Texas Attorney General Announces $235.9 Million Medicaid Fraud Settlement with Xerox

Texas Attorney General Ken Paxton today announced a $235.9 million settlement with Xerox Corp. and its former subsidiaries resolving a May 2014 lawsuit filed by the Texas Attorney General’s Office (OAG) under the Texas Medicaid Fraud Prevention Act (TMFPA), State of Texas v. Xerox Corp. et al., Cause No. D-1-GV-14-000581, in the 353rd Judicial District Court of Travis County, Texas.

Attorney General Paxton reported that “[t]he announced settlement represents the largest single resolution in a case filed by the attorney general’s office for Medicaid-related claims.”  This settlement is the culmination of a formal investigation launched by the OAG in 2012 and subsequent lawsuit.  Texas practitioners have been closely watching the Xerox case given the high stakes for both sides: the State’s $133 million repayment obligation to the Centers for Medicare & Medicaid Services and the possibility of a 10-figure judgment against Xerox, as well as a potential decade-long exclusion from participation in Medicaid.

With respect to the Settlement Amount, $212,347,800.00 is allocated to reimburse the Texas Health and Human Services Commission and/or the State for losses claimed to have resulted from defendants’ alleged failure to comply with contractual obligations, including but not limited to the $133 million federal repayment obligation.  The remaining $23,594,200.00 of the Settlement Amount is allocated to payment of the State’s attorneys’ fees, costs, and legal expenses incurred in connection with this matter.