S & P down grade of Smiles Brands put it a step closer to bankruptcy, hopefully

S & P cuts Smile Brand Group rating, revises outlook

http://www.reuters.com/article/2012/11/21/idUSWNA992520121121

Overview
-- U.S. dental practice management services provider Smile Brands Group Inc. had negative free operating cash flow after elevated capital spending for the past four quarters, resulting in depleted liquidity.

-- Early in 2013, we expect Smile Brands to bring capital expenditures, mainly for new dental offices, into line with internally generated cash flow.

-- We are lowering our corporate credit rating on Smile Brands to 'B-' from 'B' and revising our rating outlook to negative. At the same time, we are lowering our rating on the company's senior secured debt to 'B-' from 'B'.

-- The negative rating outlook reflects the possibility that Smile Brands will exhaust the $13.5 million of funds available from its revolving credit facility as of Sept. 30, 2012, or breach a loan agreement covenant.

Rating Action

On Nov. 21, 2012, Standard & Poor's Ratings Services lowered its corporate credit rating on Irvine, Calif.-based Smile Brands Group Inc. to 'B-'from 'B'. At the same time, we revised the outlook on the rating to negative

In addition, we lowered our rating on Smile Brands' senior secured debt to 'B-', in conjunction with the downgrade, from 'B'. Our recovery rating on this debt remains unchanged at '3', indicating our expectation for meaningful (50% to 70%) recovery of principal in the event of payment default.

Rationale

The rating on dental practice management (DPM) services provider Smile Brands Group Inc. continues to reflect its "vulnerable" business risk profile (according to Standard & Poor's Ratings Services' criteria), characterized by its narrow scope of operations in intensely competitive markets with low barriers to entry.

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Smile Brands had negative free operating cash flow (FOCF) after elevated capital spending for the past four quarters and we expect this to continue in the fourth quarter of 2012. Our downgrade is based on the expectation that early in 2013, Smile Brands will stem the trend of negative FOCF by reducing spending for new dental offices or taking other actions, such as paying interest on its holding company debt in kind, rather than in cash. 

We also expect adjusted debt to EBITDA will rise to about 8x by the end of 2012, significantly higher than our prior expectations, but still consistent with a "highly leveraged" financial risk profile. As of Sept. 30, 2012, debt to EBITDA was 7.7x, adjusted to capitalize operating leases and including holding company debt. We have lowered our expectations for Smile Brands' revenue growth, EBITDA generation, and cash flow over the next one to two years.

We expect revenues will grow at a mid-single-digit annual rate, somewhat faster than the total U.S. dental services industry over the next few years, primarily fueled by Smile Brands' geographic expansion and a slowly strengthening economic climate. Our prior growth expectations were mid- to high-single-digit annual growth. 

Although Smile Brands' revenue growth slowed in the second and third quarter of 2012, revenues increased 4.2% for the 12 months ended Sept. 30, 2012. 

We believe an unsuccessful marketing strategy, which was subsequently abandoned, contributed to the growth slowdown. Still, we believe underlying industry fundamentals remain sound and relatively resistant to downturns. During the 2008 to 2010 recession, when revenue for the total U.S. industry was nearly flat (according to data from the Centers for Medicare and Medicaid Services), Smile Brands grew modestly, supporting our expectation for continued, albeit modest, growth.

As newer offices mature, we expect the lease-adjusted EBITDA margin (11.7% in the third quarter of 2012, compared with 12.8% in the third quarter of 2011) to gradually recover to the 12% to 14% range, with some quarter-to-quarter variation. 

Smile Brands' profitability is supported by its infrastructure, economies of scale, and supplier discounts. More rapid office expansion in recent quarters contributed to lower profitability. Smile Brands' EBITDA margin (adjusted for leases, stock compensation and nonrecurring items) began to dip in the fourth quarter of 2011, after rising substantially and steadily from 8.9% in 2005 to 14.8% for the 12 months ended Sept. 30, 2011. Our lowered expectations for 2012 and 2013 EBITDA also affect cash flow generation Smile Brands' affiliated dental practices operate a network of approximately 350 dental offices that offer general and specialty dental services. 

The $110 billion U.S. dental practice industry is extremely fragmented and highly competitive, contributing to our vulnerable business risk assessment.

Treatment volume, especially for more discretionary services such as orthodontics, and patient financial capacity exhibit some sensitivity to economic conditions. The availability of financing for patients influences demand. 

We also see vulnerabilities in the nature of the DPM structure. While we believe potential changes in state or federal laws, regulations, or accounting rules could hurt the DPM industry, we do not currently incorporate any adverse developments in our base-case scenario.

The DPM business model has many retail industry attributes, and so carries risks associated with advertising and promotion, branding, and real estate selection, among others. Smile Brands markets its brands, selects high-traffic office locations, and offers customers convenient hours, comprehensive treatment, financing, and prices typically 15% to 25% below those of traditional dentists. It targets middle-income patients in growing metropolitan areas. Affiliated offices operate in 18 states, but there are material concentrations in Texas and California.

The company provides administrative, financial, and operating services to affiliated professional corporations (PCs). Although the company does not own the affiliated PCs, its financial statements consolidate them. Smile Brands generally owns the dental office assets, but dentists and hygienists generally are not employees of the company, in accordance with state laws. 

We analyze the consolidated financial statements on the basis presented (adjusted for the capitalization of operating leases and other standard adjustments) because we believe they best reflect the economic substance of the company's business model.

Liquidity

We revised our assessment of Smile Brands' liquidity to "less than adequate" (according to our criteria), reflecting its diminished liquid resources.

