CSHM, LLC (Small Smiles Dental Centers) Files for Chapter 7 Bankruptcy

February 17, 2015
Just 4 months after CSHM, LLC (Small Smiles Dental Centers) were Excluded from the Medicaid program, Michael F. Gries, the installed Chief Restructuring Officer, filed Chapter 7 Bankruptcy in Delaware Bankruptcy Court on February 5, 2015. (Case No. 15-bk-10206)

CSHM, LLC is the restructured company that emerged in June 2012 when Church Street Health Management (f/k/a FORBA) filed for Chapter 11 Bankruptcy February 20, 2012. (Case No. 12-bk-01573)

Church Street Health Management signed a 5 years Quality of Care Corporate Integrity Agreement in January 2010 (CIA) after a 3 year investigation by the feds that found billing fraud and gross mistreatment, overtreatment and failure to come close to meeting an acceptable standard of care treating the dental needs of children on Medicaid. They also agreed to pay $24 Million for their misdeeds; the Department of Justice was to received $14.2 Million and 21 states were to share $9.7 million and explained here on page 6.

In addition Church Street Health Management (f/k/a FORBA) signed a Corporate Integrity Agreement with the New York Office of Medicaid Inspector General. Agreeing to paying New York and additional $2.3 million.

After continued blatant disregard for the Quality of Care Corporate Integrity, consistent failures of inspections, a 1500 page bi-partisan 2012 Congressional Report  and various warnings by HHS-OIG, CSHM, LLC received notice they were Excluded from the Medicaid program in March 2014. However the government saw fit to allow CSHM, LLC to pilfer and plunder the Medicaid slush fund for an additional 6 months under an Exclusion Agreement.

“This exclusion marks the culmination of a series of alleged failures by CSHM and its corporate predecessors to comply with its CIA. Under the CIA, an independent quality monitor conducted more than 90 site visits and reviews to monitor CSHM's compliance. Since the 2010 settlement, OIG repeatedly cited CSHM and took actions to address those violations, promote improved compliance, and maintain access to care for an underserved population. These actions included imposing financial penalties and forcing the divestiture of one of the company's clinics.

Despite these actions, CSHM remained in material breach of its CIA and OIG issued Notices of Intent to Exclude to the company in December 2013 and January 2014. In such cases, providers have the opportunity to demonstrate to OIG that they have cured, or are in the process of curing, the material breaches. CSHM represented to OIG that it would cure the material breaches. However, through meetings with CSHM and its Board of Directors and review of its written submissions, OIG determined that CSHM had failed to cure the material breaches and proceeded with the exclusion.

Until the exclusion goes into effect on September 30, 2014, an independent monitor will continue to monitor the quality of care being provided to patients at CSHM clinics. CSHM is required to inform patients at least 30 days before closing a clinic. CSHM is also required to keep State Medicaid agencies abreast of developments and provide monthly status reports to OIG. Any divestiture of assets by CSHM must be through bona fide, arms-length transactions to an entity that is not related to or affiliated with CSHM.”

Despite the “Quality of Care” issues as indicated by the classification of the type of Corporate Integrity Agreement they were under, and results of the Monitor’s monitoring, when CSHM received their Exclusion letter they claimed none of the clinics they own were effected it was just the management division of the company and issued a press release stating the centers different entities therefore not effected. HUH?

Here we are in 2015, 8 years since Small Smiles dental centers and their so called management company, CSHM were first investigated—it started in mid 2007— and it just past the anniversary of the 5 year CIA. Heck it expired two weeks ago—January 15, 2015.
According to the 31 page, 3 columns, list of Creditors filed February 5, 2015 they still owe various states their portion of the $24 million dollars. (a breakdown is below)  

They owe several “owner dentists”, support staff, and other dentists, as well as whistleblowers, dental boards, ad agencies, law firms, TV stations, court reporters, (for the numerous lawsuits in which they are involved), storage facilities,(wonder what’s hidden there), utility bills for their clinics, dental labs and insurance companies (hope they kept the Malpractice premiums up for all those dentists!), and every dental supply company in the country, and various management companies. (yep, the management company hires management companies)

Other notables were, Garrison Loan Agency who ponied up the dough to keep this scumbag company alive and kicking from 2012-2015 and the IRS.

