(June 27, 2023): In the State of Texas, Medicaid plays a significant role in providing healthcare services to a large portion of the population. With more than 5.9 million Texans (approximately 18.9% of the current population) enrolled in Medicaid, it is an essential program for qualifying low-income citizens. In Texas, Medicaid costs taxpayers over $40 billion. Federal and industry authorities estimate that fraud  comprises up to 10% of the costs of the Medicaid program, making Medicaid fraud a $4 billion problem for the State. In an ongoing effort to identify and prevent improper billings, a number of Federal and State agencies and offices currently investigate and prosecute Medicaid providers and suppliers suspected or accused of Medicaid waste, fraud and abuse. This article focuses on the fraud enforcement efforts of the Texas Office of Inspector General, a division of the Texas Health and Human Services Commission (HHSC-OIG), with respect to Texas pediatrician offices participating in the Medicaid program.
I. Overview of the Texas Medicaid Fraud Enforcement Landscape:
The State of Texas employs a multi-faceted approach to investigate and prosecute instances of Medicaid fraud. These agencies work in close collaboration, sharing information and resources, to ensure the integrity of the Medicaid program in Texas and to protect taxpayer funds from fraudulent activities. Their efforts aim to detect and deter fraudulent practices, hold accountable those involved in Medicaid fraud, and safeguard the program for those who genuinely need it. At the State level, the various investigative and enforcement agencies and offices responsible for uncovering and prosecuting instances of Medicaid fraud include the following:
- Health and Human Services Commission (HHSC): The HHSC is the umbrella agency that oversees the Medicaid program in Texas. While its primary role is to administer and manage the program, it also has investigative and enforcement divisions that work alongside the HHSC-OIG and the MFCU to identify and address instances of Medicaid fraud. There are several offices within HHSC that are actively investigating instances of Medicaid fraud. These offices include:
- Texas Health and Human Services Commission, Provider Investigations Division (HHSC-PI): The HHSC-PI is responsible for conducting investigations related to abuse, neglect, and exploitation by various providers, including facilities, community services, mental health services, home and community-based services. When reports of abuse, neglect, or exploitation are received, the HHSC-PI notifies the involved provider and, if applicable, law enforcement. In certain cases, the HHSC-PI may collaborate with other agencies for further investigation.
- Texas Health and Human Services Commission, Office of the Inspector General (HHSC-OIG): The HHSC-OIG was first created in 2003 by the 78th Texas Legislature. It is responsible for detecting and preventing fraud in Medicaid and other State healthcare programs. HHSC-OIG regularly conducts investigations and audits of Medicaid claims submitted by providers and suppliers and has the authority to prosecute individuals or entities involved in Medicaid fraud. HHSC-OIG's Medicaid Provider Field Investigation (PFI) team has been tasked with reviewing allegations against enrolled providers accused of wrongdoing or identified through data analysis as a potential outlier.
- Texas Office of the Attorney General, Medicaid Fraud Control Unit (MFCU): The MFCU is a specialized unit within the Texas Office of the Attorney General. It is responsible for investigating and prosecuting cases of Medicaid fraud, as well as patient abuse and neglect in Medicaid-funded facilities. The MFCU works closely with Federal and State law enforcement agencies, and it has the power to arrest, prosecute, and bring legal action against individuals or organizations engaged in Medicaid fraud. The MFCU receives 75% of its funding from the U.S. Department of Health and Human Services under a grant award totaling $20,944,200 for Fiscal Year (FY) 2023. The remaining 25%, totaling $6,981,395, is funded by the State of Texas.
- Texas Attorney General's Office, Civil Medicaid Fraud Division: This division, also part of the Office of the Attorney General, focuses on civil enforcement actions related to Medicaid fraud. It investigates cases of fraud, waste, and abuse involving Medicaid funds and takes legal action to recover improperly obtained funds. The Civil Medicaid Fraud Division can pursue civil remedies such as restitution, penalties, and fines.
- Texas Department of Insurance (TDI): The TDI is responsible for regulating and overseeing health insurance in Texas. It has a Fraud Unit that investigates various types of insurance fraud, including Medicaid fraud. The TDI works collaboratively with other State agencies, such as HHSC-OIG and the MFCU, to share information and coordinate efforts in combating Medicaid fraud. Actions of the TDI Fraud Unit include, but are not limited to:
- Investigating reports of fraud.
- Making referrals to criminal district attorneys and Federal prosecutors.
