Court Opinion

ID: 4071464
Source: CourtListenerOpinion
Date Created: 2016-09-30 02:06:37.493369+00
Date Added: 2024-06-11T14:33:23.015344
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ACCEPTED
                                                                                         03-15-00401-CV
                                                                                                 6493720
                                                                              THIRD COURT OF APPEALS
                                                                                         AUSTIN, TEXAS
                                                                                    8/13/2015 6:32:28 PM
                                                                                       JEFFREY D. KYLE
                                                                                                  CLERK
                              No. 03-15-00401-CV

                        IN THE COURT OF APPEALS                       FILED IN
                                                               3rd COURT OF APPEALS
                         FOR THE THIRD DISTRICT                    AUSTIN, TEXAS
                              AUSTIN, TEXAS                    8/13/2015 6:32:28 PM
                                                                 JEFFREY D. KYLE
                                                                       Clerk
 IN RE XEROX CORPORATION AND XEROX STATE HEALTHCARE,
          LLC F/K/A ACS STATE HEALTHCARE, LLC,
                          Relators

                        On Petition for Writ of Mandamus
             Original Proceeding from the 53rd Judicial District Court
              Travis County, Texas, Cause No. D-1-GV-14-000581
                  The Honorable Stephen Yelenosky, Presiding

    BRIEF IN RESPONSE TO PETITION FOR WRIT OF MANDAMUS

KEN PAXTON                             RAYMOND C. WINTER
Attorney General of Texas              Assistant Attorney General
                                       Chief, Civil Medicaid Fraud Division
CHARLES E. ROY                         Raymond.Winter@texasattorneygeneral.gov
First Assistant Attorney General       State Bar No. 21791950
                                       REYNOLDS B. BRISSENDEN
JAMES E. DAVIS                         Assistant Attorney General
Deputy Attorney General for Civil      Managing Attorney, Civil Medicaid Fraud
Litigation                             Division
                                       Reynolds.Brissenden@texasattorneygeneral.gov
                                       State Bar No. 24056969
                                       P. O. Box 12548
                                       Austin, TX 78711-2548

                                       Attorneys for Real Party in Interest
                                       The State of Texas

                            Oral Argument Requested
                     IDENTITY OF PARTIES AND COUNSEL

The following is a complete list of all parties, as well as the names and addresses
of all counsel.

Relators                                       Counsel
(Defendants in trial court)
Xerox Corporation;                             Eric J.R. Nichols
Xerox State Healthcare, LLC                    Gretchen Sween
f/k/a ACS State Healthcare, LLC                Christopher R. Cowan
                                               BECK REDDEN
                                               515 Congress Avenue, Suite 1900
                                               Austin, TX 78701
                                               Constance H. Pfeiffer
                                               BECK REDDEN
                                               1221 McKinney Street, Suite 4500
                                               Houston, TX 77010
                                               Robert C. Walters
                                               GIBSON, DUNN & CRUTCHER
                                               2100 McKinney Avenue, Suite 1100
                                               Dallas, TX 75201
                                               C. Andrew Weber
                                               KELLY HART & HALLMAN
                                               301 Congress, Ste. 2000
                                               Austin, TX 78701

Real Party in Interest/Respondent              Counsel
(Plaintiff in trial court)

The State of Texas                             Office of the Attorney General
                                               Raymond C. Winter
                                               Reynolds B. Brissenden
                                               Civil Medicaid Fraud Division
                                               PO Box 12548
                                               Austin, TX 78711-2548

                                          ii
                                         TABLE OF CONTENTS

IDENTITY OF PARTIES AND COUNSEL ........................................................... ii
TABLE OF CONTENTS ......................................................................................... iii
INDEX OF AUTHORITIES......................................................................................v
STATEMENT OF THE CASE CORRECTED ....................................................... ix
ISSUES CORRECTED .............................................................................................x
BRIEF IN RESPONSE TO PETITION FOR WRIT OF MANDAMUS .................1
STATEMENT OF FACTS CORRECTED ...............................................................4
   1. Texas Medicaid provides a limited benefit for orthodontia. ............................4
   2. Xerox, HHSC’s Prior Authorization vendor, had responsibility to review, and
   approve or deny, each request for orthodontia services. ........................................6
   3. The State brings the underlying law enforcement action against Xerox,
   seeking civil remedies for the unlawful acts Xerox, and only Xerox, committed. 8
   4. The trial court denied Xerox’s attempt to join third parties to the State’s law
   enforcement action. ..............................................................................................10
SUMMARY OF THE ARGUMENT ......................................................................12
STANDARD OF REVIEW .....................................................................................12
ARGUMENT ...........................................................................................................14
   I. Because CPRC Chapter 33 does not apply in a law enforcement action
   brought by the State under the Texas Medicaid Fraud Prevention Act, the trial
   court did not abuse its discretion in granting the State’s motion to strike Xerox’s
   third party claims, or in denying Xerox’s motion for leave to designate
   responsible third parties. .......................................................................................14
      A. The TMFPA is not a “cause of action based on tort” and is therefore
      outside the scope of Chapter 33. .......................................................................14
      1.      Essential tort law concepts are missing from the TMFPA. .....................15
      2. The cases cited by Xerox are distinguishable, because the statutory
      causes of action were either “based on tort,” or the issue was never reached by
      the court, and are inapplicable here because none involved statutory law
      enforcement actions. .........................................................................................20
      3. The TMFPA was modeled after federal criminal law, not on ....................21
      traditional tort law. ............................................................................................21

                                                           iii
      4. The TMFPA lacks a single, indivisible injury. ............................................22
      5. When a statutory conflict would result, courts have held that Chapter 33
      cannot be applied to a statute. ...........................................................................24
   B. The False Claims Act cases cited by Xerox do not assist the Court when
   interpreting the TMFPA. ......................................................................................27
   C. The civil remedies the State seeks to impose against Xerox for Xerox’s
   violations of the TMFPA are based solely on Xerox’s conduct and are not the
   “same alleged injury” for which the State seeks redress from dental providers. .29
   D. Even if the TMFPA were a “statutory tort” to which Chapter 33 would
   otherwise apply, the Legislature did not intend for Chapter 33 to apply to the
   State suing in its sovereign capacity.....................................................................33
   E. Applying CPRC Chapter 33 to the TMFPA would violate tenets of
   statutory construction and lead to absurd and conflicting results. .......................37
II. Xerox has an adequate remedy at law because all of its complaints can be
addressed on appeal. ................................................................................................42
   A. Only Xerox’s conduct as the State’s vendor is at issue in the instant matter,
   and Xerox has an adequate remedy on appeal. ....................................................43
      1. The reasoning in Andersen is inapplicable in a statutory law enforcement
      case.. ..................................................................................................................43
      2. Xerox fails to cite any case law to show it lacks an adequate remedy on
      appeal. ...............................................................................................................46
   B.      Factors weigh in favor of affirming trial court’s rulings. ...........................49
PRAYER ..................................................................................................................50
CERTIFICATE OF COMPLIANCE .......................................................................51
CERTIFICATE OF SERVICE ................................................................................51

                                                              iv
                                         INDEX OF AUTHORITIES

Cases
Acker v. Tex. Water Comm’n, 790 S.W.2d 299 (Tex. 1990) ...................................38
Argonaut Ins. Co. v. Baker, 87 S.W.3d 526 (Tex. 2002) .......................................38
Atacosa Cnty. v. Atacosa Cnty. Appraisal Dist., 990 S.W.2d 255 (Tex. 1999) ......37
Brookhouser v. State of California, 10 Cal. App. 4th 1665, 13 Cal. Rptr. 2d 658,
  665 (1992).............................................................................................................19
Challenger Gaming Solutions, Inc. v. Earp, 402 S.W.3d 290 (Tex. App.—Dallas
  2013, no pet.) ..................................................................................... 24, 25, 29, 31
City of Hutchins v. Prasifka, 450 S.W.2d 829 (Tex. 1970) .....................................41
Compton v. Sesso, 2006 Tex. App. LEXIS 6322, at 18-19 (Tex. App.—Austin July
  21, 2006, no pet.) ..................................................................................................45
Cont’l Cas. Ins. Co. v. Functional Restoration Assocs., 19 S.W.3d 393 (Tex. 2000)
   ..............................................................................................................................38
Cunningham v. Blue Cross Blue Shield of Tex., No. 2-06-363-CV, 2008 WL
467399, at 5 (Tex. App.—Fort Worth Feb. 21, 2008, pet. denied) ......................19
Dollar Sav. Bank, 86 U.S. (19 Wall.) at 239 ...........................................................34
Dugger v. Arredondo, 408 S.W.3d 825 (Tex. 2013) ...............................................21
Equitable Recovery v. Heath Ins. Brokers of Tex., 235 S.W.3d 376 (Tex. App.–
  Dallas 2007, pet. dism’d)......................................................................................29
F.F.P. Operating Partners v. Duenez, 237 S.W.3d 680 (Tex. 2007) ......................21
Fitzgerald v. Advanced Spine Fixation Sys., Inc., 996 S.W.2d 864 (Tex. 1999) ....36
Goose Creek Consol. Indep. School Dist. v. Jarrar's Plumbing, Inc., 74 S.W.3d
486 (Tex. App.—Texarkana 2002, pet. denied) ...................................................30
Grogan v. Garner, 498 U.S. 279 (1991) ..................................................................22
Henning v. One West Bank, 405 S.W.3d 950 (Tex. App.–Dallas 2013, no pet.) ....19
In re Altec Indus., No. 10-12-00207-CV, 2012 WL 2469542, at 2 (Tex. App.—
  Waco June 22, 2012, orig. proceeding) (mem. op.) .............................................46
In re Arthur Andersen. 121 S.W.3d 471 (Tex. App.—Houston [14th Dist.] 2003,
  orig. proceeding) ...................................................................................... 43, 45, 48
In re Brokers Logistics, 320 S.W.3d 402, 404 (Tex. App.—El Paso 2010, orig.
  proceeding) ...........................................................................................................46
In re Columbia Med. Ctr., 290 S.W.3d 204 ( Tex. 2009).......................................13
In re Greyhound Lines, Inc., No. 05-13-01646-CV, 2014 WL 1022329, at 1-3
  (Tex. App.—Dallas Feb. 21, 2014, orig. proceeding) (mem. op.) .......................46
In re Inv. Capital Corp. & Serv. Corp. Int’l, No. 14-09-00105-CV 2009 WL
310899, at 2 (Tex. App.—Houston [14th Dist.] Feb. 4, 2009, orig. proceeding) .48

