Fixing the Broken Dental Medicaid Program

Dr. Michael W. Davis




The dental Medicaid program is beyond requiring a tune-up. The dental Medicaid program is wallowing in full-blown failure mode.

Dismal fee schedule rates have squeezed out most ethical and skilled clinicians, except those who provide care as a charity or community service. Governmental price fixing has failed miserably. Many providers on the list of managed care organizations (MCOs) read like a rogues’ gallery within the dental profession. Patients and parents are not only frustrated by the troubling level of care they receive, but shortcuts in dental sedation have led to alarming rates of morbidity and mortality. The media reports case after case of civil and criminal legal actions for alleged dental Medicaid fraud.

Here’s exactly what needs to be established:
1. We need to attract (not coerce) talented and ethical dental providers to the mainstream of care for dental Medicaid. Our disadvantaged citizens deserve no less.
2. We must assure taxpayers that their tax dollars are utilized responsibly and not targeted on “welfare for the rich.” That means minimal expenditures for MCOs, which manage dental Medicaid for the states; serious due diligence with oversight of taxpayer expenditures; and a halt to the largess the private equity industry currently enjoys in its position as beneficial owner of so-called dental Medicaid mills.
3. We must empower Medicaid recipients and their parents to make positive healthcare decisions in their own self-interests. The present arrogant, paternalistic attitude of government and big business knowing best has failed. True consumer transparency and empowerment is vastly superior to our entrenched model of crony capitalism.
4. The failed model of continuously throwing additional taxpayer dollars at the dental Medicaid problem represents flushing good money down a toilet. Seemingly, that’s the best that policymakers in Washington, corporate dentistry, and organized dentistry can come up with. That disturbing policy only serves special interests and not taxpayers or our disadvantaged citizens. Don’t take their bait/refrain of “What about the poor children?” The entire model of dental Medicaid requires a total restructuring.

It’s critically important we examine systems that are already viable. Most or all of these models promote optimal free-market decision-making for Medicaid beneficiaries. Top-down centralized government planning has failed in the former Soviet Union and Venezuela. Top-down, corporate-directed healthcare, in collusion with big government (crony capitalism) as we currently see in the States, is likewise a disaster.

Electronic Benefits Transfer
Electronic benefits transfer (EBT) has been largely successful in the nation’s Supplemental Nutrition Assistance Program (SNAP). The beneficiary has an eligibility card, which is run through a scanner at the food market. The cashier instantly can determine eligibility and the dollar amount for expenditure. The same system would be very effective for dental Medicaid. There is no price fixing, and consumers are free to select from a range of options.

Firstly, the program could be set to disallow certain dental services, like cosmetic treatments. Each state could determine which dental services they desire to allow for care. This is no different than an EBT grocery store machine, which disallows purchases for tobacco and alcohol. Providers would be free to set fees for services and to not be restricted by some steeply discounted Medicaid fee structure. They would be incentivized to enroll as providers. A set dollar amount for expenditures could be established by each state, per annum. An unlimited expenditure rate is grossly unfair to taxpayers, who are generally limited to dental insurance maximums of $1,000 to $1,500 per year. Providers would be free to charge standard fees for dental services, like food markets that accept EBTs. Consumers, in their own self-interests, would be free to select the best value for their limited benefits. Such a change would invite better dental providers to re-enter the dental Medicaid program. Consumers (Medicaid beneficiaries) would enjoy a greater selection of provider options. Those providers who formerly abused Medicaid patients would either reform or lose the Medicaid population from their practices. Free-market decision-making would be placed into the hands of the least fortunate among us. Government would no longer select winners and losers in the dental Medicaid marketplace.


Managed Care Organizations
MCOs administer billings from dental providers and payments to such providers. Their cost to the states is about $6.00 per month per Medicaid enrollee. Obviously, Medicaid EBT cards for dental care would dramatically reduce overhead costs for the administration of billings and payments to providers. Costs to the states and federal government would be significantly reduced.