Those missing for the list are David R. Wilson, CEO and other top executives, and Waller Landsden Law Group.  Hmmm… Pleadings indicate Wilson was paid $1,194,432.85 the year preceding the filing of the bankruptcy.

Other points of Interest in the initial documents:
Doc 2 Schedules of Assets and Liabilities,
Page 2, Item 3
—In accordance with the Exclusion Agreement, the Company divested itself of substantially all of the CSHM Assets through a series of sales between April and September 2014.  Included among the sale of the CSHM Assets, the Company sold certain assets to First Quality Management, Inc. (FQMI), pursuant that certain Asset Purchase Agreement, dated as of September 30, 2014.  Separately, the Company also entered into that certain Assignment and Assumption Agreement with FQMI, dated September 30, 2014, in connection with the assumption of six (six) MSA’s.  A breakdown of the other clinics can be found here, beginning on page 9.  Missing from that list is all the Colorado clinics except the Colorado Springs clinic.  Interesting, indeed.

So I was right when I posted about FQMI and the continued operations of Small Smiles Dental Centers. Current pleadings say they paid Dr. Paul Elkin $401,574.00 in the year proceeding this bankruptcy filing.  He’s the new head at FQMI according to his LinkedIn page.

Page 2, Item 4
—Additional assets were sold to employees of the Debtor in September 2014…

Wait, I thought the “owner dentists” were already “owners”, not employees!” (sarcasm)

Page 11 & 12
—1st. Lien Holder: Garrison Loan Agency Services, LLC – $37,500,000.00 initial loan, still owed $28,764,918.60;
—2nd Lien Holder: Garrison Loan Agency Services, LLC – $17,500,000.00 initial loan, still owed $17,786,714.00.
——Grand Total for Secured Creditor Garrison Loan Agency $46,551,633.00
Under Creditors Holding Unsecured Nonpiority Claims (Schedule F, page 15, of Doc 2) are all Medicaid Fraud Control Units Creditors and the amount:

	State	Known 2010 Settlement Amounts	Due as of January 2015
1	MFCU of Alabama	$463,028.00	$79,595.63
2	MFCU of Arizona		$127,853.41
3	MFCU of Colorado	$1,200,00.00	$616,099.66
4	MFCU of  Georgia		$288,910.84
5	MFCU of Idaho		$46,687.18
6	MFCU of Indiana		$348,534.90
7	MFCU of Kansas	$517,959.60	$260,969.66
8	MFCU of Kentucky	$123,693.14	$22,484.43
9	MFCU of Maryland		$275,814.83
10	MFCU of Massachusetts		$726,035.97
11	MFCU of Nebraska	$270,000.00	$61,717.55
12	MFCU of Nevada		$83,402.83
13	MFCU of New Hampshire		$48,090.36
14	MFCU of New Mexico		$182,376.06
15	MFCU of New York $1.15M+ $2.3M	$3,450,000.00	$315,849.66
16	MFCU of DC		$78,057.19
17	MFCU of Ohio	$2,392,926.50	$502,185.04
18	MFCU of Oklahoma	$700,00.00	$355,411.82
19	MFCU of South Carolina		$471,779.92
20	MFCU of Texas	$546,000.00	$117,851.57
21	MFCU of Virginia		$228,616.76
22	Department of Justice	$14,200,000.00	$12,966,496.00
23	Department of Justice		$7,844,455.34
	Grand Total	$26,300,000.00	$26,049,276.61

According to the pleadings (Doc 8-1) Amended Schedule B Personal Property they have:
Assets:            $136,369.67
Liabilities:  $73,314,905.16

The 2010 Corporate Integrity Agreement
The DOJ said in 2010 “"We have zero tolerance for those who break the law to exploit needy children," said Tony West, Assistant Attorney General for the Civil Division of the Department of Justice. "Illegal conduct like this endangers a child’s well-being, distorts the judgments of health care professionals, and puts corporate profits ahead of patient safety."

(cough, choke and puke, they have complete tolerance, encourage it, and are accomplices to it!)

Drs. Michael and Rebecca Tarver: A Serious Threat to Children? I think so!

The latest report out of Ocala, Florida reveals some of the dangerous practices taking place inside Churchill Dentistry, formerly known as Polliwog Dentistry.  I can’t believe there haven’t been a host of dead children due to these two quacks.

