Contrasting Dental Medicaid Enforcement: Florida versus Texas

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.

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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

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. 

I found this ad found on Craig’s List; posted January 6, 2016.  My first thought is Reachout Healthcare America until I read the "Non For Profit". 

The Smile Center–San Antonio Settlement Reached

December 10, 2015 By Patrick Danner

The last of the one-time Smile Center dentists accused in lawsuits of performing “unnecessary” or “excessive” treatments on minors that were then billed to Medicaid have settled the cases. Four dentists this week reached confidential settlements with some 100 patients who had filed medical malpractice claims in Bexar County. “Since 2011, we have filed several lawsuits on behalf of more than 250 children against the Smile Center or former dentists of the Smile Center,” San Antonio attorney Thomas Crosley said. “With this court approval of these last five lawsuits against former Smile Center dentists, we now bring to a close these tragic cases.” He added the cases were settled “to the mutual satisfaction of all parties concerned.” The Smile Center gained notoriety four years ago when WOAI-TV aired a series of stories on the chain of six dental offices. Some of the stories included parents who complained about dental procedures that allegedly left their children in pain.

Read the rest of the story here 

Read one of the Lawsuits here.

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Astroturfing by the Dental Support Organization Industry

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

“Astroturfing is the practice of masking the sponsors of a message or organization (e.g., political, advertising, religious or public relations) to make it appear as though it originates from and is supported by grassroots participant(s).”^1. -Wikipedia 
Introduction
It is imperative the so-called “dental support organization industry” (DSO industry) employ astroturfing techniques, as their entire business model is formulated on gross misrepresentations.^2-12 In order to obfuscate the rule of law relating to the unlicensed and unlawful practice of dentistry, these corporate entities must misrepresent themselves as only providing limited nonclinical support services for their chains of dental practices. This is patently false, and has been challenged by numbers of legal rulings and studies. In reality, DSOs either represent the true beneficial owners and clinical management for vast numbers of dental clinics, or they provide management for the private equity beneficial ownership. Doctors only serve in a limited role as facade nominee owners. The word “support” is intentionally designed to deceive. The lies go on.

Forms of DSO Astroturfing
There are four basic designs of astroturfing utilized by the DSO industry. At the most basic level is DSOs placing bogus positive patient reviews with online rating services or their website. The next astroturfing technique involves individual dentists who openly advocate for the DSO industry. The third method employs hired public relations and public advocacy specialists. The final level, and often most challenging to prove, is hired lobbyists who direct public policy through directly influencing government agencies and government elected officials. 

Bogus online Patient Reviews
Although this form of deceptive advertising is unlawful, violators are rarely discovered or sanctioned.¹³ The DSO utilizes existing employees or a retained service to generate positive patient reviews for dental services with online review sites, and/or their own website. Often the specific language utilized in the review is a tip-off, that the bogus reviewer is truly not a clinical dental patient, but working in the dental field. Certain DSOs have such a disturbingly high degree of employee turnover and negative staff retention rates, they now resort to posting bogus positive reviews of current or former employees on employment websites such as Glassdoor.com and Indeed.com. One will generally see multiple low rated “one-star” reviews, intermixed with over-the-top glowing “five-star” reviews. Obviously, corporate astroturfing is in play. 

Individual Dentists Espousing the DSO Agenda
On occasion, state legislatures will take up the cause of regulating and restricting the DSO industry to benefit the public interest. Bills will be presented to establish enhanced transparency in true beneficial clinic ownership. Clarification will be added to protect the doctor/patient relationship (contract), and patient rights such as the informed consent process, and always holding the patient’s interests paramount in clinical decisions. Truth in advertising and lending will be advocated. Mechanisms for bait-and-switch schemes will be discouraged.

Cleaning up DSO's is Essential to Increasing Access to Dental Care for Low-Income Children

“…For most Americans, going to the dentist isn't at the top of the list of things we want to do, but we go anyway, because dental care is necessary for our health and well-being. However, many of the poorest children in America don't have the luxury of dreading a trip to the dentist.

According to the Centers for Medicare and Medicaid Services (CMS), 43 million children in the U.S., including half of all low-income children, receive health coverage through Medicaid. This coverage includes dental services as part of the Early and Periodic Screening, Diagnostic, and Treatment benefit.”

“…While the DSO model has been successful, there remain areas of concern. A 2012 joint investigation by PBS's Frontline and the Center for Public Integrity (CPI) uncovered the questionable practices of some DSO's that raise red flags with state Medicaid officials.

The piece did, however, hold up one particular DSO as an ideal model that is "showing hope." Sarrell Dental, a nonprofit dental practice with 17 locations throughout Alabama, received a glowing review. However, some unsettling changes have occurred at Sarrell Dental since that Frontline broadcast.

In 2013, Sarrell Dental was acquired by Massachusetts-based DentaQuest. DentaQuest's President of Care delivery is Todd Cruse, who previously ran a company called FORBA Holdings LLC, a dental management company that provides business management and administrative services to 69 clinics nationwide known as "Small Smiles Centers."

Read the entire piece at Huffington Post

 

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Arizona’s Dental Dangers: Reports by ABC15 News Phoenix

