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Small Smiles owner settles case for $24 million

5:17 PM, Jan 22, 2010   |    comments
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"We have zero tolerance for those who break the law by exploiting needy children," Assistant Attorney General Tony West said at a news conference.

The U.S. Justice Department says there is now a civil settlement with the company that owns the Small Smiles clinics, FORBA Holdings, LLC. The clinics used to be co-owned by Michael and Edward DeRose of Pueblo, but the father and son sold their stakes in the clinics three years ago. They helped found the clinics and said they used the technique of strapping children to papoose boards while they had dental work to do more work on children faster.

The papoose board technique used around the county was taught to dentists training at Small Smiles clinics in Colorado before they went elsewhere across the country.

"Today's settlement is the result of holding FORBA accountable for conduct that was both unacceptable and illegal," West said.

9NEWS first exposed the DeRoses's techniques through an investigation in 2004. Three years later, 9Wants to Know investigated again and found many of the same practices were still in effect.

9NEWS talked to Colorado parents who filed police reports after their children left the clinics bloody, bruised and scraped from fighting while strapped on the papoose boards for more than an hour.

Small Smiles was founded in Colorado and now has 69 clinics across the U.S. in 21 states and in Washington, D.C.

As part of the settlement announced Wednesday FORBA will pay the U.S. government $24 million "to resolve allegations that Small Smiles dentists performed unnecessary or substandard dental services on low-income children and then billed Medicaid for those services," West said.

As part of the settlement, Colorado will get about $1.2 million.

West says that many of the dentists who work for Small Smiles were providing appropriate and good services to children in need, but also "found too many instances of dentists who were overly aggressive in their treatment - performing procedures like excessive pulpotomies or 'baby root canals,' needless stainless steel crowns, or unnecessary tooth extractions."

West said FORBA was pressuring dentists to make more money and do the unnecessary procedures so it could bill more from Medicaid.

Human Health Services Inspector General Daniel Levinson said FORBA "allegedly directed a pervasive practice of causing false and fraudulent claims to be submitted to Medicaid for unnecessary and potentially dangerous services to children in an attempt to maximize profits."

West says Small Smiles is not being ordered to stop operations because FORBA and the clinics have taken steps over the past year to make sure they are complying with Medicaid rules. It has also fired dentists who were performing practices that fell below professional standards.

"We were also mindful of the fact that notwithstanding FORBA's conduct, many Small Smiles dentists were doing the right thing and providing quality care to an underserved population. For many of these young patients, Small Smiles is the only source of dental care available to them, so we wanted to strike a balance between enforcement on the one hand and patient access to necessary dental care on the other. This agreement strikes that balance," West said.

There are six Small Smiles clinics in Colorado; two in Denver, one in Thornton, one in Colorado Springs, one in Greeley and one in Pueblo.

As part of the settlement, FORBA must enter into a corporate integrity agreement with the Inspector General's Office.

"We believe the stringent terms of this agreement, coupled with the built-in oversight mechanisms, will help to deter future misconduct and ensure that FORBA's dental clinics provide appropriate and high quality care in the future," Levinson said.

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Click here to read West's full remarks.

Click here to read Levinson's full remarks.

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