Texas HHSC Dropping Anti-Fraud Initiative Started by Former Deputy Inspector General

In 2012, Jack Stick, deputy inspector general of the Texas Health and Human Services Commission, introduced a program to step up the agency’s anti-fraud investigations. This program required HHSC investigators, who look into whether recipients of Medicaid, food stamps and other programs are overpaid, to produce cases totaling at least $35,000 every month. In addition, Medicaid overpayment cases had to be closed within 16 weeks unless an investigator could demonstrate why more time was needed to complete the investigation.

While this program reaped results — 108 Medicaid overpayment cases totaling $500 million were completed in 2013 versus 12 cases worth $28 million in 2011 — it was heavily criticized in a December 2014 Sunset Advisory Commission report that showed actual amounts recovered from Medicaid providers did not change much over time. The report also illuminated weaknesses in the way the Office of the Inspector General’s fraud caseload was monitored and managed.

In the end, the Sunset Commission found that the quota program for HHSC fraud investigators may not encourage the actual recovery of funds. The report noted that, “Focusing on a dollar amount of fraud identified, not substantiated or recovered, could incentivize OIG to apply a harsh, exaggerated approach, such as to penalize providers for paperwork mistakes and extrapolate those errors to millions of dollars, in an effort to appear to be effectively combating fraud. If applied in an overzealous manner, focus on dollars identified can be to the detriment of actual monetary recoveries because providers go out of business or stop providing services to Medicaid clients without ever being found to have engaged in fraud.”

Following the release of the Sunset Commission’s report, the HHSC announced in January 2015 that it was discontinuing the quota program, stating, “We are looking at those performance targets and plan to change them. You want to set clear expectations for investigators in terms of workload, but you also have to guard against any incentive to push through cases just to meet a target.”

Stick resigned his post in December 2014 amid allegations that his ties to a technology company lobbyist were influential in that company’s receipt of a $110 million software deal with the HHSC.

The Cogdell Law Firm is a full service criminal litigation and appellate law firm with a focus on federal fraud defense, Medicare fraud defense, bank fraud defense, and white collar criminal defense. We provide client-focused representation at all stages of the process, whether our clients are seeking to avoid charges, have been charged, or are seeking reversal of a conviction on appeal. When results matter most, contact Dan Cogdell at (713) 426-2244 or info@cogdell-law.com.