The US Department of Health and Human Services Office of Inspector General (HHS OIG) has openly questioned our current system, which disincentivizes MCOs from reporting fraudsters and abusers of the Medicaid program. The HHS OIG has firmly established in their investigations of state dental Medicaid programs that the majority of “outlier billers” are from larger corporate chain dental clinics. MCOs often win the bids for state contracts based primarily on the size of their provider networks. These large corporate dental chains, which bring forth a huge number of (dubious) providers, often win state contracts for their sponsoring MCOs. Yet, these are usually the exact opposite types of providers, which are of most benefit to the Medicaid population. Furthermore, when MCOs are remunerated on a monthly capitated rate per enrollee, there is no incentive to watch over illegitimate expenditures or quality of care. In fact, there is no incentive to see patients receive any dental care whatsoever.

Too many MCOs are not transparent with the states that they do business with. They too often misrepresent their dentist rolls, both in credentialing and the volume number of providers. Patients and taxpayers benefit when the role and costs of MCOs are kept to an absolute minimum. Allowing patients through EBT cards’ vast selection options of providers places patients, not MCOs, in a position of leverage.

The dental insurance industry has utilized patient copayments successfully for years. Yet, the dental Medicaid program is generally averse to this solution. Copayments are rarely required for preventive healthcare services in order to motivate patients to obtain these highly beneficial services. However, copayments are nearly universally required for restorative treatment. In effect, the insurance industry enlists patients as a fiscal watchdog partner.

There are 2 primary scams in the private sector dental Medicaid mills. One involves generating excessive stainless steel crowns and pulpotomies (baby tooth root canals) on the maximal number of teeth. This may include teeth with minimal-to-no dental caries and teeth ready to exfoliate. Furthermore, treatments are frequently below standards of care. To achieve this self-serving objective, clinics demand maximal production from employee doctors through high-pressure production quotas. Children may be needlessly placed in “protective stabilization,” achieving maximal dollar production, at the expense of a child’s best interest. Others are needlessly placed under risky deep or IV general sedation.

The second major scam involves upcoding sealants and preventive resin restorations placed on primary and permanent teeth as permanent direct restorations. This generally manifests as an appointment of 4 quadrants of “restorative dentistry” at a single visit. Obviously, there is no need for local anesthesia, as the “restorations” never enter dentin.

Patient copays will eliminate or substantially minimize this fraud. Out-of-pocket payments, even if only a few dollars, can go a long way with patient oversight of unreasonable expenditures. The condescending attitude that the Medicaid demographic lacks the intellect or ability to watch over their money is a myth presented by those profiting from the current rampant dental Medicaid fraud and abuses. Cheating Medicaid is far more evident from big business than beneficiaries.

Eliminate FQHC Encounter Fees
Encounter fees are a mechanism of additional Medicaid payments from the state that are made each time a patient is treated by an eligible provider in a nonprofit clinic, such as a federally qualified health center (FQHC). For-profit clinics are not eligible for this added compensation. In a remodeled dental Medicaid program where providers are free to charge usual and customary rates for dental services up to the yearly maximal allowance of their states, encounter fees should not be needed.

The common scam that played out in FQHCs is termed “patient churning.” A clinic director will mandate an absurd degree of double- and triple-booked patient scheduling. Little time is allotted for necessary dental services to be completed at a single patient visit. Little regard is given to patients and parents who must take time off work or school or struggle with transportation. The goal is to maximize total patient visits, thereby maximizing dollar yield from encounter fees. Patients and their parents become exasperated. Clinical staff becomes frustrated “working on roller skates” from patient to patient. Seemingly, the only entities to profit from this toxic scheme are nonprofit clinic directors, who often take home salaries well into 6 figures.

Certainly, this is not a perfect plan. There will be special needs cases, in which expenditures must be allocated beyond the standard maximum. Oversight mechanisms must be extended further than patients themselves. Blockchain technology appears promising for the monitoring of suspect metrics. There is not adequate space in this report to expand upon the benefits of required work and/or education for Medicaid-eligible adults. However, these instruments that are focused on serving patients, doctors, and taxpayers are vastly superior to social programs designed to feed big government and big business.

Dental Medicaid healthcare directed for optimal patient choice will produce immediate enhanced access to care. Common sense, free-market tools have never been tested or tried in dental Medicaid. The current program is so utterly dysfunctional that we have nothing to lose.

Dr. Davis maintains a general dental practice in Santa Fe. He also provides expert legal witness work on cases of alleged malpractice and fraud. Dr. Davis may be reached at or at the website

Disclosure: Dr. Davis is a credentialed Medicaid provider.

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