                                                                v
In re License Plates of Tex., No. 03-13-00671-CV, 2013 WL 6466919, at 1 (Tex.
  App.—Austin Nov. 27, 2013, no pet.) .......................................................... 42, 47
In re Masonite Corp., 997 S.W.2d 194 (Tex. 1999) ................................................49
In re Oncor Elec. Delivery Co., 355 S.W.3d 304 (Tex. App.–Dallas 2011, orig.
  proceeding) ...........................................................................................................46
In re Prudential Ins. Co. of Am., 148 S.W.3d 124 (Tex. 2004).................. 13, 47, 49
In re State Line Fireworks, 387 S.W.3d 27, 31-33 (Tex. App.—Texarkana 2012,
  orig. proceeding) ...................................................................................................47
In re State, 355 S.W.3d 611, 612 (Tex. 2011) .........................................................49
In re Taymax Fitness, No. 04-14-00119-CV, 2014 WL 1831100, (Tex. App.—San
  Antonio May 7, 2014, orig. proceeding) ..............................................................47
In re Team Rocket, 256 S.W.3d 257 (Tex. 2008) ....................................................49
In re Unitec Elevator Servs. Co., 178 S.W.3d 53, 66 (Tex. App.—Houston [1st
  Dist.] 2005, orig. proceeding)...............................................................................47
In re United Servs. Auto. Ass’n, 307 S.W.3d 299 (Tex. 2010) ................................50
In re Wilkerson, No. 14-08-00376-CV, 2008 WL 2777418, at 2 (Tex. App.—
  Houston [14th Dist.] June 6, 2008, orig. proceeding) ..........................................48
Italian Cowboy Partners, Ltd. v. Prudential Ins. Co. of Am., 341 S.W.3d 323 (Tex.
  2011) .....................................................................................................................20
JCW Elecs., Inc. v. Garza, 257 S.W.3d 701 (Tex. 2008) ........................... 21, 24, 25
JLG Trucking v. Garza, 2015 Tex. LEXIS 346, at 16 .............................................46
Jones v. Ray, 886 S.W.2d 817 (Tex. App.—Houston [1st Dist.] 1994, orig.
  proceeding) ...........................................................................................................46
Lexington Ins. Co. v. Strayhorn, 209 S.W.3d 83 (Tex. 2006) .................................25
Liberty Mut. Ins. Co. v. Garrison Contractors, Inc., 966 S.W.2d 482 (Tex.1998) .38
Malouf v. State ex. rel. Ellis, 461 S.W.3d 641 (Tex. App.—Austin 2015, pet.
  requested)....................................................................................................... 34, 38
Moore v. Collins, 897 S.W.2d 496 (Tex. App.—Houston [1st Dist.] 1995, no writ)
   ..............................................................................................................................15
Parex v. ERG Resources, 427 S.W.3d 407 (Tex. App.—Houston [14th] 2014, pet.
  filed)......................................................................................................................45
Pemex Exploracion y Produccion v. BASF Corp., 2011 WL 9523407, at 13 (S.D.
  Tex. Oct. 20, 2011) ...............................................................................................21
Pub. Util. Comm’n of Tex. v. Cofer, 754 S.W.2d 121 (Tex. 1988) .................. 20, 32
R.R. Comm'n v. United States, 290 S.W.2d 699 (Tex. Civ. App.—Austin 1956),
  aff'd, 159 Tex. 197, 317 S.W.2d 927 (Tex. 1958) ......................................... 33, 34
Republicbank Dallas, N.A. v. Interkal, Inc., 691 S.W.2d 605 (Tex. 1985) .............35
Schlumberger Tech. v. Swanson, 959 S.W.2d 171 (Tex. 1997) ..............................20
Simmons v. Arnim, 220 S.W. 66 (Tex. 1920) ..........................................................35
State v. Crawford, 771 S.W.2d 624 (Tex. App.—Dallas 1989, writ. denied) .........42
                                                                vi
State v. Durham, 860 S.W.2d 63 (Tex. 1993) .................................................. 32, 41
Stewart Title Guar. Co., v. Sterling, 822 S.W.2d 1 (Tex. 1991) .............................37
Sw. Bank v. Info. Support Concepts, Inc., 149 S.W.3d 104 (Tex. 2004).................24
Tex. Hum. Res. Code § 36.052(a)(1) .......................................................................23
Thomas v. State, 226 S.W.3d 697 (Tex. App.–Corpus Christi 2007, pet. dism’d) .32
U.S. v. Bollinger Shipyards, Inc., 775 F.3d 255 (5th Cir. 2014) .............................42
United States ex. rel. Hagwood v. Sonoma Cnty. Water Agency, 929 F.2d 1416 (9th
  Cir. 1991) ..............................................................................................................16
United States ex. rel. Schwedt v. Planning Research Corp., 59 F.3d 196 (D.C. Cir.
  1995) .....................................................................................................................16
United States v. Sci. Applications Int’l Corp., 626 F.3d 1257 (D.C. Cir. 2010) .....28
United States v. Southland Mgmt. Corp., 326 F.3d 669 (5th Cir. 2003) .................42
United States v. United Mine Workers of Am., 330 U.S. 258 (1947) ......................33
Univ. of Tex. Sw. Med. Ctr. at Dallas v. Loutzenhiser, 140 S.W.3d 351 (Tex. 2004)
   ..............................................................................................................................39
Varljen v. Cleveland Gear, 250 F.3d 426 (6th Cir. 2001) .......................................16
Villareal v. Wells Fargo Brokerage Servs., 315 S.W.3d 109 (Tex. App.—Houston
  [1st Dist. 2010], no pet.) .......................................................................................21
Vt. Agency of Natural Res. v. United States ex rel. Stevens, 529 U.S. 765 (2000) .33
Walker v. Packer, 827 S.W.2d 833 (Tex. 1992) ................................... 12, 13, 42, 49
Waller v. Sanchez, 618 S.W.2d 407 (Tex. App.—Corpus Christi 1981, no writ) ...41
Wheaton Van Lines, Inc. v. Mason, 925 S.W.2d 722 (Tex. App.—Fort Worth 1996,
  writ denied) ...........................................................................................................19
Statutes
25 Tex. Admin. Code § 33.71 ....................................................................................5
31 U.S.C. § 3729(a) .................................................................................................28
31 U.S.C. § 3729(a)(1) .............................................................................................16
31 U.S.C. § 3729(a)(1)(A) .......................................................................................27
31 U.S.C. § 3729(a)(1)(B) .......................................................................................27
31 U.S.C. § 3729(a)(1)(E)........................................................................................27
42 U.S.C. § 1320a-7b, ..............................................................................................22
42 U.S.C. § 1396 ........................................................................................................4
CPRC § 33.001 ................................................................................................. 29, 40
CPRC § 33.002(a)(1) ...............................................................................................14
CPRC § 33.002(a)(2) ...............................................................................................14
CPRC § 33.003(a) ....................................................................................................39
CPRC § 33.004 ........................................................................................................39
Tex. Bus. & Com. Code § 27.01 ..............................................................................19
Tex. Gov’t Code § 311.021(2) .................................................................................38

                                                               vii
Tex. Gov’t Code § 311.021(5) .................................................................................40
Tex. Gov’t Code § 531.0055(b)(1) ............................................................................4
Tex. Gov’t Code ch. 311 ..........................................................................................39
Tex. Hum Res. Code § 36.002 ...................................................................................8
Tex. Hum Res. Code § 36.002(2) ............................................................................18
Tex. Hum Res. Code § 36.002(9) ............................................................................27
Tex. Hum Res. Code § 36.002(10)(c) ......................................................................27
Tex. Hum Res. Code § 36.012(a)(1) ........................................................................28
Tex. Hum. Res. Code § 36.052(a) ...........................................................................17
Tex. Hum. Res. Code § 36.052(a)(3) .......................................................................19
Tex. Hum. Res. Code § 36.115 ................................................................................29
Tex. Hum. Res. Code § 36.115(a)(2) .......................................................................29
Tex. Hum. Res. Code §§ 36.002(1) .........................................................................18
Tex. Hum. Res. Code §§ 36.052(a)(1)-(3) ...............................................................10
Tex. Hum. Res. Code Ann. § 11.002(b) ..................................................................36
Tex. Hum. Res. Code Ann. § 36.052 .......................................................................16
Tex. Hum. Res. Code Ann. § 36.131 (1995) ...........................................................22

Other Sources
2 William Blackstone, Commentaries .....................................................................34
3 N. Singer, Sutherland on Statutory Construction § 62:1, 377-78 (7th ed. 2008).34
82 C.S.J. Statutes § 389, 483-84 (2009) ..................................................................34
86 C.J.S. Torts § 2 ....................................................................................................15
Gregory J. Lensing, Proportionate Responsibility and Contribution Before and
  After the Tort Reform of 2003, 35 Tex. Tech L. Rev. 1125, 1131 .......................15
Gus Hodges, Contribution and Indemnity among Tortfeasors, 26 Tex. L. Rev. 150
  ..............................................................................................................................30
Gus Hodges, Contribution and Indemnity among Tortfeasors, 26 Tex. L. Rev. 150,
  ..............................................................................................................................30
Justin Roberts & Randell Roberts, Can Immune Parties Really be Responsible?:
  An Analysis of the Current Interpretation of the Responsible Third Party Statute
  and Its Vulnerability to Constitutional Challenge, 43 St. Mary’s L.J. 559 (2012)
  ..............................................................................................................................34

                                                              viii
                   STATEMENT OF THE CASE CORRECTED

Nature of the Case:                 This is a mandamus action in which the Xerox
                                    parties (“Xerox”) seek review of two orders issued
                                    by the trial court. The underlying suit is a law
                                    enforcement action brought on behalf of the State
                                    of Texas (“the State”) by the Attorney General of
                                    Texas pursuant to the Texas Medicaid Fraud
                                    Prevention Act (“TMFPA”), a remedial public
                                    welfare statute. The State seeks to recover civil
                                    remedies against Xerox for the unlawful acts
                                    Xerox, and only Xerox, committed against the
                                    Texas Medicaid program. Xerox has attempted to
                                    join dental providers as responsible third parties to
                                    the State’s suit.

Trial Court:                        345th Judicial District Court of Travis County, The
                                    Hon. Stephen Yelenosky, Presiding.

Trial Court Disposition:            The trial court has ruled repeatedly in this, and in
                                    similar litigation, that Chapter 33 of the Civil
                                    Practice & Remedies Code does not apply to the
                                    State’s actions under the TMFPA.

                                    The trial court granted the State’s motion to strike
                                    Xerox’s third party claims under Rule 38 and
                                    denied Xerox’s motion for leave to designate
                                    responsible third parties.1 The trial court then
                                    denied Xerox’s request to appeal the two rulings.
                                    Xerox then filed this original proceeding.

1
        In addition to striking Xerox’s third party claims against multiple dental providers and
denying Xerox’s motion for leave to designate responsible third parties, the trial court also
denied two attempts by Xerox to consolidate the underlying lawsuit in the instant proceeding
with other suits. Xerox, however, has failed to seek appellate relief from the trial court’s two
orders denying Xerox’s two motions to consolidate.

                                               ix
                                     ISSUES CORRECTED2

1.       Because Chapter 33 of the Civil Practice & Remedies Code does not apply
         in an action brought by the State under the Texas Medicaid Fraud
         Prevention Act, the trial court did not abuse its discretion in granting the
         State’s motion to strike Xerox’s third party claims, or in denying Xerox’s
         motion for leave to designate responsible third parties.

2.       Xerox has an adequate remedy at law because all of its complaints can be
         addressed on appeal. Therefore, mandamus will not lie.

                    STATEMENT REGARDING ORAL ARGUMENT

            The State of Texas requests oral argument.

     2
            See Tex. R. App. P. 38.2(a)(1)(B).

                                                 x
                               No. 03-15-00401-CV

                        IN THE COURT OF APPEALS
                         FOR THE THIRD DISTRICT
                              AUSTIN, TEXAS

 IN RE XEROX CORPORATION AND XEROX STATE HEALTHCARE,
          LLC F/K/A ACS STATE HEALTHCARE, LLC,
                          Relators

                        On Petition for Writ of Mandamus
             Original Proceeding from the 53rd Judicial District Court
              Travis County, Texas, Cause No. D-1-GV-14-000581
                  The Honorable Stephen Yelenosky, Presiding

    BRIEF IN RESPONSE TO PETITION FOR WRIT OF MANDAMUS

TO THE HONORABLE THIRD COURT OF APPEALS:

      The State of Texas (“State”), plaintiff in the trial court proceeding below and

the real party in interest in this action, respectfully submits this Response to the

Petition for Writ of Mandamus (“Petition”) filed by Xerox Corporation and Xerox

State Healthcare, LLC f/k/a ACS State Healthcare, LLC (collectively “Xerox”).

Xerox cannot meet either requirement for mandamus relief to be granted. In the

first place, Chapter 33 of the Civil Practice & Remedies Code (“CPRC”) does not

apply in a law enforcement action brought by the State under the Texas Medicaid

Fraud Prevention Act (“TMFPA”). Therefore, the trial court did not abuse its
discretion in granting the State’s motion to strike Xerox’s third party claims or in

denying Xerox’s motion for leave to designate responsible third parties into the

State’s law enforcement action against Xerox.

       The underlying suit is a statutory law enforcement action brought by the

Attorney General of Texas against Xerox under the TMFPA. See generally

Plaintiff’s Original Petition (“State’s Petition”), at MR.1-23. The State’s claims

against Xerox are not “based on tort.” Instead, the TMFPA is a remedial public

welfare statute, designed by the Legislature to address the specific scourge of

unlawful acts against the Texas Medicaid program. See generally TMFPA, Tex.

Hum. Res. Code ch. 36. Although the name of the statute includes the word

“Fraud,” the causes of action created in the TMFPA are not a codification of the

doctrine of common law fraud or any other tort-based cause of action.

       The State seeks to hold Xerox – and only Xerox – liable for Xerox’s false

statements and material misrepresentations – both affirmatively and by omission –

to the Texas Medicaid program. State’s Pet., at MR.1-23. The State does not seek

to hold Xerox responsible for the conduct of any other parties. Id. Although the

State has brought law enforcement actions against a few dental providers for their

conduct, the State is not seeking, as erroneously claimed by Xerox, “the same

damages” against dental providers that the State seeks against Xerox. See Xerox’s

Pet. 1, 8.

                                         2
      The State alleges that during the time at issue, Xerox made

misrepresentations to State officials, affirmatively and by omission, regarding its

actions administering the Texas Medicaid orthodontia Prior Authorization (“PA”)

function. Specifically, the State contends that Xerox (1) misrepresented that Xerox

staff reviewed diagnostic materials (e.g., x-rays, color photographs, cephalometric

tracings) submitted by providers along with PA requests to make clinical

determinations about whether the PA requests met Texas Medicaid standards for

medical necessity; (2) failed to disclose that the majority of its personnel working

on orthodontic PA requests had no dental education and only minimal training in

their job functions; and (3) misrepresented to the State that orthodontia PA

requests were being approved or denied by Xerox in accordance with Texas

Medicaid policy.

      Contrary to Xerox’s erroneous assertion, the State does not seek “damages”

from Xerox under the TMFPA. See Xerox Pet. at, e.g., 1, 2, 5, 7, 8. Rather, the

State seeks to recover civil remedies from Xerox, including the amounts paid by

Texas Medicaid “directly or indirectly” as a result of Xerox’s unlawful acts, civil

penalties, costs, and attorney’s fees. Tex. Hum. Res. Code § 36.052.

      Finally, Xerox has an adequate remedy at law because all of its complaints

can be addressed by appeal. Therefore, Xerox’s Petition should be denied.

                                         3
                     STATEMENT OF FACTS CORRECTED

       Xerox’s statement of facts contains argument, omits material facts, and

misstates facts. The State thus submits this corrected statement of facts. Tex. R.

App. P. 52.4(b).

       1.     Texas Medicaid provides a limited benefit for orthodontia.

       The United States Congress enacted the Medicaid program in 1965 as a

cooperative undertaking between the federal and state governments to help provide

medical care to lower income individuals. Medicaid is funded jointly by the United

States and each of the fifty states, as mandated by federal law. 42 U.S.C. § 1396. In

Texas, the single state agency responsible for the administration of Medicaid is the

Health and Human Services Commission (“HHSC”). Tex. Gov’t Code §

531.0055(b)(1) (“[HHSC] shall “supervise the administration and operation of the

Medicaid program.”). 3

       Texas Medicaid provides coverage for dental services, including, on a very

limited basis, orthodontic services. Only Medicaid-eligible children between the

ages of 12 and 21 who are diagnosed with severe handicapping malocclusion or

other related conditions described in the Texas Medicaid Provider Procedures

3
        Currently more than 4.5 million Texans are enrolled in Medicaid. Texas, Monthly
Medicaid and CHIP Enrollment Data, Medicaid.gov, http://www.medicaid.gov/Medicaid-CHIP-
Program-Information/By-State/texas.html. In 2013, Medicaid comprised about 26.2 percent of
the Texas state budget, amounting to approximately $25.6 billion dollars total for state and
federal expenditures. “Pink Book,” Tex. Medicaid & CHIP in Perspective (10th ed.) 1-1,
http://www.hhsc.state.tx.us/medicaid/about/PB/PinkBook.pdf.

