Dental company with East Texas locations to pay millions for allegedly 'exploiting needy children'

TYLER, Texas (KETK) - *Editor's Note: This story has been updated throughout.

 Management company with multiple dental company affiliates in East Texas have agreed to pay almost $24 million in a settlement for allegedly exploiting needy children for financial gain.

According to a release by the Justice Department, Kool Smiles Dental Clinics performed unnecessary pediatric dental procedures on Medicaid patients.

Under the agreement, Benevis and the Kool Smiles clinics will pay the United States and participating states a total of $23.9 million, plus interest, to resolve allegations that they knowingly submitted false claims for payment to state Medicaid programs for medically unnecessary dental services performed on children insured by Medicaid.       

In the release, the Justice Department alleges between January 2009 and December 2011, Benevis LLC -- their management company -- and Kool Smiles clinics located throughout 17 states knowingly submitted false claims to state Medicaid programs for medically unnecessary baby root canals, tooth extractions, and stainless steel crowns, in addition to seeking payment for root canals that were never performed. 

There are four Kool Smiles locations in East Texas: Tyler, Lufkin and two in Longview.

Of the $23.9 million to be paid by Benevis and its affiliated Kool Smiles clinics, the federal government will receive a total of $14,244,073.49, plus interest, and a total of $9,655,926.51, plus interest, will be returned to individual states, which jointly funded improper claims submitted to state Medicaid programs, including Texas.

“The allegations in these cases are particularly egregious because they involved medically unnecessary dental services performed on children,” said U.S. Attorney John H. Durham for the District of Connecticut.  “Exploiting needy children for financial gain is inexcusable.  The U.S. Attorney’s Office in Connecticut is committed to aggressively pursuing health care providers that submit fraudulent claims to government health care programs.”

The investigation began when three whistleblowers alerted authorities. The former Kool Smiles employees will receive $2.4 million for their share of the settlement.

“Today’s settlement sends a very clear signal:  Fraud in the federal healthcare system will not be tolerated,” said U.S. Attorney John F. Bash for the Western District of Texas. “Especially when that fraud involves performing unnecessary procedures on kids—here, unnecessary baby root canals and tooth extractions, among other procedures—we will not hesitate to use every tool at our disposal to punish those who break the law.”

The company has released a statement on the settlement:

Benevis, and its affiliate Kool Smiles, have voluntarily entered into a settlement with the U.S. Department of Justice (DOJ) and various State Attorneys' General to end the government's seven-year long False Claims Act (FCA) investigation relating to services provided from 2009 to 2011.  
The settlement agreement with the government does not relate to any claims regarding the quality of the dental care provided to patients. Importantly, the settlement does not include any admission or determination of wrongdoing by the companies, their employees or any Kool Smiles dentists.  In fact, the companies strongly disagree with the government's allegations.
 
The investigation largely focused on professional disagreements between qualified dentists in determining the appropriate level and cost of the care.  For perspective, the government disagreed with the care provided in less than one percent of the procedures billed during the reviewed period.
 
The government's own data, as well as independent, third-party research and analysis conducted by experts, disprove the allegations. A recent study by respected healthcare economists Dobson DaVanzo & Associates found Kool Smiles dentists provided fewer total dental services per Medicaid patient than non-Kool Smiles providers. It also found this resulted in the government paying significantly less per Medicaid patient for dental services provided by Kool Smiles dentists than it pays for Medicaid patients treated by non-Kool Smiles dentists.
 
The companies are disappointed that reasonable disagreement between dentists can become a FCA case.  However, given the seven years and significant expense already incurred, as well as the anticipated additional time and expense associated with lengthy litigation, the companies believe putting this matter behind them was the best option for their dentists, team members and the patients they serve.
 
The companies have complete confidence in Kool Smiles dentists and the quality and level of care they provide, and are proud to support the ongoing work of Kool Smiles dentists as leading providers of dental care for underserved communities nationwide.
 
Since 2002, Kool Smiles has been serving underserved communities, and today Kool Smiles provides needed dental care through more than two million patient visits per year, many of whom would not otherwise have access to dental care.  In addition, Kool Smiles dentists have provided more than $128 million in uncompensated dental care to treat patients and families who did not have access to Medicaid dental benefits or other dental insurance, and could not afford to pay. The companies will continue to work toward expanding access to quality dental care for all families.

   

Don't Miss

Trending Stories

Latest News

  • KETK NBC

  • KFXK Fox 51

  • Friday Football Fever

  • KETK News

  • KFXK Fox 51

  • Friday Football Fever Scoreboard

  • KETK NBC East Texas

    Instagram
  • KFXK Fox51 East Texas

    Instagram
  • MyEastTex Mobile App