Benevis, Kool Smiles settle with DOJ for $24M

By Tony Edwards, editor in chief

January 10, 2018 -- The U.S. Department of Justice (DOJ) announced a $23.9 million settlement with dental management company Benevis and its Kool Smiles affiliate after a seven-year False Claims Act investigation.

The justice department alleged that false claims were submitted to state Medicaid programs for medically unnecessary dental services performed on children insured by Medicaid from 2009 to 2011. The settlement will be divided between the U.S. government and the 17 individual states involved.

The department will take action when vulnerable patients are put at risk, noted Acting Assistant Attorney General Chad Readler in a DOJ statement.

"Billing Medicaid programs for dental procedures that are not necessary contributes to the soaring costs of healthcare," he stated. "When healthcare providers put vulnerable patients at risk by performing medically unnecessary procedures to achieve financial goals, we will take action."

The claims resolved by this settlement are allegations, and there has been no determination of liability, the DOJ noted.

Medically unnecessary

The justice department alleged that between January 2009 and December 2011, Kool Smiles clinics in the 17 states knowingly submitted false claims to those state's Medicaid programs for medically unnecessary pulpotomies, extractions, and stainless steel crowns. The DOJ also alleged that the companies sought payment for pulpotomies that were never performed.

“Billing Medicaid programs for dental procedures that are not necessary contributes to the soaring costs of healthcare.”
— Acting Assistant Attorney General Chad Readler

Additionally, dentists were allegedly pressured to meet production goals, according to the DOJ.

"Kool Smiles clinics routinely pressured and incentivized dentists to meet production goals through a system that disciplined 'unproductive' dentists and awarded 'productive' dentists with substantial cash bonuses based on the revenue generated by the procedures they performed," the department stated.

It was further alleged that Kool Smiles clinics ignored complaints from their own dentists regarding overutilization.

The investigation began when five lawsuits were filed under the whistleblower provision of the False Claims Act, which permits private citizens to file suit on behalf of the U.S. for false claims, according to the department. As part of the resolution, three former Kool Smiles employees will receive payments of more than $2.4 million from the U.S. government's share of the settlement.

These lawsuits are currently pending in federal courts in Connecticut and Texas, according to the DOJ.

Disagreement between dentists

In a statement to, Kool Smiles stated that the investigation was "largely focused on professional disagreements between qualified dentists in determining the appropriate level and cost of the care."

The company cited the time spent and expense incurred both to this point and into the future as reasons for agreeing to the settlement.

"Given the seven years and significant expense already incurred, as well as the anticipated additional time and expense associated with lengthy litigation, the companies believe putting this matter behind them was the best option for their dentists, team members, and the patients they serve," Kool Smiles stated.

The company noted that the government "disagreed with the care provided in less than [1%] of the procedures billed during the reviewed period."

Copyright © 2018

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