Article

Dental Fraud: A Multi-Faceted International Crime Problem

By David A. Picard Sep 07, 2023

In a press release on January 25, 2023, the U.S. Department of Justice announced an indictment of 12 individuals who were operating and participating in a “multifaceted racketeering conspiracy through a multi-state network of dental practices and related dental businesses (the Savani Group).” The indictment, which was brought forth in the Eastern District of Pennsylvania, charged six defendants with being a part of a racketeer influences corrupt organization (RICO) conspiracy based on their roles in the Savani Group. Charges in the indictment included visa fraud, health care fraud, wire fraud involving federal tax evasion and money laundering, and three defendants were charged with obstruction of justice. Four of the indicted subjects were licensed dentists, and the scheme allegedly conspired to recruit foreign workers to work in the U.S. while concealing the worker’s true job titles and responsibilities.

In a separate case announced by the U.S. Department of Justice announced on September 30, 2021, the Juan Carlos Perez-Camacho was sentenced in the District of Puerto Rico. Perez-Camacho was a Colombian national who had been practicing dentistry without a license in Puerto Rico since 2018. In the press release, U.S. Attorney W. Stephen Muldrow stated, “We are seeing foreign persons traveling to PR to illegally practice medicine and dentistry, and we need to be aware of these doctors and the urge the community not to give them opportunity to practice illegally in PR.” Perez-Comacho, who had been charged with violations of false statements, Visa fraud and misbranding of the prescription drug Xylocaine, was sentenced to three years of probation.

These investigations are excellent examples of the complexity, intricacies and internationalism of dental fraud, and the indications are that this type of health care fraud is under investigated across many countries and states. Aside from health care fraud, dental businesses and practices are fertile and lucrative areas for drug trafficking, immigration fraud and money laundering due to a lack oflaw enforcement attention of this medical provider type. In addition, the complexities of investigating dental fraud and the large amounts of money dental practices can generate create a unique set of challenges. The purpose of this article is to highlight a fraud area that may be largely ignored, misunderstood and under the radar by international, federal and state investigative agencies and private health care Special Investigations Units.

What is Dental Fraud?

Dental fraud is “any crime where an individual receives insurance money for filing a false claim, inflating a claim or billing for services not rendered,” according to the American Dental Association (ADA). Fraud can take many forms, but it requires intent, deception and unlawful gain.

The global dental market is projected to grow from USD 38.84 billion in 2022 to USD 63.93 billion by 2029. In 2020, dental health spending in the U.S. was at USD 142.4 billion and projected to increase to USD 166.4 billion in 2021. Due to the COVID-19 pandemic, dental spending in the U.S. is expected to dip slightly to USD 165.6 billion in 2022 before rising through 2030 when, according to data analysis, it is expected to reach USD 230.1 billion.

FDI World Dental Federation one of the largest international dental associations, reportedly has a membership of one million plus dentists in 133 countries. There are 188,074 active licensed dentists in the United States as of 2022,and there were 178,867 dental businesses in the United States in 2022. In 2019, 65.5% of adults aged 18−64 had a dental visit in the previous 12 months, which translates into approximately 21.7 million adult dental visits per year

Given this amount of independent practitioners and the increasing demand for dental healthcare services in the U.S. alone, the vast opportunities for dental fraud and related activities within practices to occur becomes clear. 

In the U.S. Department of Health and Human Services Office of Inspector General (HHS-OIG) report from March 2022 titled, “Medicaid Fraud Control Units Fiscal Year 2021 Annual Report,” there were only 330 open investigations on dentists (263 criminal, 67 civil) and four open investigations for dental hygienists (two criminal, two civil). The number of prosecutions reported for dentists in 2021 was 11 criminal convictions with $3.34 million in recoveries and 10 judgements and settlements totaling $528,864.

Comparing the number of dental fraud prosecution statistics from the HHS-OIG Fiscal Year 2021 Annual Report to the expenditures, and the number of dental businesses and practices, it can surmise dental fraud is an under investigated and prosecuted crime area.

Types of Dental Fraud Cases and Schemes

Dental fraud schemes often mimic other types of provider type health care frauds such as:

  • Billing for unnecessary services or items

  • Billing for services or items not provided

  • Unbundling

  • Upcoding

  • Kickbacks

Some types of variations that are more prevalent with dental fraud include:

  • Listing the incorrect treating dentist on a claim
  • Coding the wrong treatment (e.g., Using surgical extractions vs. simple extractions)
  • Altering dates of service
  • Waiver of deductibles
  • Improper use of codes
  • Misrepresenting patient identities

Typical dental fraud schemes related to health care can also be entwined with drug trafficking, human smuggling, immigration fraud and money laundering violations.  

Other examples of dental fraud cases that uncovered additional fraud schemes and have been prosecuted include:

  • Oregon, December 2021: Dentist indicted for converting USD 8 million in small business COVID loans into personal use.
  • South Korea, October 2021: American dentist in South Korea submitted false claims to TRICARE provided to military personnel. Settlement agreement for USD 100,000.
  • Massachusetts, September 2021: Dental office manager pled guilty for submitting false claims in conspiracy with two dentists in the same practice and knowingly submitted reimbursable claims for payments.
  • New York, August 2021: Dentist was federally prosecuted for prescribing narcotics to female addicts for more than four years in exchange for sexual favors.
  • Texas, May 2021: Two dentists and management companies paid USD 3.1 million in a settlement to False Claims Act violations committed between 2011-2017 for children’s dental fillings that were never performed.

