’n, 480 S.W.2d 180, 183 (Tex. 1972); see also City

of El Paso v. Pub. Util. Comm’n

, 883 S.W.2d at 184.

The AFO should be reversed or remanded

only if the absence of substantial evidence has prejudiced Antoine’s substantial rights.

Locklear v. Tex. Dep’t of Ins.

, 30 S.W.3d 595, 597 (Tex. App.—Austin 2000, no pet.). The Court may only reverse or remand a matter “for further proceedings”: if substantial rights of Antoine have been prejudiced because the administrative findings, inferences, conclusions, or decisions are: (A) in violation of a constitutional or statutory provision;

(B)

in excess of the agency’s statutory authority;

(C)

made through unlawful procedure;

(D)

affected by other error of law;

(E)

not reasonably supported by substantial evidence considering the reliable and

probative evidence in the record as a whole; or (F) arbitrary or capricious or characterized by abuse of discretion or clearly unwarranted exercise of discretion. Tex. Gov’t Code § 2001.174(2). In the district court, Antoine argued that the EC exceeded his authority when he reversed several of the ALJs’ findings of fact and conclusions of law. Whether the EC exceeded his authority is a question of law to be decided de novo . See, e.g. ,

Tex. Ass’n of Psychological Assocs.v. Tex. State Bd. of Exam’rs of Psychologists

, 439 S.W.3d 597, 602 (Tex. App.— Austin 2014, no pet.) (court reviews exercise of authority de novo ).

23 *34 SUMMARY OF THE ARGUMENT This case presents the issue of whether the EC acted within his authority when he issued the AFO to maintain the payment hold on Antoine. Because the EC was fully authorized to correct the ALJs’ misapplications of Medicaid law and policy he did not exceed his authority when he rejected their PFD and issued the AFO. See

Tex. Gov’t Code § 2001.058(e)(1);

Froemming v. Tex. State Bd. of Dental Exam’rs ,

380 S.W.3d 787, 793 (Tex. App.—Austin 2012, no pet.);

Sanchez v. Tex. State Bd.

of Med. Exam’rs

, 229 S.W.3d 498, 516 (Tex. App.—Austin 2007, no pet.); see also

Akin v. Tex. State Bd. of Dental Exam’rs

, No. 03-14-00390-CV, 2015 WL 1611803, at *4-5 (Tex. App.—Austin Apr. 9, 2015, no pet. hist.). Further, the AFO is supported by substantial evidence in all respects.

In reviewing the decision to issue the AFO, the Court must assume that the AFO is valid; and to overcome the presumption of validity, Antoine has the burden to establish that the AFO is not supported by substantial evidence or that the EC exceeded his statutory authority in issuing the AFO. See Graff Chevrolet , 60 S.W.3d at 159 (plaintiff has burden of proving that agency’s order is not supported by substantial evidence). In the district court, Antoine did not even argue that the AFO is not supported by substantial evidence. Instead, Antoine confined its argument and briefing to the issue of whether the EC exceeded his authority in changing the ALJs’ findings of fact. Because Antoine did not brief or argue

24 *35 substantial evidence in the district court that issue has been waived.

See Akin

, 2015 WL 1611803, at *3 n.1 Nonetheless, the State will show that the AFO is fully supported by substantial evidence in the administrative record that: (a) the ALJs misinterpreted and misapplied Texas law and Medicaid policy, and (b) the OIG’s determination to impose the payment hold was based on prima facie evidence that was relevant, credible and material to the question of fraud or willful misrepresentation.

The State urges the Court to reverse the district court—i.e. reinstate the AFO—on the basis that Antoine cannot carry its burden to establish that the AFO was not supported by substantial evidence, nor can Antoine establish that the EC exceeded his statutory authority.

ARGUMENT I. The EC acted within his discretion to correct misapplications of Medicaid law and policy by the SOAH ALJs. The APA governs contested proceedings before HHSC. The APA expressly defines the EC’s discretion to change ALJs’ proposed findings of fact and conclusions of law after contested case hearings. The APA provides, in pertinent part:

(e) A state agency may change a finding of fact or conclusion of

law made by the administrative law judge, or may

vacate or

modify

an order issued by the administrative law judge, only if the agency determines:

25 *36 (1) that the administrative law judge did not properly apply or interpret applicable law, agency rules, written policies provided under Subsection (c), or prior administrative decisions;

(2) that a prior administrative decision on which the administrative law judge relied is incorrect or should be changed ; or

(3)

that a technical error in a finding of fact should be changed. Tex. Gov’t Code § 2001.058(e) (emphasis added). Thus, the EC was authorized to change the ALJs’ incorrect legal and policy determinations. See Tex. Gov’t Code

§ 2001.058(e)(1);

see also Froemming , 380 S.W.3d at 793; Akin , 2015 WL

1611803, at 4-5, 5 n.6;

Smith v. Montemayor , 2003 WL 21401591, at *8 (Tex.

App.—Austin June 19, 2003, no pet.);

Wood v. Tex. Comm’n Envtl. Quality , No. 13-13-00189-CV, 2015 WL 1089492, at *11 (Tex. App.— Corpus Christi, Mar. 5, 2015, no pet. hist.)

Consistent with the concept that agencies determine the meaning of their policies and the laws they are committed to enforce, agencies have broad discretion to modify “legislative facts” in PFDs. 31 See Tex. State Bd. of Med.

Exam’rs v.

Dunn , 03-03-00180-CV, 2003 WL 22721659, at *3 (Tex. App.—

31 A “legislative fact” is a mixed question of fact and law and defining terms is an agency function.

F. Scott McCown & Monica Leo,

When Can an Agency Change the Findings of Conclusions of an

ALJ?: Part Two

, 51 Baylor L. Rev. 63, 69-70 (1999) (hereinafter “McCown & Leo”). A finding of fact is a “legislative fact” where the finding affects not just one specific case, but is actually an explication of agency policy and therefore may be applied to other cases or implicates agency policy. Id .

26

*37 Austin Nov. 20, 2003, no pet.) (“agencies are ‘relatively’ free to review and correct an ALJ’s ‘legislative facts,’ which ‘provide a foundation for developing law, rules, or policies and, consequently, affect the outcome of many cases.’”) (quoting McCown & Leo, at 68-69); see also Sanchez , 229 S.W.3d at 515-16; Exxon Corp.

v. Railroad Comm'n,

993 S.W.2d 704, 710 (Tex. App.—Austin 1999, no pet.);

Montemayor

, 2003 WL 2140151, *8.

The ALJs misconstrued Medicaid policy, ignored evidence, disregarded competent testimony proffered by OIG, and created “expert” testimony not offered by Antoine. The EC, acting with sound discretion, corrected the ALJs’ erroneous interpretations, and their flawed findings and conclusions that flowed from their initial errors. The EC fully explained each modification, as required by the APA, demonstrating the substantial evidence necessary to support his modifications. See Tex. Gov’t. Code § 2001.058(e).

A. The proper interpretation of Texas Medicaid policy is a question of law to be determined by the EC. The EC properly interpreted Medicaid policy in harmony with the governing statutes and regulations, and Antoine has shown no basis for the Court to deviate from the EC’s correct interpretation.

The proper interpretation and application of regulatory/statutory provisions governing Medicaid and Medicaid policy are questions of law committed to the discretion of the EC - not the ALJs. Thus, the EC was not bound to accept the ALJs’ erroneous determinations regarding Medicaid policy concerning “ectopic

27 *38 eruption.”

See, e.g.

, R.R. Comm’n of Tex. v. Tex. Citizens for a Safe Future &

Clean Water

, 336 S.W.3d 619, 629 (Tex. 2011) (“We must uphold the enforcing

agency’s construction if it is reasonable and in harmony with the statute.”);

Sw.

Pharm. Solutions, Inc., v. Tex. Health & Human Servs. Comm’n

, 408 S.W.3d 549,

557-58 (Tex. App.—Austin 2013, pet. denied);

Froemming , 380 S.W.3d at 793;

Akin

, 2015 WL 1611803, at *4-5.

The

Akin court approved the board’s modifications of the ALJ’s proposed finding and conclusion because the ALJ failed to properly interpret or apply the statute to facts in evidence. Id. While the ALJ in Akin found Akin did not commit a dishonest act, the board provided examples of evidence that showed the dentist was dishonest or practicing dentistry illegally, and the district court upheld the board’s order reversing the ALJ’s PFD. Id. Akin court also quoted with approval

Montemayor

, 2003 WL 21401591, at *8. Akin , 2015 WL 1611803, at *5 n.6

In the instant case, in reversing the AFO (without explanation), the district court implicitly determined the EC’s interpretation of Medicaid rules—especially those related to ectopic eruption—was unreasonable and not in harmony with the statutes he interpreted. The State presented substantial evidence at the district court, discussed infra , through the admission of the administrative record, 32 that

the EC’s interpretation of the Medicaid rules is reasonable and followed long-held

32 No additional evidence was presented at the district court.

28

*39 principles of statutory construction. Antoine presented nothing to counter the EC’s reasonable interpretation; therefore, the district court should not have disturbed the EC’s decision.

B. The EC’s corrections of the ALJs’ errors in interpreting Medicaid policy are entitled to respect from the Court. The EC’s interpretation of the proper scope and limitations of Texas Medicaid orthodontia policy is entitled to respect from the Court. See Texas

Citizens

, 336 S.W.3d at 624; see also Atascosa Cnty. v. Atascosa Cnty. Appraisal

Dist.,

990 S.W. 2d 255, 258 (Tex. 1999); Gomez v. Tex. Educ. Agency , 354 S.W.3d

905, 913-17 (Tex. App.—Austin 2011, pet. denied);

Sw. Pharm. , 408 S.W.3d at 562; Tex. Gov’t Code § 311.023(6).

Where a statute is ambiguous, the Court must give serious consideration to the interpretation of an agency charged with its enforcement. Texas Citizens , 336

S.W.3d at 625. In

Texas Citizens , the Supreme Court held:

We have never expressly adopted the

Chevron or

Skidmore

doctrines for our consideration of a state agency’s construction of a statute, but we agree with the Commission that the analysis in which we engage is similar. In our “serious consideration” inquiry, we will generally uphold an agency’s interpretation of a statute it is charged by the Legislature with enforcing, “‘so long as the construction is reasonable and does not contradict the plain language of the statute.’”

Id. (citations omitted). Deference to the agency’s interpretation is particularly important where, as here, the policies, rules and statutes in question concern a

29 *40 matter within the core expertise of the agency.

See Zimmer US, Inc. v. Combs

, 368 S.W.3d 579, 586 (Tex. App.—Austin 2012, no pet.)

Southwest Pharmacy is also instructive. The plaintiff pharmacy providers challenged HHSC rules pertaining to Medicaid pharmacy reimbursements. The outcome of the dispute turned, in part, on construction of the phrase “medical assistance” as defined in Government Code chapter 531, Human Resources Code chapter 32, and the rules adopted thereunder. Sw. Pharm ., 408 S.W.3d at 560-61. In siding with HHSC, the court noted that the disputed statutory language must not be read in isolation, but rather, must be analyzed “in the context of the statutes as a whole.” Id. “We must consider the role of the provisions in the full Medicaid statutory scheme and in . . . context. . . And we must construe the provisions in a way that is consistent with their underlying purpose and the policies they are intended to promote.” Id . at 561. The court further noted:

Even if we were to conclude that there is vagueness, ambiguity, or room for policy determinations in these statute and rules, we would conclude that HHSC's interpretation of the relevant code provisions and agency rules is reasonable, in harmony with the statutes and rules, and entitled to deference. We defer to the agency's interpretation unless it is plainly erroneous or inconsistent with the language of the statute or rule.. As the agency designated to administer Medicaid, HHSC is charged with overseeing a complex regulatory scheme, and deference to its construction is particularly important . An agency's construction does not have to be “the only-- or the best-- interpretation in order to warrant . . . deference.” Considering the entire statutory scheme, the

30 *41 goals and policies behind it, and the legislative history and intent, we would conclude that HHSC's interpretation is reasonable, does not conflict with the provisions' language, and is entitled to deference.

Id. at 561-62 (emphasis added) (internal citations omitted). Here, the EC’s interpretation of the meaning of ectopic eruption is reasonable, and is consistent with Medicaid policy and applicable laws.

As explained in the AFO, the EC determined that “ectopic eruption” is a term of art in the dental profession and should be interpreted for Medicaid just as it is generally recognized in the field of dentistry, and consistent with the expert opinions of Dr. Tadlock, Dr. Altenhoff and the Dr. Proffit textbook. The EC’s interpretation of ectopic eruption is narrow, objective not subjective, and consistent with Medicaid’s orthodontic policy of providing benefits to children with dysfunctional severe handicapping malocclusions rather than providing benefits to children who have solely cosmetic needs. If the EC did not correct the ALJ’s erroneous interpretation of ectopic eruption, dental providers would be able to apply a broad, subjective standard and use that subjective standard to qualify nearly any patient regardless of need or Medicaid’s other limitations solely on the basis of “ectopic eruption.” Such a scenario would fly in the face of Medicaid’s clear policy of providing limited orthodontic benefits only for severe handicapping conditions and not providing benefits for cosmetic reasons only.

The EC’s policy interpretation is also squarely within his core area of 31 *42 expertise as the chief executive of the agency in charge of Texas Medicaid.

Therefore, it is entitled to deference from the Court.

Texas Citizens , 336 S.W. at

629;

Sw. Pharm ., 408 S.W.3d at 561-62; Garcia , 454 S.W.3d at 137. This proper

interpretation

by the EC is the lynchpin of the modifications to the ALJs’ PFD, as

discussed

infra.

II.

The EC did not exceed his authority in entering the AFO and Antoine cannot establish otherwise. Antoine cannot establish that the EC exceeded his authority in entering the AFO. The standard of review for an abuse of discretion by a state agency is whether the agency’s final decision: (1) ignores the factual record; (2) relies on facts not in evidence; or (3) is not rationally connected to the factual record. City of El Paso , 883

S.W.2d at 184;

State v. Pub. Util. Comm’n , 883 S.W.2d at 201; Heritage on the San

Gabriel v. Tex. Comm’n on Envt’l Quality

, 393 S.W.3d 417, 423 (Tex. App.—Austin

2012, pet. denied), (quoting

City of Waco v. Tex. Comm’n Envtl. Quality , 346 S.W.3d 781, 819-20 (Tex. App.—Austin 2011, pet. denied)).

The AFO is squarely based on the factual record from the SOAH hearing. The AFO is 42 pages long and is replete with references to uncontested evidence. App. A . Further, no reasonable argument can be made that the AFO relies on facts not in evidence or that it is rationally unrelated to the evidence. In short, there is no credible argument that the EC abused his discretion in rendering the AFO.

32 *43 All of the EC’s modifications in the AFO were made to correct misunderstandings and misapplications of Medicaid law and policy by the ALJs. Substantial evidence exists to show the EC correctly maintained the payment hold, and Antoine cannot present evidence to the contrary; therefore, the Court should uphold the AFO.

A. The ALJs misunderstood and misapplied Texas Medicaid law and policy and the EC corrected the misunderstanding with a proper construction of law and policy.

The ALJs incorrectly concluded that OIG failed to present prima facie evidence that is “credible, reliable, or verifiable, or that has indicia of reliability” that Antoine engaged in fraud or willful misrepresentation in filing its requests for prior authorization and claims for payment with Texas Medicaid. Consequently the ALJs recommended that the EC order the OIG to lift the payment hold in its entirety. See PFD proposed FoF Nos. 48-50, at pp. 40-41, A.R. at 1234- 35.

The ALJs’ incorrect findings, conclusions, and ultimate recommendation rested on their erroneous determination that Texas Medicaid adopted a “special” definition of the term “ectopic eruption” that is subjective and broader than the meaning of the phrase in the general practice of dentistry. This is clearly at odds with the EC’s interpretation that ectopic eruption means the same thing in Texas Medicaid as it does in the general practice of dentistry. In making this determination, the ALJs ignored the plain language of the policy and the testimony

33 *44 of the only witnesses qualified to testify what Texas Medicaid policy means. The ALJs’ mistaken construction of ectopic eruption effectively destroys the limitations of Texas law and Medicaid policy which restrict orthodontia to children who suffer from a “severe handicapping malocclusion.” 25 Tex. Admin. Code § 33.71.

Rather than concluding that the definition of ectopic eruption is subjective, the ALJs should have adopted the agency’s own construction, as presented by agency staff witnesses and by the State’s testifying expert. 33 The record presented by the State shows that the TMPPM’s instruction regarding ectopic eruption is not vague and is consistent with the widely recognized understanding of ectopic eruption. See Vol.1, 236:3-15, A.R. at 2047 (Dr. Tadlock testifying that the

definition of ectopic eruption is learned at every dental school and in every

orthodontic program in the country); 34

Vol. 2 at 84:23-24, A.R. at 2135

33 Dr. Tadlock is the only board-certified orthodontist who testified in this case. He is one of only

eight directors nationally on the American Board of Orthodontists and is the incoming Chair of the

ABO clinical committee, which administers the clinical exam to orthodontic residents nationally.

Vol. 1, at 133:10-134:20, A.R. at 1944-45.

34 Dr. Tadlock reviewed nearly 1,300 articles discussing “ectopic eruption.” Vol. 1, at 152:1- 154:11, A.R. at 1963-65. As Dr. Tadlock noted, “The bottom line is this, there are no references to teeth that are rotated or tipped. There are -- ectopic eruption in every article is a tooth that is away

from, it is out of place, it is in the wrong place

. Not most of them, many of -- not most of them, all

of them.”

Id . at 153:1-6 (emphasis added), A.R. at 1864; see also 154:4-11, A.R. at 1965 (“ But in

every case, they are teeth that are out of the position

, they are not here in turn; they are out, they

are somewhere else.

That's the definition of ectopic eruption that existed that started in 1938 or somewhere before then. It has existed in its same form since then, up to '87 when Dr. Proffit wrote its eruption in the wrong place, and that definition has not changed. ”) (emphasis added).

34

*45 (where Antoine’s expert Dr. Orr acknowledged that “ectopic” means “out of place,” and that this meaning is found “in medicine all over.”).

The administrative record reflects HHSC’s long-standing requirement that medical and dental terms be interpreted for Medicaid purposes just as those terms are construed for non-Medicaid patients. Ex. R-14, (2008 TMPPM) at § 1.2.5, at App. G ; Ex. R-15 (2009 TMPPM), at § 1.4.5, at App. F ; Vol. 1, 93:2-9, 94:16- 23, 111:11-14, A.R. at 1904-05; Vol. 3, 193:5-194:1, 241:5-11, 249:11-250:19, A.R. at 2480-81, 2528, 2536-37.

Dr. Tadlock’s testimony that ectopic eruption is generally understood within the dental/orthodontic profession as a “tooth that is out of place,” is not only supported by the medical literature and the testimony of the State’s Medicaid policy witness, Dr. Altenhoff, it is also the only competent expert testimony of

record.

See generally Dr. Tadlock’s testimony at Vol. 1, at 152:1-154:11, A.R. at

1963-65;

see also Vol. 3, 240:22-241:4, A.R. at 2527-28 (testimony that Dr. Altenhoff is the person most knowledgeable about Medicaid policy), and Vol. 3, 174:19-175:7 (Antoine’s dentist Dr. Kanaan acknowledging that Dr. Altenhoff is the expert on what Medicaid covers and does not cover), A.R. at 2461-62. 35

The ALJs’ error in disregarding the testimony of Drs. Tadlock and 35 When asked by the ALJ if conditions would qualify as ectopic eruption after the January 2012 clarifying amendment, Dr. Kanaan answered: “You would need to ask Dr. Altenhoff.” Vol. 3, 174:19-175:4, A.R. at 2461-62.

35 *46 Altenhoff was magnified because they misconstrued what Antoine’s orthodontist, Dr. Kanaan actually said. The ALJs incorrectly asserted that Dr. Kanaan concluded that Patients 36, 37, 42, 43, and 47 each presented a “severe handicapping malocclusion.” See PFD at 26-27, A.R. at 1220-21. This statement is not supported by the evidentiary record. Of these patients, the only ones for which Dr. Kanaan made such statement were Patients 36 and 47. Vol. 3, at 149:3- 4, A.R. at 2436 (describing Patient 36 as a “100 percent dysfunctional handicapping case”); Vol. 3, at 161:23-162:6, A.R. at 2448-49 (opining that Patient 47 presented “dental necessity, medical necessity, hundred -- hundred percent handicap malocclusion”). For the other patients, Dr. Kanaan merely stated that the patient, in his opinion, needed orthodontic treatment. Vol. 3, at 156:16-19 (Patient 37) (answering “100 percent, 120 percent” when asked patient had a “true orthodontic need”), A.R. at 2443; Vol. 3, at 155:1-6 (Patient 42) (answering “correct, hundred percent” when asked if case was an example of “true orthodontic need”), A.R. at 2442; Vol. 3, at 159:12-16 (Patient 43) (agreeing that the patient had a “true orthodontic need for braces”), A.R. at 2446. This distinction is more than a semantic one, as the standard for Medicaid coverage is “severe handicapping malocclusion” and not merely “true orthodontic need.” See 25 Tex. Admin. Code § 33.71.

Taken together, testimony and evidence presented at the administrative 36 *47 hearing, coupled with deference that should be given to the EC’s interpretation of Texas Medicaid policy, 36 illustrate that: (a) the ALJ’s incorrectly interpreted and applied Medicaid policy; (b) the EC was authorized to correct misapplications of law and policy; and (c) the EC did not exceeded his authority in correcting the ALJs. As a result, the Court should affirm the AFO.

1. The rules of statutory construction govern questions of agency policy and administrative rules. In determining the proper scope and limitations of Medicaid policy, and the administrative rules of HHSC implementing Medicaid policy, the Court is guided by the rules governing statutory construction. See Boswell v. Brazos Electric

Power

, 910 S.W.2d 593, 599-600 (Tex. App.—Fort Worth 1995, writ denied); Tex. Gov’t Code § 311.002(4).

In construing a statute, the primary objective is to ascertain and give effect to the intent of the legislature. Cont’l Cas. Ins. Co. v. Functional Restoration

Assocs.

, 19 S.W.3d 393, 402 (Tex. 2000) (citing Liberty Mut. Ins. Co. v. Garrison

Contractors, Inc.

, 966 S.W.2d 482, 484 (Tex.1998)); Texas Citizens , 336 S.W.3d

at 624; Tex. Gov’t Code § 312.005

. In so doing, courts look first to the plain and

common meaning of the statute's words.

See Tex. Gov’t Code § 311.005;

Fitzgerald v. Advanced Spine Fixation Sys., Inc.,

996 S.W.2d 864, 865 (Tex.1999) . 36 Discussed infra .

37

*48 Courts will consider the entire statute, not simply the disputed portions. State v. Terrell , 588 S.W.2d 784, 786 (Tex.1979) . Each provision must be construed in the

context of the entire statute of which it is a part.

Bridgestone/Firestone, Inc. v.

Glyn-Jones

, 878 S.W.2d 132, 133 (Tex.1994)

The Code Construction Act, Government Code chapter 311, provides additional guidelines for statutory interpretation. For instance, words and phrases should be read in context, not in isolation. Tex. Gov’t Code § 311.011(a). Words and phrases that have acquired a technical or particular meaning shall be construed accordingly. Tex. Gov’t Code § 311.011(b). The entire statute is intended to be effective. Tex. Gov’t Code § 311.021(2). A just and reasonable result is intended; one that is feasible of execution. Tex. Gov’t Code §§ 311.021(3), (4). The public interest is favored over any private interest. Tex. Gov’t Code § 311.021(5).

In construing a statute a court may consider: (1) the object sought to be obtained; (2) the consequences of a particular construction; and (3) an agency’s construction of a statute that is committed to the agency for enforcement. Tex. Gov’t Code §§ 311.023(1), (5), (6).

2. The ALJs ignored statutes, rules, and evidence and made fundamental errors in interpreting and applying Texas Medicaid policy. The misapplications were properly corrected by the EC.

The EC acted within his authority and sound discretion when he applied principles of statutory construction and declined to adopt the ALJs’ 38 *49 misconstruction of Texas Medicaid policy. The EC corrected fundamental errors in the ALJs’ interpretation of Texas Medicaid Policy.

First, the ALJs erroneously determined that the TMPPM includes a special definition of ectopic eruption that is capable of different interpretations in different circumstances. Under this interpretation, the ALJs found that Antoine’s scoring of twisted and rotated teeth as ectopic was acceptable. However twisted and rotated teeth are normal and do not impair function. See, e.g. , note 34, supra . Therefore, the ALJs’ misinterpretation runs afoul of the plain language of Texas Medicaid policy, as set forth in the TMPPM and in HHSC rules, which clearly states the Medicaid orthodontia benefit is limited to cases where the patient presents a “severe handicapping malocclusion.” 25 Tex. Admin. Code § 33.71; Ex. R-15 at § 19.19, at App. F . Furthermore, the ALJs’ erroneous interpretation violates a fundamental requirement that law and agency policy should be construed

consistently with their plain language.

Texas Citizens , 336 S.W.3d at 624. It was therefore proper for the EC to correct these misinterpretations.

Second, the specific instruction regarding “ectopic eruption” should have been construed by the ALJs in the overall context of Medicaid’s limited orthodontia benefit policy. Tex. Gov’t Code § 311.011(a). Instead, the ALJs examined the ectopic eruption discussion in the TMPPM in isolation, and without regard to the remainder of the TMPPM or overall objectives of Texas Medicaid

39 *50 policy. In fact, the ALJs applied an interpretation of the meaning of ectopic eruption that was not only contrary to plain language of Medicaid law and policy, it was also fundamentally at odds with the overall objective of the policy. The ALJs’ liberal interpretation of the meaning of ectopic eruption 37

was erroneous because it violated the TMPPM’s clear direction that providers should be conservative in scoring the HLD. See, e.g. , Ex. R-15 at § 19.21, at App. F . (“Providers should be conservative in scoring. Liberal scoring will not be helpful in the evaluation and approval of the case.”). 38 Moreover, the ALJs’ construction of “ectopic eruption” in isolation from the overall context of Medicaid’s policy also violated the requirement to consider the disputed portions of the policy within the policy as a whole. Bridgestone/Firestone, Inc. v. Glyn-Jones , 878 S.W.2d 132, 133 (Tex. 1994).

The ALJs’ construction of Medicaid policy violated several additional 37 The absurdity of the ALJs’ construction is illustrated by Antoine’s expert, Dr. Orr, who testified that in his broad reading of the Manual’s instruction “. . . to me, semantically it has a limitless interpretation as far as the recognition by competent dentists of teeth out of position.” Vol. 2, 148:23-149:2, A.R. at 2199-2200. The ALJs’ interpretation of the instruction renders the word “unusual” in the instruction meaningless, a result that violates canons of statutory construction. See, e.g. , TGS-NOPEC Geophysical Co. v. Combs , 340 S.W.3d 432, 439 (Tex. 2011). As Dr. Tadlock testified, based on medical literature, nearly 80 percent of the population has teeth that are crooked to some degree, and therefore there is nothing “unusual” for teeth to erupt in a manner that is not straight or ideal. Vol. 1, at 157, A.R. at 1968. 38 The idea that HHSC would eviscerate Medicaid orthodontic policy and benefit limitations by promulgating a new and more liberal definition of a widely understood term –– is, at best counterintuitive.

40 *51 tenets of statutory construction in the Code Construction Act:

•

The ALJs ignored the meaning of ectopic eruption generally understood in the

dental profession, in violation of Tex. Gov’t Code § 311.011(b) (terms that have acquired technical or particular meanings shall be construed accordingly);

• The ALJs’ broad interpretation of ectopic eruption rendered the limiting language in State regulations (e.g., 25 Tex. Admin. Code § 33.71) and in Medicaid policy ( e.g ., Ex. R-15, at § 19.19, at App. F ) ineffective, in violation of Tex. Gov’t Code § 311.021(2) (the entire statute is presumed to be effective);

•

The ALJs’ interpretation leads to an “ectopic eruption in the eye of the beholder” standard, which is absurd given scarce Medicaid resources and HHSC statements regarding the limited nature of the orthodontic benefit. Opening the definition to the subjective interpretation of providers (“if the provider says its ectopic eruption, then it’s ectopic eruption”) also deprives Medicaid policy makers of their statutory and regulatory responsibility for defining the scope of the benefit. Thus the ALJs’ interpretation violates Tex. Gov’t Code § 311.021(3) (a just and reasonable result is intended), and Tex. Gov’t Code § 311.021(4) (a result feasible of execution is intended);

• The ALJs’ construction favors only the private pecuniary interests of unscrupulous providers, at the expense of taxpayers and truly eligible Medicaid recipients. Thus, the ALJs’ interpretation violates Tex. Gov’t Code § 311.021(5) (public interest is favored over any private interest);

• The ALJs failed to consider the purposes of Medicaid policy: their construction does not advance the goal of preserving scarce Medicaid dollars by limiting orthodontic reimbursements to cases of severe handicapping malocclusion. Thus, the ALJs’ interpretation violates Tex. Gov’t Code § 311.023(1) (a court considers the object sought to be obtained by the statute); and

• The ALJs failed to consider the consequences of their interpretation. Under

their

interpretation, any provider’s prior authorization request for comprehensive orthodontia will be approved, so long as the provider scores the HLD with a 26 or greater – without regard to the true condition of the patient. This has far reaching implications for the Medicaid program, particularly in light of the ALJs’ acknowledgement (proposed FoF No. 25) that HHSC’s Medicaid claims processing contractor, TMHP, abrogated its responsibility to review clinical data submitted with prior authorization requests. The ALJs’ interpretation violates Tex. Gov’t Code § 311.023(5) (a court considers the consequence of a particular construction).

41 *52 It was therefore proper for the EC to correct these misinterpretations. Finally, the ALJs’ interpretation of the Medicaid meaning of ectopic eruption was contrary to HHSC’s long-held and consistent construction of the phrase. OIG presented evidence during the hearing that a January 2012 amendment to the TMPPM language addressing ectopic eruption was intended to clarify the Medicaid program’s long-standing interpretation, not to implement a substantive change in policy. See testimony of Dr. Linda Altenhoff, Vol, 1 at 93:2- 9, 94:16-23, A.R. at 1904-05; and testimony of Deputy Inspector General for Enforcement, Vol. 3 at 193:5-194:1, 294:21-23, A.R. at 2480-81, 2581. This testimony from Medicaid program officials was uncontroverted.

Nevertheless, the ALJs erroneously concluded that the January 2012 language was intended to effect a substantive change to the “definition” of ectopic eruption. In the district court, Antoine characterized the ALJs’ determinations regarding the effect of the January 2012 language change as a finding of adjudicative fact that the EC was not allowed to alter. Antoine is wrong. Whether the language change in the TMPPM was intended to be substantive or clarifying is a question of law, committed to the discretion of the EC. Sw. Pharm. Solutions,

408 S.W.3d at 561-62;

Boswell , 910 S.W.2d at 599-600. It was therefore proper for the EC to correct these misinterpretations.

42 *53 B. Substantial evidence exists to show that Antoine committed fraud or made willful misrepresentations necessary to maintain the payment hold. The EC properly corrected the ALJs ’ errors, and Antoine cannot establish that the EC exceeded his authority.

The ALJs erroneously determined that there exists a special definition for ectopic eruption under the Medicaid Program—a definition that, as described supra , is inconsistent with Medicaid’s limited orthodontic benefit. As a result, they found that none of the HLD scoresheets Antoine submitted included false statements or misrepresentations. Consequently, they wrongly concluded that Antoine’s conduct was neither fraudulent nor willfully misrepresentative.

In reaching this conclusion, the ALJs ignored substantial evidence of Antoine’s conduct, disregarded the testimony of the OIG’s expert, and impermissibly created “expert” opinions from the testimony of Antoine’s Drs. Nazari and Kanaan.

Antoine did not address the issue of substantial evidence in its district court brief. Accordingly, Antoine waived any argument that the AFO is not supported by substantial evidence. See Akin , 2015 WL 1611803, at *3 n.1. This alone should be enough to affirm the AFO. Nevertheless, the State will show that the AFO is fully supported by substantial evidence, and in so showing will establish that the district court erred in reversing the AFO.

43 *54 1. Providers have a duty to know and follow law and policy. In reaching their flawed interpretation of Medicaid policy, the ALJs ignored Antoine’s duty, as a matter of law, to understand and comply with Medicaid requirements, standards, and procedures. See Heckler v. Community Health Servs.,

467 U.S. 51, 63-65 (1984)

. Heckler involved the Government’s recovery of payments incorrectly made to a Medicare provider, who contended the Government was estopped from recovering because the provider relied on authorization by a fiscal intermediary. Id . at 53, 60. The Heckler Court rejected

the availability of estoppel.

Heckler found that the provider had lost no legal right because it was never entitled to the money in the first place. Id . at 61-62. 39 Heckler also found that the provider had a duty to know the provisions under which it received government funds. Id . at 64. The Court noted:

Justice Holmes wrote: “Men must turn square corners when they deal with the Government” (citing Rock Island, A. & L.R. Co. v. United

States

, 254 U.S. 141, 143 (1920)). This observation has its greatest force when a private party seeks to spend the Government’s money. Protections of the public fisc requires that those who seek public funds act with scrupulous regard for the requirements of law; respondent could expect no less than to be held to the most demanding standards in its quest for public funds. This is consistent with the general rule that those who deal with the Government are expected to know the law and may not rely on the conduct of Government agents contrary to law.

39 See also Personal Care Products, Inc. v. Hawkins , 635 F. 3d 155 (5th Cir. 2001) (noting that providers have no property interest in Medicaid reimbursement receivables).

44 *55 Id.

at 63;

see also N. Mem’l Med. Ctr. v. Gomez , 59 F. 3d 735, 739 (8th Cir. 1995) (participants in the Medicaid program have a “duty to familiarize themselves with the legal requirements” of Medicaid procedures). Providers may not claim after getting caught in a lie that they interpreted a term in a manner that contradicts Medicaid policy, federal and state law, and the industry-wide understanding of the term. Likewise, Antoine’s misrepresentations were not excused and should not have been given credit by the ALJs. The EC was well within his authority to correct the ALJs misapplication and misinterpretations of Medicaid policy. Therefore, the Court should affirm the AFO.

2. Dr. Kanaan’s scoring pattern shows, at a minimum, he acted with conscious disregard or reckless indifference to the truth or falsity of his representations of patient conditions.

Dr. Kanaan’s scoring pattern shows substantial and reliable evidence of fraud: he scored 27 of the 63 patients in the sample, and of those 27 patients, Dr. Kanaan scored 23 (85%) as having the same eight teeth ectopic . Vol. 3 at 43-70, A.R. at 2330-57. Ex. P-64.01 through P-64.63; R-49, Tadlock summary, at A.R. 1097-98,

App. I

. The rate of occurrence of ectopic eruption in the cases scored by Dr. Kanaan flies in the face of expert testimony from disinterested orthodontists that, according to the scientific literature, ectopic eruption is rare and the incidence of even one tooth ectopic occurs only in between 1.5 and 9

45 *56 percent of the population. 40 The chances that 85% of Dr. Kanaan’s patients would

each have the same eight ectopic teeth, when less than 10% percent of the

population has even one ectopic tooth, is infinitesimal.

See

Dr. Tadlock’s testimony, Vol. 1 at 174-175, A.R. at 1985-86. Although the ALJs made passing note of Dr. Kanaan’s scoring pattern, they failed to draw any inferences from this conduct, nor did they explain how this evidence relates to the OIG’s burden to continue the payment hold. 41 See 42 C.F.R. § 455.2 (a Medicaid agency may

receive credible allegations of fraud from any source, including “patterns

identified through provider audits.”). 42

Additionally, OIG presented reliable evidence that Antoine submitted

fraudulently scored HLD scoresheets for 61 of the 63 patients by falsely

40 Dr. Kanaan testified the ectopic eruption is so rare that he has never treated a private-pay patient for a single ectopically-erupted tooth. Vol. 3 at 96:6-9, A.R. at 2383. Yet, he also testified that he does not diagnose Medicaid and private-pay patients differently. Id. at 17:22-25, A.R. at 2304. Dr. Kanaan even testified that the very same mouth that has ectopically-erupted teeth for Medicaid purposes is a prime example – the very example he uses on his other practice’s website– of crowding. Vol. 3 at 20:25-21:1, A.R. at 2307-08 (the photo on his website is an example of crowding), 21:5-20, A.R. at 2308 (explaining that the photo is of ADC’s Medicaid patient), 25:5-

25:8, A.R. at 2312 (stating that he scored this patient as ectopic).

41 None of the patients in the sample were eligible for Medicaid-covered comprehensive orthodontics without Antoine’s score for ectopic eruption: excluding those ectopic eruption scores, Antoine’s sample HLD scores ranged from 0 to 19. See R-49, Tadlock summary, at A.R. 1097-98,

App. I

. Assuming arguendo that each of these patients had two instances of the rare condition of anterior ectopic eruption, they still would not have been eligible for Medicaid-

covered comprehensive orthodontics, as they could not achieve the qualifying score of 26.

42 The evidentiary burden on OIG in this proceeding is very low. The evidence must have “indicia of reliability.” In other words, it is reliable unless rebutted and shown to be immaterial, untrue, inaccurate or unreliable

46 *57 representing that each of these 61 patients had six or more ectopically-erupted teeth.

See

R-49, Tadlock summary, at A.R. 1097-98, App. I . In light of the commonly understood meaning of ectopic eruption as established by the testimony of Dr. Tadlock and Dr. Altenhoff, the egregiousness of Antoine’s scoring pattern shows reliable prima facie evidence of fraud or willful misrepresentations and satisfied the OIG’s burden to maintain the payment hold. Tex. Gov’t Code § 531.102(g)(2).

