Ken Paxton

Thursday, May 8, 2014

State of Texas Files Legal Action to Recover Fraudulent Medicaid Payments from Xerox

AUSTIN – The Texas Attorney General’s Office today filed a civil lawsuit in state district court against Xerox Corporation and its wholly owned subsidiary, ACS State Healthcare LLC. The State’s legal action seeks to recover fraudulent Medicaid payments for orthodontic and dental services that were improperly approved by Xerox.

Since 2003, Xerox has served as the vendor responsible for reviewing dental and orthodontic claims submitted to the Medicaid program. Under state law, orthodontic services are not generally eligible for coverage under the Medicaid program. Only the most acute cases where orthodontic disfigurement poses a health risk to a patient are eligible for Medicaid coverage; the Medicaid program does not cover cosmetic orthodontics. The State’s lawsuit seeks to recover Medicaid payments that Xerox approved for orthodontic services that were not medically necessary and therefore not authorized by law.

Texas Attorney General's lawsuit against Xerox Corporation and ACS State Healthcare LLC

Today’s legal action reflects the culmination of a lengthy multi-agency investigation into orthodontic Medicaid fraud. In June of 2012, the Attorney General’s Office, together with the Texas Health & Human Services Commission (HHSC) and the HHSC-Office of Inspector General formed a dental and orthodontic fraud task force to investigate fraudulent overbilling by dental and orthodontic Medicaid providers. One of the results of the task force’s investigation was the discovery that Xerox had not been properly reviewing orthodontic claims as required by its contract with the State. Further, the task force uncovered evidence revealing that Xerox systemically approved orthodontic claims that were not authorized by state law.

The State’s law enforcement action is seeking injunctive relief, civil penalties and restitution of overpayments made by the Medicaid program as a result of Xerox’s unlawful conduct.