Texas Orthodontic Clinic and Former Owner Resolve Allegations of False Medicaid

DALLAS—All Smiles Dental Center, Inc. and its former majority owner, Richard Malouf, D.D.S. (collectively “All Smiles”), agreed to pay the U.S. and state of Texas $1.2 million to resolve allegations that they violated the civil False Claims Act and Texas Medicaid Fraud Prevention Act, announced U.S. Attorney Sarah R. Saldaña of the Northern District of Texas. The U.S. and Texas contend All Smiles caused “unbundled” and other improper claims to be submitted to the Texas Medicaid program for orthodontic-related items and services between 2004 and 2007. All Smiles fully cooperated with the investigation, and by settling, did not admit any wrong-doing or liability.

Orthodontic services generally are reimbursable by the Texas Medicaid program as long as they are medically necessary, correctly coded, and properly documented. The U.S. and Texas contend All Smiles submitted improper Medicaid claims between 2004 and 2007 for orthodontic-related items and services that were not furnished or rendered, were unbundled, and/or not properly documented.

The Texas Medicaid Fraud Control Unit (MFCU) and FBI initiated the case in response to patient complaints, record reviews and data analysis. As part of the settlement, All Smiles entered into a five-year corporate integrity agreement (CIA) with the U.S. Department of Health and Human Services’ Office of Inspector General. The CIA requires All Smiles to adhere to certain policies and procedures to ensure compliance with applicable statutes and regulations that govern claims for federal health care funds.

In April 2010, Dr. Malouf settled potential allegations with the Dallas County District Attorney by repaying to MFCU more than $46,000 for certain orthodontic claims and agreeing not to submit claims to Texas Medicaid for an 18-month period. Dr. Malouf did not admit any wrong-doing or liability as part of that agreement.

U.S. Attorney Saldaña praised the efforts of the MFCU and FBI for the resolution of this complex investigation. The case was handled by Assistant U.S. Attorney Sean McKenna and Assistant Texas Attorney General Susan Miller.