Medicaid Claims Administrator Responds to Allegations in Texas Attorney General’s Report
Officials from EDS, which administers Medicaid claims for Texas, on July 17 called a state attorney general's report that alleged the company overcharged the state by millions of dollars between 1999 and 2000 "fundamentally flawed, biased and politically motivated," the Austin American-Statesman reports (Copelin, Austin American-Statesman, 7/18). Texas Attorney General John Cornyn (R) on July 16 released a report that alleged EDS paid performance bonuses to employees working on a project that finished two years behind schedule and over budget; mixed revenues and expenses from its Medicaid operations in other states with its account in Texas; charged the state $2,800 per month for a two-bedroom apartment for the chief operating officer of its subsidiary National Heritage; paid doctors and hospitals without proper identification; and paid for "fringe benefits" such as free ice cream, baby shower gifts and sports tickets for employees, among other things (Kaiser Daily Health Policy Report, 7/18). In a written response, EDS called Cornyn's executive summary to the report "an inflammatory synopsis" and offered the following explanations for the report's findings:
- National Heritage, not the state, paid the bonuses to employees working on a software project that was $40 million over budget and two years late.
- EDS has halted the process of routing out-of-state funds through its Texas account.
- EDS defended spending state money to rent a $2,800 per month apartment for its chief operating officer, saying the rent was cheaper than the $118 per day it could have charged.
- EDS is awaiting state approval for a process to determine whether it improperly paid doctors and hospitals who lacked proper identification. Meanwhile, the company has agreed to put the disputed amounts in escrow.
