Beware of Medicaid nightmares

As the country's economic recovery remains stagnated, at best, and with recent news that the poverty level in the US has increased yet again, it is easy to see that Americans continue to find themselves less able to afford dental insurance or pay for fee for service dentistry. 

As children of the poor are quite often the victims of recession and unemployment, Medicaid was designed to provide the needed dental care for such children and qualified, disabled adults. It is not surprising now to see that Medicaid in dentistry is on the rise.

Just this month, Dr. Hal Hale, President of the Kansas Dental Association stated that he is aggressively attempting to recruit additional providers of Medicaid to assist in the growing number of undertreated children in the State of Kansas, which is just one of many states that find itself trying to provide dental care to the needy. 

But, before you jump on the Medicaid wagon with all of your altruistic, virtuous intentions, BEWARE of the potential consequences!

Medicaid, though a federal government program, is administered by each state and the administration is and can be very different from state to state.  However, each state must follow the primary federal guidelines for its administration.  This process creates a bureaucratic nightmare in many instances.  The guidelines are published by each state and as many governmental documents are written, can be very difficult to read and understand.  But, understand them you must!

Recently in South Texas six pediatric dentists and an oral surgeon were indicted by the United States Attorney for Medicaid fraud and Anti-kickback violations.  Not because they did anything intentionally fraudulent or with any intent to violate the rules, but because they did not follow the “Letter of the Law” when it came to understanding the regulations.  After over a year of litigation with the US Attorney’s office, and an actual trial, all were exonerated of wrong-doing.  The cost to each of these dentists in time, emotion and legal expenses was enormous. 

Unfortunately, there are, in fact, those out there in dentistry and in medicine who have and continue to abuse the system.  This puts those legitimate providers in jeopardy of intense scrutiny by both state and federal investigators.

The solution; read, understand and follow the regulations.  This is not an easy task as most state  Medicaid regulations consist of over one hundred pages of regulations and requirements that must be adhered to.  “The Florida Medicaid Dental Services Coverage and Limitations Handbook” (104 pages of regulations) by its very title indicates what to expect when you settle in to read the rules.

The most frequent violations of the Medicaid regulations fall into two categories: 

First and most common are coding violations, defined as:  False Claims Act 31 U.S.C. §3729. False Claims, LIABILITY FOR CERTAIN ACTS:  Any person who:  1. Knowingly presents, or causes to be presented to an officer or employee of the United States Government…. a false or fraudulent claim for payment or approval; 2. Knowingly makes, uses, or causes to be made or used, a false record or statement to get a false or fraudulent claim paid or approved by the Government; 

Second, the Anti-kickback regulations found in what is commonly called the Stark Law, Title 42 U.S.C. 1395nn which makes it illegal for a dentist to receive any remuneration for referring a patient to another dentist. It was under this rule that the Texas pediatric dentists were indicted because they charged the oral surgeon rent for using their dental offices while he extracted third molars from their patients. Because there was no formal written lease agreement that identified the terms and conditions of the compensation paid to the pediatric dentists, they were charged with receiving a kickback from the oral surgeon.

Because Medicaid is administered by the state, there will be state regulations and administrative functions as well as federal regulations and administrative functions. Depending on the state, these processes can be one and the same or piggy-backed on one another. There are also state and federal compliance requirements. The state's requirements may be less or more stringent than the federal requirements, but each and both must be met.  In other words, a dentist may be in compliance with the state Medicaid requirements and still in violation of the federal law.

Setting aside all of the above, it is important to understand the impact on the value of a dental practice that participates in Medicaid. There are very successful Medicaid dental practices, especially in pediatric dentistry. If one understands the rules and complies with the law by making sure there is a specific protocol that is in place to provide Medicaid treatment, it can be a very successful business model.  However, more often than not, we see practices that mix Medicaid, capitation insurance, indemnity insurance and fee for service which creates a nightmare for the front desk due to the many different rules and payment schedules each plan has.  This is a recipe for disaster and ultimately will lead to billing mistakes that could be interpreted as fraudulent.

Because very few purchasers want to buy a practice that has this built-in risk, the value of these practices is usually reduced significantly and in some cases, the risk renders them unsalable.

In no way is there intent to discourage the dental community from participating in Medicaid programs, especially when the need is so great.  However, it is critical that those who choose to participate, understand the rules and the laws and abide by them

For Coding, Dr. Charles Blair’s “Coding With Confidence” provides excellent coding guidelines. www.drcharlesblair.com.

For Medicaid rules for dentistry, see your state Medicaid Dental Provider Handbook.