The Medicaid Tooth Fairy

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The tooth fairy makes losing teeth a much more tolerable experience. (Kids know they’re going to wake up with a couple of bucks under their pillow, so why not embrace the pain for a reward at the end.) A Connecticut dentist blew the whistle on a national pediatric dental chain for fraudulently billing Medicaid for root canals, crowns and other unnecessary dental work performed on vulnerable children. Thanks to an empathetic dentist, now the corporation has to pay $24 million to settle Medicaid fraud allegations.

The Connecticut dentist was part of a whistleblower movement that included a total of eight dentists from around the country who reported complaints to federal authorities. The national chain of pediatric dentist offices paid bonuses to dentists who met production goals that encouraged expensive, unnecessary and painful treatments for kids who still had their baby teeth.

Supposedly, the chain’s protocol for treating routine cavities in baby teeth involved extractions, root canals and steel crowns. (I need a shot of Novocain just thinking about that.) The chain was also accused of billing state Medicaid programs for work that was not completed.

The whistleblower from Connecticut had previously worked for the chain at three locations in the state before working in a private practice. He reported that in one of the clinics, dentists were instructed to wrap young patients in papoose-like cocoons to keep them still and use a hair dryer to dry their clothing when they wet themselves during treatment. (Kudos to him for exposing the appalling practices.)

Today’s article notes that the dentists, who were usually young, foreign-born and in the U.S. on visas, were also instructed to perform as many procedures as possible on the pediatric patients. (This was because poor families did not typically return for follow-up dental treatment. So, they decided to inflict as much pain as possible to collect the most money allowable.)

 For nearly three years, the government charged that the pediatric dentistry chain intentionally billed 17 state Medicaid programs for treatment that was not needed. It also accused the company of incentivizing dentists with cash bonuses when they met revenue goals.

While the nearly $24 million settlement does not mean the pediatric dentistry chain is admitting guilt, it does mean that the government will receive $14,244,073.49, plus interest. Another $9,655,926.51, plus interest will be returned to individual states impacted by the Medicaid fraud scheme. Then, there’s the reward for the whistleblowers – 17 percent, or about $4,063,000. (That works out to be around half a million dollars for each of the eight whistleblowers. That’s much better than the tooth fairy could deliver, for sure.)

Today’s “Fraud of the Day” is based on an article entitled, Dental Chain Will Pay $24M To Settle False Billing Claims Over Unnecessary Work On Children,” published by the Hartford Courant on January 10, 2018.

The national pediatric dental chain Kool Smiles and an affiliated business have agreed to pay $24 million to settle claims that they fraudulently billed Medicaid programs around the country for root canals, crowns and other unnecessary work on poor children.

The case against Kool Smiles arose after whistleblowers around the country, including a Connecticut dentist, complained to federal authorities that the chain paid substantial bonuses to dentists who met production goals that rewarded expensive, unneeded and often painful treatments for children who still had their baby teeth.

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Larry Benson
Larry Benson is currently the Director of Strategic Alliances for Revenue Discovery and Recovery at LexisNexis Risk Solutions. In this role, Benson is responsible for developing partnerships for the tax and revenue and child support enforcement verticals. He focuses on embedded companies that have a need for third-party analytics to enhance their current offerings.