Fraudulent Pediatric Dentistry Claims Result in $3.1 Million Settlement

A Texas husband and wife dentist team recently reached an agreement with the United States Department of Justice (“DOJ”) to pay $3.1 Million to resolve allegations that they violated the False Claims Act (“FCA”) by defrauding the Texas Medicaid program. The filed complaint included a myriad of alleged violations, including that the pair (a) offered kickbacks to patients to utilize their services – including offering free dental services to parents of children who received services; (b) performed unnecessary procedures (including drilling healthy molars in order to fill them); (c) submitted claims for more advanced procedures than performed, and (d) submitted claims representing that other providers had performed the procedures.

The complaint also alleged that the defendants offered a $10-per-head “bounty” to marketers for recruiting patients enrolled in Medicaid, and incentivized their employed dentists to see more patients than should be clinically permitted in a day by offering bonus compensation equal to 30% of billings generated.

While many of the alleged behaviors are somewhat typical areas of fraud in the healthcare sphere, this case demonstrates a fraud unique to pediatric dentistry, which is the furnishing of unnecessary procedures, often  on “baby teeth” which are by definition temporary, and may therefore, not always require extensive interventions.  Consistent with guidance from the American Academy of Pediatric Dentistry, the expected benefits of medically necessary care should outweigh the potential risks of treatment, or the risk of no treatment. Because enforcement officials are sensitized to the potential for abuse in pediatric dentistry, claims are scrutinized with an eye toward protecting program funds and protecting children from harm.  As a result, even dentists who carefully follow the Medicaid program rules and professional ethical guidelines may find themselves subjected to an audit or investigation. 

Phillip M. Coyne, of the U.S. Department of Health and Human Services’ Office of  Inspector General (“OIG”), commented with regard to fraud involving  pediatric patients, “[i]t is intolerable when health care companies seek to boost profits by defrauding Medicaid and exploiting children…Systematically performing and billing for medically unnecessary dental procedures undermines the well-being of these young patients, corrupts the impartiality of medical decision-making, and diverts money from taxpayer-funded health care programs designed to pay for legitimate medical needs.”

As are many of these types of cases, the instant action was brought by a whistleblower alleging a violation of the FCA (also known as a qui tam action). The FCA’s whistleblower provision is a unique tool held by the Government which makes FCA cases especially effective, as we discussed in a previous article.  Whistleblowers, who may be current or former employees, patients, or competitors of the practice (among others), are financially incentivized to report fraud and to cooperate with the prosecution.  Additionally, the OIG’s recent use of algorithms and sophisticated data analysis processes to detect fraud, waste, and abuse against Medicaid programs has led to an increase in enforcement actions, especially as it relates to the Texas Medicaid program.

How Frier Levitt Can Help

Frier Levitt’s Dental Practice Group and White Collar Crime and Government Investigations Practice Group provides a range of services to oral health practitioners.  Whether you are seeking proactive compliance advice or other regulatory counsel, or you are facing an audit or other investigation, our team of experienced attorneys is prepared to guide you the process.  Call Frier Levitt to speak to an attorney.