Kool Smiles Performed “Unnecessary” Procedures on Children, DOJ Says

January 11, 2018
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by Leila Miller Tow Journalism Fellow, FRONTLINE/Columbia Journalism School Fellowships

(Wallocha/ullstein bild via Getty Images)

A national chain of dental clinics founded to provide services to underserved communities and its management company have agreed to a $23.9 million settlement with the Justice Department for allegedly submitting false Medicaid claims for “medically unnecessary” procedures performed on children.

In a statement announcing the settlement on Wednesday, the Justice Department said that between January 2009 and December 2011, Kool Smiles clinics located in 17 states and Benevis, which provides support services for the chain, “knowingly submitted false claims to state Medicaid programs” for unneeded dental procedures. These included baby root canals, tooth extractions and stainless steel crowns for patients. The companies also sought payments for root canals that were never done, the Justice Department said.

“Billing Medicaid programs for dental procedures that are not necessary contributes to the soaring costs of healthcare,” said Acting Assistant Attorney General Chad A. Readler. “When healthcare providers put vulnerable patients at risk by performing medically unnecessary procedures to achieve financial goals, we will take action.”

The government accused Kool Smiles clinics of establishing a system that awarded “productive” dentists with cash bonuses based on revenue gained from costly dental procedures, while disciplining “unproductive” dentists. Benevis and more than 130 of its affiliated Kool Smiles clinics will pay more than $14 million to the federal government and more than $9 million to states that funded fraudulent Medicaid claims, the Justice Department said.

A statement provided by Benevis on behalf of Kool Smiles denied the government’s allegations, saying that the federal investigation “largely focused on professional disagreements between qualified dentists in determining the appropriate level and cost of the care.” It said the government pays less per Medicaid patient treated by Kool Smiles dentists than by other providers. Atlanta-based Kool Smiles is one of the largest Medicaid dental providers in the country, serving roughly three million children.

FRONTLINE and the Center for Public Integrity examined Kool Smiles’s business practices as part of the 2013 documentary Dollars for Dentists. The investigation analyzed Medicaid data from Texas and Virginia and found that Kool Smiles used crowns more frequently than other providers on children eight and under.

In response to the investigation, Kool Smiles supplied its own analysis and said that in general, their offices perform fewer procedures per patient, charge less per patient and have lower X-ray costs per patient on average. But the company did not address whether children who visit Kool Smiles in Texas or Virginia were more likely to get a crown.

In the film, Christina Bowne, a dental assistant and a former Kool Smiles office manager, described an environment where providers were under pressure to produce a certain amount of revenue. She said she would receive bonuses if she met monthly targets.

“It became more about numbers — not so much as what we were doing to help the community, but more about numbers,” she said. “It became where we had a goal that we had to meet each day. So they would tell us if we had to make $15,000, that’s what we had to make, regardless of how we got there.”

In the five-and-a-half years since the investigation first aired, dental management chains have settled with state attorneys general; been kicked out of the Medicaid program; faced rebukes from the United States Senate; and come under new scrutiny from regulators in Texas.

The documentary also found that for-profit medical chains were allegedly overcharging patients and leaving them with burdensome debt. It investigated a business model in which health care providers were paid by credit card companies in advance for patient treatment plans, incentivizing providers to suggest more expensive procedures. In 2013, CareCredit, a company that helped patients finance their care, was ordered to refund up to $34.1 million to consumers for allegedly misleading them into enrolling in credit cards that accrued high interest rates.

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