Monday, January 26, 2015

Scams on the public by nonprofit dental clinics



By: Michael W. Davis, DDS

Dr. Michael W. Davis practices in Santa Fe, NM. He currently chairs the district dental society peer-review committee, and is active as an expert witness on dental legal cases. He has authored numbers of articles relating to clinical dentistry, dental ethics, and protections for the public.

The recent legal settlement between Sea Mar Community Health Centers, which provides dental services to low-income residents in 10 Washington state counties, and the Washington state attorney general’s office, for $3.65 million highlighted this growing problem. These scams don’t generally benefit the professional staff, patients, contributors, and certainly not taxpayers. These swindles are designed to elevate overall clinic revenues, to enhance salaries and benefit packages of clinic directors. These nonprofit clinic directors often have compensation packages comparable with those working for Fortune 500 companies. Most other employees are not tapping in on the dishonest largesse. Here’s how this particular hustle is played.

These clinics have favorable tax status not enjoyed by private sector companies. They are exempt from most taxes. Clinic “profits” are not taxable. However, these profits are rolled-over in the dishonest clinics, into increased personal revenue for the clinic directors. Dishonest clinic directors may also generate a kickback fee from vendors providing dental equipment and/or supplies, especially if unaudited.

Unlike private sector dental clinics serving the disadvantaged Medicaid population, nonprofit clinics may access federal, state, county, & charitable grant moneys. This can be a huge income generator, especially important since Medicaid fees are often set at a level below the cost to provide that service, to standard of care. Grant moneys provide the nonprofit clinic with a per patient served, “encounter fee”. Patient encounter fees are paid to Federally Qualified Health Centers (FQHC) as a set amount, per patient visit. The patient must lawfully visit with a duly licensed healthcare professional of that nonprofit healthcare clinic, for the FQHC encounter fee to be paid. This nonprofit encounter fee often ranges in the $200 per patient visit range.

As a result, a nonprofit clinic has a financial incentive to break up patient appointments into the maximal number possible. For example; a child’s dental cleaning, x-rays, exam, and fluoride care would generally require a single visit in the private sector, or an honest nonprofit dental clinic. A dishonest nonprofit clinic would require 2-4 visits to complete what should only require a single dental visit, in order to maximize (FQHC) encounter fee revenues, and matching charitable grant money.

Patients are harmed because children needlessly loose additional time in school. Parents, who often have a challenging time with transportation of children and getting time off of work (usually marginally paying employment), are needlessly stressed. Professional staff is denied providing a continuity of patient dental care within standard of care. Taxpayers and charitable contributors incorrectly assume their money goes to assist the disadvantaged, within medically and dentally acceptable standard of care.

We typically find patients are routinely double and triple booked, for the same appointment times. Restorative dental (fillings, crowns, etc.) times for patients are routinely blocked into 15-20 minute segments, which too often limit doctors into only working on a single tooth, when frequently 2-3 teeth could almost as easily be restored with the same injection of local anesthesia. Low-income patients must feel like pin cushions, by the time they complete necessary dental treatment (if they ever do, because of needless frustration).

Frequently—but not always— the clinic director at these dishonest nonprofit clinics is not a licensed dentist. This unlicensed individual is directing patient care through supervision of patient scheduling and maximization of patient encounters, while violating the doctor/patient relationship (lawful contract). Yet, few regulatory state dental boards are willing to challenge this abuse to our most vulnerable citizens.

As one might expect, professional staff turnover of dentists and hygienists is very high at these scamming nonprofit dental clinics. They also feel abused, because they’re unable to deliver the level of care which they feel patients are entitled. Time for tobacco counseling, dietary advice, and oral hygiene home-care instruction are greatly minimized or eliminated. Those patients with the most need are frequently given the least consideration, owing to constraints of professional staff by unlicensed management.

Dishonest nonprofit clinic directors must compensate for the frequent turnover in doctors. They may proffer bogus promises of student loan repayments and income tax reductions for serving the disadvantaged, to recent dental school graduates. Too often, these promises are hollow and only represent another lie, to get a new doctor in the door. In fact, cheating clinic directors prefer recent graduating doctors, because they’re less likely to challenge a dysfunctional and abusive program for the poor. By the time the young doctor catches on, it’s time to let them go and bring in fresh meat for the grinder. In fact, high turnover of clinic staff (disregarding benefit of continuity of care for patients) is usually an essential element for a dishonest director, to continue to perpetrate abuses on the public and patients. It’s just another tool in their toolbox.

These forms of patient abuses are not limited to large chain nonprofit providers, as alleged in the legal action against Sea Mar Community Health Centers. Much smaller nonprofit dental clinics and even Title 638 Indian clinics may cheat in a similar manner. For example; a nonprofit dental provider may go into a Women Infants and Children (WIC) meeting or a Head Start facility, and provide the service of fluoride varnish for each of 10 children. Typically, under a Medicaid program the remuneration would be in the neighborhood of $17. That translates into approximately a total of $170. However, when the encounter fee is added in, that equates to 10 X $200, or $2000 plus the $170 Medicaid fluoride treatment fee. The grand total is $2170 going to a dishonest nonprofit dental provider, versus $170.

Further, a FQHC patient encounter is limited by statutes, to specific licensed healthcare providers, and not unlicensed dental assistants, who in reality may be delivering topical fluoridation services. Under the supervision of a licensed dentist, dental assistants are usually well-qualified to provide fluoride services and these auxiliaries are often the staff to deliver this service. Cheating nonprofit dental clinics circumvent law either by directing unlicensed dental assistants to deliver fluoride services off-site to patients and adding in a per-head fee for patient encounters, or by directing licensed healthcare professionals to delivery this service, which would normally be provided by a lesser trained auxiliary, simply to collect the substantial additional FQHC encounter fee.

The key to stopping this abuse is frequent and through auditing of nonprofit providers. Charitable organizations must demand audits of their dental providers, which they help fund. State attorney generals and state dental boards must inspect the wasteful use of these limited funds to assist our disadvantaged, with a serious degree of fiduciary responsibility. Since matching federal money is an integral element of funding Medicaid, the US Department of Justice (USDOJ) also has a responsibility.

This article provides an overview of mechanisms by which a minority of nonprofit dental clinics cheats patients, professional staff, taxpayers, and charitable contributors. Exposure of these scams should alert investigators, auditors, dental professionals, as well as the public. When one follows a dishonest money trail in a nonprofit healthcare organization, the top of the pyramid (clinic director) is most frequently the primary violator.

My advice is for prosecutors to not only recoup money in civil court, but to use the unfair trade act and a clinic director’s unlicensed practice of dentistry (fraud), to access potential treble damages. It’s also reasonable to pursue criminal penalties against an unlawfully acting clinic director. The dishonest nonprofit dental clinics usually have a plethora of former unhappy professionals, who are more than willing to expose the misrepresentations and dishonesty in deposition and open court. Procurement of willing and credible state and federal court witnesses should not present a problem. Unlike the business model of unlawful dental service organizations (DSOs), the professional staff is not usually complicit in unlawful activities.