As of Sept. 30, 2012, Smile Brands reported a negative cash balance of $0.5 million, and $13.5 million was available from its $35 million revolving credit facility. We believe Smile Brands may borrow an additional $1 million to $5 million in the fourth quarter of 2012.

We estimate Smile Brands will generate about $20 million of funds from operations (FFO) in 2012 and $25 million in 2013. We expect small, if any,annual increases in working capital. We project about $32 million of capital expenditures in 2012 (actual spending for the first nine months was $27.5 million), including the recently completed roll out of digital x-rays. In 2013, we expect Smile Brands to bring capital expenditures, mainly for new dental offices, into line with internally generated cash flow. We believe annual maintenance capital spending is less than $10 million.

Our assessment of Smile Brands' liquidity profile incorporates the following assumptions and expectations:

-- Over the next 12 months, we expect sources of liquidity, including potential borrowing under the revolver, to exceed uses by 1.2x. Even if EBITDA is 15% below our projections, we estimate liquidity sources would cover cash needs, although in that scenario the revolver could be fully drawn.

-- Debt amortization is only $2.4 million annually through 2014.

-- Our analysis of Smile Brands includes unrated holding company notes with a face value of $100 million ($87 million after the original issue discount). Smile Brands has been paying the 10% coupon in cash. To conserve cash, we believe it may begin to pay interest in kind at 13%.

-- We expect Smile Brands to remain in compliance with its loan agreement covenants, notwithstanding requirement tightening. As of Sept. 30, 2012, there was a 17% cushion under the tightest covenant.

-- We assume Smile Brands will not make any acquisitions over the next two years.

Recovery analysis

For our complete recovery analysis, see our recovery report on Smile Brands, to be published following this report on RatingsDirect.

Outlook

Our negative rating outlook on Smile Brands reflects the possibility that it will exhaust the $13.5 million of funds available from its revolving credit facility as of Sept. 30, 2012, or breach a loan agreement covenant. We would consider lowering the rating if negative FOCF persists in the first quarter of 2013 or we expect the covenant cushion to approach 5%.

We would consider revising the outlook to stable if Smile Brands generates discretionary cash flow (through a combination of improved EBITDA and lower capital spending), restores availability of its revolver, and we expect the covenant cushion to stay above 15%.

Report on Small Smiles Dental Centers to air

 

	Tomorrow morning, Tuesday December 11, 2012 the Today Show will air a piece on Small Smiles Dental Centers – scheduled to air between 7:30 – 8:00 AM Eastern Time.

NCDR - Kool Smiles changing it’s management structure Jan 2013.

It appears either

1. There is pressure on NCDR & Kool Smiles to ditch the traveling trainers.
2. Strapped for cash and need to increase the bottom line in hopes of a sale.
3. Planning to hang the clinical leaders out to dry.
4. All of the above

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Friday December 7, 2012
Dear NCDR, Kool Smiles and Resolution Dental colleagues:

We continue to make great progress toward our dream of creating a world of happy, healthy smiles through access to quality dental care.

In the middle of this year, we launched a cultural initiative, developed with your constructive input during 2011, to create balance within our offices. To that end, our Kool Smiles and NCDR employees worked together to create an action plan for their vision of their office, or department. As you have seen for the last year, we have made many big steps toward achieving that vision, which include:

• The roll out of SmileOn, our new dream, mission and the Priority Pledge;
• Improved office level decision tools and responsibility; and
• Stronger focus on patient satisfaction and retention.

Today, we are announcing that NCDR is reorganizing its field leadership team to better support the evolving needs of the Kool Smiles and Resolution dental offices.

Effective January 14, 2013, the Kool Smiles and Resolution Dental clinical leaders will assume additional responsibilities over their respective offices. These changes will unify field leadership into a single structure in an effort to improve communication and local accountability for your offices.

Just saying...

The Ontario Teachers Union is to Heartland Dental as the Teamsters Union was to the Mob - bankrolling illegal business.

Actually if you think about it the DSO is modeled much like a mafia organization. They steam roll over your business, telling the people, the state agencies, the dental associations and the dentist exactly what they want to hear. But as soon as they have infiltrated, it's their way or the highway. Laws? What laws? They are the Mob.

This is the Dental Service Organization! This IS the DSO!

The DSO model mostly originated in Pueblo, Colorado; rich is mafia bloodlines and history. So what else should be expected?

Moody rates Heartland Dental

http://www.finanzen.net/nachricht/anleihen/Heartland-Dental-Care-LLC-Moody-s-assigns-B2-CFR-to-Heartland-Dental-B1-and-Caa1-to-proposed-1st-and-2nd-credit-facilities-respectively-2174193

Morgan Stanely’s Reachout Healthcare Mobile Dental Clinics continue breaking new rules put in place to protect children from their abuse of children

I realize it’s hard to believe someone, i.e. R. Kirk Huntsman, convinced Morgan Stanley that driving up to schools, sending criminally incompetent dentists and employees inside to zap them with as much radiation as possible, restrain children and perform dental procedures with or without consent, then bill the taxpayer was a great idea. But it happened.

Below is an update on the lawsuit filed by Darren and Stacey Gagnon on behalf of their son, who was traumatized by Reachout Healthcare mobile dental clinic employees in Arizona. Imagine the stuff that was too “hot” to include in the following piece.

WATCH this video!

Don’t forget to comment here and over at My Fox Phoenix here

PHOENIX – December 3, 2012

As we first reported back in June, a mobile dentistry operation is being sued by an Arizona family. They allege their special needs son received unnecessary dental work at school.

Tonight, we revisit the Gagnons, to see how their son Isaac is doing, and update a case that may have already forced the state to make changes in the way dentists do business.

