Court Opinion

ID: 4063888
Source: CourtListenerOpinion
Date Created: 2016-09-29 21:05:10.670206+00
Date Added: 2024-06-11T14:32:07.934707
License: Public Domain

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

                                                                     FILED IN
                      In the Court of Appeals for the         6th COURT OF APPEALS
                           Sixth Judicial District              TEXARKANA, TEXAS
                                                              11/10/2015 8:06:00 AM
                             Texarkana, Texas
                                                                   DEBBIE AUTREY
                                                                       Clerk
              Texas Health and Human Services Commission, AND
                         Office of Inspector General,
                                 Appellants,
                                      v.
                           Antoine Dental Center,
                                 Appellee.
                          th
    On Appeal from the 200 Judicial District Court of Travis County, Texas
                        Cause No. D-1-GN-14-002229
                    Hon. Amy Clark Meachum, Presiding
                           BRIEF OF APPELLANTS
 Respectfully submitted,                   RAYMOND CHARLES WINTER
                                           State Bar No. 21791950
 Office of the Attorney General            Chief, Civil Medicaid Fraud Division

 CHARLES E. ROY                            REYNOLDS B. BRISSENDEN
 First Assistant Attorney General          State Bar No. 24056969

 JAMES E. DAVIS                            NOAH REINSTEIN
 Deputy Attorney General for Civil         State Bar No. 24089769
 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
                   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
                                    TABLE OF CONTENTS

IDENTITY OF PARTIES AND COUNSEL ...................................................... ii

TABLE OF CONTENTS ..................................................................................... 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
             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
                            .................................................................................................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
                                         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)....................................................................................................22

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)........................................................................................................................37

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.)..........................................................................................................................27

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).....................................................................................................................49

Froemming v. Tex. State Bd. of Dental Exam’rs, 380 S.W.3d 787 (Tex. App.—
Austin 2012, no pet.)...................................................................................24, 26, 28

                                                               vi
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.)...........................................................................................................59

Gulf States Utils. Co. v. Pub. Util. Comm’n,841 S.W.2d 459 (Tex. App.—Austin
1992, writ denied)....................................................................................................22

Harlingen Family Dentistry v. Tex. Health & Human Servs. Comm’n, 452 S.W.3d
479 (Tex. App.—Austin 2014, pet. filed)................................................................18

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.)...........................................................................................................49

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)……...……………………………………………………………...... 37

Locklear v. Tex. Dep’t of Ins., 30 S.W.3d 595 (Tex. App.—Austin 2000, no
pet.)………………………………………………………………………………..23

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
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).....................................................................................................................49

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.).........................................23

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)...............................................................................................................21

Tex. State Bd. of Med. Exam’rs v. Birenbaum, 891 S.W.2d 333 (Tex. App.—Austin
1995, writ denied)....................................................................................................22

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)...........................................................................................13

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
United States v. Floyd, 343 F.3d 363 (3d Cir. 2003)...............................................12

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........................................................................................................4
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)...........................................................................20
1 Tex. Admin. Code § 357.497...............................................................................19
1 Tex. Admin. Code § 357.497(e)...........................................................................20
1 Tex. Admin. Code § 371.1...................................................................................10
1 Tex. Admin. Code § 371.1605.............................................................................11
1 Tex. Admin. Code § 371.1617(a)(1)(A)-(C)........................................................58
1 Tex. Admin. Code § 371.1617(a)(3)....................................................................20
1 Tex. Admin. Code § 371.1617(5)(B)...................................................................11
1 Tex. Admin. Code § 371.1617(1)(A)...................................................................18
1 Tex. Admin. Code § 371.1617(1)(B)...................................................................18
1 Tex. Admin. Code § 371.1617(1)(I).....................................................................18
1 Tex. Admin. Code § 371.1617(1)(K)...................................................................18
1 Tex. Admin. Code § 371.1617(2)(A)...................................................................18
1 Tex. Admin. Code § 371.1703(b)(3)....................................................................58
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
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.....................................................................................37
Tex. Gov’t Code § 531.001................................................................................10-11
Tex. Gov’t Code § 531.0055(b)(1)............................................................................4
Tex. Gov’t Code § 531.1011(1)...............................................................................12
Tex. Gov’t Code § 531.102.....................................................................................10
Tex. Gov’t Code § 531.102(a).................................................................................18
Tex. Gov’t Code § 531.102(g).................................................................................58
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)...............................................................................19
Tex. Gov’t Code § 2001.174...................................................................................21
Tex. Gov’t Code § 2001.174(1)...............................................................................21
Tex. Gov’t Code § 2001.174(2)...............................................................................23
Tex. Gov’t Code § 2001.175(e)...............................................................................21
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)......................................................................10
Tex. Hum. Res. Code § 32.091(c)...........................................................................58
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
                                  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.
                             th
    On Appeal from the 200 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
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
               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
                              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
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
             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
                    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
                        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
H.
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
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
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
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
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
        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
        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
 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., 25testified:

25
     Dr. Tadlock is a board-certified orthodontist. He is an Assistant Clinical Professor of

                                             15
     • 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
 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
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
        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
 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
                            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
 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
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
                      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
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
                 (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
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
 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
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
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
             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
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
       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
 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 see also 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
 (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
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
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
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
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
 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
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
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
            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
                         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
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
 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.41See 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
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
 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
     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); see 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
          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
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
 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
(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
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
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
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
      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
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
     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
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
                      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
                      INDEX OF APPENDIX

APPENDIX A   Amended Final Order

APPENDIX B   Medicaid.gov Website, Statistics

APPENDIX C   Excerpts from Tex. Medicaid and CHIP in Perspective, 10th
             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
Append¡x A
                                                    II32

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                                                                       §2
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                                        001747
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                                                 001748
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                                                         T

                                                 001749
                ee2
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          finding2ol’2ft2omits2the2IP2yer2ge2threshold2for2hildren2eligile2l’or2orthodontiD2
         erroneously2 suggesting2 y2 implition2 tht2 ny2 hild2 under2 PH2 is2 eligileF2
         hereforeD2 proposed2 ﬁnding2 of2 ft2 numer2 IH2 should2 e2 modiﬁed2 to2 more2
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         exF2 edminF2 gode2 §2 QQFUl@AY2 see2 exF2 qov‘t2 gode2 PHHlFHSV@eA@IAD2
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                                                                                    poliyD2 nd2
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                                                             §2
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                                                001750
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      on22feeEforEservie2sisF2
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      if22model2ws2mdeD2 nd2ny2dditionl2 pertinent2 informtion2to2 evlute2 the2
      requestF2

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      or2tretment2toolF2
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      lingul2spred2in2millimetersF2

IV2   yrthodonti2servies2provided2solely2for2osmeti2resons2were2not2overed2under2
      the2exs2wediid2progrmF2

IW2   elthough2exs2wediid2generlly2restrited2orthodonti2tretment2to2hildren2lP2
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      for22hild2who2quliﬁed2for2nother2exeption2under2the2progrmF2

PH2   sn2generlF2orthodonti2eneﬁts2were2limited2to2the2tretment2of2hildren2 IP2yers2
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PI2   xotwithstnding2lsr’s2 responsiility2 for2 reviewing2the2 filed2 mteril2 to2
      evlute2 whether2the2 orthodonti2 servies2 were2medilly2 neessry2efore

                                             V

                                       001751
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        @he2 yer2evts92 proposed2 pp2 xoF2 PI2 sttedX2 wr2ws2 responsile2for2
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        he2proposed2ﬁnding2is2 not2simply22seEspeiﬁ2ﬁnding2of2ft2tht2determines2
        the2“whoF2whtD2henD2where2nd2how”2of2this2seF2 therD2the2proposed2ﬁnding2
        ddresses22mixed2question2of2ft2nd2lw2nd2is2 2soElled2“legisltive2ﬁndingF42
        es2suhD2 the2 ixeutive2gommissioner2hs2 “omplete2disretion”2 to2 modify2the2
        proposed2ﬁndingF2 exF2 hep9t2of2viensing282egultion2vF2 hompsonD2 PHIQ2                            v2
        QUWIRVTD2t2 BT2 @“‘en2geny2enjoys2omplete2disretion2in2 modifying2n2evt‘s2
        ﬁndings2nd2onlusions2when2those2 ﬁndings2nd2onlusions2reﬂet2 2 lk2 ot2
        understnding2or2mispplition2of2the2existing2lwsD2rulesD2 or2poliiesF4’2@quoting2
        mith2 vF2 wonlemyorD2PHHQ2 v2PIRHISWID2 t2 BPTEPU2@emphsis2 ddedAAY2 exF2
        qov’t2gode2§2Py@AlFHSV@eA@IAF2
        he2ixeutive2gommissioner2modiﬁes2proposed2pop2xoF2PI2euse2the2proposed2
        ﬁnding2 rests2 upon2 n2 inorret2 legl2 premiseF2 he2 proposed2 finding2 of2 ft2
         suggests2 tht2   wr2is2 solely2 responsile2 for2 the2 disposition2 of2n2 orthodonti2
         prior2 pprovl2 @eA2requestF2 he2implition2 of2this2 proposed2ﬁnding2is2 tht2 it2
        there2were2ny2errors2in2the2es2t2issue2in2this2seD24l9wles‘2s2pprovls2somehow2
        mde2the2tte2t2 fult2for2ehg92s2 errorsF2 purtherD2           ehg2
                                                                    rgued2t2 the2heringF2nd2
        the2 evts’2 proposed2 ﬁnding2 of2 ft2 seems2 to2 suggestD2 tht2 one2            hs2    wr2
        pproved22e2requestF2ehg2nnot2e2held2lile2for2its2verity2or2uryF2
        roposed2 ﬁnding2 of2 ft2 numer2 PI2 is2 erroneous2 euse2 it2 missttesD2
        misintrpretsD2 nd2mispplies2exs2lwF2 he2lk2letter2 lw2in2exs2is2 rystl2
        lerX2 the2equitle2defenses2of2estoppel2nd2lhes2do2not2run2ginst2the2tte2in2
        the2 exerise2 of2its2 sovereign2powersF2 ee2tte2 vF2 hurhrnD2 VTH2FFPd2TQD2 TU2
        @exF2 IWWQAF‘2 ee2lso2exF2 qov4t2gode2§2 PHHIFHSV@eA@lA2 @“e2stte2 geny2my2

R2
  he2 ixeutive2 gommissioner2notes2 tht2 numerous2 rvis2gounty2histrit2 gourts2 hve2 ruled2 on2the2
ppliility2ofequitle2defensesF2suh2s2estoppelD2lhesD2wiverD2rtiﬁtion2nd2limittionsF2in2tions2
rought2y2the2yffie2of2ettomey2qenerl2under2the2uthority2of2the2       wpeF2  ln2eh2of2these2sesF2the2
distrit2ourts2hve2ruled2tht2these2defenses2re2not2ville2s22mtter2of2lwF2 eeD2eFgFD2tte2  exs2
                                                                                                          of2
ex2relF2 enEeEgre2ofthe2plF2 l92evsD2 snF2 vF2oxne2vsD2snF2 et2lF2guse2xoF2qEHHPQPU2@SQrd2tudiil2
histF2gtF2rvis2gountyD2exF2eugF2 ISD2 QHHQA2@yrder2grnting2lintits’2 pirst2emended2wotion2for2itil2
ummry2tudgmentF2 whih2ddressedF2 mong2othersD2 defenses2 oi’2 limittionsD2 estoppelD2 lhesF2 wiverF2
nd2filure2 to2 mitigteAX2tte2of2exs2exF2 relF2 en~2F»lEgre2 Gthe2plF2 ueysF2 snF2 vF2 ndHXD2snD2guse2
xoF2hElEq~HUEHHIPSW2@P@Alst2tudiil2 histF2 gtFF2 rvis2gountyD2exF2 heF2 IRF2 PHHWA2@tenttive2 rulings2
mde2from2enh2grnting2tte9s2 prtil2 motion2for2summry2judgment2onerning2viility2of2equitle2
    enses2ginst2the2stte2@limittionsD2 estoppelF2lhesD2rtiﬁtionAAX2 lte2ofeFrs2ex2relF2 erEeEgre2
dt92
rgG‘the2plF2 ueysD2snF2 vF2elphrm2hF2guse2xoF2hEs2EqEHVEHHISTT2@RlWth2tudiil2histF2
                                                                                                           gvD2rvis

                                                         W

                                                001752
          hnge22ﬁnding2of2ft2or2onlusion2of2lw2                 F2   F2   F2   ifF2   F2     the2evt2did2not2properly2
                                                                                                   F2
          pply2or2interpret2pplile2lF”AF2
          he2proposed2finding2 lso2 ignores2the2responsiility2ehg2hd2to2 sumit2truthful2
         nd2 urte2 doumenttion2to2 the2 tte2 @inluding2 the2 responsiility2 expressly2
         stted2 in2 the2 rovider2 egreement2nd2greed2to2 y2ehg2ndGor2 its2
                                                                                     providersAD2
         inluding2urte2rvh2soresheets2nd2e2requestsF2ee2lso2ixF2ElRD2ww2
         @PHHVAD2 §2 IFPFU2 rovider2 gertifitionGessignment2 @“exs2 wediid2 servie2
         providers2re2required2to2ertify2ompline2with2or2gree2to2vrious2provisions2ot2
         stte2nd2federl2 lws2nd2regultionsF2efter2sumitting22signed2lim2to2
                                                                                         wrD2
         the2provider2ertiﬁes2the2followingX2     he2informtion2on2the2lim2form2is2 trueD2
                                                        F2   F2   F2

         urteD2nd2omplete”A2@emphsis2ddedAF2
         ehg2produed2no2evidene2or2legl2uthority2to2show2           it2 ws2somehow2llowed2to2
         provide2 frudulent2 or2 flse2 sttementsD2 sumit2 lims2 for2 nonEreimursle2
         serviesD2or2engge2in2ny2ondut2in2violtion2of2the2pplile2wediid2progrm2
         rulesD2 sed2on2the2mere2ft22   wr2pproved2ehg’s2prior2uthoriztion2limsF2
         ee2idF2 @ixF2EIRD2   ww2   @PHHVAD2§2 IFPFU2rovider2gertiﬁtionGessignmentAY2see2
         lso2rekler2vF2 gommunity2IEeltlz2 ervszD2 RTU2FF2SID2 TQETS2@IWVRA2 provider2
                                                                                        @2
         hs2 the2 responsiility2 to2 4fmilirize2 itself2with2 the2 legl2 requirements2 for2 ost2
         reimursement”AF2
         he2yer2evts2lso2erred2to2the2extent2tht2they2relied2on2the2sEsrlingeiz2pmily2
         henil2deisionD2 prtiulrlyD2sQE‘op2 PWD2 QID2 nd2QQD2 for2their2 understnding2of2the2
         sope2nd2limittions2 of2exs2wediid2poliyF2 he2ixeutive2 gommissioner2
         dispproves2of2these2ﬁndingsD2nd2expressly2onludes2tht2they2were2sed2on2n2
         inorret2 interprettion2 nd2pplition2 of2exs2 lw2nd2 wediid2
                                                                                        poliyD2 nd2
         thereforeD2nnot2e2relied2onF2 exF2qov’t2gode2 PHHIFHSV@eA@PAF2
                                                                §2
         hereforeD2the2ixeutive2gommissioner2ﬁnds2tht2the2ph’s2proposed2finding2ot2
         ft2 numer2PI2 eirs2 euse2 it2 missttes2 exs2lw2 nd2 suggests2
                                                                                  tht2  is2                         ehg2
         exused2for2sumitting2flse2 informtion2if2                 wr2
                                                               pproved2ehg’s2e2requestsF2
         qiven2the2 issues2 in2 this2 pyment2hold2 proeedingD2 there2 is2 therefore2 2 rtionl2
         onnetion2etween2exs2lw2nd2the2ltered2 ﬁnding2of2ftF2 eeF2eF2gFF2 reritge2
         on2the2n2qriel2romeowners2essoF2vF2 giD2QWQ2FFQd2t2RRHERIY2tte2vF2
         FwidEouth2 versD2 InFD2 PRT2 FFQd2 t2 UPVY2 vevy2 vF2 exF2 lte2 fdF2 G‘wedF2
         ixm rsD2WTT2FFPd2t2VITF2
                 92

 PPF2    he2wnul2lrified2 tht2 prior2 uthoriztion2 of2n2 orthodonti2 servie2 did2 not2
         gurntee2 pymentF2 o2reeive2 pymentD2the2 provider2 still2 hd2to2 show2tht2 the2

gountyD2exF2 heF2 lQD2 PHIHA2@order2striking2defense2of2filure2 to2 mitigteAY2tre2 exs2ex2relF2
                                                                                          of2               ellen2
FGrmes2 vF2 FGnsseiz2I’lIrmFD2 snF2guse2xoF2 hElEqE@AREHHIPVV2@PStAth2
                                                                            tudiil2 histF2 gtFD2 rvis2gountyF2
exF2peF2PQF2PHI2lA2@order2striking2defenses2of2filure2to2mitigte2nd2
                                                                           limittionsAY2tle2fv’@l2exF2 relF2
qrmzlez2vF2 wegoF2guse2xoF2hElEqEs2lEHHHURH2@PHlst2tudiil2 histF2gtFD2rvis2
                                                                                  gountyF2exF2eptF2QHD2
PH2 QA2@two2ordersD2striking2defendnts’2estoppelD2lhsD2nd2wiver2defensesAF
   s2

                                                       sH

                                                001753
      orthodonti2proedure2ws2medilly2neessry2under2the2terms2nd2onditions2of2
      the2wnulF2

PQ2   efter2ehg2provided2the2orthodonti2tretment2to2 the2ptients2in2this2seD2       wr2
      pproved2pymentF2
PR2   yn2eugust2PWD2 PHHVD2 rrgEysq2issued2 2 performne2 udit2 report2 regrding2
      Fwr’s2prior2 uthoriztion2proess2 for2 the2 period2etween2eptemer2 lD2 PHHTD2
      nd2 wrh2QID2 PHHVF2 ﬁnding2tht2 wr’s2prior2 uthoriztion2 proess2 did2 not2
      omply2with2the2wnul2@the2PHHV2udit2reportAF2
PS2   sn2the2PHHV2udit2reportD2 rrgEysq2found2tht2wr’s2prior2uthoriztion2stff2
      filed2 to2 review2the2 supporting2mteril2 sumitted2y2providers2with2their2prior2
      uthoriztion2requestsD2 s2requiredF2nd2tht2wr’s2stff2did2not2hve2the2dentl2
      redentils2neessry2to2evlute2whether2the2supporting2doumenttion2sumitted2
      y2providers2supported2the2   rvh2 soreF2

PT2   he2rovider2 egreement2required2 ehg2nd2its2 providers2 to2 ertify2 to2 e2
      truthfulY2 to2 ide2y2the2wediid2rulesY2 nd2to2 sumit2trueD2ompleteD2nd2
      urte2 informtion2 tht2 n2 e2 veriﬁed2 y2 referene2 to2 soure2
      doumenttion2mintined2y2ehgF2
      @he2yer2evts’2proposed2pop2xoF2PT2sttedX2 ehg2ws2unwre2of2the2 PHHV2
                                q s2ssertion2tlzt2 wr2ws2not2properly2performing2
      ulit2report2nd2rrg~@As2
                                      ‘2

      prior2uthoriztion2evlutionsFA2
      eson2for2ghngeX2
      he2ixeutive2gommissioner2modiﬁes2the2 yer2GvFls’2 roposed2pop2xoF2PT2
      euse2the2proposed2ﬁnding2rests2 upon2n2inorret2 legl2 premiseF2es2suhD2the2
      ixeutive2 gommissioner2 hs2 “omplete2 disretion”2 to2 modify2 the2 proposed2
      ﬁndingF2 exF2 hept‘2of2viensing282egultion2vF2 hompsonD2 PHIQ2v2QUWIRVTD2
      t2BT2@“en2geny2enjoys2omplete2disretion2in2modifying2n2evt9s2ﬁndings2nd2
      onlusions2when2those2ﬁndings2nd2onlusions2reﬂet22lk2of2understnding2or2
      mispplition2 of2 the2 existing2 lwsD2 rulesD2 or2 poIiiesF4’2 @quoting2 mith2 vF2
      wontemyorD2PHHQ2    v2 PIRHISWID2t2 BPTEPU2@emphsis2ddedAAX2exF2qov’t2gode2
      §PHHIFHSV@eA@IAF2
      he2proposed2ﬁnding2suggests2tht2ehg2ould2not2hve2intentionlly2 sumitted2
      flse2informtion2to2wr2   euse2ehg2did2not2know2tht2wr2ws2filing2to2
      properly2 review2 e2requestsF2his2is2 2missttement2of2exs2lwF2es22threshold2
      mtterD2 the2 snspetor2 qenerl2 does2 not2 hve2 to2 show2 tht2 ehg2mde2 flse2
      sttements2 nd2 mteril2 misrepresenttions2 with2 the2 speifi2 intent2 to2 defrud2
      wediidF2ee2exF2 rumF2esF2 gode2ennF2 §2 QTFHHIl@A2@est2HIQA2@gulple2
      wentl2 tteX2 speiﬁ2 intent2 to2 defrud2 is2 not2 requiredAF2 snstedD2 the2 inspetor2
      qenerls2 urden2 in2 this2 pyment2hold2 proeeding2 is2 to2 show2 y2 prim2 fie2
      evidene2 tht2 when2ehg2sumitted2 flse2 informtion2 to2 exs2 wediid2 tht

