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Small Smiles Pays $24 Million to Resolve Fraud Allegations

Late last month, the Department of Justice announced the settlement of its claims against FORBA Holdings LLC, a dental management company which provides business management and administrative services to 69 dental clinics located nationwide, known as Small Smiles Dental Centers.

Just as the name implies, the Small Smiles clinics provide dental treatment to children, including children on Medicaid. Despite the catchy name, the Government’s allegations centered on greed and placing profit above the safety and welfare of innocent children.

The government’s investigation was initiated by three lawsuits filed under the qui tam, or whistleblower, provisions of the False Claims Act, which permits private citizens to sue on behalf of the United States and in turn share in any recovery.

The whistleblowers filed actions in three federal District Courts: a case filed by the Strom Law Firm on behalf of a whistleblower in the District of South Carolina as well as two other actions filed in the District of Maryland and the Western District of Virginia.

The suits alleged that Small Smiles submitted claims for reimbursement for a wide range of dental services provided to low-income children that were either medically unnecessary or performed in a manner that failed to meet professionally-recognized standards of care. These services included performing pulpotomies (baby root canals), placing crowns, administering anesthesia (including nitrous oxide), performing extractions, and providing fillings and/or sealants.

The suit further alleged that Small Smiles submitted bills for these unnecessary services to state Medicaid programs for reimbursement.

As part of the agreement, Small Smiles agreed to put in place various remedial measures designed to prevent similar unlawful conduct from occurring in the future. Despite the settlement, the government’s investigation of the individual dentists working for Small Smiles is ongoing, and FORBA is cooperating with that investigation by providing information about dentists who may have violated professional standards.

The settlement will hopefully be a step in the right direction towards providing proper dental care to lower income families. Most dentists will not see Medicaid patients due to the amount of paperwork and payment delays associated with treatment, limiting treatment options. The DOJ press release noted that they did not automatically close the 69 clinics because they wanted to strike a balance between enforcing the law and access to needed dental care.

“We have zero tolerance for those who break the law to exploit needy children,” said Tony West, Assistant Attorney General for the Civil Division of the Department of Justice. “Illegal conduct like this endangers a child’s well-being, distorts the judgments of health care professionals, and puts corporate profits ahead of patient safety.”

As part of the settlement, Small Smiles will pay $24 million, plus interest. The federal share of the civil settlement is $14,285,645, and the states’ Medicaid share is $9,714,355.25. In addition, as part of the settlement, FORBA has agreed to enter into an expansive five-year Corporate Integrity Agreement with the Office of Inspector General of the Department of Health and Human Services.

The agreement provides for procedures and reviews to be put in place to avoid and promptly detect conduct similar to that which gave rise to this matter. Specifically, FORBA must engage external reviewers to monitor its quality of care and reimbursement processes. In addition, the chief dental officer must develop and implement policies and procedures to ensure that the Small Smiles clinics provide services consistent with professionally recognized standards of care. FORBA has also agreed to cooperate in the government’s continuing investigation of individual dentists.

“In this case, FORBA put greed and profits before the well-being of children,” said Timothy J. Heaphy, U.S. Attorney for the Western District of Virginia. “It endangered the health and safety of innocent children and defrauded the taxpayer of millions of dollars. Today’s settlement addresses these egregious acts and sends a clear message that Medicaid fraud will be expeditiously addressed by this Department.”

As part of the resolution, the three whistleblowers credited for the government’s investigation into the allegations will receive payments totaling more than $2.4 million from the federal share of the settlement. The whistleblowers filed lawsuits under the qui tam, or whistleblower, provisions of the False Claims Act, which permit private citizens to sue on behalf of the United States and share in any recovery.

This settlement with FORBA is part of the government’s emphasis on combating health care fraud. One of the most powerful tools in that effort is the False Claims Act, which the Department of Justice has used to recover approximately $2.2 billion since January 2009 in cases involving fraud against federal health care programs.

The Qui Tam attorneys at the Strom Law Firm, L.L.C. include a former United States Attorney, a former public defender, a former Assistant Attorney General and Richland County Assistant Solicitor, as well as a tax lawyer familiar with IRS criminal investigations. The Strom Law Firm aggressively advocates justice on behalf of individuals in all State and Federal Courts in South Carolina as well as the Federal Courts in Georgia. Our lawyers proudly edit the Columbia, South Carolina Injury Board as well as the Strom Law Blog as a pro bono effort to provide the public valuable information. Our lawyers are licensed in South Carolina, New York, and Georgia.

About Pete Strom

Defending criminal charges including drug crimes, DUI, CDV, mail fraud, wire fraud, bank fraud, computer crimes, money laundering, and juvenile crimes, Pete also handles Federal and State investigations. Representing individuals in Civil Matters including Class Actions, Personal Injury, Qui Tam Actions, Defective Products, Nursing Home Neglect, and Professional Licensing Defense cases. Joseph Preston “Pete” Strom, Jr., the managing partner at Strom Law Firm, L.L.C., has been fighting for justice since 1984.

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