The first time we met the Gagnons, Isaac was kept from our cameras because they might scare him.

This time, we got a chance to watch Isaac color a picture for his friend's birthday party.

Isaac gets night terrors after what happened to him.

"He was diagnosed with post-traumatic stress disorder… he was a very fragile emotionally child in the first place," says mom Stacey Gagnon.

Fragile in the first place because Isaac was adopted after surviving severe shaken baby syndrome.

"He was horribly injured as an infant including five skull fractures."

But Isaac had come a long way with the Gagnons.

"We saw this little boy emerge who loved tractor trucks and run and play in the dirt."

That ended about a year ago.

"October 4th, Isaac was seen by a dentist at school," says dad Darren Gagnon.

A dentist from Big Smiles, a part of Reachout Healthcare America, treated Isaac inside his school's art room.

"He says you know the dentist man got me… we didn't know what had happened."

Reachout paperwork in Isaac's backpack showed the boy had been given two pulpotomies - or baby root canals - and 10 X-rays. Something his parents say they never approved. Isaac's mother called Reachout for an explanation.

"They told me it was a training error on their part," says Stacey.

Everything the Gagnons allege is part of this lawsuit they filed against Reachout, Big Smiles, and two dentists.

It alleges among other things, battery, fraud, intentional infliction of emotional distress and racketeering.

"We found out from the school they had actually held Isaac down for somewhere in the neighborhood of 40 to 45 minutes, that they physically restrained him to do the work on him because obviously he was in a lot of pain," says Darren.

The two dentists named in the lawsuit include Doctor Ralph Green who works at Reachout Corporate offices in north Phoenix -- and Doctor Alvin J. Coon, who performed the work on Isaac.

Children’s Dentistry of Rome bills taxpayers $13,407,134.34 in less than 4 years

Bet’cha some these folks used to (or still does!) work for Small Smiles, Kool Smiles, Ocean Dental maybe… or one of the other Medicaid dental mills?

At least in Georgia, the police departments are using the tools in their toolbox. -O.C.G.A. Title 16, Section 16-5-70, Cruelty to Children. #dentalboardsareuselessinprotectingpatients

UPDATE December 4, 2012 – 9:42 AM

Office bills $13 million in Medicaid claims since ’08

by Lauren Jones, Staff Writer

After numerous allegations of child abuse and fraudulent activity flooded the Rome Police Department over the weekend, detectives are continuing their criminal investigation into Children’s Dentistry of Rome, officials said on Monday.

According to the search warrant affidavit filed in Floyd County Superior Court, MCG Management Inc., doing business as Children’s Dentistry of Rome, billed more than $13 million in Medicaid claims since 2008, and some victims and other dentists alleged that dental work provided by the doctors and hygienists was unnecessary.

Employees from the dentist office issued the following statement on Monday evening: “The dentists operating their practice at the MCG facility care about patients and provide quality care. Dental visits are not always pleasant, but we believe that the practitioners will be able to show they exercised sound judgment and compassion when treating young patients with significant dental problems.”

Following complaints of improper use of restraints and improper or unnecessary performance of dental work on children, agents with the Department of Health and Human Services Office of the Inspector General and Rome Police Department investigators executed a warrant on Thursday and searched the office for billing and medical records pertinent to the criminal investigation.
No arrests have been made in the case and Rome police Lt. Gary Clayton declined to comment on the number of reports the detectives division has received.

The affidavit listed more than 300 patients with Medicaid whose records are being thoroughly investigated.

Medicaid claims
The affidavit, written by detective Joe Costolnick, lists 11 reports of excessive dentistry work performed on 14 children that resulted in serious medical problems and trauma. Reports recounted that children left the office traumatized, scratched and bruised.

Some children were allegedly tied down on papoose boards for unnecessary dental work, and some children needed additional medical attention for improperly done dental work they received at Children’s Dentistry of Rome.

Costolnick, who is specially trained with regard investigating criminal violations relating to cruelty and abuse to children, is working with Special  Agent Connie Murray with the Department of Health and Human Services who investigates Health Care fraud.

Murray obtained a summary of the dental office’s Medicaid claims data from January 2008 to August 2012, the affidavit reported.

The Georgia Medicaid program provides health services to beneficiaries who qualify based on financial need or other circumstances.

In providers’ contracts, the provider agrees to abide by state and federal laws when submitting claims and the Medicaid program requires that providers not bill for services not performed or delivered, and not to submit false or inaccurate claims.

Providers must maintain records to fully disclose the extent of services provided to members for a minimum of five years and the records must also explain the medical necessity for the services provided.

Since 2008, the company billed Medicaid for a total of
$13,407,134.34.

• $3,146,084.38 in 2008,
• $3,215,831.81 in 2009,
• $2,908,993.61 in 2010,
• $2,395,811.79 in 2011
• $1,740,412.75 as of August of 2012

Unnecessary dental work?
In the affidavit, some reports by parents of children who received dental work at Children’s Dentistry of Rome claimed that children went in to the office for routine checkups but left having had more dental work performed, as well as traumatized and in tears.

Parents not surprised over raid of Rome, Georgia dental office

ROME, Ga. - Police are investigating allegations of abuse at a children's dental office in Rome. Authorities say that MCG Management, Inc., doing business as Children's Dentistry in Rome, is under criminal investigation.

According to the district's attorney's office, the investigation began with allegations of Medicaid fraud. The Rome Police Department executed a search warrant last Thursday based on the criminal investigation, as well as complaints from parents that their children may have been improperly restrained. There were also allegations that some of the children they have had improper, if not necessary, dental work done.

