'Small Smiles' Dental Chain Reaches Settlement for Medical Fraud

Jan. 20, 2010— -- It's a promise many parents make before taking their children to the dentist: Don't worry, it won't hurt too much. But at some "Small Smiles" dental clinics catering to low-income families on Medicaid, that promise was broken behind closed doors.

FORBA Holdings LLC, the parent company of the nationwide pediatric dental chain "Small Smiles," reached a $24 million settlement with the Department of Justice Wednesday for allegedly performing medically unnecessary or substandard procedures on children insured by Medicaid, to turn a profit.

The Justice Department claimed that some dental clinics performed unnecessary procedures, including removing teeth, x-rays, and pulpotomies -- also known as baby root canals -- and then charged Medicaid.

"This was a matter of profit over compassion," said Daniel Levinson, inspector general of the U.S. Health and Human Services. The company submitted "false and fraudulent claims to Medicaid for unnecessary and potentially dangerous services to children in an attempt to maximize profits."

Whistleblowers from inside the company told ABC News it all allegedly was done to bilk taxpayers and compensate for Medicaid's low reimbursement rates.

"They wanted us to tell parents that they needed services on teeth that were healthy," one whistleblower told ABC News.

"We have zero tolerance for those who break the law to exploit needy children," Assistant Attorney General Tony West said. "Illegal conduct like this endangers a child's well-being, distorts the judgments of health care professionals and puts corporate profits ahead of patient safety."