                                             4
Manual (“TMPPM”) qualify to receive this limited orthodontic benefit. See 25

Tex. Admin. Code § 33.71.

      Since 2003, the Texas Medicaid orthodontia benefit policy has covered

orthodontic services under three limited scenarios: (i) for children between the ages

of 12 and 21 who have a severe handicapping malocclusion, which is defined by a

Handicapping Labio-lingual Deviation (“HLD”) score of 26 points or greater; (ii)

children up to the age of 20 with cleft palate; or (iii) other medically necessary

circumstances such as a head injury involving severe traumatic deviation. TMPPM

(2009), Vol. 2, § 19.19, copy attached at Appendix A. The Texas Medicaid

program does not pay for cosmetic orthodontics. Id.

      A treating provider (dentist or orthodontist) had to submit to Texas Medicaid

a prior authorization (“PA”) request and receive approval before providing

orthodontia services to a Medicaid patient. See 25 Tex. Admin. Code § 33.71.

Specifically, HHSC required providers to include with each PA request the

following documentation and diagnostic records: an orthodontic treatment plan;

cephalometric tracings; a completed HLD score sheet; facial photographs; and a

full series of radiographs or a panoramic radiograph. TMPPM at § 19.19.2, copy at

App. A.

                                         5
      2. Xerox, HHSC’s Prior Authorization vendor, had responsibility to
         review, and approve or deny, each request for orthodontia services.

      The Prior Authorization (“PA”) review process required HHSC’s vendor to

determine whether each request for orthodontia service met the criteria established

by Texas Medicaid. Specifically, the PA review was “a mechanism to determine

the medical necessity of selected non-emergency, Medicaid-covered, and medical

services prior to service delivery” and was meant to “serve as a utilization

management measure allowing payment for only those services that are medically

necessary, appropriate, and cost-effective, and reducing the misuse of specified

services.” State’s Pet. 5, at MR.5. A vendor was required to:

   • Receive, correctly disposition (i.e., approve, deny, modify, or
     determine incomplete) prior authorization requests for services.
   • Ensure that non-covered services are not prior authorized.
   • Conduct quality assurance reviews to ensure appropriateness of
     Medicaid .PA analyst decisions.
   • Ensure PA staff use well-defined processes and procedures for
     analysis and research for PA approvals.
   • Provide sufficient and adequate professional medical staff for staffing
     and managing the PA function, including medically knowledgeable
     PA analysts for processing requests and availability of licensed
     medical professionals to provide consultative services regarding all
     Medicaid ... covered service types.
   • Implement a quality assurance process and establish procedures to
     periodically sample and review dispositioned [sic] PA requests to
     determine if PA policy and procedures are being followed.

State’s Pet. 5-6, at MR.5-6.

                                         6
      Xerox submitted a proposal to HHSC to become the Texas Medicaid vendor.

Xerox represented to Texas Medicaid that its PA review process would do the

following: (1) ensure the implementation of HHSC-approved dental criteria and

policy, prevent medically unnecessary services, and identify over-utilization of

services; (2) employ qualified PA staff who would review each request and

determine both whether the orthodontic PA request complied with Medicaid policy

and if the services were medically necessary; and (3) qualified clinical personnel

would use their medical expertise and HHSC-approved policy to evaluate medical

necessity and cost-effectiveness of requested services. Xerox also promised that it

would provide ongoing quality reviews of PA activities, including reviews of

accuracy of the PA determinations and adherence to documented procedures.

State’s Pet. 6, at MR.6.

      Based on Xerox’s representations, Texas Medicaid employed Xerox as the

Texas Medicaid PA request review vendor, starting in January 2004. Medical

necessity for the requested treatment could be verified only by examination and

verification of the clinical documentation by a licensed dental professional. HHSC

expected and required the PA review process implemented by Xerox to include a

substantive review of the diagnostic materials providers submitted to verify the

patient actually had a severe handicapping maloclussion and the conditions stated

                                        7
by the providers on the HLD score sheet and to verify that the providers’ proposed

treatment plan met all program requirements.

      Instead, when Xerox received PA requests from providers for orthodontia

services, Xerox neither unboxed the diagnostic materials nor had qualified

personnel verifying whether the condition of the children’s mouths actually

qualified as a severe handicapping malocclusion. Xerox merely had clerical staff

review the HLD score sheet to check and see if the total score on the score sheet

was 26 or greater. From 2004 to 2012, Xerox approved over 500,000 PA requests

for orthodontia services. During this same time period, Xerox repeatedly

represented to Texas Medicaid and gave reassurances that qualified personnel were

indeed conducting substantive reviews of the PA requests.

      3. The State brings the underlying law enforcement action against
         Xerox, seeking civil remedies for the unlawful acts Xerox, and only
         Xerox, committed.

      The State brought the underlying statutory law enforcement action against

Xerox under the TMFPA for certain unlawful acts, including misrepresentations

Xerox made to HHSC. State’s Pet., at MR.1- 23. The State seeks civil remedies

under the TMFPA for these unlawful acts. State’s Pet. 3; Tex. Hum Res. Code §

36.002.

                                        8
        The State alleges that Xerox misrepresented facts and concealed material

facts, affirmatively and by omission, regarding Xerox’s discharge of its obligations

to HHSC. Specifically, the State alleges:

           • Xerox represented to Texas Medicaid officials that its PA
             review system ensured proper pre-determinations of medical
             necessity and enforcement of Medicaid policy. Contrary to
             those representations, Xerox knowingly failed to adequately
             review the orthodontic PA requests and documentation
             submitted by providers to obtain prior authorization for
             orthodontic treatment.
           • Unqualified Xerox employees routinely approved orthodontic
             PA requests, without proper review. Vast numbers of these
             orthodontic PA requests were for children who did not meet the
             strict Medicaid criteria to qualify for orthodontic benefits from
             Texas Medicaid.
           • Xerox’s dental director failed to properly review PA requests,
             and Xerox misrepresented to HHSC the director’s failure to
             follow mandated procedures and policy.

State’s Pet. 3-4. The State further alleges that Xerox’s conduct violated the

TMFPA.4 Xerox's unlawful acts resulted in a breach of safeguards intended to

4
        A person, or entity, commits an unlawful act under the TMFPA if a person:
    •   Knowingly makes or causes to be made a false statement or misrepresentation of
        a material fact to permit a person to receive a benefit or payment under the
        Medicaid program that is not authorized or that is greater than the benefit or
        payment that is authorized.
    •   Knowingly conceals or fails to disclose information that permits a person to
        receive a benefit or payment under the Medicaid program that is not authorized or
        that is greater than the benefit or payment that is authorized.
    •   Knowingly makes, causes to be made, induces, or seeks to induce the making of a
        false statement or misrepresentation of material fact concerning information
        required to be provided by a federal or state law, rule, regulation, or provider
        agreement pertaining to the Medicaid program.

                                               9
protect taxpayer dollars, maintain the integrity of Medicaid policies, and ensure the

appropriate delivery of services to Medicaid clients. Moreover, because of its

misrepresentations, Xerox received tens of millions of dollars for services Xerox

did not actually perform. State’s Pet. 3.

       The TMFPA provides statutory remedies to redress the conduct of a

defendant. Tex. Hum. Res. Code § 36.052. In the underlying suit, the State seeks to

recover from Xerox, and only Xerox: (l) the amount of any payments or the value

of any monetary or in-kind benefits provided under the Medicaid program, directly

or indirectly, as a result of Xerox’s unlawful acts; (2) pre-judgment interest on the

amount of the payments or the value of such payments; (3) two times the amount

of the payments or the value of such payments; (4) civil penalties in an amount not

less than $5,500 or more than $11,000 for each unlawful act committed by Xerox;

and (5) costs, attorney’s fees, and expenses. See State’s Pet. 4; Tex. Hum. Res.

Code §§ 36.052(a)(1)-(3).

       4. The trial court denied Xerox’s attempt to join third parties to the
          State’s law enforcement action.

       Xerox responded to the State’s allegations, by, among other things, casting

blame on dental providers who had submitted the PA requests that Xerox

approved. Xerox’s First Am. Original Answer and Original Third-Party Pet. 2-9, at

MR.67-74. In response, the State filed its Motion to Strike. MR.77-97. The trial

Tex. Hum. Res. Code Ann. §§ 36.002(l), (2), (4)(B) (eff. Sept. 1, 2005).

                                               10
court granted the State’s motion to strike Xerox’s third-party petition. See Order,

dated Mar. 31, 2015, at MR.629-30; see also trial court letter, dated Feb. 10, 2015,

at MR.232-34 (explaining reasoning for subsequent decision).5

       Xerox then sought leave to designate responsible third parties, under Chapter

33. See Xerox’s Mot. for Leave to Designate Responsible Third Parties, at

MR.235-606. The State filed an Objection to Xerox’s motion. MR.607-28. The

trial court denied Xerox’s motion. See Order Denying the Xerox Parties’ Mot. for

Leave to Designate Responsible Third Parties, dated Apr. 15, 2015, at MR.631.

See also court’s letter, dated Sept. 26, 2014 (“The State is . . . entitled to pursue a

Medicaid Fraud claim against a defendant to the exclusion of all other parties . .

.”). MR.210-11. After the trial court denied Xerox’s request to take an

interlocutory appeal, Xerox initiated this mandamus proceeding. 6

5
       The court, in explaining its decision to strike Xerox’s third-party petition, wrote:
       There is no authority for treating an enforcement action by the State as a statutory
       tort, and the civil remedy in the TMFPA is not a damage provision. Each
       wrongful actor is liable for a civil remedy and penalty in multiples of the State's
       actual loss that is undiminished by the civil remedy and penalty assessed on or
       paid by another actor. What Xerox characterizes as a “novel theory” is the plain
       meaning of the statute. There is no comparative fault, joint-and-several liability,
       contribution, single-satisfaction, or settlement credit in a TMFPA action. If there
       is any right to contribution, it must be pursued in a separate action between
       alleged wrongdoers.
Decision Letter, p. 1, at MR.232.
6
        Xerox erroneously asserts that a separate law enforcement action brought by the State
against several dental providers is “inextricably intertwined” with the instant suit; however, the
State’s allegations against the dental providers are factually and legally distinct from the State’s
allegations against Xerox in the instant underlying suit. See Xerox’s Pet. 8; State v. Nazari,
Cause No. D-1-GN-14-005380 (53rd Dist. Ct., Travis County, Tex.). In the State’s law
                                                11
                          SUMMARY OF THE ARGUMENT

       The Court should deny Xerox’s petition for writ of mandamus because the

trial court correctly ruled that the State’s law enforcement action, brought under

the TMFPA, is not based on tort, the State does not seek “damages” capable of

apportionment, and, thus, CPRC Chapter 33 does not apply in the underlying case.

The trial court, therefore, did not abuse its discretion in striking Xerox’s third party

claims or in denying Xerox’s motion for leave to designate responsible third

parties. Also, Xerox has an adequate remedy at law on appeal.

                               STANDARD OF REVIEW

       “Mandamus is an extraordinary remedy, available only when a trial court

clearly abuses its discretion and when there is no adequate remedy on appeal.”

Walker v. Packer, 827 S.W.2d 833, 839-40, n.7 (Tex. 1992). A clear abuse of

discretion is only found when the dispute had but one reasonable answer and the

enforcement actions against several dental providers, the liability rests only upon each dental
provider’s acts and omissions, and whether the dental providers submitted false statements to
Texas Medicaid. In contrast, the only conduct at issue in this matter, and that will be considered
by the trier of fact, is Xerox’s, and only Xerox’s acts and omissions.
        In the Nazari matter, the dental provider defendants sought to name Xerox as a
responsible third party. The trial court denied the dental providers’ attempt to join Xerox as a
third party. The dental providers now seek interlocutory appellate relief from this Court. See No.
03-15-00252-CV, Nazari v. State of Texas. In its Appellee’s Brief in 03-15-00252-CV, Xerox
argues that this Court should decide the merits of the Nazari appeal alongside the merits of this
original proceeding. On that point, the State and Xerox agree. The Court should deny Nazari’s
interlocutory appeal at the same time it declines to issue this mandamus. See State’s appellee’s
brief in No. 03-15-00252-CV (discussing reasons Nazari’s interlocutory appeal should be
denied).

                                               12
court chose another. See id at 839-40 (“A trial court clearly abuses its discretion if

it reaches a decision so arbitrary and unreasonable as to amount to a clear and

prejudicial error of law.”) (internal quotation omitted).

      Mandamus should only be granted if the relator has no other adequate

remedy at law. In re Columbia Med. Ctr., 290 S.W.3d 204, 207 (Tex. 2009)

(“Generally, mandamus will issue only to correct a clear abuse of discretion or the

violation of a duty imposed by law, . . . when an adequate remedy by appeal does

not exist. . . . . Mandamus should not issue to correct grievances that may be

addressed by other remedies.”) (citations omitted); see also Walker v. Packer, 827
S.W.2d at 841 (“The requirement that mandamus issue only where there is no

adequate remedy by appeal is sound, and we reaffirm it today.”).

      Courts look to the particular circumstances to determine that an adequate

appellate remedy is available. In re Prudential Ins. Co. of Am., 148 S.W.3d 124,

137 (Tex. 2004) ("Whether an appellate remedy is ‘adequate’ so as to preclude

mandamus relief depends heavily on the circumstances presented and is better

guided by general principles than by simple rules.”). And such “considerations

implicate both public and private interests.” Id. at 136.

                                          13
                                         ARGUMENT

I. Because CPRC Chapter 33 does not apply in a law enforcement action
   brought by the State under the Texas Medicaid Fraud Prevention Act, the
   trial court did not abuse its discretion in granting the State’s motion to
   strike Xerox’s third party claims, or in denying Xerox’s motion for leave to
   designate responsible third parties.

       A.      The TMFPA is not a “cause of action based on tort” and is
               therefore outside the scope of Chapter 33.

