Texas Medicaid Investigation & Audit Defense Lawyers

Defending Texas Medicaid Providers Against Fraud Investigations and Audits Since 1987

If you have received notice of a Texas Medicaid audit or investigation – or have reason to believe your billing practices may draw scrutiny – you need experienced legal counsel immediately. 

At Hendershot Cowart P.C., our healthcare investigation defense attorneys have defended Medicaid providers across specialties for more than 35 years. We know how these investigations are built, what investigators prioritize, and how to protect your practice, your license, and your livelihood.

Call (713) 783-3110 or contact us online to speak with a Medicaid defense attorney today.

On This Page:

• Who Investigates Medicaid Fraud in Texas?
• Texas Medicaid Providers We Defend
• How Are Medicaid Fraud Investigations Initiated In Texas?
• What Are The Potential Consequences of a Medicaid Investigation?
• What To Expect from a Texas Medicaid Investigation
• What Does Medicaid Fraud Look Like in Texas?
• How We Defend Texas Medicaid Providers
• Contact Our Texas Medicaid Defense Attorneys Today

Texas Medicaid fraud enforcement involves multiple agencies, each with distinct authority. Understanding who you are dealing with – and how these agencies interact – is critical to evaluating what’s at risk and building an effective defense.

Texas Office of the Attorney General (OAG)

The OAG operates two distinct enforcement units that often work in parallel:

• Medicaid Fraud Control Unit (MFCU): The Texas Medicaid Fraud Control Unit (MFCU), a division of the OAG established in 1979, investigates criminal fraud by Medicaid providers, investigates patient abuse and neglect in Medicaid-funded facilities, and assists local and federal authorities with prosecution.
• Healthcare Program Enforcement Division (HPED): The Healthcare Program Enforcement Division (HPED) brings civil enforcement actions against Medicaid providers under the Texas Health Care Program Fraud Prevention Act (THFPA), seeking restitution, civil penalties, and treble damages.

Texas Health and Human Services Commission (HHSC)

HHSC administers the Texas Medicaid program and conducts administrative reviews and data analysis to detect billing irregularities. When HHSC identifies a potential problem, it refers the case to its Office of Inspector General for investigation.

HHSC Office of Inspector General (HHSC-OIG)

The Texas HHSC-OIG is the primary administrative enforcement arm for Texas Medicaid. It investigates fraud, waste, and abuse allegations against Medicaid providers – including physicians, dentists, home health agencies, therapists, pharmacies, and other provider types. The HHSC-OIG and the Medicaid Fraud Control Unit meet regularly to share information and coordinate on cases that may warrant both administrative and criminal action.

Managed Care Organizations (MCOs) and Dental Maintenance Organizations (DMOs)

Most Texas Medicaid beneficiaries receive services through managed care. MCOs and DMOs are contractually required to maintain fraud and abuse detection programs and Special Investigative Units (SIUs) to investigate billing irregularities. An MCO or DMO investigation can result in recoupment demands, contract termination, and referral to the HHSC-OIG or the OAG for further action.

We represent the full range of Texas Medicaid providers facing audits, investigations, and civil enforcement actions:

• Physicians and physician groups
• Dentists and dental practices
• Home health agencies
• Occupational, physical, and speech therapists
• Pharmacies and pharmacists
• Behavioral health providers
• Nurse practitioners and physician assistants
• Durable medical equipment (DME) suppliers
• Ambulatory surgery centers and urgent care centers
• Long-term care facilities and skilled nursing facilities
• Hospitals and health systems
• Clinical laboratories and diagnostic testing facilities
• Medical billing companies
• Telemedicine providers

If you participate in Texas Medicaid and have received a records request, a Civil Investigative Demand, or any other notice of investigative or audit activity, contact us immediately.

Texas Medicaid fraud covers a wide range of conduct – from billing errors and documentation failures to deliberate schemes designed to maximize reimbursement through false claims. 

Common allegations Medicaid fraud investigators pursue include:

• Billing for services that were never rendered
• Billing for services provided to patients who were deceased, ineligible, or had transferred to another provider
• Upcoding – billing for a higher-level or more expensive service than was actually provided
• Billing under another provider's identifier or use of a departed provider's credentials
• Billing for medically unnecessary services not supported by clinical documentation
• Falsifying diagnoses or clinical records to justify treatment or tests
• Per-patient kickback arrangements with third-party marketers or referral sources
• Offering patients cash, gift cards, or other inducements to seek services at your practice
• Allowing unqualified individuals to perform services or misrepresenting that licensed employees performed procedures they did not
• Billing patients for services already paid by Medicaid
• Dispensing a generic drug while billing for the brand-name equivalent
• Home health or therapy claims for services that were not delivered or could not have been delivered
• Improper prescriptions or prescription fraud

In some cases, a provider's billing contractor – not the provider – is the source of fraudulent claims. Even so, the provider remains legally responsible for claims submitted on their behalf. If your billing company is engaged in fraud, you may be liable for those claims under Texas and federal law.

