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| Dr. Michael W. Davis |
Contrasting Dental Medicaid
Enforcement: Florida versus Texas
By:
Michael W. Davis, DDS
Dr. Michael W. Davis maintains a general dental practice in Santa Fe,
NM. He serves as chairperson for Santa Fe District Dental Society
Peer-Review. Dr. Davis also provides a fair amount of dental expert
legal work for attorneys. He may be contacted via email:
MWDavisDDS@comcast.net
Introduction
Both Florida
and Texas share similarities in that both states have long standing Republican
state legislatures, state attorney generals, and state governors. Likewise,
both states enjoy highly diverse ethnic and economic population demographics. However,
each state handles enforcement of dental Medicaid very differently.
Dental
Medicaid fee schedule rates in Texas are some of the highest nationally, while
Florida’s are at or near the bottom.1,2,3 Texas has attracted a huge
bevy of corporate dental chain Medicaid providers, headquartered both in-state
and out-of-state. Florida has a paucity of such interstate dental Medicaid
corporate providers.
Although
dental Medicaid fee schedule payouts are substantially higher in Texas, both
states’ fee schedules fall below the UCR (usual and customary rates) of the
average insurance company. With dental Medicaid remunerations below the
overhead costs of most private dental practices, only a minority of licensed
dentists sign on as Medicaid providers. Those doctors who obtain Medicaid
credentialing generally do so to serve a limited number of patients on a
charity basis, or work in the public sector. There are some disturbing
exceptions.
There are a
minority of “outlier” dentists whose goal is to scam the Medicaid program, and
make little effort to cover their tracks.4-7 Added to this number
are many more devious Medicaid fraudsters, in which only skilled dentist
auditors can identify.
Florida
dental regulatory authorities have been quicker to turn over cases of suspected
Medicaid fraud and abuses to their state’s attorney general’s office. This has
occurred far less frequently in Texas, despite Texas being a far more populous
state with far greater numbers of dental Medicaid providers.
Extent and Examination of Dental
Medicaid Fraud and Abuses
We’ve
already learned from the recent limited examination (four states) by federal
Health and Human Services- Office of Inspector General (HHS-OIG), that
approximately 9-11% of dental Medicaid providers are grossly over-the-top in
abusive Medicaid billings.4-7 These specific providers are termed
“outliers”. Depending on the state reviewed, one-third to 50% is employed by
large group practices (primarily corporate dental chains called “dental support
organizations”, “DSOs”). One must remember, these are the worst of the Medicaid
program violators, and not the majority with scams designed to “fly under the
radar”. Outliers only represent the easy to identify, low hanging fruit.
Typically
the cleverer Medicaid fraudsters (non-outlier cheats) upcode Medicaid services
or provide gross over-treatment, which isn’t discovered as easily by a HHS-OIG
audit.8 One common fraud technique is upcoding of dental sealants on
permanent teeth, to multiple surface posterior resin restorations.9 Others
place multiple steel crowns on deciduous (baby) teeth, which have minimal to no
evidence of dental decay, or are soon to naturally exfoliate (naturally come
out).10,11 Another favorite
dental Medicaid scam has been the service of a pulpotomy on deciduous teeth
(baby tooth root canal), into teeth with little caries (tooth decay) near the
tooth’s nerve.12-14 In fact, the author has specifically heard this
referenced as a “preventative pulpotomy”, in interviews with former corporate
dental employees. Of course, the bitter cynicism and avarice towards the
patient’s welfare by this terminology of “preventative pulpotomy” shouldn’t be
lost on the dental profession, auditors, or the general public.
Perhaps
unique to Texas, we saw an entrenched old-boy element of the dental profession
work to alter and amend standard accepted dental terminology, to expand
Medicaid eligibility. Texas Medicaid orthodontics (corrective movement of
teeth) eligibility required “ectopically erupted teeth”. Insiders simply
changed the Medicaid definition of “ectopically erupted tooth” from the dental
industry standard definition, to include any tooth which may be malpositioned,
angled, tipped, slightly rotated, etc.15 These schemers circumvented the intent of the
law, and lined their pockets either through providing direct Medicaid services
or for-profit courses to dentists, on how to beat the system.16
An
additional component of Texas dental Medicaid fraud-by-design was Medicaid payments
not for completion of an orthodontic case, but for payments on a per-visit
basis. Obviously, financial incentive was established to continually yo-yo
patients in active treatment, in and out of a dental office. No consideration
was afforded to transportation challenges for disadvantaged children. Further, there
was a serious disincentive to complete orthodontic treatment in a timely
manner, in the patient’s best interest. In the years 2009-2011 Medicaid
orthodontic payments in Texas outstripped the payments for all other 49 states combined.17
Texas
declined to provide dental Medicaid oversight and monitoring on the state
level, and delegated this responsibility (for a significant fee to the
taxpayer) to the highly discredited Xerox Corporation.18,19 The federal HHS-OIG agreed with Texas,
that Xerox failed in their contractual obligations of dental Medicaid
oversight. However, the federal Inspector General stated the State of Texas is
ultimately responsible for the disturbingly remiss oversight.20
In fact, services
of Xerox were so egregiously lax, that’s it’s difficult to see this as anything
other than political pay-to-play. All the while, dental Medicaid fraudsters,
both large and small were free to ply their trade in fraud-craft. Texas state
authorities provided the illusionary mantle of oversight via a wasteful model
of collusion, with big business/big government crony capitalism.
