Google “dental Medicaid fraud” and you will find hundreds of examples of dentists being investigated for, pleading guilty to, and being charged with Medicaid fraud on both the state and federal levels. Since 2010, the federal government has opened over 1000 new criminal cases and 1700 investigations, and is involved in over 900 civil investigations with an additional 1300 cases pending.
According to Texas Health and Human Services since 2007 when the Texas Legislature approved a 50 percent Medicaid rate increase for dentists to help expand access to dental services for children, the number receiving those services rose from 45 percent to 63 percent in 2010. Spending on orthodontic care, in Texas alone, increased from $102K in 2008 to $185K in 2010. As reported by WFAA, those Texas dentists collected more Medicaid reimbursements than the rest of the country combined. In an effort to stem the overbilling, HHSC made several changes to tighten the enforcement of Medicaid dental policies:
- The contractor responsible for approving requests for orthodontic services has been directed to develop a corrective action plan to ensure that existing state policies are followed. Those policies limit orthodontic services to cases where it is medically necessary. State policies do not cover orthodontic care for cosmetic reasons.
- On October 1. 2011, the state began requiring full-cast dental molds to be submitted with all requests for braces. This is in addition to the X-rays, photos and other documentation already required.
- The state has begun pulling hundreds of cases to review the contractor’s approval process for braces. The state will sample new cases each quarter to review the work of each staff member processing requests for services.
- The state Office of Inspector General is continuing its review of the authorization process for orthodontic services.
If the state determines that the HHSC criteria were not met, or incorrect information was submitted for the purpose of getting services approved, it has the legal right to recover those costs. If HCAA suspects fraud, it will turn the case over to the Office of the Attorney General. The most common types of Medicaid and Provider Fraud include:
- Billing for services or products not provided
- Billing for unnecessary services
- Billing for services provided by unqualified or unlicensed clinical personnel
- Knowingly billing for inadequate or substandard care
- Filing false claim reports
- Misrepresenting the nature of services rendered
- Advertising/issuing coupons/discounts that are not “real”
- Waiver of insurance co-payments
- Soliciting/receiving or offering/paying remuneration to induce referrals
- Unbundling services
- Failure to maintain adequate records
- Intentional destruction or concealment of records
Once the Attorney General’s office gets involved, the consequences may be severe. It is important to be aware that the federal government is aggressively pursuing and prosecuting fraud by healthcare providers. The following acts increase the already numerous avenues for criminal actions: Civil False Claims Act, Stark Act, Civil Monetary Penalties Law, Criminal False Claims Act, Mail & Wire Fraud, RICO, Money Laundering, Health Insurance Portability and Accountability Act, Health Care Fraud, Kickbacks, Conspiracy, Illegal Drug Distribution, Operating a Continuing Criminal Enterprise, and more. And the penalties can be brutal:
- The False Claims Act provides fines up to $10,000, treble damages, and up to five years in prison.
- The Anti-Kickback provisions of the Social Security Act provide for fines of up to $25,000, and up to five years in prison.
- Civil monetary penalties provide for fines up to $50,000 and treble damages.
- RICO provides for prison terms of up to 20 years. Civil conviction under RICO provides for asset forfeiture.
- The Health Insurance Portability and Accountability Act allows up to 10 years in prison, or up to 20 years if serious bodily injury results, or up to life in prison if death occurs.
- Civil Monetary Penalties Law provides for a penalty of $10,000.00 per item or service. In addition, the provider is subject to an assessment of not more than three times the amount claimed for each item
In addition, the Attorney General has the power to suspend and withhold the dentist’s payments under Medicare upon indictment or other reliable evidence of fraud. As a result, the government is able to exert tremendous pressure on health providers it has targeted. The dentist is also subject to expulsion from the Medicare and Medicaid programs for a period of not less than five years. And finally, The State Board may suspend or revoke the dentist’s license.
Unfortunately, most dentists will have no idea they are targets of a criminal investigation. However, if you think you are under investigation it is advisable that you consult an attorney and a forensics CPA before talking to authorities or disclosing any documents.
As a Partner of Goldin Peiser & Peiser, LLP, Erick Cutler focuses his tax compliance and consulting work in two main industries: Healthcare and Real Estate. Throughout the year he works with clients to improve the financial health of their practices/businesses. He has vast experience in the area of cost segregation: he uncovers hidden costs outside of standard depreciation to help reduce property owners’ tax liabilities. Erick has had article published in a variety of publications including the Dallas Business Journal and dental magazines.
Note: This content is accurate as of the date published above and is subject to change. Please seek professional advice before acting on any matter contained in this article.