                                              ll

                                           001754
                  ehg2knew2the2 informtion2ws2flseY2 @PA2 ehg2ted2with2 onsious2
       either2 @IA2
       indillerene2 to2 the2 truth2 or2 flsity‘2 ol’2 the2 informtionY2 or2 @QA2 ehg2ted2 with2
       rekless2disregrd2of2the2truth2or2flsity2of2the2informtionF2sdF2 @A@lAE@QAF2

       he2yer2esFls2lso2erred2to2the2extent2tht2they2relied2on2the2rrlingen2pmily2
       hentl2deisionD2 prtiulrlyD2 pop2PWD2 QID2 nd2QQD2 for2their2understnding2of2the2
       sope2nd2limittions2 of2exs2wediid2poliyF2 he2ixeutive2 gommissioner2
       dispproves2of2these2ﬁndingsD2nd2expressly2onludes2tht2they2were2sed2on2n2
       inorret2 interprettion2 nd2pplition2 of2exs2lw2nd2wediid2poliyD2 nd2
       thereforeD2nnot2e2relied2onF2 exF2qov’t2gode2§2PHHI2FHSV@eA@PAF2

       woreoverD2given2the2llegtions2t2 issue2in2this2 pyment2hold2proeedingD2nd2the2
       tul2stndrd2under2the2wpeD2there2is2therefore22rtionl2onnetion2etween2
       exs2lw2nd2the2ltered2ﬁnding2of2ftF2 eeD2 eF2gFD2 reritge2on2the2n2qriel2
       romeowners2essoF2 vF2 2giD2QWQ2FFQd2t2RRHERIY2tte2vF2 llGlidEouth2versD2
       snD2 PRT2FFQd2t2 UPVY2vevy2vF2 exF2 rte2fdF2 ofwelF2ixm2’rsD2 WTT2FFPd2t2
       VITF2
PU2    ln2PHIID2rIEsgEysq2onduted22dt2nlysis2of2pid2wediid2lims2in2exs2
       nd2 determined2tht2 ehg2ws2one2 of2the2 top2 providers2 in2 the2 stte2 with2high2
       utiliztion2oforthodonti2illing2etween2PHHV2nd2PHIIF2es22resultD2rrgE@Al@2
       initited22frud2investigtion2ginst2 ehgF2
PV2    rrgEysq2retined2ghrles2ivnsD2hFhFFD2n2orthodontistD2to2review2the2linil2
       reords2for2the2TQEptient2smple2olleted2y2lEllEsgEysq2for2whom2ehg2ﬁled2
       prior2uthoriztion2requests2during2the2relevnt2periodF2

PWF2   he2 rvh2sore2 sheets2 for2 the2 TQ2 ptients2 in2 the2 rndom2 smple2 were2
       ompleted2y2ehg9s2orthodontistD2el2unnD2hFhFF2nd2hrF2xzriD2who2
       is2 not2n2orthodontistD2nd2in2 eh2se2they2sored2the2ptient2s2
                                                                              hving 2
       sore2 of2PT2or2more2pointsF2 he2gretest2 numer2of2points2 ws2ssoited2
       with2the2tegory2of2“etopi2eruptionF42
       @he2yer2evts’2proposed2 HIB2xoF2PW2sttedX2 he2rvh2sore2sheets2for2the2TQ2
                                       IB‘2

       ptients2 were2 ompleted2y2ehgi2orthodontistD2 el2unnD2 hFhFF2 nd2hrF2
       xzriD2 nd2in2 eh2 se2 the2 ptient2 sored2PT2or2 more2pointsF2 he2 gretest2
       numer2ofpoinls2ws2ssoited2with2the2tegory2of24etopi2eruptionF2”A2
       eson2for2ghngeX2
       he2 ixeutive2 gommissioner2 modiﬁes2 the2 proposed2 ﬁnding2 euse2 it2
       mishrterizes2 y2omission2whih2prty2 hs2responsiility2for2 ompleting2the2
       rvh2sore2 sheets2 —2the2 providerF2 es2suhD2 the2 ixeutive2 gommissioner2hs2
       4omplete2disretion”2to2modify2the2proposed2ﬁndingF2 exF2 hep9l42 viensing 82
                                                                           of2
       egultion2vF2 hompsonD2 PHIQ2v2QUWIRVTD2t2BT2@“en2geny2enjoys2omplete2
       disretion2 in2 modifying2n2 eFFt9s2 ﬁndings2nd2onlusions2 when2those2 findings2
       nd2onlusions2reﬂet22lk2of2understnding2or2mispplition2of2the2 existing

                                               IP

                                         001755
 lwsF2 rulesD2 or2poliiesF”2@quoting2mith2vF2 wontemyorD2PHHQ2
 BPTEPU2@emphsis2ddedAAY2exF2qov’t2gode2 PHHI2
                                                                              v2PIRHISWIF2t2
                                           §2    FHSV@eA@lAF2
 rereD2hrsF2unn2nd2xzri2sored2the2rvh2soresheetsD2nd2represented2to2
                                                                                     the2
 tte2the2ury2ofthe2soresF2 EVQY2FF2olF2Q2t2RTEUHD2WTEWUY2
                                                                         FF2olF2R2t2
 WWEIHHF2 es2writtenD2 the2 proposed2 ft2 impermissily2 minimizes2the2
                                                                            tive2 nd2
 responsile2role2providers2hve2in2soring2ptientsF2exs2wediid2depends2
                                                                                  upon2
 the2providers2to2sumit2urte2doumenttion2to2the2 tteY2
                                                                  thusD2providers2er2
 the2responsiility2to2sore2the2ptientsF2ee2exF2qov’t2gode2
                                                                 §2PHHlFHSV@eA@IAY2see2
 lso2ixF2EIRD2lGsw2@PHHVAD2§2 IFPFU2rovider2gertifitionGessignment2
                                                                               @“exs2
 wediid2servie2 providers2 re2 required2 to2 ertify2 ompline2with2or2 gree2 to2
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                                                      §2PHHlFHSV@eA@PAF2
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                                  001756
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                                                                       92

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                                               sR

                                         001757
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 “legisltive2 ﬁndingF”2 es2 suhD2 the2 ixeutive2 gommissioner2
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                                                                 9I92

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nd2the2testimony2of2geny2witnesses2shows2tht2dentists2were2instruted2to2
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                                             IS

                                       001758
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                                                                     F2   F2   F2

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enforementF2 s2 long2 s2 the2 interprettion2 is2 resonle2 nd2not2 ontrry2to2 the2
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                                                         ‘2

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                                   the2lveolr2ridgeFA2

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                                        lT

                                    001759
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                                                              §2
hep9t2 of2viensing2 82egultion2 vF2 hompsonD2 PHIQ2 v2
                                                                   QUWIRVTD2 t2 BTY2
ourGnvest2hrmFD2 RHV2FFQd2t2 SSUESVF2 pirstD2 the2 ww2provides22soring2
instrutionD2 not2deﬁnitionF2eeF2 eFgFD2FFD2olF2 I2 t2 IHQXVEIP2@terms2in2the2
                                                                                   etopi2
eruption2 instrution2 re2 not2 deﬁned2 ut2 re2 orded2 their2 plin2 nd2
                                                                                  ordinry2
mening2in2 the2 inglish2lngugeAX2 FFD2 olF2 I2 t2 lllX2 IPEIR2 @providers2 must2
understnd2the2mnul2y2viitu2oftheir2professionl2triningAF2
eondD2s2proposed2y2the2yer2evtsD2pHII‘2xoF2RH2erroneously2suggests2tht2the2
tnury2PHIP2mendment2to2 the2 lnguge2in2 the2wnul2signiﬁed22sustntiveD2
rther2 thn2 lrifyingD2 hngeF2 he2PHIP2 mendment2to2 the2 instrutions2
                                                                               in2 the2
ww2lriﬁed2 existing2 wediid2 poliyY2 the2 mendment2 did2 not2 effet             2
sustntive2 hngeF2 ee2FFD2 olD2 I2 t2 WQXPEWD2 WRXPHEPQ2 @hrF2 eltenhoffAD2
                                                                                      FFD2
olF2 Q2 t2 IWQXlVEIWRXIY2 PWRIPIEPQ2 @tk2 tikAF2 lt2 is2 the2 provine2 of2sEEsrg2
                                                                                        to2
determine2wht2wediid2poliy2isD2 nd2is2 notY2the2yer2evFls2hve2no2
                                                                          uthority2
to2wrongly2determine2wediid2poliyF2outhwest2lzrmFD2 RHV2
                                                                 FFQd2t2 SSUESV2
@42must2uphold2n2enforing2geny9s2onstrution2if2it2 is2 resonle2nd2in2
hrmony2with2the2sttute2 his2deferene2is2prtiulrly2importnt2in2onstruing2
                            F2   F2   F2

2omplex2sttutory2sheme2like2 wediid”A2@iting2FF2      gomm2‘n2 of2exF2 vF2 exF2
gitizensD2 QQT2 FFQd2 t2 TPR2 @ourt2 will2 defer2 to2 geny9s2 longEstnding2
onstrution2of2sttute2tht2is2 ommitted2to2geny2for2enforementD2s2long2s2
                                                                                       the2
interprettion2is2 resonle2nd2not2ontrry2to2 the2 sttute9s2 plin2
                                                                           lngugeAY2see2
lso2etsos2gntyF2vF2ersos2gntjvF2 epprisl2FhisrFD2 WWH2FF2Pd2
                                                                           PSSD2PSV2@exF2
IWWWA2@ourts2my2not2ept2interprettions2of2sttute2tht2defet2the2purpose2
                                                                                        ot2
the2 legisltion2 so2 long2 s2 nother2 resonle2 interprettion2
                                                                     existsAY2 exF2 qov9t2
gode2§2QI2IFHPQ@TAF2
he2yesEs2eFvts2lso2erred2to2the2extent2tht2they2relied2on2the2rrlingen2pmily2
hentl2deisionD2 prtiulrlyD2 pop2PWD2 QID2 nd2QQF2 for2their2 understnding2of2
                                                                                    the2
sope2nd2limittions2 of2exs2wediid2poliyF2 he2ixeutive2 gommissioner

                                             lU

                                           001760
dispproves2of2these2ﬁndingsD2nd2expressly2onludes2tht2they2were2sed2on2n2
inorret2 interprettion2 nd2pplition2 of2exs2lw2nd2wediid2poliyD2 nd2
thereforeD2nnot2e2relied2onF2 exF2qov’t2gode2§2PHHI2FHSV@eA@PAF2

en2urte2understnding2of2the2sope2nd2limittions2of2exs2wediid2poliy2
is2 ritilly2 importnt2to2the2outome2of2this2 disputeF2he2fundmentl2llegtion2
rought2y2the2snspetor2qenerl2is2 tht2ehg2hs2sumitted2lims2for2e2nd2for2
reimursement2tht2re2not2uthorized2under2wediid2poliy2or2exs2lwF2hese2
llegtions2nnot2e2properly2evluted2if2the2 ﬁnder2of2ft2does2not2understnd2
the2 poliyF2 hereforeD2 there2 is2 2 rtionl2 onnetion2 etween2 the2 orret2
rtiultion2 of2wediid2poliy2nd2the2 ltered2 ﬁnding2of2ftD2 whih2urtely2
reflets2tht2poliyF2eeD2eF2gFD2 reritge2on2the2n2qriel2romeowners2essoF2 vF2
giD2QWQ2FFQd2t2RRHERIY2tte2vF2 widEouth2versD2snFD2 PRT2FFQd2t2UPVY2
vevy2vF2 exF2tte2felF2 of2wedF2ixm2’rsD2 WTT2FFPd2t2VITF2
he2 lnguge2       in2 the2   wnuls2 provided2 instrutions2 to2 dentists2 nd2
orthodontists2 to2 sore2 etopi2 eruption2 onsistently2 with2 the2 stndrds2 for2
etopi2eruption2tht2re2generlly2reognized2in2the2dentl2professionF2
@he2 yGl~‘s2 evts’2 proposed2pop2xoF2 RI2 sttedX2 he2 lnguge2in2 the2 wnuls2
provided2t2 t9e9finitiHtz2 fetopi2eruption2solely2for2use2in2soring2the2rvh2index2to2
tjuliGjIGor2pymentFA2

eson2for2ghngeX2
pinding2of2pt2xoF2RI2 ﬁnding2ddresses22mixed2question2of2lw2nd2ft2nd2is 2
“legisltive2 ﬁndingF42 he2 ixeutive2 gommissioner2hs2 omplete2 disretion2 to2
                                                            82
modify2the2proposed2ﬁndingF2 exF2 hep9t2Hfviensing2 egultion2vF2 hompsonD2
PHIQ2  v2   QUWIRVTD2t2 BT2@“‘en2geny2enjoys2omplete2disretion2in2modifying2
n2GvFl9s2 ﬁndings2nd2onlusions2when2those2ﬁndings2nd2onlusions2retlet 2
lk2of2understnding2or2mispplition2of2the2existing2lwsD2rulesD2 or2poliiesG”2
@quoting2mith2vF2wontemyorD2PHHQ2      v2
                                           PIRHISWID2t2BPTEPU2@emphsis2ddedlAY2
exF2qov‘t2gode2§2PHHlFFHSV@eA@IAF2
he2ixeutive2 gommissioner2modiﬁes2roposed2pp2xoF2 RI2 for2 two2 resonsF2
pirstD2 the2   ww’s2 disussion2 of2 etopi2 eruption2 is2 n2 instrutionD2 not      2
deﬁnitionF2 eeD2 eFgFD2 FFD2 olF2 I2 t2  lHQXVElP2 @terms2  in2 the2 etopi2 eruption2
instrution2re2 not2deﬁned2ut2re2orded2their2plin2 nd2ordinry2mening2in2
the2inglish2lngugeAY2FFFFD2 olF2 l2 t2 llli2 lPElR2@providers2must2understnd2the2
mnul2 y2 virtue2 of2 their2 professionl2 triningAF2 his2 error2 reﬂets 2
misinterprettion2of2lw2nd2poliy2y2the2 yer2evtsF2ee2exF2 qov’t2gode §2
PHHlFHSV@A@lAY2 hompsonD2 PHIQ2      v2    QUWIRVTF2 t2 BTY2 outhwest2 hrntD2 RHV2
FFQd2t2SSUESVF2
 eondD2 the2 proposed2ﬁnding2erroneously2 suggests2 tht2 it2 ws2exs2 wediid2
 poliy2 to2 dopt2 2 distint2 “deﬁnition”2 of2etopi2 eruption2 in2 the2 ww2tht2
 ditiered2 from2 etopi2 eruption2 s2 generlly2 understood2 within2 the2 dentl

                                         lV

                                    001761
professionF2he2   yer2elFts’2proposed2ﬁnding2would2violte2stte2nd2federl2lw2
euse2 retion2 of2 2 different2 set2 HI92 stndrds2 pplile2 only2 to2 wediid2
ptients2would2violte2oth2exs2nd2pederl2lwF2eeD2 eF2gFD2 I2 exF2edminF2gode §2
QSRFIIQI@hAY2see2 lso2 D2olF2 QD2 PSHXVEIWY2ixF2 EIR2@PHHV2wwAD2§2 IFPFSY2
ixF2 EIS2 @PHHW2 wwAD2 §2 IFRFS2 @“gompline2 with2 pederl2 vegisltionF2
eminderX2 ih2provider2 must2furnish2 overed2llGeliil2 servies2 in2 the2 sme2
mnnerD2to2the2sme2extentD2 nd2of2the2sme2qulity2s2servies2prHvi9e92to2other2
ptientsF2 ervies2 mde2ville2 to2 other2ptients2 must2e2 mde2ville2 to2
 exs2 weliil2 lients2 if2 the2 servies2 re2 eneﬁts2 of2the2 exs2 wediid2
rogrm4AF2end2in2 ftD2 ll2 pulished2poliy2douments2promulgted2y2rrg2
require2providers2to2 pply2the2 sme2stndrds2of2re2to2 wediid2ptients2 they2
pply2with2the2popultion2t2lrgeF2eeD2 eFgFD2 ixF2EITD2t2§2 IFTY2ixF2EISD2§2 IWFPF2
ther2thn2 impermissily2employing2 2 speil2 or2unique2deﬁnition2 of2etopi2
eruption2 solely2 for2 use2 in2 the2 wediid2ontextD2     rrg2  poliy2 mkers2 insted2
instruted2providers2 to2 use2their2 triningD2 edutionD2 experieneD2 nd2deﬁnitions2
generlly2 understood2 in2 the2 prtie2 of2 dentistry2 in2 qulifying2 nd2 treting2
wediid2ptients2nd2to2senGe2these2ptients2in2the2sme2mnner2s2other2ptientsF2
eeF2 eFgFD2 FFF2olF2 I2 t2 IHQXVEIP2@terms2in2the2etopi2eruption2instrution2re2not2
deﬁned2 ut2 re2 orded2 their2 plin2 nd2 ordinry2 mening2 in2 the2 inglish2
lngugeAY2FFD2 olF2 l2 t2 lllX2 IPEIR2@providers2 must2understnd2the2 mnul2y2
virtue2of2their2professionl2triningAF2

he2yer2evt2
            s2 lso2erred2to2the2extent2tht2they2relied2on2the2rrlingen2pmily2
hentl2deisionD2 prtiulrlyF2l~‘op2 PWD2 QID2 nd2QQD2for2their2 understnding2of2the2
sope2nd2limittions2 of2exs2wediid2poliyF2 he2ixeutive2gommissioner2
dispproves2of2these2ﬁndingsD2nd2expressly2onludes2tht2they2were2sed2on2n2
inorret2 interprettion2 nd2pplition2 of2exs2 lw2nd2wediid2poliyD2 nd2
thereforeD2nnot2e2relied2onF2 exF2qov’t2gode2§2PHHIFHS2V@eA@PAF2

en2urte2understnding2of2the2sope2nd2limittions2of2exs2wediid2poliy2
                                outome2of2this2 disputeF2he2fundmentl2llegtion2
is2 ritilly2 importnt2to2 the2
rought2y2the2snspetor2qenerl2is2 tht2ehg2hs2sumitted2lims2for2e2nd2for2
reimursement2tht2re2not2uthorized2under2wediid2poliy2or2exs2lwF2hese2
llegtions2nnot2e2properly2evluted2it“2 the2 finder2of2ft2 does2not2understnd2
the2 poliyF2 hereforeD2 there2 is2 2 rtionl2 onnetion2 etween2 the2 orret2
rtiultion2 of2wediid2poliy2nd2the2 ltered2 ﬁnding2of2ftD2 whih2urtely2
reﬂets2tht2poliyF2eeD2eF2gFF2 reritge2on2the2n2qriel2romeowners2essoF2 vF2
giF2QWQ2FFQd2t2RRHERIY2tte2vF2 wid~HzGth2versD2nFD2 PRT2FFQd2t2UPVY2
vevy2vF2 exF2tte2fdF2 ofllGselF2 ixm   rsD2 WTT2FFPd2t2VITF2
                                            ’2

he2wnul2did2 not2 ddress2 how2n2 orthodontist2 dignosed2 or2 treted     2
ptientD2ut2only2instruted2providers2to2sore2nterior2teeth2onsistently2with2
the2 generlly2 understood2 deﬁnition2 of2 etopi2 eruption2 in2 the2 orthodonti2
professionF

