If you participate in Texas Medicaid, be aware: The Texas Office of the Attorney General (OAG) has intensified its Medicaid fraud enforcement efforts in recent months. At the same time, the federal government is pushing states to audit all Medicaid providers, meaning Texas providers are facing an unprecedented level of scrutiny.
The Texas OAG has announced investigations into dozens of Medicaid providers across Texas and recovered more than $125 million from Medicaid fraud investigations in 2025 alone. That track record – combined with new data tools and federal pressure – signals that this wave of enforcement actions is far from over for Texas Medicaid providers.
Part of a Coordinated Push to Combat Medicaid Fraud
Texas's enforcement surge is part of a coordinated effort at both the state and federal level. In January 2026, Texas Governor Greg Abbott directed the Texas Health and Human Services OIG and HHSC to intensify their Medicaid fraud enforcement efforts. The Governor also directed the agencies to amplify public awareness of the OIG's fraud reporting portal and hotline – a signal that whistleblower tips are being actively solicited and acted upon.
In April 2026, Centers for Medicare & Medicaid Services (CMS) Administrator Mehmet Oz further upped the ante when he announced that CMS will require all states to submit a plan within 30 days outlining how they will verify that healthcare providers are real, licensed, and actually delivering care under Medicaid. States that fail to take this seriously, Dr. Oz warned, can expect the federal government to step in with more aggressive audits.
For Texas Medicaid providers, the message at both the state and federal level is the same: Enforcement is intensifying. If you participate in Texas Medicaid, now is the time to assess your exposure.
Who Is Being Targeted by Texas OAG for Medicaid Fraud?
The Texas OAG's recent enforcement activity has focused on several provider categories:
Dental Providers
Texas dental providers – particularly those serving pediatric Medicaid patients – are under intense scrutiny. The OAG has filed multiple civil enforcement actions in 2025 and 2026 against dental networks, individual dentists, and the marketing companies that funneled Medicaid patients to their clinics through illegal kickback schemes.
The pattern investigators look for is telling: Dental practices paying third-party "marketers" on a per-patient basis – under the guise of "survey services" or "community outreach" – while those marketers recruit Medicaid beneficiaries with cash, gift cards, and Zelle payments. Investigators also look for inflated billing, medically unnecessary procedures, and multi-quadrant dental work performed in a single visit on pediatric patients (a practice that carries both legal and safety risks). If your practice's per-patient Medicaid billing is significantly higher than average, or if your patient volume spiked dramatically in a short period, that pattern can trigger an investigation.
Home Health Providers
Home health agencies are a perennial focus of Medicaid fraud enforcement. Common allegations include billing for care never provided, billing for patients who have died or are no longer eligible, billing for patients who have transferred to another provider, and billing for services provided by unqualified personnel.
Occupational Therapy Providers
The OAG's April 2026 announcement of new investigations specifically named occupational therapy providers as a target category. Investigators are looking for billing anomalies, services billed for patients who could not have received them, and other indicators of fraudulent claims.
COVID-19 Treatment Providers
Entities that potentially submitted fraudulent claims related to COVID-19 treatments are also in the OAG's crosshairs. The release of federal HHS Medicaid data via DOGE has given investigators new visibility into COVID-era billing patterns – and those patterns are now under scrutiny.
Red Flags That May Trigger a Texas Medicaid Audit
Texas Medicaid investigators use data analytics, whistleblower tips, and case referrals to identify targets. If any of the following patterns or practices apply to your practice, you may already be on investigators' radar.
- High average billing per patient: Per-patient Medicaid billing significantly above regional or specialty-type averages
- Unusual patient volume growth: A sudden, unexplained spike in patient volume – especially new patients – within a short time period
- Billing under another provider's identifier: Submitting claims under a dentist's or physician's Medicaid provider number for services actually performed by a different, unlisted clinician
- Continued use of a departed provider's credentials: Using the Medicaid provider number of a clinician who no longer works at the practice to bill for ongoing services
- Misrepresentation to obtain prior authorization: Overstating the severity of a patient's condition in documentation submitted to secure prior authorization for services
- Unlicensed or unsupervised practice: Allowing unlicensed or unqualified individuals to perform services, or misrepresenting that licensed employees performed procedures they did not
- Per-patient marketing arrangements: Payments to third-party marketing or "survey" companies on a per-patient or per-visit basis
- Patient inducements: Offering gift cards, cash, Zelle payments, or other items of value to patients to induce appointments
- Phantom billing: Billing for services not rendered, billing deceased patients, or billing for patients no longer eligible
- Upcoding or misbilling: Billing for the name-brand drug when a generic was dispensed, or upcoding procedures to higher reimbursement codes
- Medically unnecessary services: Billing for services that were not medically necessary or not supported by clinical documentation
- Whistleblower exposure: A disgruntled employee, a former business partner, or a competitor with knowledge of your billing practices
If any of these apply to your practice, contact a healthcare defense attorney before you receive a letter – not after. Early action is your strongest protection.
What to Do If You Receive Notice of a Medicaid Audit or Investigation
The single most important thing you can do when you receive a letter alerting you to a Medicaid audit or investigation is contact a Medicaid investigation defense attorney immediately – before you respond to the OAG, before you speak to investigators, and before you produce a single document.
Do not assume that the letter is routine or that your billing practices are clearly defensible. The OAG's letters are not fishing expeditions. If you have been contacted, investigators have already identified your practice as a potential target. Anything you or your employees say can be used against you, and missteps in the early days of the investigation may hamper or limit your attorney’s defense strategy later.
Texas Medicaid Providers: Consider This Your Early Warning
Texas Medicaid fraud enforcement is not slowing down. The OAG has the data, the tools, and a federal mandate to pursue providers it believes are committing fraud. If you participate in Texas Medicaid, the time to review your billing practices and assess your compliance risks is now – not after you receive a letter.
If you have already received notice of an audit or investigation or would like to discuss a proactive internal assessment, contact our Texas Medicaid compliance team immediately. Call (713) 783-3110.