Police seized several crates and boxes from the office in the raid. One woman told FOX 5's Patty Pan that she wasn't surprised to hear of the Medicaid allegations. "I took my daughter to the dentist office and they basically told me that she had one cavity. And took her back four days later to have her one cavity filled and they billed her insurance for nine cavities total," said the woman, who asked not to be identified.

Mary Bodkin, whose grandkids have been going to the dentist office for years, said that she doesn't believe the accusations. "It breaks my heart because they take wonderful care of both my granddaughter and a lot of other people. This is wrong," said Bodkin. Authorities say that no criminal charges have been filed. They say it is an ongoing going investigation. Anyone with claims is urged to download a form from the Rome News Tribune website, fill it out and bring it to the Rome Police Department.

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Website
Children’s Dentistry of Rome
204 Redmond Rd NW,
Rome, GA 30165
Ph: 706 291-2550 - Fax: 706 291-8349

 

Dr. Maheshvar Patel DDS Bio from website

“Truly it is a privilege and honor to educate my community about oral health. Along with improving oral health, it is essential that my patients feel comfortable and enjoy coming to our office. In today’s society a clean, healthy smile gives us more confidence. My motto is to live life to the fullest… Carpe Diem.“

Dr. Patel, a Georgia native, raised in Cartersville, Ga and graduated Cass High School in 2002. His scholastic abilities earned him the Etowah Foundation and Mercer University scholarship. He was awarded his Bachelor of Science degree in Biology from Mercer University in 2006. Then he continued on to earn his Doctor of Dental Surgery degree from New York University in 2010. Dr. Patel was in the Honors program for Orofacial Pain/TMD Management clinic for two consecutive years at New York University. This experience allowed him to receive an award from the Academy of Orofacial Pain for providing excellence in the diagnostic and treatment aspects of orofacial pain. Along with his scholastic achievements he was a great leader among his peers. Dr. Patel served as President for two consecutive years at a highly acclaimed NYU Dental organization. Being a leader allowed him to be what he is great at, which is the ability to help others and motivate his colleagues.

After gaining world class education from NYU Dental, he pursued interest in treating children. With his knowledge and experience in treating anxious pediatric patients, he has acquired the ability to give them a healthy and beautiful smile. Dr. Patel’s charismatic personality allows his patients to feel comfortable and relaxed. His focus is to provide the best quality of dental treatment.

Professional Organizations:
American Dental Association
Academy of General Dentistry
Georgia Dental Society
Northwestern District Dental Society
Georgia Dental Association

In his spare time, Dr. Patel enjoys playing volleyball, golf, painting, playing with his nephew and nieces, and supporting the Atlanta Falcons. On the weekends you can find him barbequing with his friends and family

 

MCG Management Articles of Incorporation

CFO Robin Guice
204 Redmond Rd.
Rome GA 30165

CEO Christy Mcstotts
204 Redmond Rd.
Rome GA 30165

Secretary Robin Guice
204 Redmond Rd.
Rome GA 30165

More than 300 complaints of “cruelty to children” and 11 counts of unnecessary treatment spurred raid on MCG Dental Management’s Children’s Dentistry of Rome (Rome. Georgia)

Update December 3. 2012

 

 

Ga. dental office raided amid child cruelty charges

By DrBicuspid Staff

December 3, 2012 -- A dental office in Rome, GA, has been searched after numerous complaints were filed about the practice's alleged overuse of child restraints and the performance of unnecessary dental work on children, according to a press release sent to media outlets by Lt. Gary Clayton of the Criminal Investigations Division of the Rome Police Department (RPD).

Police investigators, in conjunction with the Department of Health and Human Services Office of Inspector General, executed a search warrant on Children's Dentistry of Rome, under the management of MCG Management, to obtain dental records pertaining to a criminal investigation. No charges have been filed.

According to an article in the Rome News-Tribune, there are more than 300 Medicaid patients named on the search warrant affidavit filed in Floyd County Superior Court. The affidavit also contains 11 reports of unnecessary treatment being performed, sometimes with the use of papoose boards, on 14 children in which trauma resulted.

As a result, authorities believe there is probable cause for investigating the practice's dentists, hygienists, and owners (if I could make these three words flash in neon, I would) for cruelty to children and payments that they were not entitled to, the article stated.

In May 2011, RPD Detective Joe Costolnick received a complaint from the parent of a 3-year-old allegedly injured during treatment at the practice and an investigation was launched. Shortly thereafter, Costolnick learned of other police reports containing abuse allegations going back to 2008.

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So Mr. or Ms. Dentist, how did you decide to treat your patient this morning?

Speedy service not always good service in dentistry

BRIAN SODOMA
SPECIAL TO LAS VEGAS REVIEW-JOURNAL

Posted: Dec. 2, 2012 | 7:43 p.m.

We all love speedy service. But we shouldn't when it comes to our dental care. In tough times, all service industries are forced to watch expenses and get the most out of staff. Dental offices, unfortunately, are no exception. But a quick cleaning could mean cut corners and oral health problems down the road.

John Hunt, attorney for the Nevada State Board of Dental Examiners, has seen firsthand how the economy has affected dental offices. Unnecessary dental work is at a "rampant" level in the valley, he says. It's the primary concern he deals with among the thousands of annual complaints that come into the board of dental examiners either as phone calls or in writing.

Hunt notes there are far fewer complaints about hygienists than dentists. But that's not to say they don't exist. And many patients may not realize the care they received wasn't satisfactory until long after it happened, usually after trying a new dental office some six months later.

