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Benevis, Kool Smiles to pay $23.9 million in settlement with Department of Justice

January 12, 2018

By David Burger

Washington ­— Dental management company Benevis and more than 130 of its affiliated Kool Smiles clinics will pay $23.9 million, plus interest, to resolve allegations from the U.S. Department of Justice that they knowingly submitted false claims for payment to state Medicaid programs for medically unnecessary dental services performed on children insured by Medicaid, according to a DOJ news release.

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

The Justice Department alleged that between January 2009 and December 2011, Benevis and Kool Smiles clinics in 17 states knowingly submitted false claims to state Medicaid programs for medically unnecessary pulpotomies, extractions and stainless steel crowns, in addition to seeking payment for pulpotomies that were never performed, according to the release. Further, the Justice Department alleged that Kool Smiles clinics pressured and incentivized dentists to meet production goals through a system that disciplined “unproductive” dentists and awarded “productive” dentists with cash bonuses based on the revenue generated by the procedures they performed. 

According to the government’s allegations, Kool Smiles clinics located in Texas knowingly submitted false claims to the Texas Medicaid Program for First Dental Home, a program intended to provide a comprehensive package of dental services aimed at improving the oral health of children under three.

“Today’s settlement sends a very clear signal that fraud in the federal health care system will not be tolerated,” said U.S. Attorney John F. Bash for the Western District of Texas in the release. “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 Justice Deprtment stated that the claims resolved by this settlement are allegations only, and there has been no determination of liability. 

Kool Smiles issued a statement about the settlement: “The companies strongly disagree with the government’s allegations.”

The statement continued: “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 False Claims Act 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.”