Detecting Dental Fraud for Providers

As in most other provider types of health care fraud, the primary targeting tool to detect fraudulent dental claims amongst a group of providers is to conduct data mining analysis. Via data analysis, listed below are some data mining criteria used to detect fraudulent providers, which includes dentists who:

  • Received extremely high payments per patient.
  • Rendered an extremely large number of services per day.
  • Provided an extremely large number of services per patient visit.
  • Provided services to an extremely large number of children and other patients.
  • Provided certain selected services to an extremely high proportion of children.
  • Generated high billings for prescription medications for pain.

In addition to data analysis, other methods to identify fraudulent dental providers include: 

  • Adverse reports filed against a dental professional on the National Practitioner Databank (NPDB).
  • Complaints against a dentist or a dental practice made by Medicare/Medicaid from beneficiaries and or their families.
  • Adverse actions taken against dentists by State Dental Boards.
  • A history or pattern of complaints and or adverse actions against dental providers with federal and or state agencies and private dental insurers.

Prosecuting Dental Fraud

In addition to the typical fraud statues utilized in cases such as Title 18 U.S. § 1341 Mail Fraud and Title 18 U.S.C § 1343 Wire Fraud and tax violations, additional federal statutes are utilized to specifically prosecute health care fraud. These health care fraud statutes also apply to dental fraud and include:

  • Health Care Fraud 18 U.S.C. § 1347.
  • Money Laundering 18 US.C. § 1956.
  • False Claims Act 31 U.S.C. §§ 3729-33. makes it illegal to submit false claims to the federal government.
  • Anti-Kickback Statute 42 U.S.C. § 1320a-7b(b) prohibits knowing and willful “remuneration” to induce or reward patient referrals.
  • Physician Self-Referral Law. 42 U.S.C. § 1395nn,also known as the Stark Law, prohibits physicians from referring patients to receive "designated health services" payable by Medicare or Medicaid from entities with which the physician or an immediate family member has a financial relationship unless an exception applies.
  • Exclusion Statute 42 U.S.C. § 1320a-7 excludes from participation in all federal health care programs, individuals and entities convicted of the following types of criminal offenses: (1) Medicare or Medicaid fraud, as well as any other offenses related to the delivery of items or services under Medicare or Medicaid; (2) patient abuse or neglect; (3) felony convictions for other health-care-related fraud, theft or other financial misconduct; and (4) felony convictions for unlawful manufacture, distribution, prescription or dispensing of controlled substances.
  • Civil Monetary Penalties Law 42 U.S.C. § 1320a-7a. creates civil monetary penalties and sometimes exclusion for a wide variety of conduct. This law also permits authorization to seek different amounts of penalties and assessments based on the type of violation at issue ranging from USD 10,000 to 50,000 per violation.

Several U.S. states also have local statutes specifically addressing health care fraud. In North Carolina, the North Carolina False Claims Act (“NCFCA” N.C. Gen. Stat. § 1-607) makes it unlawful for any person to knowingly present, or cause to be presented, a false or fraudulent claim for payment or approval to the state. Violators will be liable to the state for three times the number of damages that the state sustains.

Aside from civil and criminal investigations to prevent dental fraud, federal and state agencies may take administrative actions against providers who commit dental fraud. Administrative actions include:

  • Conducting unannounced/non-scheduled site visits at dental practices. 
  • Placing dental providers on prepayment review.
  • Initiating a post payment audit of previously paid Medicare and or Medicaid dental claims.
  • Revoking a dental practice’s Medicare and Medicaid billing privileges.
  • Suspending a dental practice’s payments for dental services billed to Medicare and Medicaid.

Developing a Proactive Dental Fraud Program

Often if a government funded program area is not actively audited or investigated by federal and state agencies, there is usually a certain level of fraud that goes undetected for long periods of time. These overlooked and neglected areas, such as dental fraud, are often attractive areas for fraudsters to take advantage of.

The first step in developing a proactive dental fraud program is to determine if dental fraud is a problem in your country or state. You’ll need to conduct analysis and review of the previously mentioned methods in detecting and identifying fraudulent dental providers thru consultations with state dental medical boards and associations, as well as state Medicaid dental units.

Education and training should be provided to investigators and prosecutors regarding the nuances of investigating and prosecuting dental fraud. Additionally, hiring investigators with a dental background is advantageous for domestic and international law enforcement agencies and local state compliance units in detecting, preventing and investigating dental fraud.

There should be a cooperative and collaborative arrangements formed between state Medicaid agencies, state and federal investigative and prosecutive units and health plans Special Investigations Units to work jointly in working groups and or task forces to dedicate resources to work dental fraud and interact and meet on regular basis.

Dental fraud harms everyone from beneficiaries and providers to dental companies and the dental industry at large. This fraud increases the costs of dental care and coverage across the industry, which are then passed along to the individual consumers and taxpayers in the form of higher premiums and taxes. Dental fraud should be more proactively identified and addressed by international, state and federal regulators, law enforcement and prosecutive entities in order to better understand how to identify fraudulent activity within the industry.

Author:

David Picard, CFE

Investigations Manager, North Carolina Health and Human Services