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Texas Tries to Crack Down on Dental Chains That Put Profits Ahead of Patients

David Heath
The Center for Public Integrity / News Investigation
Published: Tuesday 8 January 2013
Texas has been embroiled in a Medicaid fraud scandal for the past couple of years.
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A leading Republican in the Texas legislature, who says she’s outraged by allegations that corporate dental chains put profits ahead of patients, has introduced a bill that would allow the state to regulate chains and forbid them from forcing dentists to meet revenue quotas.

A joint investigation by the Center for Public Integrity and PBS Frontline last summer found that two of the largest dental chains owned by private-equity firms, Aspen Dental Management and Kool Smiles, put pressure on its dentists to meet production goals, prompting complaints of overbilling and unnecessary treatments.

Both companies deny this. And a coalition of dental chains in Texas contends that their dentists have total control over patient care. But the chief sponsor of the bill remains skeptical.

“Several reports, including the Frontline program, have uncovered outrageous activities involving the illegal enticement of patients, especially among our Medicaid providers and often involving dental service organizations,” said Republican Sen. Jane Nelson, who chairs the Senate’s Health & Human Services committee.

Nelson did not name a specific chain. Aspen Dental does not accept Medicaid and has no offices in Texas. But Kool Smiles has clinics throughout Texas, and public records show that the state Attorney General has been investigating Kool Smiles for Medicaid fraud.

Texas has been embroiled in a Medicaid fraud scandal for the past couple of years. The initial focus was on overbilling Medicaid for unnecessary braces on children. But the scandal has since widened. State authorities said last October that beyond braces, they’ve identified 89 dental providers they suspect of overbilling Medicaid by $154 million.

The state hasn’t identified those providers, but a spokeswoman for the state Health and Human Services Commission said that because chains bill Medicaid the most, they were more likely to be scrutinized.

Most states outlaw anyone but a dentist from owning a dental clinic. Corporate dental chains are often owned by private-equity firms, but they contend that dentists own the actual practice. The chains say they merely provide those owner dentists services under contract.

But in many cases, the chains open the clinics, own the equipment, hire the dentists, employ the staff, and control the business strategy, which might include specializing in dentures or Medicaid patients. And our investigation found that Aspen Dental and Kool Smiles set revenue targets for each clinic.

The push to boost corporate profits has led to allegations that dentists are pressured to bill more than they might otherwise. Regulators in Georgia, Connecticut and Massachusetts concluded that dentists at Kool Smiles were routinely doing unnecessary procedures, including using  more expensive stainless steel crowns on cavities when a simple filling would do.

The executive director of the Texas dental board, Glenn Parker, wrote legislators last October that he had no power to monitor chains to assure that dentists were free to treat patients as they saw fit.

“The dental board and staff are aware of the many media stories concerning the allegations of Medicaid fraud and patient abuse,” Parker wrote. “We are appalled by stories indicating that some dentists have over-treated young patients by placing unnecessary crowns, fillings or braces on those children.”

Nelson’s bill would require dental chains to register with the Texas State Board of Dental Examiners and forbid them from influencing treatments or setting quotas for a particular dental procedure.

The Texas Coalition of Dental Support Organizations, recently formed by a group of dental chains, opposes new regulation, saying laws on the books are already adequate.

“It is a felony to practice dentistry without a license, including by influencing, controlling or interfering with a dentist’s professional judgment,” the group says on its Web site. “The Attorney General is specifically empowered to prosecute violators of the Texas dental statutes and bring the full force of law down on anyone who would endanger patient safety by attempting to interfere with dentists’ clinical judgment or by practicing dentistry without a license.”

But without some way to track dental chain’s behavior, the Attorney General has no way of knowing whether they may be interfering in patient care, said Dr. Richard Black, an El Paso orthodontist who handles legislative matters for the Texas Dental Association. The state dental association supports the bill.

“There’s nothing sinister about this. We’re not interested in punishing anybody,” he said. “If they feel that they are doing everything exactly right then I don’t think they should feel at all put out by registering and being part of our state system.”



ABOUT David Heath

David Heath comes from The Seattle Times, where he was three times a finalist for the Pulitzer Prize. He co-authored an investigation of conflicts of interest surrounding clinical cancer research at a Seattle hospital. The series won the Harvard University’s Goldsmith prize for investigative reporting, the George Polk award for medical reporting, the Gerald Loeb award, the Scripps Howard Foundation’s public service award, the Associated Press Managing Editors’ public service award and the Newspaper Guild’s Heywood Broun award. Heath’s recent expose on congressional earmarks was recognized by the National Press Foundation with the Everett Dirksen award for best coverage of Congress. He is a graduate of Grinnell College and was a 2006 Harvard Nieman Fellow.

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