                                                 sW

                                     001762
                  s’2 proposed2pop2xoF2RP2sttedX2 he2wnuls2did2not2ddress2how2
@he2yGEr2evt2
n2orthodontist2dignosed2or2treted22ptientD2 ut2only2deﬁned2etopi2eruption2
for2 soring2 the2 rvh2sore2 sheet2 to2 determine2 2 exs2 wediid2ptient2
                                                                                 ’s2

eligiilityfor2orthodonti2tretmentFA2

eson2for2ghngeX2
roposed2pyp2xoF2RP2ddresses22mixed2question2of2ft2nd2lwD2nd2is2 therefore2
2soElled2“legisltive2 ﬁndingF42feuse2the2 yer2evts’2proposed2ﬁnding2ot2
ft2 numer2RP2 reﬂets2 2 misinterprettion2 nd2 gross2 mispplition2 of2exs2
wediid2poliyD2the2ixeutive2gommissioner2hs2omplete2disretion2to2 modify2
the2proposed2ﬁndingF2 exF2 hep’t2of2viensing282egultion2vF2 hompsonD2 PHIQ2
v2QUWIRVTD2 t2 BT2 @“9en2geny2enjoys2 omplete2 disretion2 in2 modifying2n2
evt9s2ﬁndings2nd2onlusions2when2those2ﬁndings2nd2onlusions2reflet22lk2
of2 understnding2 or2 mispplition2 of2 the2 existing2 lwsD2 rulesD2 or2 poliiesF”2
@quoting2mith2vF2 wontemyorD2PHHQ2      v2
                                           PIRHISWID2t2BPTEPU2@emphsis2ddedAAY2
exF2@ov’t2gode2§2PH@AIFHSV@eA@IAF2
he2ixeutive2 gommissioner2modiﬁes2roposed2 pop2xoF2 RP2 for2 two2resonsF2
p2irstD2 the2 ww’s2 disussion2 of2 etopi2 eruption2 is2 n2 instrutionD2 not 2
deﬁnitionF2his2error2reﬂets22misinterprettion2of2lw2nd2poliy2y2the2yer2
evtsF2ee2exF2qov‘t2gode2§2 PHHIFHSV@eA@IAY2 hompsonD2PHIQ2v2QUWIRVTD2t2
BTY2outhwest2hrntD2RHV2FFQd2t2SSUESVF2

eondD2 the2 proposed2 ﬁnding2erroneously2 suggests2tht2 it2 ws2exs2wediid2
poliy2 to2 dopt2 2 distint2 “deﬁnition”2 of2etopi2 eruption2 in2 the2 ww2tht2
differed2 from2 etopi2 eruption2 s2 generlly2 understood2 within2 the2 dentl2
professionF2he2yer2      evts’2proposed2ﬁnding2would2violte2stte2nd2federl2lw2
euse2 retion2 of22 different2 set2 of2 stndrds2 pplile2 only2 to2 wediid2
ptients2would2violte2oth2exs2nd2federl2lwF2eeD2eF2gFD2 l2 exF2edminF2gode §2
QSRFI2IQI@hAY2 see2lso2FF2olF2 QD2 PSHXVEIWY2ixF2EIR2@PHHV2wwAD2§2 IFPFSY2
ixF2 EIS2 @PHHW2 wwAD2 §2 IFRFS2 @“gompline2 with2 pederl2 vegisltionF2
eminderX2 ih2provider2 must2furnish2 overed2wediid2servies2 in2 the2 some2
mnnerD2to2the2sme2extentD2 nd2of2the2sme2qulity2s2servies2provided2to2other2
ptientsF2 ervies2 mde2ville2 to2 other2ptients2 must2e2 mde2ville2 to2
exs2 wediid2 lients2         the2 servies2 re2 eneﬁts2 of2the2 exs2 wediid2
rogrm”AF2end2in2 ftD2 ll2 pulished2poliy2douments2promulgted2y2rrg2
require2 providers2to2 pply2the2 sme2stndrds2of2re2 to2 wediid2ptients2they2
pply2with2the2popultion2t2 lrgeF2 eeD2 eFgFD2 ixF2EITD2t2 §2 IFTY2 ixF2EISD2§2 IWFPF2
he2wnuls2didD2 in2 ftD2 instrut2providers2to2use2their2trining2nd2edution2in2
the2tretment2of2wediid2ptients2nd2to2tret2those2ptients2 in2the2sme2mnner2
 s2 other2 ptientsF2    ixF2 EIS2 @PHHW2 wwAD2 §2 IFRFSF2 he2 ixeutive2
 gommissioner2is2 therefore2uthorized2to2 orret2this2error2y2the2evtsF2 ee2exF2
 @Iov‘t2gode2§2PHHIFHSV@eA@I‘2   AF2 @QA2@llowing2n2geny2to2hnge22ph2     to2orret2
 errors2of2lw2or2poliy2or2 tehnil2errors2in22proposed2finding2of2ftAF

                                          PH

                                  001763
      he2yer2elFts2lso2erred2to2the2extent2tht2they2relied2on2the2rrlingen2pmily2
      hentl2deisionD2prtiulrlyD2 pop2PWD2 QID2 nd2QQD2 for2their2understnding2of2the2
      sope2nd2limittions2 of2exs2wediid2poliyF2 he2ixeutive2 gommissioner2
      dispproves2of2these2ﬁndingsD2nd2expressly2onludes2tht2they2were2sed2on2n2
      inorret2 interprettion2 nd2pplition2 of2exs2lw2nd2 wediid2poliyD2 nd2
      thereforeD2nnot2e2relied2onF2 exF2qov’t2gode2§2PHHI2FHSV@eA@PAF2

      en2urte2understnding2of2the2sope2nd2limittions2of2exs2wediid2poliy2
                                      outome2of2this2 disputeF2 he2fundmentl2llegtion2
      is2 ritilly2 importnt2to2the2
      rought2y2the2snspetor2qenerl2is2 tht2ehg2hs2sumitted2lims2for2e2nd2for2
      reimursement2tht2re2not2uthorized2under2wediid2poliy2or2exs2lwF2hese2
      llegtions2nnot2e2properly2evluted2if2the2ﬁnder2of2ft2 does2not2understnd2
      the2 poliyF2 hereforeD2 there2 is2 2 rtionl2 onnetion2 etween2 the2 orret2
      rtiultion2 of2wediid2poliy2nd2the2 ltered2ﬁnding2of2ftD2 whih2urtely2
      reﬂets2tht2poliyF2eeD2eFgFD2 reritge2on2the2n2qriel2romeowners2essoF2 vF2
      giD2QWQ2FFQd2t2RRHERIY2tte2vF2 widEouth2yersD2srtFD2 PRT2FFQd2t2UPVY2
      vevy2vF2 exF2tte2f’2 fweGF2ixm2’rsD2 WTT2FFPd2t2VITF2
                                 F2

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       hFhFF2 n2 orthodontistD2 to2 review2the2 TQ2 ptients2 previously2reviewed2 y2hrF2
               F2

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       efter2 reviewing2 the2 ptients’2 rvh2sore2 sheetsD2 hrF2 2
                                                                   dlok2 found2 only2 one2
       ptientD2tient2ISD2who2met2the2PTEpoint2thresholds2

       sn2reviewing2the2TQ2           ehg2ptient2files2in2the2sttistilly2vlid2rndom2smpleD2
       hrF2 dlok2 pplied2 the2 deﬁnition2 of2 etopi2 eruption2 tht2 is2 generlly2
       reognized2within2the2dentl2profession2nd2sored2the2ptients2s2instruted2
       y2the2wnulsF2hrF2dlok2properly2pplied2wediid2poliyF2
       @he2 yer2evts‘2 proposed2IIop2 xoF2 RS2 sttedX2 hrF2 dlok2did2not2 pply2the2
                               etopi2eruption2in2soring2the2rvh2index2for2the2TQ2ehg2
       llGnnls2 deﬁnition2of2
                     ’2

       ptientsF A2

       eson2for2ghngeX2
       roposed2ﬁnding2of2ft2numer2RS2ddresses22mixed2question2of2ft2nd2lwD2
       nd2 is2 2 “legisltive2 ﬁndingF”2 he2 ixeutive2 gommissioner2 hs2 omplete2
       disretion2to2modify2the2proposed2ﬁndingF2 exF2 hep’t2of2viensing282egultion2
       vF2 hompsonD2 PHIQ2v2    QUWIRVTD2t2BT2@“en2geny2enjoys2omplete2disretion2
       in2 modifying2 n2 evt9s2 findings2 nd2 onlusions2 when2 those2 ﬁndings2 nd2
       onlusions2reflet22lk2of2understnding2or2mispplition2of2the2existing2lwsD2
                          2
        fy2letter2dted2tnury2 ITD2 PHIRF2the2yer2Gvts2replied2to2the2osnspetor2@tenerl92s2 Fxeptions2
                                                                                                IEX‘2

nd2notiﬁed2the2ixeutive2gommissioner2tht2their2originl2proposed2ﬁnding2of2ft2numer2RR2should2e2
reused2 he2lEvxeutive2 gommissioner2dopts2the2 elEFls’2 reommendtions2regrding2revised2proposed2
lmding2of2ft2numer2RRF2

                                                     I

                                               001764
rulesD2or2poliiesF”92@quoting2mith2vF2wonteGnyorD2PHHQ2   v2PIFRHISWID2t2BPTEPU2
@emphsis2ddedAAY2exF2qov’t2gode2§2PHHI2FHSV@eA@lAF2
he2ixeutive2 gommissioner2modiﬁes2roposed2pop2xoF2 RS2 for2 two2resonsF2
pirstF2 the2   ww’s2 disussion2 of2 etopi2 eruption2 is2 n2 instrutionD2 not   2
deﬁnitionF2his2error2reﬂets22misinterprettion2of2lw2nd2poliy2y2the2yer2
evtsF2ee2exF2qov”t2gode2§2 PHHIFHSV@eA@lAY2hompsonD2PHIQ2         v2QUWIRVTD2t2
BTY2outhwest2hrmFD2RHV2FFQd2t2SSUESVF2

eondD2 the2 proposed2 ﬁnding2erroneously2 suggests2 tht2 it2 ws2exs2wediid2
poliy2 to2 dopt22 distint2 “deﬁnition”2 of2etopi2 eruption2 in2 the2 ww2tht2
differed2 ﬁom2 etopi2 eruption2 s2 generlly2 understood2 within2 the2 dentl2
professionF2he2yer2     evts92proposed2ﬁnding2would2violte2stte2nd2federl2lw2
euse2 retion2 of22 different2 set2 of2 stndrds2 pplile2 only2 to2 wediid2
ptients2would2violte2oth2exs2nd2federl2lwF2eeD2 eF2gFD2 I2 exF2edminF2gode §2
QSRFIlQl@hAY2see2lso2 FFD2olF2 QD2 PSHXVEIWY2ixF2 EIR2@PHHV2wwAF2§2 IFPFSY2
ixF2 EIS2 @PHHW2 wwAD2 §2 IFRFS2 @“gompline2 with2 pederl2 vegisltionF2
eminderX2ih2provider2 must2furnish2 overed2wediid2servies2 in2 the2 sme2
mnnerD2to2the2sme2extentD2 nd2of2tlze2 sme2qulity2s2servies2provided2to2other2
ptientsF2 ervies2 mde2ville2 to2 other2ptients2 must2e2 mde2 ville2 to2
 exs2 wediid2 lients2 if2 the2 servies2 re2 eneﬁts2 of2the2 exs2 wediid2
rogrm”AF2end2in2ftD2 ll2 pulished2poliy2douments2promulgted2y2rrg2
require2 providers2 to2 pply2the2 sme2stndrds2of2re2to2 wediid2ptients2 they2
 pply2with2the2popultion2t2lrgeF2eeD2 eFgFD2 ixF2EITD2t2§2 IFTY2  EISD2§2 IWFPF2

elsoD2 the2 proposed2 ﬁnding2 misonstrues2 hrF2 dlol`92s2 testimonyF2 sn2 ftD2 hrF2
9l4dlok’s2 testimony2 shows2 tht2 in2 his2 viewD2 the2 wnul‘s2 instrutions2 re2
onsistent2with2the2generlly2understood2deﬁnition2of2etopi2eruptionF2FFD2olF2
lD2 PHPIPIEPHQXIHF2his2error2reﬂets22misinterprettion2of2
                                                                lw2nd2poliy2y2the2
yer2evFssD2 2 misinterprettion2 tht2 resulted2 in2 misonstruing2 hrF2 dlok’s2
 testimonyF2exF2qov’t2gode2§2PHHlFHSV@eA@lAF2
 he2yer2evls2lso2erred2to2the2extent2tht2they2relied2on2the2rrlingen2pmily2
 hentl2deisionD2 prtiulrlyD2 pop2PWD2 QID2 nd2QQD2 for2their2understnding2of2the2
 sope2nd2limittions2 of2exs2wediid2poliyF2 he2ixeutive2 gommissioner2
 dispproves2of2these2findingsD2nd2expressly2onludes2tht2they2were2sed2on2n2
 inorret2 interprettion2 nd2pplition2of2exs2 lw2nd2wediid2poliyD2 nd2
 thereforeD2nnot2e2relied2onF2       qov’t2gode2§2PHHIFHSV@eA@PAF2

 en2urte2understnding2of2the2sope2nd2limittions2of2exs2wediid2poliy2
                              outome2of2this2 disputeF2he2fundmentl2llegtion2
 is2 ritilly2 importnt2to2 the2
 rought2y2the2snspetor2qenerl2is2 tht2ehg2hs2sumitted2lims2for2e2nd2for2
 reimursement2tht2re2not2uthorized2under2wediid2poliy2or2exs2lwF2hese2
 llegtions2nnot2e2properly2evluted2if2the2tinder2of2ft2does2not2understnd2
 the2 poliyF2 herel’oreD2 there2 is2 2 rtionl2 onnetion2 etween2 the2 orret2
 rtiultion2of2wediid2poliy2nd2the2 ltered2 ﬁnding2of2ftD2 whih2urtely

                                          4U

                                      001765
  reﬂets2tht2poliyF2eeD2eFgFD2 reritge2on2the2n2
                                                    qriel2romeowners2essoF2 vF2
  giD2QWQ2FFQd2t2RRHER|Y2tte2vF2 widEouth2oversD2InFD2 PRT2FFQd2t2
                                                                               UPVY2
  vevy2vF2 exF2tte2fdF2of2
                            wedF2ixm rsD2WTT2FFPd2t2VITF2
                                              ’2

  hespite2 the2yer2evts2ﬁnding2hrF2 xzri’s2
  x2zri2did2not2properly2follow2wediid2poliy2testimony2    to2 e2redileD2 hrF2
                                                     in2his2identiﬁtion2of2etopi2
  eruptionsY2 the2 overwhelming2evidene2of2the2 onsistent2
                                                                pttern2 of2inﬂted2
  rvh2sores2 sumitted2 y2 ehg2estlishes2 prim2 fie2        evidene2 tht2 is2
  relileD2 relevnt2 nd2 mteril2 tht2 ehg‘s2
                                                   misrepresenttions2 of2 medil2
  neessity2onstitute2willful2misrepresenttionsF2
 @he2yer2evts’2proposed2pp2xoF2RT2sttedX2hrF2xzri2
                                                             ws22redile2witness2
 nd2properly2utilized2the2wnuls2 deﬁnition2in2soring2the2rvh2
                                        ’2

                                                                          indexFA2
 eson2for2ghngeX2
 roposed2pop2xoF2RT2ddresses22mixed2question2of2ft2
                                                            nd2lwD2ndD2s2suhD2is 2
 soElled2 “legisltive2 ﬁndingF42 hereforeD2 the2
                                                       ixeutive2 gommissioner2 hs2
 omplete2 disretion2 to2 modify2 itF2 exF2 hep9t2
                                                      of2viensing2 82egultion2 vF2
 hompsonD2 PHIQ2v2QUWIRVTD2t2 BT2@“en2geny2enjoys2
                                                                 omplete2disretion2in2
 modifying2n2evt9s2ﬁndings2nd2onlusions2when2those2ﬁndings2
                                                                       nd2onlusions2
 reflet2 2lk2 of2understnding2 or2 mispplition2
                                                       of2the2 existing2 lwsD2 rulesD2 or2
 poliiesF4’2 @quoting2 mith2 vF2
                                   wontemyorD2 PHHQ2 v2PIRHISWID2 t2 BPTEPU2
 @emphsis2ddedAAX2exF2qov’t2gode2§2PHHIFHSV@eA@lAF2
 he2 ixeutive2 gommissioner2modiﬁes2roposed2pHI‘2 xoF2
                                                            RT2 for2 two2 resonsF2
 pirstD2 the2 9I‘ww’s2 disussion2 of2 etopi2
                                                  eruption2     is2 n2 instrutionD2 not 2
 deﬁnitionF2 eeD2 eFgFD2 FFD2 olF2 l2 t2 IHQXVEIP2
                                                        @terms2 in2 the2 etopi2 eruption2
 instrution2re2not2deﬁned2ut2re2orded2their2
                                                          plin2 nd2ordinry2mening2in2
 the2inglish2lngugeAY2 FFD2olF2 I2 t2 ll2IX2 IPEIR2
                                                         @providers2must2understnd2the2
 mnul2 y2 virtue2 of2 their2 professionl2 triningAF2
                                                                  his2 error2 reﬂets 2
 misinterprettion2of2lw2nd2poliy2y2the2        yer2 evtsF2ee2exF2 qov’t2gode §2
                                                   82
 PHHlFHSV@eA@lAY2 exF2 hep9t2of2viensing2 egultion2 vF2
                                                                    hompsonD2 PHIQ2 v2
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eondD2 the2 proposed2 ﬁnding2erroneously2 suggests2 tht2
                                                              it2 ws2exs2wediid2
poliy2 to2 dopt2 2distint2 “deﬁnition”2 of2etopi2
 differed2 from2 etopi2 eruption2 s2 generlly2
                                                        eruption2 in2 the2   ww2      tht2
                                                        understood2 within2 the2 dentl2
 professionF2he2yesEEs2evts’2proposed2ﬁnding2would2
                                                            violte2stte2nd2federl2lw2
 euse2 retion2 of2 2 different2 set2 of2stndrds2
                                                          pplile2 only2 to2 wediid2
 ptients2would2violte2oth2exs2nd2federl2lwF2
                                                        eeF2 eFgFD2 I2 exF2edminF2gode
                                                                                            §2
 QSRFIlQl@hAX2 see2lso2 FD2 olF2 QD2 PSHXVEIWY2 ixF2 EIR2
                                                                @PHHV2wwAD2§2 IFPFSY2
ixF2 EIS2 @PHHW2 wwAD2
                                  §2 IFRFS2 @“gompline2 with2 pederl2 vegisltionF2
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                                                                     servies2 in2 the2 sme2
mnnerD2to2the2some2extentD2 nd2of2the2sme2qulity2s2
                                                               servies2provided2to2other2
ptientsF2 ervies2 mde2ville2 to2 other2
                                                 ptients2 rnust2 e2 mde2ville2 to

                                             PQ

                                    001766
 exs2 wediid2 lients2 if2 the2 servies2 re2 eneﬁts2               exs2 wediid2
                                                              of2the2
 rogrG9nF4AF2 end2in2 ftD2 ll2 pulished2poliy2douments2
                                                                  promulgted2y2rrg2
 require2providers2 to2 pply2the2 sme2stndrds2 HI42re2 to2
                                                                  wediid2ptients2 they2
 pply2with2the2popultion2t2lrgeF2eeD2 eFgFD2 ixF2EITD2t2 IFTY2 ixF2EISD2 IWFPF2
                                                               §2                 §2
 woreoverD2ontrry2 to2 exs2 wediid2poliy2 requirements2 tht2 providers2
                                                                                       tret2
 wediid2ptients2 to2 the2 sme2stndrd2 of2re2 s2 the2 generl2
                                                                           popultionD2 hrF2
 xzri2 testitied2 tht2 orthodontis2 for2 wediid2 ptients2 is2
                                                                            different2 thn2
 orthodontis2 for2 nonEwediid2 ptientsF2 FFD2 olF2
                                                             RD2 t2 IHQIIQEITD2 IHRXI—RD2
 IRSXW—IHF2 purtherD2 hrF2 xzri2 ws2 unle2 to2 deﬁne2 2 “severe2
                                                                             hndipping2
 mlolusionF”2l’2 t2lRRXlUE2IRSXTF2his2testimony2reﬂets2
                     F2
                                                                  thtD2though2hrF2xzri2
 my2e2viewed2y2the2ﬁnder2of2ft2s2redileD2hrF2xzri2ws2unle2to2properly2
 pply2exs2wediid2poliy2to2the2soring2of2ptientsF2
 he2 yer2evts2lso2erred2to2the2extent2tht2they2relied2on2the2rrlingen2pmily2
 hentl2deisionD2 prtiulrlyD2 pop2PWD2 QID2 nd2QQD2 for2their2understnding2
                                                                                 of2the2
 sope2nd2limittions2 of2exs2wediid2poliyF2 he2ixeutive2
                                                                         gommissioner2
 dispproves2of2these2ﬁndingsD2nd2expressly2onludes2tht2
                                                                 they2were2sed2on2n2
 inorret2 interprettion2 nd2pplition2 of2exs2lw2nd2
                                                                  wediid2poliyD2 nd2
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                                                     §2PHHlFHSV@eA@PAF2
 he2proposed2ﬁnding2reﬂets22fundmentl2misunderstnding2nd2
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                                                                      importnt2 to2 the2
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                                                                      y2the2 snspetor2
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                                                                                  tht2re2
not2uthorized2under2wediid2poliy2or2exs2lwF2 hese2
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                                                                          pply22poliyF2
hereforeD2 there2 is2 2 rtionl2 onnetion2 etween2 the2 orret2
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                                                                                    IWWVD2
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                                                                 e2redileD2 hrF2
unn2 did2 not2 properly2 follow2 wediid2 poliy2 in2 his2 identiﬁtion2
                                                                                of2
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inﬂted2rvh2sores2sumitted2y2ehg2estlishes2prim2fie2
                                                                   evidene2tht2
is2 relileD2 relevnt2 nd2mteril2
                                       tht2ehg‘s2misrepresenttions2of2medil2
neessity2onstitute2willful2misrepresenttionsF2
@he2 yer2evts’2 proposed2 pop2 xoF2 PQ2 sttedX2 el2 unnD2
                                                                      hFhFF2 n2
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                ’2