3. The ALJs compounded their errors by relying on “experts” who misunderstood and misapplied Texas Medicaid policy.

The ALJs expressly declined to rely on Antoine’s proffered experts, Orr and Ornish, for their determinations regarding ectopic eruption. PFD at 28, A.R. at 1222. Instead the ALJs attempted to refute Dr. Tadlock’s expert testimony by citing to the testimony of Drs. Nazari and Kanaan. However, Antoine did not proffer or qualify either Dr. Nazari or Dr. Kanaan as an expert, and the ALJs erred in considering them experts. 43 See also Petitioner’s Expert Designations (listing 43 The State objected to Dr. Kanaan being treated as an expert witness. Vol. 3 at 128:2-5, A.R. at 2415. The ALJs abused their discretion when they considered Dr. Kanaan’s testimony as an expert. Vol. 3 at 128:6-16 (ALJ: “Well he [Dr. Kanaan] may not have been offered as an expert but he certainly is qualified as an expert as much as any other.”). The ALJs, sua sponte designated Dr. Kanaan as an expert. Vol. 3 at 129: 3-5, 19-22, A.R. at 2416 (allowing a treatise to be shown to Dr. Kanaan to show “what the expert relied on” and “showing in part what Dr. Kanaan relied upon in forming his expert opinions”). Nor did Antoine ever offer or qualify Dr. Kanaan as an expert witness. Because of the ALJs’ abuse of discretion in designating a party opponent as an expert, the EC acted well within his discretion in correcting any proposed findings or conclusions that were predicated on the ALJs’ erroneous ruling. As for Dr. Nazari, Antoine never offered him as an expert. Vol. 4, A.R. 2633-2794. The ALJs in their PFD, again sua sponte , designated Dr. Nazari as an expert. See PFD at 28 (discussing Dr.

47

*58 Dr. Orr and Dr. Ornish), A.R. at 356-74. The ALJs also failed to note Dr. Nazari’s

testimony that he learned to score the HLD index “for Medicaid” from Dr. Orr.

Vol. 4 at 137:17-25, A.R. at 2765. 44

Thus, even though the ALJs putatively did not rely on Orr and Ornish, their reliance on Dr. Nazari is misplaced because his opinions are derivative of Dr. Orr, who incorrectly opined that Texas Medicaid adopted a special liberal definition of ectopic eruption. 45

The ALJs therefore erred by relying on providers, for their interpretation of Medicaid policy; and by disregarding the testimony of Medicaid policy witnesses and qualified experts. See

Sw. Pharm

., 408 S.W.3d at 561-62; Wood v. Tex. Comm’n Envtl. Quality , 2015

WL 1089492, at *6.

Nazari’s testimony as an expert), A.R. at 1222. The EC correctly modified any findings or

conclusions relying on the ALJs’ erroneous designation of Dr. Nazari as an “expert.”

44 Dr. Nazari testified the methodology he applied for ectopic eruption was to include any teeth that were "rotated, the slanted leaning teeth" based on what he learned from Dr. Orr a decade prior. Vol. 4, at 102:22-103:4, 138:18-23, A.R. at 2730-31, 2766 (including "twisted or turned or crooked" teeth). This description, comports with neither the generally-accepted scientific understanding of the term "ectopic eruption" nor the instruction of the TMPPM which refers to "an unusual pattern of eruption." 45 The ALJs summarily, and incorrectly, stated that the HLD scores of Dr. Orr and Dr. Ornish, , were “generally similar” to Antoine’s scores and that their testimony was “cumulative” of the testimony of Drs. Nazari and Kanaan; the ALJs asserted that they did not rely upon the testimony of either Dr. Orr or Dr. Ornish. PFD at 28, A.R. at 1222. OIG objected to this supposed cursory treatment of Antoine’s experts for two reasons. First, the evidence shows Dr. Nazari’s understanding of HLD scoresheets was directly based on training he received from Dr. Orr. Vol. 4, at 137-38, A.R. at 2765-66; See also Respondent’s Closing Brief at 13, 33-37, A.R. at 1001, 1021-22. Second, it is factually incorrect to conclude that Dr. Ornish’s scores were “generally similar” to Antoine’s– in fact, Dr. Ornish, the only expert orthodontist retained by Antoine, scored 13 of the 63 Antoine patients as having an HLD score less than 26. Thus, Antoine’s own expert opined that nearly 21 percent of the Antoine patients did not qualify for Medicaid based on the HLD score.

48

*59 III. Every modification made in the EC ’ s AFO is supported by substantial evidence and Antoine cannot establish otherwise. For each modification that he made to the ALJs’ PFD, the EC met the requirements to support his changes to the PFD in his AFO. See e.g. , Flores v.

Emps. Ret. Sys. of Tex.

, 74 S.W.3d 532, 540 (Tex. App.—Austin 2002, pet.

denied);

Pierce v. Tex. Racing Comm’n , 212 S.W.3d 745, 755 (Tex. App.—Austin

2006, pet. denied); s

ee also Dunn , 2003 WL 22721659, at *1. There must be a rational connection between an underlying agency policy and the altered finding of fact or conclusion of law. See , e.g. , Heritage on the San Gabriel , 393 S.W.3d at

440-4;

State v. Mid-South Pavers, Inc., 246 S.W.3d 711, 728 (Tex. App.–Austin

2007, pet. denied);

Levy v. Tex. State Bd. of Medical Exam’rs , 966 S.W.2d 813, 816 (Tex. App.–Austin 1998, no pet.).

In the district court, Antoine specifically claimed that the EC erred in changing Findings of Fact 45-50 and Conclusion of Law 13. Because Antoine limited its arguments to those findings of fact and conclusion of law, it has waived argument as to any other changes the EC made to the AFO. Each of the EC’s modifications to the contested findings and conclusions was authorized by law and fully supported by substantial evidence in the record.

A. Finding of Fact No. 45 Finding of Fact No. 45 reads: In reviewing the 63 ADC patient files in the statistically valid

49 *60 random sample, Dr. Tadlock applied the definition of ectopic eruption that is generally recognized within the dental profession and scored the patients as instructed by the Manuals. Dr. Tadlock properly applied Medicaid policy.

As proposed by the ALJs, proposed FoF No. 45 read: “ Dr. Tadlock did not apply the Manual’s definition of ectopic eruption in scoring the HLD index for the 63 patients. ” A.R. at 1234.

The EC was authorized to modify proposed FoF No. 45 because it addresses

a mixed question of fact and law, and is therefore a “legislative finding.” 46 See

Sanchez

, 229 S.W.3d at 515-16; Dunn , 2003 WL 22721659, at *3 (quoting

McCown & Leo, at 68-69);

Montemayor , 2003 WL 2140151, *8.

The ALJs’ proposed FoF No. 45 was a legislative finding because it was expressly premised on the erroneous and impermissible interpretation that Texas Medicaid policy incorporates a special definition for ectopic eruption. The ALJs’ proposed FoF No. 45 had two incorrect assumptions: (1) Medicaid had a special definition for ectopic eruption; and (2) Dr. Tadlock failed to apply Medicaid policy. Neither assumption is accurate.

The EC fully explained the reasons for his modification of FoF No. 45 in his AFO. See App. A , at pp. 21-23, A.R. at 1764-66. This explanation provides the substantial evidence needed to support the AFO. Antoine cannot establish a 46 See McCown & Leo, supra note 31.

50

*61 lack of substantial evidence on the part of the EC, and consequently, the Court should affirm the AFO.

B. Finding of Fact No. 46. Finding of Fact No. 46 reads: Despite the SOAH ALJs finding Dr. Nazari’s testimony to be credible, Dr. Nazari did not properly follow Medicaid policy in his identification of ectopic eruptions; the overwhelming evidence of the consistent pattern of inflated HLD scores submitted by ADC establishes prima facie evidence that is reliable, relevant and material that ADC‘s misrepresentations of medical necessity constitute willful misrepresentations. As proposed by the ALJs FoF No. 46 stated: Dr. Nazari was a credible

witness and properly utilized the Manuals’ definition in scoring the HLD index. Finding of Fact No. 46 is a legislative finding because it is founded on the (erroneous) presumption that Texas Medicaid policy incorporates a special definition for ectopic eruption. The ALJs’ proposed finding had two components: (1) Medicaid had a special definition for ectopic eruption; and (2) Dr. Nazari properly followed Medicaid policy in scoring his patients. Neither element is accurate.

The EC modified the ALJs’ proposed FoF No. 46 because the ALJs relied on the faulty proposition that Medicaid adopted a special definition for ectopic eruption. Further, Dr. Nazari’s testimony reveals that he did not properly apply Medicaid policy to the scoring of his patients. Vol. 4, at 103:13-16, 104:1-4, 145:9-

51 *62 10, A.R. at 2731-32, 2773, where Dr. Nazari testified that orthodontics for Medicaid patients is different than orthodontics for non- Medicaid patients. 47 Further, Dr. Nazari was unable to define a “severe handicapping malocclusion.”

Id.

, at 144:17-145:6, A.R. at 2772-73. The EC fully explained his reasons for

modifying FoF No. 46.

See App. A , at pp. 23-24, A.R. at 1766-67. This provides the substantial evidence needed to support the AFO. Antoine cannot establish a lack of substantial evidence on the part of the EC, and consequently, the Court should affirm the AFO.

C. Finding of Fact No. 47. Finding of Fact No. 47 reads: Despite the SOAH ALJs finding Dr. Kanaan’s testimony to be credible, Dr. Kanaan did not properly follow Medicaid policy in his identification of ectopic eruptions; the overwhelming evidence of the consistent pattern of inflated HLD scores submitted by ADC establishes prima facie evidence that is reliable, relevant and material that ADC‘s misrepresentations of medical necessity constitute willful misrepresentations. As proposed by the ALJs FoF No. 23 stated: Wael Kanaan, D.D.S. an

orthodontist who worked with ADC was a credible witness and properly utilized the Manuals’ definition of ectopic eruption in scoring the HLD index.

Finding of Fact No. 47 is a legislative finding because it is founded on the 47 In this regard, Dr. Nazari’s testimony differed from Dr. Kanaan’s. Dr. Kanaan testified that Medicaid patients and non-Medicaid patients should be diagnosed and treated to the same standard; yet, in practice he did not follow that guidance. See supra note 40.

52

*63 (erroneous) presumption that Texas Medicaid policy incorporates a special

definition for ectopic eruption. The ALJs

’ proposed finding had two components: (1) Medicaid had a special definition for ectopic eruption; and (2) Dr. Kanaan properly followed Medicaid policy in scoring his patients. Neither element is accurate.

First, the EC corrected the ALJs’ error of law regarding Medicaid policy. Then, he appropriately applied the law to the facts in the record. In their PFD, the ALJs acknowledged that Dr. Kanaan scored 23 of 27 patients exactly the same way—with the same eight teeth being scored as ectopic in all 23 patients. PFD at p.25, A.R. at 1219. Although they recognized this pattern by Dr. Kanaan, the ALJs failed to correctly apply the law to the facts. Dr. Kanaan’s approach to Medicaid patients, at the very least, indicates that Dr. Kanaan was reckless in his scoring, or indifferent to the actual standards for qualifying a Medicaid patient. Dr. Kanaan’s scoring 23 out of 27 patients exactly the same way constitutes prima facie evidence that he acted with the requisite scienter to commit fraud or willful misrepresentations. See Tex. Hum. Res. Code § 36.0011(b), defining Culpable Mental State:

A person acts knowingly with respect to information if the person: (1) has knowledge of the information;

(2)

acts with conscious indifference to the truth or falsity of the

information; or (3) acts in reckless disregard of the truth or falsity of the

53

*64 information. Tex. Hum. Res. Code § 36.0011(a). In his AFO the EC fully explained the reasons for his changes to FoF No. 47. See App. A , at pp. 24-26, A.R. at 1767-69. This provides the substantial evidence needed to support the AFO. Antoine cannot establish a lack of substantial evidence on the part of the EC, and consequently, the Court should affirm the AFO.

D. Finding of Fact No. 48. Finding of Fact No. 48 reads: HHSC-OIG presented evidence that is credible, reliable, and verified, and that has indicia of reliability when analyzed consistently with Texas law and Medicaid policy, that ADC knowingly incorrectly scored the HLD index on orthodontic prior approval requests submitted to Texas Medicaid. As proposed by the ALJs, FoF No. 48 stated: There is no evidence that is

credible, reliable, or verifiable, or that has indicia of reliability, that ADC incorrectly scored the HLD Index to obtain Texas Medicaid benefits for patients or to obtain Texas Medicaid payments.

The EC was authorized to change FoF No. 48 because it is a mixed finding of fact and law. The finding incorporates two components: (1) a statement regarding whether Antoine properly scored the HLD index (“ There is no evidence

. . . that ADC incorrectly scored the HLD . .

.”); and (2) a statement regarding

Antoine’s intent (“. .

. to obtain Texas Medicaid benefits for parents or to obtain

54

*65 Texas Medicaid benefits. ”). As to both components, the ALJs’ proposed finding reflected a misunderstanding of: (a) Texas Medicaid policy; (b) the OIG’s burden of proof in a payment hold proceeding; and (c) the standard for proving scienter under the TMFPA.

In contravention of HHSC policy, the ALJs erroneously determined that Texas Medicaid adopted a liberal interpretation of Medicaid policy with respect to ascertaining whether a patient exhibits ectopic eruption. Upon accepting the “anything goes” standard propounded by Drs. Orr, Nazari and Kanaan, the ALJs then found no error, much less a willful error in Antoine’s scoring. The lynch-pin to this finding was the ALJs’ misunderstanding, and misapplication, of the limits of Texas Medicaid’s orthodontia policy. The ALJs compounded their error by misapplying Texas law: specifically, the ALJs misapplied the OIG’s burden of proof at the proceeding, and they ignored the TMFPA standard for scienter of conscious indifference or reckless disregard. See Tex. Hum. Res. Code § 36.0011(a).

At the payment hold hearing, the OIG bore the burden of presenting prima

facie

evidence of fraud or willful misconduct. Prima facie evidence is “evidence that, until its effect is overcome by other evidence, will suffice as proof of a fact in issue.” Rehak Creative Servs. v. Witt , 404 S.W.3d 716, 726 (Tex. App.— Houston [l4th Dist.] 2013, pet. denied). The OIG satisfied its burden by presenting

55 *66 evidence of Antoine’s scoring pattern for the HLD scoresheets.

See

R-49, Tadlock summary, at A.R. 1097-98,

App. I

. Section 36.0011 of the TMFPA, as noted supra , defines the culpable mental state the State must establish to prove unlawful acts. The State must show the person acted with knowledge of the truth or falsity of information; or with conscious indifference to the truth or falsity of the information;

or

with reckless disregard of the truth or falsity. Tex. Gov’t Code § 36.0011(a). Importantly, the State is not required to show the person’s specific

intent to commit an unlawful act.

Id. , § 36.0011(b).

Therefore, in correctly applying Medicaid policy and Texas law to the evidence, the EC was fully authorized to correct the ALJs’ erroneous finding: (1) that there was not credible, reliable, verified evidence with indicia of reliability that Antoine incorrectly scored HLD indices; (2) that there was no evidence Antoine did so for the purpose of obtaining Medicaid benefits.

As required by law, the EC fully explained the rationale for his changes. See

App. A

, at pp. 26-28, A.R. at 1769-71. This explanation provides the substantial evidence needed to support the AFO. Antoine cannot establish a lack of substantial evidence on the part of the EC, and consequently, the Court should affirm the AFO.

E. Finding of Fact No. 49. Finding of Fact No. 49 reads: 56 *67 HHSC-OIG presented

prima facie

evidence that is credible, reliable, and verified, and that has indicia of reliability when analyzed consistently with Texas law and Medicaid policy, that [Antoine] committed fraud or willful misrepresentations to Texas Medicaid.

As proposed by the ALJs, FoF No. 49 stated: There is no evidence that is credible, reliable, or verifiable, or that has indicia of reliability, that [Antoine] committed fraud or engaged in willful misrepresentation with respect to the 63 [Antoine] patients in this case.

The EC was authorized to change FoF No. 49 because it is a mixed finding of fact and law. The ALJs’ proposed finding incorporated their misunderstanding of Medicaid policy, and misapplication of Texas law, to the evidence. The EC explained the reasons for his changes to FoF No. 49. See App. A , at pp. 28-30, A.R. at 1771-73. This explanation provides the substantial evidence needed to support the AFO. Antoine cannot establish a lack of substantial evidence on the part of the EC, and consequently, the Court should affirm the AFO.

F. Finding of Fact No. 50. Finding of Fact No. 50 reads: HHSC-OIG presented prima facie evidence that is credible, reliable, and verified, and that has indicia of reliability when analyzed consistently with Texas law and Medicaid policy, that ADC committed fraud or wilful misrepresentations in filing requests for prior authorization with TMHP for a substantial majority of patients in the OIG audit sample.

As proposed by the ALJs, FoF No. 50 stated: There is no evidence that is credible,

57

*68 reliable, or verifiable, or that has indicia of reliability, that ADC committed fraud or misrepresentation in filing requests for prior authorization with TMHP for the 63 patients at issue in this case.

The EC was authorized to change FoF No. 50 because it is a mixed finding of fact and law. The ALJs’ proposed finding incorporated their misunderstanding of Medicaid policy, and misapplication of Texas law, to the evidence. As with FoF No. 49, the EC explained the rationale for his changes. See App. A , at pp. 30-31, A.R. at 1773-74. This explanation provides the substantial evidence needed to support the AFO. Antoine cannot establish a lack of substantial evidence on the part of the EC, and consequently, t the Court should affirm the AFO.

G. Conclusion of Law No. 13. Conclusion of Law No. 13 in the AFO reads: HHSC-OIG should maintain the payment hold against ADC for alleged fraud or willful misrepresentation, and program violations. Tex. Gov’t Code § 531.102(g) (2011); 42 CFR § 455.23 (2011); Tex. Hum. Res. Code § 32.091(c) (2003); 1Tex. Admin. Code §§ 371.1703(b)(3), and (b)(5), 371.1617(a)(1)(A)-(C), (I), (K), (2)(A), (5)(A), (5)(G) (2005). As proposed by the ALJs, CoL No. 13 stated: HHSC-OIG lacks authority to

maintain the payment hold against ADC for alleged fraud or misrepresentation. Tex. Gov’t Code § 531.102(g) (2011); 42 CFR § 455.23 (2011); Tex. Hum. Res. Code § 32.091(c) (2003); 1 Tex. Admin. Code §§371.1703(b)(3), 371.1617(a)(1)(A)-(C) (2005).)

58 *69 The EC was authorized to change CoL No. 13 because it was a pure question of law committed to the discretion of the agency. Further, to the extent that CoL No. 13 was actually a recommendation from the ALJs, and not a true conclusion of law, the EC was fully authorized to modify it. See Granek v. Texas State Bd. of

Med. Exam'rs,

172 S.W.3d 761, 781 (Tex. App.—Austin 2005, no pet.); Akin ,

2015 WL 1611803, *5;

see also Pierce v. Tex. Racing Comm’n , 212 S.W.3d at 754 n.7 (“We need not decide, however, whether the ALJ had authority to recommend a penalty in a racing commission case because, regardless of whether the ALJ's conclusion of law was authorized, the Commission was statutorily authorized to modify or reject it.” (citing Tex. Gov't Code § 2001.058(e))).

As required by the APA and black letter Texas law, the EC fully explained the reasons for his change to CoL No. 13. See App. A , at pp. 39-40, A.R. at 1782-83. This explanation provides the substantial evidence needed to support the AFO. Antoine cannot establish a lack of substantial evidence on the part of the EC, and consequently, the Court should affirm the AFO.

PRAYER WHEREFORE, the State prays that the Court find that the AFO is fully supported by substantial evidence, and the EC did not exceed his authority in entering the AFO. The State respectfully prays that this Court reverse the honorable district court and affirm the EC ’ s AFO in all respects.

59

*70 Respectfully submitted, OFFICE OF THE ATTORNEY GENERAL

CHARLES E. ROY First Assistant Attorney General JAMES E. DAVIS Deputy Attorney General for Civil Litigation /s/ Raymond C. Winter RAYMOND C. WINTER Chief, Civil Medicaid Fraud Division State Bar No. 21791950 Phone: (512) 936-1709

Fax: (512) 370-9477 raymond.winter@texasattorneygeneral.gov REYNOLDS B. BRISSENDEN State Bar No. 24056969 reynolds.brissenden@texasattorneygeneral.gov Phone: (512) 936-2158 NOAH REINSTEIN State Bar No. 24089769 noah.reinstein@texasattorneygeneral.gov Phone: (512) 463-3457 Assistant Attorneys General Office of the Attorney General of Texas Civil Medicaid Fraud Division P.O. Box 12548, Capitol Station Austin, Texas 78711-2548 ATTORNEYS FOR TEXAS HEALTH AND HUMAN SERVICES COMMISSION AND OFFICE OF THE INSPECTOR GENERAL

60 *71 CERTIFICATE OF COMPLIANCE I certify pursuant to Tex. R. App. P. 9.4(i) that this Brief, excluding the: caption, identity of parties and counsel, statement regarding oral argument, table of contents, index of authorities, statement of the case, statement of issues presented, signature, proof of service, certification, certificate of compliance, and appendix has 14,450 words. This Brief was prepared using Microsoft Word 2010 and I have relied on the word count from that program.

/s/ Raymond C. Winter Raymond C. Winter

CERTIFICATE OF SERVICE

I certify that I have on this the 9th day of November, 2015, served copies of

this Appellant

’ s Brief to the following:

Jason Ray

J.A. “Tony” Canales

Riggs & Ray, PC

Canales & Simonson, PC

506 W. 14th Street, Suite A

2601 Morgan Avenue

Austin, Texas 78701

P.O. Box 5624

jray@r-alaw.com

Corpus Christi, Texas 78465

tonycanales@canalessimonson.com /s/ Raymond C. Winter Raymond C. Winter

61 *72 INDEX OF APPENDIX APPENDIX A Amended Final Order APPENDIX B Medicaid.gov Website, Statistics Excerpts from Tex. Medicaid and CHIP in Perspective, 10 th APPENDIX C

Ed., Feb. 2015 APPENDIX D 2011 Tex. Medicaid Provider Procedures Manual - Excerpts

APPENDIX E

2010 Tex. Medicaid Provider Procedures Manual - Excerpts

APPENDIX F

2009 Tex. Medicaid Provider Procedures Manual - Excerpts

APPENDIX G

2008 Tex. Medicaid Provider Procedures Manual – Excerpts

APPENDIX H

Exhibit R-51. Prevalence of malocclusion and orthodontic

treatment need in children and adolescents in Bogota, Colombia. An epidemiological study related to different states of dental development . Birgit Thilander, 2001, European J. of Orthodontics.

APPENDIX I Spreadsheet of dental scores submitted by Antoine

APPENDIX J

Exhibit R-88. HHSC-OIG’s Proffer of Rebuttal Testimony

from Dr. Linda Altenhoff 62 *73 Append¡x A

11!

*74 TEXAS HEALTH AND HUMAN SERVICES COMMISSION KYLE L. JANEK, MD. EXECUTIVE COMMISSIONER

May 2, 2014 ,2 -. J. A. “Tony” Canales Steven Johnson

EL’:

Canales & Simonson Q3 ‘*5 Associate Counsel -12,, 2601 Morgan Avenue 27 1’1‘; Office of Inspector General if P O Box 5624 at F- P O Box 85200, MC: 135-8

T"

,- Corpus Christi, Texas 78465 Austin, Texas 78708-5200 we-1%: »~ C ’ -.’ _ -“J; .. -*"nj.

,. Dan Hargrove Z1» r: Jason D. Ray ‘

DJ?

Waters & Kraus, LLP Riggs, Aleshire, Ray, P.C. 1.1 3219 McKinney Avenue 700 Lavaca, Suite 9200 Dallas, Texas 75201 Austin, Texas 78701 James Moriarty Thomas H. Watkins Moriarty Leyendecker, PC Husch Blackwell 4119 Montrose Blvd, Suite 250 111 Congress Avenue, Suite 1400 Houston, Texas 77006 Austin, Texas 78701 Raymond C. Winter Civil Medicaid Fraud Division Ofﬁce of Attorney General P O Box 12548 Austin, Texas 78711-2548 Gentlemen: Enclosed is the signed amended Final Order in Antoine Dental Care v. Texas Health and Human Services Commission, Oﬂice of Inspector General, HHSC-OIG Case No. P201 1131652384891. Sincerely,

74//1- Chris Traylor Chief Deputy Commissioner P. O. Box 13247 v Austin, Texas 78711 0 4900North Lamar, Austin, Texas 78751 0 (512)424-6500

001743 *75 SOAH DOCKET NO. 529130997 HHSC APPEALS DIVISION NO. I3-0039-K HHSC-OIG CASE NO.: P2011131652384891

ANTOINE DENTAL CENTER, BEFORE THE

Petitioner

v. TEXAS HEALTH AND HUMAN SERVICES COMMISSION TEXAS HEALTH & HUMAN APPEALS DIVISION SERVICES COMMISSION, OFFICE OF INSPECTOR GENERAL,

Respondent

AMENDED FINAL ORDER On this _f__ day of €ﬁ;t=:i~.~.». , 2014, came to be considered the above- styled case before the Executive Commissioner of the Texas Health and Human Services Commission (HI-ISC).

Before the Executive Commissioner are: the Proposal for Decision (PFD) issued by the SOAH ALJs Howard S. Seitzman and Catherine C. Egan (“SOAH ALJs”), dated November 4, 2013; the Inspector General‘s Exceptions to the PFD, dated November 22, 2013; the Response to the Inspector Generz1l’s Exceptions filed by Antoine Dental Center (“ADC”), dated December 6, 2013; the SOAH ALJs’ letter amending their PFD, dated January l6, 2014; the first Final Order issued by HHSC ALJ Rick Gilpin, dated February 27, 20l4; the Motion for Rehearing filed with HHSC by the Office of Inspector General, dated April 2, 2014; and the record in the case at SOAH. See Tex. Gov’t Code Ann. §§ 2001.060, 2001.062 (West 2013).

On February 27, 2014, after consideration of the PFD, the pleadings of the parties and record, the HHSC-ALJ issued a Final Order in this case. The HHSC-ALJ served notice of the Final Order on all parties by letter dated March 12, 2014. See Tex. Gov’t Code § 200l.l42(b) (requiring a state agency to serve a party with a copy of an order that may become final ﬁrst class mail). On April 2, 2014, the Inspector General filed a timely Motion for Rehearing with the HHSC Appeals Division. Tex. Gov’t Code § ?.00l.146(a) (requiring a party to file a motion for rehearing within twenty days after the party receives notice of an order that may become final).

I

001744 *76 Alter considering the additional arguments raised in the Motion for Rehearing, and in accordance with Tex. Gov’t Code § 200l.058(e), the Executive Commissioner issues this Amended Final Order.

The Executive Commissioner ﬁnds that the SOAH ALJ s did not properly apply or interpret applicable Texas Medicaid policy and applicable laws governing the Medicaid program and this proceeding. Tex. Gov’t Code § 200l.058(e)(l).

Speciﬁcally, the Executive Commissioner ﬁnds that the SOAH AI.Js erred in interpreting Texas Medicaid policy as allowing Medicaid providers to apply a special interpretation to the meaning of the phrase "ectopic eruption.” The SOAH ALJs’ determination that ectopic eruption has a special meaning for the purposes of Medicaid eligibility that is different from, and more liberal than, the interpretation of the phrase in the general practice of dentistry contravenes Texas Medicaid policy and Texas and federal law. See, e.g., 25 Tex. Admin. Code § 33.7l(a) (2008) (Orthodontic Services and Prior Authorization) (providing that Medieaid’s oithodontia benelit is limited to cases presenting severe handicapping malocclusion); see also Ex. R-I4. 2008 TMPPM, § 1.2.5, Compliance with Federal Legislation (mandating that providers must “furnish covered Medicaid services in the same manner, to the same extent. and of the same quality as services provided to other patients"). The SOAH ALJs misapplied applicable law, agency rules, and policies, and then misinterpreted the testimony of Witnesses regarding the limitations ol’ Medicaid policy and regarding the meaning oi’ ectopic eruption. See Tex. Gov’t Code § 200l.O58(e)(l); SOLtllZW€.S’lPl1lJl’I7’I. Solutions, Inc. v. Tex. HHSC, 408 S.W.3d 549, 562 (Tex. App.~Austin 2013, pet. denied) (“As the agency designated to administer Medicaid, HHSC is charged with overseeing a complex regulatory scheme, and deference to its construction is particularly important.” (citing R.R. Comm ‘

n v. Tex. Citizens/or a ScgfØ Future & Clean Water, 336 S.W.3d 619, 629 (Tex. 201 1)). The Executive Commissioner further ﬁnds that the SOAH ALJs erred to the extent that they impermissibly misinterpreted and misapplied applicable law, rules, and policy which resulted in wrongly dismissing prima ﬁzcie evidence that satisﬁes the evidentiary requirements to maintain a payment hold. See Tex. Gov‘t Code § 200l.058(e)(l). The Executive Commissioner ﬁnds that the Inspector General presented relevant, credible, and material evidence that ADC submitted fraudulent or willfully misrepresented prior authorization requests and claims for reimbursement; ADC submitted claims for services not reimbursable; and ADC failed to maintain or provide records as required by law.

The Executive Commissioner further finds that the SOAH ALJs erred to the extent that they relied on certain findings of fact in la-II»-ISC’ s tinal order in Harlingen Fa/nily Dental v. Texas Health and Human Services Cl’ on1/nlssfon, O‘/fice of Inspector General.

’7 . 001745 *77 See Order signed by HHSC-ALJ S. Nash Fekety, dated Jan. 7, 2013, in HHSC Appeals Division, Cause No. 12~0789-K. The Executive Commissioner has detemiined that certain ol’ the ﬁndings in the Harlingen Family Dental case incorrectly stated the law, rules, and Medicaid policy and cannot be relied on in this case. See Tex. Gov’t Code § 2001.05 8(e)(2). Speciﬁcally, the Executive Commissioner concludes that Finding of Fact No. 29 in the Harlingen Family Dental case was erroneous to the extent that it suggested that the Inspector General’s retained expert Dr. Charles Evans was not qualiﬁed to be an expert because he did not treat Medicaid patients. That ﬁnding was erroneous and cannot be relied on in this case because State and federal laws require Medicaid patients to be treated to the same standard of care as patients in the general population. See, e,g., 25 Tex. Admin. Code § 33.7l(a) (providing that Medicaid’s oithodontia beneﬁt is limited to cases presenting severe handicapping malocclusion); see also Ex. R-l4, 2008 TMPPM, § 1.2.5, Compliance with Federal Legislation (mandating that providers must “furnish covered Medicaid services in the same manner, to the same extent, and of the same quality as services provided to other patients"). Accordingly, the fact that Dr. Evans did not treat Medicaid patients in his practice may not be used in properly evaluating his qualiﬁcations (skill, knowledge, experience, and training) as an expert in this case. To the extent that the SOAH ALJs in the instant case relied on Finding of Fact No. 29 from Harlingen in their analysis of this case and of Dr. Evans, they erred.

In addition, Finding of Fact No. 31 in the Harlingen Family Dental case erroneously stated and applied Texas law and Medicaid policy, to the extent that the ﬁnding suggested Medicaid policy interprets “ectopic eruption” differently and more expansively (or more liberally) than the condition is interpreted in the general practice of dentistry. As noted above, the Harlingen Family Dental decision applied the law and policy erroneously and cannot be relied on in this case. Tex. Gov’t Code § 20()l.()58(e)(2).

Harlingen Family Dental Finding of F act No. 33 was also erroneous to the extent that it explained away evidence of fraud by impermissibly claiming Dr. Evans was not a qualiﬁed expert witness. The Harlingen Family Dental AL] opined that Dr. Evans has not treated Medicaid patients in his private practice and that Dr. Evans scored the HLD indices in the Harlingen Family Dental sample in accordance with the common interpretation in the general practice of dentistry. as opposed to the “more expansive" interpretation that the Harlingen Family Dental AL] erroneously claimed had been adopted by HHSC. Thus, because the Harlingen Family Dental ALJ relied on these faulty premises, Harlingen Family Dental Finding of Fact No. 33 was a misapplication of

3 001746 *78 law. To the extent that the SOAI-I AI..Js relied on the Harlingen Family Dental case for their understanding of Medicaid policy, they erred. Id.

The Executive Commissioner expressly disapproves ol’ Harlingen Family Dental Findings of Fact Nos. 29, 31, and 33 and declares that these ﬁndings were incorrectly decided and should not be relied on in this case or any other case. See Tex. Gov’t Code § 200l.058(e)(2) (authorizing an agency to modify a PFD when it relies on a prior administrative decision that is “incorrect or should be changed”).

The Executive Commissioner also finds that the SOAH ALJS failed to both properly articulate and then properly apply the Inspector General’ s evidentiary burden to the evidence presented. In order to maintain the payment hold, the Inspector General is required to present prima facie evidence that is relevant, credible, and material to the issue of fraud or willful misrepresentation, or prima facie evidence that ADC has committed other, non-fraudulent program violations. See Tex. IIum. Res. Code Ann. § 32.029l(c) (Vernon 2003) (amended 2013) (“The department shall discontinue the hold unless the department makes a pri/na faeie showing at the hearing that the evidence relied on by the department in imposing the hold is relevant, credible, and material to the issue of:/raud 0r wilful misrepresentation.”) (emphasis added); see also Tex. Gov"t Code § 53l.l02(g)(2) (“the [Inspector General] shall impose without prior notice a payment hold on claims for reimbursement submitted by a provider . . . on the determination that a credible allegation of fraud exists“); 42 C.F.R. § 455.23 (“The State Medicaid agency must suspend all Medicaid payments to a provider alter the agency determines there is a credible allegation of fraud for which an investigation is pending under the Medicaid program against an individual or entity unless the agency has good cause to not suspend payments or to suspend payment only in part"); I Tex. Admin. Code § 37l.1703(b) (2005) (Recovery of Overpayments) (“A payment hold on payments of Future claims submitted for reimbursement will be imposed, without prior notice, after it is determined that prima facie evidence exists to support the payment hold”).

Speciﬁcally, the Executive Commissioner ﬁnds that the Inspector General presented prima facie evidence of acts and omissions by ADC justifying the imposition of a 100% payment hold. and that ADC failed to rebut such evidence. Tex. Hum. Res. Code § 32.029l(c); Tex. Gov"t Code § 531.l02(g)(2); 42 C.F.R. § 455.23.

The Executive Commissioner ﬁnds that when Medicaid policy and Texas laws are properly interpreted and properly applied to the facts of record in this case the Inspector General has met his evidentiary burden to maintain a 100% payment hold. Indeed, the Executive Commissioner ﬁnds that a 100% payment hold is required by law. Tex. IrIum. Res. Code § 32.029l(c); Tex. Gov’t Code § 531.102(g)(2); 42 C.F.R. § 455.23.

For these reasons, the Executive Commissioner declines to adopt the SOAII ALJs’ proposed ﬁndings of fact I0, 21, 26, 29, 39-42, 42, 44-50, 54-55, 57, and proposed conclusions of law 4, 10, 13, 14, and 16. Instead, the Executive Commissioner linds that

4 001747 *79 the inspector General’s Exceptions have merit and should be granted. Further, the Executive Commissioner determines that the inspector General’s payment hold should be maintained at l0()%.

lt is now therefore ORDERED as follows: FIN DINGS OF FACT Behzad Nazari, D.D.S., has owned Antoine Dental Center (ADC) since 1998. l. ADC has two dental clinics in Houston, Texas, that treat Medicaid and private pay clients. Between November 1, 2008, and August 31, 2011, ADC provided dental and

2. orthodontic services to Medicaid patients as a Texas Medicaid Provider holding Provider ldentiﬁcation Nos. 1905432, 2187031, 1952657, and 0908162.DC.

3. During this period, ADC billed Texas Medicaid approximately $8,104,875.75 for orthodontic services. 4. ln 2010, approximately 70% ofADC’s patients were Medicaid patients. The federal govemment and the State of Texas share the cost of Texas Medicaid, 5.

with the federal government contributing approximately 60% of the payments for Medicaid services. The Texas Health and Human Service Commission (the Commission) is the single

6. agency responsible for the administration of the Texas Medical Assistance Program (Texas Medicaid) and does so by contracting with healthcare providers, claims administrators, and other contractors. During the times in question in this case, Texas Medicaid Health Partnership

7. (TMHP) was the contracted Texas Medicaid claims administrator. 8. During all applicable periods, the Commission’s Office of Inspector General (HHSC-OIG) was responsible for monitoring and investigating allegations of fraud, Waste, and abuse associated with the Texas Medicaid program.

9. As part of the enrollment process, a provider agreed to comply with the terms of the annual Texas Medicaid Provider Procedures Manual (Manual) and the bulletin updates issued every two months.

10. Medicaid orthodontia services are limited to treatment of children aged 12 to 20 years with severe handicapping malocclusions and other related conditions, unless an exemption is expressly sought by the provider.‘

I

By letter dated January 16, 2014. the SOAH /\l.Js replied to the Inspector General’s Exceptions and notiﬁed the Executive Commissioner that their original proposed ﬁnding offact number l0 should be revised to read: According to the Manual. I/1e intent of /he Merlicaid dental program was to provide dental cure /0 clients 30yeurs Q/"age oryuunger. 1* or the reasons stated in this Amended Final Order, the

5 001748 *80 (The SOAH ALJs’ proposed FoF No. l0 stated: According to the Manual, the intent of the Medicaid orthodontia program was to provide orthodontic care to clients 20 years of age or younger with severe handicapping malocclusion to improve _/itnction. ) Reason for Change: The proposed ﬁnding is not simply a case-speciﬁc ﬁnding of fact that determines the “who, What, when, where and how” of this case. Rather, in purporting to recite Medicaid policy, the proposed ﬁnding addresses a mixed question of fact and law and is a so-called “legislative ﬁnding.‘"2 As such, the Executive Commissioner has “complete discretion” to modify the proposed ﬁnding. Tex. Dept of Licensing & Regulation v. Thompson, O3-ll-00316-CV, 2013 WL 3791486, at *6 (July 18, 2013. pet. ﬁled) (‘“An agency enjoys complete discretion in modifying an ALJ’s ﬁndings and conclusions when those ﬁndings and conclusions reﬂect a lack 01‘ understanding or misapplication of the existing laws, rules, or policies.” (quoting Smith v. .Montemayor, 03-()2-00466-CV, 2()03 WL 21401591, at *26-27 (T ex. /\pp.—Austin June 19, 2003, no pet.) (emphasis added»; Tex. Gov‘t Code § 200l.058(e)(1). The Executive Commissioner modiﬁes proposed FoF No. 10 because it misstates Medicaid policy. See Tex. Gov’t Code § 200l.058(e)(l) (state agency may change a ﬁnding of fact or conclusion of law if the ALJ did not “properly apply or interpret applicable law, agency rules, [or] written policies”). Proposed ﬁnding or fact number 10 misstates Texas Medicaid policy, as codiﬁed in 25 Tex. Admin. Code § 33.71 and in the Texas Medicaid Provider Procedures Manual (T1\/IPPM). As codiﬁed in 25 Tex. Admin. Code § 33.7l(a), orthodontia services are a limited beneﬁt:

(a) Orthodontic services for cosmetic reasons only are not a covered Medicaid service. Orthodontic services must be prior authorized and are limited to treatment of severe handicapping malocclusion and other related conditions as described and measured by the procedures and standards published in the TMPPM.