       CPRC Chapter 33 applies only (1) to an action “based on tort,” in which a

trier of fact can apportion, among a defendant and others, responsibility for a harm,

or (2) to an action brought under the DTPA in which “a defendant, settling person,

or responsible third party is found responsible for a percentage of the harm.”

CPRC §§ 33.002(a)(1), (2).7

       Xerox argues that because the TMFPA has the word “fraud” in its title, and

because fraud is a tort, the TMFPA is a statutory tort. See Xerox’s Pet. 13. In

support of this argument, Xerox points to cases that have applied Chapter 33 to

statutory causes of action, and to some federal False Claims Act (“FCA”) cases in

which the FCA is described as a tort or sounding in tort. Id. at 14. For the

following reasons, and as the trial court correctly determined, the TMFPA is not a

statutory tort. First, the TMFPA lacks the requisite elements of tort law, such as

7
        The fact that the Legislature specifically included the DTPA within the scope of Chapter
33’s reach illustrates that it did not intend to include the TMFPA or other public welfare statutes.
If the Legislature had wanted Chapter 33 to apply to the TMFPA, it would have said so – clearly
and unambiguously.

                                                14
reliance, causation, and damages. Second, the TMFPA is not a codification of the

common law tort of fraud, and there is no “single indivisible injury” to apportion

among joint tortfeasors, as contemplated by Chapter 33.8 And third, the TMFPA is

fundamentally different from the False Claims Act, and comparisons to the False

Claims Act are not instructive in this instance.

               1. Essential tort law concepts are missing from the TMFPA.

       “The basic elements necessary to state any tort claim are duty; breach of

duty; causation between the breach of the duty and the injury; and actual damage.”

86 C.J.S. Torts § 2. A civil wrong or breach of duty imposed by law “is called a

tort only if the harm that has resulted is capable of being compensated in an action

at law for damages.” Moore v. Collins, 897 S.W.2d 496, 501 (Tex. App.—Houston

[1st Dist.] 1995, no writ) (noting that a tort is a breach of some duty, other than a

contractual or quasi-contractual duty, which gives rise to an action for damages).

To establish liability under the TMFPA, the State has no obligation to show an

independent duty on the part of Xerox. However, even assuming that the TMFPA

imposes a legal duty and Xerox has breached that duty, other essential elements of

8
        See Gregory J. Lensing, Proportionate Responsibility and Contribution Before and After
the Tort Reform of 2003, 35 Tex. Tech L. Rev. 1125, 1131 (“In sum, the proportionate-
responsibility principles set forth in Chapter 33 will govern virtually any Texas tort case
(possibly excluding statutory causes of action) in which more than one party (including the
plaintiff) is alleged to have caused or contributed to cause a single, indivisible injury through the
violation of any legal duty ‘based on tort.’”) (emphasis added).

                                                 15
a tort-based cause of action – e.g., causation, injury, and damages – are not present

in the TMFPA and are not required for the State to prevail on its TMFPA claims.

       For a defendant to be liable under the TMFPA, the State must prove that the

defendant committed an unlawful act as described in section 36.002. Tex. Hum.

Res. Code § 36.002. Section 36.002 defines proscribed conduct for which the State

may recover civil remedies, without regard to whether or not the proscribed

conduct caused the State any harm. Put another way, the defendant’s liability to the

State is established once a violation of the TMFPA is established and the State

need not show actual monetary loss in order to recover civil remedies. 9 Tex. Hum.

Res. Code § 36.052.

       Additionally, for a defendant to be held liable for civil remedies, the

TMFPA does not require the defendant to have actually received a benefit or a

payment from the State. A benefit or payment may have gone to a third party, and

the defendant may still be liable to the State for that benefit or payment. Tex. Hum.

Res. Code Ann. § 36.052(a)(1) (authorizing the State to recover “the amount of

9
        See § 36.052: “CIVIL REMEDIES. (a) …[A] person who commits an unlawful act is
liable to the state . . .” Tex. Hum. Res. Code Ann. § 36.052 (2011) (emphasis added). See also
31 U.S.C. § 3729(a)(1) (a person who presents a false claim “is liable to the United States
Government . . .”); Varljen v. Cleveland Gear, 250 F.3d 426, 429-30 (6th Cir. 2001) (“Recovery
under the FCA is not dependent upon the government’s sustaining monetary damages.”); United
States ex. rel. Schwedt v. Planning Research Corp., 59 F.3d 196, 199 (D.C. Cir. 1995)
(“regardless whether the submission of the claim actually causes the government any damages . .
. its very submission is a basis for liability”); United States ex. rel. Hagwood v. Sonoma Cnty.
Water Agency, 929 F.2d 1416, 1421 (9th Cir. 1991) (holding that government need not show
damages in order to recover civil penalties under FCA).

                                              16
any payment or the value of any monetary or in-kind benefit provided under the

Medicaid program, directly or indirectly, as a result of the unlawful act, including

any payment made to a third party”) (emphasis added). The State is also entitled to

recover a civil penalty for each unlawful act. Tex. Hum. Res. Code §

36.0052(a)(3). See generally Tex. Hum. Res. Code § 36.052(a) (containing scope

of civil remedies to which the State is entitled under TMFPA).

      Importantly, the TMFPA provides for recovery of the amount paid by Texas

Medicaid, not the amount paid in error or in overpayment, and not the amount paid

less any benefit that may have been received by the Medicaid program. Tex. Hum.

Res. Code § 36.052(a)(1). The amount the State may recover as civil remedies is

therefore measured by the amount the state paid, without reference to whether the

State sustained any actual loss or “damage” from the unlawful conduct. The

TMFPA unambiguously includes all of the payment made by the State, even if, but

for the unlawful conduct, the State would have made the same payment at a

different time, or made some payment in a lesser amount. Under the TMFPA,

therefore, any remedies owed to the State are a measure of the magnitude of the

defendant’s unlawful conduct, and not a measure of any tort-based concept of

damages. See Tex. Hum. Res. Code § 36.052(a)(1).

       Likewise, in a TMFPA action the State does not have to show causation – a

necessary element in tort-based causes of action. As previously described, a

                                        17
defendant “is liable” to the State for civil remedies once the State has proved the

unlawful act. See Tex. Hum. Res. Code § 36.052(a). Yet Xerox argues that the “as

a result of” language in the civil remedies portion of the statute, section

36.052(a)(1), is the equivalent of a tort-based causation standard and is a

prerequisite to the State establishing liability. It is not.

       First, in the liability section of the TMFPA, there is no causation

requirement. A person is liable if he knowingly makes a false statement, regardless

of whether that misrepresentation actually caused injury or harm to the State. See,

e.g., Tex. Hum. Res. Code §§ 36.002(1) (affirmative false statements), 36.002(4)

(false statements regarding information required by law). 10

       Second, by using, in the remedies section, the phrases “directly or

indirectly” and “as a result of” the unlawful act, the Legislature defined the scope

of the benefits or payments the State may recover from an already-liable

defendant. Should the State fail to show the payment or benefit was made “as a

result of” the unlawful act, the State may not recover those amounts, but the

defendant is nonetheless liable for the unlawful act, and for a civil penalty for the

10
       The words “to permit” found in 36.002(2) do not require the State to show that a
defendant’s unlawful conduct caused harm; rather, “to permit” refers to the fact that the
defendant’s unlawful conduct may “open the door” to allow a person to obtain a benefit. See
Tex. Hum. Res. Code § 36.002(2). The State has no obligation to demonstrate, for liability
purposes, that anyone actually received an unauthorized benefit. See id.

                                             18
unlawful act. See Tex. Hum. Res. Code § 36.052(a)(3) (prescribing minimum

penalty of $5,500 per unlawful act).11

       In contrast, with a tort cause of action there can be no liability without

causation of damages. See Cunningham v. Blue Cross Blue Shield of Tex., No. 2-

06-363-CV, 2008 WL 467399, at *5 (Tex. App.—Fort Worth Feb. 21, 2008, pet.

denied) (citing Wheaton Van Lines, Inc. v. Mason, 925 S.W.2d 722, 728 (Tex.

App.—Fort Worth 1996, writ denied) (“In any cause of action, whether grounded

in tort, contract, or a hybrid of the two, causation is the essential element necessary

to attribute fault for one's injuries to another.”)); Brookhouser v. State of

California, 10 Cal. App. 4th 1665, 1677, 13 Cal. Rptr. 2d 658, 665 (1992) (“It is

axiomatic that a defendant cannot be held liable in tort for an injury he or she did

not cause.”).

       The TMFPA also lacks any element of reliance. Fraud causes of action, even

some statutory frauds, include an element of reliance. Indeed, the elements of

statutory fraud are essentially the same as those of common-law fraud, except that

the plaintiff need not prove the defendant’s knowledge or recklessness. See

Henning v. One West Bank, 405 S.W.3d 950, 963 (Tex. App.–Dallas 2013, no pet.)

(comparing elements of statutory fraud under Tex. Bus. & Com. Code § 27.01 to

11
      The civil penalty provision contains no “as a result” language. A person who commits an
unlawful act is subject to a mandatory civil penalty regardless whether there was any payment by
the Medicaid program as a result of the unlawful act. Tex. Hum. Res. Code § 36.052(a)(3).

                                              19
elements of common law fraud). In a fraud case, including a statutory fraud case,

the defendant can show the plaintiff’s knowledge of the fraudulent conduct to

negate the element of reliance.12 But the State’s knowledge is not relevant in this

case because reliance is not an element of a TMFPA claim. 13 The absence of a

reliance element in the TMFPA is further indication that it is not a “statutory

fraud” to which Chapter 33 applies.

          2. The cases cited by Xerox are distinguishable, because the
             statutory causes of action were either “based on tort,” or the issue
             was never reached by the court, and are inapplicable here because
             none involved statutory law enforcement actions.

       As a preliminary matter, none of the cases that Xerox cites in support of

applying Chapter 33 to the TMFPA involve statutory law enforcement actions

brought by the State in its sovereign capacity to enforce a public welfare statute.

Nor could the State identify such a case. 14 This is not surprising because, as will be

discussed below, the State in a TMFPA enforcement action is not a “person” to

whom Chapter 33 applies. In the cases Xerox cites, the courts either took pains to

analyze the particular statute at issue and determine, on a statute-by-statute basis,

12
     Schlumberger Tech. v. Swanson, 959 S.W.2d 171, 181 (Tex. 1997); see also Italian
Cowboy Partners v. Prudential Ins. Co. of Am., 341 S.W.3d 323, 336-37 (Tex. 2011).
13
        See Pub. Util. Comm’n of Tex. v. Cofer, 754 S.W.2d 121, 124 (Tex. 1988) (orig.
proceeding) (holding that a court may not write special exceptions into a statute to make the
statute inapplicable under certain circumstance not mentioned in the statute).
14
       The undersigned counsel conducted a diligent search and could find no Texas case where
a court applied Chapter 33 to a statutory law enforcement action brought by the State in its
sovereign capacity.

                                             20
whether the statutory cause of action was “based on tort” within the meaning of

Chapter 33, or failed to reach the issue at all.15

       Regarding the statutes to which the Texas Supreme Court has applied

Chapter 33, each requires a plaintiff to prove the necessary elements of a tort cause

of action: duty, breach, causation, and damages. Consequently, none of the cases

cited by Xerox are binding on this Court, and none of the findings translate to the

TMFPA or are persuasive given the particular statutory scheme adopted by the

Legislature in the TMFPA.

              3. The TMFPA was modeled after federal criminal law, not on
                 traditional tort law.

       The enumerated unlawful acts in the TMFPA have their roots in criminal

law, and are not a codification of any common law or traditional tort-based causes

15
        See Dugger v. Arredondo, 408 S.W.3d 825 (Tex. 2013) (holding that Wrongful Death
Act is based on tort); F.F.P. Operating Partners v. Duenez, 237 S.W.3d 680 (Tex. 2007)
(recognizing previous holding that Dram Shop Act incorporates essential elements of negligence
action and holding that it thus sounds in tort); JCW Elecs., Inc. v. Garza, 257 S.W.3d 701 (Tex.
2008) (holding that UCC Article 2 breach of implied warranty claim is tort based, as claim for
implied warranty a traditional basis for product liability claim); Villareal v. Wells Fargo
Brokerage Servs., 315 S.W.3d 109 (Tex. App.—Houston [1st Dist. 2010], no pet.) (applying
CPRC § 33.004(e) to Texas Securities Act and Texas Trust Act claims because real parties in
interest failed to argue that acts were not based on tort); Pemex Exploracion y Produccion v.
BASF Corp., H-10-1997, H-11-2019, 2011 WL 9523407, at *13 (S.D. Tex. Oct. 20, 2011)
(applying CPRC Chapter 33 to Theft Liability Act (“TLA”) to permit designation of responsible
third parties under section 33.004(j)).
        Regarding the TLA, the Texas Supreme Court has not yet been asked to determine
whether Chapter 33 might apply to the TLA, or portions thereof. The TLA allows a civil remedy
for certain theft offenses, several of which have a corresponding common law tort-based cause of
action, such as conversion, quantum merit, and trespass to personal property. CPRC §§ 134.001-
.005. The Pemex court did not identify the penal code violation(s) made the basis of the TLA
claims in the suit Pemex, 2011 WL 9523407, at *11.