Here are a few items pulled from the latest article:

• "…Churchill Dental billed Medicaid and the Medicaid recipient for the same service and also delegated their duties to dental assistants who sedated patients,"
• “…Tarver would tell parents that he had to apply the sealant to the patient's teeth and Medicaid doesn't reimburse him for the procedure.”
• “…Tarver would use a dental tool called a gold flame bur on the top of the child's teeth where natural grooves and cracks were present and would remove "pieces of healthy tooth…Tarver would then fill the space with a resin composite and bill Medicaid as if he had "filled a one- to two-surface cavity. Parents would later complain because they had received a bill from Medicaid, which charges recipients $25 per tooth for each resin filling, though Tarver had told them their children had no cavities.”
• “…both dentists would sedate every patient with hydroxyzine, which is used as a sedative to treat anxiety and tension, and with other medications for anesthesia..dental assistants would weigh patients and report the weight to one of the two dentists, and then one of them would say how many milligrams to administer…sometimes 12 to 15 children were being sedated. The average number, she said, was 10. For most kids, blood pressure and oxygen levels were not checked during sedation, the former office manager said, yet all their charts reflect blood pressure and oxygen readings that were "almost the same."
• “…Those who didn't respond to hydroxyzine were given Versed, a brand version of midazolam, used to "produce sleepiness or drowsiness and to relieve anxiety before surgery or certain procedures," the report states. Dr. Michael Tarver would inject it into the child's mouth.”
• “…the dental assistant — estimated that the office would treat 60 patients a day. It was open 9 a.m. to 5 p.m. Monday through Thursday with only the two dentists.”

Read the entire shocking story here.

Polliwog Dental f/k/a Churchill Dentistry Raided By Medicaid Fraud Control Unit.

Wednesday, January 28, 2015

OCALA - Investigators were executing a search warrant at a pediatric dental office in Ocala Wednesday morning.

As part of a Medicaid fraud investigation, officials with the Florida Attorney General's Office and other investigators were at Churchill Dentistry, at 255 SE 17th St., the former Polliwog Dental.

Capt. John W. Nicks Jr., of the Florida attorney general's Medicaid Fraud Control Unit, declined to give other details about the investigation. He said agents would take whatever has evidentiary value in connection with their case, including anything from computers to papers….

…Ocala Police Department officers were telling patients that the office was closed. Dr. Rebecca J. Tarver, who works there, was not at the office Wednesday morning. Nor was her husband, fellow dentist Dr. Michael Tarver….

Read the entire story at Ocala.com

Scams on the public by nonprofit dental clinics

 

By: Michael W. Davis, DDS

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

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

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

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

Dental billing fraud is more common than you think

Everybody knows going to the dentist is important, yet half of American adults skip out on regular dental care.

Some avoid dentistry out of fear of pain or sheer busyness, but a large portion of Americans can’t afford it without financial assistance.

Unfortunately, it’s Americans on government assistance programs for dental care who are being taken advantage of. Worse, their children are suffering for it.

It started as a solution

Many low-income children don’t receive dental care until they’re brought to the emergency room with a toothache, simply because their parents can’t afford it. Nearly half of American children are on some form of government-funded health insurance, either Medicaid or the Children’s Health Insurance Program (CHIP).

…As a result, corporate dental chains started accepting Medicaid and CHIP, and even opening new offices specializing in Medicaid…

…most of the charges were coming from one dental chain, Kool Smiles, and that the x-rays didn’t justify their treatments. Kool Smiles was investigated, and state officials found that the crowns were not only unnecessary but that the dental work was shoddy….

…Kool Smiles isn’t the only dental chain implicated by government officials in fraudulent billing practices. Dental chain Small Smiles settled with the United States in 2010 for $24 million to resolve allegations of fraudulent charges. In April 2014, the company that owns Small Smiles, CSHM, Inc., was excluded from participating in federal health care programs like Medicaid for five years…

Read the entire story at Fox.com

What the story fails to mention:

Small Smiles/CSHM is still operating Small Smiles clinics.  They are simply using a different corporate name—First Quality Management, Inc.  Many of the original corporate level employees still in place. Some clinics are under the control of Hero Management who operates Adventure Dental and Vision and others have been taken over by Sarrell Dental based in Alabama.

