News and Updates

Kool Smiles Dental - A Disturbing Peak Behind the Curtain

 

By:  Michael Davis,DDS

Most of the public initially heard of Kool Smiles Dental with the US Senate’s Report on Corporate Dentistry issued June, 2013.1 This bipartisan Senate report asked important questions and came to very troubling conclusions. “Defenders of this corporate structure are quick to claim that without their organizations, the under-served Medicaid population would not have access to dental care. Countless news reports cite low Medicaid reimbursement rates as the principal cause for the lack of access to dental care for low-income families. However, if states and Medicaid are having difficulty recruiting good dentists to serve such a vulnerable population due to lack of reimbursement, how are private investors so successful at producing huge profits from those allegedly inadequate Medicaid reimbursements? Do short-term profits come at the cost of quality care and a sustainable business model in the long run? Local dentistry practices should be able to provide quality care to the Medicaid population and still be profitable. Fortunes should not be made on Wall Street by sacrificing proper care for the underprivileged.”

 

Small Smiles Dental

The Senate’s report was highly critical of the unlawful practice of dentistry by unlicensed corporate managers and private equity investment firms.  To a large extent they focused on Small Smiles Dental. Today, this disgraced dental support organization (DSO) is bankrupt and disallowed from service in federal government health programs.1-5  

Small Smiles Dental served as an unfortunate example and “training ground” for numbers of problematic doctors, as well as private equity investors. Many dentists and DSOs came to view Medicaid fraud as the most lucrative business model in the dental industry.5-9 Individual doctors paid the price when prosecuted for dental Medicaid fraud. Corporate managers generally received a wrist-slap, if any sanction what-so-ever. Facilitating this abuse of disadvantaged children and taxpayers is the highly burdensome student loan debt for recent dental grads, and the excessive number of doctor graduates seeking employment.1,5-9  

Kool Smiles Dental

Drs. Tu Tran and Thien Pham were former employees of Small Smiles Dental, before they founded Kool Smiles Dental in 2002. Today, Kool Smiles Dental is managed by the DSO, Benevis, which is in the private equity investment portfolio of FFL Partners.10 

Kool Smiles Dental is no stranger to reports for unnecessary dental treatment inflicted upon the disadvantaged.11-16 Complaints ranged from Texas, Massachusetts, Connecticut, Virginia, to their headquartered state of Georgia. Most of the complaints centered on excessive utilization of stainless steel crowns, which were often of poor quality fit on teeth. This was alleged to crank up additional Medicaid billings, versus simple direct fillings. Frustrated Connecticut officials were forced to the extent of requiring pre-authorization, before allowing placement of steel crowns. Texas legal cases also involved excessive use of patient restraints (a.k.a . “protective stabilization”) to facilitate dollar production, not patient welfare. Complaints also alleged excessive dental care was delivered without adequate local anesthesia (not to exceed overdose guidelines for a child’s body weight, yet maximize dollar production of services). Further, Senator Chuck Grassley (R-IA) complained of Kool Smiles Dental’s cheating the Medicaid program, “I’m finding in this investigation that there are people that know nothing about dentistry are saying you got to see so many people, you got to do so much work for each one, and in a sense, gaming the system”.12

In March of 2016, Georgia Governor Nathan Deal (R-GA) appointed Dr. Dale Mayfield, Kool Smiles Dental chief dental officer, to the Georgia Board of Dentistry.17 This activity is frequently termed “regulatory capture” or “agency capture”, when the entity to be monitored and regulated, captures their government oversight agency.18,19 This action undermines the public’s trust in government to serve the public interest, as “the fox guards the henhouse”.  

Yet, back in 2009, 18 Kool Smiles dentists were sanctioned in Georgia.20 Allegedly; Kool Smiles Dental represented 5% of providers under Georgia State dental Medicaid WellCare, and generated 20% of dental billings. Practicing dentists were punished with disciplinary actions and suspensions from serving Medicaid, while corporate managers walked away unblemished. Governor Deal may have memory problems?  

