Computer Analytics Uncover Dental Medicaid Fraud

Michael W. Davis, DDS


In July 2019, the Texas Health and Human Services Office of Inspector General (HHS-OIG) issued a letter (see attachment above) highlighting its use of computer algorithms to find dental Medicaid providers who may illegally solicit patients.     

Under both Texas and federal statutes, many forms of patient solicitation and self-referrals are unlawful under government sponsored programs, such as dental Medicaid. These rules and statutes are commonly known as anti-kickback laws and Stark laws. Violators may face potential civil and criminal penalties as well as possible exclusion from serving government healthcare programs.


The Texas HHS-OIG’s ares of investigation include unsolicited personal contact, such as direct mail, telephone, and door-to-door solicitation; canvassing neighborhoods and offering free transportation to clients; and offering gifts or other inducements designed to influence a client’s choice of provider.

Also, the HHS-OIG is investigating dentists who offer cash, cash equivalents, gift cards, and dental services or credits to parents who bring in Medicaid-eligible patients for treatment.

Non-cash-related offers of goods or services of any value could constitute an impermissible inducement, but typically that would not be the case where the value of any individual item does not exceed $10, the aggregate annual value does not exceed $25, and the goods or services are directly related to the provider’s profession. Examples might include a toothbrush or a tube of toothpaste from a dental provider.

History in Texas

Texas has an unfortunate history of unlawful patient solicitations under its dental Medicaid program. Byron Harris, formerly an investigative reporter with WFAA Dallas, offered multiple reports on this abusive and illegal scamming. He earned the prestigious DuPont Award in 2015 for broadcast investigative journalism, which is equivalent to the Pulitzer Prize for print journalism for his multiple exposés.

Disadvantaged children were lured into vans in the parking lots of big box stores and even in front of food stamp offices with offers of cash, gift cards, iPods, tickets to the zoo, and other items. Oftentimes parents were totally unaware. These Medicaid-eligible children were next dropped off at select Medicaid mill clinics. They generally received services of multiple steel crowns and pulpotomies, or baby tooth root canals, usually of dubious clinical necessity and quality. 

The recruiters, sometimes called “bounty hunters,” were professionally dressed, often in clinic scrubs. They enticed children and poor parents face to face in their neighborhoods with offers of pizza dinners and $20 gift cards. The Medicaid mills in return paid a recruitment fee, which some might term a kickback or bribe, to those who brought child patients to their clinics. The Texas HHS-OIG was fully aware of this extensive pattern of unlawful activity at least by 2012. 

Texas has a recent history of extensive dental Medicaid fraud. At one point, the state paid out more for dental Medicaid orthodontic services than the other 49 states combined. Another issue has been private equity beneficially owned Medicaid clinics that utilize a dentist licensed in Texas as a nominal or sham owner. The state legislature has enacted very positive statutes and oversight rules to protect taxpayers and dental Medicaid recipients. Unfortunately, enforcement has been remiss.

Focus of the Texas HHS-OIG

The Texas HHS-OIG reported in its letter that “Red flags in the data include an unusually large number of new clients in a short period of time, clients receiving services on the same tooth from multiple providers, or excessive services performed following a switch in providers.”

Data analysis offered interesting insights. Only 1% of providers were considered at high risk. Of this “1%” high risk group of providers, 85% were in group practice.

Further breakdown of the numbers demonstrated that 60% of the “high risk” providers practiced in the Dallas/Fort Worth area, with 15% in the Houston area. The remaining were primarily in the El Paso and south Rio Grande Valley sectors.

“Provider education around fraud, waste and abuse continues to be a priority for the OIG,” the HHS-OIG said in its letter. “As a result of these findings, the OIG has begun sharing its analysis of the dental solicitation review with Dental Maintenance Organizations (DMOs) and provider organizations.”

This pronouncement seems somewhat weak if not disturbing considering the history of dental Medicaid fraud in Texas. First, rules and statutes surrounding patient solicitation were made very clear as early as 2013 by the Texas Dental Association and in the state’s broadcast and print news media. Violators don’t require “education.” Violating providers need to suffer civil and criminal indictments, prosecution, and stiff sentencing.

Second, DMOs should be sharing their analytical review of questionable dental solicitation with the Texas HHS-OIG and Texas Attorney General Medicaid Fraud Unit. It shouldn’t be the other way around. Again, serious enforcement needs to come from state and federal prosecutors, not private companies administering Medicaid benefits and payments.