A Wide Range Discussion with Dr. Fred Quarnstrom: Dental Ethics, Regulations and Professional Turf Wars

 

A Wide Range Discussion with Dr. Fred Quarnstrom: Dental Ethics, Regulations and Professional Turf Wars

 

By: Michael W. Davis, DDS

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

 

INTRODUCTION

With an extensive education and history in the dental profession, Dr. Fred Quarnstrom has been an outspoken advocate for the public when it comes to their dental healthcare. For decades, Dr. Quarnstrom has often taken a heroic stand in protecting the public which often times lands him on the opposite side of fellow professionals and dental organizations.

Recognized as an expert, Dr. Quarnstrom’s many accomplishments include: his current private practice, a faculty member at 3 dental schools, quality assurance consulting, independent expert testimony, and speaker. He has also held positions on what is the equivalent to the dental board in Washington state and Western Regional Examining Board. Dr. Quarnstrom graduated from the University of Washington in 1964 and completed a residency program in General Anesthesia at Washington Hospital Center, Washington D.C. in 1967.

INTERVIEW

Dr. Davis: Dr. Quarnstrom, a number of years ago, you completed a residency program in anesthesiology. You went on to utilize sedation services for your patients, and taught sedation courses, to fellow dental professionals. We both see how dental sedation can be a very helpful adjunct in the practice of dentistry.

What concerns do you have relating to weekend seminar sedation courses, often offered hotel conference rooms? What are the dangers to the public, as well as professionals offering sedation, for marginally trained and minimally emergency equipped dental clinics? Do you have specific concerns relating to the public health and safety; is the public being protected or it is buyer beware? What are the regulating agencies who are setting the standards and rules, and do you feel there is “agency capture” at work?

Are you concerned that it seems violators of sedation rules and regulations of state dental boards, far too often receive little or no disciplinary actions, and what advice do you have for state dental boards?

What advice can you offer to the public, whereby they can more actively protect themselves and their families? What advice do you have for the professional who chooses to offer sedation to patients?

Dr. Quarnstrom: First, I along with a Doctor of Pharmacy and a Professor Emmeritis teach weekend courses in the use of nitrous oxide and oral CONSCIOUS sedation. There is heavy emphasis on CONSCIOUS. We do not teach multiple drugs. When you add a little of drug A plus a little of Drug B plus maybe a little of drug C, D, and/or E. There is simply no research to suggest what the results will be. Personally, I have taught 245 nitrous oxide courses and 110 oral conscious sedation courses.

Nitrous Oxide is very safe. You really only need to know a few things. Never give more than 50% nitrous for more than a minute. Always check your system to be sure the gases have not been switched.

I know of one near death from switched gas in a surgery office doing IV sedation/general anesthesia and another 70 cases, where gases were switched but there was no damage to the patient.

In the oral surgery office the one patient was under general anesthesia. The surgeon expected him to be unconscious. He discounted the fact that the pulse oximeter reading dropped as low as 35%. His staff had asked him several times if they should call the paramedics. The third time he agreed. But the oxygen levels had been very low for too long. 95% to 98% is the normal saturation at sea level. You should get concerned if it drops to 90%. The patient who was an a student and star athlete ended up with severe neurologic and vision problems. 

In the other 70 cases patients either got too relaxed or went to sleep.The dentists have been taught when this  happens you should take the mask off and get them breathing room air and they quickly returned to normal with no residual problems. I published research 15 years ago to show it was safe to do this. If a dentist insisted on giving the patient 100% Oxygen and the gas lines are switched they would be giving 100% nitrous oxide. You need a minimum of 30% oxygen when being sedated preferably it would be 70 to 80% oxygen. I have taught for 40 years— “if something is wrong take the mask off”. 

The final thing you need to know. IF THE PATIENT BECOMES UNCONSCIOUS OR STOPS REACTING TO VERBAL COMMAND, TAKE OFF THE MASK. If in doubt it is never wrong to call 911. My patients who are paramedics plead with me to tell the dentists at our courses that they will not get into trouble for calling 911. As they state, “Our save record goes way up if we get there while the patient is still alive”.The ADA guidelines and most states require a 14 hour course to administer nitrous oxide sedation.