                                       PR

                                 001767
eson2for2ghng2
                eX2

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v2QUWIRVTD2t2 BT2 @“‘en2geny2enjoys2 omplete2 disretion2 in2 modifying2n2
evt‘s2ﬁndings2nd2onlusions2when2those2ﬁndings2nd2onlusions2reﬂet22lk2
of2 understnding2 or2 mispplition2 of2 the2 existing2 lwsD2 rulesD2 or2 poliiesF”2
@quoting2mith2vF2 wontemyorD2PHHQ2v2PIRHISWID2t2BPTEPU2@emphsis2ddedAAY2
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PH@AIFHSV@A@lAY2 hompsonD2PHIQ2      v2   QUWIRVTD2 t2 BTY2 outhwest2hrntD2 RHV2
FFQd2t2SSUESVF2
eondD2 the2 proposed2 ﬁnding2erroneously2 suggests2 tht2 it2 ws2exs2wediid2
poliy2 to2 dopt22 distint2 “definition”2 of2etopi2 eruption2 in2 the2 lG{w2 tht2
differed2 from2 etopi2 eruption2 s2 generlly2 understood2 within2 the2 dentl2
professionF2he2yGIIevls’2proposed2ﬁnding2would2violte2stte2nd2federl2lw2
euse2 retion2 of2 2 different2 set2 of2stndrds2 pplile2 only2 to2 wediid2
ptients2would2violte2oth2exs2nd2federl2lwF2eeF2 eFgFD2 I2 exF2edminF2gode §2
QSRFIIQl@hAY2see2lso2FD2olF2QD2 t2PSHXVEIWY2ixF2EIR2@PHHV2wwAD2§2 IFPFSY2
      EIS2 @PHHW2 wwAD2 §2 IFRFS2 @“gompline2 with2 pederl2 vegisltionF2
eminderX2 ih2provider2must2furnish2 overed2wediid2servies2 in2 the2 sme2
mnnerD2 to2the2sme2extentD2 nd2of2the2sme2qulity2s2servies2provided2to2other2
ptientsF2 ervies2 mde2ville2 to2 other2ptients2 must2e2 mde2ville2 to2
exs2 wediid2 lients2 if2 the2 servies2 re2 eneﬁts2 of2the2 exs2 wediid2
rogrm”AF2end2in2 ftD2 ll2 pulished2poliy2douments2promulgted2y2rsE{g2
require2 providers2to2 pply2the2 sme2stndrds2of2re2to2 wediid2ptients2they2
pply2with2the2popultion2t2lrgeF2eeD2 eFgFF2ixF2EITD2t2§2 lFTY2ixF2EISD2§2 IWFPF2
por2exmpleD2 hrF2 unn2testified2 tht2 the2 word2“hndipping”2 in2 the2 phrse2
“severe2 hndipping2mlolusion”2 mens2“extreme2 devition2 from2the2 normF”2
FFD2olF2QF2 t2 IHIXQEVF2 etD2 of2the2TQ2 ptients2 in2 the2sttistilly2 vlid2rndom2
smpleD2unn2greed2tht2of2his2ptients2he2sored2t2lest2seven2etopi2teeth2in2
eh2ptientD2 2rte2 of2IHH7F2ldFD2 WUXSEVF2his2testimony2rellets2thtD2 though2hrF2
unn2my2e2 viewed2 y2the2 ﬁnder2of2ft2 s2 redileD2 hrF2 unn2did2 not2
properly2pply2exs2wediid2poliy2to2the2soring2ofptientsF2

                                        PS

                                                          Rs

                                  001768
  hirdF2hrF2 unn2sored2PQ2of2PU2ptients2
                                                  extly2the2sme2y—with2the2sme2
  eight2 teeth2 eing2 sored2 s2 etopiF2 EVQY2
                                                    olF2 Q2 t2 RQEUHF2 he2
  knowledged2 this2 undisputed2 evideneF2 phD2 t2
                                                                             yer2   evFls2
                                                              PSF2 his2 evidene2 of2 hrF2
  unn‘s2pttern2 oi‘2 soring2is2 prim2fie2
                                                  evidene2tht2 hrF2 unn2ted2with2
  requisite2knowledge2under2the2wpeF2
                                                 rumF2esF2gode2§2 QTFHHll@AF2 he2
                                               exF2
  ixeutive2 gommissioner2 is2 uthorizedD2 thereforeD2
                                                        to2 orret2 the2 yer2evts‘2
  errorF2exF2qov’t2gode2§P@A@AIFHSV@eA@IAF2

  he2yer2evt2     s2lso2erred2to2the2extent2tht2
                                                     they2relied2on2the2rrlingen2pmily2
 hentl2deisionD2 prtiulrlyD2 pop2PWD2 QID2 nd2
                                                       QQD2 por2their2understnding2of2the2
 sope2nd2limittions2 of2exs2wediid2
                                                 poliyF2 he2ixeutive2 gommissioner2
 dispproves2of2these2ﬁndingsD2nd2expressly2
                                                   onludes2tht2they2were2sed2on2n2
 inorret2 interprettion2 nd2pplition2 of2
                                                  exs2lw2nd2 wediid2poliyD2 nd2
 thereforeF2nnot2e2relied2onF2 exF2qov’t2
                                                gode2§2P@AHIFHSV@eA@PAF2
 he2proposed2ﬁnding2reﬂets22fundmentl2
                                                   misunderstnding2nd2mispplition2
 of2exs2lw2nd2wediid2poliy2 the2yGr2
                                       y2              evtsF2en2urte2understnding2
 of2the2sope2nd2limittions2of2exs2wediid2
                                                      poliy2is2 ritilly2importnt2to2the2
 outome2 of2this2 disputeF2 he2fundmentl2 llegtion2
                                                                rought2 y2the2 snspetor2
qenerl2is2 tht2ehg2hs2sumitted2lims2for2e2
                                                          nd2for2reimursement2tht2re2
not2 uthorized2under2wediid2poliy2or2
                                               exs2lwF2 hese2llegtions2nnot2e2
properly2evluted2if2the2ft2ﬁnder2does2not2
                                                   properly2interpret2nd2pply22poliyF2
hereforeD2 there2 is2 2 rtionl2 onnetion2
                                                  etween2 the2 orret2 rtiultion2 ot2
wediid2poliy2 nd2the2 ltered2 finding2 of2ftD2
                                                          whih2urtely2 reﬂets2 tht2
poliyF2eeF2 eFgFD2 reritge2on2the2n2qriel2
                                                     romeowners2essoF2 vF2 giD2QWQ2
FFQd2RIUD2 RRHERI2 @exF2 eppF—eustin2PHIPD2 pet2
                                                             deniedAY2 tte2 vF2 widEouth2
versD2InFF2 PRT2FFQd2UIID2UPV2@exF2eppF—eustin2
                                                               PHHUD2petF2 deniedAY2vevy2vF2
exF2 tte2fdF2HfwedF2ixm2’rsD2 WTT2
                                         FFPd2VIQD2VIT2@exF2eppF—eustin2IWWVD2no2
petFAF2

rrgEysq2presented2 evidene2tht2 is2 redileD2 relileD2 nd2
tht2hs2indii2of2reliility2when2
                                                                  veriﬁedD2 nd2
                                     nlyzed2onsistently2with2exs2lw2nd2
wediid2poliyD2 tht2   ehg2 knowingly2inorretly2 sored2the2        rvh2
                                                                      index2on2
orthodonti2prior2pprovl2requests2sumitted2
                                                to2exs2wediidF2
@he2 yer2evts’2 proposed2 sE4op2 xoF2 RV2 sttedX2
                                                          here2 is2 no2 evidene2 tht2 is2
redileD2 relileD2 or2 verifileD2 or2 tht2
                                                 hs2 indii2 of2reliilityD2 tht2 ehg2
inorretly2sored2the2rvh2sndex2to2 otin2
                                                  exs2wediid2enefits2for2ptients2
or2to2otin2exs2llGelii92pymentsFA2
eson2for2ghngeX2
roposed2polc2 xoF2 RV2ddresses2 2mixed2question2
                                                        of2ft2 nd2lwD2 nd2is2 2soE2
lled2“legisltive2ﬁndingF”2 hereforeD2
                                            the2ixeutive2gommissioner2hs2omplete2
                                             82egultion2vF2 hompsonD2 PHIQ2
disretion2to2 modify2itF2 exF2 hep’t2G‘viensiizg2
v2QUWIRVTD2 t2 BT2 @“en2geny2enjoys2 omplete2 disretion2 in2 modifying2          n2

                                       PT
                                                         9

                                  001769
 esFt9s2 ﬁndings2nd2onlusions2whenF2those2
                                              ﬁndings2nd2onlusions2reﬂet22lk2
    understnding2 or2 mispplition2 oi’2 the2 existing2 lwsD2 rulesD2 or2 poliiesF”2
 ol’2

 @quoting2mith2vF2wontemyorD2PHHQ2sF2PlRHlSWlD2t2BPTEPU2@emphsis2
                                                                                ddedAAY2
 exF2qov’t2gode2§2PHHlFHSV@eA@lAF2
 he2ixeutive2gommissioner2modiﬁes2roposed2pol’2xoF2RV2euse2the2 yess2
 ests2 misinterpreted2 nd2 mispplied2exs2lw2nd2wediid2
                                                                 poliyF2 pirstD2 the2
 proposed2ﬁnding2mispplies2lw2nd2wediid2poliy2y2stting2 tht2 there2 is2 no2
 evidene2tht2ehg2inorretly2sored2the2rvh2indexF2sn2ftD2 the2evidene2
                                                                              shows2
 tht2the2rsh2sores2sumitted2y2hrsF2xzri2nd2unn2
                                                          were2inorret2euse2
 of2their2interprettion2of2etopi2 eruptionF2 eeD2 eFgFF2 testimony2of2hrF2
                                                                               dloek2t2
 D2olF2 lD2 t2 IUQXQETY2 IURXTEIUSXIY2 lUTXlREPHY2 IUUXIEITY2see2lso2testimony2of2
 hrF2xzriD2D2olF2RD2t2 IRRXIcEIRSXTY2nd2testimony2of2hrF2
                                                                      unnD2D2olF2QD2
 t2RQEUHF2he2totlity2of2the2evideneD2whih2inludes2the2
                                                                 testimony2ot‘ehg‘2s2own2
 witnessesD2 s2 well2s2 the2 snspetor2qenerl92s2 ft2 witnesses2nd2expertsD2 is2
                                                                                       muh2
 more2thn2prim2ﬁzieD2nd2is2 relevntD2 redile2nd2mterilF2ee2exF2rumF2esF2
 gode2§2QPFHPWI@AF2
eondD2 the2 proposed2 ﬁnding2 is2 erroneous2 euse2 impliit2 in2 it2 re2
                                                                                 the2
ssumptions2tht2 the2 deﬁnition2of2etopi2 eruption2is2 wholly2open2to2 sujetive2
interprettionF2 nd2tht2exs2wediid2dopted224speil42deﬁnition2
                                                                          of2etopi2
eruption2tht2 ws2more2lierl2 thn2 the2 generlly2epted2deﬁnition2 of2
                                                                             etopi2
eruption2in2the2orthodonti2profession2@nd2ontrry2to2the2ww’s2
                                                                         instrution2
to2 providers2 to2 e2 “onservtive”2 in2 their2 soringAF2
                                                              hese2 errors2        reflet2
niisinterprettions2nd2mispplitions2of2lw2nd2wediid2
                                                                    poliy2y2the2 yess2
evtF2
hirdD2hrF2unn2sored2PQ2of2PU2ptients2extly2the2sme2y—with2
                                                                                   the2sme2
eight2teeth2 eing2 sored2 s2 etopiF2 EVQY2 olF2 Q2 t2 RQEUHF2
                                                                      purtherD2 the2yer2
evts2knowledged2this2 undisputed2evideneF2phD2t2 PSF2 his2evidene2of2hrF2
unn’s2pttern2 of2soring2 is2 prim2fie2 evidene2tht2 hrF2 unn2
                                                                                ted2with2
requisite2knowledge2under2the2 wpeF2exF2 rumF2esF2gode2
                                                                        §2 QTFHHI2l@AF2 he2
ixeutive2 gommissioner2 is2 uthorizedD2 thereforeD2 to2 orret2 the2 yer2evts’2
errorF2exF2qov’t2gode2§2PHHlFHSV@A@lAF2

pinllyD2this2proposed2ﬁnding2reflets22further2mispplition2of2lw2
                                                                       in2suggesting2
tht2the2snspetor2qenerl2ers2the2urden2of2proving2intent2
                                                               to2defrud2wediidF2
es2 the2 yess2evts2 knowledge2 in2 the2 nrrtive2 setion2 of2their2 phD2 the2
snspetor2qenerl2does2not2hve2the2urden2to2show2speiﬁ2intent2to2
                                                                         defrud2the2
wediid2progrm2to2 show2tht2 ehg2hs2 ommitted2n2unlwful2t2 under2the2
wpeF2ee2ph2t2 lSD2iting2deﬁnition2of2“knowingly”2t2setion2QTFHHI2I2 ofthe2
wpeY2 see2 lso2 gov2 xoF2 TD2 t2 pge2 RP2 of2 the2 ph2 @sme2 propositionAF2
xeverthelessD2 in2 proposed2pop2xoF2RVD2the2 yer2evts2write2 tht2 the2
                                                                         snspetor2
qenerl2 tiled2 to2 present2 redileD2 relileD2 or2 veritile2 evidene2
                                                                              tht2 ehg

                                        PU

                                 001770
inorretly2sored2 rvh2indies2“to2otin2exs2wediid2eneﬁts2for2ptients2or2
to2otin2exs2wediid2
                        pymentsF”2
he2urden2on2the2snspetor2qenerl2is2 only2to2demonstrte2relevntD2redile2nd2
mteril2evidene2tht2ehg2knowingly2sumitted2sores2tht2overstted2the2hild‘s2
true2 onditionF2 exF2 rumF2 esF2 gode2 §2 QPFHPWl@AF2 hrsF2 unn2 nd2 xzri2
knowledge2 they2 pplied2 n2 interprettion2 of2 etopi2 eruption2 tht2 did2 not2
omport2with2wediid2poliyF2o2the2extent2the2yer2evts2ttempt2to2hold2the2
snspetor2qenerl2to2the2dditionl2urden2of2proving2intent2on2the2prt2of2ehg2to2
defrud2the2wediid2progrmD2proposed2pop2xoF2RV2is2erroneousF2
he2yer2evts2lso2erred2to2the2extent2tht2they2relied2on2the2rrlingen2pmily2
hentl2deisionD2 prtiulrlyD2 por‘2 PWD2QID2 nd2QQD2 for2their2understnding2of2the2
sope2nd2limittions2 of2exs2wediid2poliyF2 he2ixeutive2gommissioner2
dispproves2of2these2ﬁndingsD2nd2expressly2onludes2tht2they2were2sed2on2n2
inorret2 interprettion2 nd2pplition2 of2exs2 lw2nd2wediid2poliyD2 nd2
thereforeF2nnot2e2relied2onF2 exF2qov’t2gode2§2PHHlFHSV@eA@PAF2

woreoverD2 the2 proposed2 ﬁnding2 reﬂets2 2 fundmentl2 misunderstnding2 nd2
mispplition2of2exs2lw2nd2wediid2poliy2y2the2yer2evtsF2en2urte2
understnding2of2the2sope2nd2limittions2 of2exs2wediid2poliy2is2 ritilly2
importnt2to2 the2 outome2of2this2 disputeF2 hese2llegtions2 nnot2e2 properly2
evluted2 if2the2 tinder2 of2ft2 does2 not2 properly2 interpret2 nd2 pply2 2 poliyF2
hereforeD2 there2 is2 2 rtionl2 onnetion2 etween2 the2 orret2 rtiultion2 ot2
wediid2 poliy2 nd2the2 ltered2 ﬁnding2 of2ftD2 whih2urtely2 reﬂets2 tht2
poliyF2eeD2eF2gFD2 reritge2on2the2n2qriel2roineowners2essoF2 vF2 giD2QWQ2
FFQd2RlUD2 RRHERI2 @exF2 eppF—eustin2PHIPD2 pet2 deniedAY2 tte2 vF2 wid~Huth2
versD2 InFD2 PRT2FFQd2Ul2lD2 UPV2@exF2eppF—eustin2PHHUD2petF2 deniedAY2vexy2vF2
exF2tte2felF2 Gw€TlF2ixm29rsD2 WTT2FFPd2VIQD2VIT2@exF2eppF—eustin2IWWVD2no2
petFAF2

rrg~ylq2presented2prim2fie2 evidene2 tht2 is2 redileD2 relileD2 nd2
veriﬁedD2 nd2tht2 hs2indii2 of2reliility2 when2nlyzed2onsistently2 with2
exs2 lw2 nd2 wediid2 poliyD2 tht2 ehg2ommitted2 frud2 or2 willful2
misrepresenttions2to2exs2wediidF2
@he2 yer2evts’2 proposed2po‘2 xoF2 RW2 sttedX2 here2 is2 no2 evidene2 tht2 is2
redileD2 relileD2 or2 verifileD2 or2 tht2 hs2 indii2 of2reliilityD2 tht2 ehg2
oGnmitl9edﬁ4ud2or2engged2in2 willful2 misrepresenttion2with2respet2to2 the2 TQ2
ehg2ptients2in2this2seFA2
eson2por2ghngeX2
roposed2polc2 xoF2RW2ddresses2 2mixed2question2of2ft2 nd2lwD2 nd2is2 2soE2
lled2“legisltive2ﬁndingF”2 hereforeD2the2ixeutive2gommissioner2hs2omplete2
                                                                                  o
disretion2to2modi4l’y2itF2 exF2 hept2ofliensing282egultion2vF2 hompsonD2 PHIQ2
v2QUWIRVTD2 t2 BT2@49en2geny2 enjoys2 omplete2 disretion2 in2 modifying2 n2
                                       PV

                                  001771
 evt‘s2ﬁndings2nd2onlusions2when2those2ﬁndings2nd2onlusions2
                                                                            rellet22lk2
 oi’2 understnding2 or2
                         mispplietion2 of2 the2 existing2 lwsD2 rulesD2 or2 poliiesF”2
 @quoting2mitlz2vF2 wontemyorD2PHHQ2     v2PIRHISWID2t2BPTEPU2@emphsis2ddedAAY2
 exF2qov’t2gode2§2PHHlFHSV@eA@lAF2
 he2ixeutive2gommissioner2modiﬁes2roposed2polc2xoF2RW2euse2the2 yer2
 evss2misinterpreted2nd2mispplied2exs2lw2nd2wediid2poliyF2 pirstD2 the2
 proposed2ﬁnding2mispplies2exs2lw2governing2the2snspetor2qenerl’s2urden2
 of2proof2in2this2 seF2 es2noted2in2 gov2xoF2 IPD2to2mintin2the2pyment2holdD2the2
 snspetor2 qenerl2 must2 only2 mke22prim2fie2 showing2 of2evidene2 tht2 is2
 redileD2 relile2 or2 veriﬁleD2 or2 tht2 hs2 indii2 of2reliility2 tht2   ehg2hs2
 ommitted2frud2or2willful2misrepresenttions2in2this2seF2
he2 yer2evts42 determintion2 tht2 the2 snspetor2 qenerl2 presented2 “no2
evidene”2 on2 this2 issue2 is2 the2 result2 of2 the2 yer2evts’2 leglly2
                                                                                  erroneous2
interprettion2of2wediid2poliy2with2respet2to2the2deﬁnition2of2etopi2
                                                                                   eruptionF2
es2the2snspetor2qenerl2noted2in2his2ixeptionsD2the2yesEs2evs’2determintions2
tht2 the2 following2 re2 ll2 errors2 in2 the2 interprettion2 nd2 pplition2
                                                                                   of2exs2
wediid2poliy2nd2lwX2@IA2exs2wediid2“deﬁned”2etopi2eruption2uniquely2
nd2 differently2 in2 the2 ww2thn2 the2 generlly2 epted2 definition2 in2 the2
orthodonti2 professionY2 @PA2 tht2 sid2 deﬁnition2 ws2wholly2 open2 to2 sujetive2
interprettionY2 nd2@QA2 tht2 the2 PHIP2 hnges2 to2 the2 lGw2“deﬁnition”2
                                                                                       were2
sustntive2rther2thn2lrifyingF2

purtherD2 the2 yesEs2 evts2 lso2 mispplied2 lw2 nd2 poliy2 to2 the2 following2
evideneD2 whih2 they2 themselves2 knowledgedX2 hrF2 unn2 sored2 PQ2 of2PU2
ptients2extly2the2sme2wy—Ewith2the2sme2eight2teeth2eing2sored2s2
                                                                            etopiF2
EVQY2olF2 Q2 t2RQEUHF2his2evidene2of2hrF2unn’s2pttern2of2soring2is2 prim2
feie2evidene2tht2hrF2unn2ted2with2requisite2knowledge2under2
                                                                      the2            wpeF2
exF2 sEEsumF2 esF2 gode2§2 QTFHHII@AF2he2ixeutive2gommissioner2is2 uthorizedD2
thereforeD2to2orret2the2yess2evts’2errorF2exF2qov’t2gode2
                                                             §2PHHlFHSV@eA@lAF2
he2yer2evs2     s2 lso2erred2to2the2extent2tht2they2relied2on2the2rrlingen2
                                                                                   pmily2
hentl2deisionD2 prtiulrlyD2 poil2 PWD2 QID2 nd2QQD2 for2their2 understnding2of2the2
sope2nd2limittions2 of2exs2wediid2poliyF2 he2ixeutive2gommissioner2
dispproves2of2these2ﬁndingsD2nd2expressly2onludes2tht2they2were2sed2on2n2
inorret2 interprettion2 nd2pplition2 of2exs2lw2nd2 wediid2
                                                                              poliyF2 nd2
thereforeD2nnot2e2relied2onF2 exF2qov’t2gode2 PHHI2FHSV@eA@PAF2
                                                      §2
woreoverD2 the2 proposed2 finding2 reﬂets2 2 fundmentl2 misunderstnding2 nd2
mispplition2of2exs2lw2nd2wediid2poliy2y2the2yesEs2e9vtsF2en2urte2
understnding2of2the2sope2nd2limittions2of2exs2wediid2poliy2is2 ritilly2
importnt2to2the2 outome2of2this2 disputeF2 he2fundmentl2llegtion2rought2
                                                                                y2
the2 snspetor2 qenerl2 is2 tht2 ehg2 hs2 sumitted2 lims2 for2
                                                                      e2 nd2 for2
reimursement2tht2re2not2utltorized2under2wediid2poliy2or2exs2lwF2hese2
llegtions2nnot2e2properly2evluted2if2the2deision2mker2does2not2
                                                                        understnd