For most of the time period in question, November l, 2008 to August 1, 2011, Medicaid oithodontia services were limited to children twelve years of age and

Executive Commissioner also declines to adopt the SO/~\l~l ALJs recommended FoF No. l0, as stated in their January 16, 2014 letter to the Executive Commissioner. ^[2]

A "legislative fact" is a mixed question of fact and law and deﬁning terms is an agency function. F. Scott McCown & Monica Leo, When Can an /lgencv Change the Findings of(."onclti.s’i0ns of an .41,/P.‘ Part Two, Sl Baylor L. Rev. 63, 69-70 (1999). A ﬁnding of fact is a "legislative fact” where the ﬁnding affects not just one speciﬁc case. but is actually an explication of agency policy and therefore may be applied to other cases or implicates agency policy. Id.

6 001749 *81 R- 15 at 19-38 § 19.19.1 (2009 TMPPM). As written, the proposed older. See ﬁnding does not accurately reﬂect Medicaid policy. Speciﬁcally, the proposed finding ol’ fact omits the 12 year age threshold for children eligible l’or orthodontia, erroneously suggesting by implication that any child under 20 is eligible. Therefore, proposed ﬁnding of fact number 10 should be modiﬁed to more accurately reﬂect the limited beneﬁt 0’1’ Medicaid orthodontia as articulated in 25 Tex. Admin. Code § 33.7l(a); see Tex. Gov‘t Code § 200l.058(e)(1), (3) (allowing an agency to change a PFD to correct errors of law or policy or technical errors in a proposed ﬁnding of fact). See also, e.g., Ex. R-17. T MPPM (2011), Vol. 2, § 4.2.24: Ex. R-16, Tl\/1PPM (2010), Vol. 2, § 5.3.24; Ex. R-15, T1\/{PPM (2009), Vol. 2, § 19.19; Ex. R-14, TMPPM (2008), Vol. 2 § 19.19. A correct understanding of the limitations of Texas Medicaid’s orthodontia beneﬁt is especially important in this case, Where there are a number of examples of ADC requesting full banding (braces) for children under 12 years of age.3 See, e. g., Ex. R-15 T1\/lPPt\/I (2009) § 19.l9.1 (2009 TMPPM) (comprehensive orthodontic treatment restricted to clients who are 12 years of age or older or clients who have exfoliated all primary dentition). The SOAH ALJs may not incorrectly revise or incorrectly interpret the meaning of the agency’s policies. See Southwest Pharm., 408 S.W.3d at 557-58; R.R. C0mm’n 0fTex. v. Tex. Cl/’lZ€I’lS, 336 S.W.3d at 624. The new ﬁnding of fact accurately reﬂects the policy of Texas Medicaid ot providing a very limited beneﬁt and thus advances the goal of preserving scarce Medicaid dollars by articulating the limited orthodontic beneﬁt. Tex. Gov’t Code §3l1.023(l). The SOAH ALJs also erred to the extent that they relied on the Harlfngen Family Dental decision, particularly, Fol? 29, 31, and 33, for their understanding of the scope and limitations of Texas Medicaid policy. The Executive Commissioner disapproves of these ﬁndings, and expressly concludes that they were based on an incorrect interpretation and application of Texas law and Medicaid policy, and therefore, cannot be relied on. Tex. Gov’t Code § 200l.058(e)(2). An accurate understanding of the scope and limitations of Texas Medicaid policy is critically important to the outcome of this dispute. The fundamental allegation brought by the Inspector General is that ADC has submitted claims For prior approval (PA) and for reimbursement that are not authorized under Medicaid policy or Texas law. Allegations cannot be properly evaluated if the fact tinder does not properly interpret and apply a policy. Therelbre, there is a rational connection between the correct articulation of Medicaid policy and the altered ﬁnding of fact, which accurately reﬂects that policy. See, e.g.. Heritage on the San Gabriel Homeowners Assoc. v. TCEQ, 393 S.W.3d 417, 440-41 (Tex. App.~ Austin 2012, pet denied); State v. Mid-South Pavers, lnc., 246 S.W.3d 711, 728

ii_ ’\D( request full banding (braces). D8080, for three patients. P-15, P-56, and P-60 who were under 12 years of age at time oftreatment.

7 001750 *82 (Tex. App.~Austin 2007, pet. denied); Levy v. Tex. State Bd. 0fMed. Exam ’rs, 966 S.W.2d 813. 816 (Tex. App.—Austin 1998, no pet.). In 2008 through 2011, Texas Medicaid paid the providers of orthodontic services on a fee-for-service basis. To be reimbursed for orthodontic services, the Manual required dental providers to ﬁrst obtain prior authorization from TMHP. In making prior authorization decisions in orthodontia cases, TMI-IP relied in part on a Handicapping Labio-lingual Deviation (HLD) score sheet contained in the Manual to determine whether orthodontic services qualiﬁed For Medicaid coverage. The Manual required providers to complete and submit the l—ll.D score sheet to TM}-[P together with a prior authorization request and the supporting clinical materials including the treatment plan, cephalometric radiograph with tracing models, facial photographs, radiographs, the model (or cast) of the patient’s teeth if a model was made, and any additional pertinent information to evaluate the request. The HLD lndex is an index measuring the existence or absence of handicapping malocclusion and its severity, and is a tool used by Medicaid to measure whether a patient qualiﬁes for the public funding program. lt is not intended to be diagnostic or treatment tool. The Manual described the categories of the HLD Index, and instructed providers on how to score those categories. The HLD score sheet assigned a certain number of points for the Following observed conditions: cleft palate, severe traumatic deviations, overjet, overbite, mandibular protrusion, open bite, ectopic eruption, anterior crowding, and labio- lingual spread in millimeters. Orthodontic services provided solely for cosmetic reasons were not covered under the Texas Medicaid program. Although Texas Medicaid generally restricted orthodontic treatment to children l2 years of age or older who no longer had primary teeth, a provider could request that TMHP approve prior authorization for interceptive treatment or for treatment for a child who qualiﬁed for another exception under the program. In general. orthodontic beneﬁts were limited to the treatment of children 12 years of age or older with a severe handicapping malocclusion. If the HLD Index score did not meet the 26-point threshold. a provider could submit a narrative to establish the medical necessity of the treatment. Notwithstanding TlVIHP’s responsibility for reviewing the filed material to evaluate whether the orthodontic services were medically necessary before

8 001751 *83 granting prior authorization, ADC was required to submit accurate HLD scoresheets and PA requests substantiating the patient’s condition as meeting Medicaid’s requirements. (The SOAH ALJs’ proposed FQF No. 21 stated: TMHP was responsible for reviewing the ﬁled material to evaluate whether the orthodontic services were medically necessaijv before granting prior authorization.) Reason for Change: The proposed ﬁnding is not simply a case-speciﬁc ﬁnding of fact that determines the “who. what, When, where and how” of this case. Rather, the proposed ﬁnding addresses a mixed question of fact and law and is a so-called “legislative ﬁnding." As such, the Executive Commissioner has “complete discretion” to modify the proposed ﬁnding. Tex. Dep’t of Licensing & Regulation v. Thompson, 2013 WL 3791486, at *6 (“‘An agency enjoys complete discretion in modifying an ALJ‘s ﬁndings and conclusions when those ﬁndings and conclusions reﬂect a lack ot understanding or misapplication of the existing laws, rules, or policies."’ (quoting Smith v. Monlemayor, 2003 WL 21401591, at *26-27 (emphasis added)); Tex. Gov’t Code § 2O()l.058(e)(1). The Executive Commissioner modiﬁes proposed FoF No. 21 because the proposed ﬁnding rests upon an incorrect legal premise. The proposed finding of fact suggests that TMHP is solely responsible for the disposition of an orthodontic prior approval (PA) request. The implication of this proposed ﬁnding is that it there were any errors in the PAs at issue in this case, "l’MleIP‘ s approvals somehow made the State at fault for ADC’ s errors. Further, ADC argued at the hearing. and the ALJs’ proposed ﬁnding of fact seems to suggest, that once TMHP has approved a PA request. ADC cannot be held liable for its veracity or accuracy. Proposed ﬁnding of fact number 21 is erroneous because it misstates, misintcrprets, and misapplies Texas law. The black letter law in Texas is crystal clear: the equitable defenses of estoppel and laches do not run against the State in the exercise of its sovereign powers. See State v. Durharn, 860 S.W.2d 63, 67 (Tex. 1993).‘ See also Tex. Gov"t Code § 2001.058(e)(l) (“A state agency may ^[4] The Executive Commissioner notes that numerous Travis County District Courts have ruled on the applicability ofequitable defenses. such as estoppel, laches, waiver, ratiﬁcation and limitations. in actions brought by the Office of Attomey General under the authority of the TMFPA. ln each of these cases. the district courts have ruled that these defenses are not available as a matter of law. See, e.g., State of Texas ex rel. Ven-A-Care ofthe Fla. l\’ e_vs, Inc. v. Roxane Labs, Inc. et al. Cause No. GV-002327 (_53rd Judicial Dist. Ct. Travis County, Tex. Aug. 15, 3003) (Order granting PlaintitTs’ First Amended Motion for Paitial Summary Judgment. which addressed. among others, defenses oi’ limitations, estoppel, laches. waiver. and failure to mitigate): State of Texas ex. rel. Ven~ .»l-Care Q/the Fla. Keys. Inc. v. Sand0:, Ina, Cause No. D-l-GV~07-001259 (2()lst Judicial Dist. Ct.. Travis County, Tex. Dec. 14. 2009) (tentative rulings made from bench granting State’s partial motion for summary judgment concerning viability of equitable dct’ enses against the state (limitations, estoppel. laches, ratiﬁcation)): Slate ofTe.ras ex rel. Vera-A-Care rg/‘the Fla. Keys, Inc. v. Alpharma USPD. Cause No. D-I -GV-08-001566 (4l9th Judicial Dist. CL, Travis

9 001752 *84 change a ﬁnding of fact or conclusion of law . . . if. . .[ the ALJ] did not properly apply or interpret applicable laW.”). The proposed finding also ignores the responsibility ADC had to submit truthful and accurate documentation to the State (including the responsibility expressly stated in the Provider Agreement and agreed to by ADC and/or its providers), including accurate HLD scoresheets and PA requests. See also Ex. R-l4, TMPPM (2008), § 1.2.7 Provider Certification/Assignment (“Texas Medicaid service providers are required to certify compliance with or agree to various provisions ot state and federal laws and regulations. After submitting a signed claim to TMHP, the provider certiﬁes the following: .

. . The information on the claim form is true, accurate, and complete”) (emphasis added). ADC produced no evidence or legal authority to show it was somehow allowed to provide fraudulent or false statements, submit claims for non-reimbursable services, or engage in any conduct in violation of the applicable Medicaid program rules, based on the mere fact T MHP approved ADC’s prior authorization claims. See id. (Ex. R-14, TMPPM (2008), § 1.2.7 Provider Certiﬁcation/Assignment); see also Heckler v. Community 1-[ealtlz Servsz, 467 U.S. 51, 63-65 (1984) (a provider has the responsibility to "familiarize itself with the legal requirements for cost reimbursement”). The SOAH ALJs also erred to the extent that they relied on the I-Iarlingeiz Family Denial decision, particularly, I3-‘oF 29, 31, and 33, for their understanding of the scope and limitations of Texas Medicaid policy. The Executive Commissioner disapproves of these ﬁndings, and expressly concludes that they were based on an incorrect interpretation and application of Texas law and Medicaid policy, and therefore, cannot be relied on. Tex. Gov’t Code § 2001.058(e)(2). Therefore, the Executive Commissioner ﬁnds that the PFD’s proposed finding ot fact number 21 eirs because it misstates Texas law and suggests that ADC is excused for submitting false information if TMHP approved ADC’s PA requests. Given the issues in this payment hold proceeding, there is therefore a rational connection between Texas law and the altered ﬁnding of fact. See. e. g.. Heritage on the San Gabriel Homeowners Assoc. v. TCEQ, 393 S.W.3d at 440-41; State v. .Mid-South Pavers, 1nc., 246 S.W.3d at 728; Levy v. Tex. Slate Bd. Q/‘Med.

’ Exam rs, 966 S.W.2d at 816. 22. The Manual clarified that prior authorization of an orthodontic service did not guarantee payment. To receive payment, the provider still had to show that the County, Tex. Dec. l3, 2010) (order striking defense of failure to mitigate); Stare of Texas ex rel. Allen ./rmes v. ./ansseiz 1’l1arm., Inc. Cause No. D-l-GV-()4-001288 (25t)th Judicial Dist. Ct., Travis County. Tex. Feb. 23. 201 l) (order striking defenses of failure to mitigate and limitations); Stale QfTL’X(lS ex. rel. Grmzalez v. Mego. Cause No. D-l-GV-I l-000740 (20lst Judicial Dist. Ct., Travis County. Tex. Sept. 30, 20 I 3) (two orders, striking defendants’ estoppel, lachcs, and waiver defenses).

I0

001753 *85 orthodontic procedure was medically necessary under the terms and conditions of the Manual. After ADC provided the orthodontic treatment to the patients in this case, TMHP

23 approved payment. On August 29, 2008, HHSC-OIG issued a performance audit report regarding 24 T.MHP’s prior authorization process for the period between September l, 2006, and March 31, 2008. ﬁnding that TMHP’s prior authorization process did not comply with the Manual (the 2008 audit report).

25 In the 2008 audit report, HHSC-OIG found that TMHP’s prior authorization staff failed to review the supporting material submitted by providers with their prior authorization requests, as required. and that TMHP’s staff did not have the dental credentials necessary to evaluate whether the supporting documentation submitted by providers supported the HLD score. The Provider Agreement required ADC and its providers to certify to be

26 truthful; to abide by the Medicaid rules; and to submit true, complete, and accurate information that can be veriﬁed by reference to source documentation maintained by ADC. (The SOAH ALJs’ proposed FoF No. 26 stated: ADC was unaware of the 2008

‘ auclit report and HHSC~()I G s assertion tlzat TMHP was not properly performing prior authorization evaluations.) Reason for Change: The Executive Commissioner modiﬁes the SOAH /\L.ls’ Proposed FoF No. 26 because the proposed ﬁnding rests upon an incorrect legal premise. As such, the Executive Commissioner has “complete discretion” to modify the proposed ﬁnding. Tex. Dept‘ of Licensing & Regulation v. Thompson, 2013 WL 3791486, at *6 (“An agency enjoys complete discretion in modifying an ALJ’s ﬁndings and conclusions when those ﬁndings and conclusions reﬂect a lack of understanding or misapplication of the existing laws, rules, or po1icies."’ (quoting Smith v. Montemayor, 2003 WL 21401591, at *26-27 (emphasis added)): Tex. Gov’t Code §2001.058(e)(1). The proposed ﬁnding suggests that ADC could not have intentionally submitted false information to TMHP because ADC did not know that TMHP was failing to properly review PA requests. This is a misstatement of Texas law. As a threshold matter, the Inspector General does not have to show that ADC made false statements and material misrepresentations with the specific intent to defraud Medicaid. See Tex. Hum. Res. Code Ann. § 36.001l(b) (West Z013) (Culpable Mental State: speciﬁc intent to defraud is not required). Instead, the inspector Generals burden in this payment hold proceeding is to show by prima facie evidence that when ADC submitted false information to Texas Medicaid that

ll 001754 *86 either (1) ADC knew the information was false; (2) ADC acted with conscious indillerence to the truth or falsity‘ ol’ the information; or (3) ADC acted with reckless disregard of the truth or falsity of the information. Id. (a)(l)-(3). The SOAH AI.ls also erred to the extent that they relied on the Harlingen Family Dental decision, particularly, FoF 29, 31, and 33, for their understanding of the scope and limitations of Texas Medicaid policy. The Executive Commissioner disapproves of these ﬁndings, and expressly concludes that they were based on an incorrect interpretation and application of Texas law and Medicaid policy, and therefore, cannot be relied on. Tex. Gov’t Code § 2001 .058(e)(2). Moreover, given the allegations at issue in this payment hold proceeding, and the actual standard under the TMFPA, there is therefore a rational connection between Texas law and the altered ﬁnding of fact. See, e. g., Heritage on the San Gabriel Homeowners Assoc. v. T CEQ, 393 S.W.3d at 440-41; State v. ll/lid-South Pavers, Inc, 246 S.W.3d at 728; Levy v. Tex. Srate Bd. ofMecl. Exam ’rs, 966 S.W.2d at 816.

27 ln 2011, H1-ISC-OIG conducted a data analysis of paid Medicaid claims in Texas and determined that ADC was one of the top providers in the state with high utilization oforthodontia billing between 2008 and 2011. As a result, HHSC-()l(] initiated a fraud investigation against ADC. HHSC-OIG retained Charles Evans, D.D.S., an orthodontist, to review the clinical

28 records for the 63-patient sample collected by l-ll-ISC-OIG for whom ADC ﬁled prior authorization requests during the relevant period. The HLD score sheets for the 63 patients in the random sample were

29. completed by ADC’s orthodontist, Wael Kanaan, D.D.S. and Dr. Nazari, who is not an orthodontist, and in each case they scored the patient as having a score of 26 or more points. The greatest number of points was associated with the category of “ectopic eruption." (The SOAH ALJs’ proposed 1*‘ 01* No. 29 stated: The HLD score sheets for the 63 patients were completed by ADCE orthodontist, Wael Kanaan, D.D.S. and Dr. Nazari, and in each case the patient scored 26 or more points. The greatest number ofpoinls was associated with the category of "ectopic eruption. ”) Reason for Change: The Executive Commissioner modiﬁes the proposed ﬁnding because it mischaracterizes by omission which party has responsibility for completing the HLD score sheets — the provider. As such, the Executive Commissioner has "complete discretion” to modify the proposed ﬁnding. Tex. Dep’l" of Licensing & Regulation v. Thompson, 2013 WL 3791486, at *6 (“An agency enjoys complete discretion in modifying an A.[.J’s ﬁndings and conclusions when those findings and conclusions reﬂect a lack of understanding or misapplication of the existing

12 001755 *87 laws. rules, or policies.” (quoting Smith v. Montemayor, 2003 WL 21401591. at *26-27 (emphasis added)); Tex. Gov’t Code § 2001 .058(e)(l). Here, Drs. Kanaan and Nazari scored the HLD scoresheets, and represented to the State the accuracy ofthe scores. R-83; R.R. Vol. 3 at 46-70, 96-97; R.R. Vol. 4 at 99-100. As written, the proposed fact impermissibly minimizes the active and responsible role providers have in scoring patients. Texas Medicaid depends upon the providers to submit accurate documentation to the State; thus, providers bear the responsibility to score the patients. See Tex. Gov’t Code § 200l.058(e)(1); see also Ex. R-14, Tl\/IPPM (2008), § 1.2.7 Provider Certification/Assignment (“Texas Medicaid service providers are required to certify compliance with or agree to various provisions of state and federal laws and regulations. After submitting a signed claim to TMHP, the provider certiﬁes the following: .

. The information . on the claim form is true, accurate, and c0mplete.”) (emphasis added). Proposed FoF No. 29 is also misleading because it omits the fact that Dr. Nazari is not an orthodontist. Therefore, the Executive Commissioner is fully authorized to correct this technical error (by omission) in FoF No. 29. Tex. Gov’t Code § 2001.058(e)(3). The SOAH ALJs also erred to the extent that they relied on the l~’{arlz’ /vgen Family Dental decision, particularly, Fol? 29, 31, and 33, for their understanding of the scope and limitations of Texas Medicaid policy. The Executive Commissioner disapproves of these ﬁndings, and expressly concludes that they were based on an incorrect interpretation and application of Texas law and Medicaid policy, and therefore. cannot be relied on. Tex. (}ov’t Code § 200l.058(e)(2). Given the issues in this payment hold proceeding, and the requirements of Texas law and Medicaid policy, there is therefore a rational connection between Texas law and the altered ﬁnding of fact. See, e. g., Heritage on the San Gabriel Homeowners Assoc. v. T CEQ, 393 S.W.3d at 440-41; State v. 11/lid-South Pavers, lnc., 246 S.W.3d at 728; L€l{}/ v. Tex. State Ba’ . of Med. Exam ’rs, 966 S.W.2d at 816. Dr. Evans concluded that in all 63 cases. the clinical records did not support the scoring on the l-ILD score sheets submitted with the prior autl1ori’/..ation requests because of the score assigned to the ectopic eruption category. Dr. Evans did not testify in this matter. Although HHSC-GIG represented that its field investigators interviewed ADC’s office staff. dentists, and the patients and their parents/guardians, it did not present this evidence during the hearing. Based in large part on Dr. Evans’ conclusions, on April 4. 2012, HHSC-O’1G issued a letter to ADC notifying ADC that it was imposing a 100% payment hold on all future Medicaid reimbursements due to a credible allegation of fraud for claims ADC submitted from November 1, 2008 through August 31, 201 1.

l3 001756 *88 ADC timely requested a hearing to contest the payment hold, and the matter was 33 relerred to the State Ol’t’ 1ce of Administrative Hearings (SOAH) on November 7, 2012. HHSC-OlG referred ADC to the Medicaid Fraud Control Unit ol’ the Office of the

34 Attorney General (MP CU), and on March 29, 2012, MF CU opened an investigation.

35 On January 15, 2013, HHSC-OIG issued its First Amended Notice of Hearing to ADC. The notice contained a statement of the time, place, and nature of the hearing; a statement of the legal authority and jurisdiction under which the hearing was to be held; a reference to the particular sections of the statutes and rules involved; and a short plain statement of the matters asserted.

36 The hearing on the merits was held May 28 through 31, 2013, before Administrative Law Judges Catherine C. Egan and Howard S. Seitzman at the State Oftice of Administrative Hearings (SOAH) in the William P. Clements Building, 300 West 15th Street, Fourth Floor, Austin, Texas. ADC appeared through its attorneys of record, .l.A. Tony Canales. Hector Canales, Robert M. Anderton, Philip H. Hilder, William B. Graham, James G. Rytting, and Thomas Watkins. HHSC-OIG was represented by outside counsel Dan Hargrove, Caitlyn Silhan, James R. Moriarty, Ketan Kharod; by Assistant Attorneys General Raymond C. Winter and Margaret M. Moore, from the Office of Attorney General ofTexas, and by Enrique Varela and John R. Medlock. from IIHSC-OIG.

37 In the 2008 through 2011 Manuals (Manuals). the HLD index described the term "ectopic eruption” as “an unusual pattern of eruption, such as high labial cuspids or teeth that are grossly out of the long axis of the alveolar ridge.” The Manuals instructed providers not to include (score) teeth from an arch if the provider counted the arch in the category for anterior crowding. For each arch, the Manual further instructed that either the ectopic eruption or anterior crowding could be scored, but not both.

38 The Manuals’ references to high labial cuspids and teeth grossly out of the long axis of the alveolar ridge were nonexclusive examples of ectopic eruption. 39 The Manual requires providers to apply the HLD scoring methodology in accordance with their professional training, education and generally accepted standards in the dental profession. Among those standards is the standard for identifying ectopic eruption. (The ALJs" proposed FoF No. 39 stated: The Manual ’

s deﬁnition of ectopic eruption in the 2008 through 20/1 it/[ant/al required subjective judgment to interpret.) Reason for Change:

I4

001757 *89 The proposed ﬁnding addresses a mixed question of fact and law, and is a “legislative ﬁnding.” As such, the Executive Commissioner has “complete discretion" to modify it. Tex. Dep’t of Licensing & Regulation v. Thompson, 2013 WI. 379.1486, at *6 (“‘An agency enjoys complete a’1’ scretz’ on in modifying an ALJ’s ﬁndings and conclusions when those ﬁndings and conclusions reﬂect a lack of understanding or misapplication of the existing laws, rules, or policies.” (quoting Smith v. Montemtn/or, 2003 WL 21401591, at *26-27 (emphasis added)); Tex. Gov’t Code § 2001.058(e)(1). The Executive Commissioner modiﬁes Proposed FoF No. 39 because it is erroneous for two reasons. First, the T MPPM’s discussion of ectopic eruption is an instruction, not a deﬁnition. See, e.g., R.R., Vol. ^[1] at 103:8-12 (terms in the ectopic eruption instruction are not deﬁned but are accorded their plain and ordinary meaning in the English language); R.R., Vol. ^[1] at 111: 12-14 (providers must understand the manual by virtue of their professional training). This error reﬁects a misinterpretation of law and policy by the SOAH ALJ s. See Tex. (}ov’t Code § 2001.058(e)(1); Thompson, 2013 WL 3791486, at *6; Southwest Pharm., 408 S.W.3d at 557-58. Second, the proposed ﬁnding erroneously suggests that it was Texas Medicaid policy to adopt a distinct “deﬁnition” of ectopic eruption in the TMPPM that differed from ectopic eruption as generally understood within the dental profession. The proposed ﬁnding would violate state and federal law because creation of a different set of standards applicable only to Medicaid patients would violate both Texas and federal law. See, e. g., ^[1] Tex. Admin. Code § 354.l131(h); see a/so RR., Vol. 3, 250:8-19; Ex. R-14 (2008 TMPPM), § 1.2.5; Ex. R-15 (2009 T1\/ll’PM). § 1.4.5 (“Compliance with Federal Legislation. Reminder: Each provider mztstfurhish covered Medicaid services in the same manner, to the same extent, and of the same quality as services provided to other patients. Services made available to other patients must be made available to Texas Medicaid clients if the services are benefits of the Texas .Medicaid Progra/12.”). And in fact, all published policy documents promulgated by HHSC require providers to apply the same standards of care to Medicaid patients they apply with the population at large. See. e.g., Ex. R-16, at§ 1.6; Ex. R-15, § 19.2. Third, the SOAII ALJs‘ proposed ﬁnding suggests that the determination of whether a patient exhibited ectopic eruption was left entirely to the subjective opinion of the treating dentist. This is wrong because Medicaid policy documents and the testimony of agency witnesses shows that dentists were instructed to use their education, training, and experience in evaluating patients. See, e.g.. R.R., Vol. ^[1] at 103:8-12 (terms in the ectopic eruption instruction are not deﬁned but are accorded their plain and ordinary meaning in the English language); R.R., Vol. ^[1] at 111: 12-14 (providers must understand the manual by virtue of their professional training).

15 001758 *90 It is the province of HHSC to determine what Medicaid policy is, and is not; the SOAH AL.ls have no authority to wrongly determine Medicaid policy. Southwest Pharm., 408 S.W.3d at 557-58 ("[W]e must uphold an enforcing agency’s construction if it is reasonable and in harmony with the statute . . . This deference is particularly important in construing a complex statutory scheme like Medicaid”) (citing R.R. Comm ’n of Tex. v. Tex. Citizens, 336 S.W.3d at 624 (court will defer to agency’s construction of statute that is committed to agency for enforcement. as long as the interpretation is reasonable and not contrary to the statute’s plain language); see also Atascosa Cnty. v. Atascosa Cnty. Appraisal Dist, 990 S.W. 2d 255, 258 (Tex. 1999) (courts may not accept interpretations of a statute that defeat the purpose of the legislation so long as another reasonable interpretation exists); Tex. Gov‘t Code § 3 l l 023(6). The SOAH ALJs also erred to the extent that they relied on the Harlingen Family Dental decision, particularly. FoF 29, 31, and 33, for their understanding of the scope and limitations of Texas Medicaid policy. The Executive Commissioner disapproves of these ﬁndings, and expressly concludes that they were based on an incorrect interpretation and application of Texas law and Medicaid policy. and therefore, cannot be relied on. Tex. (}ov’t Code § 2001 .058(e)(2). An accurate understanding of the scope and limitations of Texas Medicaid policy is critically important to the outcome of this dispute. The fundamental allegation brought by the Inspector General is that ADC has submitted claims for PA and for reimbursement that are not authorized under Medicaid policy or Texas law. Allegations cannot be properly evaluated if the fact ﬁnder does not properly interpret and apply a policy. Therefore, there is a rational connection between the correct articulation of Medicaid policy and the altered ﬁnding of fact, which accurately reflects that policy. See. e.g., Heritage on the San Gabriel Homeowners Assoc. v. TCEQ, 393 S.W.3d at 440-41; State v. Mia’-South Pavers, 1nc., 246 ‘ S.W.3d at 728; Levy v. Tex. State Bd. oftl/fed. Exam

rs, 966 S.W.2d at 816. The Manual’s instruction regarding ectopic eruption was amended, effective January 1, 2012 (2012 Manual), to include the following sentence: Ectopic eruption does not include teeth that are rotated or teeth that are leaning or slanted especially when the enamel-gingival junction is within the long axis of the alveolar ridge. This amendment clariﬁed existing Texas Medicaid policy regarding conditions qualifying as ectopic eruption and did not substantively change Texas Medicaid policy. (The SOAH A[.Js’ proposed FoF No. 40 stated: The Manual ’s definition of ectopic eruption was amended, effective January 1, 2012 (2012 Manual). to include the fol/owing sentence: Ectopic eruption does not include teeth that are rotated or teeth that are leaning or slanted especially when the etzcmiel-gingival junction is within the long axis of the alveolar ridge.) Reason for Change:

l6 001759 *91 Finding of‘ Fact No. 40 concerns an interpretation of HHSC"s intent in adopting changes to Medicaid policy. As such, the proposed ﬁnding addresses a mixed question of law and fact and is a “legislative ﬁnding.” The Executive Commissioner has complete discretion to modify the proposed ﬁnding. Tex. Dep’t of Licensing & Regulation v. Thompson, 2013 WL 3791486, at *6 (“‘An agency enjoys complete discretion in modifying an ALJ’s ﬁndings and conclusions when those ﬁndings and conclusions reﬂect a lack of understanding or misapplication oi the existing laws, rules, or policies?” (quoting Smith v. Montemayor, 2003 WL 21401591, at ’-‘26-27 (emphasis added)); Tex. Gov’t Code § 2001 .058(e)(l.). The Executive Commissioner modiﬁes the proposed ﬁnding because (i) the TMPPM’s discussion of ectopic eruption is a scoring instruction. not a deﬁnition; and (ii) the proposed FoF misleadingly suggests that the 2012 amendment was substantive and not clarifying. These errors reﬂect a misinterpretation of law and Medicaid policy by the SOAH ALJs. See Tex. Gov’t Code § 200l.058(e)(l); Tex. Dep’t of Licensing & Regulation v. Thompson, 2013 WL 3791486, at *6; Sour/nvest Pharm., 408 S.W.3d at 557-58. First, the TMPPM provides a scoring instruction, not deﬁnition. See. e.g., R.R., Vol. ^[1] at 103:8-12 (terms in the ectopic eruption instruction are not deﬁned but are accorded their plain and ordinary meaning in the English language): R.R., Vol. ^[1] at lll: 12-14 (providers must understand the manual by viituc oftheir professional training). Second, as proposed by the SOAH ALJs, F011‘ No. 40 erroneously suggests that the January 2012 amendment to the language in the Manual signiﬁed a substantive, rather than clarifying, change. The 2012 amendment to the instructions in the TMPPM clariﬁed existing Medicaid policy; the amendment did not effect a substantive change. See R.R., Vol, ^[1] at 93:2-9, 94:20-23 (Dr. Altenhoff), R.R., Vol. 3 at 193:l8-194:1; 294121-23 (Jack Stick). lt is the province of I--IHSC to determine what Medicaid policy is, and is not; the SOAH AL.ls have no authority to wrongly determine Medicaid policy. Southwest Plzarm., 408 S.W.3d at 557-58 ("[W]c must uphold an enforcing agency’s construction if it is reasonable and in harmony with the statute . . . This deference is particularly important in construing a complex statutory scheme like Medicaid”) (citing R.R. Comm ‘n of Tex. v. Tex. Citizens, 336 S.W.3d at 624 (court will defer to agency’s long-standing construction of statute that is committed to agency for enforcement, as long as the interpretation is reasonable and not contrary to the statute’s plain language); see also Atascosa Cnty. v. Arascosa Cntjv. Appraisal .Disr., 990 S.W. 2d 255, 258 (Tex. 1999) (courts may not accept interpretations ofa statute that defeat the purpose ot the legislation so long as another reasonable interpretation exists); Tex. Gov’t Code § 31 1.023(6). The SOAI-I A.LJs also erred to the extent that they relied on the Harlingen Family Dental decision, particularly, FoF 29, 31, and 33. for their understanding of the scope and limitations of Texas Medicaid policy. The Executive Commissioner

l7 001760 *92 disapproves of these ﬁndings, and expressly concludes that they were based on an incorrect interpretation and application of Texas law and Medicaid policy, and therefore, cannot be relied on. Tex. Gov’t Code § 2001 .058(e)(2). An accurate understanding of the scope and limitations of Texas Medicaid policy is critically important to the outcome of this dispute. The fundamental allegation brought by the Inspector General is that ADC has submitted claims for PA and for reimbursement that are not authorized under Medicaid policy or Texas law. These allegations cannot be properly evaluated if the ﬁnder of fact does not understand the policy. Therefore, there is a rational connection between the correct articulation of Medicaid policy and the altered ﬁnding of fact, which accurately reflects that policy. See, e. g., Heritage on the San Gabriel Homeowners Assoc. v. TCEQ, 393 S.W.3d at 440-41; State v. Mid-South Pavers, Inc., 246 S.W.3d at 728; Levy v. Tex. State Bel. of Med. Exam ’rs, 966 S.W.2d at 816. The language in the Manuals provided instructions to dentists and orthodontists to score ectopic eruption consistently with the standards for ectopic eruption that are generally recognized in the dental profession. (The SO/\l~‘I ALJs’ proposed FoF No. 41 stated: The language in the Manuals provided ct ct’e_’finiti0tz Qfectopic eruption solely for use in scoring the HLD index to tjuali/j1_/or payment.) Reason for Change: Finding of Fact No. 41 ﬁnding addresses a mixed question of law and fact and is a “legislative ﬁnding." The Executive Commissioner has complete discretion to modify the proposed ﬁnding. Tex. Dep’t 0fLicensing & Regulation v. Thompson, 2013 WL 3791486, at *6 (“‘An agency enjoys complete discretion in modifying an /\L.l’s ﬁndings and conclusions when those ﬁndings and conclusions retlect a lack of understanding or misapplication of the existing laws, rules, or policies/” (quoting Smith v. Montemayor, 2003 WL 21401591, at *26-27 (emphasis addedl); Tex. Gov‘t Code § 200l..058(e)(1). The Executive Commissioner modiﬁes Proposed FQF No. 41 for two reasons. First, the TMPPM’s discussion of ectopic eruption is an instruction, not a deﬁnition. See, e.g., R.R., Vol. ^[1] at l03:8-l2 (terms in the ectopic eruption instruction are not deﬁned but are accorded their plain and ordinary meaning in the English language); .R..R., Vol. l at llli l2-l4 (providers must understand the manual by virtue of their professional training). This error reﬂects a misinterpretation of law and policy by the SOAH ALJs. See Tex. Gov’t Code § 200l.058(c)(l); Thompson, 2013 WL 3791486. at *6; Southwest Pharnt, 408 S.W.3d at 557-58. Second, the proposed ﬁnding erroneously suggests that it was Texas Medicaid policy to adopt a distinct “deﬁnition” of ectopic eruption in the TMPPM that ditiered from ectopic eruption as generally understood within the dental

l8 001761 *93 profession. The SOAH Al.Js’ proposed ﬁnding would violate state and federal law because creation of a different set 01’ standards applicable only to Medicaid patients would violate both Texas and Federal law. See, e. g., ^[1] Tex. Admin. Code § 354.1131(h); see also RR, Vol. 3, 250:8-19; Ex. R-14 (2008 TMPPM), § 1.2.5; Ex. R-15 (2009 TMPPM), § 1.4.5 (“Compliance with Federal Legislation. Reminder: Each provider must furnish covered ll/[eclicaicl services in the same manner, to the same extent, and of the same quality as services pr0via’ea’ to other patients. Services made available to other patients must be made available to Texas Meclicaicl clients if the services are beneﬁts of the Texas Medicaid Program"). And in fact, all published policy documents promulgated by HHSC require providers to apply the same standards of care to Medicaid patients they apply with the population at large. See, e.g., Ex. R-16, at § 1.6; Ex. R-15, § 19.2. Rather than impermissibly employing a special or unique deﬁnition of ectopic eruption solely for use in the Medicaid context, HHSC policy makers instead instructed providers to use their training, education, experience, and deﬁnitions generally understood in the practice of dentistry in qualifying and treating Medicaid patients and to sen/e these patients in the same manner as other patients. See. e.g., R.R.. Vol. ^[1] at 103:8-12 (terms in the ectopic eruption instruction are not deﬁned but are accorded their plain and ordinary meaning in the English language); R.R., Vol. l at lll: 12-14 (providers must understand the manual by virtue of their professional training). The SOAH ALJ s also erred to the extent that they relied on the Harlingen Family Dental decision, particularly. l~‘oF 29, 31, and 33, for their understanding of the scope and limitations of Texas Medicaid policy. The Executive Commissioner disapproves of these ﬁndings, and expressly concludes that they were based on an incorrect interpretation and application of Texas law and Medicaid policy, and therefore, cannot be relied on. Tex. Gov’t Code § 2001.05 8(e)(2). An accurate understanding of the scope and limitations of Texas Medicaid policy is critically important to the outcome of this dispute. The fundamental allegation brought by the Inspector General is that ADC has submitted claims for PA and for reimbursement that are not authorized under Medicaid policy or Texas law. These allegations cannot be properly evaluated it“ the finder of fact does not understand the policy. Therefore, there is a rational connection between the correct articulation of Medicaid policy and the altered ﬁnding of fact, which accurately reﬂects that policy. See, e. g.. Heritage on the San Gabriel Homeowners Assoc. v. TCEQ. 393 S.W.3d at 440-41; State v. Mid~S0z/th Pavers, [nc., 246 S.W.3d at 728;

’ Levy v. Tex. State Bd. ofll/Iecl. Exam rs, 966 S.W.2d at 816. The Manual did not address how an orthodontist diagnosed or treated a patient, but only instructed providers to score anterior teeth consistently with the generally understood deﬁnition of ectopic eruption in the orthodontic profession.