- Seeking criminal indictments.
- Making arrests.
- Working with and training law enforcement agencies on how to investigate and prevent fraud.
- Texas Medical Board: The Texas Medical Board is responsible for licensing and regulating physicians and other medical professionals under its jurisdiction. It investigates complaints and allegations of Medicaid fraud involving healthcare practitioners and takes appropriate disciplinary action when necessary.
- Texas State Board of Dental Examiners: The Texas Board of Dental Examiners is responsible for regulating licensed dentists and other dental professionals. It also investigates complaints related to Medicaid fraud involving dental services and takes disciplinary action against those found guilty of fraudulent practices.
- Texas State Board of Pharmacy: The State Board of Pharmacy plays a crucial role in investigating Medicaid fraud related to prescription drugs. It oversees the licensing and regulation of pharmacies and pharmacists in Texas. The State Board of Pharmacy investigates cases of fraudulent billing, prescription forgery, diversion of prescription drugs, and other pharmacy-related Medicaid fraud.
II. Private Entities Handling Texas Medicaid Audits:
Separate and apart from these State agencies and offices, it is important to keep in mind that each of the Medicaid medical and dental managed care plans active in Texas are required by law to “develop a plan to prevent and reduce waste, abuse and fraud” that must be reported to HHSC-OIG each year for approval. Each Medicaid Managed Care Organization is responsible for investigating acts of waste, abuse and fraud for all services. To accomplish this task, Medicaid Managed Care Organizations have established a Special Investigative Unit (SIU) within their company that is responsible for investigating allegations of provider fraud. Although the actions taken (or recommended to a payor) are administrative in nature, the SIU’s findings may be shared with Federal and State enforcement agencies and may result in separate governmental enforcement. In fact, if a SIU discovers Medicaid fraud, it must:
“(a)(1) immediately submit written notice to the commission's office of inspector general and the office of the attorney general in the form and manner prescribed by the office of inspector general and containing a detailed description of the fraud or abuse and each payment made to a provider as a result of the fraud or abuse.” 
As a final point, the agencies, offices, licensing boards AND SIUs discussed in Sections I and II above, collaborate with each other and also work in partnership with Federal agencies such as the U.S. Department of Health and Human Services Office of Inspector General (HHS-OIG) and the U.S. Department of Justice (DOJ) to combat Medicaid fraud. A review of recent cases reflects that HHSC-OIG has actively audited and / or investigated allegations of Medicaid improper billing by a number of participating pediatricians and their practices. Current HHSC-OIG audit risk areas for Texas pediatric practices are discussed below:
III. Overview of Recent Texas HHSC-OIG’s Medicaid Audits of Pediatric Laboratory Claims:
In 2021, both Medicaid and Children’s Health Insurance Program (CHIP) laboratory claims received a fair amount of scrutiny by Texas regulators. Two of the government’s favorite testing panels to audit included (and continue to include), outpatient respiratory and gastrointestinal tests conducted on multiplex polymerase chain reaction (PCR) testing equipment. Even though there are a wide variety of benefits associated with the use of multiplex PCR testing panels, both Texas and Federal auditors have repeatedly expressed concern regarding the improper billing of tests that have not been shown to be medically necessary in the care of a particular patient. For a more detailed discussion of this issue, please see our article titled “Audits of Respiratory (CPT Code 87633) / Gastro (CPT 87507) Panels are Ongoing.”
While earlier pediatric testing audits have focused on the use of multiplex PCR testing practices, more recent audits have targeted pediatricians and pediatric practices that have improperly billed for testing services that should have been covered by an earlier test or service performed on the same patient. For example, using data mining to identify improper laboratory testing billing practices, HHS-OIG has been conducting audits of Medicaid pediatric providers alleged to have billed for tests that did not qualify for separate payment. For example:
- Texas Pediatrician – Alleged Improper Billing of Molecular Culture / Rapid Culture Strep Tests: In a case against an Irving, Texas pediatrician, HHSC-OIG alleged that the pediatrician’s office improper billed both molecular culture and rapid culture strep tests on the same dates of service or within three dates of service for the same patient. The practice agreed to settle the improper billing allegations for approximately $1.3 million.
- Texas Pediatrician – Alleged Improper Billing of Strep A-Molecular Panel: In this case, a South Texas pediatrician was alleged to have improperly billed the provider billed for a Strep A-Molecular Panel on the same date or within three days of a Strep A-Rapid Test. The practice agreed to settle HHSC-OIG’s allegations for $522,901.