"That's how you hear about it," he says. "They (patients) go to someone else and it's a case of 'They did what?' "

Hunt highlighted a recent case in which a hygienist had a license taken away after admitting to doing 36 root paling and scaling procedures in a day. The standard, per the board of dental examiners, is 45 minutes to 60 minutes for one paling and scaling procedure.

Is Chad Hoecker and Ocean Dental getting a piece of the Texas orthodontic pie?

Ocean Dental and Sun Orthodontix are right next door in Corpus.

Ocean Dental in Corpus Christi, Texas:
http://www.dexknows.com/business_profiles/ocean_dental_corpus_christi-l902708722

Sun Orthodontix in Corpus Christi, TX:
http://www.dexknows.com/business_profiles/sun_orthodontix-l906080244

.Dr "Bad" Chad Hoecker's operation is Ocean Dental.

Dr Jack Vondrack is owner of the Orthodontix outfits

Feds raid Georgia children’s dental office over accusations of child endangerment–improper use of restraints

Georgia, being the “Capitol” of corrupt and child abusing dental clinics, the “shit is on” as they say, when officials start raiding clinics in that state. (Yes, I realize Texas and Colorado are alternate choices, but I choose Georgia.)

To each and every dentist working for these dental clinics, such as Kool Smiles, Small Smiles, and a whole host of other “Smiles”, here is the deal:

1. If you spent last week tied children up in papoose boards for dental care, you should drop to your knees in prayer. This is no longer going unnoticed and unreported.

2. There are people out here who are determined to see that you pay dearly for your crimes against children.

Personally, I’d like to see each and everyone of you dentists UNDER the jail – each corporate head, like Al Smiles and Michael Lindley of Small Smiles, Michael and Dan DeRose as well. Jeff Lane and Dale Mayfield, of Kool Smiles - Drs. Tran and Pham too. Each and every “regional manger” should be horse whipped in my opinion.

3. Monday, when you head in to work, you better think long and hard before you try to meet those production goals - really long and really hard. This is just a wild guess, but I bet you are someone’s “list”, and it’s not Santa’s “Nice” list either. In case you need a refresher on the AAPD guidelines here they are – AAPD Guideline on Behavior Guidance  (yeah, I realize the some of the folks who wrote these are up to their eyeballs in breaking every one of them) 

 

ROME, Ga. - Federal agents and police raided a northwest Georgia dentist office, saying they were responding to complaints about the improper use of restraints and concerns about dental procedures on children.

Rome police said in a statement that they executed a search warrant at the children's dentistry practice in Rome on Thursday to obtain records in an ongoing criminal investigation. Police say the U.S. Department of Health and Human Services was also involved in the search.

A search warrant affidavit in Floyd County Superior Court says the probe began in May 2011, when the mother of a 3-year-old girl told police her daughter was tied down and injured during an appointment.

The Rome News-Tribune reports (http://bit.ly/X8kjMd) that the case involves several other families and children.

Police said no charges have been filed.

Information from: Rome News-Tribune, http://www.romenews-tribune.com

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Restraining children for dental treatment guidelines from the AAPD were drastically changed in 2006, to warn dental professionals it is dangerous and risky, to say the least. If you have been doing it other than by these guidelines, I hope you…  well never mind.

Aspen settles with former employee who was assaulted by her supervisor

By Tony Lystra / The Daily News

Columbia, Oregon

Aspen dental, former employee reach settlement on eve of trial

A Longview dental clinic has reached a settlement with a former employee who claimed that she had a mental breakdown after her supervisor assaulted her in the workplace.

The settlement, the terms of which were not disclosed, came on Monday, the day the case was scheduled for a civil jury trial in Cowlitz County Superior Court.

Crystal M. Manes, who had been working as a dental assistant in Aspen Dental’s Ocean Beach Highway branch, sued the company, saying her supervisor slapped her on the arm on April 21, 2010. Manes said she had come to work early that day and, at around 5 p.m., informed the supervisor, Jessica Scruggs, that she was leaving for the day. Scruggs became angry because there were still patients waiting to be seen and, with an open palm, struck Manes in the left arm declaring, “Well then, go home,” according to the suit.

Aspen Dental’s attorneys contended that Scruggs may have touched Manes only while gesturing and that the impact could not have been enough to cause an injury.

Manes, however, said a black and blue bruise appeared on her arm that evening. Manes also said that she was later prescribed Xanax for panic attacks, according to court documents. On May 8, 2010, Manes was admitted to St. John Medical Center after “the combination of panic attacks and a reaction to the Xanax medication caused (her) to have a mental breakdown,” according to Manes’ lawsuit.

Manes, who was diagnosed with post traumatic stress disorder resulting from the incident, sued Aspen Dental for medical expenses, lost wages and “general damages,” court documents said.

Manes’ attorney, David Nelson of Longview, declined to disclose the terms of the settlement. Aspen Dental’s attorney, Douglas Parker of the firm Littler Mendelson in Portland, did not return a phone call Wednesday.

Aspen Dental is a national chain of dental offices with 340 branches in 22 states, according to the company’s public relations department.

Dr. Sang Hyuk Park arrested for more sexual assaults day before court appearance.

Dentist pleads not guilty in sex abuse case

By VICTOR A. PATTON - vpatton@mercedsunstar.com

MERCED -- Merced dentist Sang Hyuk Park pleaded not guilty Wednesday in Merced County Superior Court to allegations that he sexually abused four women.

Dressed in a business suit, Park, 43, left the courtroom after the brief hearing, declining questions from reporters.

Merced police arrested Park, a Stockton resident, at his 3040 Park Ave. office Tuesday afternoon on five counts of sexual battery and one count of sexual penetration. He was released from jail after posting bail Tuesday evening.