I9

001762 *94 (The SO/-\H ALJ s’ proposed FoF No. 42 stated: The Manuals did not address how an orthodontist diagnosed or treated a patient, but only deﬁned ectopic eruption for scoring the HLD score sheet to determine a Texas Medicaid patient ’s eligibilityfor orthodontic treatment.) Reason for Change: Proposed FOF No. 42 addresses a mixed question of fact and law, and is therefore a so-called “legislative ﬁnding." Because the SOAH ALJs’ proposed ﬁnding ot fact number 42 reﬂects a misinterpretation and gross misapplication of Texas Medicaid policy, the Executive Commissioner has complete discretion to modify the proposed ﬁnding. Tex. Dep’t of Licensing & Regulation v. Thompson, 2013 WL 3791486, at *6 (“’An agency enjoys complete discretion in modifying an ALJ’s ﬁndings and conclusions when those ﬁndings and conclusions reflect a lack of understanding or misapplication of the existing laws, rules, or policies.” (quoting Smith v. Montemayor, 2003 WL 21401591, at *26-27 (emphasis added)); Tex. (]ov’t Code § 20()1.058(e)(1). The Executive Commissioner modiﬁes Proposed FoF No. 42 for two reasons. F irst, the TMPPM’s discussion of ectopic eruption is an instruction, not a deﬁnition. This error reﬂects a misinterpretation of law and policy by the SOAH ALJs. See Tex. Gov‘t Code § 2001.058(e)(1); Thompson, 2013 WL 3791486, at *6; Southwest Pharnt, 408 S.W.3d at 557-58. Second, the proposed ﬁnding erroneously suggests that it was Texas Medicaid policy to adopt a distinct “deﬁnition” of ectopic eruption in the TMPPM that differed from ectopic eruption as generally understood within the dental profession. The SOAH ALJs’ proposed ﬁnding would violate state and federal law because creation of a different set of standards applicable only to Medicaid patients would violate both Texas and federal law. See, e. g., l Tex. Admin. Code § 354.1 131(h); see also R.R. Vol. 3, 250:8-19; Ex. R-14 (2008 TMPPM), § 1.2.5; Ex. R-15 (2009 TMPPM), § 1.4.5 (“Compliance with Federal Legislation. Reminder: Each provider must furnish covered Medicaid services in the some manner, to the same extent, and of the same quality as services provided to other patients. Services made available to other patients must be made available to the services are beneﬁts of the Texas Medicaid Texas Medicaid clients Program”). And in fact, all published policy documents promulgated by HHSC require providers to apply the same standards of care to Medicaid patients they apply with the population at large. See, e.g., Ex. R-16, at § 1.6; Ex. R-15, § 19.2. The Manuals did, in fact, instruct providers to use their training and education in the treatment of Medicaid patients and to treat those patients in the same manner The Executive Ex. R-15 (2009 TMPPM), § 1.4.5. as other patients. Commissioner is therefore authorized to correct this error by the ALJs. See Tex. (1ov‘t Code § 2001.058(e)(1‘ ). (3) (allowing an agency to change a PFD to correct errors of law or policy or technical errors in a proposed finding of fact).

20 001763 *95 The SOAH Al.Js also erred to the extent that they relied on the Harlingen Family Dental decision, particularly, FoF 29, 31, and 33, for their understanding of the scope and limitations of Texas Medicaid policy. The Executive Commissioner disapproves of these ﬁndings, and expressly concludes that they were based on an incorrect interpretation and application of Texas law and Medicaid policy, and therefore, cannot be relied on. Tex. Gov’t Code § 2001 .058(e)(2). An accurate understanding of the scope and limitations of Texas Medicaid policy is critically important to the outcome of this dispute. The fundamental allegation brought by the Inspector General is that ADC has submitted claims for PA and for reimbursement that are not authorized under Medicaid policy or Texas law. These allegations cannot be properly evaluated if the ﬁnder of fact does not understand the policy. Therefore, there is a rational connection between the correct articulation of Medicaid policy and the altered ﬁnding of fact, which accurately reﬂects that policy. See, e.g., Heritage on the San Gabriel Homeowners Assoc. v. TCEQ, 393 S.W.3d at 440-41; State v. Mid-South Payers, Irtc., 246 S.W.3d at 728; Levy v. Tex. State Ba’ . QfMea/. Exam ’rs, 966 S.W.2d at 816. After HHSC-OIG imposed the payment hold on ADC. it hired Larry Tadlock, D.D.S. _. an orthodontist, to review the 63 patients previously reviewed by Dr. Evans. After reviewing the patients’ HLD score sheets, Dr. T adlock found only one patient, Patient 15, who met the 26-point thresholds In reviewing the 63 ADC patient files in the statistically valid random sample, Dr. Tadlock applied the deﬁnition of ectopic eruption that is generally recognized within the dental profession and scored the patients as instructed by the Manuals. Dr. Tadlock properly applied Medicaid policy. (The SOAH ALJs‘ proposed 11oF No. 45 stated: Dr. Tadlock did not apply the

’ deﬁnition of ectopic eruption in scoring the HLD index for the 63 ADC

ll/[annals

patients. ) Reason for Change: Proposed ﬁnding of fact number 45 addresses a mixed question of fact and law, and is a “legislative ﬁnding.” The Executive Commissioner has complete discretion to modify the proposed ﬁnding. Tex. Dep’t of Licensing & Regulation v. Thompson, 2013 WL 3791486, at *6 (“An agency enjoys complete discretion in modifying an ALJ’s findings and conclusions when those ﬁndings and conclusions reflect a lack of understanding or misapplication of the existing laws,

________ By letter dated January 16, 2014. the SOAH /\LJs replied to the Inspector (Jeneral’ s 1-:‘ .xceptions o and notiﬁed the Executive Commissioner that their original proposed ﬁnding of fact number 44 should be reused The l-Lxecutive Commissioner adopts the Al-.ls’ recommendations regarding revised proposed lmding of fact number 44.

Z1

001764 *96 rules, or policies.”’ (quoting Smith v. Monte/nayor, 2003 WL 21.401591, at *26-27 (emphasis added)); Tex. Gov’t Code § 2001 .058(e)(l). The Executive Commissioner modiﬁes Proposed FoF No. 45 for two reasons. First. the TMPPM’s discussion of ectopic eruption is an instruction, not a deﬁnition. This error reﬂects a misinterpretation of law and policy by the SOAH ALJs. See Tex. Gov”t Code § 2001.058(e)(l); Thompson, 2013 WL 3791486, at *6; Southwest Pharm., 408 S.W.3d at 557-58. Second, the proposed ﬁnding erroneously suggests that it was Texas Medicaid policy to adopt a distinct “deﬁnition” of ectopic eruption in the TMPPM that differed ﬁom ectopic eruption as generally understood within the dental profession. The SOAH ALJs’ proposed ﬁnding would violate state and federal law because creation of a different set of standards applicable only to Medicaid patients would violate both Texas and federal law. See, e. g., ^[1] Tex. Admin. Code § 354.1l3l(h); see also R.R., Vol. 3, 250:8-19; Ex. R-14 (2008 TMPPM). § 1.2.5; Ex. R-15 (2009 TMPPM), § 1.4.5 (“Compliance with Federal Legislation. Reminder: Each provider must furnish covered Medicaid services in the same manner, to the same extent, and of tlze same quality as services provided to other patients. Services made available to other patients must be made available to Texas Medicaid clients if the services are beneﬁts of the Texas Medicaid Program”). And in fact, all published policy documents promulgated by HHSC require providers to apply the same standards of care to Medicaid patients they R-15, § 19.2. apply with the population at large. See, e.g., Ex. R-16, at § 1.6; Also, the proposed ﬁnding misconstrues Dr. Tadlocl<’ s testimony. In fact, Dr. ’l"adlock’s testimony shows that in his view, the Manual‘s instructions are consistent with the generally understood deﬁnition of ectopic eruption. R.R., Vol. l, 202121-203:10. This error reﬂects a misinterpretation of law and policy by the SOAH AL.Is, a misinterpretation that resulted in misconstruing Dr. Tadlock’s testimony. Tex. Gov’t Code § 200l.058(e)(l). The SOAH ALls also erred to the extent that they relied on the Harlingen Family Dental decision, particularly, FoF 29, 31, and 33, for their understanding of the scope and limitations of Texas Medicaid policy. The Executive Commissioner disapproves of these findings, and expressly concludes that they were based on an incorrect interpretation and application of Texas law and Medicaid policy, and

Gov’t Code § 2001.058(e)(2). therefore, cannot be relied on. An accurate understanding of the scope and limitations of Texas Medicaid policy is critically important to the outcome of this dispute. The fundamental allegation brought by the Inspector General is that ADC has submitted claims for PA and for reimbursement that are not authorized under Medicaid policy or Texas law. These allegations cannot be properly evaluated if the tinder of fact does not understand the policy. Therel’ore, there is a rational connection between the correct articulation of Medicaid policy and the altered ﬁnding of fact, which accurately

"7 001765 *97 reﬂects that policy. See, e.g., Heritage on the San Gabriel Homeowners Assoc. v. TCEQ, 393 S.W.3d at 440-4|; State v. Mid-South Povers, 1nc., 246 S.W.3d at 728; ’ Levy v. Tex. State Bd. of Med. Exam

rs, 966 S.W.2d at 816. Despite the SOAH ALJs ﬁnding Dr. Nazari’s testimony to be credible, Dr. N azari did not properly follow Medicaid policy in his identiﬁcation of ectopic eruptions; the overwhelming evidence of the consistent pattern of inﬂated HLD scores submitted by ADC establishes prima facie evidence that is reliable, relevant and material that ADC‘s misrepresentations of medical necessity constitute willful misrepresentations. (The SOAH ALJs’ proposed FQF No. 46 stated: Dr. Nazari was a credible witness and properly utilized the Manuals ’

deﬁnition in scoring the HLD index.) Reason for Change: Proposed FoF No. 46 addresses a mixed question of fact and law, and, as such, is a so-called “legislative ﬁnding." Therefore, the Executive Commissioner has complete discretion to modify it. Tex. Dep’t of Licensing & Regulation v. Thompson, 2013 WL 3791486, at *6 (“An agency enjoys complete discretion in modifying an ALJ’s ﬁndings and conclusions when those ﬁndings and conclusions reflect a lack of understanding or misapplication of the existing laws, rules, or policies."’ (quoting Smith v. Montemayor, 2003 WL 21401591, at *26-27 (emphasis added)): Tex. Gov’t Code § 2001.058(e)(l). The Executive Commissioner modiﬁes Proposed F01‘ No. 46 for two reasons. First, the ’1‘MPPM’s discussion of ectopic eruption is an instruction, not a deﬁnition. See, e.g., R.R., Vol. l at 103:8-12 (terms in the ectopic eruption instruction are not deﬁned but are accorded their plain and ordinary meaning in the English language); R.R., Vol. ^[1] at ll 1: 12-14 (providers must understand the manual by virtue of their professional training). This error reﬂects a misinterpretation of law and policy by the SOAH ALJs. See Tex. Gov’t Code § 200l.058(e)(l); Tex. Dep’t of Licensing & Regulation v. Thompson, 2013 WL 3791486, at *6; Southwest Pharm., 408 S.W.3d at 557-58. Second, the proposed ﬁnding erroneously suggests that it was Texas Medicaid policy to adopt a distinct “deﬁnition” of ectopic eruption in the TMPPM that differed from ectopic eruption as generally understood within the dental profession. The SOAI--I ALJs’ proposed ﬁnding would violate state and federal law because creation of a different set of standards applicable only to Medicaid patients would violate both Texas and federal law. See. e.g., ^[1] Tex. Admin. Code § 354.1l3l(h): see also RR., Vol. 3, 250:8-19; Ex. R-14 (2008 TMPPM), § 1.2.5; Ex. R-15 (2009 TMPPM), § 1.4.5 (“Compliance with Federal Legislation. Reminder: Each provider must fitrnish covered Medicaid services in the same manner, to the some extent, and of the same quality as services provided to other patients. Services made available to other patients rnust be made available to

23 001766 *98 Texas Medicaid clients if the services are beneﬁts of the Texas Medicaid Progra/’n."). And in fact, all published policy documents promulgated by HHSC require providers to apply the same standards 01" care to Medicaid patients they apply with the population at large. See, e.g., Ex. R-16, at § 1.6; Ex. R-15, § 19.2. Moreover, contrary to Texas Medicaid policy requirements that providers treat Medicaid patients to the same standard of care as the general population, Dr. Nazari testitied that orthodontics for Medicaid patients is different than orthodontics for non-Medicaid patients. R.R., Vol. 4, at 103113-16, 104:1—4, 145:9—10. Further, Dr. Nazari was unable to deﬁne a “severe handicapping malocclusion.” la’ . at l44:l7- 145:6. This testimony reﬂects that, though Dr. Nazari may be viewed by the ﬁnder of fact as credible, Dr. Nazari was unable to properly apply Texas Medicaid policy to the scoring of patients. The SOAH ALJs also erred to the extent that they relied on the Harlingen Family Dental decision, particularly, FoF 29, 31, and 33, for their understanding of the scope and limitations of Texas Medicaid policy. The Executive Commissioner disapproves of these ﬁndings, and expressly concludes that they were based on an incorrect interpretation and application of Texas law and Medicaid policy, and therefore. cannot be relied on. Tex. Gov’t Code § 200l.058(e)(2). The proposed ﬁnding reﬂects a fundamental misunderstanding and misapplication of Texas Medicaid policy by the SOAH /\L.ls. An accurate understanding of the scope and limitations of Texas Medicaid policyis critically important to the outcome of this dispute. The fundamental allegation brought by the Inspector General is that ADC has submitted claims For PA and for reimbursement that are not authorized under Medicaid policy or Texas law. These allegations cannot be properly evaluated if the fact ﬁnder does not properly interpret and apply a policy. Therefore, there is a rational connection between the correct articulation ot Medicaid policy and the altered ﬁnding of fact, which accurately reflects that policy. See, e. g., .Heritage on the San Gabriel Homeowners Assoc. v. T CEQ, 393 S.W.3d 417, 440-41 (Tex. App.—Austin 2012, pet denied); State v. Mid-South Pavers, 1nc.. 246 S.W.3d 711, 728 (Tex. App.—Austin 2007, pet. denied); Levy v. Tex. State Bel. ofll/led. Exam’ rs, 966 S.W.2d 813, 816 (Tex. App.—Auslin 1998, no pct). Despite the SOAH ALJs finding Dr. Kanaan’s testimony to be credible, Dr. Kanaan did not properly follow Medicaid policy in his identiﬁcation of ectopic eruptions; the overwhelming evidence of the consistent pattern of inﬂated HLD scores submitted by ADC establishes prima facie evidence that is reliable, relevant and material that ADC‘s misrepresentations of medical necessity constitute willful misrepresentations. (The SOAH ALJs’ proposed FoF No. 23 stated: Wael Kanaan, D.D.S. an 0rtlz0a’orztz’st who worked with ADC was a credible witness and properly utilized’

’ the Manuals aleﬁnition ofectopic eruption in scoring the HLD index.) 24 001767 *99 Reason for Chang e: Proposed FoF No. 47 addresses a mixed question of fact and law, and is a so- callcd “legislative ﬁnding.“ Therefore, the Executive Commissioner has complete discretion to modify it. Tex. Dep’t of Licensing & Regulation v. Thompson, 2013 WL 3791486, at *6 (“‘An agency enjoys complete discretion in modifying an ALJ‘s ﬁndings and conclusions when those ﬁndings and conclusions reﬂect a lack of understanding or misapplication of the existing laws, rules, or policies.” (quoting Smith v. Montemayor, 2003 WL 21401591, at *26-27 (emphasis added)); Tex. Gov’t Code § 200l.058(e)(l). The Executive Commissioner modiﬁes Proposed FoF No. 47 for three reasons. First, the TMPPM’s discussion of ectopic eruption is an instruction, not a deﬁnition. See, e.g., R.R., Vol. l at 103:8-12 (terms in the ectopic eruption instruction are not deﬁned but are accorded their plain and ordinary meaning in the English language); R.R., Vol. ^[1] at lll: 12-14 (providers must understand the manual by virtue of their professional training). This error reﬂects a misinterpretation of law and policy by the SOAH ALJs. See Tex. Gov’t Code § 20()1.058(c)(l); Thompson, 2013 WL 3791486, at *6; Southwest Pharnt, 408 S.W.3d at 557-58. Second, the proposed ﬁnding erroneously suggests that it was Texas Medicaid policy to adopt a distinct “definition” of ectopic eruption in the Tl\/{PPM that differed from ectopic eruption as generally understood within the dental profession. The SO/\11ALls’ proposed ﬁnding would violate state and federal law because creation of a different set of standards applicable only to Medicaid patients would violate both Texas and federal law. See. e.g., ^[1] Tex. Admin. Code § 354.113l(h); see also RR., Vol. 3, at 250:8-19; Ex. R-14 (2008 TMPPM), § 1.2.5;

R-15 (2009 TMPPM), § 1.4.5 (“Compliance with Federal Legislation. Reminder: Each provider must furnish covered Medicaid services in the same manner, to the same extent, and of the same quality as services provided to other patients. Services made available to other patients must be made available to Texas Medicaid clients if the services are beneﬁts of the Texas Medicaid Program”). And in fact, all published policy documents promulgated by HI-{SC require providers to apply the same standards of care to Medicaid patients they apply with the population at large. See, e.g.. Ex. R-16, at § l.6; Ex. R-15, § 19.2. For example, Dr. Kanaan testified that the word “handicapping” in the phrase “severe handicapping malocclusion” means “extreme deviation from the norm.” R.R., Vol. 3. at 101:3-8. Yet, of the 63 patients in the statistically valid random sample, Kanaan agreed that of his patients he scored at least seven ectopic teeth in each patient, a rate of 100%. ld., 97:5-8. This testimony rellects that, though Dr. Kanaan may be viewed by the ﬁnder of fact as credible, Dr. Kanaan did not properly apply Texas Medicaid policy to the scoring ofpatients.

25 4s 001768 *100 Third. Dr. Kanaan scored 23 of 27 patients exactly the same Way—with the same eight teeth being scored as ectopic. R-83; Vol. 3 at 43-70. The SOAH AL.ls acknowledged this undisputed evidence. PFD, at 25. This evidence of Dr. Kanaan‘s pattern oi‘ scoring is prima facie evidence that Dr. Kanaan acted with requisite knowledge under the TMFPA. Tex. Hum. Res. Code § 36.00ll(b). The Executive Commissioner is authorized, therefore, to correct the SOAH ALJs‘ error. Tex. Gov’t Code §2()()1.058(e)(1). The SOAH ALJ s also erred to the extent that they relied on the Harlingen Family Dental decision, particularly, FoF 29, 31, and 33, For their understanding of the scope and limitations of Texas Medicaid policy. The Executive Commissioner disapproves of these ﬁndings, and expressly concludes that they were based on an incorrect interpretation and application of Texas law and Medicaid policy, and therefore. cannot be relied on. Tex. Gov’t Code § 2()01.058(e)(2). The proposed ﬁnding reﬂects a fundamental misunderstanding and misapplication of Texas law and Medicaid policy by the SO/\H ALJs. An accurate understanding of the scope and limitations of Texas Medicaid policy is critically important to the outcome of this dispute. The fundamental allegation brought by the Inspector General is that ADC has submitted claims for PA and for reimbursement that are not authorized under Medicaid policy or Texas law. These allegations cannot be properly evaluated if the fact ﬁnder does not properly interpret and apply a policy. Therefore, there is a rational connection between the correct articulation ot Medicaid policy and the altered finding of fact, which accurately reﬂects that policy. See. e.g., Heritage on the San Gabriel Homeowners Assoc. v. TCEQ, 393 S.W.3d 417, 440-41 (Tex. App.—Austin 2012, pet denied); State v. Mid-South Pavers, 1nc.. 246 S.W.3d 711, 728 (Tex. App.—Austin 2007, pet. denied); Levy v. Tex. State Bd. 0fMed. Exam ’rs, 966 S.W.2d 813, 816 (Tex. App.—Austin 1998, no pet.). HHSC-OIG presented evidence that is credible, reliable, and veriﬁed, and that has indicia of reliability when analyzed consistently with Texas law and Medicaid policy, that ADC knowingly incorrectly scored the HLD index on orthodontic prior approval requests submitted to Texas Medicaid. (The SOAH ALJs’ proposed I-"oF No. 48 stated: There is no evidence that is credible, reliable, or verifiable, or that has indicia of reliability, that ADC incorrectly scored the HLD Index to obtain Texas Medicaid benefits for patients or to obtain Texas ll/[eclicaia’ payments.) Reason for Change: Proposed Fol? No. 48 addresses a mixed question of fact and law, and is a so- called “legislative ﬁnding.” Therefore, the Executive Commissioner has complete discretion to modify it. Tex. Dep’t Q/‘Licensiizg & Regulation v. Thompson, 2013 WL 3791486, at *6 (“An agency enjoys complete discretion in modifying an

’ 26 001769 *101 AI_.J’s ﬁndings and conclusions when. those ﬁndings and conclusions reﬂect a lack ol’ understanding or misapplication oi’ the existing laws, rules, or policies.” (quoting Smith v. Montemayor, 2003 WI. 2l40l59l, at *26-27 (emphasis added)); Tex. Gov’t Code § 200l.058(e)(l). The Executive Commissioner modiﬁes Proposed Fol’ No. 48 because the SOAII AI_Js misinterpreted and misapplied Texas law and Medicaid policy. First, the proposed ﬁnding misapplies law and Medicaid policy by stating that there is no evidence that ADC incorrectly scored the HLD index. In fact, the evidence shows that the HID scores submitted by Drs. Nazari and Kanaan were incorrect because of their interpretation of ectopic eruption. See, e.g.. testimony of Dr. Tadloek at RR, Vol. l, at 173:3-6; 174:6-175:1; l76:l4-20; 177:1-16; see also testimony of Dr. Nazari, RR, Vol. 4, at 144:1?-145:6; and testimony of Dr. Kanaan, RR, Vol. 3, at 43-70. The totality of the evidence, which includes the testimony ot‘ADC‘ s own witnesses, as well as the Inspector General’ s fact witnesses and experts, is much more than prima ﬁzcie, and is relevant, credible and material. See Tex. Hum. Res. Code § 32.0291(c). Second, the proposed ﬁnding is erroneous because implicit in it are the assumptions that the deﬁnition of ectopic eruption is wholly open to subjective interpretation. and that Texas Medicaid adopted a "special" deﬁnition of ectopic eruption that was more liberal than the generally accepted deﬁnition of ectopic eruption in the orthodontic profession (and contrary to the TMPPM’s instruction to providers to be “conservative” in their scoring). These errors reflect niisinterpretations and misapplications of law and Medicaid policy by the SOAII

ALJS.

Third, Dr. Kanaan scored 23 of 27 patients exactly the same Way—with the same eight teeth being scored as ectopic. R-83; Vol. 3 at 43-70. Further, the SOAH ALJs acknowledged this undisputed evidence. PFD, at 25. This evidence of Dr. Kanaan’s pattern of scoring is prima facie evidence that Dr. Kanaan acted with requisite knowledge under the TMFPA. Tex. Hum. Res. Code § 36.001 l(b). The Executive Commissioner is authorized, therefore, to correct the SOAH ALJs’ error. Tex. Gov’t Code § 200l.058(c)(l). Finally, this proposed ﬁnding reflects a further misapplication of law in suggesting that the Inspector General bears the burden of proving intent to defraud Medicaid. As the SOAII ALJs acknowledge in the narrative section of their PFD, the Inspector General does not have the burden to show speciﬁc intent to defraud the Medicaid program to show that ADC has committed an unlawful act under the TMFPA. See PFD at l5, citing deﬁnition of “knowingly” at section 36.001 ^[1] ofthe TMFPA; see also CoL No. 6, at page 42 of the PFD (same proposition). Nevertheless, in proposed FoF No. 48, the SOAH ALJs write that the Inspector General tailed to present credible, reliable, or veritiable evidence that ADC

27

001770 *102 incorrectly scored HLD indices “to obtain Texas Medicaid beneﬁts for patients or to obtain Texas Medicaid payments.” The burden on the Inspector General is only to demonstrate relevant, credible and material evidence that ADC knowingly submitted scores that overstated the child‘s true condition. Tex. Hum. Res. Code § 32.029l(c). Drs. Kanaan and Nazari acknowledge they applied an interpretation of ectopic eruption that did not comport with Medicaid policy. To the extent the SOAH ALJs attempt to hold the Inspector General to the additional burden of proving intent on the part of ADC to defraud the Medicaid program, proposed FoF No. 48 is erroneous. The SOAH ALJs also erred to the extent that they relied on the Harlingen Family Dental decision, particularly, For‘ 29, 31, and 33, for their understanding of the scope and limitations of Texas Medicaid policy. The Executive Commissioner disapproves of these ﬁndings, and expressly concludes that they were based on an incorrect interpretation and application of Texas law and Medicaid policy, and therefore. cannot be relied on. Tex. Gov’t Code § 200l.058(e)(2). Moreover, the proposed ﬁnding reﬂects a fundamental misunderstanding and misapplication of Texas law and Medicaid policy by the SOAH ALJs. An accurate understanding of the scope and limitations of Texas Medicaid policy is critically important to the outcome of this dispute. These allegations cannot be properly evaluated if the tinder of fact does not properly interpret and apply a policy. Therefore, there is a rational connection between the correct articulation ot Medicaid policy and the altered ﬁnding of fact, which accurately reﬂects that policy. See, e. g., Heritage on the San Gabriel Hoineowners Assoc. v. TCEQ, 393 S.W.3d 4l7, 440-41 (Tex. App.—Austin 2012, pet denied); State v. Mid~S0uth Pavers, 1nc., 246 S.W.3d 7l l, 728 (Tex. App.—Austin 2007, pet. denied); Lexy v. Tex. State Bel. Q/M€6l. Exam ’rs, 966 S.W.2d 813, 816 (Tex. App.—Austin 1998, no pet.). HHSC~OlG presented prima facie evidence that is credible, reliable, and veriﬁed, and that has indicia of reliability when analyzed consistently with Texas law and Medicaid policy, that ADC committed fraud or willful misrepresentations to Texas Medicaid. (The SOAH ALJs’ proposed Fob‘ No. 49 stated: There is no evidence that is credible, reliable, or verifiable, or that has indicia of reliability, that ADC co/nmitl’ed_ﬁ"aud or engaged in willful misrepresentation with respect to the 63 ADC patients in this case.) Reason For Change: Proposed Fol? No. 49 addresses a mixed question of fact and law, and is a so- called “legislative ﬁnding.” Therefore, the Executive Commissioner has complete

o discretion to modi"l’y it. Tex. Dept oflicensing & Regulation v. Thompson, 2013 WL 3791486, at *6 ("’An agency enjoys complete discretion in modifying an

28 001771

—

*103 ALJ‘s ﬁndings and conclusions when those ﬁndings and conclusions rellect a lack oi’ understanding or misapplieation of the existing laws, rules, or policies.” (quoting Smitlz v. Montemayor, 2003 WL 21401591, at *26-27 (emphasis added)); Tex. Gov’t Code § 200l.058(e)(l). The Executive Commissioner modiﬁes Proposed Fol? No. 49 because the SOAH ALIs misinterpreted and misapplied Texas law and Medicaid policy. First, the proposed ﬁnding misapplies Texas law governing the Inspector General’s burden of proof in this case. As noted in CoL No. 12, to maintain the payment hold, the Inspector General must only make a prima facie showing of evidence that is credible, reliable or veriﬁable, or that has indicia of reliability that ADC has committed fraud or willful misrepresentations in this case. The SOAH ALJs" determination that the Inspector General presented “no evidence” on this issue is the result of the SOAH ALJs’ legally erroneous interpretation of Medicaid policy with respect to the deﬁnition of ectopic eruption. As the Inspector General noted in his Exceptions, the SOAI-I ALIS’ determinations that the following are all errors in the interpretation and application of Texas Medicaid policy and law: (1) Texas Medicaid “deﬁned” ectopic eruption uniquely and differently in the TMPPM than the generally accepted definition in the orthodontic profession; (2) that said deﬁnition was wholly open to subjective interpretation; and (3) that the 2012 changes to the Tl\/[PPM “deﬁnition” were substantive rather than clarifying. Further, the SOAI-I ALJs also misapplied law and policy to the following evidence, which they themselves acknowledged: Dr. Kanaan scored 23 of 27 patients exactly the same way—-with the same eight teeth being scored as ectopic. R-83; Vol. 3 at 43-70. This evidence of Dr. Kanaan’s pattern of scoring is prima faeie evidence that Dr. Kanaan acted with requisite knowledge under the TMFPA. Tex. I--Ium. Res. Code § 36.0011(b). The Executive Commissioner is authorized, therefore, to correct the SOAII ALJs’ error. Tex. Gov’t Code § 200l.058(e)(l). The SOAH ALI s also erred to the extent that they relied on the Harlingen Family Dental decision, particularly, Foil 29, 31, and 33, for their understanding of the scope and limitations of Texas Medicaid policy. The Executive Commissioner disapproves of these ﬁndings, and expressly concludes that they were based on an incorrect interpretation and application of Texas law and Medicaid policy. and therefore, cannot be relied on. Tex. Gov’t Code § 2001 .058(e)(2). Moreover, the proposed finding reﬂects a fundamental misunderstanding and misapplication of Texas law and Medicaid policy by the SOAI-I A’LJs. An accurate understanding of the scope and limitations of Texas Medicaid policy is critically important to the outcome of this dispute. The fundamental allegation brought by the Inspector General is that ADC has submitted claims for PA and for reimbursement that are not autltorized under Medicaid policy or Texas law. These allegations cannot be properly evaluated if the decision maker does not understand

29 001772 *104 the policy. Therefore, there is a rational connection between the correct articulation of Medicaid policy and the modiﬁed ﬁnding of fact, which accurately reflects that policy. See, e. g., Heritage on the San Gabriel Homeowners Assoc. v. TCEQ, 393 S.W.3d at 440-41; State v. Mid-South Pavers, Inc., 246 S.W.3d at 728;

’ Levy v. Tex. State Bzl of Med. Exam rs. 966 S.W.2d at 816. HHSC-OIG presented prima facie evidence that is credible, reliable, and veriﬁed, and that has indieia of reliability when analyzed consistently with Texas law and Medicaid policy, that ADC committed fraud or willful misrepresentations in ﬁling requests for prior authorization with TMHP for a substantial majority of patients in the OIG audit sample. (The SOAH ALJs‘ proposed FoF No. 50 stated: There is no evidence that is credible, reliable, or verifiable, or that has indicia of reliability, that ADC committed ﬁat/cl or misrepresentation in ﬁling requests _/or prior authorization with TMHPfor the 63 patients at issue in this case.) Reason for Change: Proposed FoF No. 50 addresses a mixed question of fact and law, and is a so~ called “legislative ﬁnding." Therefore, the Executive Commissioner has complete discretion to modify it. Tex. Dep’r of Licensing & Regulation v. Thompson, 2013 WL 3791486, at *6 (“‘An agency enjoys complete discretion in modifying an ALJ’s ﬁndings and conclusions when those ﬁndings and conclusions reflect a lack of understanding or misapplication of the existing laws, rules, or policies.” (quoting Smith v. Montemayor, 2003 WL 21401591. at *26-27 (emphasis added)); Tex. Gov’t Code § 200l.O58(e)(l). The Executive Commissioner modiﬁes Proposed Fol? No. 50 because the SOAH ALJs misinterpreted and misapplied Texas law and Medicaid policy. First, the proposed ﬁnding misapplies Texas law governing the Inspector General’s burden of proof in this case. As noted in CoL No. 12, to maintain the payment hold, the Inspector General must only make a prima jacie showing of evidence that is credible, reliable or veriﬁable, or that has indicia of reliability that ADC has committed fraud or willful misrepresentations in this case. The SOAH ALJs’ determination that the Inspector General presented “no evidence” on this issue is the result of the SOAI-I ALJs’ legally erroneous interpretation of Medicaid policy with respect to the deﬁnition of ectopic eruption. As the Inspector General noted in his Exceptions, the SOAH ALJ s’ determinations that the following arc all errors in the application of Texas Medicaid policy and law: (1) Texas Medicaid “defined” ectopic eruption uniquely and differently in the TMPPM than the generally accepted deﬁnition in the orthodontic profession; (2) that said deﬁnition was wholly open to subjective interpretation; and (3) that the 2012 changes to the TMPPl\/l “deﬁnition” were substantive rather than clarifying.

30 001773 *105 Further, Dr. Kanaan scored 23 of 27 patients exactly the same way-—vvitb the same eight teeth being scored as ectopic. R—83; Vol. 3 at 43-70. The SOAH ALJs acknowledged this undisputed evidence. PFD, at 25. This evidence of Dr. Kanaan’s pattern of scoring is prima Facie evidence that Dr. Kanaan acted with requisite knowledge under the TMFPA. Tex. Hum. Res. Code § 36.001 l(b). The Executive Commissioner is authorized, therefore, to correct the SOAH ALJs’ error. Tex. Gov’t Code § 2001.()58(e)(l). The SOAH ALJs also erred to the extent that they relied on tl1e Harlingen Family Dental decision, particularly, FOF 29, 31, and 33, for their understanding of the scope and limitations of Texas Medicaid policy. The Executive Commissioner disapproves of these ﬁndings, and expressly concludes that they were based on an incorrect interpretation and application of Texas law and Medicaid policy, and therefore. cannot be relied on. Tex. Gov’t Code § 20()1.058(e)(2). Moreover, the proposed ﬁnding reflects a fundamental misunderstanding and misapplication of Texas law and Medicaid policy by the S()AH ALJ s. An accurate understanding of the scope and limitations of Texas Medicaid policy is critically important to the outcome of this dispute. The fundamental allegation brought by the Inspector General is that ADC has submitted claims for PA and for reimbursement that are not authorized under Medicaid policy or Texas law. These allegations cannot be properly evaluated if the fact ﬁnder does not understand the policy. Therefore, there is a rational connection between the correct articulation of Medicaid policy and the modiﬁed ﬁnding of fact, which accurately reﬂects that policy. See. e. g., Heritage on the San Gabriel Homeowners Assoc. v. TCEQ, 393 S.W.3d at 440-41; State v. ll/Iid-South Pavers, Inc, 246 S.W.3d at 728; Levy v. Tex. State Ba’ . 0fMed. Exam ’rs, 966 S.W.2d at 816. When 1-IHSC-OIG arrived at ADC in November ll, 2012. and asked for 63 case

51 ﬁles, prima facie evidence exists that ADC could not locate eight dental models, four HLD score sheets, and two pre-treatment x~rays. ADC forwarded the l-{LD score sheets and supporting documentation to Tl\/[HP

52. when ADC ﬁled its requests for prior authorization. HHSC-OIG presented prima facie evidence that ADC failed to retain these records 53 and models for the required five years. HHSC-OIG presented prima facie evidence that is credible, reliable, and 54 verified. and that has indicia of reliability when analyzed consistently with Texas law and Medicaid policy, that ADC billed or caused claims to be submitted to Texas Medicaid for services or items that are not reimbursable by the Texas Medicaid program. (The SOAI-I A.LJs’ proposed FoF No. 54 stated: HHSC-OIG failed to present prima facie eviclence that ADC billed 0r caused claims to be submitted I0 Texas

3] 001774 *106 ll/ledicaiclfbr services or items that are not reimbursable by the Texas Medicaid program.) Reason for Change: Proposed FoF No. 54 addresses a mixed question of fact and law, and is a so- called “legislative ﬁnding." Therefore, the Executive Commissioner has complete discretion to modify it. Tex. Dep’t of Licensing & Regulation v. T hompson, 2013 WL 3791486, at *6 (“’/\n agency enjoys complete discretion in modifying an /\LJ’s ﬁndings and conclusions when those ﬁndings and conclusions reﬂect a lack ol‘ understanding or misapplication of the existing laws, rules, or policies.” (quoting Smith v. Moritemayor, 2003 WL 21401591, at *26-27 (emphasis added)); Tex. Gov’t Code § 2001.U58(e)(]). The Executive Commissioner modiﬁes Proposed FoF No. 54 because it misapplies Texas law and Medicaid policy. lf the SOAH ALJs had applied the proper standard for ectopic eruption, consistent with the T MPPM provision requiring providers to be “conservative” in scoring, to the facts of this case, then the SOAH AL] s would have concluded that HHSC-OIG presented prima facie evidence that in at least 58 of the 63 cases in the sample ADC submitted PA requests for patients who were not qualiﬁed for full orthodontia. The SOAII ALJs also orrcd to the extent that they relied on the Harlingen Family Dental decision, particularly, FoF 29, 31, and 33, for their understanding of the scope and limitations of Texas Medicaid policy. The Executive Commissioner disapproves of these ﬁndings, and expressly concludes that they were based on an incorrect interpretation and application of Texas law and Medicaid policy, and therefore. cannot be relied on. Tex. Gov’t Code § 200l.058(e)(2). Moreover, the proposed ﬁnding reﬂects a fundamental misunderstanding and misapplication of Texas law and Medicaid policy by the SOAH AL_Is. An accurate understanding of the scope and limitations of Texas Medicaid policy is critically important to the outcome of this dispute. The fundamental allegation brought by the lnspector General is that ADC has submitted claims for PA and for reimbursement that are not authorized under Medicaid policy or Texas law. These allegations cannot be properly evaluated if the decision maker does not understand the policy. Therefore, there is a rational connection between the correct articulation of Medicaid policy and the modiﬁed ﬁnding of fact, which accurately reflects that policy. See, e.g., Heritage on the Sari Gabriel Homeowners Assoc. v. TCEQ. 393 S.W.3d at 440-41; State v. Mid-South Pave/‘s, Ina, 246 S.W.3d at 728;

‘ L€\{V v. Tex. State Bel. 0f.Med. Exam rs, 966 S.W.2d at 816. ADC committed program violations when it submitted prior authorization requests and HLD forms for D8080 comprehensive orthodontic treatment, of Patients 15, 56, and 60 when these patients did not qualify For comprehensive orthodontics.