                                              21
of action. The majority of the unlawful acts in section 36.002 of the TMFPA,

including all of the provisions at issue in this case, do not derive from or codify

existing tort law, but rather were created from 42 U.S.C. § 1320a-7b, entitled

“Criminal penalties for acts involving Federal health care programs.” Moreover,

prior to the repeal of section 36.131 of the Human Resources Code in 2005, prior

versions of the TMFPA specified that committing an unlawful act under section

36.002 constituted a criminal offense.16 The fact that the TMFPA now provides

only civil remedies and penalties for violations of the Act does not change the

underlying statutory, non-tort based nature of the causes of action. 17

              4. The TMFPA lacks a single, indivisible injury.

       Unlike the tort-based statutes to which Chapter 33 has been previously

applied, under the TMFPA there is no single, indivisible injury to apportion among

joint tortfeasors. First, as noted earlier, the State need not show actual injury in

order to hold Xerox liable for its unlawful acts. Second, Xerox can only be held

liable for payments made directly or indirectly as a result of its unlawful acts. See

16
        See § 36.131 Tex. Hum. Res. Code Ann. (1995) (providing that a violation of section
36.002 constituted at least a Class C misdemeanor and up to a first degree felony depending on
the total amount of payments made as a result of the unlawful act).
17
        Xerox argues that “claims to recover damages for overpayments based on false
statements for Medicaid reimbursement [under the FCA] are ‘“substantive causes of action for
fraud’” and cites to Grogan v. Garner, 498 U.S. 279, 288 (1991) for this proposition. The
Grogan court, however, even though citing the FCA as one of several federal “fraud” statutes,
did not undertake to analyze whether the FCA is “based in tort.” See Xerox Pet. at p. 16. The
State discusses the differences between the TMFPA and the FCA, in section I.B., below.

                                             22
Tex. Hum. Res. Code § 36.052(a)(1). Therefore, Xerox can never be held liable

under the TMFPA for the actions of third parties and cannot be held liable for

payments made, directly or indirectly, as the result of someone else’s conduct. See

id.

       Additionally, the Legislature intended to allow the State to recover from a

defendant payments the State made to third parties. See Tex. Hum. Res. Code §

36.052(a)(1) (“a person who commits an unlawful act is liable to the state for the

amount of any payment or the value of any monetary or in-kind benefit provided

under the Medicaid program, directly or indirectly, as a result of the unlawful act,

including any payment made to a third party”). The State may recover the full

amount of the “payment” under section 36.052, without regard to whom the

payment was made and without reference to any alleged “harm” or “injury” to the

State. That the State may recover these dollars as a statutory remedy does not mean

Xerox is paying some other violator’s “proportionate share,” or discharging the

liability of third parties such that a contribution claim would be available.18

18
        Xerox also contends that TRCP Rule 38 permits Xerox to join potentially responsible
contribution defendants. See Xerox’s Pet. 26. While Rule 38 provides the procedural mechanism
for joining contribution defendants, it does not create a cause of action for contribution. Rule 38
neither creates a cause of action nor confers an independent right of contribution. See Tex. Gov’t
Code § 22.004(a) (“The supreme court has the full rulemaking power in the practice and
procedure in civil actions, except that its rules may not abridge, enlarge, or modify the
substantive rights of a litigant.”). Contribution is a statutory creation. Consequently, absent an
independent, substantive right to contribution, Rule 38 alone has no legal effect.

                                                23
        Permitting “contribution defendants,” such as dental providers, to be joined

or named as responsible third parties under Chapter 33 would undermine this

language in the TMFPA, which expressly permits the State to recover, from Xerox,

any “payments made to third parties” as a result of Xerox’s unlawful acts. Tex.

Hum. Res. Code § 36.052(a)(1). Such a result is contrary to the unambiguous

language of the statute, would dramatically alter the legislative liability scheme

inherent in the TMFPA, and would have sweeping implications for every TMFPA

case.

              5. When a statutory conflict would result, courts have held that
                 Chapter 33 cannot be applied to a statute.

        The Dallas Court of Appeals’ analysis in declining to apply Chapter 33 to

the Uniform Fraudulent Transfers Act (“UFTA”) is instructive. See Challenger

Gaming Solutions, Inc. v. Earp, 402 S.W.3d 290, 296 (Tex. App.—Dallas 2013, no

pet.) (holding that Chapter 33 “has no applicability in an UFTA claim”). 19 The

same result should occur here.

        In Challenger, a lender sued a borrower’s ex-wife under the UFTA. Id. at

291. The ex-wife moved to designate the borrower as a responsible third party

under Chapter 33, and the trial court allowed the designation. Id. The jury found

the borrower 50% responsible for Challenger’s damages, and reduced the award to

19
        The court also provided a cogent analysis of two cases cited by Xerox. See JCW Elecs.,
Inc. v. Garza, 257 S.W.3d 701 (Tex. 2008); Sw. Bank v. Info. Support Concepts, Inc., 149
S.W.3d 104 (Tex. 2004).

                                             24
Challenger against the ex-wife. Id. On appeal, Challenger argued that Chapter 33

did not apply to the UFTA. Id. at 296-99.

       In determining that Chapter 33 does not apply to the UFTA, the court noted

that the UFTA “delineates what types of transfers and obligations are fraudulent,

enumerates the remedies available to a creditor, prescribes the measure of liability

to a transferee, and lists the defenses and protections afforded to a transferee.” Id.

at 294.20 The court noted that “the proportionate responsibility statute [Chapter 33]

conflicts with the liability scheme in the UFTA and cannot be reconciled.” Id. at

299. When two statutes conflict and cannot be reconciled, the specific statute

controls over the more general. Challenger, 402 S.W.3d at 295 (citing to Tex.

Gov’t. Code Ann. § 311.026(b), Lexington Ins. Co. v. Strayhorn, 209 S.W.3d 83,

86 (Tex. 2006)).

       As in Challenger, allowing the application of Chapter 33 to TMFPA cases

would turn the Legislature’s intended effectiveness of the TMFPA on its head. For
20
       Interestingly, in reaching its decision the court did not find JCW Electronics dispositive:
       In contrast…an UFTA claim does not lend itself to a fault-allocation scheme.
       Rather the focus of an UFTA claim is to ensure the satisfaction of a creditor’s
       claim when the elements of a fraudulent transfer are proven. Specifically, the
       UFTA provides several different forms of equitable relief designed to follow and
       reach assets…. Also, the UFTA provides for a money judgment that does not
       exceed the value of the asset transferred or the amount necessary to satisfy the
       creditor’s claim….Further the UFTA allows recovery against the debtor, the
       transferee, or the person for whose benefit the transfer was made, but does not
       distinguish the forms of relief based on culpability….That is, “[i]t operates
       against the title of an ‘innocent’ transferee who has not paid value just as fully as
       against the title of a transferee who has participated in a fraud.
Id. at 298-99 (citing JCW Elecs., Inc. v. Garza, 257 S.W.3d 701).

                                                25
instance, in a TMFPA case involving off-label promotion of pharmaceutical rugs

by a pharmaceutical company, the potential “contribution defendants” could

number in the thousands, with pharmaceutical companies seeking to join every

Texas Medicaid provider who prescribed the drug and each pharmacy as “causing

or contributing to cause the harm for which damages is sought.” When the

Legislature limited participation in TMFPA actions to the Attorney General

(subchapter B) and qui tam relators (subchapter C), the Legislature foreclosed the

participation in an action of any other “private persons,” including third-party

contribution defendants.

      In sum, the concept of “joint tortfeasors” combining to violate the TMFPA

and causing the State one indivisible injury is not supported by the TMFPA’s plain

language. Xerox seeks to have the fact-finder consider the “proportionate

responsibility” of dental providers for false statements contained in their PA

requests for orthodontia services. Those false statements, so goes Xerox’s theory,

caused or contributed to cause injury to the State. But Xerox’s defense necessarily

fails because Xerox is liable under the TMFPA for its own independent unlawful

conduct – whether that conduct caused injury to the State or not and whether an

assertion made by a dental provider in its PA request was accurate or not. In this

way, the goal of the TMFPA is not merely to make the State whole but also to

deter future unlawful acts.

                                        26
       B.     The False Claims Act cases cited by Xerox do not assist the Court
              when interpreting the TMFPA.

       The False Claims Act (“FCA”) cases as cited by Xerox are neither

instructive nor persuasive when analyzing the TMFPA. 21 The TMFPA is far more

specific than the FCA in its enumeration of unlawful acts, and broader in terms of

the proscribed conduct that it reaches. Moreover, apart from the use of the word

“Fraud” in the title, the word appears only twice in the body of the TMFPA. 22 In

contrast, the FCA requires presentment of a false or fraudulent claim. 31 U.S.C. §§

3729(a)(1)(A), (B). The TMFPA does not have this requirement, nor makes any

reference to a “fraudulent” claim. The FCA also references an actor’s intent “to

defraud” the government, and provides that “no proof of specific intent to defraud

is required.” Id. at §§ 3729(a)(1)(E), (b)(1)(B). With respect to the latter provision,

the Legislature considered this exact language, but ultimately did not include it in

the 2005 amendments to the TMFPA. 23 Of particular significance to Chapter 33’s

21
       The FCA and the TMFPA differ in many important ways, but briefing constraints
preclude an exhaustive analysis of the differences.
22
        See Tex. Hum Res. Code § 36.002(9) (making it an unlawful act to enter into a
“conspiracy to defraud the state by obtaining or aiding another person in obtaining an
unauthorized payment or benefit from the Medicaid program or fiscal agent”); Tex. Hum Res.
Code § 36.002(10)(c) (making it an unlawful act to “engage in a fraudulent activity in connection
with the enrollment of an individual eligible under the Medicaid program in the organization’s
managed care plan or in connection with marketing the organization’s services to an individual
eligible under the Medicaid program”).
23
       The introduced version of SB 563, which would become the 2005 amendments to the
TMFPA, originally defined the culpable mental state now contained in section 36.0011 as “the
person’s specific intent to defraud. . . .” This language was amended to read “the person’s
                                               27
inapplicability to the TMFPA, the government’s recovery under the FCA is

couched in terms of “damage” to the government. 24 Hence, it is the harm to the

government in a FCA case, not the amount the government paid, that is considered.

The TMFPA makes no such reference to “damage” in connection with the State’s

recovery. 25

       But Xerox argues that because section 36.1021 references damages, and

because the State has made reference to “damages” at various times in the record,

that the State seeks damages in a TMFPA action. See Xerox’s Pet. 22. That the

State is not seeking “damages” in a TMFPA action is covered below, but for

purposes of distinguishing the TMFPA from the FCA, it is important to note that

section 36.1021 is referencing both the State’s recovery of civil remedies and

penalties, and a qui tam relator’s recovery of damages.

       Section 36.1021 reads: “STANDARD OF PROOF. In an action under this

subchapter, the state or person bringing the action must establish each element of

the action, including damages, by a preponderance of the evidence.” As discussed

below, there is no requirement that the State prove damage or harm to prevail in a

specific intent to commit an unlawful act” prior to the passage of the bill. Compare Tex. S.B.
563, 79th Leg., R.S. (2005) (introduced version), with Tex. Hum Res. Code § 36.0011.
24
       31 U.S.C. § 3729(a) (permitting the government to recover a civil penalty “plus 3 times
the amount of damages which the Government sustains because of the act of that person.”)
(emphasis added). This provision has been interpreted to allow for evidence of the government’s
net economic harm to be presented. See United States v. Sci. Applications Int’l Corp., 626 F.3d
1257, 1279 (D.C. Cir. 2010).
25
       Compare Tex. Hum Res. Code § 36.012(a)(1), with 31 U.S.C. § 3729(a).

                                              28
TMFPA case, and “damages” is not an element of the State’s claim. The TMFPA

contains a retaliation provision: A private person relator may choose to assert a

claim for damages as a result of any retaliation or discrimination for bringing the

unlawful conduct to the State’s attention. See Tex. Hum. Res. Code § 36.115. It is

in this context that the word “damages” appears again. In addition to reinstatement,

a person who is retaliated against for bringing a TMFPA action is entitled to “two

times the amount of back pay, interest on the back pay, and compensation for any

special damages sustained as a result of the discrimination . . .” See Tex. Hum.

Res. Code § 36.115(a)(2). The damages reference, made in this context, is limited

to the potential damages awarded to a qui tam relator for wrongful termination, and

does not operate to transform the plain language of section 36.052 into a

“damages” provision.

      C.     The civil remedies the State seeks to impose against Xerox for
             Xerox’s violations of the TMFPA are based solely on Xerox’s
             conduct and are not the “same alleged injury” for which the State
             seeks redress from dental providers.

      Because Chapter 33’s sole purpose is to apportion “proportionate

responsibility,” the statute “requires the trier of fact to determine the percentage of

responsibility of each claimant.” CPRC § 33.001; Challenger Gaming, 402 S.W.3d

at 292. See also Equitable Recovery v. Heath Ins. Brokers of Tex., 235 S.W.3d
376, 387 (Tex. App.–Dallas 2007, pet. dism’d) (“Contribution and indemnity are

methods by which the burden of paying damages to a plaintiff is shifted from one
                                          29
defendant to another, both of whom are jointly liable to the plaintiff on the same

claim.”) (emphasis added); Goose Creek Consol. Indep. School Dist. v. Jarrar's

Plumbing, Inc., 74 S.W.3d 486, 492 (Tex. App.—Texarkana 2002, pet. denied)

(third-party actions under Tex. R. Civ. P. 38(a) “join a party who may be liable to

the defendant or to the plaintiff for all or part of the plaintiff's claims against the

defendant”).26

       Here, there is no “joint liability” between Xerox and any dental providers,

somehow resulting in one indivisible injury to Texas, such that Xerox can “shift”

its TMFPA liability onto these putative third parties. Xerox’s violations of the

TMFPA stand alone and do not depend on whether dental providers also violated

the TMFPA. 27 For example, Xerox’s misrepresentations to HHSC regarding

Xerox’s prior authorization (PA) review process violated the TMFPA without

regard or reference to the veracity of dental providers’ submissions to Xerox.