“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
 
Arizona’s Dental Dangers: Reports by ABC15 News Phoenix
By Michael Davis, DDS

This year investigative reporters, Dave Biscobing and Shawn Martin presented a series of very insightful reports for ABC15 News out of Phoenix, AZ. These investigative journalists openly challenged policies of the Arizona State Board of Dental Examiners (ASBDE). They took their investigations directly to the state legislature and governor. In our modern era of diminished resources for investigative journalism in the media, these local media market reporters exemplify the highest standards for service to their profession and the public interest.
The entire series of “Dental Dangers” stories can be accessed via this link:
http://www.abc15.com/dentaldangers
Mrs. Biscobing and Martin have detailed problems as diverse as the protective “old boy’s club” for deviant dentists, within the state dental regulatory board. They exposed the dental board’s failure to disclose public record material on dentist violators. Their report on unlicensed and unregulated dental laboratories was also disturbingly informative. Patients and doctors may have no idea from what nation, and under what safeguards, their dental prosthetics may be fabricated. In fact, ABC15 uncovered that Arizona failed to provide criminal background checks for newly licensed dentists.
This reporting goes far beyond the interests of Arizona. It has significant merit nationally. Dental dangers to the public welfare can be found in most states. Our dental public regulatory agencies, which are supposed to serve the public interest, are often primarily serving a variety of other interests. This investigative reporting did in fact stimulate the process for positive changes to the operation of the ASBDE, although much more is required.
The courageous reporting of Mrs. Biscobing and Martin exposed elements within the state legislature and governor’s office, which discounted the public interest. That unfortunate fact came forth loud and clear. We witness a form of journalistic integrity, which is too infrequently seen on the national media stage, let alone a local media outlet.
We all owe a tip of the hat to Dave Biscobing, Shawn Martin, and the entire crew at ABC15 News in Phoenix. I encourage Dentist the Menace readers to click on the above link, and enjoy an inspired series of reports on dental investigative journalism.

Dental Assistant of Howard S. Schneider, LaTosha Bevel-Hillsman Arrested

Florida’s attorney general’s Medicaid Fraud Control Unit and the Jacksonville Sheriff’s Office have issued another warrant in the medicaid / abuse criminal case related to Jacksonville dentist Howard S. Schneider. Schneider was arrested yesterday. Read more about that here. They arrested and booked his assistant LaTosha Bevel-Hillsman on charges of practicing dentistry without a license, defrauding the Florida Medicaid program and child abuse. Hillsman was booked into the Duval County jail just after 5 p.m. Tuesday, November 17, 2015. What has been identified as her facebook page has very risque (and unhygienic) photos. Her license cannot be found on the State’s license verification as her name doesn’t match.

According to the JSO Inmate Information Search, Bevel-Hillsman is being held on a $30,009 bond. She is not yet scheduled for a court date. It is unknown if the practice will be providing her with a criminal defense lawyer.

Here is her booking report:

Warrant Issued for LaTosha Bevel-Hillsman, Dental Assistant of Dr. Howard S Schneider

JACKSONVILLE, Fla. —

The Jacksonville Sheriff’s Office has issued a warrant for one of Dr. Howard Schneider’s former dental assistants.

LaTosha Bevel-Hillsman is accused of practicing dentistry without a license, defrauding the Florida Medicaid program and child abuse.

Bevel-Hillsman is facing a child abuse charge and the state says she practiced dentistry without a license at Schneider's former office. The state also said she defrauded the Medicaid program while she worked at the office.

The embattled pediatric dentist Schneider was arrested Monday for Medicaid fraud by submitting claims for dental procedures he performed without parental consent. 

- See more at: http://www.actionnewsjax.com/news/news/local/schneiders-former-dental-assistant-accused-practic/npPjK/#sthash.Hwi9N95M.dpuf

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Duval County Pediatric Dentist Arrested for Medicaid Fraud

TALLAHASSEE, Fla.—Attorney General Pam Bondi’s Medicaid Fraud Control Unit and the Jacksonville Sheriff’s Office today announced the arrest of former pediatric dentist, Dr. Howard S. Schneider, 78, for defrauding the Florida Medicaid program.

The MFCU’s investigation revealed that Schneider, the sole owner of Howard S. Schneider, D.D.S. P.A., defrauded Florida Medicaid by submitting claims for dental procedures he performed without parental consent. The procedures allegedly fell below the standard of care and produced unauthorized claims submitted to the Medicaid program for reimbursement.

In conjunction with Schneider’s arrest, the MFCU and the Jacksonville Sheriff’s Office have an active arrest warrant for one of Schneider’s former dental assistants, LaTosha Bevel-Hillsman, for practicing dentistry without a license, defrauding the Florida Medicaid program and child abuse. Hillsman, 39, allegedly performed an extraction on a pediatric patient; a procedure that Hillsman is not authorized to perform. The investigation revealed that this procedure caused harm to the child and produced unauthorized claims submitted to the Medicaid program for reimbursement.

Schneider faces 11 counts of Medicaid provider fraud of $10,000 or less, a third degree felony. If convicted, Schneider faces up to 55 years in prison and more than $825,000 in fines and restitution.

The State Attorney’s Office for the Fourth Judicial Circuit will prosecute this case. Hillsman faces one count of practicing dentistry without a license, one count of Medicaid provider fraud of $10,000 or less, and one count of child abuse, all third degree felonies. If convicted, Hillsman faces up to 15 years in prison and more than $15,000 in fines and restitution.

 

 

Mugshot of LaTosha Bevel-Hillsman from a previous arrest for writing bad checks

 

 

 

 

Mugshot of Howard S. Schneider Nov 2015 arrest

Dr. Howard S. Schneider Arrested for 11 Counts Medicaid Fraud

Nov. 16, 2015

Dr. Howard S. Schneider of Jacksonville, Florida has been arrested this afternoon.

Pediatric dentist accused by a group of parents of hurting children, was arrested Monday.
According to the Jacksonville Sheriff's Office Inmate Information Search, Schneider was arrested on 11 counts of unauthorized Medicaid claims.
Schneider turned himself into to JSO around 4 p.m. Monday, according to the office of Attorney General Pam Bondi.

His total bond is listed at $110,033, according to JSO's Inmate Information Search. Schneider does not have a court date scheduled at this time.