In fairness to Georgia Gov. Deal and his state’s Republican Party, Democratic politicians also suffer the appearance of pay-to-play. Former Maryland Governor Martin O’Malley (D-MD) stated in 2009, “…With partners like … Kool Smiles, we can make oral health services available to Medicaid-eligible and uninsured children in Prince George's County and throughout the region; and reach out to kids just like Deamonte, ensuring that they will not be turned away from routine but potentially life-saving care.”21  

Further compounding Mr. O’Malley’s blatant ignorance of the problematic nature of dental Medicaid is found in the official released paper, “Maryland’s 2014 Annual Oral Investigative Legislative Report” (signed off by Gov. O’Malley and Democratic Party officials), which lauds the work of dental Medicaid administrator, DentaQuest.22 DentaQuest is infused with numbers of problematic former officers and directors of the aforementioned and disgraced Small Smiles Dental.23

The main concern of Kool Smiles Dental is financial, as openly stated by a corporate officer.24 One doubts that level of honesty wasn’t a slip-up, and subsequently met with inter-corporate discipline.

Federal Health and Human Services Office of Inspector General has released reports related to dental Medicaid fraud, isolated to four specific states (CA, NY, LA, IN).25-28 Common themes appear in each of these auditing reports. Interestingly, 50% of “outlier billers” (those most suspected of fraud) occur in large group practices (dental corporate DSO practices). Yet, only about 7% of all dentists work in DSO practices.29 Further, a large number of corporate DSO dental clinics don’t accept Medicaid participation. Therefore, a great deal of highly suspicious dental Medicaid billing originates from a relatively small percentage of dentists, who are largely concentrated to bigger corporate-run Medicaid clinics.  

Texas Administrative Law requires DSOs to register with the Texas Secretary of State, as non-dentist dental practice owners. A fee is paid, and non-dentist owners are listed for public access review. It’s certainly troubling, that no clinic address and associated clinic names are cited for any of the duly listed DSOs. However, for unknown reasons, Kool Smiles Dental has elected to ignore state statutes and not list their practices as required under state law (Texas State records accessed 7-20-2017, under open records request of Texas Secretary of State.).  

Acquittal of Kool Smiles “Fall Guy”

Very recently, the criminal trial of a former Kool Smiles Dental office manager (later district manager) in Georgia concluded with her acquittal.30-32 This case received no national attention, and little local attention, outside of Chattanooga, TN, which aired the report across the Georgia state line. Naturally, as was implied with the Georgia governor’s appointment of a Kool Smiles Dental corporate officer, to the Georgia Board of Dentistry, Kool Smiles Dental, and their advertising and lobbyist funding, carry great influence in Georgia.  

The defendant’s attorney, McCracken “Ken” Poston issued the following press release, which gives one a great deal of insight into ground level operations of Kool Smiles Dental. 

 

 (Representatives of Benevis, the management company for Kool Smiles Dental, were also contacted and asked for a comment or statement. None has been received to date.)  

 

A Georgia jury only required 4 hours of deliberation, to determine a former Kool Smiles Dental employee was set up as a “fall guy” and found her innocent of criminal embezzlement charges. Yet, the defendant’s life was placed on-hold, for five long years, from the time of her criminal indictment to a jury’s acquittal. Implied in this case are obvious company violations to federal Stark Laws and federal anti-kickback statutes.33 A deliberate effort by senior management was apparently designed to pin the blame for federal Medicaid statute violations and a defrauding of company moneys ($112,000) onto a “patsy” or “fall guy”. Coercion of the defendant was initially blamed by state prosecutors, on senior human resources personnel of Kool Smiles. Defense attorney Ken Poston went to lengths to demonstrate at trail, coercion of his client was ultimately directed by senior management of Benevis, Chief Operating Officer (COO) Bill Brigham (no longer associated with Benevis).      

Very infrequently will former employees of corporate dental Medicaid clinics go on record (except as paid company spokespersons), to discuss their workplace experiences. Mr. Poston stated about the Kool Smiles clinic, “The place was operating somewhere between a game show and a sweatshop”. According to defense evidence, Ms. McGill (5-months pregnant at the time) was subjected to intense intimidation and coercion, which was directed by the highest levels of the corporate structure. It’s no wonder so few former employees of such clinics report workplace abuses, and inappropriate clinical patient care. Potential whistleblowers are justifiably too frightened to come forward. Corporate violators can utilize the full weight of government resources (which they purchase through lobbyist money), to punish and destroy the lives of potential whistleblowers. 