Additionally, Xerox’s failure to provide trained personnel to review PA requests

has no factual nexus with any conduct attributable to dental providers. Xerox’s

26
       See also Gus Hodges, Contribution and Indemnity among Tortfeasors, 26 Tex. L. Rev.
150, 150 (“Historically neither the common law courts nor the legislative bodies have been
sympathetic with the plight of wrongdoers in the adjustment of their affairs.”). Not until 1917 did
Texas adopt a statute which expressly provided for contribution. Id. at 151.
27
        Here Xerox attempts to join as third parties twenty-seven dental providers. See Xerox’s
First Am. Original Answer and Original Third-Party Pet., at MR.68-71. But these are not the
only dentists who treated Medicaid patients, and they are not the only dentists who the State
alleges have committed unlawful acts. It appears that Xerox’s attempt to implead these dentists is
retaliatory, after these dentists first cast blame on Xerox.

                                                30
focus on the potential measure of the remedy mandated by section 36.052(a)(1),

rather than on the nature of its own, independent liability under the TMFPA, is

misdirected. The fact that one potential measure of the civil remedies prescribed by

the TMFPA for Xerox’s unlawful conduct is the dollars paid to providers is not

germane to the question of whether joint liability exists. Because there is no joint

liability between Xerox and the third party providers, Xerox can never be

responsible for more than its own injury-causing conduct. See Challenger Gaming,
402 S.W.3d at 292.

      While Xerox may deem it a harsh reality, the TMFPA does not provide for

common law or equitable defenses. As the State has explained:

      Allowing the Xerox Parties and Providers to Consolidate Texas’s
      TMFPA case with other cases involving common law claims, where
      all claims would be tried to the same jury and damages awarded
      accordingly, would indeed allow the Xerox Parties and providers to
      assert equitable and common law defenses and introduce such
      concepts as comparative fault and responsible third-party liability and
      contribution into the same jury trial, addressing Texas’s TMFPA
      claims. Consolidating these cases into a single case would circumvent
      this Court’s and other Travis County Court’s consistent holdings that
      equitable and common law defenses and concepts do not apply to the
      TMFPA and allowing such would cause jury confusion and be
      substantially prejudicial to Texas.

See State of Texas’s Opp’n to Xerox Parties’ Mot. to Consolidate, at p. 8, copy

attached at Appendix B.

      Furthermore, the right to contribution has its origins in equity. Texas courts

have consistently held that the State of Texas in its sovereign capacity is not
                                        31
subject to equitable defenses, including laches, estoppel, quasi-estoppel, and

ratification. See State v. Durham, 860 S.W.2d 63, 67-68 (Tex. 1993). The rationale

behind this policy is to allow governmental entities to pursue claims and enforce

statutes intended to protect the public interest. Thomas v. State, 226 S.W.3d 697,

710 (Tex. App.–Corpus Christi 2007, pet. dism’d). Like other Texas law

enforcement statutes, the TMFPA is a statute that sets forth all violations and

available defenses. A violation of a statute is limited to the terms of the statute

itself. Likewise, the only defenses available are those specifically set forth in the

statute; common law defenses are simply not applicable. See, e.g., Pub. Util.

Comm’n of Tex. v. Cofer, 754 S.W.2d 121, 124 (Tex. 1988) (“when the Legislature

has spoken on a subject, its determination is binding upon the courts unless the

Legislature has exceeded its constitutional authority”). And, Travis County courts,

when interpreting the TMFPA, have held that equitable and common law defenses

and concepts are not available.28

28
        See Exs. A - E to the State’s Opp’n to Xerox Parties’ Mot. to Consolidate, at App. B.
(Ex. A, Order from The Honorable Judge Yelenosky granting Pls.’ Traditional and No-Evidence
Mot. for Partial Summ. J. on Defs.’ Waiver Defense; Ex. B, Order from The Honorable Judge
Yelenosky granting Pls.’ Traditional Mot. for Partial Summ. J. on Defs.’ Equitable Defenses; Ex.
C, Order from Judge John K. Dietz on Cross-Motions for Summ. J. (granting, inter alia,
Plaintiffs’ Motion for Partial Summary Judgment on Defendants’ Defenses to the [TMFPA] at 3-
4 (“The Court finds that equitable defenses and defenses or limitations found in the [CPRC] do
not apply to the Plaintiffs’ claims under TMFPA”); Ex. D, Order from Judge Lora Livingston on
Motions for Summ. J. (granting, inter alia, Plaintiffs’ Traditional Motion for Partial Summary
Judgment on Certain Defenses (ratification, failure to mitigate, good faith, industry practice,
proximate cause and intervening/superseding acts) and Plaintiffs’ No-Evidence Motion for
Partial Summary Judgment as to All Defendants (waiver and selective enforcement)) at 2-3; and
Ex. E, Order from Judge Suzanne Covington granting Pl.’s First Am. Mot. for Partial Summ. J.).

                                              32
       D.     Even if the TMFPA were a “statutory tort” to which Chapter 33
              would otherwise apply, the Legislature did not intend for Chapter
              33 to apply to the State suing in its sovereign capacity.

       Under the common law, there is a “longstanding interpretive presumption

that ‘person’ does not include the sovereign,” which “may be disregarded only

upon some affirmative showing of statutory intent to the contrary.” See Vt. Agency

of Natural Res. v. United States ex rel. Stevens, 529 U.S. 765, 780–81 (2000)

(applying Supreme Court’s “longstanding interpretive presumption that ‘person’

does not include the sovereign” to term “person” in federal False Claims Act and

noting that presumption “may be disregarded only upon some affirmative showing

of statutory intent to the contrary”); United States v. United Mine Workers of Am.,

330 U.S. 258, 275 (1947) (“In common usage [‘person’] does not include the

sovereign, and statutes employing it will ordinarily not be construed to do so.”);

see also R.R. Comm'n v. United States, 290 S.W.2d 699, 702 (Tex. Civ. App.—

Austin 1956), aff'd, 159 Tex. 197, 317 S.W.2d 927 (Tex. 1958) (stating common-

law rule that the sovereign “shall not be bound unless the statute is made by

express words to extend to [the sovereign]” and noting that “ordinary legislation is

intended merely to regulate the acts and rights of individuals” (citation and internal

quotation marks omitted)). 29

29
       “Statutory provisions which are written in such general language that they are reasonably
susceptible to being construed as applicable both to the government and to private parties are
subject to a rule of construction which exempts the government from their operation in the
                                              33
       Indeed, this Court recently ruled that CPRC Chapter 74, the Texas Medical

Liability Act, (“TMLA”) does not apply to the TMFPA because the State is not a

“person” as included in the definition of “claimant” in the TMLA. See Malouf v.

State ex. rel. Ellis, 461 S.W.3d 641 (Tex. App.—Austin 2015, pet. requested). The

Court also considered the conflicts that would result from a forced application of

the TMLA onto the TMFPA. Id. n.3 This Court should similarly hold that the State

is not a claimant for the purposes of analyzing CPRC 33. 30

       To allow a TMFPA defendant to apply Chapter 33 would be to interfere with

the State’s right to manage its fiscal affairs. The sovereign is generally not a

“person” under statutes that would restrict the sovereign’s rights and interests:

       It is a familiar principle that the King is not bound by any act of the
       Parliament unless he be named therein by special and particular
       words. The most general words that can be devised (for example, any
       person or persons, bodies politic or corporate) affect not him in the
       least, if they may tend to restrain or diminish any of his rights and
       interests.

Dollar Sav. Bank, 86 U.S. (19 Wall.) at 239 (emphasis added); accord 2 William

Blackstone, Commentaries *253; see also, e.g., R.R. Comm’n, 290 S.W.2d at 702.

absence of other particular indicia supporting a contrary result in particular instances.” 3 N.
Singer, Sutherland on Statutory Construction § 62:1, 377-78 (7th ed. 2008). This “general rule
applies with special force to statutes by which prerogatives, rights, titles, or interests of the
government would be divested or diminished,” and “[i]f there is doubt as to the construction of
the statute, the doubt should be resolved in favor of the government.” 82 C.S.J. Statutes § 389,
483-84 (2009).
30
        Interestingly, appellant Dr. Malouf in No. 03-14-00036-CV is one of the dentists Xerox
seeks to have designated as a responsible third party in the State’s underlying case against Xerox.
See Xerox’s Mot. for Leave to Designate Responsible Third Parties, MR.250-52.

                                                34
As already discussed, applying Chapter 33 to the State’s claims would severely

restrict its rights and interests, and no “particular words” in Chapter 33 include the

State. 31

       The assertion that failing to apply Chapter 33 would permit a “double

recovery” by the State, see Xerox Pet. 19, also misstates both the legislative intent

of the TMFPA and the nature of the State’s claims. The TMFPA represents a

specific statutory framework for deterring unlawful conduct and obtaining civil

remedies for the Texas Medicaid program. In enacting the TMFPA, the Legislature

deliberately limited the State’s burden to establish a violation of the statute and

recover civil remedies and penalties. And courts must defer to the plain language

of a statute:

       ‘Courts must take statutes as they find them. More than that, they
       should be willing to take them as they find them. They should search
       out carefully the intendment of a statute, giving full effect to all of its
       terms. But they must find its intent in its language and not elsewhere. .
       . .They are not responsible for omissions in legislation.’

Republicbank Dallas, N.A. v. Interkal, Inc., 691 S.W.2d 605, 607 (Tex. 1985)

(quoting Simmons v. Arnim, 220 S.W. 66 (Tex. 1920)). See also Fitzgerald v.

31
        Xerox may argue that a governmental unit may be named as a responsible third party
under Chapter 33, and is therefore a “person” within the meaning of Chapter 33. Whether the
sovereign may be named as a responsible third party in situations in which it is immune from suit
is open to debate, but is ultimately not relevant to whether a TMFPA defendant may assert
Chapter 33 to thwart the State’s rights and interests in protecting its fiscal well-being through
enforcement of a public welfare statute. See generally Justin Roberts & Randell Roberts, Can
Immune Parties Really be Responsible?: An Analysis of the Current Interpretation of the
Responsible Third Party Statute and Its Vulnerability to Constitutional Challenge, 43 St. Mary’s
L.J. 559 (2012).

                                               35
Advanced Spine Fixation Sys., Inc., 996 S.W.2d 864, 867 (Tex. 1999) (holding that

courts “may add words into a statutory provision only when necessary to give

effect to clear legislative intent. Only truly extraordinary circumstances showing

unmistakable legislative intent should divert us from enforcing the statute as

written”).

      Xerox argues that the TMFPA’s silence as to whether it permits “double

recoveries” is somehow indicative of the legislature’s intent that Chapter 33 should

apply to the TMFPA, and to the State suing in its sovereign capacity. 32 Precisely

the opposite is true. As the trial court noted:

      Each wrongful actor is liable for a civil remedy and penalty in
      multiples of the State’s actual loss that is undiminished by the civil
      remedy and penalty assessed on or paid by another actor. What Xerox
      characterizes as a ‘novel theory’ is the plain meaning of the statute.
      There is no comparative fault, joint-and-several liability, contribution,
      single-satisfaction, or settlement credit in a TMFPA action.

Decision Letter, dated Feb. 10, 2015, at MR.232.

      A person who commits an unlawful act does not escape liability because

there may be multiple violators. Indeed, the unlawful acts listed in section 36.002

specifically contemplate multiple violators. See §§ 36.002(1), (2), (4), (9), (12).

And because the TMFPA is a remedial statute subject to the liberal construction

required by the Human Resources Code, it must be read broadly to ensure that its

32
   See Xerox’s Pet. 26 (claiming that “[t]he TMFPA’s silence regarding contribution, single
satisfaction, et cetera cannot be interpreted as expressly permitting a double recovery.”).

                                            36
purposes are accomplished. See Tex. Hum. Res. Code Ann. § 11.002(b) (“This title

shall be liberally construed in order that its purpose may be accomplished as

equitably, economically, and expeditiously as possible.”). In addition to relying

primarily on the plain meaning, a court may not accept interpretations of a statute

that defeat the purpose of the legislation, “so long as another reasonable

interpretation exists.” Atacosa Cnty. v. Atacosa Cnty. Appraisal Dist., 990 S.W.2d
255, 258 (Tex. 1999).

      Also, as explained above, in a TMFPA action there is no “single, indivisible

injury” committed by “joint tortfeasors.” Consequently, there can be no “double

recovery” to the State. As the Texas Supreme Court has noted:

      The one satisfaction rule applies to prevent a plaintiff from obtaining
      more than one recovery for the same injury. Appellate courts have
      applied the one satisfaction rule when the defendants commit the same
      act as well as when defendants commit technically differing acts
      which result in a single injury.

Stewart Title Guar. Co., v. Sterling, 822 S.W.2d 1 (Tex. 1991) (emphasis added).

Therefore, Chapter 33 does not, and cannot, apply to a law enforcement action

brought by the State in its sovereign capacity, specifically in a TMFPA suit, and

the trial court, therefore, did not abuse its discretion.

      E.     Applying CPRC Chapter 33 to the TMFPA would violate tenets of
             statutory construction and lead to absurd and conflicting results.

      A court’s objective in construing a statute is to determine and give effect to

the Legislature's intent. Cont’l Cas. Ins. Co. v. Functional Restoration Assocs., 19
                                            37
S.W.3d 393, 402 (Tex. 2000) (citing Liberty Mut. Ins. Co. v. Garrison Contractors,

Inc., 966 S.W.2d 482, 484 (Tex.1998)). In doing so, it is helpful to consider the

purpose behind a statute, as stated by the Legislature.

       In 1995, the Legislature enacted the TMFPA, chapter 36 of the Human

Resources Code. By enacting the TMFPA, the Legislature provided the State with

a robust statute to investigate, prosecute, and deter fraud, waste, and abuse in the

Texas Medicaid system, including providing specific investigative authority to the

Office of Attorney General and stiff remedies and penalties for violations of the

statute. The Legislature adopted chapter 36 to safeguard the public treasury and to

protect the health and welfare of Medicaid recipients by preventing the diversion

of Medicaid funding to private purposes.