- See more at: http://www.actionnewsjax.com/news/news/local/dr-howard-s-schneider-arrested-medicaid-fraud-char/npPGs/#sthash.5rQ156kR.dpuf

On November 13, 2015, Schneider filed for an emergency distribution of marital funds in anticipation of his arrest.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Charges:

Howard Schneider Charges.pdf by Dentist The Menace

Business Service Agreements: A Tool for Deception within the Corporate Dental Support Industry

Business Service Agreements: A Tool for Deception within the Corporate Dental Support Industry
By Michael W. Davis, DDS

Business Service Agreements (BSAs), also called Business Service Contracts or Management Service Agreements (MSAs), are a tool created by the dental support industry (a/k/a dental support organizations) to mask their true business operational models. These contracts are generated between the unlicensed ownership (corporate beneficial owner) and the sham figurehead owner (nominee owner dentist(s)).
These agreements contain a variety of misrepresentations specifically designed to circumvent the rule of law. These BSAs serve as a lynchpin supporting the unlawful house of cards, of largely unlicensed and unregulated healthcare entities. Please note: the term “dental support organization” is also an intentional misrepresentation, to mask beneficial ownership.
Case precedent was established in federal Fifth Circuit ruling 07-30430)¹., in which the court determined a Dental Support (Service) Organization (DSO), Orthodontic Centers of America (beneficial owner of dental clinics), was engaged in the unlicensed and unlawful practice of dentistry. The court also ruled the business agreements with so-called “owner” dentists were unenforceable and non-severable (denying one part could be enforced while another could not), because elements in these contracts were unlawful, the entire contract was rendered unenforceable.
Nationally, every DSO has created different BSAs. And, within different states, different DSOs will produce different agreements. However, there exist common features worth examination in the vast majority of these contracts.

Dental Clinic Ownership
The DSO generally will deny ownership of the dental practice. Yet, the DSO usually owns the facility or is the landlord on the lease agreement. The DSO owns the dental equipment, supplies, and any possible leasehold improvements.
The DSO enjoys contract rights to control what dentists or entity may be artificially designated as “owners”. An owner dentist(s) may not freely sell “their” asset of a dental practice, and thus are merely façade nominee owners. The DSO controls the bank accounts of the “owners’” clinic bank accounts, which are swept out several times per week, or daily. These are central points in the lawsuit against Dental One Partners, DentalWorks, et al, by 14 duly licensed North Carolina dentists enjoined by the North Carolina Board of Dental Examiners, in 2013.^2.

Ben Carson Wants Jail Time For Health Care Fraud -- Except For Dentist Friend

"We became friends about a decade ago because we discovered that we were so much alike and shared the same values and principles that govern our lives."

 

"…Pittsburgh dentist Alfonso A. Costa pleaded guilty to a felony count of health care fraud after an FBI probe into his oral surgery practice found he had charged for procedures he never performed, according to court records."

"At Costa's 2008 sentencing hearing, Carson described the dentist as "one my closest, if not my very closest friend...”

"We became friends about a decade ago because we discovered that we were so much alike and shared the same values and principles that govern our lives," Carson told the judge, adding that their families vacationed together and that they were involved in "joint projects."

"Next to my wife of 32 years, there is no one on this planet that I trust more than Al Costa," Carson said."

Read The Entire Story Here

AOL Accuses Dr. Richard Malouf of Gaming The Texas Judicial System

Everyone remember the Texas dentist, Dr. Richard Malouf, who sued nearly everyone in sight that had the gall to report or offer comment on the “House That Medicaid Built”?  The place got so big he had to purchase the house next door and he installed his own personal waterpark; dubbed here as 6 Flags Over Malouf.

The story won investigative reporter Byron Harris and WFAA a 2013 Edward R. Murror Award:

WFAA won a 2013 Edward R. Murrow Award for its investigation of Texas Medicaid fraud, including the allegation that Malouf used taxpayer money to build his personal waterpark. Texas law generally prohibits the seizure of one's home, even in the event of wrongdoing, but there is a loophole.
"If that home is purchased with stolen money, or that home is purchased based on money that has been earned by falsehood or deceit, then that home is not protected at all," attorney Jim Moriarity told WFAA.

Malouf sued a long list of folks, including actor Owen Wilson’s mom, who lived next door, for trespassing, invasion of privacy, and defamation which included America Online (AOL) for publishing the story.
Apparently Malouf , and his wife LeAnne find themselves in the 11th hour of trial without legal representation in his defamation suit which continues with AOL, Graham Wood and Candace Evans. 
AOL is basically calling “bullshit”, saying Richard and Leanne Malouf have a pool of a dozen or more attorney’s across Texas and should not need 4 months to hire another one.
I agree!
This is a must read! Enjoy!

PS. That is not the only system Mr. and Mrs. Richard Malouf gamed.  Just saying.

Malouf v AOL_Wood - Response to Motion for Continuance

Grassley Welcomes Exclusion of Two Pediatric Dentists from Federal Health Care Programs

Nov 06, 2015

Earlier this year, Sen. Chuck Grassley of Iowa asked key government agencies what they’re doing to prevent and punish Medicaid dental fraud, including billing for unnecessary and painful treatments for children, in light of inspector general audits and related media reports documenting worrisome practices.  This week, the Department of Health and Human Services Office of Inspector General notified Grassley that it has excluded two pediatric dentists from federal health programs.  One dentist is in Florida.  The other dentist is in Colorado.  Grassley made the following comment on the exclusions.

“The taxpayers pay for quality health care services.  If doctors and dentists are bilking the taxpayers and mistreating patients, they need to be shut out of Medicare and Medicaid, period.    The inspector general is right to use this tool whenever it’s appropriate.”

The Department of Health and Human Services Office of Inspector General provided the following details of the two newly excluded dentists:

On September 30, 2015, OIG excluded Howard Sheldon Schneider, DDS, from participation in all Federal health care programs because his license to practice in the State of Florida was revoked, suspended, or otherwise lost for reasons bearing on his professional competence, professional performance, or financial integrity.  OIG conducted an investigation of Dr. Schneider which revealed that the State of Florida Board of Dentistry issued a Final Order for a Disciplinary Voluntary Relinquishment of his dental license after the Florida Department of Health opened an investigation into allegations of Dr. Schneider’s abuse of his pediatric dental patients.  Dr. Schneider cannot apply for reinstatement until his dental license is reissued by the State of Florida.  

On August 12, 2015, Dr. Robert E. Hackley, Jr., DDS, agreed to be excluded from participation in all Federal health care programs for a period of three years. OIG conducted an investigation of Dr. Hackley for dental care he provided to patients at Small Smiles Dentistry for Children in Colorado Springs, Colorado. OIG's investigation revealed that Dr. Hackley furnished dental services to patients of a quality which failed to meet professionally recognized standards of care, including: performing medically unnecessary dental procedures, failing to treat existing dental conditions, and performing dental procedures that were below professionally recognized standards of care.

