Only on ABC-7: Dental clinics ordered to pay multimillion dollar settlement

Two El Paso dental clinics are involved in a multimillion dollar lawsuit settlement.

Smile Magic Dental Clinic was accused of defrauding Texas Medicaid.

In March, they were ordered to pay $4.5 million to the
state as a settlement.

Four offices were named in the lawsuit, including both El Paso locations.

One is on the 5100 block of Montana Avenue near Chelsea Street in Central El Paso and the other is on the 500 block of Zaragoza Road in the Lower Valley.

A news release issued by the legal firm representing the whistleblower, a former human resources director, claimed Smile Magic performed unnecessary or excessive dental services on young children and billed Medicaid for the work.

The whistleblower also claimed the clinic paid recruiters to round up children in grocery store parking lots and at bus stops and bring them into clinics, and that parents were paid to sign up their children for treatment.

ABC-7 spoke over the phone to Smile Magic’s owner, Dr. Chad Evans, who denied the claims.

“None of those were true,” he said. “The investigation didn’t find anything along those lines. The settlement had nothing to do with the things you just mentioned.”

Evans said the settlement centered around a legal battle between the clinics and the Texas Health and Human Services Commission (HHSC) and the Texas Office of the Inspector General (OIG).

“We fought like heck to get in front of a judge because we didn’t do anything wrong and they were relying on these ridiculous so-called paperwork mistakes to hold our feet to the fire,” Evans told ABC-7. “And at the end of the day, we couldn’t continue the fight. It was taking too long and it was too expensive.”

It was the cost, said Evans, that forced the clinic to settle.

“I can understand it has the appearance (of wrongdoing),” Evans said. “But we’ve been trying to get this resolved for two years and spent a lot of money. We were literally on the edge of serious financial consequences and had to take a settlement.”

Evans told ABC-7 the whistleblower’s lawsuit was tacked onto the OIG’s audit of the clinic’s charting process, which the OIG said had “documentation errors.”

“(OIG) actually alleged that we didn’t write down what angle to hold the toothbrush,” said Evans. “(That) we documented that oral hygiene instruction had been provided but didn’t write down … how much toothpaste to put on the toothbrush.”

Evans also cited a criminal investigation into HHSC and OIG.

“The governor’s strike force came out with a report that totally criticized the OIG for the way it’s treating providers like me. No one who’s looked at it thinks it’s OK,” he said.

That investigation to which Evans is referring was launched after the HHSC was criticized for how it handled a major contract for Medicaid fraud detection software last year.

According to multiple Austin-area news reports, the $20 million contract was awarded to an Austin-based tech firm without going to bid.

On March 30, Gov. Greg Abbott released findings of the investigation his so-called strike force launched into the agencies in January.

Abbott said in a statement that the HHSC is “riddled with operational, managerial, structural and procedural problems that go far beyond any individual or contract. That is unacceptable.”

Evans told ABC-7 he and other dentists are working with lawmakers in Austin to prevent a reoccurrence of his ordeal in another clinic.

“You’re going to see some big changes coming to those agencies this legislative session. We’re cleaning up where the mess really needs to be cleaned up,” he said.

Evans added that the $4.5 million settlement will be paid over 15 years without interest, and the El Paso clinics are not in danger of closing.