Defense attorney Poston presented overwhelming evidence supporting his client’s innocence, most of which Georgia State prosecutors had well in advance of trial. Also well-established far in advance of trial were the state prosecutor’s witnesses, whose testimony was relatively easy to impugn. This entire indictment and lengthy prosecution process cost taxpayers of Georgia substantial money. The logic of bringing this flawed case forward by Georgia Attorney General Chris Carr (R-GA) appears dubious. Motivations other than the best interest of Georgia citizens may well have been in play. 

On July 13, 2017, US Attorney General Jeff Sessions announced a landmark indictment of alleged Medicaid and Medicare fraudsters.34 This effort represents the largest healthcare fraud enforcement, in the history of the US Department of Justice. To date, three dentists have been charged with Medicaid fraud in this action.35,36 Not one is associated with a DSO, as one would expect from the findings of the federal HHS-OIG. Each seems to be a relatively “small fish”, as related to overall dollars of dental Medicaid fraud. To date, no Kool Smiles Dental employee has been charged in this specific federal action. One can only wonder, why? 

Conclusion

A disturbing pattern exists in dental service for the least fortunate among us. Wall Street sees the potential for fortunes made at the expense of disadvantaged children, and the corruption of the dental profession. Government officials are also seemingly corrupted. Dental Medicaid has sadly devolved into a program of “welfare for the rich”.   

The lives and careers of doctors and dental personnel are poisoned. The entire dental profession is demeaned and degraded. Children are abused, and their innocent trust betrayed. Taxpayers feel cheated, as they justly lose faith in government programs. 

This disturbing fraud and abuse has been happening for years. One corporate dental fraud operation gets closed down, and more spring up in its place. Like a sword severing a single head of the Hydra in Greek mythology, apparently two more grow back. These criminal organizations operate across state lines. Yet, federal RICO statute violations aren’t charged in briefs by prosecutors. Corporate interstate dental Medicaid mills operate similar to organized crime cartels. Witnesses knuckle-under or face the thuggery evidenced in Georgia vs. McGill. Only a few years earlier in the Small Smiles Dental trials in New York State, jurors were stalked and intimidated by a paid agent of corporate defendants.37 This corporate power-based form of lawlessness has been integrated and mainstreamed. The judicial and regulatory processes are being subverted. It’s seemingly an accepted and routine element in the troubling landscape of corporate Medicaid dentistry. 

Gratitude

Finally, I want to personally thank you, the reader. It’s a difficult task to venture beyond your comfort and peek behind the curtain of a company like Kool Smiles Dental, or any DSO focused on our vulnerable Medicaid population. Please re-read the press release of defense attorney Ken Poston. It gives one a small taste and smell of these very toxic environments. Such sorted activities in healthcare go far beyond a few isolated clinics in the Kool Smiles operation. Please also utilize the cited references. We can only start to address solutions, once we embrace the vast extent of problems.  

Michael W. Davis, DDS operates a general dentistry practice in Santa Fe, NM. He chairs his district peer-review committee and is active in state dental association matters. Dr. Davis provides the legal community with dental expert witness services. He may be reached at MWDavisDDS@comcast.net or www.SmilesofSantaFe.com  

References (accessed 7-30-2017)

1. Max Baucus, Chuck Grassley. Joint Staff Report on the Corporate Practice of Dentistry in the Medicaid Program. Finance Committee US Senate and Judiciary Committee US Senate; June 2013. https://www.finance.senate.gov/imo/media/doc/Report%20on%20Corporate%20Dentistry--0710.pdf

 2. US Department of Justice. National Dental Management Company Pays $24 Million to Resolve Fraud Allegations. Jan 20, 2010. https://www.justice.gov/opa/pr/national-dental-management-company-pays-24-million-resolve-fraud-allegations

 3. US Health and Human Services Office Inspector General. OIG Excludes Pediatric Dental Management Chain from Participation in Federal Health Care Programs. Apr 3, 2014. https://oig.hhs.gov/newsroom/news-releases/2014/cshm.asp

 4. Hagan D. CSHM, LLC (Small Smiles Dental Centers) Files for Chapter 7 Bankruptcy. Dentist the Menace online dental blog Feb 17, 2015. http://blog.dentistthemenace.com/2015/02/cshm-llc-small-smiles-dental-centers.html

 5. Hagan D. Corporate Dentistry Bleeds Medicaid, Vulnerable Low-Income Children. Coalition against Insurance Fraud Jan 8, 2015. http://www.insurancefraud.org/article.htm?RecID=3398