The most common
Medicaid unlawful scheme of non-profit dental clinics (federally qualified
health centers or FQHCs) is via abuse of “patient encounters”.21 To
date, we’ve only see this frequent Medicaid scam addressed by government
regulators to much extent in Washington and New York.22,23 This particular abuse of taxpayer money
is a favorite with certain public health clinics, Native American title 638
clinics, and non-profit healthcare facilities. Generally we don’t see
rank-and-file healthcare providers managing this particular fraud mechanism.
Usually fraud is generated though the unlawful systems of directors and
managers (some are physicians and dentists), who enjoy very inflated salaries
and benefits, by cheating programs designed to serve the disadvantaged.
To its
credit in Texas, the non-profit United Medical Centers Board of Directors
(Maverick, Kinney, and Val Verde Counties) recently terminated employment of
their Chief Executive Officer and Medical Director after an internal
investigative audit.24 Unfortunately,
I expect another miracle from the waters of Lourdes, before I anticipate Texas
authorities to file a civil or criminal case against these Medicaid cheats
within the public sector.
One would
like to assume nonprofit organizations are distanced from scamming taxpayers.
However, that assumption has proven inaccurate and very dangerous. Schemes
defrauding the dental Medicaid program are highly pervasive, lucrative, and
relatively easy to pull off. Dental Medicaid fraud and abuses are ubiquitous
both in the private and public sectors. The largess which comes to those who
defraud American taxpayers from dental Medicaid scams has in fact become an
entrenched and fully accepted dental industry model of business.
Handling and Mishandling of Dental
Medicaid Cases
Both Texas
and Florida have historically operated under a failed enforcement model of “pay
and chase”.25,26 Medicaid payments are made to providers (or their corporate
beneficial owners, usually DSOs) year after year without question or
examination. If an audit is eventually generated, it then becomes a massive
records undertaking. Government regulators usually lack funds to retain
meaningful dentist auditors, to thoroughly review patient records and billings.
Behind the 8-ball, government prosecutors nearly always settle cases for
pennies on the dollar, and no admission of wrong-doing by violators.
By contrast,
the dental insurance industry mandates pre-authorizations prior to a provider
billing for a vast number of patient services. Questionable services and
payments are better “nipped in the bud”. Payments are better held in check, not
as easily getting out of hand.
Payment
holds from the private insurance industry generally are upfront from the onset,
on an individual case-by-case basis. By contrast, Medicaid payment holds are
usually well down the road, and may represent many hundreds of thousands of
dollars or even several million dollars. Medicaid payment holds are formulated
by deviations in billings, which are assumed to represent patterns of fraud and
abuse. Obviously, a long-term pattern of abusive billings must be established,
prior to control of taxpayer (public) monies. Private insurance companies,
which have their own set of difficulties, rarely allow fiscal problems to build
to this crisis level.
Texas
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| Dr. Tuan "Terry" Truong |
The government’s
prosecution of Dr. Tuan “Terry” Truong is a case worth examination.27
Dr. Truong was employed by Kool Smiles Dental in Abilene, Texas, for over a
year. After conviction for Medicaid fraud, Dr. Truong was fined and sentenced
to federal prison for 18-months. The statement released by Kool Smiles Dental
acknowledged their full cooperation with the government’s investigation and
prosecution. Yet, Kool Smiles Dental monitors daily production metrics for each
of their dentist providers. It seems inconceivable, corporate management didn’t
fully realize the inappropriate and unlawful activities of Dr. Truong at a very
early stage. Yet, government prosecutors were very willing to accept a low
level dentist Medicaid cheat for a guaranteed felony conviction, versus those
pulling the strings at higher levels. One is left to wonder what real rats
could be convicted, if Dr. Truong were offered a deal to finger corporate
management at the DSO level, or even private equity level.
Former Texas
Attorney General (today Governor) Greg Abbott gave much ballyhoo to his
settlement deal with alleged dental Medicaid fraudster, Dr. Richard Malouf for
$1.2 million dollars.28 This settlement only represented pennies on
the dollar for the true extent of the alleged fraud (many $10s of millions of
dollars). Naturally, there was no admission of wrong-doing by Dr. Malouf,
former owner of All Smiles Dental.