                                         PW

                                  001772
 the2 poliyF2 hereforeD2 there2 is2 2 rtionl2 onnetion2 etween2 the2 orret2
 rtiultion2of2wediid2poliy2nd2the2modiﬁed2ﬁnding2of2ftD2 whih2urtely2
 reflets2tht2poliyF2eeD2eF2gFD2 reritge2on2the2n2qriel2romeowners2essoF2vF2
giD2QWQ2FFQd2t2RRHERIY2tte2vF2 widEouth2versD2snFD2 PRT2FFQd2t2UPVY2
vevy2vF2 exF2tte2fzl2of2wedF2ixm rsF2WTT2FFPd2t2VITF2
                                        ’2

rrgEysq2presented2prim2fie2 evidene2 tht2 is2 redileD2 relileD2 nd2
veriﬁedD2nd2tht2hs2indiei2 of2reliility2 when2nlyzed2onsistently2with2
exs2 lw2 nd2 wediid2 poliyD2 tht2 ehg2ommitted2 frud2 or2 willful2
misrepresenttions2in2ﬁling2requests2for2prior2uthoriztion2with2          wr2for 2
sustntil2mjority2of2ptients2in2the2ysq2udit2smpleF2
@he2 yer2evts‘2 proposed2pop2xoF2 SH2 sttedX2 here2 is2 no2 evidene2 tht2 is2
redileD2 relileD2 or2 verifileD2 or2 tht2 hs2 indii2 of2reliilityD2 tht2 ehg2
ommitted2ﬁtGl2or2misrepresenttion2 in2ﬁling2requests2Gor2prior2uthoriztion2
with2wrfor2the2TQ2ptients2t2issue2in2this2seFA2
eson2for2ghngeX2
roposed2pop2xoF2 SH2 ddresses2 2mixed2question2of2ft2 nd2lwD2 nd2is2 2 so~2
lled2“legisltive2ﬁndingF42hereforeD2the2ixeutive2gommissioner2hs2omplete2
                                              82
disretion2to2modify2itF2 exF2 hep9r2of2viensing2 egultion2vF2 hompsonD2 PHIQ2
v2QUWIRVTD2 t2 BT2 @“‘en2geny2enjoys2 omplete2 disretion2 in2 modifying2n2
evt9s2ﬁndings2nd2onlusions2when2those2ﬁndings2nd2onlusions2reflet2
                                                                                2lk2
of2understnding2 or2 mispplition2 of2 the2 existing2 lwsD2 rulesD2 or2 poliiesF”2
@quoting2mith2vF2wontemyorD2PHHQ2      v2
                                          PIRHISWIF2t2BPTEPU2@emphsis2ddedAAY2
exF2qov’t2gode2§2PHHlFySV@eA@lAF2
he2ixeutive2gommissioner2modiﬁes2roposed2polc2 xoF2SH2euse2the2yer2
evts2misinterpreted2 nd2mispplied2exs2lw2nd2wediid2poliyF2 pirstD2 the2
proposed2ﬁnding2mispplies2exs2lw2governing2the2snspetor2qenerl’s2urden2
of2proof2in2this2 seF2es2noted2in2gov2xoF2 IPD2 to2mintin2the2pyment2holdD2the2
snspetor2 qenerl2 must2 only2 mke22prim2jie2 showing2of2evidene2 tht2 is2
redileD2 relile2 or2 veriﬁleD2 or2 tht2 hs2 indii2 of2reliility2 tht2 ehg2
                                                                                       hs2
ommitted2frud2or2willful2misrepresenttions2in2this2seF2
he2 yer2evts’2 determintion2 tht2 the2 snspetor2 qenerl2 presented2 “no2
evidene”2 on2 this2 issue2 is2 the2 result2 of2the2 yesEs2 evts’2 leglly2
                                                                             erroneous2
interprettion2of2wediid2poliy2with2respet2to2the2deﬁnition2of2etopi2eruptionF2
es2the2snspetor2qenerl2noted2in2his2ixeptionsD2the2    yer2    evt2s’2 determintions2
tht2the2 following2r2 ll2 errors2 in2 the2pplition2of2exs2wediid2
                                                                         poliy2nd2
lwX2@IA2exs2wediid2“defined”2etopi2eruption2uniquely2nd2differently2
                                                                               in2the2
ww2     thn2the2generlly2epted2deﬁnition2in2the2 orthodonti2professionY2
                                                                                   @PA2
tht2 sid2deﬁnition2ws2wholly2open2to2sujetive2interprettionY2 nd2
                                                                        @QA2 tht2 the2
PHIP2hnges2to2the2wlGl2“deﬁnition”2were2sustntive2rther2thn2lrifyingF

                                       QH

                                 001773
        purtherD2 hrF2 unn2sored2 PQ2 of2PU2ptients2 extly2 the2 sme2wyE—vvit2 the2
        sme2eight2teeth2eing2sored2s2etopiF2—VQY2olF2Q2t2RQEUHF2he2yer2evts2
        knowledged2 this2 undisputed2 evideneF2 phD2 t2 PSF2 his2 evidene2 of2 hrF2
        unn’s2pttern2 of2soring2is2 prim2pie2 evidene2tht2 hrF2 unn2ted2 with2
        requisite2knowledge2under2the2wpeF2exF2rumF2esF2gode2 QTFHHI2l@AF2 he2
                                                                           §2
        ixeutive2 gommissioner2 is2 uthorizedD2 thereforeD2 to2 orret2 the2 yer2evts’2
        errorF2exF2qov’t2gode2§2PHHIF@ASV@eA@lAF2

       he2yer2evts2lso2erred2to2the2extent2tht2they2relied2on2tlIe2 rrlingen2pmily2
       hentl2deisionD2 prtiulrlyD2 pyp2PWD2 QID2 nd2QQD2 for2their2understnding2of2the2
       sope2nd2limittions2 of2exs2wediid2poliyF2 he2ixeutive2gommissioner2
       dispproves2of2these2ﬁndingsD2nd2expressly2onludes2tht2they2were2sed2on2n2
       inorret2 interprettion2 nd2pplition2 of2exs2 lw2nd2wediid2poliyD2 nd2
       thereforeF2nnot2e2relied2onF2 exF2qov’t2gode2 PH@AIFHSV@eA@PAF2
                                                           §2
       woreoverD2 the2 proposed2 ﬁnding2 reflets2 2 fundmentl2 misunderstnding2 nd2
       mispplition2of2exs2lw2nd2wediid2poliy2y2the2@Aer2evt2       sF2 en2
                                                                                     urte2
       understnding2of2the2sope2nd2limittions2of2exs2wediid2poliy2is2 ritilly2
       importnt2to2 the2outome2of2this2 disputeF2 he2fundmentl2llegtion2rought2y2
       the2 snspetor2 qenerl2 is2 tht2 ehg2hs2 sumitted2 lims2 for2 e2 nd2 for2
       reimursement2tht2re2not2uthorized2under2wediid2poliy2or2exs2lwF2hese2
       llegtions2nnot2e2properly2evluted2if2the2ft2ﬁnder2does2not2understnd2the2
       poliyF2hereforeD2there2is2 2rtionl2onnetion2etween2the2orret2rtiultion2of2
       wediid2poliy2nd2the2 modiﬁed2ﬁnding2of2ftD2 whih2urtely2 reﬂets2 tht2
       poliyF2eeF2eF2gFD2 reritge2on2the2n2qriel2romeowners2essoF2 vF2 giD2QWQ2
       FFQd2t2 RRHERIY2tte2 vF2 llGsidEouth2 versD2 snD2 PRT2FFQd2t2 UPVY2 vevy2vF2
       exF2tte2f’2HfwedF2ixm2’rsD2 WTT2FFPd2t2VITF2
                    F2

SI2    hen2IEsrgEysq2rrived2t2ehg2in2xovemer2llD2 PHIPF2nd2sked2for2TQ2se2
                                           ehg2ould2not2lote2eight2dentl2modelsD2
       ﬁlesD2 prim2fie2evidene2exists2 tht2
          rvh2sore2sheetsD2nd2two2preEtretment2x~rysF2
       four2
SPF2   ehg2forwrded2the2 lE{vh2sore2sheets2 nd2supporting2doumenttion2to2 lGr2
       when2ehg2ﬁled2its2 requests2for2prior2uthoriztionF2
SQ2    rrgEysq2presented2prim2fie2evidene2tht2ehg2filed2to2retin2these2reords2
       nd2models2for2the2required2five2yersF2
SR2    rrgEysq2     presented2prim2fie2 evidene2 tht2 is2 redileD2 relileD2 nd2
       verifiedF2 nd2tht2 hs2indii2 of2reliility2 when2nlyzed2onsistently2with2
       exs2 lw2 nd2 wediid2 poliyD2 tht2 ehg2illed2 or2 used2 lims2 to2 e2
       sumitted2to2exs2wediid2for2servies2or2items2tht2re2not2reimursle2
       y2the2exs2wediid2progrmF2
       @he2 yesEs2 eFvts’2 proposed2 pop2 xoF2 SR2 sttedX2 rrgEysq2filed2 to2 present2
       prim2fie2evilene2tht2ehg2illed2Hr2used2lims2to2 e2sumitted2sH2 exs

                                             Q

                                       001774
llGlediilfr2servies2or2items2tht2re2not2reimursle2y2the2 exs2wediid2
progrmFA2
eson2for2ghngeX2
roposed2pop2xoF2 SR2 ddresses2 2mixed2question2 of2ft2 nd2lwD2 nd2is2 2 soE2
lled2“legisltive2ﬁndingF42 hereforeD2the2ixeutive2gommissioner2hs2omplete2
disretion2to2modify2itF2 exF2 hep9t2of2viensing282egultion2vF2 2 hompsonD2 PHIQ2
v2QUWIRVTD2 t2 BT2 @“9Gn2 geny2enjoys2 omplete2 disretion2 in2 modifying2n2
Gvt9s2ﬁndings2nd2onlusions2when2those2ﬁndings2nd2onlusions2reﬂet22lk2
ol‘2 understnding2 or2
                        mispplition2 of2 the2 existing2 lwsD2 rulesD2 or2 poliiesF”2
@quoting2mith2vF2 woritemyorD2PHHQ2      v2
                                             PIRHISWID2t2BPTEPU2@emphsis2ddedAAY2
exF2qov9t2gode2§2PHHIFSV@eA@AF2
he2ixeutive2gommissioner2modiﬁes2roposed2pop2xoF2SR2euse2it2 mispplies2
exs2 lw2 nd2 wediid2poliyF2 lf2 the2 yer2evts2hd2 pplied2 the2 proper2
                                                         ww2
stndrd2 for2 etopi2 eruptionD2 onsistent2 with2 the2 2     provision2 requiring2
providers2to2e2“onservtive”2in2soringD2to2the2fts2of2this2seD2then2the2yer2
ev2s2 would2hve2onluded2tht2rrgEysq2presented2prim2fie2evidene2tht2
in2t2lest2SV2of2the2TQ2ses2in2the2smple2ehg2sumitted2e2requests2for2ptients2
who2were2not2quliﬁed2for2full2orthodontiF2
he2yess2evts2lso2orrd2to2the2extent2tht2they2relied2on2the2rrlingen2pmily2
hentl2deisionD2 prtiulrlyD2 pop2PWD2 QID2 nd2QQD2 for2their2understnding2of2the2
sope2nd2limittions2 of2exs2wediid2poliyF2 he2ixeutive2gommissioner2
dispproves2of2these2ﬁndingsD2nd2expressly2onludes2tht2they2were2sed2on2n2
inorret2 interprettion2 nd2pplition2 of2exs2lw2nd2wediid2poliyD2 nd2
thereforeF2nnot2e2relied2onF2 exF2qov’t2gode2§2PHHlFHSV@eA@PAF2

woreoverD2 the2 proposed2 ﬁnding2 reﬂets2 2 fundmentl2 misunderstnding2 nd2
mispplition2of2exs2lw2nd2wediid2poliy2y2the2yer2evssF2en2urte2
understnding2of2the2 sope2nd2limittions2of2exs2wediid2poliy2is2 ritilly2
importnt2to2 the2 outome2of2this2 disputeF2 he2fundmentl2llegtion2rought2y2
the2 lnspetor2 qenerl2 is2 tht2 ehg2 hs2 sumitted2 lims2 for2 e2 nd2 for2
reimursement2tht2re2not2uthorized2under2wediid2poliy2or2exs2lwF2hese2
llegtions2nnot2e2properly2evluted2if2the2deision2mker2does2not2understnd2
the2 poliyF2 hereforeD2 there2 is2 2 rtionl2 onnetion2 etween2 the2 orret2
rtiultion2of2wediid2poliy2nd2the2modiﬁed2ﬁnding2of2ftD2 whih2urtely2
reflets2tht2poliyF2eeD2eFgFD2reritge2on2the2ri2 qriel2romeowners2essoF2 vF2
giF2QWQ2FFQd2t2RRHERIY2tte2vF2 widEouth2veG‘sD2snD2PRT2FFQd2t2UPVY2
v€{2vF2 exF2tte2felF2 HfFwedF2ixm rsD2 WTT2FFPd2t2VITF2
                                      ‘2

ehg2ommitted2progrm2violtions2 when2 sumitted2 prior2uthoriztion2
                                                 it2
requests2nd2rvh2forms2for2hVHVH2omprehensive2orthodonti2tretmentD2of2
tients2ISD2STD2nd2TH2when2these2ptients2did2not2qulify2por2omprehensive2
orthodontisF

                                       QP

                               001775
@he2 yer2esFFts’2 proposed2 pop2xoF2 SS2 sttedX2 tient2 sSD2 STD2 nd2THD2 were2
eligile2for2intereptive2tretment2under2exs2wediidFA2

eson2for2ghng2
                eX2

roposed2pp2xoF2 SS2 ddresses2 2mixed2question2 of2ft2 nd2lwD2 nd2is2 2 soE2
lled2“legisltive2ﬁndingF”2 hereforeD2the2ixeutive2gommissioner2hs2omplete2
disretion2to2modify2itF2 exF2 hep’t2of2viensing282egultion2vF2 hompsonD2 PHIQ2
v2QUWIRVTD2 t2 BT2 @“en2geny2enjoys2 omplete2 9isErerion2 in2 modifying2n2
Gvt9s2lindings2nd2onlusions2when2those2ﬁndings2nd2onlusions2reflet22lk2
   understnding2 or2 mispplition2 ol’2 the2 existing2 lwsD2 rulesD2 or2 poliiesF”2
oi‘2

@quoting2mith2vF2 wontemyorD2PHHQ2    v2PIRHISWID2t2BPTEPU2@emphsis2ddedAAY2
exF2qov4t2gode2§2PHHIFHSV@eA@lAF2
he2ixeutive2gommissioner2modifies2roposed2pop2xoF2SS2euse2it2mispplies2
exs2lw2nd2wediid2poliyF2 o2the2extent2the2yer2evts2use2“intereptive”2
tretment2to2men2something2less2 thn2omprehensive2oithodontis2hVHVH2@nd2
therefore2 outside2 the2 requirement2tht2 ptients2 e2 IP2 or2 older2or2hve2no2y2
teethAD2 the2 yer2evts2misstte2 the2 evideneF2 ehg2illed2 the2 ode2hVHVH2for2
these2 ptientsF2 mening2they2 flsely2 represented2to2 the2 stte2 tht2 these2 ptients2
were2 IP2 or2older2or2hd2lost2 ll2 y2teethF2 o2the2 extent2the2 @Aer2evts2use2
“intereptive”2to2 inlude2ode2hVHVHD2see2ix2EIS2t2 §2 lWFlVFUD2they2re2gin2in2
errorX2 hVHVH2is2expliitly2not2pplile2to2ptients2like2these2who2hve2y2teeth2
nd2re2under2IP2yers2oldF2
hese2ptients2 my2well2 hve2een2eligile2 for2 intereptive2 tretment2—2tht2 isD2
something2less2thn2omprehensive2orthodontis2—2ut2the2evidene2in2 this2 se2is2
lerX2 ehg2illed2wediid2for2—2nd2represented2to2the2 tte2tht2these2ptients2
quliﬁed2for2—2hVHVHD2or2omprehensive2orthodontisF2 por2exmpleD2with2regrd2
to2 tient2 ISD2 the2 h2 sttes2 tht2    ehg2requested2 “prior2 uthoriztion2 for2
intereptive2 tretmentF42 ph2 t2 QQF2     ehg2 requested2 hVHVHF2 omprehensive2
orthodontisF2for2this2ptientD2even2though2the2ptient2ws2W2yers2old2nd2hd2y2
teethF2    ~lS2 t2 lS~HHIW2@ehg2rior2euthoriztion2equest2porm2for2tient2
lS2 requesting2 “AVHVH”FA2 his2 is2 2 progrm2 violtionF2 I2 exF2 edminF2 gode §2
QUIF2lTlU@lA@uA2nd2@SA@qAF2
ith2regrd2to2tient2STD2ehg2requested2hVHVH2omprehensive2orthodontis2for2
this2ptientF2even2though2the2ptient2ws2W2yers2old2nd2hd2y2teethF2ixF2EST2
t2 STEHHIS2 @ehg2rior2euthoriztion2equest2 porm2for2 tient2 ST2 requesting2
“hVHVH”2for2 2hrge2of26UUSFHHFA2 his2is2 2progrm2violtionF2 I2 exF2edminF2
gode2§2Q’GIFlTlU@lA@uA2nd2@SA@qAF2
                          ehg2
pinllyD2 for2 tient2THF2   requested2hVHVH2omprehensive2orthodontisD2even2
though2this2 ptient2ws2under2lP2nd2hd2y2teethF2 ixF2ETH2t2 THEHHHR@ehg2
rior2euthoriztion2equest2porm2for2 tient2TH2requesting2“hVHVH”2for22hrge

                                        QQ

                                001776
ol’6UUSFH@AFAF2 his2is2 2progrm2violtionF2 l2 exF2edminF2gode2 QUlFlTlU@IA@uA2
                                                                   §2
nd2@SA@qAF2
he2pt2 tht2   ehg2
                     illed2for2omprehensive2orthodontis2when2their2ptients2did2
not2qulify2for2tht2tretment2is22progrm2violtionD2nd2wrrnts22pyment2holdF2
he2yer2esFFts2lso2erred2to2 the2extent2tht2they2relied2on2the2rrlingen2pmily2
hentl2deisionD2 prtiulrlyD2 pop2PWD2 QID2 nd2QQD2 for2 their2 understnding2of2the2
sope2nd2limittions2 of2exs2wediid2poliyF2 he2ixeutive2gommissioner2
dispproves2of2these2ﬁndingsD2nd2expressly2onludes2tht2they2were2sed2on2n2
inorret2 interprettion2 nd2pplition2 oi’2 exs2 lw2nd2wediid2poliyD2 nd2
thereforeD2nnot2e2relied2onF2 exF2qov”X2gode2§2PH@AIFHSV@eA@PAF2

en2urte2understnding2of2the2sope2nd2limittions2of2exs2wediid2poliy2
is2 ritilly2importnt2 to2 the2 outome2 of2 ny2 disputeF2 ellegtions2 nnot2 e2
properly2evluted2if2the2 deision2mker2does2not2properly2interpret2 nd2pply 2
poliyF2hereforeD2there2is2 2rtionl2onnetion2etween2the2orret2rtiultion2of2
wediid2poliy2 nd2 the2 ltered2 ﬁnding2of2ftD2 whih2urtely2 reflets2 tht2
poliyF2eeD2eFgFD2 reritge2on2the2n2qriel2romeowners2essoF2 vF2 giD2QWQ2
FFQd2RIUD2 RRHERI2 @exF2 eppF—eustin2PHIPD2pet2 deniedAY2 lte2 vF2 wi’Eouth2
versD2snFD2 PRT2FFQd2UIID2UPV2@exF2eppF~eustin2PHHUD2petF2 deniedAY2vevy2vF2
                   wedF2ixm2’rsD2 WTT2FFPd2VIQD2VIT2@exF2eppF—eustin2IWWVF2no2
exF2tte2felF2 of2
petFAF2

rogrm2violtions2rnge2from2“very2innouous”2to24very2importntF”2
ehg’s2 reord2 keeping2 violtionsD2 together2 with2 the2 prim2fie2 evidene2
presented2 y2 rrgEysq2of2ehg’s2frud2 nd2 willful2 misrepresenttionsD2
when2 nlyzed2 onsistently2 with2 exs2 lw2 nd2 wediid2 poliyD2 justify2
mintining2the2pyment2holdF2
@he2yer2evts’2 proposed2pol‘2 xoF2 U2sttedX2 ehg s2violtion2 is2 2tehnil2
                                                           ‘2

violtion2 nd2sed2upon2 this2 reord2does2 not2 rise2 to2 2 level2 of2sustntive2
onernFA2
eson2for2ghngeX2
roposed2polc2 xoF2SU2ddresses2 2mixed2question2of2ft2 nd2lwD2 nd2is2 2soE2
lled2“legisltive2ﬁndingF42 hereforeD2the2ixeutive2gommissioner2hs2omplete2
disretion2to2modify2itF2 exF2 hep’t2loG4viensing282egultion2F2 hompsonD2 HIQ2
v2QUWIRVTD2 t2 BT2 @“en2geny2enjoys2 omplete2 disretion2 in2 modifying2n2
evt9s2ﬁndings2nd2onlusions2when2those2ﬁndings2nd2onlusions2reﬂet22lk2
of2 understnding2 or2 mispplition2 of2 the2 existing2 lwsD2 rulesD2 or2 poliiesF”2
@quoting2mith2vF2 wontemyorD2PHHQ2   v2   PIRHISWID2t2BPTEPU2@emphsis2dddAAY2
exF2qov’t2gode2§2P@AHIFHSV@A@lAF2
roposed2pop2xoF2SU2is2 erroneous2euse2it2 inispplies2exs2lw2nd2wediid2
poliyD2 inluding2to2 the2extent2this2 ﬁnding2rests2on2the2 flse2premise2tht2ehg’s