 6. Freedberg SP. Dental Abuse Seen Driven by Private Equity Investments. Physicians for a National Health Program (originally in Bloomberg News) May16, 2012. http://pnhp.org/blog/2012/05/17/private-equity-investors-moving-into-dentistry/

 7. Davis MW. Dental service organizations: Truths Revealed by Financial Insider (interview w/ Dr Kevin Cain). June 25, 2015. Dentist the Menace online dental blog.

http://blog.dentistthemenace.com/2015/06/exclusive-dental-service-organizations.html

8. Davis MW. Our Junior Colleagues and Interstate Medicaid Clinics. NM Dent Jour 2011; 62(4): 24-28. http://blog.dentistthemenace.com/2011/10/dr-michael-w-davis-reports-on.html

9. Davis, MW. Support for Limiting Private Equity Dentistry- Report to New Mexico Board of Dental Health Care. June 13, 2012. http://www.scribd.com/doc/97584307/Limiting-Private-Equity-Dentistry-A-Report-by-Michael-Davis-DDS

10. FFL Partners Portfolio. Benevis. http://www.fflpartners.com/investments/benevis

11. US Department of Justice Northern District of Texas. Abilene, Texas, Dentist Pleads Guilty in Medicaid Fraud Scheme. Aug 27, 2013; https://www.justice.gov/usao-ndtx/pr/abilene-texas-dentist-pleads-guilty-medicaid-fraud-scheme

 12. Heath D, Rosenbaum J. Complaints about Kids Care Follow Kool Smiles. PBS Frontline & The Center for Public Integrity; June 26, 2012; http://www.pbs.org/wgbh/frontline/article/complaints-about-kids-care-follow-kool-smiles/

 13. Rosenbaum J. PBS Frontline & The Center for Public Integrity; Dec 12, 2013; http://www.pbs.org/wgbh/frontline/film/dollars-and-dentists/

14. Langford C. Kids’ Dental Clinic Settles With 618 Parents. Courthouse News Service; Dec 16, 2015; http://oldarchives.courthousenews.com/2015/12/16/kids-dental-clinic-settles-with-618-parents.htm

 15. Heath D. Senate Report Recommends Ouster of Large Dental Chain from Medicaid Program. The Center for Public Integrity; July 23, 2013; https://www.publicintegrity.org/2013/07/23/13029/senate-report-recommends-ouster-large-dental-chain-medicaid-program

 16. Wilson J. Dental Chain Accused of Strapping Kids to Papoose Boards, Pulling Teeth Without Sedation and Placing Oversized Crowns, Settles Massive Lawsuit. Holistic Dentistry News; Dec 17, 2015; http://www.holisticdentistry.news/2015-12-17-dental-chain-accused-of-strapping-kids-to-papoose-boards-pulling-teeth-without-sedation-and-placing-oversized-crowns-settles-massive-lawsuit.html

17. Kool Smiles Dental Press Release. Gov. Deal Appoints Kool Smiles Chief Dental Officer to Georgia Board of DentistryMar 4, 2016; https://www.mykoolsmiles.com/media/press-release/gov-deal-appoints-kool-smiles-chief-dental-officer-to-georgia-board-of-dentistry

 18. Wikipedia. Regulatory Capture. Last edit July 27, 2017; https://en.wikipedia.org/wiki/Regulatory_capture

 19. Hagan D. Agency Capture: Association of Dental Support Organizations (ADSO) Main Goal to get Corporate Dentists Appointed to State Dental Boards. Dentist the Menace online dental blog Oct 30, 2015;

 http://blog.dentistthemenace.com/2015/10/agency-capture-association-of-dental.html

 20. Hagan D. 18 Kool Smiles Dentists Sanctioned by Georgia. Dentist the Menace online dental blog Aug 10, 2009;  http://blog.dentistthemenace.com/2009/08/18-kool-smiles-dentists-sanctioned-by.html

 21. Kool Smiles Dental Press Release. Kool Smiles Joins Governor O'Malley to Announce New Healthy Smiles Tour (public/private partnership). Sept 14, 2009; https://www.mykoolsmiles.com/media/press-release/kool-smiles-joins-governor-omalley-to-announce-new-healthy-smiles-tour

22. O’MALLEY M, BROWN AG, SHARFSTEIN JM. MARYLAND’S 2014 ANNUAL ORAL HEALTH LEGISLATIVE REPORT. PP 3, 12, 18-21, 27-28.HTTPS://PHPA.HEALTH.MARYLAND.GOV/ORALHEALTH/DOCUMENTS/2014.PDF

