Medicaid mix-up causes families to lose coverage


Sept. 3, 2012 at 4:03 a.m.
Updated Sept. 4, 2012 at 4:04 a.m.

Her son's pounding headaches and grinding teeth led Talitha Kloss to Sun Orthodontix about two years ago for dental treatment for the then 12-year-old boy.

It's the orthodontics process itself, however, that has caused recent headaches in the family's life.

Kloss said she initially learned of issues with the office at a routine appointment, when asked to sign a paper that said she would terminate her relationship with Medicaid. Although she did not sign, the form indicated Sun would continue treating her son for free.

Three months later, at her son's next appointment, the company said it was no longer possible to treat patients free of charge. She was given the option of having his braces removed, continuing with Sun by making monthly payments or finding somewhere else for treatment.

A form letter that went out to patients indicated the Texas Medicaid program had made significant changes to its coverage policies and stopped paying many dentists, including Sun, for services provided to Medicaid patients.

"In these unfortunate circumstances, we have had no choice but to stop participating in the Texas Medicaid program," the letter read. "Under these circumstances, there is reasonable cause to discontinue our treatment of your child as a Medicaid patient, and we regretfully must give you notice of termination of your child's care."

However, Stephanie Goodman, communications director with the Texas Health and Human Services Commission, said the state made no change to coverage and dropped no children from Medicaid. Its Office of Inspector General has begun a massive investigation into orthodontist offices that provide children's Medicaid services.

Medicaid-approved children are eligible for braces only when required for medical reasons, she said, not purely aesthetics.

Many places, she said, appeared to be applying braces when not necessary.

Goodman would not say whether Sun Orthodontix was among those under investigation. Those offices suspected of fraud experienced Medicaid payment holds.

Tony Goodall, of Austin's Goodall & Davison P.C. law firm, serves as general counsel for Sun Orthodontix. He said the entire situation began about five years ago, when a ruling came down that Texas must provide more access to care, particularly regarding dental coverage.

The state modified its programs, he said, but took drastic measures to pull back about a year and a half ago, once news reports indicated Texas' payments for orthodontics care was higher than expected. That, he said, was when the investigations set in.

The state determined its 25 largest orthodontics providers - Sun being among them - and asked offices to hand over patient records, X-rays, photos and more.

"If records were missing, they put you on payment hold," Goodall said, noting not only Sun was affected, but virtually every office under investigation. "Pretty slick way to shut down a program, if you ask me."

He said the company still offered emergency treatment to affected patients for 30 days after the patient's dismissal date, according to rules established by the administrative code.

Sun was put on payment hold the third week of February, Goodall said, and counsel asked for an expedited hearing two days later. The company is still waiting on that hearing, he said, but believes it can defend itself.

No office has yet completed the two-step process that includes a hearing regarding whether payment holds should have been invoked and another regarding whether practices owe money back to Medicaid, but Goodall said a case in Harlingen similar to what Sun experienced offered some hope.

A judge recently concluded that the state had not made a sufficient argument in support of withholding pay because of fraud or misrepresentation by Harlingen Family Dentistry. The courts ruled to cut back the 40 percent payment hold - put in place because an estimated 40 percent of the office's Medicaid work was orthodontics related - to 9 percent, according to court documentation.

"We are confident that Sun will achieve a similar ruling when its turn comes up," Goodall said in an email.

Legal processes under way or not, actions have left some Crossroads parents to face difficult decisions.

Kloss said she opted against having her son's braces removed because they were a medical necessity, and because he had endured removal of his wisdom teeth and a jaw expansion before the braces even went on. Instead, she went with the closest office she could find to accept Medicaid - in Corpus Christi.

She said the situation angered her, and presented a new set of roadblocks. Monthly trips to Corpus Christi meant a major time commitment, she said, and extra out-of-pocket costs.

"When you're worried about whether or not the electric bill will be paid, you have to weigh those decisions pretty heavily," said the mother of four, who also attends Victoria College. "I never would have put braces on my son's teeth if he didn't need them desperately, or if we couldn't do it locally."

Angela Kidd Peoples experienced much of the same situation with her 14-year-old daughter, who has been in braces for about 14 months. Although an income boost recently moved her daughter from Medicaid to CHIP, a similar program for Texan children, she said she still felt the effects.

To stay on at Sun, she said, would require $100 monthly payments.

"If we had $100 a month, we wouldn't be on government programs," she said. "We don't have anybody close to take transfers, except for places out of town, and my vehicle's not reliable enough to get there."

Peoples said she felt it was important to keep her child in braces, but didn't know how to do it. The entire situation, she said, was frustrating.

"I feel like they need to finish up her work," she said. "She's a child. You don't do that to people."



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