The United States HHS-OIG has issued studies that cite the problematic and troubling disincentive of managed care organizations such as DMOs to provide protective oversight. The 2018 report by the US HHS-OIG emphasized numerous mechanisms by which our current managed care organizations fail in delivery of optimal care to patients and in providing value to taxpayers. 

States pay DMOs to administer government programs like dental Medicaid. These firms competitively bid for contracts with the states. Remuneration to DMOs for dental Medicaid is generally in the area of approximately $6 per enrolled patient per month. DMOs are paid a monthly amount if patients don’t receive services or, by contrast, patients receive abusive over-treatment.

The DMO ideally should act as a watchdog for abusive provider billings, fraudulent billings, and illegal patient solicitations. It’s the job of government to step up and provide law enforcement, thorough investigation, and prosecution. As a side note, with these serious failings of the dental Medicaid program, one wonders how a very expanded dental Medicare program, and with proposed “Medicare for all,” might not collapse into an even worse disaster.

DMOs in Texas 

A record setting settlement of $236 million to the State of Texas from Xerox/Conduent was announced in February 2019. Allegedly, this DMO failed in its oversight responsibility for orthodontic services under the dental Medicaid program.

“The attorney general’s office determined that employees of Xerox, Conduent and related companies rubber-stamped orthodontic prior authorization requests without assuring the required review of each request by qualified clinical personnel, which violated its responsibilities,” the state Attorney General’s Office said

“As a result, expensive, taxpayer-funded orthodontic work was performed on thousands of children who either didn’t meet the Medicaid standard for braces or didn’t require treatment,” the office added.

Xerox/Conduent no longer operates in Texas.  


Currently, Texas retains two DMOs for Medicaid recipients, MCNA and DentaQuest. DentaQuest openly offers an inducement for parents to sign their children up with this Medicaid DMO. It includes a $10 Walmart gift card, dental health supplies, and a backpack, which are called “Value Added Services.” Toothbrushes, floss, and toothpaste seem very reasonable. The additional offerings may be of concern.

MCNA knows how to play the insiders’ game in Texas. Between stints as Texas governor and current US Secretary of Energy, Rick Perry served as a senior corporate officer with MCNA. MCNA was a major contributor to Perry in his failed bid for the Republican Party’s Presidential nomination as well as to his political action committee (PAC) during his time as Texas governor.

MCNA board vice chairman Albert Hawkins formerly served as head of the Texas Health and Human Services Commission (HHSC). Dr. Linda Altenhoff formerly served as chief dental officer for the Texas HHSC. This was a time when Xerox/Conduent were running their alleged rampant frauds on Texas Medicaid. Today, Altenhoff is the vice president for program integrity at MCNA.

Texas HHS Inspector General Statement

Texas HHS Inspector General Sylvia Hernandez Kauffman recognizes serious problems in the illegal solicitation of dental Medicaid patients.

“One of the OIG’s priorities is to prevent fraud, waste, and abuse from happening in the first place,” she said. “The agency is proactively working with dental maintenance organizations, providers, and other stakeholders.” 

With the historical perspective of extensive, entrenched dental Medicaid fraud and abuses in the Texas dental Medicaid program, Hernandez Kauffman has a challenging job. Does she have the necessary support? 

Dental Medicaid has brought hundreds of millions of dollars of federal matching money into Texas. State officials and former officials have milked the cash cow of dental Medicaid for years. Dental Medicaid fraud may reasonably and cynically be viewed as a state jobs program. 

The education of unlawful providers, unmotivated DSOs, and greedy illegal stakeholders won’t solve problems. Kauffman requires the direct assistance of federal prosecutors, as state prosecutors may also have their hands tied by superiors enriched by the largess of Medicaid fraud.   

Dr. Davis practices general dentistry in Santa Fe, NM. He assists as an expert witness in dental fraud and malpractice legal cases. He currently chairs the Santa Fe District Dental Society Peer-Review Committee and serves as a state dental association member to its house of delegates. He extensively writes and lectures on related matters. He may be reached at or

Related Articles

Most Americans Believe the Oral Health System Is Failing

How Did the World’s Richest Dentists Make Their Money?

The United Dentists of Kansas Challenge Delta Dental