January 10, 2018

CT shares in $23.9M Kool Smiles settlement

A chain of dental clinics must return $23.9 million to federal taxpayers and to state Medicaid funds in Connecticut and 16 other states for allegedly overbilling for unnecessary or unperformed dental work on needy children, authorities say.

The U.S. Justice Department, including the Connecticut U.S. Attorney's Office, announced the False Claims Act settlement Wednesday with Benevis LLC, a dental management company previously known as NCDR LLC, which managed a network of 133 dental clinics under the name Kool Smiles Dentistry P.C.

Of the settlement sum, $14.2 million, plus interest, will go to the U.S. Treasury, with $2.4 million of that set aside as remuneration to five current or former Kool Smiles staffers whose filing of federal "whistleblower'' lawsuits against Kool Smiles prompted the federal probe, authorities said. The remaining $9.7 million will divided between Connecticut and the other 16 states' Medicaid programs.

Neither Benevis and nor any of the Kool Smiles clinics involved admitted or denied culpability as part of the settlement, authorities said.

In Connecticut, Kool Smiles operated five dental clinics in Hartford, New Britain, New Haven, Bridgeport and Waterbury, prosecutors said.

Wallingford dentist Michael M. Greenwald, whom prosecutors identified as among the whistleblowers, nor his Waterbury lawyer, immediately returned calls Wednesday seeking comment.

"Billing Medicaid programs for dental procedures that are not necessary contributes to the soaring costs of healthcare," said Acting Assistant Attorney General Chad A. Readler of the Justice Department's Civil Division. "When healthcare providers put vulnerable patients at risk by performing medically unnecessary procedures to achieve financial goals, we will take action."

Benevis and its predecessor managed a network of company- and franchisee-owned dental clinics in 17 states, according to federal investigators.

In a statement late Wednesday, Benevis reiterated that neither it, nor its staff or dentists, admitted to any wrongdoing. It also said it "strongly disagreed'' with the government's allegations. Indeed, Benevis insists the allegations "focused on professional disagreements between qualified dentists in determining the appropriate level and cost of the care."

The U.S. government alleged that between Jan. 2009 and Dec. 2011, Benevis and Kool Smiles clinics in those states knowingly submitted false claims to state Medicaid programs for medically unnecessary pulpotomies (baby root canals), tooth extractions, and stainless steel crowns, in addition to seeking payment for pulpotomies that were never performed.

Federal prosecutors also alleged 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 government said Kool Smiles clinics ignored complaints from their own dentists regarding overutilization.

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