In 2010, Small Smiles, which is owned and operated by Church Street Health Management (formerly Forba Holdings), 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.
In 2011, lawsuits were filed by 10 families on behalf of 30 children in Onondaga, Monroe, and Schenectady counties, accusing Small Smiles and its dentists of "unnecessary, inappropriate, unsafe, and excessive dental procedures" performed on young children at various Small Smiles clinics between 2005 and 2009. Battery, false advertising, malpractice, negligence, and breach of fiduciary duty also were alleged.
The parties named in those complaints -- which include more than a dozen Small Smiles dentists, the former and current owners and managers of Small Smiles, and the corporate entities under which the clinics operated -- subsequently asked the Onondaga County Supreme Court to dismiss some of the issues, including fraud and battery in the Onondaga lawsuit, claiming the lawsuits did not meet required legal standards.
'Emotional and physical nightmare'
The parents who filed the lawsuits are requesting punitive damages due to the "egregious nature" of the dentists' alleged conduct. (Malpractice suits do not ordinarily include punitive damages.) They allege that their children were subjected to an "emotional and physical nightmare," often "struggling, screaming, and crying during dental procedures," according to a 39-page decision issued August 23 by Judge John Cherundolo of the 5th Judicial District of New York.
“It is clear that the defendants' actions constituted more than just malpractice.”
— Judge John Cherundolo, Onondaga
County Supreme Court
Judge Cherundolo denied the defendants' requests for dismissal, writing that Small Smiles allegedly created "a culture that put revenue generation as a top priority at the expense of quality dental treatment."
New dentists were required to attend training sessions that allegedly "made it clear that production was more important than quality patient care and they were expected to meet production goals," he added. Dentists allegedly received bonuses if they produced revenue that exceeded the goals, and they were expected "to reduce the time spent with each child without regard for the health and welfare of the child," the judge stated.
In addition, dentists commonly restrained children to "speed up treatment" and meet production goals, the ruling noted.
Company dentists also allegedly told parents that the use of restraints on their children had no risks, while the alternatives of sedation or general anesthesia carried risks. This tactic was used to induce parents to consent to treatment involving restraints, according to the plaintiffs.
The lawsuits also contend that company dentists breached their fiduciary duty to the parents because they did not make truthful and complete disclosures regarding treatment.
"It is clear that the defendants' actions constituted more than just malpractice," according to the court's ruling. "This scheme was allegedly created to take advantage of children in poorer families so that defendants could defraud the U.S. and several state governments of as much Medicaid monies as possible. Certainly, these allegations go beyond mere malpractice and establish a claim for fraud."
More than 90% of the company's $161 million in revenues in 2011 came from Medicaid and the state Children's Health Insurance Program.
The complaints have a valid claim for battery because the dentists "appear to have intended to injure the infant plaintiffs by subjecting them to harmful and unnecessary dental procedures well before they stepped through the door at a Small Smiles clinic," Judge Cherundolo wrote. "This intentional misconduct was a part of the alleged scheme to generate revenue as quickly as possible."
The lawsuits also allege that Small Smiles clinics violated a New York law that requires dentists to own dental practices. The company allegedly got around the requirement by designating dentists to register as clinic owners.
"However, these dentists were allegedly handpicked and let go at Forba's whim," Judge Cherundolo ruled.
As of press time, Church Street Health Management officials had not responded to requests for comment.
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