Grassley’s letters to the Justice Department and the Department of Health and Human Services Office of Inspector General from June are available here and here.

In 2013, following a year-long investigation, Grassley and then-Finance Committee Chairman Max Baucus of Montana issued a report and recommendations urging the administration to ban dental clinics from participating in the Medicaid program if the dental clinics circumvent state laws designed to ensure only licensed dentists own dental practices to prevent substandard care.  In 2014, the inspector general moved to disqualify a firm from Medicaid. 

Grassroots Efforts of Texas Dentists Challenge Activities of the American Dental Association

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.
 
 


A newly formed group of grassroots Texas dentists has challenged activities of the American Dental Association (ADA), with the Association of Dental Support Organizations (ADSO). In an open letter to ADA House of Delegates members, Concerned Dentists of Texas, Inc. has expressed their concerns about ADA leading officials meeting with ADSO representatives. The ADSO has gone so far as to highlight these meetings in their public online marketing. Concerned Dentists of Texas contend these clandestine meetings were unsanctioned and violate established ADA rules and protocols.  They also express that the ADA’s appearance of collusion is highly evident and problematic.
Membership of the ADSO raised more than a few eyebrows. Of note in the ADSO membership is Aspen Dental Management, Inc. Aspen Dental in recent months has formally signed individual and separate legal settlement agreements, with the state attorney generals of Massachusetts, New York, and Indiana. These settlements allege specific violations ranging from unlicensed practice of dentistry, violations to consumer protection laws, false and misleading advertising, violations to full disclosures in consumer borrowing, bait-and-switch business schemes, etc.
Another ADSO member, Heartland Dental Care, Inc., in 2008 settled with the federal government for alleged Medicaid fraud for falsification and misappropriation of doctors’ Drug Enforcement Agency (DEA) numbers. This DSO also settled with the State of North Carolina in 2011, for alleged unlawful attempt to purchase a dental practice.
To follow is the open letter of Concerned Dentists of Texas, Inc. to ADA House of Delegates membership:

Concerned Dentists of Texas, Inc..

October 27, 2015
Dear ADA Delegates and Alternate Delegates,
Approximately 80% of ADA members practice as independent dentists in small local offices. We are a concerned part of that group. There is an effort by our ADA to support a corporate form of dentistry that we believe is counter to the best interests of our members and our patients. We must ask ourselves, will the ADA support its members or will it support organizations controlled and owned by hedge funds, private equity firms, and public pension plans? The increased proliferation of this type practice model poses serious risks to our 175 year established philosophy of patient care and the doctor-patient relationship.
By not taking a stand to inform and represent the majority of its current members the ADA actively supports the DSO philosophy. This is a membership gamble that the ADA cannot afford to take.
See attachments (pages numbered 1-4) documenting these major changes in the focus of ADA activities:
Page 1 &2. Breaking News Notable Joint Meeting: ADSO & ADA … Several workforce group meetings were held with ADSO (Association of Dental Support Organizations) and ADA representatives seeking a memorandum of understanding.
Page 2 & 3. The last 2 pages of a presentation asking for “collaboration”, “harmony”, and “input” between the ADA and DSOs given at the 2015 ADSO Summit that demonstrates the position ADA is taking regarding the DSOs mode of practice.
Page 1 & 4. The ADSO website screen shots showing proof of this presentation given by the ADA at the 2015 ADSO Summit and then subsequently removed from the website while the other presentations remained.
These changes are affecting the future of the private practice of dentistry and are occurring without bringing it before the House of Delegates for your vote or discussion.

• What does our House of Delegates want in regards to support of the private practice of dentistry?
• What do 80% of our practicing members want in support from their Association? Will the Tripartite support its members?
• What are our ADA candidates’ opinions and beliefs on the future models of dentistry?
• Will they be willing to support the majority of our ADA members and their autonomy?

Over five years of steadily decreasing membership will not be corrected by failing to inform and represent our current practicing members. Rather, the reversal of the trend will be affected by building relevancy and reason for belonging based on representation, transparency, accountability and adherence to long-established principles of professionalism, patient care, and enhancement of the traditional doctor-patient relationships.
Thank you for allowing us to express our concerns and personal opinions. Opinions are our own, but facts are facts. Please look forward to a blog, Concerned Dentists of Texas, which will further address these issues. The blog will serve as an informational source and reference site in order that members may stay informed. Please feel free to contact us at concerneddentistsoftexas@gmail.com.
Sincerely,
Concerned Dentists of Texas, Inc.
Attachments

Link to the entire letter including attachments

Agency Capture: Association of Dental Support Organizations (ADSO) main goal to get corporate dentists appointed to state dental boards

The Association of Dental Support Organizations, (ADSO) governmental affairs committee, chaired by non-dentist Heartland VP and 6 other non-dentist corporate guys decided that their number one priority is getting corporate/chain friendly dentists appointed to state dental boards.  

Read the article and tell me this isn't flat out corruption.  They are asking for volunteers in states where they have lobbyists.  They want to influence regulatory decisions.  And you've got to love the whole "often political preferences will apply to the candidate selection process".  

Government of the corporations, by the corporations and for the top dogs at the corporations.

---

October 2015 Association of Dental Support Organizations Quarterly Newsletter:

ADVOCACY UPDATE

The Importance of Getting DSO-supported Dentists on Dental Boards

The ADSO Government Affairs Committee was formed this summer.  The committee, chaired by John Pantazis, Heartland’s Vice President, General Counsel and Secretary with representatives from 6 other ADSO member companies, meets monthly and is charged with providing the ADSO with strategic guidance on state and federal legislative and regulatory issues.  Among the committee’s top priorities is promoting DSO-supported dentists for appointments to state dental boards. 

Board appointments are a top priority for the ADSO government affairs team because many of the state issues the DSO industry faces grow out of dental board actions.  We strongly believe that having one or more DSO-supported dentists or strong public sector members on the board involved in discussions and rule-making will go a long way in mitigating state legislative and regulatory issues we have faced in recent years. 

