There’s a McDonald’s on Garland Road in Dallas near the old Lochwood Mall, almost across the street from what used to be Galaxy Dental. Galaxy’s florescent green and yellow paint scheme made it stick out, even in the clutter of Garland Road.
I spent several mornings at that Mcdonald’s in the spring of 2012, nursing a coffee while everybody else was dining on McMuffins. I was there to try to overhear the conversation a group of women who often met there for business. They were “community outreach workers,” they said. But what they talked about were their plans to scour low income neighborhoods for children eligible for Medicaid. Their mission: to recruit Medicaid eligible mothers to bring their children into Galaxy Dental. The outreach workers talked loud enough that I could tell they were pumped.
A federal lawsuit unsealed in Dallas last week alleges why they were so excited.
For every Medicaid kid they put in a dentist’s chair at Galaxy Dental, they’d get a kickback, the suit alleges. The suit’s been sealed for four years. But now that it’s settled, with no one admitting guilt, we know what the charges were. Recruiters got paid, and the parents of the kids got paid too, the suit alleges, sometimes with gift cards, electronics, or even manicures. Galaxy was managed by a firm now known as MB2, which dispersed the kickbacks from an account of $1 million, the suit alleges. (MB2 was originally known as Dental Professionals of Texas, but changed its name after a News 8 investigation revealed their ‘outreach’ activity.)
MB2 and its principals have agreed to pay the federal government $8.45 million without admitting guilt. They’ve also agreed to enter into a five-year “Corporate Integrity Agreement” with the Inspector General of Health and Human Services. Nineteen dental brands like Galaxy, many with more than one clinic, will pay $7.1 million of the total.
In the fall of 2012, producer Jason Trahan and I tracked down Texas Community Outreach Associates, which at one time was headquartered in the same office as MB2. In two lengthy and surprising on-camera interviews, Kevin Byington, head of marketing for the group, admitted his 400 workers solicited Medicaid moms in four states and got paid by dentists for bringing in patients. He never revealed who the dentists paying him were.
Unknown to us, as we were unpeeling the layers of the questionable patient solicitation scheme on Channel 8 News, the feds were investigating MB2 and the nineteen brands it managed. Our stories were mentioned three times in this week’s court filing. The Galaxy on Garland Road was one of more than 40 dental clinics in four states which used “community outreach” solicitors.
An MB2 employee named Veronica Garcia had stepped forward as a whistleblower under the False Claims Act. If money is recovered in the lawsuit she would receive part of the settlement. False Claims Act suits, also known as qui tam actions, are filed in secret, allowing for investigation and the protection of the whistleblower. While it’s possible for the federal government to detect massive fraud simply from record discrepancies, successful cases nearly always involve tips from insiders.
Medicaid dental care for kids can be big money. In 2011, Dental Professionals of Texas, the predecessor of MB2, billed Medicaid for $100 million, the federal lawsuit alleges.
The settlement MB2 and its principals agreed to indicates that, in addition to paying kickbacks, the clinics also charged Medicaid for work they didn’t do. This involved a common scheme where a provider delivers one service and charges for another, or delivers no services at all and bills Medicaid anyway.
Pediatric dentists apply sealants to children’s teeth to fight decay. A dentist can bill Medicaid about $30 a tooth for a sealant application. But Medicaid pays about $80 for a composite tooth filling. So it’s tempting for some dentists to treat a child with sealant and bill Medicaid for a filling instead, without doing the extra work. The suit against MB2 alleges the clinics were billing for fillings that weren’t provided. Some MB2 clinics were seeing scores of patients a day, the lawsuit alleges. One clinic in the suit billed Medicaid $63,000 for one day of patient treatment alone, the suit alleges.
The suit against MB2 and the five dentists was settled last fall and unsealed this week. It took more than four years from filing to finish. The case just unsealed is only one of several False Claims cases filed against MB2 or its principals, people familiar with those filings tell me. They were filed at the state level, where there has been little action on pursuing dental fraud.
Eight million dollars is a lot of money. But, given the more than 40 individual offices involved, their combined revenue, and the fact that the activities allegedly took place over five years, the settlement may not seem so large. All the dentists are still licensed. Galaxy Dental has changed its name to Dental Kids Zone, but is still being run by the same people, according to the Texas Secretary of State. Those with the most to lose are Chris Villanueva and Trang Minh Tang, because in addition to their individual fines, they were partners in all the clinics, which must pay $7.1 million to state and federal governments. That said, Tang, who is in his early 40’s, does not appear to be suffering. His mansion in Bluffview is listed in county tax records at $8.35 million.
Attorney Mark Schlein, who represented the whistleblower, calls the settlement “conservative.” “This case is particularly egregious because it allegedly involves painful dental procedures done on very young children,” he says. “To make it even more unthinkable, the children were essentially sold to the dentists by their parents for the price of a gift card.”
Speaking to WFAA.com about the settlement, Jeff Ansley, attorney for Trung Tang, said, “We simply decided to resolve this and put all these chapters behind us.”