       In 1995, the Legislature also enacted certain provisions of CPRC Chapter

33, namely section 33.004 (Designation of Responsible Third Parties) and

subsequently in 2003 significantly amended other provisions of Chapter 33 in its

efforts to address tort reform. 33 Presumably, the Legislature was aware of both

measures 34 and intended both of its enactments to be effective.35 The application

33
   In 2003 the Amendments to Chapter 33 by the Texas Legislature were part of the same
legislation enacting Chapter 74 of the CPRC (the Texas Medical Liability Act), which this Court
recently found did not apply to the TMFPA. Malouf v. State ex. rel. Ellis, 461 S.W.3d 641 (Tex.
App.—Austin 2015, pet. requested).
34
       See Argonaut Ins. Co. v. Baker, 87 S.W.3d 526, 530-31 (Tex. 2002) (quoting Acker v.
Tex. Water Comm’n, 790 S.W.2d 299, 301 (Tex. 1990) (“A statute is presumed to have been
enacted by the legislature with complete knowledge of the existing law and with reference to it”).

                                               38
of CPRC Chapter 33 to the TMFPA would violate these tenets of statutory

construction. Moreover, common sense dictates that the Legislature would not

have enacted the TMFPA on the one hand to combat and deter fraud, waste and

abuse in the Medicaid system, but on the other hand restrict the State’s ability to

enforce the TMFPA and limit its effect by subjecting the State and the TMFPA to

the limitations and restrictions set forth in CPRC Chapter 33.

      The forced application of Chapter 33 to the TMFPA fails because it would

lead to absurd results and conflicts, not only within the two statutes but also with

other Texas law. Any attempt at reconciliation leads inexorably to an absurd result

that cannot have been the intent of the Legislature. See, e.g., Univ. of Tex. Sw.

Med. Ctr. at Dallas v. Loutzenhiser, 140 S.W.3d 351, 356 (Tex. 2004) (“Courts

should not read a statute to create such an absurd result.”) (internal quotation

omitted). Therefore, the Court must resort to Code Construction Act provisions for

resolution of conflicting provisions. See generally Tex. Gov’t Code ch. 311.

Consideration of these principles leads only to the conclusion that Chapter 33 was

not intended to apply to the TMFPA.

      One absurd result from the forced application of Chapter 33 to the TMFPA,

is that a defendant like Xerox could designate not just several Texas Medicaid

providers as responsible third parties under Chapter 33, section 33.004, but

35
      Tex. Gov’t Code § 311.021(2).

                                         39
designate hundreds, if not thousands, of Texas Medicaid providers from around the

State of Texas who received even one payment over the eight year period Xerox

was HHSC’s vendor. Allowing a defendant in a TMFPA action to designate

hundreds of Medicaid providers from across the State would require the trier of

fact – a single jury – “to determine the percentage of responsibility, stated in whole

numbers . . . for each defendant and for each responsible third party who has been

designated.” See CPRC § 33.003(a). Allowing such a designation would favor a

defendant’s private pecuniary interests over the public interest in punishing and

deterring unlawful acts by a defendant against the Texas Medicaid program. This

result violates Tex. Gov’t Code § 311.021(5) and the presumption that the public

interest is favored over the private.

      Another absurd result from the forced application of Chapter 33 to the

TMFPA would arise from the application of section 33.003(a) requiring the trier of

fact to determine the percentage of responsibility of the “claimant.” In other words,

the forced application of Chapter 33 to the TMFPA would require a jury to

determine the percentage of responsibility of the State of Texas itself, and could, in

essence, make the State responsible for defendants’ unlawful acts. Such a result

would require a jury to focus not just on the unlawful acts of the defendant but to

also focus and assess the general responsibility of any State employee or State

                                         40
official. This forced application would impermissibly abrogate the sovereign

immunity of the State.

       Moreover, if section 33.001 were applied to the jury’s determination, the

State of Texas would be barred from recovering any civil remedies whatsoever

from a defendant (and even potentially civil penalties as well) in a TMFPA

enforcement case if the jury found the State of Texas’s percentage of responsibility

to be greater than 50 percent. See CPRC § 33.001. In other words, even if a jury

found a defendant to have committed an “unlawful act” under the TMFPA, the

State could not recover any civil remedies or penalties if the jury found the State

more than 50 percent responsible. This forced application of CPRC sections

33.003(a) and 33.001 directly conflict with the TMFPA provisions addressing civil

remedies and civil penalties.

        These absurd results would not only undermine the Legislature’s intended

purpose of enacting a robust and effective TMFPA statute but would also conflict

with case law recognizing that certain similar equitable and common law concepts

and defenses do not apply to the State. For example, equitable defenses of

limitations, estoppel and laches do not apply to the State in its sovereign capacity,36

36
      State v. Durham, 860 S.W.2d 63, 67 (Tex. 1993); see also City of Hutchins v. Prasifka,
450 S.W.2d 829, 835-36 (Tex. 1970); Waller v. Sanchez, 618 S.W.2d 407, 409 (Tex. App.—
Corpus Christi 1981, no writ).

                                            41
the affirmative defense of implied waiver does not run against the State,37 and the

so-called “government knowledge” defense is not an affirmative defense a

defendant can assert. 38 And yet, the forced application of Chapter 33 to the

TMFPA would allow a defendant to inject these defenses into a TMFPA

enforcement action under the auspices of allocating proportionate responsibility.

Such a result was not and could not have been the intent of the Legislature.

II.    Xerox has an adequate remedy at law because all of its complaints can
       be addressed on appeal.

       Regardless of whether the trial court somehow clearly abused its discretion,

the Court should still deny the request for mandamus relief because Xerox has

failed to show that it lacks an adequate remedy by appeal. See Walker v. Packer,

827 S.W. 2d. at 840. See also In re License Plates of Tex., No. 03-13-00671-CV,

2013 WL 6466919, at *1 (Tex. App.—Austin Nov. 27, 2013, no pet.) (holding that

relator had adequate remedy by ordinary appeal of trial court’s denial of leave to

designate two state agencies as responsible third parties).

37
        Texas courts have recognized that the affirmative defense of implied waiver is not
applicable to the State. State v. Crawford, 771 S.W.2d 624, 629-630 (Tex. App.—Dallas 1989,
writ. denied). The defense of waiver can only be established against the State by evidence of the
intentional relinquishment of the State’s known rights by an authorized representative. Id.
38
         Federal Courts have made clear that a defendant cannot assert the so-called “government
knowledge defense” as a defense in an FCA case. See U.S. v. Bollinger Shipyards, Inc., 775 F.3d
255, 263 (5th Cir. 2014) (citing United States v. Southland Mgmt. Corp., 326 F.3d 669, 682 n.8
(5th Cir. 2003) (“This defense is inaptly named because it is not a statutory defense to FCA
liability but a means by which the defendant can rebut the government’s assertion of the
‘knowing’ presentation of a false claim.”)).

                                               42
       A. Only Xerox’s conduct as the State’s vendor is at issue in the instant
          matter, and Xerox has an adequate remedy on appeal.

       As a threshold matter, Xerox has an adequate remedy at law. The State seeks

to only hold Xerox liable, for Xerox’s conduct. Nevertheless, if Xerox believes

some unknown number of potential parties is somehow responsible for Xerox’s

unlawful acts, Xerox is free to sue those parties (bringing common law, non-

statutory causes of action). In fact, there are four lawsuits pending, brought by four

dental providers against Xerox, in which Xerox is free to bring counterclaims. 39

Xerox is also free to initiate any number of lawsuits against providers for recovery

of some alleged harm.

           1. The reasoning in Andersen is inapplicable in a statutory law
              enforcement case.

       None of the cases, or the reasoning, on which Xerox relies support Xerox’s

argument. The principal case upon which Xerox relies is In re Arthur Andersen.

121 S.W.3d 471 (Tex. App.—Houston [14th Dist.] 2003, orig. proceeding). Xerox

cites Andersen for the proposition that there is no adequate remedy at law when a

trial court erroneously denies a defendant the opportunity to join responsible third

parties in a complex case where damage is caused by multiple tortfeasors. But

Andersen is readily distinguishable.
39     The four cases, all in Travis County District Court are: (1) Harlingen Family Dentistry v.
ACS State Healthcare, Cause No. D-1-GN-14-000319; Antoine Dental Center v. ACS State
Healthcare, Cause No. D-1- GN-14-000320; (3) M&M Orthodontics v. ACS State Healthcare,
Cause No. D-1-GN-14-000321; (4) Dr. Paul Dunn, DDS v. ACS State Healthcare, Cause No. D-
1-GN-14-000322.
                                               43
      Most importantly, the causes of action in Andersen are different from the

State’s TMFPA claims. Here, the only causes of action are codified in the TMFPA,

none of which are based on tort, and only concern the acts and omissions of Xerox

acting as HHSC’s PA authorization vendor and whether Xerox misrepresented to

HHSC Xerox’s PA review process. In stark contrast, in Arthur Andersen a group of

investors who had lost money in the Enron collapse sued the accounting firm

Arthur Andersen for three common law causes of action: negligent

misrepresentation, fraud, and conspiracy. Id. at 475. Each of the claims asserted by

the plaintiffs are based on tort; and no party contested the applicability of chapter

33 in the Andersen proceedings.

      The plaintiffs accused Andersen of providing “false and misleading

information and misleading public information regarding Enron’s financial

condition.” Andersen claimed it had been misled by Enron executives and

attempted to name responsible third parties and to join third parties, particularly

other financial institutions.40 Id. The trial court denied Andersen’s motion, and the

company sought mandamus relief. Id. In granting mandamus relief, the Andersen

court noted that the investor-plaintiffs made “broad sweeping allegations”

regarding financial entities other than Andersen and other named defendants, and

these unnamed entities would “play a pivotal role in the stories the Plaintiffs will

40
       Andersen sought leave to name responsible third parties under an earlier version of
chapter 33. Id. at n.18.

                                           44
tell the jury.” Id. at 480-81. Regarding the latter two causes of action of fraud and

conspiracy, the court reasoned that the other financial institutions were necessarily

implicated in the allegations against Andersen.41 Id. at 481-82 (holding that

Andersen had shown that third parties were “implicated” in the plaintiffs’ claims

“to such an extent that the Plaintiffs could have sued each third party, and that each

third party ‘may’ be liable to the Plaintiffs for all or a part of the ‘damages

claimed’ against Andersen and the other defendants”).

       Here, the State seeks to hold Xerox liable for only Xerox’s conduct, not the

conduct of third parties. The State does not seek remedies from Xerox for any

unlawful acts committed by third parties. Therefore, the reasoning and holding in

Andersen, which focused on common-law fraud and conspiracy, are inapplicable

here.42 Additionally, any law enforcement action the State might bring against a

41
        For fraud, “third parties . . . need not have made representations directly to the Plaintiffs.”
Id. at 481 (noting that “each party to a fraudulent scheme is responsible for the acts of the other
participants done in furtherance of the scheme and liable for fraud”). As for conspiracy, the court
dismissed plaintiffs’ claims that a third party “cannot be liable for conspiracy to commit fraud
without being liable for the underlying fraud.” Id. at 482-82 (noting that “[a] party may be liable
for conspiracy to commit fraud without being liable for the underlying fraud).
42
        In most of the other 33 Texas cases citing Andersen, courts reference the opinion when
analyzing the causes of action of either common law fraud or conspiracy. See, e.g., Parex v. ERG
Resources, 427 S.W.3d 407, 440 (Tex. App.—Houston [14th] 2014, pet. filed) (noting that “[f]or
a party to be liable for fraud, it need not have made representations directly to the plaintiff”).
This Court has cited to Andersen only once, in a case in which the Court had to determine
whether a trial court correctly ruled whether a third party may be held jointly and severally liable
for common-law fraud. See Compton v. Sesso, 2006 Tex. App. LEXIS 6322, at *18-19 (Tex.
App.—Austin July 21, 2006, no pet.) (noting that a “party who benefits from a fraudulent
transaction may be a principal in the fraud and may be held liable as such”).
       The Texas Supreme Court also only cites to Andersen once, and only in reference to the
proposition that parties may plead conflicting claims and defenses if they “have a reasonable
                                                  45
dental provider would only, and separately, implicate that provider’s

misrepresentations or omissions and have no bearing on Xerox’s own unlawful

conduct.

               2.     Xerox fails to cite any case law to show it lacks an adequate
                      remedy on appeal.

       Xerox also makes several other arguments that fail to show it lacks an

adequate remedy on appeal. First, the cases cited by Xerox for the proposition that

not being allowed to name a responsible third party would somehow “skew” the

proceedings are inapposite because the cases are all common-law negligence cases,

none are statutory law enforcement cases brought by the State in its sovereign

capacity. 43

basis in fact [and] law.” JLG Trucking v. Garza, 13-0978, 2015 Tex. LEXIS 346, at *16 (Tex.
Apr. 24, 2015). This issue is not before the Court.
43
        See In re Altec Indus., No. 10-12-00207-CV, 2012 WL 2469542, at *2 (Tex. App.—
Waco June 22, 2012, orig. proceeding) (mem. op.) (design defect, negligence, premises liability,
and failure to warn) (noting that not naming responsible third party would “potentially affect the
outcome of the litigation, and compromise the presentation of the defense in ways unlikely to be
apparent in the appellant record”); see also In re Oncor Elec. Delivery Co., 355 S.W.3d 304
(Tex. App.–Dallas 2011, orig. proceeding) (negligence) (after parents named owner of lifting
apparatus as causing their child’s injuries, defendant sought to name the individual who operated
the apparatus as a Responsible third party); In re Brokers Logistics, 320 S.W.3d 402, 404 (Tex.
App.—El Paso 2010, orig. proceeding) (negligence) (relator-defendant, as premises owner,
sought leave to name doctor whose negligent treatment proximately caused plaintiff’s injuries);
Jones v. Ray, 886 S.W.2d 817 (Tex. App.—Houston [1st Dist.] 1994, orig. proceeding)
(negligence) (holding that part of a group of healthcare providers who may have all contributed
to plaintiff’s paralysis could not sever case); In re Greyhound Lines, Inc., No. 05-13-01646-CV,
2014 WL 1022329, at *1-3 (Tex. App.—Dallas Feb. 21, 2014, orig. proceeding) (mem. op.)
(personal injury suit) (holding that where passenger sued bus company but not the owners of the
other vehicle involved in crash, bus company could name owner of other vehicle as responsible
third party).