While we are happy to promote candidates in any state, we recognize that we are much more likely to have success in one of the 13 states where we have a contract lobbyist on the ground to assist in shepherding the candidate(s) through the process. So make a committed effort when openings are coming up to reach out for potential candidates.  We include in our Government Affairs Weekly Round-up, which is distributed every Friday, the list of states with lobbyists where we need our members help to promote candidates (if you are not on the distribution list for the Round-up and would like to be, please contact Wendy Chew).  The lobbyists are able meet with the governors’ appointment staff and follow up throughout the decision-making process.  They can also assist the dentist in getting letters of support from state legislators or other recognized leaders in the state to support their nominations.

With few exceptions, Board appointments are made by the governor of the state.  Dental boards generally consist of dentists, hygienists, public sector (non-dental related) members and sometimes academics.  All states have rules around the appointments and can include: how long the term of service lasts; requirements on how long the candidate has been a resident of the state; how long the dentist/hygienist have practiced in the state; what area of the state the appointee needs to be from; as well as many other possible requirements.  Since the appointments are made by the governor of the state, often political preference will also apply to the candidate’s selection process.  

In the past year, the ADSO has helped get DSO-supported dentists on the dental boards in Colorado, Iowa and Florida and are actively working on appointments in every other state where we have lobbyists. In addition to supported dentists, the ADSO has also promoted public sector members for state dental board appointment.

If you haven’t already done so, please participate in the ADSO database project.  Your dentists’ information is confidential and will not be shared in any way, but having the information in the database allows us to identify potential candidates in states where there are openings on the dental board. Participation in the database also helps us when we have legislative issues in a state.  We are able to reach out through a contact at your company to activate supported dentists on issues of concern to our industry.

Dental Hygienists Struggle In Corporate Dentistry

Deborah Stewart is a dental hygienist, author, mentor, office manager, coach, consultant, and popular speaker for dental hygiene schools. She holds degrees in dental hygiene, organizational behavior and coaching as well as an MBA. She is author of the 2014 book “Perspectives on Dentistry: An Insider’s Guide to the Professional Business of Dental Hygiene (available here).

Deborah passionately promotes collaboration, ethical standards, and high achievement in both hygienists and the dental industry she loves. A proud member of The Daughters of the Republic of Texas, she is also an historian and a civic and community advocate. 

What Do Dental Hygienists Do to be Employed?
by Deborah Stewart

North Texas, the area where I live, was once roamed by Frank and Jesse James, and home to one of the top ten feuds in American history. The Lee-Peacock Feud was a continuation of the Civil War. North Texas was very prosperous with cotton agricultural growth after the Civil War, so a feud developed whether North Texas would continue to have slaves. Fighting a Civil War apparently was not enough for the additional 200 lives that were killed in the feud. 

To say North Texans are a bit hard headed is an understatement.  

One hundred fifty years later, North Texas dental hygienists are fighting another war. Striving to maintain respect for their profession, they fight the battles of what preventive dental hygiene services are to be performed and how they are to work in dental offices. Faced with very few options, what allies do dental hygienists develop in this fight to stay employed? 

What is obvious is disrespect and disregard for the dental hygiene profession by Texas dentists. This behavior by dentists provided a growth opportunity for corporate dentistry business models.  

You don’t have to have multiple offices and a logo to become corporate dentistry, you just have to have a mindset of disrespect. Texas dentists began disrespecting the profession of dental hygiene in the 1980s when the Texas Dental Association (TDA) decided that the Texas Dental Hygiene Association (TDHA) needed to have their own convention.

Since then, the industry has progressed to a corporate way of thinking that now thrives in North Texas. The “dental business” has a checklist for employment of dental hygienists.

Those items include: 

       1)  Businesses will set minimum production dollars per day 

       2)  “CREATE URGENCY” to pressure patients/parents to consent to procedures immediately

        3) Identify 3 patients that need SRP each day 

        4) Use intraoral camera to identify 3 patients per day that need dentistry with $1200-1900 per day. 

        5) All patients seven years and up need an orthodontic appointment    

        6) All patients 14-20 years of age need a wisdom tooth evaluation 

        7) All patients requiring Scaling and Root Planing (SRP) need to be referred to in-house Periodontist 

        8) Call 5 people per day to come into the clinic for treatment

        9) Clean the bathroom 

       10) No employment benefits with longevity  

       11) Hiring through temporary employment agencies; having no intention of providing full-time employment 

       12) Abusive employment policies.

Does anyone think this list of job duties is appropriate?  

DSO Business Model Includes Violating State Labor Laws

 
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.





David Sohn is the principal attorney at SOHN LEGAL GROUP, P.C., which prosecutes and defends employment and business disputes on behalf of individuals, small businesses, and non-profit organizations.  Prior to starting his own law firm, David worked at several prominent national law firms in San Francisco.  He received his bachelor’s degree in Economics from Stanford University and his law degree from Harvard Law School.  Due to the successful results he has achieved for his clients, David has been recognized as a Northern California Super Lawyer by Super Lawyers Magazine. David can be reached at 415-421-1300 and david@sohnlegal.com.
 
INTRODUCTION
David Sohn is an attorney in San Francisco specializing in employment litigation matters. Last year, he represented a dentist in his wage and hour lawsuit against Western Dental Services, Inc. (“Western Dental”) for misclassifying him as an exempt employee and not paying him overtime wages and providing proper meal and rest breaks, among other things. Mr. Sohn tried this case in San Francisco Superior Court against an army of big law firm lawyers hired by Western Dental – and prevailed. As a result of his trial victory, the overwhelming majority of dentists in California are now misclassified. They should be receiving overtime wages, proper meal and rest breaks, and all of the benefits and protections of California’s employment laws.
The case is entitled Nanda v. Western Dental Services, Inc . (Case No. CGC-13-529601).

