March 17, 2015 — Four clinics of Texas’ Smile Magic chain have agreed to pay $4.5 million to settle Medicaid fraud charges. The whistleblower lawsuit claimed the clinics used paid recruiters to target parents in grocery store parking lots and at bus stops with offers of money and gift cards to bring their kids to the clinics.
The settlement resolves the Medicaid fraud allegations in a lawsuit filed in 2014 by the Texas Health and Human Services Commission’s Office of Inspector General (HHSC-OIG), as well as two whistleblower suits.
The settlement is a fraction of the more than $19 million in Medicaid fraud detailed in the lawsuit. The complaint accused the chain and owner Everett Chad Evans, DDS, of defrauding the Texas Medicaid program of more than $19 million between February 2010 and September 2012 by performing unnecessary or excessive dental services on young children, failing to get treatment consent from parents, upcoding of services, and billing Medicaid for dental services that were never done.
The HHSC-OIG suit said most of the claims for orthodontic treatment lacked required documentation and did not qualify for Medicaid coverage. The state put Smile Magic on a Medicaid payment hold in March 2013.
“While the settlements are a step toward remedying the Medicaid fraud problem, too often they’re insufficient to really fix the problem.”
— Dan Hargrove, plaintiff’s attorney
“Ultimately, this case had to be settled to end an exhaustive financial and time-consuming process that sadly eclipsed two years without our Texas small business’ day in court,” Dr. Evans said in emailed comments to DrBicuspid.com. He noted the resignations of former HHSC Inspector General Doug Wilson and HHSC’s chief counsel, Jack Stick, in December 2014, saying their forced ouster reflects “problems in the current due process for medical providers.”