                                               46
       Second, contrary to Xerox’s assertion, no bright line rule exists in

determining that an adequate appellate remedy is available. See In re Prudential,
148 S.W.3d at 136 (whether an adequate remedy by appeal exists “is not an

abstract or formulaic” inquiry and “resists categorization”).44 In Prudential, the

trial court’s ruling would have forced the parties to have sixteen unnecessary trials

and subject the parties to jury trials that had been waived in the underlying

contract. Id. at 137-38. Here, even if the Court were to determine that Chapter 33

could apply, there could only be one trial—to determine only Xerox’s liability.

Xerox would still, therefore, have an adequate remedy by appeal.

       In fact, this Court has held that an adequate remedy on appeal exists when a

trial court denies leave to name a responsible third party. See In re License Plates

of Tex., No. 03-13-00671-CV, 2013 WL 6466919, at *1 (Tex. App.—Austin Nov.

27, 2013, orig. proceeding) (holding that adequate remedy on appeal existed after

trial court denied leave to name responsible third parties).45 And, Xerox cannot

44
       See Xerox Pet. 30-31 (erroneously asserting that “[o]ther courts have adopted bright-line
holdings that a trial court’s improper denial of leave to designate a responsible third party can
never be adequately remedied on appeal").
45
         Other Texas intermediate courts have also held the same. See, e.g., In re State Line
Fireworks, 387 S.W.3d 27, 31-33 (Tex. App.—Texarkana 2012, orig. proceeding) (products
liability) (holding that relator had adequate remedy on appeal where relator-defendant, if found
liable, could then file suit against other parties); In re Unitec Elevator Servs. Co., 178 S.W.3d 53,
66 (Tex. App.—Houston [1st Dist.] 2005, orig. proceeding) (negligence, gross negligence)
(noting that, in holding to deny mandamus, “whether mandamus relief is appropriate ‘depends
heavily on the circumstances presented’” (quoting In re Prudential, 148 S.W.3d at 137)); In re
Taymax Fitness, No. 04-14-00119-CV, 2014 WL 1831100, (Tex. App.—San Antonio May 7,
2014, orig. proceeding) (personal injury claim) (holding that relator failed to show lack of
                                                 47
establish it lacks a remedy on appeal. See, e.g., id.; see also supra note 42 (list of

cases in which other intermediate courts have similarly denied mandamus after a

trial court denied leave to name third parties).

       Xerox then argues that the underlying instant matter is some unsettled area

of the law, as mentioned in Andersen. In Andersen the question was whether

Chapter 33 permits a “tortfeasor subject to a judgment to bring a post-judgment

contribution claim against a tortfeasor who was not a party to the original suit.”
121 S.W.3d at 485. Here, there are no tortfeasors. Rather, Xerox’s–and only

Xerox’s–misrepresentations and omissions are at issue. Under the TMFPA, the

trier of fact will only be able to determine Xerox’s liability, and there will not be,

and cannot be, an apportionment of liability to anyone else besides Xerox.

Moreover, as discussed above, Chapter 33 does not apply to law enforcement

actions brought by the State in its sovereign capacity.

       Lastly, Xerox makes a curious argument that because the State’s recovery

might be large, an adequate remedy on appeal is somehow not available. See Xerox

Pet. 28. No case law supports this reasoning.

adequate remedy on appeal); In re Inv. Capital Corp. & Serv. Corp. Int’l, No. 14-09-00105-CV
2009 WL 310899, at *2 (Tex. App.—Houston [14th Dist.] Feb. 4, 2009, orig. proceeding)
(negligence, gross negligence, premises liability) (distinguishing Andersen, not because of the
type of case, but because the facts were, unlike in Andersen, “relatively straightforward and the
trial court’s error, if any, can be corrected through the regular appellate process”); In re
Wilkerson, No. 14-08-00376-CV, 2008 WL 2777418, at *2 (Tex. App.—Houston [14th Dist.]
June 6, 2008, orig. proceeding) (negligence) (in denying mandamus, holding that relator had
adequate remedy by appeal).

                                               48
       B. Factors weigh in favor of denying Xerox’s Petition.

       Denying Xerox’s Petition will actually save money—for both the State and

Xerox. Cf. Walker v. Packer, 827 S.W.2d at 842 (“An appellate remedy is not

inadequate merely because it might involve more delay or cost than mandamus.”).

Here, by trying the instant underlying law enforcement action with Xerox as the

only defendant will result in less delay and less expense. 46

       And, in considering the public interest, the State has an interest in having its

claims timely heard and not being unnecessarily subjected to potentially hundreds

of putative third parties being improperly designated and/or added to its lawsuit

against Xerox. See In re Prudential, 148 S.W.3d at 136 (weighing whether denying

mandamus would “spare . . . the public the time and money utterly wasted

enduring eventual reversal of improperly conducted proceedings”). Unnecessarily

46
        Of the three cases Xerox cites to support its position, one of the cases actually supports
the State’s position: denying mandamus will save both parties and the judicial system
unnecessary time, expense, and extra trials; and the latter two are inapposite—focusing on
improper venue transfer. See In re State, 355 S.W.3d 611, 612 (Tex. 2011) (holding that trial
court abused discretion in ordering severance of state’s condemnation suit into eight separate
proceedings after landowner subdivided the one parcel into eight tracts); see also In re Team
Rocket, 256 S.W.3d 257 (Tex. 2008) (holding that wrongful death action was improperly
transferred to different venue); In re Masonite Corp., 997 S.W.2d 194 (Tex. 1999) (granting
mandamus relief after trial court granted motion to transfer venue of non-residents homeowners
in defective building materials suit).
         Here, denying mandamus will not result in multiple identical trials regarding the same
facts; rather, the only liability to be determined in this suit is Xerox’s liability as the State’s
vendor. And any potential suit the State might bring against a dental provider will only concern
that particular provider’s actions, and only that provider’s liability to the State. See trial court
letter, dated Apr. 28, 2015 (“State v. Xerox will proceed to trial more quickly without third
parties, and the trial will be shorter and less complicated . . .”), at MR.633.

                                                49
expanding this case beyond the existing two parties would exponentially increase

the costs to the State and would significantly delay the resolution of the case. See

In re United Servs. Auto. Ass’n, 307 S.W.3d 299, 314 (Tex. 2010) (“wasted trials

are not the most efficient use of the state’s judicial resources”). The USAA court

also considered, as one of the factors in whether to deny mandamus, if granting of

mandamus would “thwart the legislative intent” of the statute in question. Id. at

314. Here, granting mandamus and applying Chapter 33 to the TMFPA would

thwart the Legislature’s intent of having an effective statute, the TMFPA, to

combat and deter unlawful acts against the Texas Medicaid program.

                                     PRAYER

      Because the third party claims asserted in Xerox's First Amended Answer

and Original Third Party Petition have no basis in law, the trial court did not abuse

its discretion in striking those claims, pursuant to Texas Rule of Civil Procedure

38. Xerox’s allegations, even if true, do not entitle Xerox to the relief it sought

from the trial court. Moreover, Xerox has an adequate remedy on appeal. The State

prays the Court will deny Xerox’s Petition.

                                   Respectfully submitted,

                                   KEN PAXTON
                                   Attorney General of Texas

                                   CHARLES E. ROY
                                   First Assistant Attorney General

                                         50
                                   JAMES E. DAVIS
                                   Deputy Attorney General for Civil Litigation

                                   /s/ Raymond C. Winter____________
                                   RAYMOND C. WINTER
                                   State Bar No. 21791950
                                   Chief, Civil Medicaid Fraud Division
                                   (512) 936-1709 direct
                                   raymond.winter@texasattorneygeneral.gov
                                   REYNOLDS B. BRISSENDEN
                                   State Bar No. 24056969
                                   (512) 936-2158 direct
                                   reynolds.brissenden@texasattorneygeneral.gov
                                   Assistant Attorneys General
                                   P. O. Box 12548
                                   Austin, Texas 78711-2548
                                   (512) 499-0712 facsimile

                      CERTIFICATE OF COMPLIANCE

      I certify that this Brief in Response to Petition for Writ of Mandamus has
13,984 words.

                                /s/ Raymond C. Winter
                                Raymond C. Winter

                         CERTIFICATE OF SERVICE

    I certify that I have on this 13th day of August 2015, served copies of this
Response to Petition for Writ of Mandamus to the following:

Via efile:

Eric J.R. Nichols                      Constance H. Pfeiffer
Gretchen Sween                         Beck Redden LLP
Christopher R. Cowan                   1221 McKinney St., Suite 4500
Beck Redden LLP                        Houston, Texas 77010
515 Congress Ave. Suite 1900           cpfeiffer@beckredden.com
Austin, Texas 78701                    COUNSEL FOR RELATORS
                                         51
enichols@beckredden.com
gsween@beckredden.com
ccowan@beckredden.com
COUNSEL FOR RELATORS

Robert C. Walters                   C. Andrew Weber
Gibson, Dunn & Crutcher LLP         Kelly Hart & Hallman LLP
2100 McKinney Ave., Ste 1100        301 Congress Ave., Suite 2000
Dallas, Texas 75201                 Austin, Texas 78701
rwalters@bigsondunn.com             andrew.weber@kellyhart.com
COUNSEL FOR RELATORS                COUNSEL FOR RELATORS

                               /s/ Raymond C. Winter
                               Raymond C. Winter

                                      52
Append¡x A
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
                                                                                                                                  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
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
Append¡x B
9/8/2014 6:43:30 PM
     Amalia Rodriguez-Mendoza
                   District Clerk
                   Travis County
                D-1-GV-14-000581
                                        II.     ARGUMENT

A.      The TMFP A Does Not Allow for Intervention or Consolidation of Other
        Parties' Claims into a TMFPA Case

        Twenty providers, all represented by the same counsel who also represent the

seven providers in the four Separately Filed Provider Cases, 2 have wrongly intervened in

Texas's TMFPA Case. Texas has properly filed a Motion to Strike their interventions.

See Motion to Strike Petitions in Intervention, Answer and Pleas to the Jurisdiction filed

June 9, 2014, in Texas's TMFPA Case (the arguments set forth therein are re-alleged and

incorporated by reference herein). As explained in the Motion to Strike Intervention,

there is no basis for the providers to intervene in Texas's TMFPA case. See Id. at pp. 9-

13. Likewise, consolidation of Texas's TMFPA Case is not a permissible alternative to

wrongly intervening in a case. Furthermore, consolidation of the providers' common law

claims and Xerox's contribution claims do not make them any more relevant or common

to Texas's TMFPA Case against Xerox. See Section C, infra.

        Furthermore, twenty providers wrongly intervened in Texas HHSC's Injunction

Case and HHSC has properly filed a Motion to Strike their intervention. See Motion to

Strike Intervention filed September 3, 2014, in Texas HHSC' s Injunction Case (the

arguments set forth therein are re-alleged and incorporated by reference herein).

Consolidating these cases would allow the providers to wrongly intervene in a case and

2
 The following cases are collectively referred to as the 4 Separately Filed Provider Cases: (1) Harlingen
Family Dentistry, P.C., et al. v. ACS State Healthcare, LLC, Cause No. D-GN-14-000319 ("Harlingen");
(2) Antoine Dental Center v. ACS State Healthcare, LLC, Cause No. D-GN-14-000320 ("ADC"); (3)
M&M Orthodontics, PA, et al. v. ACS State Healthcare, LLC, Cause No. D-GN-14-000320 ("M&M");
(4) Dr. Paul Dunn, DDS v. ACS State Healthcare, LLC, Cause No. D-GN-14-000322 ("Dunn").

Texas' Response in Opposition to Motion to Consolidate                                             Page3
successfully circumvent the Court's ruling on Texas's Motion to Strike Intervention in

Texas HHSC' s Injunction Case by also seeking consolidation.

B.      Consolidation of Six Separate Cases Into a Single Case For Trial Will Not
        Promote Judicial Economy or Convenience, and Will Create An Unwieldy
        Single Case Resulting in Jury Confusion and Prejudice.

     1. Consolidation will promote jury confusion.

        In deciding whether to consolidate cases, a trial court must weigh the judicial

economy and convenience that may be gained by the consolidation, against the risk of an

unfair outcome because of prejudice or jury confusion. TEX. R. CIV. P. 174; In re Van

Waters & Rogers, Inc., 145 S.W.3d 203, 208 (Tex. 2004) ("In determining whether

various claims are appropriate for consolidation, 'the dominant consideration in every

case is whether the trial will be fair and impartial to all parties"); Owens-Corning

Fiberglass Corp. v. Martin, 942 S.W.2d 712, 716 (Tex. App. -Dallas 1997).

"Consolidation should be avoided if it would cause 'confusion or prejudice as to render

the jury incapable of finding the facts on the basis of the evidence."' In re Van Waters &

Rogers, Inc., 145 S.W.3d at 208.

        The providers in the 4 Separately Filed Provider Cases intervened in both Texas'

TMFPA Case and Texas HHSC' s Injunction Case. See Pleas in Intervention filed by

Harlingen, ADC, M&M, and Dunn on May 15, 2014 in Texas's TMFPA Case, and

Petition in Intervention filed by Intervenors in Texas HHSC' s Injunction Case on

September 3, 2014 at 2 (identifying the Harlingen, ADC, M&M and Dunn providers as

Intervenors). Consolidating these 4 Separately Filed Provider Cases with the two Texas

cases against Xerox, would result in a single case consisting of Texas, the Xerox Parties

Texas' Response in Opposition to Motion to Consolidate                              Page4
EXHIBIT A
EXHIBIT B
EXHIBIT C
EXHIBIT D
EXHIBIT E