Dr. Davis: Mr. Sohn, I sincerely thank you for taking the time and effort to address matters of this case. I understand much of your legal work involves labor workplace rights. The public may not appreciate how even a licensed dentist may have their rights violated in the workplace. Could you give our readers an overview of the merits of this case and how your client was damaged? 

Mr. Sohn: Thank you, Michael, for giving me an opportunity to discuss with you and your readers my trial victory against Western Dental. This is a very important, game-changing case that all dentists and to-be-dentists need to know about so that they understand what their workplace rights are.

When I decided to take on this case back in 2013, I didn’t know anything about the dental industry. I took it on because I saw a very interesting legal question. That question was: are dentists employed by Western Dental compensated in the form of a “salary?” Western Dental compensates its dentists by a fixed daily rate and/or a percentage of their production. They are not guaranteed in advance a minimum weekly or monthly amount of compensation.

This legal question is important because in order for dentists and other licensed professionals to be exempt from all of the benefits and protections of California’s employment laws – such as overtime wages and proper meal and rest breaks – they must be paid in the form of a “salary.” If they are not, they must be provided these benefits and protections.

California law does not provide a definition for the term “salary.” Instead, California courts look to federal regulations for the definition of “salary.” The pertinent federal regulation, 29 C.F.R. § 541.602(a), states that an employee is paid on a “salary basis” if he or she “regularly receives each pay period on a weekly, or less frequent basis, a predetermined amount constituting all or part of the employee's compensation, which amount is not subject to reduction because of variations in the quality or quantity of the work performed.” This same federal regulation also explains that if an employee is ready, willing, and able to work, but he or she does not work due some reason occasioned by the employer, he or she is not being paid on a “salary basis.”

At the conclusion of trial, the judge held that the dentist I represented was not paid in the form of a “salary.” The dentist never received on a weekly, or less frequent basis, a predetermined amount of compensation which was not subject to reduction based upon variation in the quality of quantity of work performed. He was only paid for the days that he worked and on occasion received a percentage of the production he generated. On numerous occasions, even though he wanted to work, if he was not called into work, he was not paid. Given these circumstances, he was entitled to overtime wages and proper meal and rest breaks like other non-exempt staff employed by Western Dental.

As a result of the judgment issued in my case, all dentists – and for that matter any licensed dental healthcare professional (such as orthodontists, periodontists, etc.) – in California paid on any basis other than a salary basis are “non-exempt” employees who are entitled to overtime wages, and proper meal and rest breaks.   

Dr. Davis:  The defendant in this case, Western Dental, is the largest employer of dentists in the state of California. They also operate dental clinics in Nevada and Arizona. They are the largest provider of dental Medicaid services for California. As large of a dental industry operation as is represented by Western Dental, is it reasonable to speculate on the pervasiveness of dentist/employee workplace labor violations (both in Western Dental and the dental service organization (DSO) industry, as a whole)?   

Mr. Sohn: During the course of my case against Western Dental, I discovered that Western Dental’s approach to how it compensates its dentists is not unique. I spoke to a number of dentists and specialists who worked for other practices large and small, including other DSOs and small private practices, and the impression I received was that the overwhelming majority of dentists and specialists in California – and in the country – are paid on a similar non-salary basis. That’s when I realized my case could have significant industry-wide consequences.

CDMO, Inc and CDET, LLC v. Comfort Dental Lawsuit Rages On

150908 Doc 109 CDMO & CDET v Comfort Dental Response to Opp

 

150908 Doc 109-1 CDMO & CDet v Comfort Dental Declarations

Sending A Message to Texas Gov. Greg Abbott

They need 75 more signatures guys, let's make this happen. Texas is the worst state in the nation for dental fraud and lack of action by it's dental board. It's the state where criminal dentists thrive in administrative protection! Remember for every $1 of fraud in Texas, .50 is stolen from taxpayers of the other 49 states.

Another one of those “studies” paid for by Kool Smiles parent company suggests more Medicaid money is needed for dental benefits to serve children in Texas!

I know it’s hard but try to stop laughing and read this ridiculous press release.
(Benevis was formerly NCDR (Kool Smiles), owned by private equity firm FLL Partners.)

Study Finds Only 26.5% Of Texas Children Eligible For Medicaid Dental Coverage Frequently Visit Dentist.

PRNewswire (7/30) carries a release announcing that a new survey by the Benevis Foundation, conducted by Kennesaw State and Emory University researchers, finds that “only 26.5% of Texas parents with children eligible for Medicaid dental coverage consistently bring their children to the dentist as frequently as they should,” with parents citing financial hardships as the primary barrier to more frequent dental visits. Geoffrey Freeman, spokesperson for the Benevis Foundation, said, “This suggests that parents may not be aware of the complete coverage of their benefit, or that there may be secondary costs – such as transportation or unpaid time off work – that keeps these families from visiting the dentist as often as they would like.”

2015 Texas State Dental Board Continues Massive Failure to Protect Citizens

Aired WFAA July 20, 2015

Grassley Seeks Key Agency Updates on Medicaid Pediatric Dental Fraud

These answers should be interesting don’t’ ya think? I can answer. Little to nothing to “prevent” and even less to “punish”.

 

Jul 02, 2015

WASHINGTON – Sen. Chuck Grassley is asking key government agencies what they’re doing to prevent and punish Medicaid dental fraud, including billing for unnecessary treatments for children, in light of inspector general audits and related media reports documenting worrisome practices.

“Some dentists are clearly performing unwanted and unneeded medical procedures on children without the consent of parents and bilking Medicaid for the privilege,” Grassley wrote to Attorney General Loretta Lynch and Department of Health and Human Services Inspector General Daniel Levinson. 

Grassley’s letters cited Health and Human Services Office of Inspector General audits of questionable billing practices for Medicaid pediatric dental services in four states: California, New York, Louisiana and Indiana.  All of these audits identified questionable billing practices that suggest Medicaid dental providers are performing medically unnecessary procedures on children.  Grassley wrote that this conclusion has been echoed by a variety of news sources that have reported on troubling practices performed by dentists treating children in Medicaid, including a Florida-based dentist who allegedly subjected hundreds of children to unneeded tooth extractions, improper dental fixtures, and other troublesome procedures.