While the billing of laboratory tests is expected to remain one of the primary audit areas of the HHSC-OIG, there are also several other risk areas that deserve further discussion.
IV. Overview of Recent Texas HHSC-OIG’s Audits of Medicaid Pediatric Telemedicine Claims:
During the COVID-19 pandemic, Federal, State and private payors expanded their coverage of telemedicine services. Post-COVID-19, many payors have continued to permit the billing of these expanded telemedicine services. Unfortunately, payor audits of telemedicine claims have alleged that many of the services billed by payors were improper. HHSC-OIG is actively auditing Medicaid and CHIP telemedicine claims, both directly and through private contractors hired by the government to conduct these audits.
It is worth noting that Texas is not the only jurisdiction auditing Medicaid telemedicine claims. Medicaid pediatric telemedicine audits are currently being conducted by a number of other states to ensure that the quality of care provided through telemedicine is equivalent to that provided in-person. Audits have also examined whether the documentation maintained meets applicable requirements. Medicaid telemedicine audits are typically conducted by a team of experts who review patient charts, audio and video recordings of telemedicine visits, and other documentation. The team may also interview patients and providers to get their feedback on the quality of care. Here are two examples of current Medicaid pediatric telemedicine audits:
- California – Pediatric Telemedicine Audits: In California, the Department of Health Care Services (DHCS) has conducted a number of audits of Medicaid pediatric telemedicine providers. The audits have found that the quality of care provided through telemedicine is generally equivalent to that provided in-person. However, the audits have also identified some areas where quality improvement is needed, such as improving the documentation of patient visits.
- New York – Pediatric Telemedicine Audits: In New York, the Medicaid program has contracted with a private company to conduct audits of Medicaid pediatric telemedicine providers. The audits are still ongoing, but they have already found that the quality of care provided through telemedicine is generally equivalent to that provided in-person.
In 2023, Texas HHSC-OIG has initiated multiple pediatric telemedicine audits of Texas Medicaid and CHIP claims. Should your pediatric practice be audited, issues of concern include, but are not limited to the following:
- Billing for Excessive Time: Physicians should exercise care when billing for pediatric telemedicine services. Prior audits have identified instances where excessive time was billed when performing Evaluation and Management (E/M) services. This has been a significant concern when the E/M services have been associated with the provision of behavioral health services. If you or the physician members of your practice are providing behavioral health telemedicine services (such as mental health assessments, individual therapy, and medication management consults), it is essential that you properly document the services being provided. Remember -- behavioral health telemedicine services should be (a) significant and separately identifiable and (b) medical services that would be billable if provided in person.
- Eligibility and Coverage: One of the risk areas audited by HHSC-OIG and their contractors is whether the patient was eligible for Medicaid and whether the specific telemedicine service being audited qualified for covered under the beneficiary’s Medicaid program. Medicaid eligibility criteria and coverage policies may vary by state, so it's crucial to verify these factors before providing services to avoid claim denials or reimbursement issues.
- Documentation and Coding: Accurate and thorough documentation is essential for proper coding and billing. Providers must document the telemedicine encounter appropriately, including the patient's medical history, assessment, and plan of care. Using the correct telemedicine-specific E/M codes is crucial to ensure proper reimbursement. Failure to document and code correctly can lead to claim denials and / or audits. For example, in a recent guidance document issued by Superior, the payor noted that if a provider did an audio only visit, then they shouldn't bill an E/M IF their decision from the audio visit resulted in the patient needing to do a video telemedicine or in-person office visit. If that was the case, then the audio visit is to be considered part of the subsequent visit. If not, then the provider could bill the audio-only visit as an E/M during the PHE.
- State-Specific Regulations: Each state, including Texas, has its own regulations and requirements regarding Medicaid telemedicine billing. Providers must stay updated with Texas specific rules and guidelines to ensure compliance. For instance, in Texas, the Medicaid program has recently developed “Telecommunication Services Handbook” which sets out detailed requirements for the provision, coverage and payment of Texas Medicaid telehealth services. Providers who meet these standards are eligible to receive reimbursement for telemedicine services. The quality standards include requirements for provider training, patient safety, and documentation. Failure to adhere with Texas’s Medicaid telemedicine regulations can result in claim denials or potential legal issues.