Sang Hyuk Park

After Wednesday's hearing, Park's attorney Thomas Johnson said his client is a highly competent dentist who's innocent of the charges. Johnson questioned why his client was arrested on Tuesday, when he was already scheduled to appear in court today for his arraignment hearing.

"Dr. Park is not guilty of the charges and the investigation has been unusual, at best," he said. "Everything the office of the district attorney is doing seems like a thinly veiled attempt to get him into custody prior to the case being heard."

In response to Johnson's claim about the investigation, Chief Deputy District Attorney Rob Carroll said his office is very confident with the evidence police obtained.

Private Equity Firms warn Texas Dental Association to leave our “glory hole” alone

AUSTIN, Texas, Nov. 27, 2012 /PRNewswire via COMTEX/ -- Stressing the need for Texas dentists to work together to help public officials curb Medicaid fraud and expand access to affordable, high-quality dental care, dentists from throughout Texas recently sent a letter to the Texas Dental Association (TDA) concerning its recent testimony before the Texas House Public Health Committee.

The letter, signed by more than 60 Texas dentists from across the state, takes issue with the October 15th testimony of Dr. Richard Black before the committee. Dr. Black, on behalf of TDA, made what the dentists characterized as "troubling" and "unsubstantiated statements" pertaining to Texas dentists' 30-year history of utilizing non-clinical administrative support services that enable them to spend more time with patients and less time on administrative tasks.

"As one might expect," the letter says, "the committee members pressed Dr. Black for evidence that would substantiate his accusations. Rather than offer any, Dr. Black instead called for legislation that would impose additional regulations and restrict dentists' access to non-clinical administrative support services."

Like the medical support services provided to physicians for decades, the letter explains, dental support services include facility maintenance, supply procurement, scheduling support, as well as accounting and marketing services: "Contracting for such non-clinical administrative services enables dentists like us to devote more time to the delivery of high-quality, cost-effective dental care to patients and spend less time on administrative duties. In addition, contracting with DSOs enables us to benefit from their economies of scale and bring state-of-the-art technology to our patients and communities, thereby improving patient access, safety, outcomes and convenience."

Gentle Dental in more hot water

New Jersey State Comptroller Statement

November 20, 2012 -- The New Jersey Office of the State Comptroller (OSC) is seeking recoveries from a dental practice that forged Medicaid reimbursement documents to conceal that its owner, who was no longer physically able to treat patients, had been replaced with a dentist who was debarred from the Medicaid program.

Anicia Cruz-Sledge assumed control of the Gentle Dental Group in East Orange in 2007 after her husband, the owner and primary dentist for the practice, suffered a medical condition that left him incapacitated and no longer able to treat patients, according to a notice filed by the OSC's office.

The investigation by OSC's Medicaid Fraud Division found that Gentle Dental submitted Medicaid reimbursement claims using the individual Medicaid provider number of her husband, Edward Sledge, DMD; signatures purporting to be from Dr. Sledge; and certification forms stating that Dr. Sledge had performed the medical services in question.

However, those services were actually provided by Carl McGloster, DDS, a dentist hired by Cruz-Sledge to treat patients at the dental practice although he was debarred from participating in the Medicaid program. According to the OSC, Cruz-Sledge admitted to OSC investigators that she signed her husband's name on the reimbursement claim forms submitted to the state even though her husband did not treat the patients. OSC investigators also determined that Cruz-Sledge continued to order new prescription pads under her husband's name long after he became incapacitated.

Read the entire story - http://www.drbicuspid.com/index.aspx?sec=sup&sub=pmt&pag=dis&itemId=312051

Former dentists, Gary Anusavice in a hole of no return? It’s looking like.

NORTH KINGSTOWN, R.I. (AP) — North Kingstown officials say FBI agents will be joining local authorities in investigating a fire at a vacant million-dollar home whose last two owners were charged with fraud.

The 8,100-square-foot house on Potter Road was gutted in Friday's fire. The cause isn't clear yet. One firefighter who responded was taken to a hospital with chest pains, but was later discharged.

Fire Chief Fenwick Gardiner Jr. told The Providence Journal (http://bit.ly/Tm3mKw ) that FBI officials will be helping with the investigation. He didn't elaborate.

The home's last owner was a company controlled by Gary Anusavice, a former dentist now awaiting trial in an alleged $20 million Medicaid fraud scheme. The owner before Anusavice was Antonio Giordano, who was sentenced to one year in prison in 2007 for embezzling from nursing homes.

___

Information from: The Providence Journal, http://www.providencejournal.com

Read more: http://www.sfgate.com/news/crime/article/FBI-to-join-probe-of-North-Kingstown-fire-4065070.php#ixzz2DMWPxnq7

Former employee of dentist arrested on bad checks charges speaks out

http://wtkr.com/2012/11/21/former-employee-of-dentist-arrested-on-bad-checks-charges-speaks-out/

Video included

Dentist Derrick Broadaway is facing four felony bad checks charges.

It is a direct result of Andrea Ross and another former employee taking action to press charges.

Ross came to NewsChannel 3 when thousands of dollars’ worth of paychecks from Broadaway’s dentistry kept bouncing after close to 17 years there.

The dentistry’s former business manager says she quit when Broadaway wouldn’t make good on the checks.

Friday, Broadaway turned himself in to Chesapeake police.

Authorities released him on bond.

NewsChannel 3 began investigating Broadaway for the bounced checks.

Our investigation into Broadaway’s bad checks led us to his checkered history with the Board of Dentistry. 

This summer, the board suspended him for 60 days and fined him 20,000 dollars. The decision was made partially because of questionable root canal work done on Rosemary Rogers.

