Thursday, March 05, 2015

Smile Magic Dental Clinics Settle Texas Medicaid Fraud Allegations for $4.5 Million

Waters & Kraus, LLP is pleased to announce a qui tam lawsuit it filed has resulted in the largest recovery to date in a Texas dental Medicaid fraud case. 
DALLAS – March 5, 2015 – Four dental clinics of the Texas Smile Magic chain have agreed to settle Medicaid fraud charges for a total of $4.5 million. The four clinics that will pay the record-setting settlement include: Smile Magic of Denton, PLLC; Smile Magic of Lewisville, PLLC; Smile Magic of Garland, PLLC; and Smile Magic of El Paso, PLLC.

Amy Smith, represented by Waters & Kraus, LLP, blew the whistle on Smile Magic. To protect Texas children and taxpayers, Ms. Smith first reported to Texas officials that Smile Magic was allegedly engaging in several acts of misconduct that violated the rules of the Texas Medicaid program and later filed a qui tam lawsuit under the Texas Medicaid Fraud Prevention Act (TMFPA).

It was alleged in the qui tam lawsuit that Smile Magic defrauded the Texas Medicaid program by performing unnecessary or excessive dental services on young children, billed Medicaid for dental services never-performed, targeted young Medicaid beneficiaries through improper financial incentives, and used paid recruiters to round up poor kids to be used to commit Medicaid fraud. At times, the clinics allegedly solicited young Texas children by targeting their parents in grocery store parking lots, bus stops and other locations in poor neighborhoods, paid money to parents to induce them to have their kids treated at these Smile Magic clinics, and orchestrated teams of solicitors to round up Texas kids for all of these purposes. As further alleged in the qui tam lawsuit, once these young, mostly poor kids were in the dentist’s chair, Smile Magic’s goal was to maximize the amount it could bill Texas Medicaid, regardless of whether the services were medically necessary or, in some cases, even provided to the patient.

Based upon the allegations by Ms. Smith and another whistleblower, the Texas Health and Human Services Office of Inspector General (OIG) and the Civil Medicaid Fraud Division of the Texas Attorney General (OAG) conducted their own investigation of Smile Magic and determined that Smile Magic submitted improper claims to the Texas Medicaid program. The OAG intervened in Ms. Smith’s qui tam lawsuit.

“We are pleased to work with the Texas OIG and OAG to obtain this significant recovery for Texas taxpayers,” said Dan Hargrove of Waters & Kraus LLP, who represents Ms. Smith. “We applaud the tenacity and professionalism of the Texas investigators and attorneys. They are protecting Texas kids and Texas taxpayers. Dental clinics that engage in health care fraud waste our scarce health care dollars. Texas taxpayers should have confidence that their hard-earned tax dollars are being put to good use – to help the neediest kids in our state – not to line the pockets of fraudsters. Texas children and their parents should have confidence they won’t be used as tools by others who seek to rip off Medicaid. This case is a good first step towards protecting our children and cleaning up the Medicaid program. But much remains to be done.”

“What OIG and OAG uncovered during their review of Smile Magic’s billing practices was a chain of dental clinics that apparently viewed a young, vulnerable patient population as cogs in the wheel of a sophisticated profit-making operation.” said Ketan Kharod, who assisted Hargrove in Ms. Smith’s representation. “And to make matters worse, the clinics expected Texas taxpayers to support their scheme.”

This settlement resolves the Medicaid fraud allegations in two lawsuits filed in Travis County, Texas, as well as an administrative action brought against Smile Magic by the OIG. The TMFPA allows private citizens to sue on the government’s behalf when health care providers commit Medicaid fraud. The qui tam provisions of the TMFPA reward whistleblowers, who often act in fear of losing their jobs, with a share of any recovery.

The Smile Magic dental clinics dispute the allegations against them and deny any wrongdoing.

About Waters & Kraus
Waters & Kraus is a national plaintiffs’ law firm devoted to representing whistleblowers in False Claims Act lawsuits and other qui tam matters involving health care fraud, government contractor fraud, tax fraud, securities law violations and foreign bribery allegations under the Foreign Corrupt Practices Act (FCPA). In addition, the firm has won record-setting verdicts, negotiated monumental settlements, and established ground-breaking new law in cases involving toxic exposure and defective products. Based in Dallas, Texas, with offices in California and Maryland, Waters & Kraus has participated in the representation of families from all fifty states and many foreign countries, as well as foreign governments. Learn more about our qui tam whistleblower practice at


DTM update:
March 14, 2015

Chad Evan, DDS is the poster child for Texas Dentist for Medicaid Fraud Reform (TDMR).  Last September he testified before Texas Lawmakers with a line of bull.  He admits he helped write SB 1803, which Perry signed into law. Watching the video, clearly he’s on a first name basis with lawmakers. He and his childhood friend Emmet Scott operate the shady business. (Scott was a presenter at the LDS Homeschool association. His bio stated he was childhood friend with Evans since age 2) With assistance from TDMR there was a media blast headlined -

“$4 Million Mistake - Dentist Didn't Record Toothbrush Instructions to Medicaid Patients”

Other business names associated with these two include:

Community Dental Partners
Strategic Dental Executives

According to the data obtain for the Laffer Study (if that’s what you want to call it), Smile Magic’s had three clinics in 2011and were quite busy slapping on those stainless steel crowns.

Smile Magic - Laffer Data


According to TDMR, “Texas funnels a river of federal and state money — at that time $28 billion and change each year — out to doctors, dentists, labs and other medical providers to pay them for treating Medicaid patients.” (that “time” was 2012)

Anyone besides me find it odd not one other media outlet has mentioned this settlement?