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Grassley Investigates Allegations Against Dental Clinics

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Location: Washington, DC

Senator Chuck Grassley is scrutinizing Medicaid-funded dental clinics in response to allegations of abusive treatment of children in clinics controlled by corporate investors rather than dentists.

"We're finding that these dental practices, under pressure from owners who are not licensed dentists, have been providing services with the highest Medicaid reimbursement levels more often than less expensive, arguably more appropriate services," Grassley said. "There are legitimate concerns that children are receiving unnecessary care, sometimes in a traumatic way, and taxpayers are paying for it."

Grassley has asked questions about ownership structures, incentives, parental notification policies, and participation in Medicaid from Small Smiles, Kool Smiles, and ReachOut Healthcare America. The companies have been responsive to his inquiries, he said. All three treat Medicaid children almost exclusively.

"We're finding that the business model has led to abuses because dentists are under pressure to perform as many high reimbursement services on the maximum number of children on Medicaid as possible," Grassley said. "You have dentists under pressure to perform more services than may be necessary -- giving a child a crown instead of a filling, for example -- because of a bonus payment structure that creates the wrong incentives."

The issue involves an investment structure that technically meets some state-level requirements that dental practices be dentist-owned but do not, in practice, have dentists in control. These "owner dentists" are effectively ghost owners who maintain none of the traditional aspects of ownership of their operations, allowing the corporate investors to have control over clinical operations.

A majority of states and the District of Columbia have laws that require owners of a dental practice to be licensed in the state where the practice is located.

Last year, Church Street Health Management owned 70 Small Smiles dental clinics in 22 states and the District of Columbia. At least five of these clinics have been closed by state regulators. NCDR, LLC owned more than 130 Kool Smiles clinics in 16 states and the District of Columbia. ReachOut Health Care America operates mobile clinics that treat children at schools around the country.

Grassley's review of allegations about dental clinics also has led to Aspen Dental Management, Inc., which doesn't accept Medicaid patients. Questions there have been about complaints that the company promotes unnecessary treatment plans with exorbitantly expensive credit arrangements. Aspen Dental Management, Inc. operates more than 300 clinics in 22 states.

Grassley said he expects to issue a staff report on his findings involving the companies that serve children in the Medicaid program. His investigation into credit arrangements offered by Aspen Dental Management, Inc. is ongoing.


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