Alleged Abuse by Medicaid-funded Dental Clinics Gain Grassley’s Attention

With all of the reimbursement issues the state Medicaid programs are facing, one area Senator Charles Grassley (R-Iowa) has taken on is Medicaid-funded dental clinics after becoming aware of allegations of abusive treatment of children in clinics controlled by corporate investors rather than dentists. “There are legitimate concerns that children are receiving unnecessary care, sometimes in a traumatic way, and taxpayers are paying for it, ” Grassley said. Accordingly, Grassley began sending letters asking for information about ownership structures, incentives, parental notification policies, and participation in Medicaid from such companies as Small Smiles, Kool Smiles, and ReachOut Health Care America. The companies provided responses to the Grassley inquiries.

Grassley’s letters noted that he had received information that these businesses may be providing unnecessary health care services to Medicaid patients and, therefore, overcharging the United States government in Medicaid reimbursement claims. The letter identified concerns over ownership of the dental clinics and who was making dentistry decisions. The ownership information requested included:

  • a detailed description of ownership of all the facilities for a specified period,
  • dentistry certifications and names of any person with a partial or full ownership interest in each of the businesses, including (1) the total number of procedures each person with a full or partial interest had performed, (2) the employment contract of each person with a partial or full ownership interest, and (3)  all purchase agreements, professional service agreements  between the dental clinic and its affiliates.

To assess potential abusive treatment Grassley also requested information regarding the dental clinics policies and procedures as follows:

  • All documents related to production goals of the dental clinic;
  • All policies and document,s including emails, related to bonus incentive structure for each dental procedure for a specific period;
  • The number of baby root canals and crowns each facility has performed on all Medicaid and non-Medicaid patient for a specific period.
  • The number of patients given restorative or endodontic care in more than one quadrant in a single visit;
  • All policies, procedures, and documents regarding parental or guardian observation of dental procedures;
  • All policies, procedures, and documents regarding the use of the “papoose board” or other restraint devices during dental procedures;
  • All polices, training manuals, informational booklets, other classroom materials and other related documents provided to dentist or used during training of any dentists employed by the dental clinic;
  • The amount of revenue received for reimbursement on Medicaid patients specifically related information regarding Medicaid reimbursement for x-rays, crowns, and root canals;
  • The average reimbursement for x-rays per patient per year for the past three years;
  • All retaliation policies;
  • All emails and other documents used to promote the existence of the disclosure program to employees.

Grassley found that “these dental practices, under pressure from owners who are not licensed dentists, have been providing services with the highest Medicaid reimbursement levels more often than less expensive, arguably more appropriate services.” The business model has led to abuses because dentists are under pressure to perform as many high reimbursement services on the maximum number of children on Medicaid as possible, Grassley added. Examples include giving a child a crown instead of a filling and performing unnecessary root canals on baby teeth because of a bonus payment structure that creates the wrong incentives and improperly restraining children during dental treatment.

Grassley explained that the issue involves an investment structure that technically meets some state-level requirements that dental practices be dentist-owned but do not, in practice, have dentists in control.  A majority of states and the District of Columbia have laws that require owners of a dental practice to be licensed in the state where the practice is located.  Grassley discovered that the “owner dentists” in these cases are “effectively ghost owners who maintain none of the traditional aspects of ownership of their operations allowing the corporate investors to have control over clinical operations.”

 Grassley expects to issue a staff report on his findings involving companies that service children in the Medicaid program.  For more details see the results of a joint investigation and conducted by the Center for Public Integrity and FRONTLINE.