                                      QR

                                001777
reord2keeping2violtions2re2the2only2tionle2violtions2found2y2the2snspetor2
qenerlF2 he2yer2evts2pper2to2 reson2tht2 Ghg’s2progrm2violtionsD2 y2
themselvesF2 do2 not2justify2 ontinution2 of2thepyment2holdF2 he2underlying2
premiseD2 in2 turnD2 is2 sed2the2 yesEs2 evts2mispplition2 of2exs2wediid2
poliy2regrding2 etopi2 eruptionF2 his2 ﬁnding2is2 lso2 erroneous2 euse2 it2 is2
within2the2 sound2disretion2 of2the2 ixeutive2 gommissionerD2nd2not2the2 yess2
evtsD2to2determine2whether2or2not2ehg92      s2reord2keeping2violtions2re2use2for2
onemF2
he2snspetor2 qenerl2sed2 his2 pyment2 holdD2 in2 pnD2 on2 ehg’s2filure2 to2
provide2reords2pursunt2to2 the2 snspetor2qenerl’s2requestF2 sn2some2sesD2ehg2
hd2these2reordsD2nd2entered2them2into2evidene2in2this2ese2over22yer2qﬂer2the2
snspetor2 qenerl2 requested2 themF2 ehg’s2 filure2 to2 provide2 these2 reords2
immeditely2 is2 2 progrm2 violtion2 nd2my2result2 in2 2 pyment2holdF2 s2 exF2
edminF2gode2§2 QUIFlTlU@PA@GAY2 EsR2t2 sEV2 @“pilure2 to2 supply2the2requested2
douments2 nd2 other2 itemsF2 within2 the2 time2 frme2 speiﬁedD2 my2result2 in 2
pyment2hold2 or2exlusion2from2wediidf‘AF2
               F2   F2   F2

roposed2pop2xoF2 SU2is2 erroneous2 in2 hrterizing2these2progrm2violtions2 s2
4tehnil2violtions”2tht2re2not2“of2sustntive2onemD”2prtiulrly2in2light2
of2the2 ft2tht2 the2 snspetor2qenerl2is2 oligted2to2 investigte2wediid2frudD2
wsteD2 nd2 useD2 ndD2 in2 the2 ourse2 of2 investigtingD2 is2 entitled2 to2 request2
douments2 of2providersF2 ixF2 EsR2 @PHHV2 wwA2§2 IFPFQF2 siurthermoreD2 the2
snspetor2qenerl2is2 entitled2to2 se2pyment2hold2determintions2on2the2reords2
tht2wediid2providers2provide2in2response2to22proper2request2on2the2prt2of2the2
snspetor2 qenerlF2 wediid2 providers42 filure2 to2 provide2 douments2 to2 the2
snspetor2 qenerl2 pursunt2 to2 2 written2 request2 for2 them2 is2 2 “sustntive2
onernF”2 prtiulrly2 in2 sesD2 like2this2 oneD2where2the2 provider2lter2ttks2the2
vlidity2 of2the2 pyment2hold2 sed2on2the2 existene2 of2douments2 it2 filed2 to2
provide2 to2 the2 snspetor2 qenerlF2 he2 existene2 nd2 provision2 of2douments2
neessry2to2 fully2 doument2nd2evlute2 the2 neessity2nd2delivery2of2medil2
servies2 is2 prmount2to2the2integrity2of2the2wediid2systemF2ee2iere2vF2 exF2
ing2gomm2UID2 PIP2 FFQd2URSD2 USR2 @exF2 eppF—eustin2PHHTD2 petF2 deniedA2
@geny2detemiines2pproprite2 penlty2to2 further2genyG’s2 gols2 of2ompline2
with2 stte2 lwA2 @iting2 piremen9s2 82 Hliemen9s2 givil2 ervF2 gHmm9n2 vF2
frlnkmeyerD2TTP2FFPd2WSQF2WST2@exF2IFWVRAAY2 ee2lso2 exF2 tte2f’2 of2hentl2
                                                                             F2

ixm rs2 vF2 frownD2PVI2 FFQd2TWPD2TWU2@exF2 GppF—gorpus2ghristi2 PHHWD2petF2
      92

deniedA2@genyD2not2evsD2determines2pproprite2sntionAF2
he2yer2evts2lso2erred2to2the2extent2tht2they2relied2on2the2rrlingen2pmily2
hentl2deisionD2 prtiulrlyD2 p2op2PWF2 QIF2 nd2QQD2 for2their2understnding2of2the2
sope2nd2limittions2 of2exs2wediid2poliyF2 he2ixeutive2 gommissioner2
dispproves2of2these2ﬁndingsD2nd2expressly2onludes2tht2they2were2sed2on2n

                                        QS

                                 001778
inorret2 interprettion2 nd2pplition2 of2exs2 lw2 nd2wediid2poliyD2 nd2
thereforeD2nnot2e2relied2onF2 exF2qov’t2gode2§2PHHI2FHSV@eA@PAF2

woreoverD2 the2 proposed2 ﬁnding2 rellets2 2 fundmentl2 misunderstnding2 nd2
mispplition2ol’2exs2lw2nd2wediid2poliy2y2the2yer2evt2      sF2 en2urte2

understnding2of2the2sope2nd2limittions2 of2exs2wediid2poliy2is2 ritilly2
importnt2to2the2outome2of2this2 disputeF2 he2fundmentl2llegtion2rought2y2
the2 snspetor2 qenerl2 is2 tht2 ehg2hs2 sumitted2 lims2 for2 e2 nd2 for2
reimursement2tht2re2not2uthorized2under2wediid2poliy2or2exs2lwF2 hese2
llegtions2nnot2e2properly2evluted2if2the2ft2finder2does2not2understnd2the2
poliyF2hereforeD2there2is2 2rtionl2onnetion2etween2the2orret2rtiultion2of2
wediid2poliy2 nd2the2modiﬁed2ﬁnding2of2ftD2 whih2urtely2reﬂets2tht2
poliyF2eeD2 eF2gFD2 reritge2on2the2n2qriel2romeowners2essoF2 vF2 giD2QWQ2
FFQd2t2 RRHERIY2tte2 vF2 wi’Eouth2versD2 snD2 PRT2FFQd2t2 UPVY2vevy2vF2
exF2tte2fdF2HfwedF2ixm2’rsD2 WTT2FFPd2t2VITF2

                        gyxgvsyx2yp2ve2
rrgEylq2hs2jurisdition2over2this2 seF2 exF2qov9t2gode2hF2 SQY2exF2 rumF2
esF2gode2hF2QPF2
yer2hs2jurisdition2over2the2hering2proess2nd2the2preprtion2nd2issune2
of22proposl2for2deisionD2with2ﬁndings2of2ft2nd2onlusions2of2lwF2exF2qov9t2
gode2hF2PHHQF2
xotie2of2the2hering2ws2properly2providedF2exF2qov9t2gode2hF2PHHIF2
he2snspetor2qenerl’s2urden2to2 mintin2the2pyment2hold2under2setion2
SQlFlHP@gA@PA2of2the2 qovernment2gode2or2setion2 QPFHPWl@A2 of2the2 rumn2
esoures2godeD2is2 to2show2y2relile2or2prim2fie2evidene2tht2ehg2hs2
ommitted2frud2or2mde2willful2misrepresenttionsF2
@he2 yer2evts’2 proposed2gov2xoF2 R2 sttedX2 rrgEysq2hd2the2 urden2of2
proofA2
eson2for2ghngeX2
he2ixeutive2gommissioner2modiﬁes2roposed2gov2xoF2RF2 roposed2gov2xoF R2
is2 erroneous2 euse2 it2 is2 2 missttement2 of2the2 lwF2 ee2 exF2 qov‘t2 gode §2

PH@AlF@ASV@eA@IAF2 he2inspetor2 qenerl2 is2 required2y2lw2to2 impose2 2 pyment2
hold24on2reeipt2of2relile2evidene2tht2the2irumstnes2giving2rise2to2the2hold2
on2pyment2involve2 frud2or2willful2 misrepresenttion2under2the2 stte2 wediid2
progrm2 in2 ordne2 with2 RP2 gFpFF2 etion2 RSSFPQF“2 exF2 qov’t2 gode §2
SQlFlHP@gA@PAF2 edditionllyF2 4the2 deprtment2shll2 disontinue2the2hold2unless2
the2deprtment2mkes22primGizie2showing2t2the2hering2tht2the2evidene2relied2
on2y2the2deprtment2in2imposing2the2hold2is2 relevntD2redile2nd2mteril2to2the2
issue2of2frud2or2willful2 misrepresenttionF“2 exF2 rumF2esF2gode2§2 QPFHPWl@A

                                       QT

                                001779
          @emphsis2 ddedAF2 feuse2 the2    yer2 GEvts’2    proposed2 onlusion2 of2 lw2
          misstted2 the2 pplile2 lwD2 the2 ixeutive2 gommissioner2 hs2 disretion2 to2
          modify2 itF2 hompsonD2 PHIQ2      v2   QUWIRVTD2 t2 BTY2 exF2 qHv’t2 gode §2
          PHHlFHSV@eA@lAF2
          he2HGEFr2evs2  s2 lso2erred2to2the2extent2tht2they2relied2on2the2rrlingen2pmily2
          hentl2deisionD2prtiulrlyD2pop2PWD2 QID2 nd2QQD2 for2 their2 understnding2of2the2
          sope2nd2limittions2 of2exs2wediid2poliyF2 he2ixeutive2 gommissioner2
          dispproves2of2these2ﬁndingsD2nd2expressly2onludes2tht2they2were2sed2on2n2
          inorret2 interprettion2 nd2pplition2 of2exs2lw2 nd2iGlediid2 poliyD2 nd2
          thereforeD2nnot2e2relied2onF2 exF2qov’t2gode2§2PHHI2FHSV@eA@PAF2

          woreoverD2the2 proposed2onlusion2reflets2 2fundmentl2misunderstnding2nd2
          mispplition2of2exs2lw2y2the2 yer2ev2sF2 hereforeD2there2 is2 2rtionl2
          onnetion2etween2exs2lw2nd2wediid2poliy2nd2the2modified2onlusion2
          of2lwF2eeD2eF2gFD2 reritge2on2the2n2qriel2romeowners2essoF2 vF2 giD2QWQ2
          FFQd2t2 RRHERIY2tte2vF2 widEouth2versD2 snFD2 PRT2FFQd2t2 UPVY2vevy2vF2
          exF2tte2f’2 ofwedF2ixm2’rsD2 WTT2FFPd2t2VITF2
                        F2

S                                 knowingly2mke2or2use2to2e2mde22flse2sttement2or2
          lt2 is2 n2unlwful2t2to2

          misrepresenttion2 of22 mteril2 ft2 to2 permit2 2 person2to2 reeive2 2 eneﬁt2 or2
          pyment2under2the2wediid2progrm2tht2is2 not2uthorized2or2tht2is2greter2thn2
          the2 eneﬁt2 or2 pyment2 tht2 is2 uthorizedF2 exF2 rumF2 esF2 gode2 §2 QTFHHP@lA2
          @PHHQAF2
T         he2term2“knowingly”2mens2tht2 the2 person2hs2knowledge2of2the2 informtionD2
          ts2with2onsious2indifferene2to2the2truth2or2flsity2of2the2informtionD2or2ts2in2
          rekless2disregrd2of2the2truth2or2flsity2of2the2informtionF2roof2of2the2person‘ s2
          speifi2intent2to2ommit2n2unlwful2t2under2§2 QTFHHP2is2 not2required2to2 show2
          tht22person2ted2“knowinglyF”2exF2lsElumF2 esF2gode2§2QTFHHII2@PHHQAF2

U2        “prud”2is2n2intentionl2deeption2or2misrepresenttion2mde2y22person2with2the2
          knowledge2tht2 the2 deeption2ould2result2 in2 some2unuthorized2eneﬁt2to2 tht2
          person2 or2 some2 other2 personD2 inluding2 ny2 t2 tht2 onstitutes2 frud2 under2
          pplile2federl2or2stte2lwF2exF2qov4t2gode2§2SQIFIHI2I@IA2@PHI2IAF2

    VF2   l9Il~lgEysq2 must2 impose2 2 hold2 on2 pyment2 of2 lims2 for2 reimursement2
          sumitted2 y2 2 provider2 on2reeipt2 of2relile2 evidene2 tht2 the2 irumstnes2
          giving2rise2to2the2hold2on2pyment2involve2frud2or2willful2misrepresenttion2under2
          the2stte2wediid2progrmF2exs2qov’t2gode2§2SQ2lFlHP@gA@PA2@PHI2IAF2

    WF2   ell2 wediid2pyments2to22provider2must2e2suspended2fter2the2stte2wediid2
          geny2 determines2 tht2 there2 is2 2 redile2 llegtion2 of2 frud2 for2 whih2 n2
          investigtion2 is2 pendingD2 unless2 the2 geny2 hs2 good2 use2 not2 to2 suspend2
          pyments2 @or2 to2 suspend2 pyments2 only2 in2 pitAF2 sf2 the2 stte’s2 wediid2 frud2
          ontrol2 unit2 epts2 2 referrl2 for2 investigtion2 of2the2 providerD2 the2 pyment

                                                  QU

                                           001780
  suspension2 my2 e2 ontinued2 until2 suh2 time2 s2 the2 investigtion2 nd2
  ssoited2enforement2proeedings2re2ompletedF2
                                                                                  ny2
                                                     RP2gFpFF2§2RSSFPQ2@PHI2lAF2
  e2 “gredile2 llegtion2 of2frud”2 my2e2 “n2
                                                      llegtionD2 whih2 hs2 een2
  veriﬁed2y2the2tteD2 from2ny2soure”2inludingD2
                                                         ut2not2limited2toD2 ‘frud2
  hotline2 omplintsD2 lims2 dt2 miningD2 nd2
                                                       ptterns2 identiﬁed2 through2
 provider2 uditsD2 nd2 lw2 enforement2 investigtionsF2
                                                                     ellegtions2 re2
 onsidered2 redile2 when2 they2 hve2 indii2 of2
                                                          reliility2 nd2 the2 tte2
 wediid2geny2hs2 reviewed2 ll2 llegtionsD2 ftsD2 nd2
                                                                   evidene2refully2
 nd2ts2judiiously2on22se—yEse2sisF”2RP2gFpFF2
                                                              §2RSSFPF2
 @he2yer2evts92proposed2gov2x2    oF2 lH2sttedX2 4gredile2llegtion2          42
 “2
  n2llegtionD2whih2hs2een2veriﬁed2y2the2tteD2ﬁ9onz2              offrud2 is
                                                                          42
                                                              ny2soureD2 inludingD2
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                                                            xoF2 IHF2 roposed2gov2xoF2
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                                        ee2hompsonD2PHIQ2v2QUWIRVTD2t2 BTY2
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he2yer2evts2lso2erred2to2the2extent2tht2they2relied2
                                                        on2the2rrlingen2pmily2
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                                                               tht2they2were2sed2on2n2
inorret2 interprettion2 nd2pplition2 of2
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thereforeD2nnot2e2relied2onF2 exF2qov’t2gode2
                                                       §2PHHlFHSV@eA@PAF2
woreoverD2 euse2 the2 proposed2 onlusion2
                                                          reﬂets2 2 fundmentl2
misunderstnding2nd2mispplition2of2lw2 the2yer2
                                             y2             evtsD2there2is22rtionl2
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                                               poliy2nd2the2modiﬁed2onlusion2
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                                               romeowners2essoF2 vF2 giD2QWQ2
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                                  progrmF2           2                   hs2     sumitted2
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                                                        PHIQ2 v2                         ell2 s2
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                                                                                BTY2
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                                                                                              ompline2
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                                                                                                                                       vF2
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                                                                     001782
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 ll2

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         inorret2 interprettion2 nd2pplition2 of2exs2 lw2
                                                                    nd2wediid2poliyD2 nd2
         thereforeD2nnot2e2relied2onF2 exF2qov’t2gode2 PHHI2
                                                            §2     FHSV@eA@PAF2
        woreoverD2the2proposed2onlusion2reflets2 2fundmentl2
                                                                     misunderstnding2nd2
        mispplition2of2exs2lw2y2the2 yer2evtsF2hereforeD2
                                                                         there2 is2 2rtionl2
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                                                                       modiﬁed2onlusion2
        of2lwF2eeD2eF2gFD2reritge2on2the2n2qriel2romeowners2
                                                                      essoF2 vF2 giD2QWQ2
        FFQd2t2 RRHERIY2tte2 vF2 widEouth2versF2 snD2 PRT2FFQd2
                                                                            t2 UPVY2 vevy2vF2
        exF2tte2f’2 HfwedF2ixm2’rsD2 WTT2FFPd2t2V2lTF2
                      F2

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                                                                                       relile2
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                                                                               exF2qHv’t2
        gode2§2SQlFlHP@gA@PAF2he2ixeutive2gommissioner2shll2disontinue2the2
                                                                                       hold2
        unless2 the2deprtment2mkes22prim2fie2showing2
                                                                 t2 the2 hering2tht2 the2
        evidene2 relied2 on2 y2 the2 deprtment2 in2 imposing2 the2
                                                                        hold2 is2 relevntD2
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        resonly2relted2to2the2nzgnitmle2frlze2violtionFA2
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                                                                           roposed2gov2xoF2
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                                                             ee2 exF2 qov’t2    gode §2
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                                                                        pyment2hold2 when2
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                                                            willful2 misrepresenttionF2 exF2
       qov’t2gode2§2SQlFl@AP@gA@PAF2edditionllyD2“l9the2
                                                           deprtment2shll2disontinue2   the2
       hold2unless2the2 deprtment2mkes22primfie2showing2
                                                                     t2 the2 hering2tht2 the2
       evidene2relied2on2y2the2deprtment2in2imposing2the2hold2is2
                                                                      relevntD2redile2nd2
       mteril2to2the2issue2of2frud2or2willful2misrepresenttionF42
                                                                      exF2rumF2esF2gode2
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                                                                         the2 pplile2
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                                                       modify2itF2 hompsonD2PHIQ2v2
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                                                                            rrliGzgen2pmily2
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                                                                         understnding2 of2the2
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                                                                   ixeutive2 gommissioner2
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                                                                      they2were2sed2on2n2
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                                                                       wediid2poliyF2 nd2
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                                                          §2PHHlFHSV@eA@PAF2
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                                                                       there2 is2 2 rtionl2
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                                                                    modiﬁed2onlusion

                                             RH

                                        001783
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                    F2

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IT2   ehg’s2filure2to2 immeditely2provide2ssrgEysq2with2the2douments2nd2
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                                                                        t2IFPFQF2

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      tehnil2 violtion2 nor2innouousD2 s2 rrgEysq2deided2to2 impose22pyment2
      hold2on2ehg2sed2on2the2ptient2reords2it2 provided2in2response2to2 srgEysq‘ s2
      written2requestF2nd2sed2on2the2ft2tht2ehg2filed2to2provide2ertin2reords2t2
      tht2timeF2

      feuse2 gyv2xoF2 lT2 rests2 on2 fulty2 pplitions2 of2lw2 s2 wells2erroneous2
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      PHHlFHSV@eA@lAF2 purtherF2 the2ixeutive2gommissionerD2nd2not2the2 yer2evtsD2
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      with2stte2lw2@iting2p2 ireGnen9s282oliemen29s2 givil2ervF2 gomm2
                                                                           9n2 vF2 frirtkmeyerD2

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      frownD2 PVI2 FFQd2 TWPD2 TWU2 @xF2 eppF—gorpus2ghristi2 PHHWF2 petF2 deniedA2
      @genyF2not2evtF2determines2pproprite2sntionAF2
      he2yesEs2evts2lso2erred2to2the2extent2tht2they2relied2on2the2rrlingen2pmily2
      hentl2deisionD2 prtiulrlyD2 pop2PWF2 QID2 nd2QQD2 for2 their2 understnding2of2the2
      sope2nd2limittions2 of2exs2wediid2poliyF2 he2ixeutive2 gommissioner2
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                                                       001785
Append¡x B
lexas I Medicaid.gov                                                                                                                                                             Page 1 ofl
                                                                                                                                                         Learn about yg!Lhgq!!h!3Ig_9pl!!9!9
                                                                                                                                                         lhtto://www.healthca¡e.qovl

 Medicaid,q*
 Keeping Ameríca Healthy                                              (/index.html)

Return to previous paqe

lome (/index.html)   ¡                                                                                                                  )   BY State

      Texas
                                                                                                             (/medica id-ch ip-oroqram-information/bv-state/bv-state. html)
                                 State of Texas Website
                                 (http:i/www.   h   hsc. state. tx. u s/)

      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.