Grassley asked Lynch for the number of criminal and civil fraud referrals from the Health and Human Services Office of Inspector General related to Medicaid dentistry chains in the past five years, with a listing of the referrals by state and how each criminal and civil case was resolved; details of the number of ongoing Department of Justice Medicaid dental chain fraud investigations by state; and a description of the Department of Justice’s plan to address the findings by the Health and Human Services Office of Inspector General that indicate health care fraud in the context of dental procedures provided to children in Medicaid. 

Grassley asked Levinson for the steps the inspector general’s office will take, or has already taken, to increase the auditing of dentistry offices that are recipients of federal dollars; the number of criminal and civil fraud referrals from the inspector general’s office to the Department of Justice relating to Medicaid dentistry chain activity in the past five years; details of the Medicaid dentistry audits the office performed by state in the past five years, with a note on whether the audit resulted in criminal or civil referral to the Department of Justice; the number of ongoing Medicaid dental fraud investigations by state; and a description of the progress on following up on billing fraud and unnecessary procedures in Medicaid pediatric dental services. 

In 2013, following a year-long investigation, Grassley and then-Finance Committee Chairman Max Baucus of Montana issued a report and recommendations urging the administration to ban dental clinics from participating in the Medicaid program if the dental clinics circumvent state laws designed to ensure only licensed dentists own dental practices to prevent substandard care.  In 2014, the inspector general moved to disqualify a firm from Medicaid.  

Grassley’s latest letters are available here and

EXCLUSIVE: Dental Service Organizations (DSO’s): Truth Revealed by Financial Insider

June 25, 2015

By: Michael W. Davis, DDS

Dr. Michael W. Davis maintains a private general practice in Santa Fe, NM. He chairs the Santa Fe District Dental Society Peer-Review Committee. Dr. Davis is active in dental care for disadvantaged citizens, and expert legal work. His publications and lectures are on ethical and whistleblower issues within the dental profession, as well as numbers of clinical research papers. He may be contacted at: MWDavisDDS@comcast.net

Dr. Kevin Cain is an Assistant Professor of Management in the James M. Hull College of Business and guest lecturer in practice management in the College of Dental Medicine at Georgia Regents University. He teaches courses on strategy and entrepreneurship and does academic research in the fields of strategic management, organizational theory, and healthcare management. He also serves on a task force with the Georgia Dental Association and teaches continuing education courses focused on the business of dentistry. Additionally, he is a co-founder and board member of several companies serving the dental industry. He earned a PhD in Business Administration at the University of Georgia, an MBA from Wake Forest University and a BA in Economics from the University of North Carolina at Chapel Hill. He can be contacted at: kevin@kevinwcain.com.
 

Introduction from Dr. Michael Davis-

Dr. Kevin Cain has an interesting and established history in study of the dental industry, and particularly dental service organizations (DSOs). He does research and has given lectures on the risks this business model presents against the public welfare and the integrity of the dental profession. Dr. Cain effectively counters the private equity spin of unlicensed corporate managers keeping at arm’s length from clinical decisions, within the doctor/patient relationship. He confronts DSO industry misrepresentations, of which there are many, head on.

Interview

Dr. Davis: Dr. Cain, please relay the personal story of your mother, a practicing nurse, and the degradation of her once honored profession by corporate health care. How did that affect you personally and influence your fields of academic research?
Dr. Cain: My mother has been a nurse within the same healthcare organization (and its predecessor hospitals) for 40 years. Since the late 1980s, she’s seen her role increasingly shift from being a caretaker to being part of a production line. The healthcare group she works for – mind you its a not-for-profit – sets performance benchmarks for pre- and post-operative care that her and her colleagues must meet. Additionally, her organization implemented EPIC Systems as its EMR provider last year and the time it takes to document patient care further decreases the quality of care she can provide patients.
She is no longer a happy nurse, and actually tried to dissuade my sister from majoring in nursing. At the center of her frustration with her company is its inability to treat patients as idiosyncratic. There are aspects of her job that, if not performed adequately, can jeopardize patient lives. However, her company pushes for efficiency and sets limits on the amount of time allocated for intake. When you generalize patients to the extent that her company has, and minimize the time nurses have to gather information about patients, it is inevitable that those nurses will miss something critical.
My mother’s frustrations with her organization have really shaped my perspective of the dental industry. She and many other healthcare professionals I have spoken with are disillusioned by the current state of their industry. The drive for growth and profitability in healthcare has superseded the drive for quality care, and I do not want to see the dental students I have the pleasure of interacting with here face the same disillusionment for their entire careers. It is imperative that the dental community protects the general dentist from becoming marginalized in the same manner as the primary care physician.
My research on the dental industry is driven, primarily, by the desire to help dentists remain clinically autonomous. In order for the dental profession to maintain its clinical autonomy, practitioners need to understand how institutional forces shape industries. In my field, we study institutional isomorphism – that organizations within an institutional environment look the same – because it helps explains how mimetic, coercive, and normative forces influence those organizations. There are currently no coercive (regulatory) forces preventing the DSO model from becoming the de facto dental model in the U.S., and there is very little normative pressure coming from private practice dentists to change that course.
With regards to mimetic forces, you have baby-boomers selling their practices to DSOs because a friend did and got more money than they would have in a private transition, and you have dental students – year after year – going to work for DSOs because they have been told that the high guaranteed salary is the quickest way to pay off student debt. Meanwhile, a few “business savvy” – or opportunistic – dentists are building their own DSOs and acquiring other practices because they see founders of the large DSOs driving twenty-five million dollar classic Ferraris and want in on that kind of wealth. These mimetic forces are shaping the industry, and the confluence of these forces is leading dentistry down a familiar path (i.e. optometry, pharmacy, primary care medicine).
 
