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IRS Conducts Audit of Texas Medicaid Program

September 5th

medicaid taxesThe Internal Revenue Service has begun a comprehensive audit of Texas Medicaid spending, after numbers showed that the Texas program spent more funding children’s orthodontia than the other 49 states combined.

Last year, Texas Medicaid spent more than $184 million just funding orthodontic treatment for children. This is nine times more than California spent during the same period.

The Medicaid program is designed to provide medical treatment for the elderly, poor and disabled. Medicaid is not designed to fund any procedures done for cosmetic reasons. However, several dentists in Texas have testified that this is not always the case, and it is not uncommon for cosmetic orthodontia to be covered by Medicaid. While the state claims that the discrepancy is due primarily to a 2007 court ruling stating that Texas children needed greater access to Medicaid, this does not account for the entire difference.

Federal Audit Follows on the Heels of a Preliminary State Investigation

The Texas Health and Human Services Commission say they began their own investigation after WFAA-TV began asking questions about charges made under Medicaid. However, shortly thereafter the Commission received notification from the US Department of Health and Human Service’s Office of the Inspector General stating its intention to begin an audit of its own.

The IRS audit is focused specifically on the state Medicaid program’s pre-authorization process for orthodontic treatment. It will cover the period from September 1, 2008 to May 28, 2011. During the period in question, Texas taxpayers paid a total of $424 million for orthodontic treatments for children covered by Medicaid.


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