In recent years, interstate Medicaid clinics have come onto the scene. Their focus is primarily the niche market of underserved Medicaid-eligible children. They would argue that they fill the need of a demographic that receives little to no dental care. They would further point out that most private sector dentists will not serve this population.

Because of their debt burden, many of our junior colleagues are opting to work in these clinics. But they are basically working as transient laborers. They may see little immediate hope of getting out of debt while attempting to raise young families. Some working conditions would disgust an Occupational Safety and Health Administration inspector or peer-review member. Unfortunately, many recent graduates need the income too badly to come forward and complain.

Dentists in the private sector contend Medicaid fees are often below overhead costs to deliver proper (key word: "proper") patient treatments. This patient population often has special needs and a family history of challenged parenting skills, education, values, and possibly chemical abuse. The seemingly simple task of showing up for a scheduled appointment can be daunting.

Why are interstate Medicaid clinics highly profitable and "successful," while much of the private sector is far less likely to embrace this market? The answers, formerly only given in hushed whispers, are now in the public record and public domain.

Last year one of the larger interstate dental corporations settled with the U.S. Department of Justice for $24 million for alleged Medicaid fraud and abuse. This was hardly the first time for this corporation, with similar cases of alleged Medicaid fraud prosecuted throughout the U.S. at the states' level.

Medicaid fraud and abuse are big business, conducted within a large, profitable business model. Fines, penalties, and legal settlements are just a small part of the cost of doing business. Individual doctors may be exposed to licensing sanctions or even civil malpractice legal claims, but the corporations just keep rolling along. Associate dentists caught up in a gigantic system of fraud and abuses are expendable.

Medicaid billing scams

Let's get down to the nuts and bolts of how these scams are perpetrated. Billing for services never delivered is fairly common. Another tactic is to maximize the services rendered at every visit, regardless of the child's stamina, past dental experiences, or fear. Restraints become common and routine practice to maximize dollars.

Restraint for children younger than age 5 is usually a papoose board. For older children, a team of dental assistants may secure the child's body parts and forehead with tightly drawn towels or in a specially designed restraint chair. Obviously, these clinics discourage parents in clinical areas, although many have questioned their child's bruising, tears, and trembling after treatments.

Other billing schemes include "unbundling" of charges. Instead of billing for a full-mouth series of x-rays, Medicaid is billed for multiple x-rays, all totaling a greater fee. Instead of billing for two- or three-surface restorations, teeth are peppered with multiple one-surface restorations, all on a single tooth.

"Upcoding" of services is also common. Sealants are billed as two-, three-, or four-surface resin restorations. The lab technician is ordered to use a less-costly nonprecious alloy for a patient's crown, but the billing is for a noble or high-noble alloy. A standard size 2 periapical radiograph may be turned 90° horizontally, then billed as an occlusal x-ray.

Insurance actuaries use algorithms to determine the statistical validity in delivery of specific clinical services. In one Medicaid investigation, the frequency of restoration with nickel-chromium (Ni-Cr) crowns and pulpotomies was two to three times that of neighboring pedodontists. Not surprisingly, the Medicaid dollar payout for these crowns and pulpotomies vastly outstripped the allowable fees for other, more appropriate services. Pedodontic crowns and pulpotomies have become the bread-and-butter moneymaker for these clinics, regardless of appropriateness.

In fact, overtreatment with Ni-Cr crowns, prefabricated anterior resin crowns, and pulpotomies is a huge money generator. Medicaid fee schedules are generally antiquated and based on the older type of stainless steel crown, which required extensive marginal trimming, and expert crimping of margins, proximal contacts, and occlusal contacts. Modern Ni-Cr crowns are highly flexible and easily snap over buccal and lingual contours. A quick bur pass on the occlusal and proximal surfaces is usually all the preparation required. The patient "bites in" their occlusal contacts. These crowns are not only far easier to place than an alternative direct restoration, but command three to five times the revenue per tooth.

Pulpotomies also are an added income source, regardless of patient benefit. No attention is paid to restoration of teeth soon to exfoliate, incipient lesions, or teeth of minimal orthothodontic space-saving importance when it comes to the maximization of crowns and pulpotomies for profit.

Mollifying parents' concerns

How do these clinics mollify parents' concerns? First, parents are discouraged or denied from accompanying their children in clinical areas. Radios and TVs are often turned up to maximum volume to mask the crying of children. Professional-grade hair dryers may be used to dry urine-soaked clothing of overly frightened children before returning to parents. When informed consents are given, restraints may be described (never demonstrated) as a "comfort pillow" or some other innocuous descriptor. But many of these parents are at an informed consent disadvantage because of limited education and English is their second language.