23. Hagan D. DentaQuest Care Group Connection. Dentist the Menace Facebook; July 3, 2017. https://www.facebook.com/dentistthemenace/photos/a.275288489215879.66160.101880433223353/1389969954414388/?type=3&theater

 24. Hagan D. NCDR- Kool Smiles and Resolution Dental Says Main Concern is “Financial”. Dentist the Menace online dental blog Mar 31, 2014; http://blog.dentistthemenace.com/2014/03/ncdrkool-smiles-and-resolution-dental.html

 25. US Department of Health and Human Services- Office Inspector General. Questionable Billing for Medicaid Pediatric Dental Services in California. May 2015; https://oig.hhs.gov/oei/reports/oei-02-14-00480.pdf

 26. US Department of Health and Human Services- Office Inspector General. Questionable Billing for Medicaid Pediatric Dental Services in New York. Mar 2014; https://oig.hhs.gov/oei/reports/oei-02-12-00330.pdf

 27. US Department of Health and Human Services- Office Inspector General. Questionable Billing for Medicaid Pediatric Dental Services in Louisiana. Aug 2014; https://oig.hhs.gov/oei/reports/oei-02-14-00120.pdf

28. US Department of Health and Human Services- Office Inspector General. Questionable Billing for Medicaid Pediatric Dental Services in Indiana. Nov 2014; https://oig.hhs.gov/oei/reports/oei-02-14-00250.pdf

 29. Garvin J. HPI: 7.4 Percent of US Dentists are Affiliated with Dental Service Organizations. ADA News Mar 7, 2017. http://www.ada.org/en/publications/ada-news/2017-archive/march/hpi-7-4-percent-of-us-dentists-are-affiliated-with-dental-service-organizations

 30. The Chattanoogan. Com. Not Guilty Verdict Returned in Dalton Dental Office Theft Case. Jun 15, 2017; http://www.chattanoogan.com/2017/6/15/349864/Not-Guilty-Verdict-Returned-In-Dalton.aspx

 31. WTVC Channel 9 News (Chattanooga, TN). Jury Acquits Whitfield Co. Woman on Theft Charges. Jun 15, 2017; http://newschannel9.com/news/local/jury-acquits-whitfield-co-woman-on-theft-charges

 32. McDonald RR. Dental Office Manager Tagged as “Fall Guy” Wins Acquittal. Daily Report; Jun 29, 2017: http://www.dailyreportonline.com/id=1202791901521/Dental-Clinic-Manager-Tagged-As-Fall-Guy-Wins-Acquittal

 33. Davis MW. Focus On: Hot Topics in Ethics (fee-splitting and kickbacks in the dental profession). Dentistry Today Jul 17, 2017; 36 (7): 14. http://www.dentistrytoday.com/focus-on/10318-focus-on-hot-topics-in-ethics

 34. US Department of Justice. National Health Care Fraud Takedown Results in Charges Against Over 412 Individuals Responsible for $1.3 Billion in Fraud Losses- Largest Health Care Fraud Action in Department of Justice History. Jul 13, 2017; https://www.justice.gov/opa/pr/national-health-care-fraud-takedown-results-charges-against-over-412-individuals-responsible

 35. Klecker M. Omaha Dentist Among Hundreds Indicted in Nationwide Health Care Fraud Sweep. World-Herald July 17, 2017; http://www.omaha.com/livewellnebraska/health/omaha-dentist-among-hundreds-indicted-in-nationwide-health-care-fraud/article_9b383838-67f7-11e7-b9e3-ef5086573f1d.html

 36. Steckroth J. Schuette Charges 3 People, Including 2 Michigan Dentists, with Medicaid Fraud. WDIV ClickOnDetroit July 13, 2017; https://www.clickondetroit.com/news/schuette-charges-3-people-including-2-michigan-dentists-with-medicaid-fraud

 

37. Dowty D. Update: After Jury Clears Syracuse Dentistry of Mistreating Boy, Lawyer for Dozens of Other Children Questions ‘Creepy’ Jury Stalker. Syracuse.Com The Post-Standard; Nov 8, 2013: http://www.syracuse.com/news/index.ssf/2013/11/with_dozens_more_cases_to_go_jury_finds_syracuse_dentistry_did_not_mistreat_low-.html

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