Operation Root Canal Targets Dental Medicaid Fraud in North Carolina

Michael W. Davis, DDS


Operation Root Canal is an ongoing program of the North Carolina Department of Justice (NCDOJ) Medicaid Investigations Division (MID). This law enforcement endeavor led by North Carolina Attorney General Josh Stein is focused on uncovering dental Medicaid fraud through civil and criminal investigations and prosecutions. 

“While Attorney General Stein’s Medicaid Investigations Division has investigated Medicaid fraud by dental providers in the past, Operation Root Canal is a focused effort that our office has been working on in concert with the Medicaid program to investigate and examine billing code data and root out this fraud among dentists,” said Nazneed Ahmed, NCDOJ communications and policy advisor.  

Most of the investigations of Operation Root Canal were initiated by review of billing data, although whistleblowers have been of assistance.

“These frauds manifest in different ways depending on the individual case, including submitting fraudulent claims, billing for services not rendered, upcoding, or providing services that were not medically necessary or did not have supporting clinical documentation,” Ahmed said. “The ultimate goal is to investigate and hold providers responsible when they defraud Medicaid and cheat taxpayers out of hard-earned money.” 

On September 5, 2019, the NCDOJ announced a settlement of $375,000 with a dentist in Durham, NC.

“People who cheat the Medicaid system are cheating taxpayers and people who need health care,” said Stein. “My office will continue to fight fraud and abuse among dental providers and other healthcare providers.”

The settlement agreement was jointly achieved through efforts of the MID and the North Carolina Department of Health and Human Services, Division of Medical Assistance. Ahmed added that the North Carolina State Board of Dental Examiners (NCSBDE) has also assisted state investigators and prosecutors with related cases.

The NCDOJ reached another high-profile settlement of nearly $800,000 for alleged dental Medicaid fraud with a dentist in Mebane, NC, in May 2019. The investigation and settlement stemmed from the MID’s work to find Medicaid dental providers engaged in fraudulent practices involving a wide variety of services including dental cleanings, use of nitrous oxide, repetitive restorations on the same tooth, palliative care, and upcoding of patient examinations.

From 2015 to 2019, the NCDOJ reached nine settlement agreements with dentists for alleged dental Medicaid fraud. This represents a serious continual and concerted effort to enforce the rule of law and protect taxpayers.

Interestingly, these settlements don’t include certain bad apples from corporate dentistry. Several dental service organizations (DSOs) have had an unfortunate history of allegedly defrauding the Medicaid program. It’s not that the NCDOJ ignores corporate dentistry abuses, though. These potential violations have been stopped from the onset by North Carolina’s enforcement of laws prohibiting the corporate practice of dentistry. The NCSBDE, unlike most state dental boards, has been vigilant in enforcing these statutes

One troubling DSO, Small Smiles Dental, settled with the US Justice Department for $24 million in 2010. At that time, Small Smiles Dental was the nation’s largest DSO focused on treating the children’s Medicaid population. It later failed to meet its corporate integrity agreement with the US Health and Human Services Office of Inspector General. It was subsequently excluded from government programs and dissolved into bankruptcy.

Small Smiles Dental was never allowed operation through the “front door” in North Carolina as a DSO. A principal of Small Smiles Dental, Dr. Michael DeRose of Pueblo, Colorado, obtained a North Carolina dental license. His group established a chain of “privately owned” dental Medicaid clinics in North Carolina in concert with Dr. Letitia Balance under the Medicaid Dental Center brand, also known as Smile Starters and Carolina Dental Center.

In 2008, the group settled for alleged dental Medicaid fraud violations with North Carolina and the US government for $10 million. In this action, nine dentists were also sanctioned for alleged fraud of the Medicaid program. Under the continual watch of North Carolina investigators, this operation eventually folded.

North Carolina’s no-nonsense approach to handling dental Medicaid fraudsters has proven effective. Violating the dental Medicaid program can be highly lucrative. Unfortunately for such professional criminals, NCDOJ officials take their responsibility of watchdog over public funds very seriously. 

Prosecutors like North Carolina’s Josh Stein understand that criminals active in profiting by defrauding the Medicaid program don’t need information, education, or advice. These lawbreakers require thorough investigation and prosecution. Our nation’s poor and disadvantaged as well as hardworking taxpayers should demand no less.

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 mwdavisdds@comcast.net or smilesofsantafe.com.

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