32 001775 *107 (The SOAH AI..Js’ proposed FoF No. 55 stated: Patient I5, 56, and 60, were eligible for interceptive treatment under Texas Medicaid.) Reason for Chang e: Proposed FQF No. 55 addresses a mixed question of fact and law, and is a so- called “legislative ﬁnding.” Therefore, the Executive Commissioner has complete discretion to modify it. Tex. Dep’t of Licensing & Regulation v. Thompson, 2013 WL 3791486, at *6 (“An agency enjoys complete a’isc-rerion in modifying an /\LJ’s lindings and conclusions when those ﬁndings and conclusions reflect a lack oi‘ understanding or misapplication ol’ the existing laws, rules, or policies.” (quoting Smith v. Montemayor, 2003 WL 21401591, at *26-27 (emphasis added)); Tex. Gov"t Code § 2001.058(e)(l). The Executive Commissioner modifies Proposed FoF No. 55 because it misapplies Texas law and Medicaid policy. To the extent the SOAH ALJs use “interceptive” treatment to mean something less than comprehensive oithodontics [D8080] (and therefore outside the requirement that patients be 12 or older or have no baby teeth), the SOAH ALJs misstate the evidence. ADC billed the code D8080 for these patients. meaning they falsely represented to the state that these patients were 12 or older or had lost all baby teeth. To the extent the S()AH ALJs use “interceptive” to include code D8080, see Ex R-15 at § l9.l8.7, they are again in error: D8080 is explicitly not applicable to patients like these who have baby teeth and are under 12 years old. These patients may well have been eligible for interceptive treatment — that is, something less than comprehensive orthodontics — but the evidence in this case is clear: ADC billed Medicaid for — and represented to the State that these patients qualiﬁed for — D8080, or comprehensive orthodontics. For example, with regard to Patient 15, the PPD states that ADC requested “prior authorization for interceptive treatment." PFD at 33. ADC requested D8080. comprehensive orthodontics. for this patient, even though the patient was 9 years old and had baby P~l5 at Pl5~0019 (ADC Prior Authorization Request Form for Patient teeth. l5 requesting “[)8080”.) This is a program violation. ^[1] Tex. Admin. Code § 371. l6l7(l)(K) and (5)(G). With regard to Patient 56, ADC requested D8080 comprehensive orthodontics for this patient. even though the patient was 9 years old and had baby teeth. Ex. P-56 at P56-0015 (ADC Prior Authorization Request Form for Patient 56 requesting “D8080” for a charge of $775.00.) This is a program violation. ^[1] Tex. Admin. Code § 3’/1.l6l7(l)(K) and (5)(G). Finally, for Patient 60. ADC requested D8080 comprehensive orthodontics, even though this patient was under l2 and had baby teeth. Ex. P-60 at P60-0004(ADC Prior Authorization Request Form for Patient 60 requesting “D8080” for a charge

33 001776 *108 ol’$775.0().). This is a program violation. l Tex. Admin. Code § 37l.l6l7(1)(K) and (5)(G). The Fact that ADC billed for comprehensive orthodontics when their patients did not qualify for that treatment is a program violation, and warrants a payment hold. The SOAH AI..Js also erred to the extent that they relied on the Harlingen Family Dental decision, particularly, FoF 29, 31, and 33, for their understanding of the scope and limitations of Texas Medicaid policy. The Executive Commissioner disapproves of these ﬁndings, and expressly concludes that they were based on an incorrect interpretation and application oi’ Texas law and Medicaid policy, and therefore, cannot be relied on. Tex. Gov”: Code § 20()1.058(e)(2). An accurate understanding of the scope and limitations of Texas Medicaid policy is critically important to the outcome of any dispute. Allegations cannot be properly evaluated if the decision maker does not properly interpret and apply a policy. Therefore, there is a rational connection between the correct articulation of Medicaid policy and the altered ﬁnding of fact, which accurately reflects that policy. See, e.g., Heritage on the San Gabriel Homeowners Assoc. v. TCEQ, 393 S.W.3d 417, 440-41 (Tex. App.—Austin 2012, pet denied); Slate v. Mia’-South Pavers, Inc., 246 S.W.3d 711, 728 (Tex. App.~Austin 2007, pet. denied); Levy v. Tex. State Bel. of Med. Exam ’rs, 966 S.W.2d 813, 816 (Tex. App.—Austin 1998. no pet.). Program violations range from “very innocuous” to "very important.” ADC’s record keeping violations, together with the prima facie evidence presented by HHSC-OIG of ADC’s fraud and willful misrepresentations, when analyzed consistently with Texas law and Medicaid policy, justify maintaining the payment hold. (The SOAH ALJs’ proposed Fol‘ No. S7 stated: ADC ‘

s violation is a technical violation and based upon this record does not rise to a level of substantive concern.) Reason for Change: Proposed Fol? No. 57 addresses a mixed question of fact and law, and is a so- called “legislative ﬁnding." Therefore, the Executive Commissioner has complete discretion to modify it. Tex. Dep’t lo/"Licensing & Regulation V. Thompson, Z013 WL 3791486, at *6 (“An agency enjoys complete discretion in modifying an ALJ’s ﬁndings and conclusions when those ﬁndings and conclusions reﬂect a lack of understanding or misapplication of the existing laws, rules, or policies.” (quoting Smith v. Montemayor, 2003 WL 21401591, at *26-27 (emphasis addcd)); Tex. Gov’t Code § 2()01.058(c)(l). Proposed FoF No. 57 is erroneous because it inisapplies Texas law and Medicaid policy, including to the extent this ﬁnding rests on the false premise that ADC’s

34 001777 *109 record keeping violations are the only actionable violations found by the Inspector General. The SOAH ALJs appear to reason that /\DC’s program violations, by themselves. do not justify continuation of thepayment hold. The underlying premise, in turn, is based the SOAI-I ALJs misapplication of Texas Medicaid policy regarding ectopic eruption. This ﬁnding is also erroneous because it is within the sound discretion of the Executive Commissioner, and not the SOAII ALJs, to determine whether or not ADC’ s record keeping violations are cause for concem. The Inspector General based his payment hold, in pan, on ADC’s failure to provide records pursuant to the Inspector General’s request. In some cases, ADC had these records, and entered them into evidence in this ease over a year qﬂer the Inspector General requested them. ADC’s failure to provide these records immediately is a program violation and may result in a payment hold. I Tex. Admin. Code § 371.l6l7(2)(/\); R-I4 at I-8 (“Failure to supply the requested documents and other items. within the time frame speciﬁed, may result in a payment hold . . . or exclusion from Medicaidf‘). Proposed FoF No. 57 is erroneous in characterizing these program violations as "technical violation[s]” that are not “of substantive concem,” particularly in light of the fact that the Inspector General is obligated to investigate Medicaid fraud, waste, and abuse, and, in the course of investigating, is entitled to request documents of providers. Ex. R-I4 (2008 TMPPM) § 1.2.3. Iiurthermore, the Inspector General is entitled to base payment hold determinations on the records that Medicaid providers provide in response to a proper request on the part of the Inspector General. Medicaid providers" failure to provide documents to the Inspector General pursuant to a written request for them is a “substantive concern.” particularly in cases, like this one, where the provider later attacks the validity of the payment hold based on the existence of documents it failed to provide to the Inspector General. The existence and provision of documents necessary to fully document and evaluate the necessity and delivery of medical services is paramount to the integrity of the Medicaid system. See Pierce v. Tex. Racing Comm 71, 212 S.W.3d 745, 754 (Tex. App.—Austin 2006, pet. denied) (agency detemiines appropriate penalty to further agency/’s goals of compliance with state law) (citing Firemen’s & P0licemen’s Civil Serv. C0mm’n v. Brlnkmeyer, 662 S.W.2d 953. 956 (Tex. 1.984)); See also Tex. State Ba’ . of Dental

’ Exam rs v. Brown, 281 S.W.3d 692, 697 (Tex. /\pp.—Corpus Christi 2009, pet. denied) (agency, not ALI, determines appropriate sanction). The SOAH ALJs also erred to the extent that they relied on the Harlingen Family Dental decision, particularly, F oF 29. 31. and 33, for their understanding of the scope and limitations of Texas Medicaid policy. The Executive Commissioner disapproves of these ﬁndings, and expressly concludes that they were based on an

35 001778 *110 incorrect interpretation and application of Texas law and Medicaid policy, and therefore, cannot be relied on. Tex. Gov’t Code § 2001 .058(e)(2). Moreover, the proposed ﬁnding rellects a fundamental misunderstanding and misapplication ol’ Texas law and Medicaid policy by the SOAH ALJ s. An accurate understanding of the scope and limitations of Texas Medicaid policy is critically important to the outcome of this dispute. The fundamental allegation brought by the Inspector General is that ADC has submitted claims for PA and for reimbursement that are not authorized under Medicaid policy or Texas law. These allegations cannot be properly evaluated if the fact finder does not understand the policy. Therefore, there is a rational connection between the correct articulation of Medicaid policy and the modiﬁed ﬁnding of fact, which accurately reﬂects that policy. See, e. g., Heritage on the San Gabriel Homeowners Assoc. v. TCEQ, 393 S.W.3d at 440-41; State v. Mia’-South Pavers, Ina, 246 S.W.3d at 728; Levy v. Tex. State Bd. 0fMed. Exam ’rs, 966 S.W.2d at 816.

CONCLUSIONS OF LAW HHSC-OlG has jurisdiction over this case. Tex. Gov’t Code ch. 53]; Tex. Hum. Res. Code ch. 32. SOAH has jurisdiction over the hearing process and the preparation and issuance of a proposal for decision, with ﬁndings of fact and conclusions of law. Tex. Gov’t Code ch. 2003. Notice of the hearing was properly provided. Tex. Gov’t Code ch. 2001. The Inspector General’s burden to maintain the payment hold under section 53l.l02(g)(2) of the Government Code or section 32.029l(c) of the Human Resources Code, is to show by reliable or prima facie evidence that ADC has committed fraud or made willful misrepresentations. (The SOAH ALJs’ proposed CoL No. 4 stated: HHSC-OIG had the burden of proof) Reason for Change: The Executive Commissioner modiﬁes Proposed CoL No. 4. Proposed CoL No. 4 is erroneous because it is a misstatement of the law. See Tex. Gov‘t Code § 20()l.()58(e)(1). The inspector General is required by law to impose a payment hold "on receipt of reliable evidence that the circumstances giving rise to the hold on payment involve fraud or willful misrepresentation under the state Medicaid program in accordance with 42 C.F.R. Section 455.23.“ Tex. Gov’t Code § 53l.l02(g)(2). Additionally. "[t]he department shall discontinue the hold unless the department makes a prima/Ezcie showing at the hearing that the evidence relied on by the department in imposing the hold is relevant, credible and material to the issue of fraud or willful misrepresentation.“ Tex. Hum. Res. Code § 32.029l(c)

36 001779 *111 (emphasis added). Because the SOAH /-\LJs’ proposed conclusion of law misstated the applicable law, the Executive Commissioner has discretion to modify it. Thompson, 2013 WL 3791486, at *6; Tex. G0v’t Code § 200l.058(e)(l). The S0/-\.H ALI s also erred to the extent that they relied on the Harlingen Family Dental decision, particularly, FoF 29, 31, and 33, for their understanding of the scope and limitations of Texas Medicaid policy. The Executive Commissioner disapproves of these ﬁndings, and expressly concludes that they were based on an incorrect interpretation and application of Texas law and i\/ledicaid policy, and therefore, cannot be relied on. Tex. Gov’t Code § 2001 .058(e)(2). Moreover, the proposed conclusion reflects a fundamental misunderstanding and misapplication of Texas law by the SOAH AL] s. Therefore, there is a rational connection between Texas law and Medicaid policy and the modified conclusion of law. See, e. g., Heritage on the San Gabriel Homeowners Assoc. v. TCEQ, 393 S.W.3d at 440-41; State v. Mid-South Pavers, Inc., 246 S.W.3d at 728; Levy v. Tex. State Ba’ . ofMed. Exam ’rs, 966 S.W.2d at 816. lt is an unlawful act to knowingly make or cause to be made a false statement or

5 misrepresentation of a material fact to permit a person to receive a beneﬁt or payment under the Medicaid program that is not authorized or that is greater than the beneﬁt or payment that is authorized. Tex. Hum. Res. Code § 36.002(l) (2003). The term “knowingly” means that the person has knowledge of the information,

6 acts with conscious indifference to the truth or falsity of the information, or acts in reckless disregard of the truth or falsity of the information. Proof of the person‘ s specific intent to commit an unlawful act under § 36.002 is not required to show that a person acted “knowingly.” Tex. ls-lum. Res. Code § 36.0011 (2003). “Fraud” is an intentional deception or misrepresentation made by a person with the

7 knowledge that the deception could result in some unauthorized beneﬁt to that person or some other person, including any act that constitutes fraud under applicable federal or state law. Tex. Gov"t Code § 531.101 1(1) (201 1). l’1l~lSC-OIG must impose a hold on payment of claims for reimbursement

8. submitted by a provider on receipt of reliable evidence that the circumstances giving rise to the hold on payment involve fraud or willful misrepresentation under the state Medicaid program. Texas Gov’t Code § 53 l.l02(g)(2) (201 1). All Medicaid payments to a provider must be suspended after the state Medicaid

9. agency determines that there is a credible allegation of fraud for which an investigation is pending, unless the agency has good cause not to suspend payments (or to suspend payments only in pait). If the state’s Medicaid fraud control unit accepts a referral for investigation of the provider, the payment

37 001780 *112 suspension may be continued until such time as the investigation and any associated enforcement proceedings are completed. 42 C.F.R. § 455.23 (201 l). A “Credible allegation of fraud” may be “an allegation, which has been veriﬁed by the State, from any source” including, but not limited to, ‘fraud hotline complaints, claims data mining, and patterns identiﬁed through provider audits, and law enforcement investigations.

Allegations are considered credible when they have indicia of reliability and the State Medicaid agency has reviewed all allegations, facts, and evidence carefully and acts judiciously on a case—by-case basis.” 42 C.F.R. § 455.2. (The SOAH ALJs’ proposed CoL N o. l0 stated: "Credible allegation offraud

" “ is an allegation, which has been veriﬁed by the State, ﬁ’onz any source,

" including, for example, ﬁ’az/d hotline complaints, claims data mining, and provider audits, Allegations are considered credible when they have indicia of reliability and the State Medicaid agency has reviewed all allegations, facts, and evidence carejillly and acts judiciouslv on a case-by-case basis. 42 (.IF.R. § 455.2 (2011). ”.) Reason for Change: The Executive Commissioner modiﬁes Proposed CoL No. 10. Proposed CoL No. 10 omits words and phrases from the statute, all essential to the meaning of the statute: ‘“patterns identiﬁed through‘ provider audits”; the SOAH ALJs also deleted the phrase “and law enforcement investigations” and substituted the word “is” for “may be” and “for example" for “but not limited to.” Because Proposed CoL No. l0 incorrectly states the law, the Executive Commissioner has complete discretion to modify CoL No. 10 to correctly state the law, add the essential phrases and Words of “patterns identiﬁed through" and “and law enforcement investigations” and substitute the Words “can be” for “is” and “but not limited to” for “for example.” See Thompson, 2013 WL 3791486, at *6; Tex. Gov’t Code § 2001.058(e)(l). The SOAH ALJs also erred to the extent that they relied on the Harlingen Family Dental decision, particularly, Fol?‘ 29, 31, and 33, for their understanding of the scope and limitations of Texas Medicaid policy. The Executive Commissioner disapproves of these ﬁndings, and expressly concludes that they were based on an incorrect interpretation and application of Texas law and Medicaid policy, and therefore, cannot be relied on. Tex. Gov’t Code § 200l.058(e)(2). Moreover, because the proposed conclusion reﬂects a fundamental misunderstanding and misapplication of law by the SOAH ALJs, there is a rational connection between Texas law and Medicaid policy and the modiﬁed conclusion of law. See, e.g., Heritage on the San Gabriel Homeowners Assoc. v. TCEQ, 393 S.W.3d at 440-41; State v. Mid-South Pavers, lnc.. 246 S.W.3d at 728; Levy v. ’ Tex. State Bd. ofzl/led. Exam

rs, 966 S.W.2d at 816. 38 001781

‘v;»’:—:_.-

*113 - . .. R __ \- ..,‘....,._~__..__._.. __2_. - __ .. \~> __ .-_ _.~.u,J ll

HHSC-OIG

may impose a if there is payment hold on future reliable evidence misrepresentation that the claims assistance regarding provider submitted a claim program. has by a l2. Tex. tor committed .ln a SOAH hearing provider Hum. Res. Code § 32.0291 fraud or reimbursement showing vvillful on a under the that the payment (b) (2003). medical credible. evidence hold, and relied HHSC-OIG material to the issue Res. Code § 32.0291(¢) upon in must make a prima facie imposing 13. offraud or willful the payment hold is HHSC-OIG (2003). should or relevant,

misrepresentation. willful maintain Tex. the Hum. 531.102(g) misrepresentation, payment hold and (2011); 42 CFR § 455.23 against ADC for (2003); 1 Tex. program Admin. violations. alleged (C), (I), Code (2011); fraud Tex. Gov’t (K), Tex. §§ (2)(A), Hum. Res. Code § 32.091(c) Code § (The SOAH /\L]s’ (5)64), 371.1703(b)(3), (5)((?) and (b)(5), (2005)- !I2(lll1Z(IIl’Z proposed 371.161 //ze Col. No. l3 stated: pcg/men! /to/ct’ Tex. Gov 1 C0./Q § 531.102(,¢y 7(a)(1_)(A)~ aga1’ 1zsf Code HHSC-OIG ADCﬁ)r alleged § 32, lacks 091(1) 371. 16/ (2011); 42 CFR § 455. 23 ant/z0r1’ t_‘y to franc! or (2003); 7(<z)(1)(/1)~(C) I m1lvreprese11/a!1’ Tex. Reason (2005).) (2011); 0n. f ‘ /Id/nin. Tex. or(l1an e

Code 1111111. g : Res. §§ 37 [.1 703 ,/b)(3), The Executive l 3 is , Commissioner erroneous of this modiﬁes because it . case. Proposed This misapplies CoL No. 13. misapplication conclusion Texas law and Proposed of ectopic rests on the SOAH ALJs’

ot‘Medicaid’ CoL No. Medicaid s eruption. limited policy to the facts apply the Further, orthodontic proper this misinterpretation benefit evidentiary conclusion and their Because and burden in this reﬂects CoL No. 13 rests on faulty the SOAH ALJs’ misconstruction case. interpretations of failure discretion Medicaid to to applications policy the correct it. of law as Well as 2001.058(e)(l). 1’-Executive T/lolnpson, 2013 WL 3791486, determines Further, Commissioner erroneous the the Executive enjoys [facing appropriate at *6; Comm ’ complete sanction if‘ Tex. Gov’t Commissioner, n, 212 S. W.3d 745, 754 (agency the law has been and not the SOAH ALJs, Code § determines with state law (citing violated. appropriate (Tex. See Pierce v. T ex. 662 S. W.2d 953, 956 penalty to App.\Austin Fire/vze/zlv & P0/icenmzlv further 2006. Brown, agency’ s pet. (Tex. 281 S. W.3d 692, 697 denied) goals of 1984)); see also Civil Se/-v. (agency. Comm ^[92] v. compliance not Tex.

ALI,

(Tex. S/ate Ed ofDenra/ determines The Brinkmeyer, App.\Corpus SOAHALJs also appropriate Exa/iz’ 1~.s’ Christi Denial sanction). 2009. v. erred to the decision, pet. scope extent denied) and particularly, that FoF 29. 31, and 33, for they relied on the limitations clisapproves of Texas of these /~/or/irigen Medicaid their findings, Fami/y policy. and understanding The expressly of the Executive concludes that Commissioner they were 39 based on an 001782

I

*114 w ll

V

incorrect interpretation and application of Texas law and Medicaid policy, and therefore, cannot be relied on. Tex. Gov’t Code § 2001 .058(e)(2). Moreover, the proposed conclusion reflects a fundamental misunderstanding and misapplication of Texas law by the SOAH ALJs. Therefore, there is a rational connection between Texas law and Medicaid policy and the modiﬁed conclusion of law. See, e. g., Heritage on the San Gabriel Homeowners Assoc. v. TCEQ, 393 S.W.3d at 440-41; State v. Mid-South Pavers. Inc, 246 S.W.3d at 728; Levy v. Tex. State Ba’ . 0fMed. Exam ’rs, 966 S.W.2d at 8 l6. The Texas Government Code mandates a payment hold when reliable evidence has been presented of fraud or willful misrepresentation. Tex. G0v’t Code § 53l.l02(g)(2). The Executive Commissioner shall discontinue the hold unless the department makes a prima facie showing at the hearing that the evidence relied on by the department in imposing the hold is relevant, credible and material to the issue of fraud or willful misrepresentation. Tex. Hum. Res. Code § 32.029l(c). (The SOAH ALJs’ proposed CoL No. I4 stated: A payment hold should be reasonably related to the nzagnitmle Qfrlze violation.) Reason for Change: The Executive Commissioner modiﬁes Proposed CoL No. l4. Proposed CoL No. 14 is erroneous because it misstates the law. See Tex. Gov’t Code § 200l.058(e)(l). The Texas Govemment Code mandates a payment hold when reliable evidence was been presented of fraud or willful misrepresentation. Tex. Gov’t Code § 53l.l()2(g)(2). Additionally, “l’t]he department shall discontinue the hold unless the department makes a primafacie showing at the hearing that the evidence relied on by the department in imposing the hold is relevant, credible and material to the issue of fraud or willful misrepresentation." Tex. Hum. Res. Code § 32.0291(c) (emphasis added). Because the SOAH ALJs’ proposed conclusion of law misstated the applicable law, the HHSC-ALJ had complete discretion to modify it. Thompson, 2013 WL 3791486, at *6; Tex. Gov‘t Code § 200l.O58(e)(l). The SOAH ALJs also erred to the extent that they relied on the Harli/zgen Family Dental decision, particularly, FoF 29, 31, and 33, for their understanding of the scope and limitations of Texas Medicaid policy. The Executive Commissioner disapproves of these ﬁndings, and expressly concludes that they were based on an incorrect interpretation and application of Texas law and Medicaid policy. and therefore, cannot be relied on. Tex. Gov’t Code § 200l.058(e)(2). Moreover, the proposed conclusion reﬂects a fundamental misunderstanding and misapplication of Texas law by the SOAI--[ ALJs. Therefore, there is a rational connection between Texas law and Medicaid policy and the modiﬁed conclusion

40 001783 *115 of law. See, e. g., Heritage on the San Gabriel Homeowners Assoc. v. TCEQ, 393 I’ S.W.3d at 440-41; State v. Mid-South Pavers, nc., 246 S.W.3d at 728; Levy v. Tex. State Ba’ . of Med. Exam ’rs, 966 S.W.2d at 816. The prima Facie evidence established that ADC committed program violations by

1: failing to maintain certain patient records for the required ﬁve years. l Tex. Admin. Code §§ 37l.1703(b)(5),(6); 37l.l6l7(2)(/\), (5)(/\) and (G) (2005). ADC’s failure to immediately provide IIHSC-OIG with the documents and

16 other items requested in writing, along with the extensive and overwhelming pattern of willful misrepresentations or fraud in ADC’s HLD scoresheets, and ADC’s billing for non-reimbursable services, should result in a continuing payment hold. Tex. Gov’t Code § 531.102(g) (2011); Tex. Hum. Res. Code § 32.0291(c); 1 Tex. Code § 371.1617(2)(A) (2005); 2008 TMPPM at 1.2.3. (The SOAH ALJs’ proposed CoL N0. 16 stated: These technical violations are very limited in number and are inn0cu0zt.s’,’ therefore, they do not warrant a payment hold in this case.) Reason for Change: The Executive Commissioner modiﬁes Proposed CoL No. 16. Proposed CoL No. 16 is erroneous because (1) failure to provide records to HHSC-OIG is also a program violation; and (2) failure to provide records to HHSC-OIG is neither a technical violation nor innocuous, as HHSC-OIG decided to impose a payment hold on ADC based on the patient records it provided in response to [IHSC-OIG‘ s written request. and based on the fact that ADC failed to provide certain records at that time. Because COL No. l6 rests on faulty applications of law as wellas erroneous interpretations of Medicaid policy the Executive Commissioner enjoys complete discretion to correct it. Thompson, 2013 WL 3791486, at *6; Tex. Gov’t Code § 200l.058(e)(l). Further. the Executive Commissioner, and not the SOAH ALJs, determines the appropriate sanction if the law has been violated. See Pierce v. Tex. Racing Com/n’n, 212 S.W.3d 745, 754 (Tex. App.—Austin 2006, pet. denied) (agency determines appropriate penalty to further agency’s goals of compliance with state law (citing F ire/nen’s & Policemen ’s Civil Serv. Comm ’n v. Brirtkmeyer, 662 S.W.2d 953, 956 (Tex.l984)); see also Tex. State Bd. of Dental Exam’rs v. Brown, 281 S.W.3d 692, 697 (Tcx. App.—Corpus Christi 2009. pet. denied) (agency. not ALJ. determines appropriate sanction). The SOAI-I ALJs also erred to the extent that they relied on the Harlingen Family Dental decision, particularly, FoF 29. 31, and 33, for their understanding of the scope and limitations of Texas Medicaid policy. The Executive Commissioner disapprovcs of these ﬁndings, and expressly concludes that they were based on an incorrect interpretation and application of Texas law and Medicaid policy, and thcrctore, cannot be relied on. Tex. Gov’t Code § 2001 .058(e)(2).

4] 001784 *116 Moreover, the proposed conclusion reﬂects a fundamental misinterpretation and misapplication of Texas law by the SGAH ALJs. Therefore, there is a rational connection between Texas law and Medicaid policy and the modified conclusion of law. See, e. g., Heritage on the San Gabriel Homeowners Assoc. v. TCEQ. 393 S.W.3d at 440-41; State v. Mid-South Pavers, Inc., 246 S.W.3d at 728; Levy v. Tex. Stare Bd. 0fMed. Exam’rs, 966 S.W.2d at 816. It is further ORDERED that the 100% payment hold instituted on April 4, 2012

shall remain in place until further order of the Executive Commissioner. lﬂl on ,20l_. Signed this j1_- _ day of 1 ‘A ^[7] 1’ \ _‘ , UL\.~\..~*-is V _r~4 _ ‘Mt

X

Kyle L. Jan‘ek,(M.D,.’> Executive Commissioner

42 001785 *117 Append¡x B *118 Page 1 ofl lexas I Medicaid.gov Learn about yg!Lhgq!!h!3Ig_9pl!!9!9 lhtto://www.healthca¡e.qovl

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Med icaid-Marketplace Overview The Federally-facilitated Marketplace (FFM) is offering health coverage in Texas in 2015. The FFM will make assessments of Medicaid/CHIP eligibility and then transfer the applicant's account to the state agency for a final eligibility determination. Texas has not expanded Medicaid coverage to low-income adults. Medicaid and CHIP Eligibility Levels To view the income-and-medicaid-chip.pdfl -based eligibility levels, expressed as a percentage of the federal poverty level (FPL) and by monthly dollar amount and family size for Medicaid and cHlP, visit the

for more information.

Parents3 Other Adults Ghildren - Medicaid Separate CHIP Pregnant Women State Medicaid Expansion Ages 0-11 Ages 1-52 Ages 6-182 Medicaid CHIP 201% N/A 15% 0% Texas 198% 144% 133% 198o/o N 1. These el¡g¡b¡l¡ty standards include CHIP-funded Medicaid expans¡ons. 2 Children in separate CH\P programs are typically charged premiums Th¡s table does not include notations of states that have elected to provide CHIP coverage from conception lo bit1h, 3 /n slafes that use dollar amounts rather than percentages of the federal poverty level (FPL) for 2013 to detemine eligibility for parents, we convefted those amounts to a percent of lhe FPL and selected the highest percentage to reflecl eligib¡lity level for the group ln additíon, ¡n states that are adopting the Medicaid expansion, we have indicaled the upper ¡ncome timit for parents to also be 133% of the FPL, s¡nce parents can be eligible for coverage under the new adult group. The actuat dottar standards that states w,// use to determine eligibility are quoted in the monthly ¡ncome tables Monthly Medicaid and CHIP Enrollment Data Each month, CMS releases state-reported data on State Medicaid and CHIP program Enrollment. The enrollment data for each month is a point.in- time count of total Medicaid and CHIP enrollment on the last day of the month, and is not solely a count of those newly enrolled during the reporting period. Below,thisdataiscomparedtoaverageenrollmentfromJuly-September20l3,theperiodbeforetheinitial openenrollmentperiodofthe Health lnsurance Marketplaces. Additional information and enrollment data is available on the Medicaid and CHIP Application, Eliqibility National State Medica¡d & CHIP Enrollment State Gomparison of February 2015 Comparison of February Total Medicaid & CHIP

Total Medica¡d & CHIP data to July-September 2013 2015 data to July-September Enrollment, all States Enrollment (February (February 2015) Average Enrollment 2015) (Preliminary) 20'l 3 Average Enrollment

(Preliminary) Net Change % Change Net Change % Change 20 28% 214,004 4 82% 70,5'15,716 11 ,718,178 Texas 4,655,609 Medicaid and CHIP Applications

The Affordable Care Act established a streamlined enrollment process through which individuals can gain access to affordable insurance coverage

for which they are eligible. The law directed the Secretary of Health and Human Services (HHS) to develop a model application that will be used to

. States have the option to adopt the Secretary of HHS's model application form for affordable insurance programs or to adopt an alternative application that meets federal requirements rttp://www.medicaid.gov/Medicaid-CHlP-Program-lnformatiorVBy-State/texas.html 51281201: *119 Page2 of ': lexas I Medicaid.gov ln response to , many states have adopted one or more "targeted enrollment strategies" designed to facilitate enrollment and retain coverage for eligible individuals in Medicaid/CHlP. The states that have adopted one or more targeted enrollment strategies are listed on the Targeted Enrollment Strateqies (/medicaid-chip-proqram-

page. Medicaid and CHIP State Plan Amendments The state Medicaid and CHIP plans spell out how each state has chosen to design its program within the broad requirements forfederal funding. As always, states amend their Medicaid and CHIP state plans in order to inform CMS of programmatic and financing changes and to secure legal authority for those changes. The Affordable Care Act included many new opportunities for states to augment and improve their Medicaid and CHIP programs. As a result there has been a great deal of state plan amendment activity over the past several years in the areas of eligibility, benefits design and financing, as well as new approaches to providing health homes, long{erm services and supports, and enrollment strategies like hospital presumptive eligibility. See below for a state-specific list of approved Medicaid and CHIP SPAs.

Amendments. htm l?filterBv=Texas) Demonstrations and Wa¡vers Demonstration and waivers are vehicles states can use to test new or existing ways to deliver and pay for health care services in Medicaid and CHIP. The primary types of waivers and demonstration projects include section 1115 demonstrations, section 1915(b) managed care waivers, and section ^[1] 915(c) home and community-based services waivers. More information about waivers is available on the Waivers (/medicaid-chip- oroqram-information/bv{opics/wa ivers/waivers. html) page.

filterBv=Texas) Medicaid Delivery System States have choices in their approach to delivery system design under the Medicaid and CHIP programs. States are increasingly moving to the use of

and olhqjnleffated-gele in serving their Medicaid beneficiaries. On average, more than 70 percent of the Medicaid population is enrolled in some form of managed care. GHIP Program lnformation

was established in 1997 to provide new coverage opportunities for

children in families with incomes too high to qualify for Medicaid, but who cannot afford private coverage. Like Medicaid, CHIP is administered by the states, but is jointly funded by the federal government and states. States had the opportunity to desiqn their CHIP proqrams (/chip/downloads/chip-map.pdfl as an expansion of Medicaid, as a stand-alone program orthrough a combined approach. Medicaid/CHIP Participation Rates The participation rate is the percentage of eligible children enrolled in Medicaid and CHIP in the state. Data from 2013 show 88.3 percent of the eligible children in the Unifed States are enrolled in Medicaid and CHIP programs. More information about the participation rate among children in Texas is available on

State Participation Texas 83.7% Medicaid/G HIP Eli gi bi lity Verification Plans Medicaid and CHIP agencies now rely primarily on information available through data sources (e.9., the Social Security'Administration, the Departments of Homeland Security and Labor) rather than paper documentation from families for purposes of verifying eligibility for Medicaid and

CHIP.

Texas's Medicaid and CHIP Verification MAGI Gonversion Plans CMS provided states w¡th a template for completing their "MAGl Conversion Plans" that are designed to reflect the MAG|-based eligibility standards that are used to determine Medicaid and CHIP eligibility. The MAG|-conversion process involved a translation oÍ pre-2014 net income eligibility standards into MAGI-based eligibility standards. Moving to MAGI replaced income disregards with simpler, more universal income eligibility rules that are generally aligned with the rules that are used to determine eligibility for the premium tax credits in the Marketplace. To complete the transformation to MAGI, states needed to "convert" their nelincome based eligibility standards to MAG|-based standards. . Texas's MAGI Conversion Plan is currently in progress

marketplace/downloads/tx-converted{hresholds-26ap1201 3. pdf) rttp://www.medicaid.gov/Medicaid-CHIP-Program-lnformatiorVBy-State/texas.html 5128120t: *120 Append¡x G

Texas Medicaid

*121 and CHIP n Perspective Tenth Edition Texas Health and Human Services Commission February 2015 *122 Ghapter 1: Texas Med¡ca¡d

Perspective

n I What is Medicaid? What is Medicaid managed care? How is lexas

Medicaid changing?

What ls Medicai d? Medicaid is a jointly funded state-federal health care program, established in Texas in 1967 and administered by the Health and Human Services Commission (HHSC). ln order to participate in Medicaid, federal law requires states to cover certain population groups (mandatory eligibility groups) and gives them the flexibility to cover other population groups (optional eligibility groups). Each state chooses its own eligibility criteria within federal minimum standards. States can apply to the Centers for Medicare & Medicaid Services (CMS) for a waiver of federal law to expand health coverage beyond these groups. Medicaid is an entitlement program, which means the federal government does not, and a state cannot, limit the number of eligible people who can enroll, and Medicaid must pay for any services covered under the program. ln July 2013, about one in seven Texans (3.7 million of the 26.4 million) relied on Medicaid for health coverage or long-term services and supports. Medicaid pays for acute health care (physician, inpatient, outpatient, pharmacy, lab, and x-ray services), and long-term services and supports (home and community-based services, nursing facility services, and services provided in lntermediate Care Facilities for lndividuals with an lntellectual Disability or Related Conditions (lCFs/llD))for people age 65 and older and those with disabilities. ln state fiscal year (SFY)2013, total expenditures (i.e. state and federal) for Medicaid were estimated to represent26.2 percent (about $25.6 billion) of Texas' budget'. The federal share of the jointly financed program is determined annually based on the average state þer capita income compared to the U.S. average. The federal share is known as the federal medical i All funds, excluding disproportionate share hospital (DSH), uncompensated care (UC), and Delivery System lmprovement Program (DSRIP). Sources: Texas Medicaid History Report, August 2014, and Fiscal Size-Up(s)..

1-1 *123 Append¡x D *124 TÐI{S MEDICATD PnovIDER PROCEDURE S MNNUAL

Volumes 1&2 This nra¡rual is available for download at www.tnrhp.conr, and ìs also available on CD. There are n'ìany benefits to using the ele ctronic manual, includirrg easy navìgation r¡rith booknrarks and hyperlinked cross-references, the abílìty to quickly search for speclfic terms or codes, and form printing on demand. The Texas Medicaid & Healthcare Partnership (TM H P) is the claims administrator for Texas Medicaid under contract with the Texas Health and Human Services Commission.

*125 TEXAS MEDICAID PROVIDER PROCEDURES MANUAL: VOL.2 4.2.23 Hospitalization and ASC/HASC Dental services performed in an ASC, HASC, or a hospital (either as an inpatient or an outpatient) may be benefits of THSteps based on the medical or behavioral justification provided, or if one of the following conditions exist:

. The procedures cannot be performed in the dental office. . The client is severely disabled.

To satis$r the preadmission history and physical examination requirements of the hospital, ASC, or HASC, a THSteps medical checkup for dental rehabilitation or restoration may be performed by the child's primary care provider. Physicians who are not enrolled as THSteps medical providers must submit claims for the examination of a client before the procedure with the appropriate evaluation and management procedure code from the following table:

Place of Service (POS) Procedure Code POS I (office) 99202 POS 3 (inpatient hospital) 99222 POS 5 (outpatient hospital) 99282 Refer to: Subsection 5.3.l.6, "Exception-to-Periodicity Checkups" in this handbook.

Note: The dental provider must submit claims to TMHP using the ADA Dental Claim Form to be considered for reimbursement through THSteps Dental Services. The dental provider is responsible for obtaining prior authorization for the services performed under general anesthesia. Hospitals, ASC's, and anesthesiologists must obtain the prior authorization number from the dental provider. Contact the individual HMO for precertification requirements related to the hospital procedure. If services are precertified, the provider receives a precertification number effective for 90 days. In those areas of the state with Medicaid managed care, the provider should contact the managed care plan for specific requirements or limitations. It is the dental provider's responsibility to obtain precerti- fication from the client's HMO or managed care plan for facility and general anesthesia services if precertification is required. To be reimbursed by the HMO, the provider must use the HMO's contracted facility and anesthesia provider. These services are included in the capitation rates paid to HMOs, and the facility or anesthe- siologist risk nonpayment from the HMO without such approval. Coordination of all specialty care is the responsibility of the client's primary care provider. The primary care provider must be notified by the dentist or the HMO of the planned services. Dentists providing sedation or anesthesia services must have the appropriate current permit from the TSBDE for the level of sedation or anesthesia provided. The dental provider must be in compliance with the guidelines detailed in General Information.