The front line for malpractice and fraud rests with the individual associate dentist. The next in line may be the "lead dentist," who on paper is the "clinic owner." No state regulates the management companies, which in reality own and operate these vast series of Medicaid clinics, which in turn manipulate, direct, and tacitly threaten employee dentists.

What has been state government's involvement? Some may remember only a few years ago there were soda pop and junk food vending machines in our public schools. State governments signed off on licensing these sales until justly embarrassed by organized dentistry and concerned parents.

Few know that the major vending company's owners and officers responsible were dentists who at that time owned and operated interstate children's Medicaid clinics. One is left to wonder about doctors involved in dental care of disadvantaged youngsters, feeding those same kids a diet high in sugar, caffeine, and empty calories.

Thanks to outstanding investigative journalism by Paul Gessing of the Rio Grande Foundation, we learned of the connection between our state government and one of these large Medicaid operations. The New Mexico State Investment Council, then headed by former Gov. Bill Richardson, awarded a specific dental Medicaid provider $550,000. The council was mandated to assist only New Mexico-based businesses; this corporation was headquartered in Tennessee, and an investment banking company in Bahrain claimed ownership. This same Medicaid provider had made political donations to both Gov. Richardson and New Mexico U.S. Rep. Ben Ray Lujan.

Behind the fine print

I've had the opportunity to review several employee contracts proffered to young associate dentists by these clinics. Sometimes the manner in which employee income was calculated seemed overly complex and bizarrely esoteric.

For example, a seemingly beneficent term in one contract was to offer employee dentists a regular salary draw against future earnings. (Note: Earnings were based on a complex formulation related to a percentage of Medicaid collections.) If employees were to terminate their contract, they would be responsible for reimbursing the employer for "overpayments." On the surface this may seem fair, but it may also trap employees in debt bondage in a workplace rife with abuses.

The employee contract clauses for covenant not-to-compete can be designed to keep employees frozen in their current employment. One employer wished to enforce a noncompete clause within a 10-mile radius of every clinic they maintained in the state of New Mexico. This effectively excluded 80% of the state's population from access to this doctor.

Employees in some contracts are required to give 90 days' notice of termination. Of course the contract neglects to mention no termination notice is required in cases of workplace harassment and certain other workplace abuses. It's seemingly just one more method to keep young dentists shackled "down on the farm."

Some contracts also stipulate that employees are not to make copies of employer's records. Seriously, what clinical or business methodology in the dental profession, especially in a Medicaid clinic, is a cutting-edge proprietary business secret? This obviously seems designed to limit record access in qui tam (whistleblower) legal investigations.

Another "benefit" in some employee contracts is employer payments for malpractice insurance. Would "your attorney" (assigned to you by your employer's insurance carrier) possibly have a conflict of interest? Is there a possibility a prosecutor's office with evidence of fraud may accept the employer's "full and complete cooperation" and accept associate dentists as "fall guys"?

Currently, there are pleadings before federal district court by representatives of the malpractice insurance industry. They argue that usual and customary business practices of one of their large, corporate Medicaid providers is so egregious that fraud and abuse are routine. They seek relief from the court to not honor contractual obligations of malpractice insurance, based on unethical and unlawful business models of their insured. Good luck to any associate dentist seeking to purchase a reasonably priced liability "tail," as required under the employee contract.

Protecting the public interest

Eventually taxpayers, with their limited resources, will demand an accounting of the Medicaid money pit. Their frustrations will certainly be vented at corporate creeps who scammed the system and government regulators who gave these crooks a pass. The question we in the dental profession must ask is, "Did we take appropriate steps to protect the public interest, taxpayers, Medicaid recipients, and our junior colleagues?" Or did we turn our collective backs on a problem seemingly too large, complex, and uncomfortable to face?

A number of these Medicaid providers are clearly operating as criminal enterprises masquerading as legitimate business. Some officials in state government are involved in aiding and abetting these criminals. A recently graduated doctor has little opportunity for professional growth within such negative environments, and the public receives questionable benefit, all at substantial financial and emotional costs.

Many of our junior professionals are facing hard times and hard choices. Some face the prospect of either not paying bills or working and contributing to the abuse of disadvantaged children. Medicaid fraud and abuse are big business, being played out on a vast interstate corporate stage. State government may collude with these large dental corporations in abusing poor children for profit. We need to either address these problems or face wholesale collapse of Medicaid programs and a sellout of large segments of our junior colleagues.

This article previously appeared as a Letter to the Editor in the New Mexico Dental Journal (Fall 2011, Vol. 62:3, pp. 24-28).

Michael W. Davis, DDS, is in private practice in Santa Fe, NM. His background includes peer review, education, public health dentistry, and expert legal work. He may be reached at MWDavisDDS@comcast.net or www.SmilesofSantaFe.com.