Dr. Nathaniel Chan and his practice, Advanced Dental Arts, will pay $135,000 to resolve allegations that they were running an illegal kickback scheme that led to improper payments from Massachusetts’ MassHealth state Medicaid program.
The settlement resolves allegations that Chan and the practice were operating a customer rewards scheme that provided monetary incentives and raffle prizes to customers who attended more appointments who attended more appointments and referred more patients.
This kind of incentive is a violation of state law and may encourage patients to book or refer medically unnecessary appointments paid for by MassHealth, according to the Commonwealth of Massachusetts Office of Attorney General.
“This dentist orchestrated an illegal kickback scheme to boost his own profits at the expense of our MassHealth program, which provides healthcare to some of our most vulnerable populations,” said Attorney General Maura Healey. “Dental providers need to know that we will enforce state law to protect these resources.”
The Attorney General’s Office alleges that from October 2014 through December 2017, Chan and the practice operated a loyalty program where patients earned monetary incentives and entries into a monthly raffle drawing based on the number of times they received treatment and the number of patients they referred to the practice.
Raffle prizes included Apple TVs, tickets to Boston Red Sox and Boston Bruins games, and an Amazon Kindle Fire. Monetary incentives escalated based on the number of treatments received and patients referred, ranging from $25 to $100 in gift cards, as well as birthday dinner gift certificates for “VIP” members.
Addressing wrongdoing at dental practices is a focus of the Attorney General’s Medicaid Fraud Division. In January 2018, Kool Smile settled for $1.7 million to resolve allegations that it performed unnecessary dental work on children.
The division also reached settlements with Dental Dreams for more than $1.3 million, which was alleged to have billed MassHealth for unnecessary procedures, and dentist Annie Watson for $500,000, who was alleged to have improperly billed MassHealth for palliative care.