Dr. Davis: We continually hear and read the misrepresentations from DSO private equity managers and their hired supporters that they keep at arm’s length from the practice of dentistry. Yet, we know they establish production quotas and bonuses upon employee dentists. Every doctor’s production metric is monitored on a daily basis. Each clinic’s bank account is swept clean, at least two to three times weekly. They determine clinic scheduling, staffing, as well as purchases for dental materials, dental laboratories, and dental equipment. State regulatory dental boards and even the Federal Trade Commission (FTC) seemingly have bought into these outlandish misrepresentations. (1) What private equity firm, whose sole responsibility is towards its shareholders and not patients, would not logically control every aspect of its business, inclusive of the practice of dentistry? (2) Why do we see so little regulatory enforcement for the unlicensed and unlawful practice of dentistry? Is it a matter of laziness, corruption, or some other factor?
Dr. Cain: The short answer is that private equity (PE) firms routinely leave control of their investments to the top management of those companies, but charge those managers with generating the best possible returns. The pressure of those expected financial returns can drive decision-making by managers of those companies, which is where you would see diffusion of pressure from top managers to the level of the organization at which revenues are generated. In the DSO model, that level is the dentist. To think that PE investments in the practice of dentistry, or the legal structure – where the DSO and the professional corporation that employs the dentists are connected only via a management service agreement (MSA) – keep DSO dentists immune to this pressure for financial returns is naïve. I would venture to guess that most dentists working for a DSO would tell you that they are not told to do certain procedures or pressured based on performance, but the psychology of seeing their production and their office’s production ranked against other associates and offices in the DSO probably provides enough of a catalyst to pressure driven, competitive individuals (generalizing here based on current crops of dental students) to alter treatment plans. That pressure might cause the best-intentioned dentists to compromise their training and ethics in order to climb rankings or achieve desired results (or bonuses). Because continuing education for DSO dentists is provided at corporate headquarters in some companies, treatment plans, labs, and materials used across the company probably begin looking very similar – and profitable – over time.

NY Attorney General says Aspen has to change it’s ways; or did he?

What apparently escaped the NY Attorney General is that the parent company is the actual owner of the dental practices and the "owner dentist” doesn’t own diddly-squat. 

Hey NY AG! The  "Dental Management Companies" hires individual dentists as salaried employees who then pretend to "own" the clinics!  But you know that, right?

In the case of Small Smiles, the original "owner dentists" paid $10.00 per clinic or less. But when we caught on the price went up to a whopping $100. That's a pretty sweet,,, "owning" a business that generates millions of dollars a year, for $100.  Sign me up!

June 2016 New York State Attorney General Settlement Order With Aspen Dental

Wondering how the Small Smiles Dental Malpractice Settlement Stands?

This pretty much covers where the settlement is today.

Basic Economic Models of Large Scale Corporate Dentistry

Basic Economic Models of Large Scale Corporate Dentistry
By: Michael W. Davis, DDS
June 5, 2015





The first misnomer and misrepresentation which must be addressed is dental service organizations (DSOs). These are primarily business structures designed to circumvent state laws relating to ownership of dental practices. Most state statutes require only licensed dentists in their states may lawfully own a dental practice. DSOs falsely allege they restrict management to non-clinical areas.

In reality, the corporate entity DSOs own the dental practices they manage. Doctors in those practices are merely employees, whose employment may be terminated at the will of their employer, the DSO. The DSO fully controls the bank accounts of each and every clinic they manage, with accounts usually swept into Delaware banks at least bi-weekly. They establish monetary production quotas and bonuses for patient services. They establish the hours of operation and staff. They usually dictate office equipment, patient clinical supplies, and dental laboratories for patients. They supervise and control patient scheduling. They also dictate numbers of clinical protocols bypassing the doctor/patient relationship, such as mandating crowns over fillings, often unnecessary and more costly “deep cleanings”, antibiotic therapy into alleged “deep gum pockets”, etc.

Most “owner” doctors in these larger corporate practices are sham figureheads. They provide the corporate managers a layer of liability protection, for their unlicensed and unlawful practice of dentistry (see: Federal Fifth Circuit ruling 07-30430). These alleged “owner” doctors are not allowed to freely sell their asset of the dental practice, under their contract service agreements with the DSO. They aren’t as “owners” allowed discontinuing services with the DSO, and must retain the DSO’s services into perpetuity. In effect, the doctor owner(s) represent a façade of nominee ownership. The valid beneficial owner of the dental practices is obviously the DSO.

ADSO and Gryphon Investors: OneSmile to buy existing dental practices.

We are all F’d!

June 3, 2015

Gryphon Investors and dental industry vets launch OneSmile

Gryphon Investors has teamed up with dental industry veterans Steven C. Bilt and Bradley E. Schmidt to form OneSmile. No financial terms were disclosed. OneSmile will initially focus on buying existing dental practices in the western U.S.

PRESS RELEASE

June 3, 2015, San Francisco –Gryphon Investors (“Gryphon”), a San Francisco-based private equity firm, announced today that it has formed a partnership with Steven C. Bilt and Bradley E. Schmidt to establish OneSmile, LLC (“OneSmile”). The new company will initially focus on acquiring existing dental practices and groups in the western United States, as part of a strategy to build a comprehensive Dental Services Organization (“DSO”) platform.

Mr. Bilt, a seventeen-year veteran of the dental industry, is OneSmile’s CEO. He previously served as the president and CEO of Smile Brands, Inc., one of the largest providers of support services to general and multi-specialty dental groups in the United States. Brad Schmidt will be OneSmile’s CFO, a position he previously held at Smile Brands, Inc. Together with Gryphon’s financial backing, Mr. Bilt and Mr. Schmidt built that company from inception to over 250 locations with revenues of over $350 million before Gryphon sold a majority of its shares in 2005. The executives continued to lead the company for subsequent investors, eventually expanding it to more than 400 locations and over $500 million in revenues.

Mr. Bilt, who is a founding member and former director and president of the Association of Dental Support Organizations (ADSO), said, “There is a compelling opportunity to build a leading DSO in the Western U.S., and I look forward to working with Gryphon again in this exciting new venture. Their experience helping to build Smile Brands’ predecessor starting in 1998, along with their financial and operational support, will benefit us as we establish a unique model bringing comprehensive general, pediatric and specialty dental care and healthy, happy smiles to millions of people.”