The Attorney General of Texas Ken Paxton sent out a press release Thursday that a Travis County judge had issued a summary judgment ordering Dr. Richard Malouf of Dallas to pay Texas back some $12 million for Medicaid fraud. The court order is available below.
NOTE: THERE ARE MORE RECENT STORIES
May 19, 2020 – Incorrectly Billed $68 Fee Led to $12 Million Malouf Judgment, Not Medically Unnecessary Treatment
August 12, 2020 – Final Judgment in Malouf Case – $16.5 million
Allegations started back in 2011 about Medicaid orthodontia
If y’all remember back, Dr. Malouf was accused of millions of dollars of Medicaid orthodontic fraud back in 2011, along with lots of other dentists in the great Medicaid/Xerox orthodontia debacle about which TDMR has reported on extensively. Malouf received the most media attention as the allegations caught him building one of the largest, most expensive residences in Dallas after he had sold his practice to a private equity firm. He gained further notoriety for suing the media and his neighbor, the mom of actors Luke and Owen Wilson, after she allowed media on her property to film Malouf’s mansion in progress. You know, the one with the world-class waterpark which he sold last December for an undisclosed amount.
Back in the day, Malouf underwent criminal and civil investigations like other dentists who had practices with high Medicaid orthodontic billings. No dentist we are aware of has ever been criminally charged over the orthodontic matter including Malouf. But little was heard about these cases after 2015 until today.
Judgment not based on Medicaid orthodontic allegations
Now you might think that this judgment had to do with false HLD scoring and matters having to do with Medicaid orthodontia.
Well, that’s not the case. Malouf had “fraudulently billed Medicaid for services that were actually provided by a different doctor” some 1,842 times, even while he was on vacation, according to the press release sent out by AG Paxton.
The actual amount of the fraud was $538,228.45 per the judgment. With TMFPA penalties, Texas winds up with a tidy sum of around $12 million that they will have to share with the whistleblowers Dr. Christine Ellis et al and her lawyers. They get 14-25%.
$68 fee to blame
Here is the information TDMR obtained that came from court documents:
- The OAG agreed that orthodontic services provided to Texas Medicaid patients by All Smiles were all done by properly licensed orthodontists.
- The orthodontic services were pre-approved by the state’s agent, TMHP/Xerox/Conduent.
- All Smiles billers sometimes incorrectly submitted requests for payment for procedures under Dr. Malouf’s provider number.
- Apparently, these billings were for a $68 fee that All Smiles collected from TMHP/Xerox/Conduent when its dentists periodically adjusted braces per TMHP requirements.
- It appears from the judge’s order that the fine levied against Dr. Malouf was $5000 per violation (1,842) plus three times the amount that was billed and collected—or a whopping 74 times the $68 adjustment fee
- The OAG was seeking $20.1 million from Dr. Malouf for 3,711 acts. The judge ruled he was liable for 1,842.
- Lawyers for Dr. Malouf had argued that the over $10 million civil penalties awarded against him personally violated the Constitution’s 8th Amendment prohibition against excessive fines.
- The OAG has sought civil penalties from Dr. Malouf amounting to more than 34 times the total amount of payments the state made to All Smiles (not Dr. Malouf).
No need to prove treatment fraud
Ouch. This billing “gotcha” eliminates the need of the state to prove medically unnecessary fraudulent orthodontic services were delivered, which has been the chief accusation against Dr. Malouf for years and destroyed his reputation (the reason he attempted to sue media and others).
No issues of material fact, no need for a trial
This summary judgment means that the OAG convinced the judge that no genuine issues of material fact existed and that it was entitled to judgment as a matter of law. So there was no need for a trial. Only took nine years.