HHS moves to block chain of dental clinics from receiving Medicaid

David Heath

David Heath

Small Smiles, one of the nation’s largest dental chains, is facing exclusion from Medicaid, David Heath of the Center for Public Integrity reported this week.

The chain has been accused of performing unnecessary treatments on children to boost profits. With Medicaid dental providers in short supply in many communities, the ouster of Small Smiles from the program could send thousands of poor families in search of new dentists.

“The inspector general of the Department of Health and Human Services notified the chain last week that after years of monitoring, the company remains out of compliance with the terms of a 2010 settlement of a whistleblower lawsuit brought by the Justice Department,” Heath wrote in his March 11 report.

The settlement “required Small Smiles to refund $24 million to the Medicaid program for performing unnecessary treatments on children and to submit to independent monitoring to assure the problems are fixed,” Heath wrote. “Last week’s letter cited a series of ongoing quality and reporting problems at Small Smiles clinics.”

The chain could be ousted from the Medicaid program in early April unless it appeals the decision, wrote Heath.

Company officials have said they plan to appeal, Donna Domino of DrBicuspid.com reported on March 12.

Small Smiles was first accused of offering bonuses to dentists who reached production targets in a series of reports by then-reporter Roberta Baskin of WJLA-Washington, D.C.

Heath, collaborating with Jill Rosenbaum of PBS on a 2012 Frontline report “Dollars and Dentists,” raised questions about practices at another chain, Kool Smiles. (Heath answered questions about the investigation for AHCJ and Rosenbaum wrote about their reporting for AHCJ.)

Heath has continued to follow problems with corporate-owned dental chains ever since.

Last year, following a two-year investigation, U.S. senators Charles Grassley (R-Iowa) and Max Baucus (D-Mont., now U.S. ambassador to China) issued a 1,500-page report concluding that Small Smiles should be excluded from Medicaid.

“A two-year Senate investigation of dental chains owned by private-equity firms found that Small Smiles’ business model deceptively gave managers rather than dentists control over the clinics,” wrote Heath. “The report said that management set daily production goals and awarded dentists bonuses based on the amount of work they do, resulting in overbilling and poor quality of care.”

At the time, Baucus and Grassley asked the U.S. Department of Health and Human Services to ban dental clinics from participating in the Medicaid program if they skirted state laws that aimed to prevent substandard care by requiring that only licensed dentists could own dental practices.

While many of the clinics technically met state-level rules requiring their owners to be licensed dentists, the report concluded, the clinics had placed control of their operations in the hands of corporate investors, resulting in a system that “places profits above patient care,” Baucus said. At the time of the report, 22 states and the District of Columbia banned corporate dentistry.

 

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