CSHM, the owner of the Small Smiles dental chain that was excluded from the Medicaid program last year, has filed for Chapter 7 bankruptcy, according to documents filed in the U.S. District Court for the District of Delaware.
CSHM owns 53 Small Smiles dental clinics in 19 states and the District of Columbia. The company was excluded from participating in the Medicaid and Medicare programs for a minimum of five years by the U.S. Department of Health and Human Services in March 2014.
CSHM owes $73.3 million and claimed $78,337 in assets, according to documents that accompanied the February 5 bankruptcy filing. The company's list of creditors filled 31 pages and included dental boards, dental supply companies, dental labs, law firms, TV stations, insurance companies, and management companies. CSHM also owes 20 states, the District of Columbia, and the U.S. Department of Justice for costs related to Medicaid fraud investigations of the company.
Court documents also show that CSHM paid company CEO David Wilson $1.2 million last year.
Trouble-plagued CSHM is the restructured company that emerged in June 2012 when Church Street Health Management (formerly Forba Holdings) filed for Chapter 11 bankruptcy in February 2012. After being excluded from the federal healthcare programs for encouraging dentists to perform unnecessary treatments to boost profits, CSHM pledged to "mend its ways."
In 2010, Small Smiles paid $24 million to settle allegations of Medicaid fraud brought by the U.S. Department of Justice. A total of $3.45 million of that went to the state of New York, where the company operates several clinics.
More than 90% of the company's $161 million in revenues in 2011 came from Medicaid and New York's Children's Health Insurance Program.