Dentists were pressured to perform the procedures, prosecutors said — and their child patients suffered for it.
At Kool Smiles dental clinics across 17 states, dentists performed unnecessary baby root canals and tooth extractions on child patients, according to the Justice Department. Then the clinics allegedly submitted false claims to Medicaid for the procedures, saying they were medically necessary. Dentists also gave kids unneeded stainless steel crowns, prosecutors said, and sought payment for baby root canals that were never performed.
The Justice Department announced Wednesday that it has reached a settlement with Benevis LLC over False Claims Act allegations against the company and 130 affiliated Kool Smiles clinics across the country.
The settlement will require the company and clinics to pay the U.S. and 17 states $23.9 million — plus interest — for performing medically unnecessary dental services on kids insured through Medicaid between Jan. 2009 to Dec. 2011.
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Kool Smiles has locations in Arizona, New Mexico, Texas, Oklahoma, Arkansas, Louisiana, Mississippi, Georgia, South Carolina, Virginia, Maryland, Kentucky, Indiana, Connecticut, Massachusetts and Washington, D.C., according to Kool Smiles’ website.
“When health care providers put vulnerable patients at risk by performing medically unnecessary procedures to achieve financial goals, we will take action,” Acting Assistant Attorney General Chad A. Readler said in a statement announcing the settlement.
Readler added that performing unnecessary procedures “contributes to the soaring costs of healthcare.”
“Unproductive” dentists who didn’t perform enough procedures at the clinics were disciplined, according to the Justice Department. “Productive” dentists who met Kool Smiles’ goals got bonuses, prosecutors said. Office “scorecards” were given to Kool Smiles clinics to make sure they were meeting productivity and revenue goals.
Complaints from Kool Smiles’ own dentists about the medically unnecessary procedures were ignored, according to the settlement agreement.
“It is intolerable when health care companies seek to boost profits by defrauding Medicaid and exploiting children,” Special Agent Phillip M. Coyne, of the Department of Health and Human Services’ Inspector General’s Office, said in a statement.
The settlement is the result of an investigation conducted by several federal and state agencies, the Justice Department said.
From the settlement, nearly $10 million plus interest will be given to individual states, prosecutors announced. The federal government will receive just more than $14 million.
Three whistleblowers, who used to be Kool Smiles employees, will get more than $2.4 million from the federal portion of the settlement, the Justice Department announced. Five lawsuits, all filed under the whistleblower provision of the False Claims Act, helped launch the government’s investigation into Kool Smiles.
“Today’s settlement sends a very clear signal: Fraud in the federal healthcare system will not be tolerated,” U.S. Attorney John F. Bash, of the Western District of Texas, said in a statement.
Bash said the fraud was particularly upsetting given who the patients were.
“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,” Bash said.
Benevis released a statement Wednesday saying the company “will continue to work toward expanding access to quality dental care for all families,” ABC 15 reports.
“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,” the statement said.
The company has been linked to the deaths of two child patients in Arizona, according to ABC 15. Those deaths were unrelated to the settlement.