       State Medicaid Expansion                          Ghildren - Medicaid      Separate CHIP Pregnant Women Parents3 Other Adults
                                             Ages       0-11 Ages 1-52 Ages 6-182               Medicaid CHIP
      Texas                  N                        198%            144%         133%                  201%             198o/o      N/A          15%                 0%

       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

       State             State Medica¡d & CHIP Enrollment                                                                     National
                Total Medica¡d & CHIP    Comparison of February                              Total Medicaid & CHIP              Gomparison of February 2015
                Enrollment (February 2015 data to July-September                             Enrollment, all States              data to July-September 2013
                  2015) (Preliminary)                 20'l 3   Average Enrollment               (February 2015)                      Average Enrollment
                                                     Net Change             % Change
                                                                                                  (Preliminary)                     Net Change             % Change
      Texas                        4,655,609              214,004                4 82%                          70,5'15,716              11   ,718,178            20 28%

      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:
lexas I Medicaid.gov                                                                                                                            Page2 of    ':

    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:
Append¡x G
Texas Medicaid
   and CHIP
 n Perspective
                       Tenth Edition

Texas Health and Human Services Commission
                              February 2015
    Ghapter                       1: Texas                        Med¡ca¡d
                        I   n     Perspective
      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
Append¡x   D
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.
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:

       Procedure Code                               Place of Service (POS)

       99202                                       POS    I (office)
       99222                                        POS 3 (inpatient hospital)
       99282                                        POS 5 (outpatient hospital)

           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
                                                                                                               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)
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)
                                                                                                          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
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: Fora 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
Appendix E
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)

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                                     CPTONLY, COPYRICHT2OO9AMERICAN   MEDICALASSOCIATION ALL RICHTS RESERVED
                                                                                                              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:

 Procedure Code                             Place of Service (POS)
 99202                                      POS      I    (office)
 99222                                      POS 3 (inpatient hospital)
 99282                                      POS 5 (outpatient hospital)

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.

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     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).

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                                                                                                            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
     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 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.

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     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

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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.

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      5.3,24,6 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
       D0350*, and         procedure codes, when billed together for denied cases, replace
       D0470*              local procedure code 22010.
       D7280               A 1-20                                                                                                             $62.s0
       D7997*              Replaces 22016. Not payable to the dentist who placed the                                                          $s0.00
                           appliance. Includes removal of arch bar and premature removal of
                           braces.   A l-20

       D8050*              Replaces Z2OIB and 8l l0D. Limited to one per lifetime.                                                            $340.00
       D8060*              Replaces 22018 and 8120D. Limited to one per lifetime.                                                             $340.00

       D8080*              Replaces 22009,            Z20ll,       and 22012. Limited to one per lifetime                                     $77s.00

       D8210*             Refer to Subsection 5.3.25, "Special Orthodontic Appliances" below                                                  See separate
                          for associated remarks field code.                                                                                  table
       D8220x             Refer to Subsection 5.3.25, "Special Orthodontic Appliances" below                                                  See separate
                          for associated remarks field code.                                                                                  table

       D8660*             Replaces 22008. Denied when billed on the same DOS as D0120,                                                        $ 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
       D8691              Not considered medically necessary                                                                                  NC
       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
      +                                     for
          = Services payable to an FQHC           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.

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                                (lPlONl-\'(iOP\l{l(itll2Ur)9r\IIl,l{l(i,\NÀll,l)l(i?\l              r\SSO(ll,\llON^llftl(ìlllSltf,Sl:R\/Ct)
Appendix F
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
                                                                                                       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-
directed by the requestor who will take custody of the                        tation in a timely manner because no response or
requested ¡tems.                                                              insufficient documentation will count against the state as
                                                                              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
agencres.
                                                                              t.4.4     Release of Gonfidential Information
                                                                              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
employees, agents, or contractors of HHSC Office of                           Only the client may give written permission for release of
lnspector General (OlG), the Texas Attorney General's                         any pertinent information before client information can be
Medicaid Fraud Control Unit (MFCU) or Antitrust and Civil                     released, and confidentiality must be maintained in all
Medicaid Fraud Section, TMHP, DFPS, the Department of                         other respects. lf a client's medical records are requested
Aging and Disability Services (DADS), Department of State                     by a licensed Texas health-care provider or a physician
Health Services (DSHS), Department of Assistive and                           licensed by any state, territory, or insular possession of
Rehabilitative Services (DARS), U.S. Department of Health                     the United States or any State or province of Canada, for
and Human Services (HHS) representative, any state or                         purposes of emergency or acute medical care, a provider
federal agency authorized to conduct compliance,                              must furnish such records at no cost to the requesting
regulatory, or program ¡ntegrity functions on the provider,                   provider. This includes records received from another
person, or the services rendered by the provider or                           physician or healthcare provider involved in the care or
person, or any agent, contractor, or consultant of any                        treatment of the patient. lf the records are requested for
agency or division delineated above. ln addition, the                         purposes other than for emergency or acute medical care,
provider must meet all requirements of 1 TAC, Part 15,                        the provider may charge the requesting provider        a
s371.1643(f).                                                                 reasonable fee and retain the requested information until
                                                                              payment is received.
The records must be available as requested by each of
these entities, during any investigation or study of the                      The client's signature is not required on the claim form for
appropriateness of the Medicaid claims submitted by the                       payment of a claim, but HHSC recommends the provider
provider.                                                                     obtain written authorization from the client before
                                                                              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
review of the claim. All providers should check the TMHP
                                                                              .   Title Vl of the Civil Rights Act of 1964 (Public Law
system to ensure their current telephone number and                               88-352), Section 504 of the Rehabilitation Act of 1 97 3
addresses are correct in the system. lf the information is                        (Public Law 93-!t2), The Americans with Disabilities Act
incorrect or incomplete, providers must request a change                          of 1990 (Public Law 101-336), Title 40, Chapter 73, of
immediately to ensure the PERM medical record request                             the TAC, all amendments to each, and all requirements
can be delivered. Client authorization for release of this                        imposed by the regulations issued pursuant to these
information is not required.                                                      acts. The laws provide in pari that no persons in the

CPT only   copyright 2008 Ameícan ¡/edical Association. All rights reseryed                                                               1_-L3
Section 1

    U.S. shall, on the grounds of race, color, nationalorigin,   fully compliant with all three categories of the tamper-
    age, sex, disability, political beliefs, or religion, be     resistant regulations, provided they contain at least one
    excluded from pafticipation in or denied any aid, care,      feature from each of the three following categories:
    service, or other benefits provided by federal and/or        .   Prevents unauthorized copying of completed or blank
    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,
    and State Contractors" on page G-2 (relating to
                                                                 .   Prevents the use of counterfeit prescription forms.
    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
with the laws and regulations concerning discrimination.
                                                                 1903, mandates ut¡l¡zation control of all Texas Medicaid
Payments for services and supplies are not authorized
                                                                 services under regulations found at Title 42 CFR, Part
unless the services and supplies are provided w¡thout            456. Utilization review activities required by Texas
                                                                 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
Reminder: Each provider must furnish covered Medicaid            payments are appropriate and according to Texas
services to eligible clients in the same manner, tothe same      Medicaid policies, rules, and regulations. All providers
extent, and of the same quality as services provided to          identified as a result of utilization control activities are
other patients. Services made available to other pat¡ents        presented to HHSC OIG to determine any and all subse-
must be made available to Texas Medicaid clients if the          quent actions.
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
Providers are required by federal law (Public Law 110-28)        control monitoring systems allows for identification of
to use a tamper+esistant prescription pad when writing a         providers whose patterns of practice and use of services
prescription for any drug for Medicaid clients.                  fall outside of the norm for their peer groups. Providers
                                                                 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
prescription was filled.                                         areas of concern identified in each case. As part of the
Providers may pu rchase ta mper-res ista nt prescri ption        prepayment review process, providers are required to
pads from the vendor of their choice.                            submit paper claims, ratherthan electronic claims, along
                                                                 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
                                                                                                                                  Denta   I

L9.4.2 THSteps Dental Eligibility                                         .   Dental prophylaxis, if appropriate
The client must be Medicaid- and THSteps-eligible (birth                  .   Topical fluoride application using fluoride varnish, if
through 20 years ofage) atthe time ofthe service request                      appropriate
and service delivery. However, Medicaid-approved                          .   Caries risk assessment
orthodontic services already in progress may be continued                 .   Dental anticipatory guidance
even after the client loses Medicaid eligibility if the
orthodontic treatment is begun before the loss of                         Procedure code D0145 bundles the above services for
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
approved orthodontic services already in progress may be                  Healthcare Centers (FQHCs) that have completed training
continued even afterthe client loses Medicaid eligibility if              and been certified to participate in the First Dental Home
the orthodontic treatment is:                                             initiative may be reimbursed for procedure code D0145.
.                                                                         FQHC providers attending the training will be certified at
    Begun before the loss of Medicaid eligibility
                                                                          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 client is not eligible for THSteps dental preventive or               the samê date of service by any provider. A First Dental
therapeutic benefits if the client's Medicaid ldentification              Home examination is limited to ten services per client
Form (Form H3087) or Medicaid Eligibility Verification                    lifetime with at least 60 days between visits. This service
Form (Forms H7O27 and HLO27-A-C) states any of the                        is limited to once per day.
following:
.   Emergency care only
.   Presumptive eligibility (PE)
                                                                          19.5       ICF-MR Dental Services
                                                                          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-
A check mark will be present ¡n   the "Dental" column of the              ities who are 2tyears of age or older. Residents of ICF-MR
client's Medicaid ldentification Form (Form H3087) to                     facilities who are 20 years of age or younger receive
indicate that the client is eligible for dental services. A               services through the regular THSteps Program. Eligibility
message (THSteps Dental checkup due) may appear                           for ICF-MR services is determined þy DADS.
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,
therapeutic, or orthodontic) for a period of six months.                  For procedure codes with a CCP designation, a provider
                                                                          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
services (see fee schedule for CCP and nonCCP                             Refer to: "Medicaid Dental Fee Schedule" on page 19-11.
reimbursed services)through the end of the month of their
21st birthday.
Note: lf a client has a birthday on any day except the first              19.6 THSteps and ¡CF-MR Provision
day during the month, the new eligibility period is                       of Services
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
First Dental Home is an initiative designed to establish a                practices, or in a commercial laboratory registered with
dental home, provide preventive care, identify oral health                the Texas State Board of Dental Examiners (TSBDE). The
problems, and provide treatment and parenlal/ guardian                     Texas Dental Practice Actand the rules and regulations of
oral health instruct¡ons as early as possible.                            the TSBDE (22f AC, Part 5) define the scope of work that
                                                                          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.

CDf only copyíght 2008 American Dental Association- All rights reseryed                                                             19-5
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-
ments related to the hospital procedure. lf services are
                                                                .   Orthodontic services for cosmetic purposes only are
precertified, the provider receives a precertification              not a benefit of Texas Medicaid or THSteps.
number effective for 90 days.                                   .   Orthognathic surgery, to include extractions, required or
ln those areas of the state with Medicaid managed care,             provided in conjunction with the application of braces
the provider should contact the managed care plan for               must be completed while the client is Medicaid-eligible
specific requirements or limitations. lt is the dental              in order for reimbursement to be considered.
provider's responsibility to obtain precertification from the   .   Except for D8660, all orthodontic procedures require
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.
Dentists providing sedation/anesthesia services must            .   Prior authorization is issued to the requesting provider
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
The dental provider must be in compliance with the guide-           practicing dentistry in Texas Medicaid for whatever
lines detailed in "Dental Therapy Under General                     reason, a new prior authorization must be requested.
Anesthesia" on page 19-35.                                      Refer to: "Transfer of Orthodontic Services" on page 19-
Note: Post-treatment authorization will not be approved                     40.
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-
Orthodontic services for cosmetic purposes only are not a               nation of whether orthodontic services are indicated
benefit of Texas Medicaid. Orthodontic services are                     and to determine the appropriate time to initiate
limited to the treatment of children t2years of age or                  such services.
older with severe handicapping malocclusion, children               .   The client is referred to an ofthodontist and elects to
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
19.19.1 Benefits and Limitations                                        orthodontic treatme nt.
Orthodontic services include the following:
                                                                .   Procedure code D8680 is payable for one retainer per
                                                                    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
    how to score the HLD. A minimum score of 26 points is
                                                                .   Procedure code D8670 should be billed only when an
    required for full banding approval (only permanent              adjustment to the appliances is provided and may not
    dentition cases are considered).                                be billed before the date the orthodontic adjustment
                                                                    was performed. The number of visits for monthly adjust-

19-38                                                                        CDf only copyright 2O08 American Denta¡ Assoc¡at¡on All righls reseryed
                                                                                                                                   Dental

    ments to the appliances is restricted to the number                     L9.L9.2 Mandatory Prior Authorization
    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
.                                                                                     Request Form" on page 8-111.
    Separate fees for adjustments to retainers are not
    payable.                                                                lf orthodontic treatment is medically indicated, providers
.   The appropriate code should be billed for those appli-                  are responsible for obtaining prior authorization for a
    ances required as part of the treatment of cleft palate                 complete orthodont¡c treatment plan while the client is
    cases.                                                                  eligible for Medicaid and THSteps and 20 years of age or
                                                                            younger.
Special orthodontic appliances may also be used with full
banding and crossbite therapy with approval by the TMHP                     Submission of diagnostic casts are not required when
Dental Director.                                                            requesting prior authorization for procedure codes
                                                                            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
    applicable with documentation of medical necessity.                     not a guarantee of payment.
    Otherwise, use the appropriate special orthodontic                      Upon receipt of prior authorization of complete treatment
    appliance code.                                                         plans, providers are to advise clients that they will be able
.   Full banding is allowed on permanent dentition only,                    to receive the approved treatment services (e.9.
    and treatment should be accomplished in one stage                       orthodontic adjustments, bracket replacements and
    and is allowed once per lifetime.                                       retainers), even if they lose Medicaid elieiibility or reach
                                                                            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
    provided for adjustments or maintenance.
                                                                                must include all procedures required to complete full
                                                                                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
    age or older or clients who have exfol¡ated all primary                 .   Full series of radiographs or a panoramic radiograph;
    dentition. Crossbite therapy includes diagnosic cast                        diagnosticauality films are required (copies are
    services.                                                                   accepted and radiographs will not be returned to the
                                                                                provider).

CDT only copyright   2008 American Dental Association All rjghls reseryed                                                           19-39
Section 19

.   Any additional pertinent information as determined by       The following supporting documentation must accompany
    the dent¡st or requested by TMHP's  Dental Director         the new request for orthodontia services and must include
    Requests for crossbite therapy require properly             the DOS the ofthodontic diagnostic tools were produced:
    trimmed models to be retained in the office and must        .   All of the documentation as required for the original
    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
                                                                .
        lingual to the incisal of the opposing arch.                A compete treatment plan addressing all procedures for
                                                                    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
damaged materials.
                                                                .   A full diagnostic workup (D8080) with an HLD lndex.
                                                                    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
19.19.3 Gompletion of Treatment Plan                            for Medicaid do not requ¡re models or the HLD score
                                                                 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
orthodontic treatment that was authorized and initiated         Note: Medicaid clients who initiate orthodontic services
while the client was 20 years of age or younger, eligible for   privately (e.9. pay out of pocket for the ofthodontic workup
Medicaid and THSteps, and completed within 36 months.           and/or ¡n¡t¡al banding, etc.) wh¡le Medicaid eligible due to
Any orthodontic-related service requested (e.9., extrac-        not meeting the HLD index 26-points, are not eligible to
tions or surgeries) must be completed before the loss of        have their orthodontic services transferred to and
client eligibility. Serv¡ces cannot be added or approved        reimbursed by Medicaid.
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
treatment appliances. Procedure code D7997 may be               Director at the following address:
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.
.   The client requests premature removal and a release
                                                                19.19.6 Gomprehens¡ve Orthodontic
    form has been signed by the parent, guardian, or client     Treatment
    if he is at least 18 years of age.                          Comprehensive orthodontic services (procedure code
                                                                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
Prior authorization issued to a dental provider for
                                                                appliance (upper), or orthodontic appliance (lower).
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
                                                                                                                   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.
  D7280                          A t-20                                                                  $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
  D8060*                     '   Replaces Z2OI8 and 8120D. Limited to one per lifetime.                 $340.00
  D8080*                     , Rep laces 22009, Z2OL1-, and 22072. Limited to one per lifetime.         $775.00

                                         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

CDT only copyright   2008 Amercan Denta Association All righls reserued                                            t94t
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
                                                                                                                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.

CD-f only copyright   2008 Ameícan Dental Associataon. All rights reseryed                                      19-45
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
             Cleft Palate                                                                         Score 15

             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
             Anterior Crowding                                    Max.      Mand           = 5 pts. each
             1O point maximum total for both arches                                        arch
             combined
             Labio-lingual Spread in mm
             TOTAL
             Diagnosis                                                      For TMHP use only
                                                                            Authorizat¡on Number

             Examiner:                                                     ,Recorder:
             Provider's Signature

             Please submit this score sheet with records

19-46                                                                     CDI only copyr¡ght 2008 American Dental Associatron All ri8hts reserued
Appendix   G
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 Resourcestable 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.

CPT only   copyíght 2OO7 Ar¡eilca¡ lvledlcal                 All rlghts reserued
                                               ^ssocratron
Section 1

documents or other requested items may be altered or              1,.2.4 Release of Gonfidential lnformation
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
produce all records completed, at the time of the                 treatment of the patient. lf the records are requested for
completion or at the end of each day of production, as            purposes other than for emergency or acute medical care,
directed by the requestor who will take custody of the            the provider may charge the requesting provider a
requested items.                                                  reasonable fee and retain the requested information until
                                                                  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
responsible for obtaining a copy of these requested               payment of a claim, but HHSC recommends the provider
records for use by the requesting state and federal               obtain written authorization from the client before
agencies.                                                         releasing confidential medical information. A release may
                                                                  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,
or court cases are resolved. Freestanding RHCs must               form. The client's authorization for release of such infor-
retain their records for a minimum of six years, and              mation is not required when the release is requested by
                                                                  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
available immediately at the time of the request to
                                                                  Antitrust and Civil Fraud Division, or HHS.
employees, agents, or contractors of HHSC Offìce of
lnspector General (OlG), the Texas Attorney General's
Medicaid Fraud Control Unit (MFCU) or Antitrust and Civil
                                                                  L.2.5 Compliance w¡th Federal Legislation
Medicaid Fraud Section, TMHP, DFPS, the Department of             HHSC complies with HHS regulations that protect against
Aging and Disability Services (DADS), Department of State         discrimination. All contractors must agree to comply with
Health Services (DSHS), Department of Assistive and               the following:
Rehabilitative Services (DARS), U.S. Department of Health         . Tiile Vl of the civil Ri$hts Act of 7964 (Public Law
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
The records must be available as requested by each of                excluded from participation in or denied any aid, care,
these entities, during any investigation or study of the             service, or other benefits provided by federal and/or
appropriateness of the Medicaid claims submitted by the              state funding, or otherwise be subjected to any
provider.                                                            discrimination.

