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Recent Industry News

Department of HHS OIG

The Department of Justice (DOJ) recently settled a False Claims Act (FCA) case with Benevis LLC (Benevis), a Dental Management Company, and 130 of its affiliated Kool Smiles dental clinics (“Kool Smiles”).  Benevis provides management and administrative services for Kool Smiles dental clinics.  Benevis and Kool Smiles settled the case for $23.9 million, plus interest, to address allegations that they knowingly submitted false claims to state Medicaid programs for medically unnecessary dental services provided to young Medicaid patients.  The FCA settlement yielded the federal government $14,244,073, plus interest.  Additionally, $9,655,926, plus interest, will be returned to the individual state parties affected.  The false claims case originated from five separate FCA qui tam lawsuits, and three of the whistleblowers received a split of $2.4 million from the federal share.  These cases are currently pending in Connecticut and Texas District Courts.

Key highlights surrounding the DOJ settlement include the following:

  • Between January 2009 and December 2011, Benevis and Kool Smiles clinics knowingly submitted false claims for payment to Medicaid in 17 states.
  • The two organizations billed for medically unnecessary pulpotomies (baby root canals), tooth extractions, and stainless steel crowns.
  • In addition, Benevis and Kool Smiles billed for pulpotomies that were not actually performed.
  • Kool Smiles clinics incentivized “productive” dentists with cash bonuses based on revenue produced and disciplined “unproductive” dentists.
  • Some dentists issued complaints that the scheme resulted in overutilization; however, Kool Smiles ignored these warnings.

The FCA settlement resulted from a collaborative effort between the DOJ’s Civil Division Commercial Litigation Branch, and the U.S. Attorney’s Offices for the District of Connecticut, Southern District of Texas, Eastern District of Virginia, and Western District of Texas.  The initial investigation was conducted by the Office of Inspector General for the Department of Health and Human Services, the Department of Defense Criminal Investigative Service, and the National Association of Medicaid Fraud Control Units (NAMFCU).

The Justice News Article can be found at: https://www.justice.gov/opa/pr/dental-management-company-benevis-and-its-affiliated-kool-smiles-dental-clinics-pay-239.