Government Continues to Focus on Inappropriate Billing of Pediatric Dental Services

On January 10, 2018, dental management company Benevis voluntarily, and without admission of wrongdoing, entered into a settlement with the Department of Justice (DOJ) to pay $23.9 million to settle False Claims Act allegations arising out of whistleblower reports from employees of its affiliated Kool Smiles Dental Clinics. The DOJ alleged a practice of pressuring dentists to overuse certain procedures, such as pulpotomies and extractions, by rewarding the most “productive” dentists with large cash bonuses. While performing any medically unnecessary dental services is a violation of the False Claims Act, government representatives involved in the case indicated in public statements that exploiting needy children for financial gain was viewed as particularly egregious. In its statement, Benevis expressed that “the companies strongly disagree with the government’s allegations.”

In recent years, the Federal government has increased the delivery of preventive dental care to children through Medicaid and the Children’s Health Insurance Program (CHIP), and a number of Medicaid-participating dentists and dental chains have been scrutinized by the HHS Office of Inspector General (OIG) for questionable billing practices. Suspect conduct includes, but is not limited to: extremely high payments and/or an extremely large number of services per child, and specific services (such as pulpotomies and extractions) that may be medically unnecessary. The penalties for findings of fraud, waste and/or abuse are significant, ranging from recovery of overpayments, to program exclusion and civil and/or criminal prosecution. As the Benevis/Kool Smiles case demonstrates, voluntary settlements are also very expensive.

Investigations and audits of pediatric dental providers are likely to remain a high enforcement priority in 2018. As counsel to dental providers, we urge Medicaid-participating dentists to abide by their State’s Provider Manual and properly document the medical necessity of all services rendered. For more information,
contact Frier Levitt to speak to an attorney in our Dental Practice Group.