1-8                                                                          cPl   only copyright   2007 Amer¡can Medical Association All rights reseryed
                                                                                                       Provider Enrollment and Responsibil¡ties

.   Health and Safety Code 85.773 as described in "Model                     be directed to communicate with the provider to offer
    Workplace Guidelines for Businesses, State Agencies,                     assistance with the techn¡cal or administrative aspects of
    and State Contractors" on page G-2 (relating to                          the Texas Medicaid Program.
    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
Exception: ln the case of minors receiving family planning                   developed for prepayment review based on the specific
services, onlythe cl¡ent may consentto release of medical                    areas of concern identified in each case. As part of the
documentation and information. Providers must comply                         prepayment review process, providers are required to
with the laws and regulat¡ons concerning discrimination.                     submit paper claims, rather than electronic claims, along
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,
discrimination on the basis of race, color, sex, nat¡onal                    other reports, superbills, X-rays, and any related medical
or¡g,¡n, age, or disability. Send written complaints of                      record documentation) attached to each claim for all
noncompliance to the following address:                                      services billed. This documentation is used to ascerta¡n
                                                                             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
T¡tle XIX of the Social Security Act, Sections 1902 and                      use of resources. Noncompliant providers are subject to
1903, mandates utilization control of all Texas Medicaid                     administrative sanctions up to and includ¡ng exclusion
Program services under regulations found at Title 42 CFR,                    and contract cancellation, as deemed appropriate by the
Part 456. Utilization review activities required by the Texas                HHSC OIG as defined in the rules in 1 TAC 9371.1643.
Medicaid Program are completed through a series of                           Providers placed on prepayment review must submit all
                                                                             paper claims and supporting medical record documen-
monitoring systems developed to ensure the quality of
services provided, and that all services are both medically                  tation to the following address:
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
providers identified as a result of utilization control activ-               1-.2.7 Provider Gertification/Ass¡gnment
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:
federal requirements and the Texas Medicaid Program                          .   Services were personally rendered by lhe billing
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.
Providers identified as exceptional are subject to an in-
                                                                             .   The information on the claim form is true, accurate, and
depth review of all Texas Medicaid billings. These review                        complete.
findings are presented to the HHSC OIG to determine any                      .   All services, supplies, or items billed were medically
necessary action. Medical records may be requested from                          necessary for the client's diagnosis or treatment.
the provider to substantiate the medical necessity and                           Exception is allowed for special preventive and
appropriateness of services billed to the Texas Medicaid                         screening programs (for example, family planning and
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

CPT only copyright 2OO7 American lvedical   Assæ¡ation All r¡ghts reseryed                                                                  1-9
Section 19

                                                                with gross malocclusion that will benefit from early
L9.L7 Hospitalization and ASG/HASC                              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:
. The procedures cannot be performed in the dental              .   Crossþite therapy.

   office.
                                                                .   Head injury involving severe traumatic deviation.
.   The client is severely disabled.                            The following limitations 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 the Texas Medicaid Program or
precertified, the provider receives a precertification              THSteps.
number effective for 90 days.                                   .   Orthognathic surgery, to include extractions, required or
ln those areas of the state with Medicaid Managed Care,             provided in conjunction with the application of braces
precertification or approval is required from the client's          must þe completed while the client is Medicaid-eligible
HMO for anesthesia and facility charges. lt is the dental           in order for reimbursement to be considered.
provider's responsibility to obtain precertification from the   .   Except for D8660, all orthodontic procedures require
client's HMO or managed care plan for facility and $eneral          prior authorization for consideration of reimbursement.
anesthesia services.                                            .   The THSteps client must be Medicaid/THSteps-eligible
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 ity,/anesthesiologist risk nonpayment
                     I                                              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.             indicated.
Dentists providing sedation/anesthesia services must            .   Prior authorization is issued to the requesting provider
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
The dental provider must be in compliance w¡th the guide-           practicing dentistry in the Texas Medicaid Program for
lines detailed in "Criteria for Dental Therapy Under                whatever reason, a new prior authorization must be
General Anesthesia" on page 19-33.                                  requested (see "Transfer of Orthodontic Services" on
                                                                    page 19-38).
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 orthodontic
                                                                services under THSteps dental services:
19.18 Orthodontic Services                                      .   Procedure code D8660 is allowed when:
(THSteps)                                                           .   The client is referred to an orthodontist for a determi-
                                                                        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-
capping malocclusion and other special medically                    .   The client is referred to an orthodontist and elects to
necessary circumstances as outlined in Benefits and                     receive services from another orthodontic provider
Limitations below.                                                      because of justifiable reasons.
                                                                    .   Repeat visits at different age levels are requlred to
                                                                        determine the appropriate time to initiate
19.18.1 Benefits and Limitations                                        orthodontic treatme nt.
Orthodontic services include the following:                     .   Procedure code D8680 is payable for one retainer per
.   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
                                                                                                                                    Dental

    that was authorized ¡n the treatment plan. However, the                  lf orthodontic treatment is medically indicated, providers
    number of monthly visits may be amended with appro-                      are responsible for obtaining prior authorization for a
    priate documentation of medical necessity while the                      complete orthodontic treatment plan while the client is
    client is Medicaid eligible.                                             eligible for Medicaid and THSteps and younger Than 21-
.                                                                            years of age.
    Procedure code D867O is paid only in conjunction with
    a history of braces (code D8080), unless special                         Prior authorization is a condition for reimbursement; ¡t is
    circumstances exist.                                                     not a guarantee of payment.
.   All orthodontic codes and appliances are global fees.                    Upon receipt of prior authorization of complete treatment
.                                                                            plans, provlders are to adv¡se clients that they will be able
    Separate fees for adjustments to retainers are not
    payable.
                                                                             to receive the approved treatment services (e.9.
                                                                             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
Special orthodontic appliances may also þe used with full                    completed within 36 months of the authorization date.
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
    D5955, D5958, D5959, and D5960 are to be used as                         orthodontic services.
    applicable with documentation of medical necessity.                      Requests for orthodontic services must be accompanied
    Otherwise, use the appropriate special orthodontic                       by all the following documentation:
    appliance code.                                                          .   An orthodontic treatment plan. The treatment plan
.   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-
Exception: Cases of mixed dentition when the treatment                           ipated bracket replacements, appliance removal if
plan includes extract¡ons of remaining primary teeth or                          indicated, spec¡al orthodontic appliances, etc.). The
cleft palate.                                                                    treatment plan should incorporate only the minimal
                                                                                 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
    a need for full banding in the adult teeth. Crossbite
                                                                             .   Completed and scored HLD sheet with diagnosis of
    therapy is an inclusive charge for treating the crossbite                    Angle class (26 points required for approval of non-cleft
    to completion, and additional reimbursement is not                           palate cases).
    provided for adjustments or ma¡ntenance.                                 .   Facial photographs.
.   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.
L9.L8.2 Mandatory Prior Authorizat¡on                                            .   Anter¡or teeth. The incisal edge of upper should be
                                                                                     lingual to the incisal of the opposing arch.
Prior authorization is required for all THSteps orthodontic
services except for procedure code D8660. The prior                          The dentist should be certain that radiographs, photo-
authorization request must contain the date of service                       graphs, and other information are properly packaged to
thatthe orthodontic records were produced. lf the request                    avoid damage. TMHP is not responsible for lost or
is approved, the date that the records were produced is                      damaged materials.
considered to be the date on which orthodontic treatment
beg¡ns.

CPT only copyr¡ght 2007 Amer¡can Medical   Assæ¡aliø All rights   reseryed                                                           L9-37
Section 19

19.18.3 Gompletion of Treatment Plan                             sheet, nor does the client have to meet the HLD lndex of
                                                                 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
completed, reimbursement is provided to complete the             Note: Medicaid clients who initiate orthodontic services
orthodontic treatment that was authorized and initiated          privately (e.g. pay out of pocket for the orthodont¡c workup
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
for Medicaid and THSteps, and completed within                   not meet¡ng the HLD index 26-points, are not eligible to
36 months. Any orthodontic-related service requested             have their orthodontic services transferred to and
(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
    the client.                                                  19.18.6 Comprehens¡ve Orthodontic
.   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
Providers must keep a copy of the release form on file and       and older or clients who have exfoliated all primary
are responsible for this documentation during a review           dentition.
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
The following supporting documentation must accompany            or Block 35 on paper claims.
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
    known.                                                       work-up and full band¡ng. Billing only one detail for a total
                                                                 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-
who ¡nitiate orthodontic services before becoming el¡g¡ble       up approved, and Z2OII, Maxillary bands, in the
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
                                                                                                                   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
  D8080*                         Replaces Z2OO9, Z2O1-!, and Z2Qt2. Limited to one per lifetime         $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
  D8680*                         Replaces Z2OI4 and 22075.                                              $100.00
  D8690*                         Bracket replacement.                                                    $20.00
  D8691                          Not considered medically necessary                                          NC

  D8692                          Limited to one service per arch per lifetime for each retainer              NC

  D8999                                                                                                 Manually
                                                                                                          priced
  *
      = Services payable to an FQHC for a client encounter

CP-f only copyr¡ght   2007 American Med¡cal Assæ¡at¡on All rights reseryed                                         19-39
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
                   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 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:
              Procedure       Remarks                                                                                               Maximum
              Code            Gode            Remarks Code Desctiption                                                              Fee
                                                     Special Orthodontic Appliances
              D8220*           DPC1000D       Appliance with horizontal projections                                                         $250
              D8220*           DPC1001D       Appliance with recurved springs                                                               $250
              D8220"           DPClOO2D       Arch wires for crossbite correction (for total treatment)                                     $595
              D8220*           DPC1003D       Banded maxillary expansion appliance                                                          $375
              D8270*           DPC1004D       Bite plate/bite plane                                                                         $100
              D8210*           DPC1005D       Bionator                                                                                      $1oo
              D8210*           DPC1006D       Bite block                                                                                    $250
              D82LO*           DPC1007D       Bite-plate with push springs                                                                  $250
              D8220*           DPC1008D       Bonded expansion device                                                                       $225
              D82LO*           DPC1010D       Chateau appliance (face mask, palatal exp and hawley)                                         $300
              D82tO*           DPC1011D       Coffin spring appliance                                                                       $275
              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
                                                                                                                        Dental

  Procedure            Remarks                                                                             Maximum
  Code                 Code                  Remarks Gode Description                                      Fee
  D8210*               DPC1O13D              Dental obturator, definitive (obturator)                            $250
  D8210*               DPC1O14D              Dental obturator, surg¡cal (obturator, surgical stayplate,          $250
                                             immediate tem porary obturator)
  D8220'É              DPC1015D              Dista lizing appliance with springs                                 $250
  D8220'(              DPC1016D              Expansion device                                                    $375
  D8210*               DPC1017D              Face mask (protraction mask)                                        $350
  D8220*               DPC1O18D              Fixed expansion appliance                                           $375
  D8220*               DPC1019D              Fixed lingual arch                                                  $225
  D8220*               DPC1020D              Fixed mandibular holding arch                                       $100
  D8220"               DPCLO2AD              Fixed rapid palatal expander                                        $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*               DPC].O2TD             lntrusion arch                                                      $100
  D8220*               DPC1028D              Jasper jumpers                                                      $100
  D8220*               DPC1029D              Lingual appliance with hooks                                        $100
  D8220*               DPC1030D              Mandibular anterior bridge                                          $175
  D8220+               DPC1031D              Mandibular bihelix (similar to a quad helix for mandibular          $10o
                                             expansion to attempt nonextraction treatment)
  D8210*               DPC1032D              Mandibular lip bumper                                               $100
  D8220"               DPC1O36D              Mandibular lingual 6x6 arch wire                                    $100
  D82rO*               DPC1037D              Mandibular removable expander with bite plane (crozat)              $275
  D82tO+               DPC1038D              Mandibular ricketts rest posit¡on splint                            $375
  D8210*               DPC1039D              Mandibular splint                                                   $225
  D8210*               DPClO4OD              Maxillary anterior bridge                                           $175
  D8210*               DPC1041D              Maxillary bite-opening appliance w¡th anterior springs              $100
  D8220"               DPCLO42D              Maxillary l¡ngual arch with spurs                                   $1oo
  D8220"               DPC1O43D              Maxillary and mandibular distalizing appliance                      $1oo
  D822O'r              DPC1044D              Maxillary quad helix with finger springs                            $325
  D8220*               DPC1045D              Maxillary and mandibular retainer with pontics                      $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*               DPC1051D              Nance appliance                                                     $10o
  D8220*               DPC1052D              Nasal stent                                                         $250
  D82LO*               DPC1053D              Occlusal orthotic device                                            $175
  *
      = Services payable to an FQHC for a client encounter

CPf only copynght 2007 American lvledical Assæiat¡on All r¡ghts reseryed                                                L94L
Section 19

              Procedure        Remarks                                                                                            Maximum
              Code            Code            Remarks Code Descliption                                                            Fee
              D82LO*           DPC1054D       Orthopedic appllance                                                                        $250
              D8210*           DPC1O55D       Other mand¡bular utilities                                                                  $100
              D8210*           DPC1O56D       Other maxillary utilities                                                                   $100
              D8220*           DPC1057D       Palatal bar                                                                                 $225
              D8210'r.         DPC1058D       Post-surg¡cal retainer                                                                      $125
              D8220*           DPC1059D       Quad helix appliance held with transpalatal arch horizontal                                 $275
                                              projections
              D8220*           DPC1060D       Quad helix maintainer                                                                       $275
              D8220*           DPC1061D       Rapid palatal expander (RPE), such as quad Helix, Haas, or                                  $350
                                              Menne
              D8210*           DPC1062D       Removable bite plate                                                                        $100
              D82LO*           DPC1063D       Removable mandibular retainer                                                               $100
              D8210*           DPC1O64D       Removable maxillary retainer                                                                $100
              D8210*           DPC1065D       Removable prosthesis                                                                        $175
              D8210*           DPC1066D       Sagittal appliance 2 way                                                                    $250
              D8210*           DPC1067D       Sagittal appliance 3 way                                                                    $350
              D8220*           DPC1068D       Stapled palatal expansion appliance                                                         $375
              08210*           DPC1069D       Surgical arch wires                                                                         $250
              D82LO"           DPC1070D       Surgical splints (surgical stenti/wafer)                                                    $250
              D8210*           DPC1071D       Surgical stabilizing a ppliance                                                             $250
              D8220*           DPC]-OT2D      Thumbsucking appliance, requires submission of models                                       $175
              D8210*           DPC1073D       Tongue thrust appliance, requires submission of models                                      $1oo
              D82LO*           DPC1074D       Tooth positioner (full maxillary and mandibular)                                            $325
              D8210*           DPC1O75D       Tooth positioner with arch                                                                  $10o
              D8220"           DPC1076D       Transpalatal arch                                                                           $100
              D8220*           DPQ|OTTD       Two bands with transpalatal arch and horizontal projections                                 $175
                                              forward
              D8220*           DPC1078D       W-appliance                                                                                 $275
              *
                  = 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
Append¡x   H
Append¡x   I
R49 – tadlock spreadsheet
                                                                                          Ectopic score

                                                                                                                        Ectopic score
                                                                            Antoine HLD

                                                                                                          Tadlock HLD
#                    ANTOINE SCORES - BY TOOTH

             Upper                                 Lower
     3   2     1       1   2    3        3     2     1       1      2   3
1        1     1       1   1                   1     1       1      1       26            24              0              0
2        1     1       1   1                   1     1       1      1       32            24              4              0
3    1   1     1       1   1    1        1                              1   26            24              2              0
4    1   1     1       1   1    1        1     1     1      1       1   1   38            36              11             6
5        1     1       1   1                   1     1      1       1       27            24              9              0
6        1     1       1   1                   1     1      1       1       27            24              1              0
7        1     1       1   1                   1     1      1       1       32            24              19             0
8        1     1       1   1                   1     1      1       1       35            24              5              0
9        1     1       1   1                   1     1      1       1       27            24              10             0
10                                                                           0             0              6              0
11       1     1       1   1                   1     1      1       1       27            24              5              0
12   1   1     1       1   1    1        1     1     1      1       1   1   36            36              7              3
13   1   1     1       1   1    1        1     1     1      1       1   1   36            36              0              0
14       1     1       1   1             1     1     1      1       1   1   33            30              2              0
15   1   1     1       1   1    1        1     1     1      1       1   1   55            36              28             0
16       1     1       1   1             1     1     1      1       1   1   36            30              13             0
17   1   1     1       1   1    1        1     1     1      1       1   1   39            36              3              0
18       1     1       1   1                   1     1      1       1       28            24              10             0
19   1   1     1       1   1    1        1     1     1      1       1   1   40            36              16             0
20   1   1     1       1   1                   1     1      1       1       29            27              7              0
21       1     1       1   1                   1     1      1       1       30            24              9              0
22   1   1     1       1   1    1                    1      1               28            24              3              0
23       1     1       1   1                   1     1      1       1       28            24              9              0
24       1     1       1   1                   1     1      1       1       29            24              1              0
25       1     1       1   1                   1     1      1       1       27            24              1              0
26   1   1     1           1                         1      1       1       31            21              12             0
27       1     1       1   1                   1     1      1       1       29            24              3              0
28       1     1       1   1                   1     1      1       1       28            24              0              0
29       1     1       1   1                   1     1      1       1       29            24              5              0
30       1     1       1   1                   1     1      1       1       28            24              3              0
31       1     1       1   1                   1     1      1       1       26            24              5              0
32   1   1     1       1   1    1        1     1     1      1       1   1   44            36              15             0
33   1   1     1       1   1    1        1     1     1      1       1   1   48            36              12             0
34   1   1     1       1   1                   1     1      1       1       30            27              7              0
35       1     1       1   1                   1     1      1       1       31            24              6              0
36       1     1       1   1                   1     1      1       1       29            24              10             0
37             1       1        1              1     1      1       1       29            21              15             6
38   1   1     1       1   1    1                                           26            18              4              0
39       1     1       1   1                   1     1      1       1       27            24              7              0
40       1     1       1   1             1     1     1      1       1   1   33            30              4              0
41       1     1       1   1                   1     1      1       1       30            24              7              0
42       1     1       1   1                   1     1      1       1       28            24              12             6
43       1     1       1   1                   1     1      1       1       27            24              1              3
44                                                                                                        11             0
45   1   1     1       1   1                   1     1      1       1       31            27              0              0
46   1   1     1       1   1    1        1     1     1      1       1   1   36            36              4              3
47       1     1       1   1                   1     1      1       1       35            24              8              0
48       1     1       1   1                   1     1      1       1       32            24              7              0
49       1     1       1   1             1     1     1      1       1   1   34            30              7              0
50       1     1       1   1                   1     1      1       1       27            24              12             0
51                                                                                                        4              0
52   1   1     1       1   1    1                                           29            18              3              0
53                                                                                                        1              0
54   1   1     1       1   1    1        1     1     1      1       1   1   36            36              1              0
55   1   1     1       1   1    1        1     1     1      1       1   1   39            36              7              3
56       1     1       1   1                   1     1      1       1       30            24              6              0
57       1     1       1   1                   1     1      1       1       35            24              4              0
58   1   1     1       1   1    1        1     1     1      1       1   1   36            36              11             0
59       1     1       1   1             1     1     1      1       1   1   30            30              0              0
60       1     1       1   1                   1     1      1       1       30            24              6              0
61   1   1     1       1   1    1        1     1     1      1       1   1   36            36              11             6
62   1   1     1       1   1    1        1     1     1      1       1   1   36            36              14             0
63   1   1     1       1   1    1                                           26            18              10             0

                           R49 - tadlock spreadsheet.Revised.xlsx                                                                       Page 1
Append¡ J
                        SOAH DOCKET NO. XXX-XX-XXXX
                     HHSC-OIG CASE NO.: P2011131652384891

ANTOINE DENTAL CENTER,                      §   BEFORE THE STATE OFFICE
       Petitioner                           §
                                            §
v.                                          §OF
                                            §
                                            §
TEXAS HEALTH & HUMAN                        §   ADMINISTRATIVE HEARINGS
SERVICES COMMISSION, OFFICE                 §
OF INSPECTOR GENERAL,                       §
         Respondent                         §
                                            §
                    HHSC-OIG’s PROFFER OF REBUTTAL
                  TESTIMONY FROM DR. LINDA ALTENHOFF

TO THE HONORABLE ADMINISTRATIVE LAW JUDGES:

       COMES NOW the Texas Health and Human Services Commission, Office of

Inspector General (“HHSC-OIG”), and requests the ability to recall Dr. Linda Altenhoff

to offer rebuttal testimony.    HHSC-OIG offers the following proffer of expected

testimony from Dr. Altenhoff:

                                       PROFFER

Q:     Dr. Altenhoff, you are the same Linda Altenhoff who testified on day one of this
hearing, correct?

A:    lam.

Q:     Have you been in attendance during all of the testimony given by the various
witnesses?

A:    Ihave been.

Q:    Specifically, did you hear the testimony of Dr. Orr and Dr. Kanaan?

A:    Idid.

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Q:    Did you hear their testimony regarding the meaning of ectopic eruption as used by
Texas Medicaid?

A:     Idid.

Q:     Dr. Altenhoff, did Medicaid 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?

A:     No.

Q:      Were dentists expected to employ the training and education they received as
dentists in applying the terms used in the Provider Manual?

A:     Yes.

                                        PRAYER

       For these reasons, HHSC-OIG prays to be allowed to recall Dr. Linda Altenhoff

for limited rebuttal testimony in keeping with the above proffer.

                                   Respectfully submitted,

                                   GREG ABBOTT
                                   Attorney General of Texas

                                   DANIEL T. lODGE
                                   First Assistant Attorney General

                                   JoHN B. SCOTT
                                   Deputy First Assistant Attorney General

                                   RAYMc(pJC. WINTER
                                   State Bar No. 21791950
                                   Chief, Civil Medicaid Fraud Division
                                   (512) 936-1709
                                  MARGARET MOORE
                                  State Bar No. 14360050

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Deputy Chief, Civil Medicaid Fraud Division
(512) 936-1319 direct dial

Assistant Attorneys General
P.O. Box 12548
Austin, Texas 78711-2548
(512) 499-0712 fax

      Va aoc’e

      Dan Hargrove
      State Bar No. 00790822
      WATERS & KRAUS, LLP
      3219 McKinney Avenue
      Dallas, Texas 75204
      (214) 357-6244 Telephone
      (214) 357-7252 Facsimile

        m

      James Moriarty
      State Bar No. 14459000
      MORIARTY LEYENDECKER, PC
      4203 Montrose Blvd, Suite 150
     Houston, TX 77006
     (713) 528-0700 Telephone

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