- Credentialing and Provider Enrollment: The proper credentialling of billing providers is an ongoing area of focus for Federal, State and private payors around the country. It is essential that you ensure that all of your billing providers are properly enrolled and credentialed by each Medicaid plan so that their services can be billed under their own number. The billing of pediatric telemedicine services performed by a non-credentialed provider under the number of a credentialed provider can be quite problematic, and can lead to administrative, civil and even criminal sanctions. Credentialing and enrollment processes can be time-consuming, and any delays or inaccuracies in the process can impact reimbursement. It's important to follow the necessary steps and provide all required documentation for successful enrollment in both traditional Medicaid and in Medicaid Managed Care plans.
- Compliance and Fraud: Billing for Medicaid services must comply with all applicable laws and regulations, including anti-fraud provisions. Providers should be cautious to avoid any fraudulent activities such as upcoding, unbundling, or billing for services not rendered. Non-compliance can result in financial penalties, legal consequences, and exclusion from Medicaid programs.
It's important to note that Medicaid policies and regulations are subject to change, so staying updated with the latest guidance from the various Medicaid payors is crucial for accurate billing and reimbursement. It is important for an experienced health lawyer to represent a provider in an audit of Medicaid telehealth claims due to the following reasons:
- Legal Expertise: Health lawyers have specialized knowledge and expertise in healthcare laws, regulations, and compliance requirements. They are familiar with the complex legal landscape surrounding telehealth and Medicaid billing. Having a health lawyer on the provider's side ensures that they have access to expert advice and guidance throughout the audit process.
- Understanding of Audit Process: Health lawyers are well-versed in traditional Medicaid and Medicaid Managed Care organization audit processes and understand how the payors’ auditors will likely evaluate your pediatric telemedicine claims. They can guide a provider through the audit, help gather relevant documentation, and ensure compliance with audit requests. Their knowledge of the audit process helps protect the provider's rights and interests.
- Compliance and Risk Mitigation: Medicaid telemedicine billing must comply with various regulations and requirements, many of which seem to be ever-changing and subject to update. An experienced health lawyer can review the provider's billing practices, policies, and documentation to identify any potential compliance issues or risks. They can assist in implementing corrective measures to address any identified vulnerabilities and minimize the risk of future audits or investigations. Beyond the audit process, an experienced health lawyer can provide ongoing compliance guidance to the provider. They can help establish effective compliance programs, train staff on billing and documentation requirements, and stay updated with evolving telehealth regulations. This proactive approach can help the provider maintain compliance and reduce the risk of future Medicaid audits.
Need help? The experienced health care lawyers at Liles Parker can assist you if your Medicaid pediatric telemedicine claims are audited by HHSC-OIG, or one of its contractors. Give us a call for a free consultation. We can be reached at: (202) 298-8750 or toll-free at: 1 (800) 475-1906.
Robert W. Liles, J.D. is an experienced health lawyer and a former Federal prosecutor. Robert and the other attorneys at Liles Parker represent healthcare providers and suppliers around the country in Medicaid audits and investigations. If your pediatric practice or clinic is audited, give us a call for a free consultation. We can be reached at: 1 (800) 475-1906.
-  As of April 2023, the State of Texas reports that 5,923,152 individuals are currently enrolled in Medicaid.
-  As of 2023, the State of Texas reports that 31,172,832 individuals reside within the state.
-  The Texas Attorney General’s Office describes Medicare and Medicaid fraud as “when a health care provider claims Medicare or Medicaid health care reimbursements that they are not entitled to in order to dishonestly collect money.”
-  https://www.texasattorneygeneral.gov/news/releases/office-attorney-generals-medicaid-fraud-control-unit-sends-owner-home-health-company-prison-57
-  The HHSC-OIG was first established in2003 to “combat fraud, waste, and abuse in publicly funded state-run Health and Human Services programs”.
-  The Texas Medicaid Fraud Control Unit is primarily funded by the Federal government.
-  For additional information, see the TDI’s website page discussing the TDI Fraud Unit. Rules outlining the authority and duties of the TDI are set out in Texas Insurance Code, Chapter 701.
-  Texas Admin. Code, Rule §353.502(a).
-  Texas Government Code, §531.1131(a)(1).
-  See Superior guidance at the following link.
-  Texas Medicaid Provider Procedures Manual, Volume 2: Telecommunication Services Handbook. (June 2023).
-  For an overview of the importance of credentialling, please see our article titled “The Dangers of Billing Payors of a Non-Credentialed Dentist / Non-Participating Dentist.”