We have also learned that Broadaway is facing three medical malpractice lawsuits.

Former patients claimed he left them “disfigured” and “permanently injured.”

Related:

Chesapeake dentist accused of giving out bad checks turns himself in to police

Former patient of suspended Chesapeake dentist speaks out

Employees take action against dentist accused of handing out bad checks

Chesapeake dentist faces millions in medical malpractice lawsuits

Chesapeake dentist blasted for bounced paychecks

More glaring evidence the California Dental Board is useless

http://losangeles.cbslocal.com/2012/11/20/cbs2-investigation-patients-claim-oc-dentist-didnt-give-them-care-they-paid-for/

NEWPORT BEACH (CBS2) – Several patients are accusing an Orange County dentist of charging them thousands of dollars for dental implants and subsequently never responding to their calls for help.

CBS2 investigative reporter David Goldstein discovered those patients never knew the California Dental Board filed a complaint last year against Dr. Thomas Teich. He was also found negligent this May in a medical malpractice lawsuit where the patient died.

That’s not all: Teich had served time in prison for mail fraud.

The dentist refused to comment on the allegations and the dental board’s complaint.

“Doctor, we’ve talked to a number of your patients who say they’ve been abandoned by you after paying you tens of thousands of dollars. How can you do that? How can you abandon these people?” Goldstein said.

Several patients who went to Teich’s Newport Beach office said the experience was nothing to smile about.

Sexual Assault at Kool Smiles–Lilburn, GA

http://lilburn.patch.com/articles/lilburn-police-blotter-city-of-lilburn-nov-11-nov-17

What’s Moodys got to say about Aspen Dental?

http://www.moodys.com/researchdocumentcontentpage.aspx?docid=PR_204721

"Aspen affiliates with its dentists through two models: the staffing model and the practice ownership program ("POP"). Under the staffing model (~55% of offices), dentists are at-will employees of affiliated PCs, where the PCs own the medical records, patient lists, and operating records. Under the POP model (~45% of offices), dentists purchase the medical records from the PC to essentially own their own practice. The company's audited financials do not consolidate the POP practices. Audited revenues for the twelve months ended December 31, 2009 approximated $260 million. The consolidated (unaudited) revenues for all Aspen branded dental offices, including POP offices, approximated $322 million over the same period."

Note: Moodys reports approx 55% of Aspen Dental offices have dentists as employees ("staffing model"). Moodys reports approx 45% operate under the POP model, where dentists purchase the "medical records". Although these doctors "essentially own their own practice", they can't freely sell this practice, nor dismiss Aspen Dental as a DMO, as might a true owner. There exists a serious difference between "essential ownership", versus true & valid ownership.

When Leonard Green purchased Aspen Dental they utilized GE Capital.

http://www.bloomberg.com/news/2012-03-06/aspen-dental-s-loan-for-leonard-green-dividend-rises-in-trading.html

The same GE Capital which runs CareCredit, which operates the consumer 3rd party payment system for Aspen Dental. This seems like a pretty tight relationship, & something which may merit further investigation?

From Aspen Dental corporate marketing on POP:

http://www.aspendental.com/news/2009/09/17/aspen’s-practice-ownership-program-pop-has-dr-timothy-owczarzak-in-a-“perfect-situation”/

An Aspen Dental President & "owner" of 2 Aspen Dental clinics, Dr Owczarak comments, "...Owning your own practice is a totally different animal. When you’re in private practice it seems like it’s 20% dentistry and 80% business. I simply became tired of it.”.

He later goes on to say about his POP position w/ Aspen Dental, "This has been a winning situation all the way around. I own a practice...". In reality, he doesn't own a practice.  Dr Owczarak may own a practice under the definition of ownership of Aspen Dental, but not true & valid ownership, under the legal definition of ownership. This misrepresentation proffered to dentists in this Aspen Dental marketing effort isn't very subtle nor sophisticated.

How cocky are Medicaid dental mill dentists feeling these days? Robin Lockwood of Ocean Dental–Stillwater, OK fought the law, and the law won.

ATTN: All Corporate Dentists

She had all the goods to be successful in life. Lockwood is a dentist; once was a promising inventor, she actually has a brother in Arkansas who is a minister. But she is STUPID!

This woman, decided it was better to abuse children, tie them up in papoose boards, do unnecessary dental procedures with little to no anesthesia and steal every penny should could from each taxpayer in America, instead of caring for her family and being the medical professional her parents sacrificed for her to become.

She chose to commit Medicaid fraud for her employer - Chad Brandon Hoecker, DDS. She chose abusing children, strapping them to papoose boards, over-treating and much worse to help her boss fuel his jet and live “high on the hog” as they say.

She also chose Federal prison. Robin Lockwood is going to be spending 18 very long months in Federal prison, plus pay $375,000 in restitution. Why? Because she bought into the corporate dental scam that has infected damn near every state. 

This was a plea deal, so imagine the goods they have on this woman!

Even the most hardened criminals have trouble stomaching those who abuse children. Pretty as she is, and ripe for the picking, I’m betting her cellmates are not going to like what she’s done to low income children. Many of whom may belong to her new cellmates. 

November 15, 2012

OKLAHOMA CITY—Robin R. Lockwood, 44, a dentist from Oklahoma City, was sentenced last week to serve 18 months in federal prison after pleading guilty to committing health care fraud, announced Sanford C. Coats, United States Attorney for the Western District of Oklahoma. In addition, Lockwood was ordered to pay $375,672.27 in restitution to Medicaid.

