Introduction
Healthcare frauds that individual clinics and medical institutions resort to are a nationally regulated aspect. The relevant legislation is designed to track the cases of the misuse of funds allocated by the government under state insurance programs. As an example, the case of Benevis Dental and its many affiliated clinics under the Kool Smiles brand will be reviewed. The charges against the corporation are significant, and this precedent is a landmark in the American justice system.
Case Description
The corresponding indictment was issued in January 2018 as a direct charge. As the key stakeholders, Benevis Dental corporation and its more than 130 subsidiary clinics under the Kool Smiles brand were involved, as well as the Department of Justice. Clinic patients from several states were additional interested parties. According to the United States Department of Justice (2018), all charges were made by the False Claims Act and its healthcare fraud policy. As a basis, the financial transactions of the group of companies were presented with the results of their activities in 17 states from early 2009 to late 2011 (the United States Department of Justice, 2018). The case caused a significant resonance since a large number of patients, including children, were involved in the fraud of Benevis and its affiliated clinics. As a result, in addition to a negative impact on its reputation, the group of companies suffered colossal financial losses as payments to all affected parties.
Actual Charges
The actual charges against Benevis and its affiliated clinics were for financial claims fraud. The United States Department of Justice (2018) notes that the group of companies provided dental services to the public, which, however, were of no practical medical relevance. Moreover, additional charges were brought against Benevis due to the use of children as patients for their fraudulent scheme. According to Berke (2016), statutory health billing systems were developed for this purpose to track down improper or unfounded financial claims from medical providers. Since Benevis and its affiliated clinics conducted their illegal activities for almost three years, a sufficient basis was gathered to assess the damage caused and impose appropriate punishment. Based on the findings, as the United States Department of Justice (2018) highlights, several categories of employees were indicted. They included both the management of the network of clinics and ordinary dentists who received cash bonuses for successful fraud and the number of cheated patients. Thus, a wide range of charges is commensurate with the general punishment imposed on the group of companies.
Official Punishment
The official punishment of Benevis and Kool Smiles clinics was announced by the United States Department of Justice (2018). In compensation to the government paying off fraudulent financial claims, the authorities ordered the group of companies to pay $23.9 million, including interest (the United States Department of Justice, 2018). At the same time, most of the funds were to be transferred to the federal authorities. Less than half of the fine (approximately $9.7 million) was to be received by the state representatives that made direct payments under official insurance programs (the United States Department of Justice, 2018). However, as Perez and Wing (2019) argue, the Benevis case is not unique, although the total sum is extremely large. According to the authors, the amount of payments depends on both the size of a healthcare institution and its profile since charity organizations tend to receive less severe punishments (Perez & Wing, 2019). Thus, due to the large size of the dental network, Benevis and Kool Smiles clinics were forced to pay off a significant share of the losses incurred by the government.
Case Outcomes
Since the decision to pay to the government was made by the state official agency, the verdict could not be appealed, and Benevis and Kool Smiles clinics had to accept the terms of the charge. At the same time, according to the United States Department of Justice (2018), the group of companies did not agree with the charges brought against them and did not accept the fact of gross financial violations. However, the official review proved numerous unfounded claims made by the guilty party between 2009 and 2011. Park (2019) cites individual situations and considers various cases of false claims and their consequences, and, as the author notes, as a rule, such organizations cannot provide evidence in support of their innocence. In the case of Benevis and Kool Smiles clinics, the representatives of the group of companies argued that the number of payments from the state to them was less compared to many other dental medical institutions. Nevertheless, there is no unambiguous data that could confirm this statement. Consequently, the decision to recover the funds due to the financial fraud committed is justified.
Conclusion
The financial fraud charges against Benevis and Kool Smiles dental clinics are commensurate with the fraud the group committed, and the severity of the punishment is reasonable. The defendant’s lack of a substantive basis reduced the likelihood of a favorable resolution of the case that became a landmark in the American system of medical insurance and government subsidies. The outcomes are logical, and the recovery rate is determined based on the calculation of funds issued to Benevis as a result of false claims.
References
Berke, D. M. (2016). Drive-by-doctoring: Contractual issues and regulatory solutions to increase patient protection from surprise medical bills. American Journal of Law & Medicine, 42(1), 170-189.
Park, E. (2019). Can your medical opinion subject you to criminal or civil liability? Recent federal cases involving medical opinions and false claims. Missouri Medicine, 116(6), 442-444.
Perez, V., & Wing, C. (2019). Should we do more to police Medicaid fraud? Evidence on the intended and unintended consequences of expanded enforcement. American Journal of Health Economics, 5(4), 481-508.
The United States Department of Justice. (2018). Dental management company Benevis and its affiliated Kool Smiles dental clinics to pay $23.9 million to settle False Claims Act allegations relating to medically unnecessary pediatric dental services. Web.