Texas Did Not Ensure That the Prior-Authorization Process Was Used To Determine the Medical Necessity of Orthodontic Services

Medicaid pays for orthodontic services, but only those that are medically necessary and that have received prior authorization. The prior-authorization process is intended to determine medical necessity. Because payments for Medicaid orthodontic services in Texas have risen sharply in recent years, we have identified this area as vulnerable to fraud, waste, and abuse.

The Health and Human Services Commission (State agency) did not ensure that the prior-authorization process was used to determine the medical necessity of orthodontic services under State Medicaid guidelines. In addition, the Texas Medicaid & Healthcare Partnership (TMHP) dental director did not follow State Medicaid policies and procedures when determining the medical necessity of orthodontic services and reviewing prior-authorization requests.

These deficiencies occurred because the State agency did not ensure (1) that TMHP properly reviewed each prior-authorization request for medical necessity and (2) that the TMHP dental director followed Medicaid policies and procedures on determining the medical necessity of orthodontic services. As a result, TMHP may have approved requests for orthodontic services that were not medically necessary. Although TMHP failed to properly use the prior-authorization process to determine the medical necessity of orthodontic services, the State agency is ultimately responsible for contractor compliance.

We recommended that the State agency provide proper oversight of the orthodontic prior-authorization process to ensure that (1) it is used to determine medical necessity and (2) personnel making the prior-authorization decisions follow the appropriate State Medicaid policies and procedures. The State agency partially agreed with our findings.