Lockwood is a dentist licensed to practice in the state of Oklahoma and was employed under contract by Ocean Dental at offices located at 1610 Southwest 74th Avenue in  Oklahoma City. Ocean Dental’s dentists provided dental care to Medicaid-eligible children. The Medicaid Program is a cooperative program that provides federal and state funds to pay for health care benefits for individuals with insufficient incomes to meet the costs of necessary medical expenses. In Oklahoma, Medicaid is administered as “SoonerCare” by the Oklahoma Health Care Authority (OHCA), a state governmental agency. Ocean Dental submitted claims to the OHCA for reimbursement of dentists’ services based on patient treatment notes created by the dentists. Ocean Dental paid Lockwood a percentage of the funds that OHCA reimbursed to Ocean Dental for services she personally rendered.

The information alleged that from July 1, 2007 through December 31, 2010, Lockwood engaged in a scheme to defraud Medicaid by submitting claims for dental services that she did not provide. Specifically, Lockwood recorded in the patient’s treatment notes that she had placed dental restorations on certain teeth when, in fact, she had not treated the teeth at all. On other teeth, Lockwood recorded that she had placed dental restorations on more surfaces of the tooth than she had, in fact, restored or recorded that she had placed a dental restoration on the tooth when, in fact, she had placed on the tooth a type of treatment that is non-reimbursable by Medicaid. Lockwood used the proceeds of the fraud for her own personal benefit.

Lockwood pled guilty on July 11, 2012.

This case was the result of an investigation conducted by the Federal Bureau of Investigation, the Department of Health and Human Services-Office of Inspector General, and the State of Oklahoma Attorney General’s Office, Medicaid Fraud Control Unit. The case was prosecuted by Assistant U.S. Attorney Amanda Maxfield Green.

Related:

Robin Lockwood, DDS

Derrick Broadaway, DDS–Millions in Medicaid Fraud

Chesapeake, Va. (WTKR) – After NewsChannel revealed former employees of Chesapeake dentist Derrick Broadaway are upset over bounced paychecks, investigator Jessica Larche uncovered millions in medical malpractice lawsuits against him.

One former patient claimed he “left a drill inside a tooth while performing a root canal” and did not tell the patient. Another said she has been “disfigured” and is “permanently injured” by dental implants Broadaway installed.

Meanwhile, Broadaway is on the heels of a $20,000 fine from the Virginia Board of Dentistry and a 60 day suspension of his license that ended in August. The sanctions, according to public records are for Broadaway’s questionable dental work. In August, his paychecks to employees kept bouncing. NewsChannel 3 confronted him about it Monday.

Chesapeake dentist blasted for bounced paychecks

“Why doesn’t he feel the need to pay me?” asked former employee Andrea Ross, who said Broadaway owes her $3,800.

According to the Board of dentistry’s records, Broadaway has had problems dating back to 1998. Over the years, the board found that Broadaway performed “incomplete extractions of teeth.” Records say he “drilled too deep into a tooth” causing the patient to have a root canal. Documents also say Broadaway billed a patient’s dental insurance for work he never did.

However, the board is allowing him to stay in business under a stayed indefinite suspension, as long as he meets certain guidelines.

Broadaway has met several of the stipulations that could lead the board to revoke his license, but they have not.

All of Broadaway’s malpractice lawsuits go to trial next year.

Broadaway Board of Dentistry Document

Are disciplinary actions against DMSOs on the rise?

Are disciplinary actions against DMSOs on the rise?

By Michael W. Davis, DDS , DrBicuspid.com contributing writer

November 13, 2012 -- More than 30% of disciplinary actions discharged by the New Mexico Board of Dental Health between June 27, 2011, and August 7, 2012 involved dental professionals affiliated with dental management service organizations (DMSOs).

According to the state regulatory board's website, 24 different entities were sanctioned during this time period. One violator, which accumulated five different sanctions, was recorded as a single violator. No other violator generated more than a single dental board sanction.

Violators were divided into four categories:

• Nonprofit (public health clinic, Veterans Affairs clinics, native tribal clinic, teaching facility, etc.)
• Solo private practice
• Small group practice (three doctors or fewer)
• Interstate DMSO

Each violating entity was assigned a lettered designation, although the identity is public record information. DMSOs were likewise assigned a lettered designation. Tracking down the employment association at the time of violation was sometimes available within the dental board's formal complaint. However, often an Internet search was required.

Violations ran the gamut from alcohol and chemical abuse to advertising violations and breaches in standard of care, and everything in between. No attempt was made to correlate the type of violation to the employment association of the offender.

Interestingly, there were no disciplinary actions discharged against nonprofit entities or their dentists, during this time frame. The largest group generating disciplinary actions was assigned to solo private practicing dentists (54.2%). However, according to the ADA's 2010 Survey of Dental Practice-Employment of Dental Practice Personnel, solo practitioners comprised 69.6% of all dentists employed in private practice for 2009.

The statistic of concern is the 33.3% of disciplinary actions involving employment association with interstate DMSOs. According to the 2008 Health Policy Resources Center, only 3% of dentists are associated with very large group practices (20 or more dentists; ADA News, April 9, 2012). This represents a statistical order of magnitude of one, or approximately 10 times.

This finding was confirmed by Lili Reitz, executive director of the Ohio State Dental Board, who reported for a "Frontline"interview that in 2011 25% of complaints filed with the dental board (140 complaints in all) were against dentists at corporate chains.

The data in this report may be of interest to state regulatory dental boards, state and federal regulators of dental Medicaid, overseers of fraud and abuse for private insurance carriers, and state and federal prosecutors. But the findings of this report should also prompt concern for the general public and dental consumers in particular.