Note: Post-treatment authorizøtion will not be approved for codes that require mandatory prior authorization. 4.2.24 Orthodontic Services (THSteps) Orthodontic services for cosmetic purposes only are not a benefit of Texas Medicaid. Orthodontic services are limited to the treatment of children who are l2 years of age and older with severe handi- capping malocclusion, children who are birth through 20 years of age with cleft palate, or other special medically necessary circumstances as outlined in Benefits and Limitations, which follows.

cH-r ^[82] CPT ONLY, COPYRIGHT 20IOAMERICAN MEDICAL ASSOCIATION ALL RICHl'S RESERVED *126 CHILDRENS SERV]CES HANDBOOK 4.2,24.1 Benefits and Limitations Orthodontic services include the following:

. Correction of severe handicapping malocclusion as measured on the Handicapping Labiolingual Deviation (HLD) Index. A minimum score of 26 points is required for full banding approval (only permanent dentition cases are considered).

Refer to: Subsection 4.2.26,"Handicapping Labio-lingual Deviation (HLD) Index" in this handbook. Exception: Retained deciduous teeth and cleft palates with gross malocclusion that will benefitfrom early treatment. Cleft paløte cases do not have to meet the HLD 26-point scoring requirement. Howeyer, it is necessary to submít ø sufficient narrøtive or outline of the proposed treatment plan when requesting authorization for orthodontic services on cleft pølate cases.

. Crossbite therapy. . Head injury involving severe traumatic deviation. The following limitations apply for orthodontic serylces: . Orthodontic services for cosmetic purposes only are not a benefit of Texas Medicaid or THSteps. . Orthognathic surgery, to include extractions, required or provided in conjunction with the appli-

cation of braces must be completed while the client is Medicaid-eligible in order for reimbursement to be considered.

. Except for procedure code D8660, all orthodontic procedures require prior authorization for consideration of reimbursement. . The THSteps client must be Medicaid THSteps-eligible when authorization is requested and the orthodontic treatment plan is initiated. It is the provider's responsibility to verifr that the client has a current Medicaid Identification Form (Form H3087) or Medicaid Eligibility Verification Form (Forms H1027 andHl027-A-C); that the date of birth on the form indicates the client is 20 years of age or younger; and that no limitations are indicated.

. Prior authorization is issued to the requesting provider only and is not transferable to another provider. Ifthe client changes providers or ifthe provider ceases to be a Medicaid provider for any reason, a new prior authorization must be requested by the new provider.

Refer to: Subsection 4.2.24.4, "Transfer of Orthodontic Services" in this handbook. The following procedure codes, policies, and limitations are applied to the processing and payment of orthodontic services under THSteps dental services: . Procedure code D8660 is allowed when:

. The client is referred to a dental provider to determine whether orthodontic services are indicated and to determine the appropriate time to initiate such services. . The client is referred to a dental provider and elects to receive services from another orthodontic provider for justifiable reasons. . Repeat visits at different age levels are required to determine the appropriate time to initiate orthodontic treatment. . Ifprocedure code D8660 is submitted within six months of procedure code D8080, procedure code D8080 will be reduced by the amount that was paid for procedure code D8660. . Procedure code D8680 is payable for one retainer per arch, per lifetime, and each retainer may be replaced once because ofloss or breakage (prior authorization is required). cU-r ^[83] CPT ONLY . COPYRICHT 20IO AMERICAN MEDICAL ASSOCIATION AI,L RICI] TS RËSERVEI) *127 TEXAS MEDICAID PROVIDER PROCEDURES MANUAL: VOL,2 . Procedure code D8670 must be submitted only when an adjustment to the appliances is provided and may not be submitted before the date on which the orthodontic adjustment was performed. The number of visits for monthly adjustments to the appliances is restricted to the number that was authorized in the treatment plan. However, the number of monthly visits may be amended with appropriate documentation of medical necessity while the client is Medicaid eligible.

. Procedure code D8670 is paid only in conjunction with a history of braces (code D8080), unless special circumstances exist. . All orthodontic procedure codes and appliances are global fees. . Separate fees for adjustments to retainers are Rot payable. . The appropriate procedure code must be submitted for those appliances required as part of the

treatment of cleft palate cases. Special orthodontic appliances may also be used with full banding and crossbite therapy with approval by the TMHP Dental Director.

. Procedure codes D5951, D5952,D5953, D5954, D5955, D5958, D5959, and D5960 are to be used as applicable with documentation of medical necessity. Otherwise, use the appropriate special orthodontic appliance code.

. Full banding is allowed on permanent dentition only, and treatment should be accomplished in one stage and is allowed once per lifetime. Exception: Cases of mixed dentition when the treotment Plan íncludes extractions of remainingprimary teeth or cleft palate. . Crossbite therapy is allowed for primary, mixed, or Permanent dentition. . Providers must not request crossbite correction (limited orthodontics) for a mixed dentition client

when there is a need for full banding in the adult teeth. Crossbite therapy is an inclusive charge for treating the crossbite to completion, and additional reimbursement is not provided for adjustments or maintenance.

. If a case is not approved, the dentist may file a claim for payment of the diagnostic workup for procedure codes used that were necessary to request the prior authorization (procedure codes D0330, D0340, D0350, and D0470). The dentist may receive payment under these procedure codes for no more than two cases out of every ten cases denied. The dentist should determine if the client's condition meets orthodontic benefit criteria before performing a diagnostic workup.

. Procedure codes D8080, D8050, and D8060, are limited to one per lifetime. . Comprehensive orthodontic services (procedure code D8080) are restricted to clients who are l2

years of age and older or clients who have exfoliated all primary dentition. Crossbite therapy includes diagnostic cast services.

4.2.24.2 Completìon of Treatment Plan If a client reaches 2l years of age or loses Medicaid eligibility before the authorized orthodontic treatment is completed, reimbursement is provided to complete the orthodontic treatment that was authorized and initiated while the client was 20 years of age or younger, eligible for Medicaid THSteps, and completed within 36 months. Any orthodontic-related service requested in the prior authorization request (e.g., extractions or surgeries) must be completed before the loss of client eligibility. Services cannot be added or approved after Medicaid THSteps eligibility has expired. Exception: Medicøid wíII not reimburse for øny orthodontic services during a period of time when a

THSteps client is incarcerated. During a period of incørceration, the facility is responsible for any and all dentøl services, including orthodontic services.

clt-r84 (]P'I'oNLY , (:OPYRtCHT 20IO AMERICAN MEDICAL ASSOCIATION ALL RICII'I'S ITESI]RVEI) *128 CHILDRENS SERVICES HANDBOOK 4.2.24.3 Premature Removol of Applìonces The overall fee for orthodontic treatment (D8080) includes the removal of orthodontic brackets and treatment appliances. Procedure codeD7997 may be used only when the appliances were placed by a different provider with an unaffiliated practice (not a partner or office-sharing arrangement) and one of the following conditions exist: . There is documentation of a lack of cooperation from the client. . The client requests premature removal and a release of liability form has been signed by the parent,

guardian, or client ifhe is at least l8 years ofage. Providers must keep a copy of the release of liability form on file and are responsible for this documen- tation during a review process. 4.2.24.4 Tra n sfe r of Orth od o ntì c S erv ice s Prior authorization that has been issued to a dental provider for orthodontic services is not transferable to another dental provider. The new provider must submit to TMHP a new prior authorization request to get approval to complete the orthodontic treatment that was initiated by the original provider. To complete the treatment plan, the client must be eligible for Medicaid with a current client Medicaid Identification Form (Form H3087) or Medicaid Eligibility Verification Form (Form H1027). If the client does not return for the completion of services and there is documented failure to keep appointments by the client, the dental provider who initiated the services may submit a claim for reimbursement. The claim must be received by TMHP within the 95-day filing deadline from the last

DOS.

The following supporting documentation must accompany the new request for orthodontia services and must include the DOS the orthodontic diagnostic tools were completed and include: . All of the documentation as required for the original provider. . The reason the client left the previous provider, if known. . An explanation of the treatment status. . A complete treatment plan addressing all procedures for which authorization is being requested

(such as the number of monthly adjustments or retainers required to complete the case). . A full diagnostic workup (procedure code D8080) with an HLD Index. The score of 26 points will be modified according to any progress achieved. Exception: The prior authorization requests for clíents who initiate orthodontic services before becoming eligible for Medicaid do not require models or the HLD score sheet, nor does the client have to meet the HLD Index of 26 points. However, a complete plan of treatment is required.

Note: If Medicaid clients initiate orthodontic services outside of Medicaid because they do not score 26 points on the HLD, they øre not eligible to høve their orthodontic services transferred to or reimbursed by Medicaid.

Providers who want to request prior authorization to complete orthodontic treatment that was initiated by another provider must complete a THSteps Dental Mandatory Prior Authorization Request Form and send it with the complete plan of treatment, and the appropriate documentation for orthodontic services or crossbite therapy to the TMHP Dental Director at the following address:

Texas Medicaid & Healthcare Partnership THSteps Dental Prior Authorization Unit

PO Box 202917 Austin, TX78720-2917 cH- I85 CPT ONLY - COPYRICHT 20IO AMERICAN MEDICAL ASSOCIATfON ALL RICHTS RESERVED *129 TEXAS MED]CAID PROVIDER PROCEDURES MANUAL: VOL.2 4,2.24. 5 Co m p reh e n sÍve O rth o dont¡ c Treatm e nt Comprehensive orthodontic services (procedure code D8080) are restricted to clients who are l2 years of age and older or clients who have exfoliated all primary dentition. Crossbite therapy includes diagnostic cast services. National procedure codes do not allow for any work-in-progress or partial submission of a claim by separating the three orthodontic components: diagnostic workup, orthodontic appliance (upper), or orthodontic appliance (lower). When submitting claims for comprehensive orthodontic treatment, procedure code D8080, three local codes must be submitted as remarks codes along with procedure code D8080. Local codes (procedure codes22009, Diagnostic workup approved; Z20ll, Orthodontic appliance, upper; orZ20l2, Orthodontic appliance, lower) must be placed in the Remarks Code field on electronic claims or Block 35 on paper claims.

Note: If the remørks code and procedure code D8080 are not submitted, the claim will be denied. Each remarks code pays the correct reimbursement rate which, when combined, totals the maximum payment of $775. Procedure code D8080 must be submitted on three separate details, with the appro- priate remarks code, even if the claim submission is for the workup and full banding. Submission of only one detail for a total of 9775 will not be accepted. Example l: A client is approved for full banding, but after the initial workup, the client discontinues treatment. This provider would submit the national procedure code D8080 and place the local code 22009, Diagnostic workup approved, in the Remarks/comment field. The claim would pay $175. Example 2: A client is approved for full banding. The provider continues treatment and places the maxillary bands. The provider would submit the national procedure code D8080 and place the local procedure code22009, Diagnostic workup approved, andZ20ll, Maxillary bands, in the Remarks/comment field. The claim would pay $475. All electronic claims for procedure code D8080 must have the appropriate remarks code associated with the procedure code. Providers must adhere to the following guidelines for electronic claim submission so TMHP can accurately apply the correct remarks code to the appropriate claim detail. A Diagnostic Procedure Code (DPC) remarks code must be submitted, only once, in the first three b¡es of the NTE02 at the 2400loop. Example 1: For a claim with one detail, submitted with procedure code D8080 and remarks code22009, enter the information as follows: DPCZ2009. The total submitted would be $175. Example 2l-For a claim with two details, where details one and two are procedure code D8080 and the remarks codes are 22009 andZ20ll, enter the information as follows: DPCZ2009Z20ll. The total submitted would be $475. Example 3: For a claim with three details, where all three details are submitted separatelywith procedure code D8080, enter the remarks code based on the order of the claim detail as follows: DPCZ2009Z20llZ20l2. The total submitted would be $775. This method ensures accurate and appropriate payment for services rendered and addresses the need for submission of a partial claim.

cll ^[186] CPT ONLY, COPYRICHT 20IO AMERICAN MEDICAL ASSOCIATION ALL RICHTS RESERVED *130 Appendix E *131 ï¡xns Mr0rcnr0 Pnovrorn PR0cEDURES MRHuRT: Vor. 1 Welcomez2Ol0 Texas Medicaid Provider Procedures Manual This manual is a comprehensive guide for Texas Medicaid providers. It contains information about Texas Medicaid benefits, policies, and procedures. It also includes information about Texas Health Steps (THSteps), the Children's Services Program and managed care programs, including Primary Care Case Management (PCCM). Texas Medicaid policy published in this manual was implemented on or before fanuary l, 2010. Policy updates effective after fanuary 2,2010, are published bimonthly in the Texas Medicaid Bulletin. All Texas Medicaid policy updates, which are published bimonthly in the Texas Medicaid Bulletin, supplement this manual and update the policy it contains. This manual is also available on the TMHP website at www.tmhp.com. New Format for 2010 This year's manual features a new format that makes it easier to access the information providers need. The following outlines the new format: Volume l: General lnformation Volume I applies to all health-care providers who are enrolled in Texas Medicaid and provide services to Texas Medicaid clients. The sections in Volume I include general information for enrolling in the program, receiving appropriate reimbursement, and claim submissions and appeals for services rendered. . Contents . Introduction . TMHP Telephone and Address Guide . Section l. Provider Enrollment and Responsibilities . Section 2. Texas Medicaid Reimbursement . Section 3. TMHP Electronic Data Interchange (EDI) . Section 4. Client Eligibility . Section 5. Prior Authorization . Section 6. Claims Filing . Section 7. Appeals . Section 8. Managed Care . Appendix A: State and Federal Offices Communications Guide . Appendix B: Vendor Drug Program . Appendix C: HIV/AIDS . Appendix D: Medical Transportation . Appendix E: Acronym Dictionary . Index (for Volume I and all handbooks)

I

CPTONLY, COPYRICHT2OO9AMERICAN MEDICALASSOCIATION ALL RICHTS RESERVED *132 CHILDRENS SERVICES H,{NDBOOK 5.3.23 Hospitalization and ASC/HASC Dental services performed in an ASC, HASC, or a hospital (either as an inpatient or an outpatient) may be benefits of THSteps based on the medical or behavioral justification provided, or if one of the following conditions exist:

. The procedures cannot be performed in the dental office. . The client is severely disabled.

To satisfr the preadmission history and physical examination requirements of the hospital, ASC, or HASC, a THSteps medical checkup for dental rehabilitation or restoration may be performed by the child's primary care provider. Physicians who are not enrolled as THSteps medical providers should bill for the examination of a client before the procedure with the appropriate evaluation and management procedure code from the following table: Place of Service (POS) Procedure Code

POS I (office) 99202 POS 3 (inpatient hospital) 99222

POS 5 (outpatient hospital) 99282 Providers enrolled in THSteps Medical should refer to subsection 6.3.1.6, "Exception-to-Periodicity Checkups" in this handbook.

Note: The dental provider should bill TMHP using the ADA Dental Claim Form to be considered for reimbursement through THSteps Dental Services. Contact the individual HMO for precertification requirements related to the hospital procedure. If services are precertified, the provider receives a precertification number effective for 90 days. In those areas of the state with Medicaid managed care, the provider should contact the managed care plan for specific requirements or limitations. It is the dental provider's responsibility to obtain precerti- fication from the client's HMO or managed care plan for facility and general anesthesia services if precertification is required. To be reimbursed by the HMO, the provider must use the HMO's contracted facility and anesthesia provider. These services are included in the capitation rates paid to HMOs, and the facility or anesthe- siologist risk nonpayment from the HMO without such approval. Coordination of all specialty care is the responsibility of the client's primary care provider. The primary care provider must be notified by the dentist or the HMO of the planned services. Dentists providing sedation or anesthesia services must have the appropriate current permit from the TSBDE for the level of sedation or anesthesia provided. The dental provider must be in compliance with the guidelines detailed in General Information.

Note: Post-treatment authorization will not be approved for codes that require mandatory prior authorization. 5.3.24 Orthodontic Services (THSteps) Orthodontic services for cosmetic purposes only are not a benefit of Texas Medicaid. Orthodontic services are limited to the treatment of children l2 years of age or older with severe handicapping maloc- clusion, children birth through 20 years of age with cleft palate, or other special medically necessary circumstances as outlined in Benefits and Limitations, which follows.

clt-l ól CPT ONLY , (]OPYRICI IT 2OO9 AMERICAN MEDJCAL ÀSSOCIATION AI-L RIGHTS RESERVED *133 TEXAS MEDICA]D PROVIDER PROCEDURES MANUAL: VOL.2 5.3.24.1 BenefÍts and Limitations Orthodontic services include the following: . Correction of severe handicapping malocclusion as measured on the Handicapping Labiolingual

Deviation (HLD) Index. Refer to subsection 5.3.26,"How to Score the Handicapping Labio-lingual Deviation (HLD) Index" in this handbook for information on how to score the HLD. A minimum score of 26 points is required for full banding approval (only permanent dentition cases are considered). Erception: Retained deciduous teeth and cleft palates with gross malocclusion that will benefit from

eaily treøtment. Cleft palate cases do not have to meet the HLD 26-point scoring requirement. However, it is necessary to submit a sfficient narrative and/or outline of the proposed treatment plan when requesting authorizøtion for orthodontic services on cleft Palate cases.

. Crossbite therapy. . Head injury involving severe traumatic deviation. The following limitations apply for orthodontic services: . Orthodontic services for cosmetic purposes only are not a benefit of Texas Medicaid or THSteps. . Orthognathic surgery, to include extractions, required or provided in conjunction with the appli-

cation of braces must be completed while the client is Medicaid-eligible in order for reimbursement to be considered.

. Except for procedure code D8660, all orthodontic procedures require prior authorization for consideration of reimbursement. . The THSteps client must be Medicaid THSteps-eligible when authorization is requested and the orthodontic treatment plan is initiated. It is the provider's responsibility to veri$ that the client has a current Medicaid Identification Form (Form H3087) or Medicaid Eligibility Verification Form (Forms H1027 andHl027-A-C); that the date of birth on the form indicates the client is 20 years of age or younger; and that no limitations are indicated.

. Prior authorization is issued to the requesting provider only and is not transferable to another provider. If the client changes providers or if the provider ceases to be a Medicaid provider for any reason, a new prior authorization must be requested by the new provider.

Refer to: Subsection 5.3.24.4, "Transfer of Orthodontic Services" in this handbook. The following procedure codes, policies, and limitations are applied to the processing and payment of orthodontic services under THSteps dental services: . Procedure code D8660 is allowed when:

. The client is referred to a dental provider to determine whether orthodontic services are indicated and to determine the appropriate time to initiate such services. . The client is referred to a dental provider and elects to receive services from another orthodontic provider for justifiable reasons. . Repeat visits at different age levels are required to determine the appropriate time to initiate orthodontic treatment. . If procedure code D8660 is billed within six months of procedure code D8080, procedure code D8080 will be reduced by the amount that was paid for procedure code D8660. . Procedure code D8680 is payable for one retaíner per arch, per lifetime, and each retainer may be replaced once because ofloss or breakage (prior authorization is required). cll- r64 CPT ONLY - COPYRICËIT 2OO9 AJ\4ERICAN MEDICAL ASSOCIATION ALL RIGT]'TS RESERVED *134 CHILDRENS SERVICES HANDBOOK . Procedure code D8670 should be billed only when an adjustment to the appliances is provided and may not be billed before the date on which the orthodontic adjustment was performed. The number of visits for monthly adjustments to the appliances is restricted to the number that was authorized in the treatment plan. However, the number of monthly visits may be amended with appropriate documentation of medical necessity while the client is Medicaid eligible.

. Procedure code D8670 is paid only in conjunction with a history of braces (code D8080), unless special circumstances exist. . All orthodontic procedure codes and appliances are global fees. . Separate fees for adjustments to retainers are not payable. . The appropriate procedure code should be billed for those appliances required as part of the

treatment of cleft palate cases. Special orthodontic appliances may also be used with full banding and crossbite therapy with approval by the TMHP Dental Director. . Procedure codes D5951, D5952, D5953, D5954,D5955, D5958, D5959, and D5960 are to be used as

applicable with documentation of medical necessity. Otherwise, use the appropriate special orthodontic appliance code.

. Full banding is allowed on permanent dentition only, and treatment should be accomplished in one stage and is allowed once per lifetime. Exception: Cases of mixed dentition when the treatment plan includes extractions of remaining primøry teeth or cleft paløte. . Crossbite therapy is allowed for primary, mixed, or permanent dentition. . Providers must not request crossbite correction (limited orthodontics) for a mixed dentition client

. Procedure codes D8080, D8050, and D8060, are limited to one per lifetime. . Comprehensive orthodontic services (procedure code D8080) are restricted to clients who are l2

years of age or older or clients who have exfoliated all primary dentition. Crossbite therapy includes diagnostic cast services.

5.3.24.2 Completion of Treatment PIan If a client reaches 2l years of age or loses Medicaid eligibility before the authorized orthodontic treatment is completed, reimbursement is provided to complete the orthodontic treatment that was authorized and initiated while the client was 20 years of age or younger, eligible for Medicaid THSteps, and completed within 36 months. Any orthodontic-related service requested in the prior authorization request (e.g., extractions or surgeries) must be completed before the loss of client eligibility. Services cannot be added or approved after Medicaid THSteps eligibility has expired. Exception: Medicaid will not reimburse for any orthodontic services during a period of time when a

THSteps client is incarcerated. During a period of incarceration, the facílity is responsible for any and all dentøI services, includíng orthodontic seruices.

cH-165 CPT ONLY - COPYRICHT 2OO9 AMERICAN MEDICAL ASSOCIATION ALL RICHTS RESERVED *135 TEXAS MEDICA]D PROV]DER PROCEDURES MANUAL: VOL.2 5.3.24.3 Premature Removal of Appliances The overall fee for orthodontic treatment (D8080) includes the removal of orthodontic brackets and treatment appliances. Procedure codeD7997 may be used only when the appliances were placed by a different provider with an unaffiliated practice (not a partner or office-sharing arrangement) and one of the following conditions exist: . There is documentation of a lack of cooperation from the client. . The client requests premature removal and a release of liability form has been signed by the parent,

guardian, or client ifhe is at least l8 years ofage. Providers must keep a copy of the release of liability form on file and are responsible for this documen- tation during a review process. 5.3.24.4 Tronsfer of Orthodontìc Services Prior authorization that has been issued to a dental provider for orthodontic services is not transferable to another dental provider. The new provider must submit to TMHP a new prior authorization request to get approval to complete the orthodontic treatment that was initiated by the original provider. To complete the treatment plan, the client must be eligible for Medicaid with a current client Medicaid Identification Form (Form H3087) or Medicaid EligibilityVerification Form (Form H1027). If the client does not return for the completion of services and there is documented failure to keep appointments by the client, the dental provider who initiated the services may submit a claim for reimbursement. The claim must be received by TMHP within the 95-day filing deadline from the last

DOS.

The following supporting documentation must accompany the new request for orthodontia services and must include the DOS the orthodontic diagnostic tools were completed and include: . AII of the documentation as required for the original provider. . The reason the client left the previous provider, if known. . An explanation of the treatment status. . A complete treatment plan addressing all procedures for which authorization is being requested

(such as the number of monthly adjustments or retainers required to complete the case). . A full diagnostic workup (procedure code D8080) with an HLD Index. The score of 26 points will be modified according to any progress achieved. Exception: The prior authorization requests for clients who initiate orthodontic services before becoming eligible for Medicaid do not require models or the HLD score sheet, nor does the client høve to meet the HLD Index of 26 points. However, a complete plan of treatment is required.

Note: If Medicaid clients initiate orthodontic services outside of Medicaid because they do not score 26 points on the HLD, they are not eligible to have their orthodontic services transferred to or reimbursed by Medicaid.

Providers who want to request prior authorization to complete orthodontic treatment that was initiated by another provider must complete a THSteps Dental Mandatory Prior Authorization Request Form and send it, the complete plan of treatment, and the appropriate documentation for orthodontic services or crossbite therapy to the TMHP Dental Director at the following address:

Texas Medicaid & Healthcare Partnership THSteps Dental Prior Authorization Unit

PO Box 202917 Austin, TX78720-2917 cu-166 CPT ONLY - COPYRIC}IT 2OO9 AMERICAN MEDICAL ASSOCIATION ALL RICHTS RESERVED *136 CHILDRENS SERVICES HANDBOOK 5,3,24.5 Comprehensìve Orthodontic Treatment Comprehensive orthodontic services (procedure code D8080) are restricted to clients who are l2 years of age or older or clients who have exfoliated all primary dentition. National procedure codes do not allow for any work-in-progress or partial billing by separating the three orthodontic components: diagnostic workup, orthodontic appliance (upper), or orthodontic appliance (lower). When billing for comprehensive orthodontic treatment, procedure code D8080, three local codes must be submitted as remarks codes along with procedure code D8080. Local codes (procedure codes22009, Diagnostic workup approved; Z20ll, Orthodontic appliance, upper; or Z2Ol2, Orthodontic appliance, lower) must be placed in the Remarks Code field on electronic claims or Block 35 on paper claims.

Note: lf the remarks code and procedure code D8080 are not submitted, the claim wiII be denied. Each remarks code pays the correct reimbursement rate which, when combined, totals the maximum payment of $775. Procedure code D8080 must be billed on three separate details, with the appropriate remarks code, even if billing for the workup and full banding. Billing only one detail for a total of $775 will not be accepted. Example l: A client is approved for full banding, but after the initial workup, the client discontinues treatment. This provider would bill the national procedure code D8080 and place the local code 22009, Diagnostic workup approved, in the Remarks/comment field. The claim would pay $175. Example 2: A client is approved for full banding, The provider continues treatment and places the maxillary bands. The provider would bill the national procedure code D8080 and place the local procedure code 22009, Diagnostic workup approved, and Z2Oll , Maxillary bands, in the Remarks/comment field. The claim would pay $475. All electronic claims for procedure code D8080 must have the appropriate remarks code associated with the procedure code. Providers should adhere to the following guidelines for electronic claim submission so that TMHP can accurately apply the correct remarks code to the appropriate claim detail. A Diagnostic Procedure Code (DPC) remarks code must be submitted, only once, in the fìrst three b¡es of the NTE02 at the 2400 loop. Example l: For a claim with one detail, submitted with procedure code D8080 and remarks code22009, enter the information as follows: DPCZ2009. The total billed would be $175. Example 2: For a claim with two details, where details one and two are procedure code D8080 and the remarks codes are 22009 andZ20l l, enter the information as follows: DPCZ2009Z20l l. The total billed would be $475. Example 3: For a claim with three details, where all three details are submitted separately with procedure code D8080, enter the remarks code based on the order of the claim detail as follows: DPCZ2009Z20||Z2Q|2. The total billed would be $775. This method ensures accurate and appropriate payment for services rendered and addresses the need for partial billing.

cÐ-167 CPT ONLY - (:OPYRICIIT 2OO9 AIVf IiIì,I(]AN ì\4EDICAL,ASSOC¡ATION ALL RI(;HTS RESERVED *137 TEXAS MEDICAID PIì.OVIDER PROCEDUIìES MANUAL: VOL ^[2] 5.3,24,6 Orthodontic Procedure Codes and Fee Schedule When submitting claims for orthodontic procedures, use the following procedure codes: Procedure Limitations Maximum Fee Code

Orthodontic Services When requested orthodontic cases are submitted for authorization D0330*, $ 100.00 and denied, two out of ten denials will be paid. These four D0340*, procedure codes, when billed together for denied cases, replace D0350*, and D0470* local procedure code 22010. A 1-20 D7280 $62.s0 Replaces 22016. Not payable to the dentist who placed the D7997* $s0.00

appliance. Includes removal of arch bar and premature removal of braces. A l-20 Replaces Z2OIB and 8l l0D. Limited to one per lifetime.

D8050* $340.00 Replaces 22018 and 8120D. Limited to one per lifetime. D8060* $340.00

Replaces 22009, Z20ll, and 22012. Limited to one per lifetime D8080* $77s.00 Refer to Subsection 5.3.25, "Special Orthodontic Appliances" below D8210* See separate

for associated remarks field code. table Refer to Subsection 5.3.25, "Special Orthodontic Appliances" below D8220x See separate for associated remarks field code. table Replaces 22008. Denied when billed on the same DOS as D0120, D8660* $ 15.00 D0145, or D0150. D8670* Replaces 22013. $68.10 D8680* Replaces 22014 and 22015; one retainer per arch per lifetime; may $ 100.00

be replaced once because ofloss or breakage (prior authorization is required).

D8690* Bracket replacement. $20.00 Not considered medically necessary NC D8691 D8692 Although procedure code D8692 is not a benefit of Texas Medicaid, NC

providers can use procedure code D8680 to bill for retainer(s). Providers should include local code 22014 or 22015 on the claim form to indicate upper or lower, as appropriate.

D8693 $s0 00 D8999 Manually

p riced + = Services payable to an FQHC for a client encounter, 5.3.25 Special Orthodontic Appliances All rernovable or fixed special orthodontic appliances rnust be prior authorized. The prior authorization request musl" include both the national code and remarks code. However, prior authorization requests may omit the DPC prefix to the eight-digit remarks code.

CI I I6{J (lPlONl-\'(iOP\l{l(itll2Ur)9r\IIl,l{l(i,\NÀll,l)l(i?\l r\SSO(ll,\llON^llftl(ìlllSltf,Sl:R\/Ct) *138 Appendix F *139 Dear Manual User: Welcome to the 2009 Texas Medicaid Provider Procedures Manual. To enhance usability, this manual is available on a searchable CD-ROM and on the TMHP website at www.tmhp.com. Note: Alt users who access www,tmhp.com are requìred to accept the American Medical Association (AMA) End-user Agreement on the use of Current Procedural Terminology (CPT). For each computer that accesses the TMHP website, the agreement must be accepted every 30 days from the last date on which the agreement was accepted by the user. lf the end-user agreement is not accepted on a particular computer every 30 days, no user will be able to enter the webs¡te from that computer, For additional information about the AMA and CPT, refer to www.ama-assn.org/ama/pub/category /3113.htm\. A Ctaims Fiting Resources table is located at the end of each service section with page references to all claim instructions, appendices, Medicaid forms, and claim form examples associated with the service. This manual contains both the Primary Care Case Management (PCCM) and Texas Health Steps (THSteps) manuals. PCCM information can befound primarily in Section 7, though relevant information can be found in othersections. THSteps information is contained in Section 43 and throughoutthe manual. Texas Medicaid policy published ¡n this manual represents policy implemented on or before October 31, 2008. Policy updates effective after October 31, 2008, are published bimonthly in the lexas Medicaid Bulletin. The November/December 2OO8 Texas Medicaid Bulletin and all Texas Medicaid Bulletins through and including the September/October 2OO9 Texas Medicaid Bulletin supplement the 2009 Texas Medicaid Provider Procedures Manual and update the policy contained herein. The Texas Medicaid Provider Procedures Manualserves as a comprehensive guide for Texas Medicaid providers, and contains information aboutTexas Medicald benefits, policies, and procedures. The manual also includes an overview of the State of Texas Medicaid Managed Care programs to include the State of Texas Access Reform (STAR), STAR+PLUS, PCCM, and NorthSTAR. The information regarding the State of Texas Medicaid Managed Care programs, including Section 7, is not an exhaustive policies and procedures guide. Forspecific managed care information, contactthe individual health plans participating in STAR, STAR+PLUS, and NorthSTAR. For PCCM, refer to the TMHP Telephone and Address Guide included in this manual. Provider Manual Overview The 2008 Texas Medicaid Provider Procedures Manual is divided into three pafts, including: Part l: Provider lnformation The information in Part I is for all health-care providers who are enrolled in Texas Medicaid and provide services to Texas Medicaid clients. ln Part l, providers find instructions for providing allowable services and receiving appropriate reimbursementforservices. The followingsections are included in Part l: . lntroduction . TMHP Telephone and Address Guide . Section 7. Provider Enrollment and Responsibilitles . Section 2. Texas Medicaid Reimbursement . Section 3. TMHP Electronic Data lnterchange (EDl) . Section 4. Client Eligibility . Section 5. Claims Flling . Section 6. Appeals . Section Z. Managed Care Part ll: Texas Medicaid Services Parl ll contains a section for each Texas lvledicaid service with information on health-care policy, proce- dures, and claims filing peftaìning to each provìder type. CP-f on y coDynght 2008 American il,4edical Assoclation All rrghts reserued

*140 Provider Enrollment and Responsibilities should allow longer than "at the time of the request" to Once a provider receives the request for medical records, produce the records, the provider will be required to the provider must submit the information electronically or produce all records completed, at the time of the in hard copy within 60calendar days. lt is important that completion or at the end of each day of product¡on, as providers cooperate by submitting all requested documen- tation in a timely manner because no response or directed by the requestor who will take custody of the insufficient documentation will count against the state as requested ¡tems.

an error. This can ultimately negatively impact the amount lf the provider places the required information in another of federal funding received by Texas for Medicaid. legal entity's records, such as a hospital, the provider is responsible for obtaining a copy of these requested records for use by the requesting state and federal t.4.4 Release of Gonfidential Information agencres.

lnformation about the diagnosis, evaluation, or treatment These documents and claims must be retained for a of a client with Texas Medicaid coverage by a person minimum period of five years from the date of service or licensed or certified to perform the diagnosis, evaluation, until all aud¡t questions, appeal hearings, investigations, or treatment of any medical, mental, or emotional or court cases are resolved. Freestanding RHCs must disorder, or drug abuse, is confidential informat¡on that retain their records for a minimum of six years, and the provider may disclose only to authorized people. hospital-based RHCs must retain their records for a Family planning information is sensitive, and confidenti- minimum of ten years. These records must be made ality must be ensured for all clients, especially minors. available immediately at the time of the request to Only the client may give written permission for release of employees, agents, or contractors of HHSC Office of any pertinent information before client information can be lnspector General (OlG), the Texas Attorney General's released, and confidentiality must be maintained in all Medicaid Fraud Control Unit (MFCU) or Antitrust and Civil other respects. lf a client's medical records are requested Medicaid Fraud Section, TMHP, DFPS, the Department of

by a licensed Texas health-care provider or a physician Aging and Disability Services (DADS), Department of State licensed by any state, territory, or insular possession of Health Services (DSHS), Department of Assistive and the United States or any State or province of Canada, for Rehabilitative Services (DARS), U.S. Department of Health purposes of emergency or acute medical care, a provider and Human Services (HHS) representative, any state or must furnish such records at no cost to the requesting federal agency authorized to conduct compliance, provider. This includes records received from another regulatory, or program ¡ntegrity functions on the provider, physician or healthcare provider involved in the care or person, or the services rendered by the provider or

treatment of the patient. lf the records are requested for person, or any agent, contractor, or consultant of any purposes other than for emergency or acute medical care, agency or division delineated above. ln addition, the the provider may charge the requesting provider a provider must meet all requirements of 1 TAC, Part 15,

reasonable fee and retain the requested information until s371.1643(f). payment is received. The records must be available as requested by each of The client's signature is not required on the claim form for these entities, during any investigation or study of the payment of a claim, but HHSC recommends the provider appropriateness of the Medicaid claims submitted by the

obtain written authorization from the client before provider. releasing confidential medical information. A release may be obtained by having the client sign the indicated block

1".4.3.L Payment Error Rate Measurement on the claim form after the client has read the statement (PERM) Process of release of information that is printed on the back of the form. The client's authorization for release of such infor- CMS assesses Texas Medicaid using the PERM process mation is not requ¡red when the release is requested by to measure improper payments in Texas Medicaid. and made to DADS, HHSC, DSHS, TMHP, DFPS, DARS, Providers will be required to provide medical record HHSC OlG, the Texas Attorney General's MFCU or documentation to support the medical reviews that the Antitrust and Civil Fraud Division, or HHS. federal review contractor will conduct for Texas Medicaid fee-for-service and PCCM Medicaid and State Children's Health lnsurance Program (SCHIP) claims. L.4.5 Compliance w¡th Federal Legislation Under the PERM process, if a claim is selected in a

HHSC complies with HHS regulations that protect aga¡nst sample for a service that a provider rendered to a discrimlnation. All contractors must agree to comply with Medicaid client, the provider will be contacted to submit a the following: copy of the medical records that support the medical . Title Vl of the Civil Rights Act of 1964 (Public Law review of the claim. All providers should check the TMHP 88-352), Section 504 of the Rehabilitation Act of ^[1] 97 3 system to ensure their current telephone number and (Public Law 93-!t2), The Americans with Disabilities Act addresses are correct in the system. lf the information is of 1990 (Public Law 101-336), Title 40, Chapter 73, of incorrect or incomplete, providers must request a change the TAC, all amendments to each, and all requirements immediately to ensure the PERM medical record request imposed by the regulations issued pursuant to these can be delivered. Client authorization for release of this acts. The laws provide in pari that no persons in the information is not required. CPT only copyright 2008 Ameícan ¡/edical Association. All rights reseryed 1_-L3

*141 Section 1 fully compliant with all three categories of the tamper- U.S. shall, on the grounds of race, color, nationalorigin, resistant regulations, provided they contain at least one age, sex, disability, political beliefs, or religion, be feature from each of the three following categories: excluded from pafticipation in or denied any aid, care,

. Prevents unauthorized copying of completed or blank service, or other benefits provided by federal and/or state funding, or otherwise be subjected to any

prescription forms. discrimination . Prevents erasure or modification of information written . HealthandSafetyCode85.1'l 3as described in "Model on the prescription form. Workplace Guidelines for Businesses, State Agencies, . Prevents the use of counterfeit prescription forms. and State Contractors" on page G-2 (relating to workplace and confidentiality guidelines on AIDS and Hlv)

1,.4.7 Utilization Control - General Exception: ln the case of minors receiving family planning Provisions services, only the client may consent to release of medical Title XIX of the Socla/ Security Act, Sections 1902 and documentation and information. Providers must comply 1903, mandates ut¡l¡zation control of all Texas Medicaid with the laws and regulations concerning discrimination. services under regulations found at Title 42 CFR, Part Payments for services and supplies are not authorized 456. Utilization review activities required by Texas unless the services and supplies are provided w¡thout Medicaid are completed through a series of monitoring discrimination on the bas¡s of race, color, sex, national systems developed to ensure the quality of services origin, age, or disability. Send written complaints of provided, and that all services are both medically noncompliance to the following address: necessary and billed appropriately. Both clients and HHSC Commissioner providers are subject to utilization review monitoring. Utili- 1100 West 49th Street

zat¡on control procedures safeguard against the delivery Austin, TX787563L72 of unnecessary services, monitor quality, and ensure payments are appropriate and according to Texas

