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 |
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!)
Least we forget HHS-OIG’s Lisa Re in her 2012 NBC interview:
- "Dentists have been fired, clinics have been closed, and this is not the same company," Lisa Re, a branch chief and attorney with the agency, said at the time.
“CSHM is improving since it emerged from bankruptcy in June 2012 with a new CEO and leadership.” - “I would say that it is getting much better."
- "The company as it operates today is simply not the same as the company that was repeatedly violating the agreement,"
- "Some of the states were alarmed that we were even considering closing any of the clinics …”
- Negative $26 million dollars. ( I call for those in charge to head back over to Congress and report they failed to collect $24 million, since they trotted over in 2010 to report they had “recovered” it. They actually called it “Significant Work”. (laughable, I knew it then and it’s been proved over and over) I also call on each and every state Attorney General who sent out press releases boasting about their portion of the negotiated settlement to issue a “correction”.
- Thousands of hours wasted by government employees. (Taxpayer dollars pay those wages too)
- 5 Million babies and children subjected to mistreatment and mangled mouths. (They see about 1 million children a year)
- $800 million or more dollars in the pockets of the bad guys. ($168M a year, based on 2011 billing; current Pleadings say they gross income was $116,446,137.00 in 2013.)
Documents:
CSHM Exclusion Agreement signed April 1, 2014
HHS-OIG Report on Questionable Billing – New York — March 2014
HHS-OIG Report on Questionable Billing – Louisiana — August 2014
HHS-OIG Report on Questionable Billing – Indiana — November 2014
CSHM. Bankruptcy Case No. 15-bk-10206 List of Creditors (Doc 1-4)
CSHM Bankruptcy Case No 15-bk-10206 (Doc 8-1) Amended Schedule B (Assets and Liabilities)
CSHM Bankruptcy Case No 15-bk-10206 (Doc 7-1) Amended Statement of Financial Affairs.