Investigations are triggered through multiple channels:

• Data analysis of billing patterns by HHSC, MCOs, or DMOs that identifies statistical outliers
• Fraud hotlines and complaint referrals from patients, employees, or competitors
• Civil Investigative Demands (CIDs) that require providers to produce documents and other information.
• Whistleblower (qui tam) lawsuits filed by insiders under the THFPA or the federal False Claims Act
• Referrals from other agencies, including the FBI, HHSC-OIG, or the Drug Enforcement Administration
• Claims data released by federal agencies – including data released through DOGE – that identifies unusual billing patterns across provider types

By the time you receive a letter, investigators have typically already spent significant time reviewing your claims data and building their case. That is why your first call should be to a defense attorney – not to the investigators.

Once a case is referred or a pattern is flagged, Texas HHSC-OIG, the OAG, or an MCO/DMO SIU may take any of the following steps:

• Send a letter – often by email – requesting patient records, billing records, or other documentation
• Issue a Civil Investigative Demand (CID) requiring production of documents and information
• Conduct interviews with providers, employees, and patients
• Subpoena additional records or evidence
• Refer the matter to the MFCU for criminal investigation if evidence suggests intentional fraud

Do not respond to any of these contacts without first speaking to a healthcare defense attorney. Even a records request that appears routine can be the opening step in a much larger investigation. How you respond – and what you produce – matters.

The consequences of a Medicaid fraud investigation or enforcement action can be severe and far-reaching:

• Recoupment of Medicaid payments, including extrapolated overpayment demands that can reach millions of dollars
• Civil penalties of $5,500 to $11,000 per unlawful act under the THFPA, or up to $15,000 for unlawful acts involving vulnerable populations
• Treble damages – two times the amount of any fraudulent payments, in addition to repayment of the original amount
• Mandatory suspension or revocation of your professional license
• Termination of your Medicaid provider agreement
• Exclusion from Medicaid and Medicare for a minimum of 10 years
• Reputational damage that affects your practice, your staff, and your patients
• Risk to Federally Qualified Health Center (FQHC) status and related grants
• Criminal prosecution by the OAG's Medicaid Fraud Control Unit if conduct is found to be willful

Call our Medicaid investigation defense attorneys at (713) 783-3110 to start preparing your defense.

When you contact Hendershot Cowart P.C. about a Medicaid audit or investigation, we move quickly. Our approach is strategic, proactive, and built around one goal: resolving the matter as favorably as possible, with the least possible damage to your practice.

Our Medicaid fraud defense attorneys can:

• Assess your legal exposure and identify the full scope of any compliance issues before investigators complete their own analysis
• Conduct our own forensic audit of your billing records, claims data, and business arrangements to build your defense from the ground up
• Open and manage all lines of communication with investigating agencies, protecting you from costly missteps in direct contact with investigators
• Shield you and your staff from questioning that could expose you to unnecessary liability or inadvertent self-incrimination
• Negotiate with the OAG or HHSC-OIG to narrow the scope of document production requests and manage what is produced
• Determine whether the investigation is civil, criminal, or both – a distinction that shapes every aspect of your defense strategy
• Develop corrective action plans and compliance documentation that demonstrate good faith and support a more favorable resolution
• Negotiate a fair civil outcome, including recoupment amounts and penalty mitigation, and work aggressively to prevent referral for criminal prosecution
• Review your current compliance policies and billing practices to identify and correct vulnerabilities before they draw regulatory attention

We do not handle criminal defense, but we work aggressively to keep civil matters civil. If your case has already been referred for criminal prosecution, we can coordinate with qualified criminal defense counsel while continuing to manage the civil and administrative aspects on your behalf.

Since 1987, the attorneys at Hendershot Cowart P.C. have represented healthcare providers in complex, high-stakes audits, investigations, and civil and administrative proceedings at both the state and federal level.

We understand the importance of early intervention. Regulators and investigators who initiate Medicaid fraud actions are experienced at identifying inconsistencies and escalating cases quickly. When agencies contact you, they have usually already built a substantial record. The sooner you engage counsel, the more options you have.

Whether you have received a records request, a Civil Investigative Demand, or a formal notice of investigation, do not wait. Speak with an attorney before you respond to anything.

Contact Hendershot Cowart P.C. online or call (713) 783-3110 for an immediate, confidential consultation with a Medicaid investigation defense attorney.