Reminder: Each provider must furnish covered Medicaid Medicaid policies, rules, and regulations. All providers services to eligible clients in the same manner, tothe same identified as a result of utilization control activities are extent, and of the same quality as services provided to presented to HHSC OIG to determine any and all subse- other patients. Services made available to other pat¡ents quent actions. must be made available to Texas Medicaid clients if the services are benefits of Texas Medicaid. The primary goal of utilization control activity is to identify

providers with practice patterns inconsistent with the federal requirements and Texas Medicaid scope of

L.4.6 Tamper-Resistant Prescription Pads benefits, policies, and procedures. The use of utilization control monitoring systems allows for identification of

Providers are required by federal law (Public Law 110-28) providers whose patterns of practice and use of services to use a tamper+esistant prescription pad when writing a

fall outside of the norm for their peer groups. Providers prescription for any drug for Medicaid clients. identified as exceptional are subject to an indepth review Providers must take necessary steps to ensure that of all Texas Medicaid billings. These review findings are tamper-resistant pads are used for all written prescrip- presented to the HHSC OIG to determine any necessary tions provided to Medicaid cl¡ents. Providers may also use action. Medical records may be requested from the com plia nt, non-written alternatives for tra ns m¡tting provider to substantiate the medical necessity and appro- prescriptions such as by telephone, fax, or electronic priateness of services billed to Texas Medicaid. submittal. Pharmacies are required to ensure that all lnappropriate service utilization may result in recoupment written Medicaid prescriptions submitted for payment to of overpayments and/or sanctions, or other adminis- the Vendor Drug Program are written on a compliant trative actions deemed appropriate by the HHSC OlG. tamper-resistant pad. There are instances when a training specialist may be lf a prescription is not submitted on a tamper-resistant directed to communicate with the provider to offer assis- prescription form, a pharmacy may fill the prescription in tance with the technical or administrative aspects of full on an emergency basis. Texas Medicaid. The pharmacy must then obtain a verbal, faxed, Atthe direction of the HHSC OlG, a provider's claims may electronic, or compliant, written prescription from the be manually reviewed before payment. Parameters are prescriber within 72 hours after the date on which the developed for prepayment review based on the specific areas of concern identified in each case. As part of the prescription was filled.

prepayment review process, providers are required to Provide rs may pu rchase ta mper-res ista nt prescri ption submit paper claims, ratherthan electronic claims, along pads from the vendor of their choice. with supporting medical record documentation (e.9., Special copy+esistant paper is not a requirement for clinical notes, progress notes, diagnostic test¡ng results, prescriptions printed from electronic medical records other reports, superbills, X-rays, and any related medical (EMRs) or ePrescribing generated prescriptions. These record documentation) attached to each claim for all prescriptions may be printed on plain paper and will be services billed. This documentation is used to ascerta¡n that the services billed were medically necessary, billed

L-L4 CPT only copyright 2008 American N4edical Association All rights reserued *142 Denta I . Dental prophylaxis, if appropriate L9.4.2 THSteps Dental Eligibility . Topical fluoride application using fluoride varnish, if The client must be Medicaid- and THSteps-eligible (birth appropriate through 20 years ofage) atthe time ofthe service request

. Caries risk assessment and service delivery. However, Medicaid-approved orthodontic services already in progress may be continued . Dental anticipatory guidance even after the client loses Medicaid eligibility if the Procedure code D0145 bundles the above services for orthodontic treatment is begun before the loss of Medicaid eligibility and before the day of the client's 21st THSteps clients age 6 months of age through 35 months birthday and is completed within 36 months. Medicaid- of age. THSteps dentists and Federally Qualified Healthcare Centers (FQHCs) that have completed training approved orthodontic services already in progress may be and been certified to participate in the First Dental Home continued even afterthe client loses Medicaid eligibility if initiative may be reimbursed for procedure code D0145. the orthodontic treatment is: . Begun before the loss of Medicaid eligibility FQHC providers attending the training will be certified at

the facility level. . Begun before the day of the client's 21st birthday Procedure code D0120, D0150, Dtt2O, D1203, or . Completed within 36 months. DL206 are denied if procedure code D0145 is billed on the samê date of service by any provider. A First Dental The client is not eligible for THSteps dental preventive or Home examination is limited to ten services per client therapeutic benefits if the client's Medicaid ldentification lifetime with at least 60 days between visits. This service Form (Form H3087) or Medicaid Eligibility Verification is limited to once per day. Form (Forms H7O27 and HLO27-A-C) states any of the following: . Emergency care only

19.5 ICF-MR Dental Services . Presumptive eligibility (PE) ICF-MR dental services are mandated by Medicaid, and . Qualified Medicare beneficiary (QMB) reimbursement is provided for treatment of dental . Women's Health Program problems for Medicaid-eligible residents of ICF-MR facil- ities who are 2tyears of age or older. Residents of ICF-MR

A check mark will be present ¡n the "Dental" column of the facilities who are 20 years of age or younger receive client's Medicaid ldentification Form (Form H3087) to services through the regular THSteps Program. Eligibility indicate that the client is eligible for dental services. A for ICF-MR services is determined þy DADS. message (THSteps Dental checkup due) may appear below the client's name on the monthly client Medicaid Procedure codes without a CCP designation in the limita- ldentification Form (Form H3087) statingthe client is due tions column of the dental fee schedule may be billed in a for a dental checkup, which serves as a reminder to routine manner for ICF-MR clients. parents to contact their child's dentist and schedule an

These procedures must be documented as medically appointment for their periodic dental checkup. This necessary and appropriate. ICF-MR clients are not subject message is printed on the H3087 when the client has not to periodicity for preventive care. received any dental services (diagnostic, preventive, For procedure codes with a CCP designation, a provider therapeutic, or orthodontic) for a period of six months. may request authorization with documentation or provide Clients are not eligible for CCP services on or after their documentation on the submitted claim. 21st birthday, but are eligible for non{CP THSteps dental Refer to: "Medicaid Dental Fee Schedule" on page 19-11. services (see fee schedule for CCP and nonCCP reimbursed services)through the end of the month of their 21st birthday.

19.6 THSteps and ¡CF-MR Provision Note: lf a client has a birthday on any day except the first of Services day during the month, the new eligibility period is considered to begin on the first day of the following

All THSteps and ICF-MR dental services shall be month. peformed by the Med icaid-en rol led denta I provide r except for permissible work delegated to a licensed dental hygienist, dental assistant, or dental technician in a

L9.4.3 First Dental Home dental laboratory on the premises where the dentist practices, or in a commercial laboratory registered with

First Dental Home is an initiative designed to establish a the Texas State Board of Dental Examiners (TSBDE). The dental home, provide preventive care, identify oral health Texas Dental Practice Actand the rules and regulations of problems, and provide treatment and parenlal/ guardian the TSBDE (22f AC, Part 5) define the scope of work that oral health instruct¡ons as early as possible. dental auxiliary personnel may perform. Any deviations A First Dental Home visit includes, but is not limited to: from these practice limitations shall be reported to the . Comprehensive oral examination TSBDE and HHSC, and could result in sanctions or other . Oral hygiene instruction with primary caregiver actions imposed agalnst the provider. 19-5 CDf only copyíght 2008 American Dental Association- All rights reseryed *143 Section 19 19.18 Hospitalization and ASG/HASC Exception: Retained deciduous teeth and cleft palates

with gross malocclusion that will benefit from early Dental services performed in an ASC, hospital ambulatory treatment. Cleft palate cases do not have to meet the HLD surgical center (HASC), or a hospital (either as an 26-point scoring requirement. However, it is necessary to inpatient or an outpatient) may be benefits of THSteps submit a sufficient narrative and,/or outline of the based on the medical or behavioraljustification provided, proposed treatment plan when request¡ng authorization or if one of the following conditions exist: for orthodontic services on cleft palate cases, . The procedures cannot be performed in the dental . Crossbite therapy. office. . Head injury involving severe traumatic deviation. . The client is severely disabled. The following l¡mitat¡ons apply for orthodontic services: Contact the individual HMO for precertification require- . Orthodontic services for cosmetic purposes only are ments related to the hospital procedure. lf services are not a benefit of Texas Medicaid or THSteps. precertified, the provider receives a precertification . Orthognathic surgery, to include extractions, required or number effective for 90 days. provided in conjunction with the application of braces ln those areas of the state with Medicaid managed care, must be completed while the client is Medicaid-eligible the provider should contact the managed care plan for in order for reimbursement to be considered. specific requirements or limitations. lt is the dental . Except for D8660, all orthodontic procedures require provider's responsibility to obtain precertification from the client's HMO or managed care plan for facility and general prior authorization for consideration of reimbursement. anesthesia services if it is required. . The THSteps client must be Medicaid/THSteps€ligible To be reimbursed by the HMO, the provider must use the when authorization is requested and the orthodontic HMO's contracted facility and anesthesia provider. These treatment plan is initiated. lt is the provider's responsi- services are included in the capitation rates paid to bility to see that the client has a current Medicaid HMOs, and the facility/anesthesiologist risk nonpayment ldentification Form (Form H3087) or Medicaid Eligibility from the HMO without such approval. Coordination of all Verification Form (Forms HLO27 and H1O27-A-C) and specialty care is the responsibility of the client's primary

that the date of birth on the form indicates the client ¡s care provider. The primary care provider must be notified 20 years of age or younger and no limitations are bythe dentist and/or the HMO of the planned services.

indicated. . Prior authorization is issued to the requesting provider Dentists providing sedation/anesthesia services must have the appropriate current permit from the TSBDE for only and is not transferable to another provider. lf the the level of sedation/anesthesia provided. client changes providers or if the provider stops

practicing dentistry in Texas Medicaid for whatever The dental provider must be in compliance with the guide- reason, a new prior authorization must be requested. lines detailed in "Dental Therapy Under General Anesthesia" on page 19-35. Refer to: "Transfer of Orthodontic Services" on page 19-

40. Note: Post-treatment authorization will not be approved for codes that require mandatory prior authorization. The following procedure codes, policies, and limitations

are applied to the processing and payment of o¡thodontic services under THSteps dental services:

19.19 Orthodontic Services . Procedure code D8660 is allowed when: (THSteps) . The client is referred to an ofthodontistfora determi- nation of whether orthodontic services are indicated Orthodontic services for cosmetic purposes only are not a and to determine the appropriate time to initiate benefit of Texas Medicaid. Orthodontic services are limited to the treatment of children t2years of age or such services.

. The client is referred to an ofthodontist and elects to older with severe handicapping malocclusion, children birth through 20 years of age with cleft palate, or other

receive services from another orthodontic provider special medically necessary circumstances as outlined in because of justifiable reasons. Benefits and Lim¡tations below. . Repeat visits at different age levels are required to determine the appropriate time to initiate orthodontic treatme nt. 19.19.1 Benefits and Limitations . Procedure code D8680 is payable for one retainer per Orthodontic services include the following: arch, per lifetime, and each retainer may be replaced . Correction of severe handicapping malocclusion as

once because of loss or breakage (prior authorization is measured on the Handicapping Labiolingual Deviation required). (HLD) lndex. Refer to page 79-45 for information on . Procedure code D8670 should be billed only when an how to score the HLD. A minimum score of 26 points is adjustment to the appliances is provided and may not required for full banding approval (only permanent be billed before the date the orthodontic adjustment dentition cases are considered). was performed. The number of visits for monthly adjust- 19-38 CDf only copyright 2O08 American Denta¡ Assoc¡at¡on All righls reseryed *144 Dental L9.L9.2 Mandatory Prior Authorization ments to the appliances is restricted to the number that was authorized in the treatment plan. However, the

Prior authorization is required for all THSteps orthodontic number of monthly visits may be amended with appro- services except for procedure code D8660. The prior priate documentation of medical necessity while the authorization request must contain the DOS that the client is Medicaid eligible. orthodontic diagnostic tools were produced. lf the request . Procedure code D8670 is paid only in conjunction with is approved, the date that the records were produced is a history of braces (code 08080), unless special considered to be the date on which orthodontic treatment circumstances exist. begins.

. All orthodontic codes and appliances are global fees. Refer to: "THSteps Dental Mandatory Prior Authorization . Separate fees for adjustments to retainers are not Request Form" on page 8-111. lf orthodontic treatment is medically indicated, providers payable. . The appropriate code should be billed for those appli- are responsible for obtaining prior authorization for a complete orthodont¡c treatment plan while the client is ances required as part of the treatment of cleft palate eligible for Medicaid and THSteps and 20 years of age or cases. younger. Special orthodontic appliances may also be used with full Submission of diagnostic casts are not required when banding and crossbite therapy with approval by the TMHP requesting prior authorization for procedure codes Dental Director. 08050, D8060, or D8080. . Procedure codes D5951, 05952, D5953, D5954, Prior authorization is a condition for reimbursement; it is D5955, D5958, D5959, and D5960 are to be used as not a guarantee of payment. applicable with documentation of medical necessity. Upon receipt of prior authorization of complete treatment Otherwise, use the appropriate special orthodontic plans, providers are to advise clients that they will be able appliance code.

. Full banding is allowed on permanent dentition only, to receive the approved treatment services (e.9. orthodontic adjustments, bracket replacements and and treatment should be accomplished in one stage retainers), even if they lose Medicaid elieiibility or reach and is allowed once per lifetime. 27 years of age. Approved ofthodontic treatment must be Exception: Cases of mixed dentition when the treatment initiated before the loss of Medicaid eligibility and plan includes extractions of remaining primary teeth or completed within 36 months of the authorization date. cleft palate. Note: Providers must submit all orthodontic services for . Crossbite therapy is allowed for primary, mixed, or Medicaid managed care clients following these guide' permanent dentition. lines. STAR and STAR+PLUS are not responsible for . Providers must not request crossbite correction (limited orthodontic services. orthodontics) for a mixed dentition client when there is Requests for orthodontic services must be accompanied a need for full banding in the adult teeth. Crossbite by all of the following documentation: therapy is an inclusive charge for treating the crossbite . An orthodontic treatment plan. The treatment plan to complet¡on, and additional reimbursement is not

must include all procedures required to complete full provided for adjustments or maintenance. treatment (such as, extractions, ofthognathic surgery, . lf a case is not approved, the dentist may file a claim upper and lower appliance, monthly adjustments, ant¡c- for payment of the diagnostic workup necessary to ipated bracket replacements, appliance removal if obta¡n the authorization using procedure codes D0330,

indicated, special orthodontic appliances, etc.). The D0340, D0350, and D0470. The dentist may receive treatment plan should incorporate only the minimal payment underthese procedure codes for no more than

number of appliances required to properly treat the two cases out of every ten cases denied. The dentist case. Requests for multiple appliances to treat an should determine if the client's condition meets individual arch are reviewed for duplication of purpose. orthodontic benefit criteria before performing a . Cephalometric radiograph with tracing models. diagnost¡c workup.

. Completed and scored HLD sheet with diagnosis of . Procedure codes D8080, D8O5O, and 08060, are Angle class (26 points required for approval of noncleft limited to one per lifetime. palate cases). . Comprehensive orthodontic services (procedure code . Facial photographs. D8080) are restricted to clients who are !2 years of . Full series of radiographs or a panoramic radiograph; age or older or clients who have exfol¡ated all primary diagnosticauality films are required (copies are dentition. Crossbite therapy includes diagnosic cast

accepted and radiographs will not be returned to the services. provider). 19-39 CDT only copyright 2008 American Dental Association All rjghls reseryed *145 Section 19 . Any additional pertinent information as determined by

The following supporting documentation must accompany the new request for orthodontia services and must include the dent¡st or requested by TMHP's Dental Director the DOS the ofthodontic diagnostic tools were produced: Requests for crossbite therapy require properly

. All of the documentation as required for the original trimmed models to be retained in the office and must demonstrate the following criteria:

provider. . Posterior teeth. Not end to end, but buccal cusp of . The reason the client left the previous provider, if upper teeth should be lingual to buccal cusp of lower known. teeth. . An explanation of the treatment status. . Anterior teeth. The incisal edge of upper should be . A compete treatment plan addressing all procedures for lingual to the incisal of the opposing arch. which authorization is being requested (such as the The dentist should be certain that radiographs, photo- number of monthly adjustments or reta¡ners required to graphs, and other information are properly packaged to complete the case). avoid damage. TMHP is not responsible for lost or . A full diagnostic workup (D8080) with an HLD lndex. damaged materials. The score of 26 points will be modified according to any Refer to: "THSteps Dental Mandatory Prior Authorization progress achieved. Request Form" on page 8-111. Exception:The prior authorization requests for clients who initiate orthodontic services before becoming eligible for Medicaid do not requ¡re models or the HLD score

19.19.3 Gompletion of Treatment Plan sheet, nor does the client have to meet the HLD lndex of lf a client reaches 2tyears of age or loses Medicaid eligi- 26 points, However, a complete plan of treatment is bility before the authorized orthodontic treatment is required. completed, reimbursement is provided to complete the Note: Medicaid clients who initiate orthodontic services orthodontic treatment that was authorized and initiated privately (e.9. pay out of pocket for the ofthodontic workup while the client was 20 years of age or younger, eligible for Medicaid and THSteps, and completed within 36 months. and/or ¡n¡t¡al banding, etc.) wh¡le Medicaid eligible due to not meeting the HLD index 26-points, are not eligible to Any orthodontic-related service requested (e.9., extrac-

have their orthodontic services transferred to and tions or surgeries) must be completed before the loss of reimbursed by Medicaid. client eligibility. Serv¡ces cannot be added or approved after Medicaid/THSteps eliÉibility has expired. To request prior authorization for completion of the

orthodontic treatment initiated by another provider, complete a THSteps Dental Mandatory Prior Authorization

L9.L9.4 Premature Removal of Appliances Request Form and send it with the complete plan of The overall fee for orthodontic treatment (D8080) treatment and appropriate documentation for orthodontic includes the removal of orthodontic brackets and/or services and/or crossbite therapy to the TMHP Dental Director at the following address: treatment appliances. Procedure code D7997 may be used only when the appliances were placed by a different

Texas Medicaid & Healthcare Partnership provider with an unaffiliated practice (not a partner or THSteps and ICF-MR Dental Authorization and lnformation office-sharing arrangement) and one of the following PO Box 2O29L7 conditions exist: Austin, TX 78720-2977 . There is documentation of a lack of cooperation from the client. 19.19.6 Gomprehens¡ve Orthodontic . The client requests premature removal and a release Treatment form has been signed by the parent, guardian, or client Comprehensive orthodontic services (procedure code if he is at least 18 years of age.

D8080) are restricted to cl¡ents who are t2years o1 age Providers must keep a copy of the release form on file and or older or clients who have exfoliated all primary are responsible for this documentation during a review dent¡tion. process. National procedure codes do not allow for any work-in- progress or partial billing by separating the three

19.19.5 Transfer of Orthodontic Services orthodontic components: diagnostic workup, orthodontic appliance (upper), or orthodontic appliance (lower).

Prior authorization issued to a dental provider for orthodontic services is not transferable to another dental When billing for comprehensive orthodontic treatment, provider. The new provider must subm¡t to TMHP a new D8080, three local codes must be submitted as remarks prior authorization request in order to be approved to codes along with code D8080. Local codes (72OO9, complete the orthodontic treatment initiated by the Dia gnostic worku p a pproved, Z2OI1-, O rthodontic original provider. 19-40 CDf only copyright 2008 Ame.ican Dental Association. All rights reseryed

*146 De nta I appliance, upper, or Z2OL2, Orthodontic appliance, lower) are placed in the Remarks Code field on electronic claims or Block 35 on paper claims. Note: lf the remarks code and procedure code D8080 are not subm¡tted, the claim will be denied. Each remarks code pays the correct reimbursement rate which, when combined, totals the maximum payment of $775. D8080 must be billed on three separate details, with the appropriate remarks code, even if billing for the workup and full banding. Billing only one detail for a total of $775 will not be accepted. Example 1: A client is approved forfull banding, but afterthe initial workup, the client discontinues treatment. This provider would billthe national code D8080 and place the local code 22009, Diagnostic workup approved, in the Remarks/comment field. The claim would pay $175. Example 2: A client is approved forfull banding. The provider continues treatment and places the maxillary bands. The provider would bill the national procedure code D8080 and place the local code Z2OO9, Diagnostic workup approved, and 2201,1, Maxillary bands, in the Remarks/comment field. The claim would pay $475. All electronic claims for D8080 must have the appropriate remarks code associated with the procedure code. Providers should adhere to the following guidelines for electronic claim submission so that TMHP can accurately apply the correct remarks code to the appropriate claim detail. A Diagnostic Procedure Code (DPC) remarks code must be submitted, only once, in the first three bytes of the NTE02 at the 2400 loop. Example 1: For a claim with one detail, submitted with procedure code D8080 and remarks code Z2OO9, enter the information as follows: DPCZ2OO). The total billed would be $175. Example 2=For a claim with two details, where details one and two are procedure code D8080 and the remarks codes are Z2OO9 andZ2Ott, enter the information as follows: DPCZ2OO9Z2011. The total billed would be $475. Example 3: Fora claim with three details, where all three details are subm¡tted separatelywith procedure code D8080, enter the remarks code based on the order of the claim detail as follows: DPCZ2OO972OI7Z2O72. The total billed would be $775. This method ensures accurate and appropriate paymentforservices rendered and addresses the need for partial billing. L9.L9.7 Orthodontic Procedure Codes and Fee Schedule When submitting claims for orthodontic procedures, use the following procedure codes Procedure Code' Limitations Maximum Fee D0330*, When requested ofthodontic cases are subm¡tted for authorization $100.00 D0340*, and denied, two out of ten denials will be paid. These four D0350*, and procedure codes, when billed together for denied cases, replace DO470* local procedure code Z2OLO. A t-20 D7280 $62.50 D7997* Replaces Z2016. Not payable to the dentist who placed the $50.00

appliance. lncludes removal of arch bar and premature removal of braces. A 1--2O

lnterceptive OrthodontÍc Treatment D8050* Replaces Z2OI8 and 8110D. Limited to one per lifetime. $340.00 ' Replaces Z2OI8 and 8120D. Limited to one per lifetime. D8060* $340.00 D8080* laces 22009, Z2OL1-, and 22072. Limited to one per lifetime. $775.00 , Rep

Minor Treatment to Control Harmful Habits D82rO* See separate table for associated remarks field code. See separate table * = Selices payable to an FQHC for a cl¡ent encountet t94t CDT only copyright 2008 Amercan Denta Association All righls reserued *147 Section 19 ProcedureGode Limitations Maximum Fee D8220* See separate table for associated remarks field code. See separate

table Other Orthodont¡c D8660* Replaces Z2QO8. Denied when bill on the same DOS as D0145. $15.00 Replaces Z2OL3 $68.10 Replaces Z2OI4 and Z2OI5; one retainer per arch per lifetime; $100.00 may be replaced once because of loss or breakage (prior authori- zation is required)

D8690* Bracket replacement. $20.00 D8691 Not considered medically necessary

NC

D8693 $50.00 D8999 Manually

priced * = Services payable to an FQHC for a client encounter L9.2O Special Orthodontic Appliances As with all otthodontic services, all removable or fixed special orthodontic applicances must be prior authorized. The prior authorization request must include both the national code and remarks code. However, prior authorizat¡on requests may omit the DPC prefix to the eight¡igit remarks code. All removable orfixed special orthodontic appliances must be billed with national procedure code DA21O or D822O. Dental models must be submitted when requesting prior authorization of a thumb- sucking ortongue thrust appliance. To ensure appropriate claims processing, the DPC remarks code (local procedure code) reflecting the specific service is also required. The appropriate remarks codes must be entered on the authorization request form. Failure to follow the following steps will cause the claims to deny. Failure to enter the DPC remarks code and the appropriate procedure code will not result in claim denial; however, manual intervention is required to process the claim, which may result ¡n a delay of payment. For paper claim submissions, providers must enterthe local procedure code in Block 35 (Remarks) of the 2006 ADA claim form. For electronic submissions, providers enter the DPC remarks code in the Comments field to ensure correct a uthorization, accu rate records, a nd re i m bu rsement. For electronic submissions other than TexMedConnect submissions, providers must follow the steps below to ensure TMHP accurately applies the correct local procedure code to the appropriate claim detail: 1) The DPC prefix must be submitted, only once, in the firstthree bytes of the NTE02 atthe 2400

loop. 2) ln bytes 4-8, providers must submit the remark code (local procedure code) based on the order of the claim detail. Do not enter any spaces or punctuat¡on between remark codes, unless to designate the detail is not billed with D8210 or D822O.

Example: For a claÌm with three details, where details one and three are subm¡tted with procedure code D8210 and detail two ¡s not, enter the following information in the NTE02 at the 2400 loop: DPC| 01 4D 1046D. (The space shows that detail two needs no local code.) lf all details require a local code, enter DPC, no spaces, and the appropriate local codes, To submit using TexMedConnect, providers must enter the local code into the Remarks Code field, located underthe details header. The Remarks Code field is the field directly afterthe Procedure Code field. TexMedConnect submitters are not required to manually enter the DPC prefix as it is placed in the appropriate field on the TexMedConnect electronic claim.

L942

CDT only copyríght 2008 Amercan Dental Associatron All íghts reseryed *148 Dental L9.2L How to Score the Handicapping Labio-lingual Deviation (HLD)

lndex

The orthodontic provider must complete and sign the diagnosis (Angle class). Cleft Palate Submit a cleft palate case in the mixed dentition only if it can be justified in a narrative why there should be treatment before the client is in the full dentition. Note: lntermittent treatment requests may exceed the allowable 26 reimbursable treatment visits. Severe Traumatic Deviations Refers to facial accidents only. Po¡nts cannot be awarded for congenital deformity. Severe traumatic deviations do not include traumatic occlusions for crossbites. Overjet in Millimeters Score the case exactly as measured, then subtract 2 mm (considered the norm), and enterthe difference as the score. Overbite in Millimeters Score the case exactly as measured, then subtract 3 mm (considered the norm), and enter the difference as the score. This would be doublecounting. Mandibular Protrusion in Millimeters Score the case by measurement in mm bythe distance from the labial surface of the mandibular incisors to the labial surface of the maxillary incisor. Do not score both overbite and open bite. Open Bite in Millimeters Score the case exactly as measured. Measurement should be recorded from the line of occlusion of the permanent teeth, not from ectopically erupted teeth in the anterior segment. Caution is advised in undertaking treatment of open bites in older teenagers, because of the frequency of relapse. Ectopic Eruption An unusual pattern of eruption, such as high labial cuspids orteeththataregrosslyoutof the longaxis of the alveolar ridge. Do not include (score) teeth from an arch if that arch is to be counted in the following category of Anterior Crowding. For each arch, either the ectopic eruption or anterior crowding may be scored, but not both. Anterior Crowding Anterior teeth that require extractions as a prerequisite to gain adequate room to treat the case. lf the arch expansion is to be implemented as an alternative to extraction, provide an estimated number of appointments required to attain adequate stabilization. Arch length insufficiency must exceed 3.5 mm to score for crowding on any arch. Mild rotations that may react favorably to stripping or moderate expansion procedures are not to be scored as crowded. Labio-lingual Spread in millimeters The score forthis category should be the total, in millimeters, of the anterior spaces. Providers should be conservative in scoring. Liberal scoring will not be helpful in the evaluation and approval of the case. The case must be considered dysfunctional and have a minimum of 26 points on the HLD index to qualify for any orthodontic care other than crossb¡te correction. Half-mouth cases cannot be approved. The intent of the program is to provide orthodontic care to cl¡ents with handicapping malocclusion to improve function. Although aesthetics is an important part of self-esteem, services that are primarily for aesthetics are not within the scope of benefits of this program. The proposals for treatment services should incorporate only the minimal number of appliances required to properlytreatthe case. Requests for multiple appliances to treat an individual arch will be reviewed for duplication of purpose. lf attaininga qualifyingscore of 26 points is uncertain, providers should include a brief narrative when submittingthe case. The narrative may reduce the time necessaryto gain final approval and reduce shipping costs incurred to resubm¡t records. Providers must properly label and protect all records (especially plaster diagnostic models) when shipping. lf plaster diagnostic models are requested by and shipped to TMHP, the provider should assure that the models are adequately protected from breakage during shipping. TMHP will return intact models to the prov¡der.

19-45 CD-f only copyright 2008 Ameícan Dental Associataon. All rights reseryed *149 Section 19 L9.2L.L HLD Score Sheet This sheet and a Boley Gauge are required to score. Procedure: . Occlude client or models in centric position. . Record all measurements rounded-off to the nearest millimeter. . Enter a score of 0 if the condition is absent. . Overjet is measured from the most protrusive inc¡sor. . Overbite is measured from the labio-incisal edge of overlapped anterior tooth or teeth to point of

maximum coverage. . Ectopic eruption and anterior crowding: Do not double-score. Record the more serious condition.

PLEASE PRINT CLEARLY:

Client Name: Date of birth Medicaid lD: Address: (Street/City/County/State/Zip Code) CONDITIONS OBSERVED HLD SCORE Score 15 Cleft Palate Severe Traumatic Deviations Score 15

Trauma/Accident related only Overjet in mm. Minus 2 mm. Example: I mm. - 2 mm. = 6 points Overbite in mm. Minus 3 mm. Example: 5 mm. - 3 mm. = 2 points Mandibular Protrusion in mm. x5 See definitions/instructions to score (previous page) Open Bite in mm. x4 See definitions/instructions to score (previous page) Ectopic Eruption (Anteriors Only) Each tooth x3 Reminder: Points cannot be awarded on the same arch for Ectopic Eruptíon and Crowding = 5 pts. each

Anterior Crowding Mand Max. 1O point maximum total for both arches arch combined Labio-lingual Spread in mm

TOTAL

For TMHP use only Diagnosis

Authorizat¡on Number ,Recorder: Examiner: Provider's Signature Please submit this score sheet with records

19-46 CDI only copyr¡ght 2008 American Dental Associatron All ri8hts reserued *150 Appendix G *151 Dear Manual User: Welcome to the 2OO8 Texas Medicaid Provider Procedures Manual. To enhance usability, this manual is available on a searchable CD-ROM and on the TMHP website at www.tmhp.com. Note: Atl users who access www.tmhp.com are required to accept the American Medical Association (AMA) End-user Agreement on the use of Current ProceduralTerminology (CPT). For each computer that accesses the TMHP website, the agreement must be accepted every 30 days from the last date on which the agreement was accepted by the user. lf the end-user agreement is not accepted on a par-ticular computer every 30 days, no user will be able to enter the website from that computer. For add¡t¡onal information about the AMA and CPT, refer to www.ama'assn.org/ama/pub/category /31-73.html. A C/aims FitinS Resources table is located at the end of each service section with page references to all claim instructions, appendices, Medicaid forms, and claim form examples associated with the service. This manual contains both the Primary Care Case Management (PCCM) and Texas Health Steps (THSteps) manuals. PCCM information can befound primarily in Section 7, though relevant informatlon can be found in other sections. THSteps information is contained in Section 43 and throughout the manual. The Texas Medicaid Program policy published in this manual represents policy implemented as of October 31,,2OO7. Policy updates effective after October 3L,2OO7, are published bimonthly in the Texas Medicaìd Bu lletin. The November/December 2OO7 Texas Medicaid Bulletin and all Texas Medicaîd Bulletins through and including the September/October 2008 lexas Medicaid Bulletin supplement the 2008 Texas Medicaid Provider Procedures Manual and update the policy contained herein' The fexas Medicaid Provider Procedures Manual serves as a comprehensive guide for Texas Medicaid providers, and contains information aboutTexas Medicaid benefits, policies, and procedures. The manual also includes an overyiew of the State of Texas Medicaid lvlanaged Care programs to include the State of Texas Access Reform (STAR), STAR+PLUS, PCCM, and NorthSTAR. The information regardingthe State of Texas Medicaid Managed Care programs, including Section 7, is not an exhaustive policies ancl procedures guide. For specific managed care informat¡on, contact the individual heatth plans participating in STAR, STAR+PLUS, and NorthSTAR. For PCCM, refer to the TMHP Telephone and Address Guide included in this manual. Provider Manual Overview The 2OO8 Texas Medicaid Provider Procedures Manual is divided into three parts, including Part l: Provider lnformation The information in Part I is for all health-care providers who are enrolled in the Texas Medicaid Program and provide services to Texas Medicaid clients. ln Part l, providers find instructions for providing allowable services and receiving appropriate reimbursement for services. The following sections are included in Part l: . lntroduction. . TlvlHP Telephone and Address Guide. . Section 1. Provider Enrollment and Responsibìlitres. . Sect¡on 2. Texas lvledicaid Reimbursement. . Section 3. TMHP Electronic Data lnterchange (EDl). . Section 4. Client EligibilitY. . Sect¡on 5. Claims Filing. . Section 6. Appeals. . Section 7. Mana1ed Care. Part ll: Texas Medicaid Services Part ll contains a section for each Texas Medicaid service with information on health-care policy, proce- dures, and claims filing pertaining to each provider type. All rlghts reserued CPT only copyíght 2OO7 Ar¡eilca¡ lvledlcal

^ssocratron *152 Section 1 1,.2.4 Release of Gonfidential lnformation documents or other requested items may be altered or destroyed, the reguest must be completed by the prov¡der

lnformation about the diagnosis, evaluat¡on, or treatment at the t¡me of the request or in less than 24 hours as of a client with Texas Medicaid Program coverage by a provided by the requestor. lf , in the opinion of the lnspector person licensed or certified to peform the diagnosis, General or other requestor, the requested documents and evaluation, or treatment of any medical, mental, or other items requested cannot be completely provided on emotional disorder, or drug abuse, is confidential infor- the day of the request, the ,nspector General or requestor mation that the provider may disclose only to authorized may set the deadline for production at 24 hours from the people. Family planning information is sensitive, and t¡me of the orig¡nal reguest. confidentiality must be ensured for all clients, especially Failure to supply the reguested doc uments and other items, mtnors. w¡thin the time frame specified, may result in payment hold

Only the client may give written permission for release of to the provider's Medicaid payments, recoupment of any pertinent information before client information can be payments for all claims related to the miss¡ng records, released, and confidentiality must be maintained in all contract cancellation, and/or exclusion from the Texas other respects. lf a client's medical records are requested Medicaíd Progiram. by a licensed Texas health-care provider or a physician As directed by the requestor, the provider or person will licensed by any state, territory, or insular possession of relinquish custody of the requested documents and other the United States or any State or province of Canada, for Items and the requestor will take custody of the records purposes of emergency or acute medical care, a provider and remove them from the premises. lf the requestor must furnish such records at no cost to the requesting should allow longer than "at the time of the request" to provider. This includes records received from another produce the records, the provider will be required to physician or health{are provider involved in the care or treatment of the patient. lf the records are requested for produce all records completed, at the time of the completion or at the end of each day of production, as purposes other than for emergency or acute medical care, the provider may charge the requesting provider a directed by the requestor who will take custody of the reasonable fee and retain the requested information until requested items.

payment is received. lf the provider places the required information in another legal entity's records, such as a hospital, the provider is The client's signature is not required on the claim form for payment of a claim, but HHSC recommends the provider responsible for obtaining a copy of these requested records for use by the requesting state and federal obtain written authorization from the client before releasing confidential medical information. A release may agencies.

be obtained by having the client s¡gn the indicated block These documents and claims must be retained for a on the claim form after the client has read the statement minimum period of five years from the date of service or of release of information that is printed on the back of the until all audit quest¡ons, appeal hearings, investigations, form. The client's authorization for release of such infor- or court cases are resolved. Freestanding RHCs must mation is not required when the release is requested by retain their records for a minimum of six years, and and made to DADS, HHSC, DSHS, TMHP, DFPS, DARS, hospital-based RHCs must retain their records for a HHSC OlG, the Texas Attorney General's MFCU or m¡nimum of ten years. These records must be made Antitrust and Civil Fraud Division, or HHS. available immediately at the time of the request to employees, agents, or contractors of HHSC Offìce of lnspector General (OlG), the Texas Attorney General's

L.2.5 Compliance w¡th Federal Legislation Medicaid Fraud Control Unit (MFCU) or Antitrust and Civil HHSC complies with HHS regulations that protect against Medicaid Fraud Section, TMHP, DFPS, the Department of discrimination. All contractors must agree to comply with Aging and Disability Services (DADS), Department of State Health Services (DSHS), Department of Assistive and the following:

. Tiile Vl of the civil Ri$hts Act of 7964 (Public Law Rehabilitative Services (DARS), U.S. Department of Health and Human Services (HHS) representative, any state or

88-352), Section 504 of the Rehabilitat¡on Act of 7973 federal agency authorized to conduct compliance, (Public Law 93-112), The Americans with Disabilities Act regulatory, or program integrity functions on the provider, of 7990 (Public Law 101-336), T¡tle 40, Chapter 73, of person, or the services rendered by the provider or the TAC, all amendments to each, and all requirements person, or any agent, contractor, or consultant of any imposed by the regulations issued pursuant to these agency or division delineated above. ln addition, the acts. The laws provide ¡n part that no persons in the provider must meet all requirements of 1 TAC, Part 15,

U.S. shall, on the grounds of race, color, national or¡gin, s371.1643(f). age, sex, disability, political beliefs, or rel¡gion, be excluded from participation in or denied any aid, care, The records must be available as requested by each of

service, or other benefits provided by federal and/or these entities, during any investigation or study of the state funding, or otherwise be subjected to any appropriateness of the Medicaid claims submitted by the discrimination. provider. 1-8 cPl only copyright 2007 Amer¡can Medical Association All rights reseryed

*153 Provider Enrollment and Responsibil¡ties . Health and Safety Code 85.773 as described in "Model be directed to communicate with the provider to offer assistance with the techn¡cal or administrative aspects of Workplace Guidelines for Businesses, State Agencies, the Texas Medicaid Program. and State Contractors" on page G-2 (relating to workplace and confidentiality guidel¡nes on AIDS and

At the direction of the HHSC OlG, a provider's claims may Hrv). be manually reviewed before payment. Parameters are developed for prepayment review based on the specific Exception: ln the case of minors receiving family planning areas of concern identified in each case. As part of the services, onlythe cl¡ent may consentto release of medical

prepayment review process, providers are required to documentation and information. Providers must comply submit paper claims, rather than electronic claims, along with the laws and regulat¡ons concerning discrimination. Payments for services and supplies are not authorìzed with supporting medical record documentation (e.9., unless the services and supplies are provided without clinical notes, progress notes, diagnost¡c testing results, other reports, superbills, X-rays, and any related medical discrimination on the basis of race, color, sex, nat¡onal or¡g,¡n, age, or disability. Send written complaints of record documentation) attached to each claim for all

services billed. This documentation is used to ascerta¡n noncompliance to the following address: that the services billed were medically necessary, billed HHSC Commissioner appropriately, and according to Texas Medicaid Program 11OO West 49th Street requirements and policies. Services inconsistent with Austin, ÍX78756-3]-72 Texas Medicaid Program requirements and policies are Reminder: Each provider must furnish covered Medicald adjudicated accordingly. C la ims su bm itted initial ly without services to eligible clients in the same manner, to the same the supporting medical record documentation will be extent, and of the same quality as services provided to denied. Additional medical record documentation other pat¡ents. Services made available to other patients submitted by the provider for claims denied as a result of rnust be made available to lexas Medlcaid clients if the the prepayment review process is not considered at a services are benefits of the Texas Medicaid Proglram. later time. A provider is removed from prepayment review

only when determined appropriate by the HHSC OlG. Once removed from prepayment review, a follow-up assessment

1,.2.6 Utilization Control - General ofthe provider's subsequent practice patterns is Provisions performed to monitor and ensure continued appropriate use of resources. Noncompliant providers are subject to T¡tle XIX of the Social Security Act, Sections 1902 and administrative sanctions up to and includ¡ng exclusion 1903, mandates utilization control of all Texas Medicaid and contract cancellation, as deemed appropriate by the Program services under regulations found at Title 42 CFR, HHSC OIG as defined in the rules in 1 TAC 9371.1643. Part 456. Utilization review activities required by the Texas Providers placed on prepayment review must submit all Medicaid Program are completed through a series of paper claims and supporting medical record documen- monitoring systems developed to ensure the quality of tation to the following address: services provided, and that all services are both medically necessary and billed appropriately. Both clients and Texas Medicaid & Healthcare Partnership providers are subject to utilization review monitor¡ng. Utili- Attention: Prepayment Review MC-411 SURS zation control procedures safeguard against the delivery PO Box 203638 of unnecessary seruices, monitor quality, and ensure Austin, Texas 78720-3638 payments are appropriate and according to Texas Medicaid Program policies, rules, and regulations. All

1-.2.7 Provider Gertification/Ass¡gnment providers identified as a result of utilization control activ- ities are presented to HHSC OIG to determine any and all

Texas Medicaid service providers are required to certify subsequent actions. compliance with or agree to various provisions of state The primary goal of utilization control activity is to identify and federal laws and regulations. After submitting a providers with practice patterns inconsistent with the signed claim to TMHP, the provider certifies the follow¡ng:

. Services were personally rendered by lhe billing federal requirements and the Texas Medicaid Program scope of benefits, policies, and procedures. The use of

provider or under the personal supervision of the billing utilization control monitoring systems allows for identifi- provider, if allowed for that provider type, or under the cation of providers whose patterns of practice and use of substitute physician arrangement. services fall outside of the norm for their peer groups. . The information on the claim form is true, accurate, and Providers identified as exceptional are subject to an in- complete. depth review of all Texas Medicaid billings. These review . All services, supplies, or items billed were medically findings are presented to the HHSC OIG to determine any necessary for the client's diagnosis or treatment. necessary action. Medical records may be requested from the provider to substantiate the medical necessity and Exception is allowed for special preventive and screening programs (for example, family planning and appropriateness of services billed to the Texas Medicaid Program. lnappropriate service utilization may result in Texas Health Steps [THSteps]). recoupment of overpayments and/or sanctions, or other : Medical records document all services billed and the administrative actions deemed appropriate by the HHSC

medical necessity of those services. OlG. There are instances when a tra¡ning specialist may 1-9 CPT only copyright 2OO7 American lvedical Assæ¡ation All r¡ghts reseryed *154 Section 19 L9.L7 Hospitalization and ASG/HASC with gross malocclusion that will benefit from early

treatment. Cleft palate cases do not have to meetthe HLD Dental services performed in an ASC, hospital ambulatory 26-po¡nt scoring requirement. However, ¡t is necessary to surgical center (HASC), or a hospital (either as an submit a sufficient narrative and/or outline of the inpatient or an outpatient) may be benefits of THSteps on proposed treatment plan when requesting author¡zat¡on the medical or behavioral justification provided, or if one for orthodontic services on cleft palate cases. of the following conditions exist: . Crossþite therapy. . Head injury involving severe traumatic deviation. . The procedures cannot be performed in the dental office. . The client is severely disabled. The following limitations apply for orthodontic services: . Orthodontic services for cosmetic purposes only are

Contact the individual HMO for precertification require- not a benefit of the Texas Medicaid Program or ments related to the hospital procedure. lf services are THSteps. precertified, the provider receives a precertification

. Orthognathic surgery, to include extractions, required or number effective for 90 days. provided in conjunction with the application of braces ln those areas of the state with Medicaid Managed Care, must þe completed while the client is Medicaid-eligible precertification or approval is required from the client's in order for reimbursement to be considered. HMO for anesthesia and facility charges. lt is the dental . Except for D8660, all orthodontic procedures require provider's responsibility to obtain precertification from the client's HMO or managed care plan for facility and $eneral

prior authorization for consideration of reimbursement. . The THSteps client must be Medicaid/THSteps-eligible anesthesia services. To be reimbursed by the HMO, the provider must use the when authorization is requested and the orthodontic HMO's contracted facility and anesthesia provider. These

treatment plan is initiated. lt is the provider's responsi- services are included in the capitation rates paid to bility to see that the client has a current Medicaid H MOs, and the faci I ity,/anesthesiologist risk nonpayment ldentification Form (Form H3087) or Medicaid Eligibility from the HMO without such approval. Coordination of all Verification Form (Forms HtO27 and HLO27-A-C) and specialty care is the responsibility of the client's primary

that the date of birth on the form indicates the client is care provider. The primary care provider must be notified younger ùhan 2L years of age and no limitations are by the dentisl and/ or the HMO of the planned seruices.

practicing dentistry in the Texas Medicaid Program for The dental provider must be in compliance w¡th the guide- whatever reason, a new prior authorization must be lines detailed in "Criteria for Dental Therapy Under requested (see "Transfer of Orthodontic Services" on General Anesthesia" on page 19-33. page 19-38). Note: Post-treatment authorization will not be approved The following procedure codes, policies, and limitations for codes that require mandatory prior authorization. are applied to the processing and payment of orthodontic services under THSteps dental services: . Procedure code D8660 is allowed when:

19.18 Orthodontic Services . The client is referred to an orthodontist for a determi- (THSteps) nation of whether orthodont¡c services are indicated Orthodontic services for cosmetic purposes only are not a and to determine the appropriate time to initiate benefit of the Texas Medicaid Program. Orthodontic such services. seryices are limited to the treatment of severe handi- . The client is referred to an orthodontist and elects to capping malocclusion and other special medically receive services from another orthodontic provider necessary circumstances as outlined in Benefits and because of justifiable reasons. Limitations below. . Repeat visits at different age levels are requlred to determine the appropriate time to initiate 19.18.1 Benefits and Limitations orthodontic treatme nt. . Procedure code D8680 is payable for one retainer per Orthodontic services include the following: . Correction of severe handicapping malocclusion as

arch, per lifetime, and may be replaced once because measured on the Handicapping Labiolingual Deviation of loss or breakage (prior authorization is required). (HLD) lndex. Refer to page L9-42 for information on . Procedure code D8670 should be billed only when an how to score the HLD. A minimum score of 26 points is

adjustment to the appliances is provided and may not required for full banding approval (only permanent be billed before the date the orthodontic adjustment dentition cases are considered). was performed. The number of visits for monthly adjust- Exception: Retained deciduous teeth and cleft palates ments to the appliances is restricted to the number 19-36 CPT only copyright 2o07 Amencan l\¡edical Assocration All rights reserued

*155 Dental lf orthodontic treatment is medically indicated, providers that was authorized ¡n the treatment plan. However, the are responsible for obtaining prior authorization for a number of monthly visits may be amended with appro-

complete orthodontic treatment plan while the client is priate documentation of medical necessity while the eligible for Medicaid and THSteps and younger Than 21- client is Medicaid eligible. . Procedure code D867O is paid only in conjunction with years of age. Prior authorization is a condition for reimbursement; ¡t is a history of braces (code D8080), unless special not a guarantee of payment. circumstances exist. . All orthodontic codes and appliances are global fees. Upon receipt of prior authorization of complete treatment . Separate fees for adjustments to retainers are not plans, provlders are to adv¡se clients that they will be able to receive the approved treatment services (e.9. payable. orthodontic adjustments, bracket replacements and . The appropriate code should be billed for those appli- retainers), even if they lose Medicaid eligibility or reach ances required as part of the treatment of cleft palate 2t years of age. Approved ofthodontic treatment must be cases. initiated before the loss of Medicaid eligibility and

completed within 36 months of the authorization date. Special orthodontic appliances may also þe used with full banding and crossbite therapy w¡th approval by the TMHP Note: Providers must submit all orthodontic seruices for Dental Director. Medicaid Managed Care cl¡ents follow¡ng, these guide- . Procedure codes D5951, D5952, D5953, D5954,

lines. STAR and STAR+PLUS are not responsible for orthodontic services. D5955, D5958, D5959, and D5960 are to be used as applicable with documentation of medical necessity. Requests for orthodontic services must be accompanied Otherwise, use the appropriate special orthodontic

by all the following documentation: . An orthodontic treatment plan. The treatment plan appliance code. . Full banding is allowed on permanent dentltion only, must include all procedures required to complete full and treatment should be accomplished in one stage treatment (such as, extractions, orthognathic surgery, and is allowed once per lifetime. upper and lower appliance, monthly adjustments, antic- ipated bracket replacements, appliance removal if

Exception: Cases of mixed dentition when the treatment indicated, spec¡al orthodontic appliances, etc.). The plan includes extract¡ons of remaining primary teeth or

treatment plan should incorporate only the minimal cleft palate. number of appliances required to properly treat the . Crossbite therapy is allowed for primary, mixed, or case. Requests for multiple appliances to treat an permanent dentition. individual arch are reviewed for duplication of purpose. . Providers must not requestcrossbite correctlon (limited . Cephalometric radiograph with tracing models orthodontics) for a mixed dentition client when there is . Completed and scored HLD sheet with diagnosis of a need for full banding in the adult teeth. Crossbite Angle class (26 points required for approval of non-cleft therapy is an inclusive charge for treating the crossbite palate cases). to completion, and additional reimbursement is not . Facial photographs. provided for adjustments or ma¡ntenance. . lf a case is not approved, the dentist may file a claim . Full series of radiographs or a panoramic radiograph; for payment of the diagnostic work-up necessary to diagnostic-quality films are required (copies are obtain the authorization using procedure codes D0330, accepted and radiographs will not be returned to the D0340, D0350, and D0470. The dentist may receive provider). payment under these procedure codes for no more than . Any additional pertinent information as determined by two cases out of every ten cases denied. The dent¡st

the dentist or requested by TMHP's Dental Director should determine if the client's condition meets Requests for crossbite therapy require properly orthodontic benefit criteria before performing a trimmed models to be retained in the office and must diagnostic work-up. demonstrate the following criteria: . Procedure codes D8080, D8050, and D8060, are . Posterior teeth. Not end to end, but buccal cusp of limited to one per lifetime. upperteeth should be lingual to buccal cusp oflower teeth.

. Anter¡or teeth. The incisal edge of upper should be L9.L8.2 Mandatory Prior Authorizat¡on lingual to the incisal of the opposing arch. Prior authorization is required for all THSteps orthodontic The dentist should be certain that radiographs, photo- services except for procedure code D8660. The prior graphs, and other information are properly packaged to authorization request must contain the date of service avoid damage. TMHP is not responsible for lost or thatthe orthodontic records were produced. lf the request is approved, the date that the records were produced is damaged materials. considered to be the date on which orthodontic treatment beg¡ns.

L9-37

CPT only copyr¡ght ^[2007] Amer¡can Medical Assæ¡aliø All rights reseryed *156 Section 19 sheet, nor does the client have to meet the HLD lndex of 19.18.3 Gompletion of Treatment Plan 26 points. However, a complete plan of treatment ¡s lf a client reaches 2tyears of age or loses Medicaid eligi- required. bility before the authorized orthodont¡c treatment is Note: Medicaid clients who initiate orthodontic services completed, reimbursement is provided to complete the

privately (e.g. pay out of pocket for the orthodont¡c workup orthodontic treatment that was authorized and initiated whi le the cl ient was younger tha n 2t years of age, el¡gible

and,/or initial band¡ng, etc.) while Medicaid eligible due to not meet¡ng the HLD index 26-points, are not eligible to for Medicaid and THSteps, and completed within have their orthodontic services transferred to and 36 months. Any orthodontic-related service requested (e.g., extractions or surgeries) must be completed before reimbursed by Medicaid. the loss of client eligibility. Services cannot be added or

To request prior authorization to complete the orthodontic approved after Medicaid/THSteps eligibility has expired. treatment initiated by another provider, complete a THSteps Dental Mandatory Prior Authorization Request Form and send it with the complete plan of treatment and

L9.L8.4 Premature Removal of Appliances appropriate documentation for orthodontic seryices The overall fee for orthodontic treatment (D8080) and/or crossbite therapy to the TMHP Dental Director at includes the removal of orthodontic brackets and/or the following address: treatment appliances. Procedure code D7997 may be

Texas Medicaid & Healthcare Partnership used only when the appliances were placed by a different THSteps and ICF-MR Dental Authorization and lnformation provider with an unaffiliated practice (not a partner or PO Box 2O29t7 office-sharing arrangement) and one of the following Austin, ÎX 74720-29]-7 conditions exist: . There is documentation of a lack of cooperation from

19.18.6 Comprehens¡ve Orthodontic the client. . The client requests premature removal and a release Treatment form has been signed by the parent, Suardian, or client Comprehensive orthodontic services (procedure code if he is at least 18 years of age. D8080) are restricted to cl¡ents who are 12 years of age

and older or clients who have exfoliated all primary Providers must keep a copy of the release form on file and dentition. are responsible for this documentation during a review process. National procedure codes do not allow for any work-in-

progress or partial billing by separating the three orthodontic components: diagnostic work-up, orthodontic

19.18.5 Transfer of Orthodontic Services appliance (upper), or orthodontic appliance (lower). Prior authorization issued to a dental provider for When b¡ll¡ng for comprehensive orthodontic treatment, orthodontic services is not transferable to another dental D8080, three local codes must be submitted as remarks provider. The new provider must submit to TMHP a new codes along with code D8080. Local codes (Z2OO9, prior authorization request ¡n order to be approved to Dia gnostic work-u p a p proved, Z2O L1-, O rthodontic complete the orthodontic treatment initiated by the appliance, upper, or 22012, Orthodontic appliance, lower) original provider. are placed in the Remarks Code field on electronic claims

or Block 35 on paper claims. The following supporting documentation must accompany the new request for orthodontia services and must include Note: lf the remarks code and procedure code D8O8O are the date of service the orthodontic records were not submitted, the claÌm will be denied. produced:

Each remarks code pays the correct reimbursement rate . All of the documentation as required for the original which, when combined, totals the maximum payment of provider. $775. D8080 must be billed on three separate details, . The reason the client left the previous provider, if with the appropriate remarks code, even if billing for the work-up and full band¡ng. Billing only one detail for a total

known. of $775 will not be accepted. . An explanation of the treatment status. Example 1: A client is approved for full banding, but after . A compete treatment plan addressing all procedures for the initial work-up, the client discontinues treatment. This which authorization is being requested (such as the provider would bill the national code D8080 and place the number of monthly adjustments or retainers required to local code Z2OO9, D¡agnostic work-up approved, in the complete the case). Remarks,/comment field. The claim would pay $175. . A full diagnostic work-up (D8080) with an HLD lndex. Example 2: A client is approved for full banding. The The score of 26 points will be modified according to any provider continues treatment and places the maxillary progress achieved. bands. The provider would bill the national procedure code Exception:'The prior authorization requests for clients D8080 and place the local code 72OO9, Diagnostic work- up approved, and Z2OII, Maxillary bands, in the who ¡nitiate orthodontic services before becoming el¡g¡ble for Medicaid do not require models or the HLD score Remarks,/comment field. The claim would pay $475. 19-38 CPT only copyright 2007 American Medical Assocjation A¡l rights reseryed

*157 Dental All electronic claims for D8080 must have the appropriate remarks code associated with the procedure code. Providers should adhere to the following guidelines for electronic claim submission so that TMHP can accurately apply the correct remarks code to the appropriate claim detail. A Diagnostic Procedure Code (DPC) remarks code must be submitted, only once, ¡n the first three bytes ofthe NTE02 at the 2400 loop. Example L= For a claim with one detail, submitted with procedure code D8080 and remarks code Z2OO9, enterthe information as follows: DPCZ2009. The total billed would be $175. Exampfe 2z For a claim with two details, where details one and two are procedure code D8080 and the remarks codes are Z2OO9 and Z2OII, enter the information as follows: DPCZ2OO9Z2011. The total billed would be $475. Example 3: For a claim with three details, where all three details are submitted separately with procedure code D8080, enter the remarks code þased on the order of the claim detail as follows: DPC220092201,122072. The total billed would be $775. This method ensures accurate and appropriate payment for services rendered and addresses the need for paftial billing. L9.L8.7 Orthodontic Procedure Codes and Fee Schedule When submitting claims for orthodontic procedures, use the following procedure codes Procedure Code Limitations Maximum Fee

Orthodontic Services D0330*, When requested orthodontic cases are submitted for authorization $100.00 D0340*, and denied, two out of ten denials will be paid. These four DO350x, and procedure codes, when billed together for denied cases, replace D0470* local procedure code Z2OLO. D7280 A1_-20 $62.50 D7997* Replaces Z2OL6. Not payable to the dentist who placed the $50.00

appliance. lncludes removal of arch bar and premature removal of braces. A1--20

D8050* Replaces Z2Ot8 and 8110D. Limited to one per lifetime. $340.00 D8060* Replaces Z2OLa and 8120D. Limited to one per lifetime. $340.00 Replaces Z2OO9, Z2O1-!, and Z2Qt2. Limited to one per lifetime D8080* $775.00

Minor Treatment to Control Harmful Habits D8210* See separate taþle for associated remarks field code See separate table D8220* See separate table for associated remarks field code See separate table D8660* Replaces Z2OO8. $15.00 D8670* Replaces Z2OI3 $68.10 Replaces Z2OI4 and 22075. D8680* $100.00 D8690* Bracket replacement. $20.00 D8691 Not considered medically necessary

NC

Limited to one service per arch per lifetime for each retainer D8692 NC D8999 Manually

priced * = Services payable to an FQHC for a client encounter 19-39 CP-f only copyr¡ght 2007 American Med¡cal Assæ¡at¡on All rights reseryed *158 Section 19 19.19 Special Orthodontic Appliances As with all orthodontic services, all removable or fixed special orthodontic applicances must be prior authorized. The prior authorization request must include both the national code and remarks code. However, prior authorization requests may omit the DPC prefix to the e¡ght-digit remarks code. All removable or fixed special orthodontic appliances must be billed with national procedure code D82\O or D822O. Dental models must be submitted when requesting prior authorization of a thumb- sucking or tongue thrust appliance. To ensure appropriate claims processing, the DPC remarks code (local procedure code) reflecting the specific seruice is also required. The appropriate remarks codes must be entered on the authorization request form. Failure to follow the following steps will cause the claims to deny. Failure to enterthe DPC remarks code and the appropriate procedure code will not result in claim denial; however, manual intervention is required to process the claim, which may result in a delay of payment. For paper claim submissions, providers must enter the local procedure code in Block 35 (Remarks) of the 2006 ADA claim form. For electronic submissions, providers enter the DPC remarks code in the Comments field to ensure correct authorization, accurate records, and reimbursement. For electronic submissions other than TexMedConnect or TDHconnect software submissions, providers must follow the steps below to ensure TMHP accurately applies the correct local procedure code to the appropriate claim detail: t) The DPC prefix must be submitted, only once, in the first three bytes of the NTEO2 at the 2400

Example: For a claim w¡th three details, where details one and three are submitted wìth procedure code D8270 and detail two rs not, enter the followin! information ¡n the NTE02 at the 24OO loop: DPC7074D 7046D. (The space shows that detail two needs no local code.) lf all details require a local code, enter DPC, no spaces, and the appropriate local codes. To submit using TexMedconnect or TDHconnect software, providers must enter the local code into the Remarks Code field, located underthe details header. The Remarks Code field is the field directly after the Procedure Code field. TexMedConnect and TDHconnect software submitters are not required to manually enter the DPC prefix as it is placed in the appropriate field on the TexMedConnect or TDHconnect electronic claim. The following table identifies the appropriate DPC remarks codes to use when requesting authorization or billing for procedure code D8210 or D822O: Maximum Procedure Remarks Remarks Code Desctiption Code Gode Fee

Special Orthodontic Appliances DPC1000D Appliance with horizontal projections D8220* $250 Appliance with recurved springs $250 D8220* DPC1001D D8220" DPClOO2D Arch wires for crossbite correction (for total treatment) $595 D8220* DPC1003D Banded maxillary expansion appliance $375 DPC1004D Bite plate/bite plane D8270* $100 D8210* DPC1005D Bionator $1oo DPC1006D Bite block $250 D8210* DPC1007D Bite-plate with push springs $250 D82LO* D8220* DPC1008D Bonded expansion device $225 Chateau appliance (face mask, palatal exp and hawley) $300 D82LO* DPC1010D D82tO* Coffin spring appliance $275 DPC1011D D8220* DPCLOL2D Crib $10o *

= Services payable to an FQHC for a client encounter 19-40 cPT only copyright 2007 Amer¡can ¡.4edical Assoc¡at¡on All r¡ghts reseryed *159 Dental Remarks Maximum Procedure Code Code Remarks Gode Description Fee Dental obturator, definitive (obturator) D8210* $250 DPC1O13D D8210* Dental obturator, surg¡cal (obturator, surgical stayplate, $250 DPC1O14D

immediate tem porary obturator) DPC1015D Dista lizing appliance with springs $250 D8220'É D8220'( DPC1016D Expansion device $375 D8210* DPC1017D Face mask (protraction mask) $350 D8220* Fixed expansion appliance $375 DPC1O18D D8220* $225 DPC1019D Fixed lingual arch D8220* DPC1020D Fixed mandibular holding arch $100 D8220" Fixed rapid palatal expander DPCLO2AD $375 D82LO* DPCtO22D Frankel appliance $100 D8210* DPC1023D Functional appliance for reduction of anterior openbite and $375

crossbite D82aO* DPC7024D Headgear (face bow) $150 D8220" DPC1025D Herbst appliance (fixed or removable) $250 D8220* DPC1026D lnter-occlusal cast cap surgical splints $375 D8210* lntrusion arch $100 DPC].O2TD DPC1028D Jasper jumpers D8220* $100 D8220* DPC1029D Lingual appliance with hooks $100 D8220* DPC1030D Mandibular anterior bridge $175 DPC1031D Mandibular bihelix (similar to a quad helix for mandibular D8220+ $10o

expansion to attempt nonextraction treatment) D8210* DPC1032D Mandibular lip bumper $100 D8220" DPC1O36D Mandibular lingual 6x6 arch wire $100 D82rO* Mandibular removable expander with bite plane (crozat) DPC1037D $275 DPC1038D Mandibular ricketts rest posit¡on splint D82tO+ $375 D8210* DPC1039D Mandibular splint $225 D8210* DPClO4OD Maxillary anterior bridge $175 D8210* DPC1041D Maxillary bite-opening appliance w¡th anterior springs $100 DPCLO42D Maxillary l¡ngual arch with spurs D8220" $1oo D8220" DPC1O43D Maxillary and mandibular distalizing appliance $1oo Maxillary quad helix with finger springs $325 D822O'r DPC1044D DPC1045D Maxillary and mandibular retainer with pontics D8220* $175 D8210* DPC1046D Maxillary Schwarz $250 D82tO* DPCAO TD Maxillary splint $225 D82tO* DPC1048D Mobile intraoral Arch-Mia (similar to a Bihelix for nonex- $100

traction treatment) D8220* DPC1049D Modified quad helix appliance $275 D8220* DPC1050D Modified quad helix appliance (with appliance) $275 D8220* Nance appliance $10o DPC1051D D8220* DPC1052D Nasal stent $250 D82LO* DPC1053D Occlusal orthotic device $175 *

= Services payable to an FQHC for a client encounter

L94L

CPf only copynght 2007 American lvledical Assæiat¡on All r¡ghts reseryed *160 Section 19 Maximum Procedure Remarks Remarks Code Descliption Fee Code Code Orthopedic appllance $250 D82LO* DPC1054D DPC1O55D Other mand¡bular utilities $100 D8210* $100 D8210* DPC1O56D Other maxillary utilities $225 D8220* DPC1057D Palatal bar DPC1058D Post-surg¡cal retainer $125 D8210'r. D8220* Quad helix appliance held with transpalatal arch horizontal $275 DPC1059D

projections D8220* DPC1060D Quad helix maintainer $275 DPC1061D Rapid palatal expander (RPE), such as quad Helix, Haas, or D8220* $350

Menne DPC1062D Removable bite plate D8210* $100 DPC1063D Removable mandibular retainer $100 D82LO* D8210* DPC1O64D Removable maxillary retainer $100 Removable prosthesis D8210* $175 DPC1065D D8210* DPC1066D Sagittal appliance 2 way $250 D8210* DPC1067D Sagittal appliance 3 way $350 DPC1068D Stapled palatal expansion appliance $375 D8220* 08210* $250 DPC1069D Surgical arch wires DPC1070D Surgical splints (surgical stenti/wafer) $250 D82LO" D8210* DPC1071D Surgical stabilizing a ppliance $250 DPC]-OT2D Thumbsucking appliance, requires submission of models D8220* $175 DPC1073D Tongue thrust appliance, requires submission of models $1oo D8210* DPC1074D Tooth positioner (full maxillary and mandibular) $325 D82LO* Tooth positioner with arch $10o D8210* DPC1O75D D8220" $100 DPC1076D Transpalatal arch Two bands with transpalatal arch and horizontal projections D8220* $175 DPQ|OTTD

forward D8220* $275 DPC1078D W-appliance *

= Services payable to an FQHC for a client encountel. L9.2O How to Score the Handicapping Labiolingual Deviation (HLD)

lndex

The orthodontic provider must complete and sign the diagnosis (Angle class)' Gleft Palate Submita cleft palate case inthe mixed dentition only if itcan be justified in a narrative whythere should be treatment before the client is in the full dentition. Note: lntermittent treatment requests may exceed the allowable 26 reimbursable treatment v¡s¡ts. Severe Traumatic Deviations Refers to facial accidents only. Points cannot be awarded for congen¡tal deformity. Severe traumatic deviations do not include traumatic occlusions for crossbites. Overjet in Millimeters Score the case exactly as measured, then subtract 2 mm (considered the norm), and enter the difference as the score.

L942 CPT only copyrght 2007 American Medrcal Assciat¡on All rights reseryed *161 Append¡x H *177 Append¡x I

R49 – tadlock spreadsheet

*178

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A

E T E Upper Lower

3 2 1 1 2 3 3 2 1 1 2 3 1 1 1 1 1 1 1 1 26 24 0 0 1 1 1 1 1 1 1 1 1 32 24 4 0 2 3 1 1 1 1 1 1 1 1 26 24 2 0 1 1 1 1 1 1 1 1 1 1 1 1 38 36 11 6 4 1 1 1 1 1 1 1 1 27 24 9 0 5 6 1 1 1 1 1 1 1 1 27 24 1 0 1 1 1 1 1 1 1 1 32 24 19 0 7 1 1 1 1 1 1 1 1 35 24 5 0 8 27 24 10 0 9 1 1 1 1 1 1 1 1 0 0 6 0 10 1 1 1 1 1 1 1 1 27 24 5 0 11 36 36 7 3 12 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 36 36 0 0 13 1 1 1 1 1 1 1 1 1 1 33 30 2 0 14 55 36 28 0 15 1 1 1 1 1 1 1 1 1 1 1 1 16 1 1 1 1 1 1 1 1 1 1 36 30 13 0 1 1 1 1 1 1 1 1 1 1 1 1 39 36 3 0 17 28 24 10 0 18 1 1 1 1 1 1 1 1 19 1 1 1 1 1 1 1 1 1 1 1 1 40 36 16 0 1 1 1 1 1 1 1 1 1 29 27 7 0 20 30 24 9 0 21 1 1 1 1 1 1 1 1 22 1 1 1 1 1 1 1 1 28 24 3 0 1 1 1 1 1 1 1 1 28 24 9 0 23 1 1 1 1 1 1 1 1 29 24 1 0 24 25 1 1 1 1 1 1 1 1 27 24 1 0 1 1 1 1 1 1 1 31 21 12 0 26 1 1 1 1 1 1 1 1 29 24 3 0 27 28 1 1 1 1 1 1 1 1 28 24 0 0 1 1 1 1 1 1 1 1 29 24 5 0 29 1 1 1 1 1 1 1 1 28 24 3 0 30 31 1 1 1 1 1 1 1 1 26 24 5 0 1 1 1 1 1 1 1 1 1 1 1 1 44 36 15 0 32 1 1 1 1 1 1 1 1 1 1 1 1 48 36 12 0 33 1 1 1 1 1 1 1 1 1 30 27 7 0 34 1 1 1 1 1 1 1 1 31 24 6 0 35 1 1 1 1 1 1 1 1 29 24 10 0 36 1 1 1 1 1 1 1 29 21 15 6 37 1 1 1 1 1 1 26 18 4 0 38 1 1 1 1 1 1 1 1 27 24 7 0 39 1 1 1 1 1 1 1 1 1 33 30 4 0 40 1 41 1 1 1 1 1 1 1 1 30 24 7 0 1 1 1 1 1 1 1 1 28 24 12 6 42 1 1 1 1 1 1 1 27 24 1 3 43 1 44 11 0 1 1 1 1 1 1 1 1 1 31 27 0 0 45 1 1 1 1 1 1 1 1 1 1 1 36 36 4 3 46 1 47 1 1 1 1 1 1 1 1 35 24 8 0 1 1 1 1 1 1 1 1 32 24 7 0 48 1 1 1 1 1 1 1 1 1 34 30 7 0 49 1 50 1 1 1 1 1 1 1 1 27 24 12 0 4 0 51 1 1 1 1 1 1 29 18 3 0 52 53 1 0 1 1 1 1 1 1 1 1 1 1 1 1 36 36 1 0 54 1 1 1 1 1 1 1 1 1 1 1 1 39 36 7 3 55 56 1 1 1 1 1 1 1 1 30 24 6 0 1 1 1 1 1 1 1 1 35 24 4 0 57 1 1 1 1 1 1 1 1 1 1 1 1 36 36 11 0 58 1 1 1 1 1 1 1 1 1 30 30 0 0 59 1 1 1 1 1 1 1 1 1 30 24 6 0 60 1 1 1 1 1 1 1 1 1 1 1 1 36 36 11 6 61 1 1 1 1 1 1 1 1 1 1 36 36 14 0 62 1 1 1 1 1 1 1 1 26 18 10 0 63

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R O FF E R

Q

D

r . A lt e nho ff , you a r e t h e s a m e L i nd a A lt e nho ff w ho t e s ti f i e d on d a y on e o f t h i s

h

ea r i n g , c o rr ec t ?

A

: l a m .

Q

H

a v e you b ee n i n a tt e nd a n ce du r i ng a ll o f t h e t e s ti m ony g i v e n by t h e v a r i ou s

w

it n e ss e s ?

A

: I h a v e b ee n .

Q

S

p e c i f i ca l l y , d i d y o u h ea r t h e t e s ti m o n y o f D r . O r r a n d D r . K a n aa n ?

A

: I d i d .

1

000695

Q

*182 :

D

i d you h ea r t h e i r t e s ti m ony r e g a r d i ng t h e m ea n i ng o f ec t op i c e r up ti on a s u s e d by

T

e x a s M e d i ca i d ?

A

: I d i d .

Q

D

r . A lt e nho ff , d i d M e d i ca i d i n t e nd , a t a ny ti m e , f o r t h e t e r m “ec t op i c e r up ti on ” t o

h

a v e a d i ff e r e n t m ea n i ng w h e n u s e d i n t h e e v a l u a ti on o f M e d i ca i d p a ti e n t s t h a n i s

g

e n e r a ll y und e r s t ood i n t h e p r ac ti ce o f d e n ti s t r y ?

A

: N o . Q : W e r e d e n ti s t s e xp ec t e d t o e m p l oy t h e t r a i n i ng a nd e du ca ti on t h e y r ece i v e d a s

d

e n ti s t s i n a pp l y i ng t h e t e r m s u s e d i n t h e P r ov i d e r M a nu a l ?

A

: Y e s .

P

R AY E R F o r t h e s e r ea s on s , HH S C - O I G p r a y s t o b e a ll o w e d t o r eca ll D r . L i nd a A lt e nho ff f

o

r li m it e d r e bu tt a l t e s ti m ony i n k ee p i ng w it h t h e a bov e p r o ff e r .

R

e s p ec t f u ll y s ub m itt e d ,

G

R E G A BB O TT A tt o r n e y G e n e r a l o f T e x a s DAN I EL T . l ODG E F i r s t A ss i s t a n t A tt o r n e y G e n e r a l J o HN B . S C O TT D e pu t y F i r s t A ss i s t a n t A tt o r n e y G e n e r a l R AY M c ( p J C . W I N TE R S t a t e B a r N o . 21791950 C h i e f , C i v il M e d i ca i d F r a ud D i v i s i on (

5

12 ) 9 3 6 - 1 7 0 9

M

A R G A R ET M OO R E S t a t e B a r N o . 14360050

2 000696

D

*183 e pu t y C h i e f , C i v il M e d i ca i d F r a ud D i v i s i on

(

512 ) 936 - 1319 d i r ec t d i a l

A

ss i s t a n t A tt o r n e y s G e n e r a l

P

. O . B ox 12548

A

u s ti n , T e x a s 78711 - 2548

(

512 ) 499 - 0712 f a x

V a a o c ’ e

D

a n H a r g r ov e

S

t a t e B a r N o . 0 0 79 0 8 2 2

W

A TE R S & K R AU S , LL P

3219

M c K i nn e y A v e nu e

D

a ll a s , T e x a s 75204

(

214 ) 357 - 6244 T e l e phon e

(

214 ) 357 - 7252 F ac s i m il e

m J a m e s M o r i a r t y

S

t a t e B a r N o . 14459000

M

O R I A R T Y LE Y E N D E C K E R , P C

4203

M on t r o s e B l vd , S u it e 150

H

ou s t on , T X 77006

(

713 ) 528 - 0700 T e l e phon e

3

000697

Counsel:

TABLE OF CONTENTS

INDEX OF AUTHORITIES

STATEMENT OF THE CASE

STATEMENT REGARDING ORAL ARGUMENT

ISSUES PRESENTED

STATEMENT OF FACTS

I.

including limited orthodontia services.

A.

B.

1.

2.

II.

III.

IV.

iii

STANDARD OF REVIEW

SUMMARY OF THE ARGUMENT

ARGUMENT

I.

Medicaid law and policy by the SOAH ALJs.

A.

B.

Medicaid policy are entitled to respect from the Court.

II.

Antoine cannot establish otherwise.

A.

1.

agency policy and administrative rules.

2.

B.

1.

iv

2.

3.

III.

substantial evidence and Antoine cannot establish otherwise.

A.

B.

C.

D.

E.

F.

G.

CERTIFICATE OF COMPLIANCE

CERTIFICATE OF SERVICE

INDEX OF APPENDIX

Atascosa Cnty. v. Atascosa Cnty. Appraisal Dist.,

Bd. of Law Exam’rs v. Stevens

v. Bd. of Law Exam’rs

Bd. of Trs. of the Emps. Ret. Sys. v. Benge

1997, writ denied)....................................................................................................

Boswell v. Brazos Electric Power

writ denied)........................................................................................................

Bridgestone/Firestone, Inc. v. Glyn-Jones

City of El Paso v. Pub. Util. Comm’n

City of Waco v. Tex. Comm’n Envtl. Quality

2011,

Cont’l Cas. Ins. Co. v. Functional Restoration Assocs.

2000)........................................................................................................................

Employees Ret. Sys. of Texas v. Garcia

2014), pet. denied (Sept. 4, 2015)………………...…….......…………………

Exxon Corp. v. R.R. Comm'n

pet.)..........................................................................................................................

Fitzgerald v. Advanced Spine Fixation Sys., Inc.,

Flores v. Emps. Ret. Sys. of Tex.

denied).....................................................................................................................

Froemming v. Tex. State Bd. of Dental Exam’rs

Austin 2012, no pet.)...................................................................................

vi

Graff Chevrolet Co. v. Tex. Motor Vehicle Bd.,

2001, pet. denied).........................................................................................

Granek v. Texas State Bd. of Med. Exam'rs

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Gulf States Utils. Co. v. Pub. Util. Comm’n

1992, writ denied)....................................................................................................

Harlingen Family Dentistry v. Tex. Health &amp; Human Servs. Comm’n

479 (Tex. App.—Austin 2014, pet. filed)................................................................

Heckler v. Community Health Servs.,

Harlingen Family Dentistry v. Tex. Health & Human Servs. Comm’n

In re: E.I. DuPont de Nemours & Co.

R.R. Comm’n of Tex. v. Tex. Citizens for a Safe Future & Clean Water

Sw. Pharm. Solutions, Inc., v. Tex. Health & Human Servs. Comm’n