FORBA, Small Smiles, and CSHM: From Medicaid Dental Settlement to Chain-Wide Exclusion

The Small Smiles Medicaid fraud settlement required FORBA Holdings LLC to pay $24 million to resolve allegations that it caused Medicaid bills for unnecessary or substandard dental treatment of children. FORBA supplied business management and administrative services to 69 Small Smiles clinics nationwide. For an insider concerned about Medicaid dental fraud, the story reaches from the treatment chair to the compliance office: the settlement required outside review of care and billing, and the successor company later agreed to exclusion over alleged failures under that agreement.

What Did the Small Smiles Settlement Cover?

The government alleged that FORBA caused claims for services children did not need or that failed to meet professionally recognized standards of care. The Justice Department announced the civil settlement on January 20, 2010. Its allegations covered pulpotomies, often called baby root canals, crowns, anesthesia including nitrous oxide, extractions, fillings and sealants.

Those are decisions about what happens to a child in a dental chair. The alleged false claim followed a treatment decision, and the government pursued the management company for causing the bill. We see the central wrong plainly: a program paying for children’s dental health allegedly financed unnecessary treatment of those same children.

The benefit helps explain the business. Medicaid makes children’s dental care mandatory through its screening, diagnostic and treatment benefit for people under 21, even where a state does not cover adult dental services. It includes relief of pain and infection, restoration of teeth and maintenance of dental health. In fee-for-service dentistry, payment attaches to procedures. Treatment selection therefore affects both the child’s care and the clinic’s revenue.

That is why the clinical record matters to a provider fraud case. A claim can identify a procedure and a patient while leaving the central question unanswered: why did this child need that procedure?

Why Was the Management Company in the Case?

FORBA’s role was to provide business management and administrative services to the clinics. The government’s allegation was that FORBA caused the submission of the Medicaid claims. That put the company behind the practices into the case alongside questions about the dentistry itself.

For an employee, that changes where we look. A dentist or assistant may know what the tooth required and what treatment occurred. Someone in billing may know what the clinic charged Medicaid. Someone in management may know which instructions reached the clinic and what happened when staff questioned them. We connect those accounts to understand how a company decision could reach a patient and then a claim.

The separate Benevis and Kool Smiles resolution shows why that connection matters. In its 2018 settlement announcement, the Justice Department alleged that Kool Smiles pressured dentists to meet production goals, rewarded revenue with cash bonuses and disciplined dentists who fell short. The government also alleged that the clinics ignored their own dentists’ complaints about excessive treatment and billed for some pulpotomies never performed.

A whistleblower’s complaint in that separate case puts a clinical test beside the procedure:

The Kool Smiles allegations illustrate the question we ask of a dental insider: what connected the treatment recommendation, the company’s expectations and the bill? That connection gives an account of unnecessary care its business context.

What Did the Integrity Agreement Require?

The FORBA settlement required a five-year Corporate Integrity Agreement with the Office of Inspector General of the Department of Health and Human Services. Under the requirements the Justice Department described, external reviewers would monitor quality of care and reimbursement processes. The chief dental officer had to develop and implement policies so that Small Smiles clinics provided care consistent with professional standards.

The agreement joined the clinical and billing sides of the business. Reviewing reimbursement alone would leave the treatment decision out. Reviewing care alone would leave out what Medicaid was asked to pay. FORBA had to submit both to outside scrutiny, while its chief dental officer had responsibility for the policies used inside the clinics.

The department also said FORBA would cooperate with the continuing investigation of individual dentists. The company resolution and the scrutiny of clinical practice were moving together. For staff who had raised concerns, the important question was what happened to those concerns after the agreement: whether they reached reviewers, prompted corrections and appeared in the company’s account of its compliance.

Who Brought the Small Smiles Case?

The Small Smiles dental lawsuit history includes three qui tam cases brought by whistleblowers that initiated the government’s investigation. The Justice Department’s Civil Division led the nationwide investigation, which the HHS Office of Inspector General, the FBI and the National Association of Medicaid Fraud Control Units conducted.

The department said the three whistleblowers would receive more than $2.4 million together from the federal share of the settlement. A whistleblower case under the False Claims Act can pay 15% to 30% of what the government recovers. In this case, people outside the government’s investigative agencies started the process that reached both the national management company and its obligations to change.

From FORBA to CSHM

CSHM was the company named in the later exclusion agreement. In its April 3, 2014 announcement, the HHS Office of Inspector General identified CSHM as formerly known as FORBA Holdings and Church Street Health Management. It said CSHM managed and operated the national Small Smiles Dental Centers chain and that its corporate predecessor had entered the integrity agreement as part of the earlier settlement.

The original settlement resolved treatment and billing allegations. The Inspector General’s exclusion action concerned alleged breaches of the agreement intended to improve care and detect problems.

What Did OIG Say Went Wrong?

The Inspector General’s office said CSHM failed to report serious quality-of-care events, take corrective action and make required notifications to state dental boards. It also identified failures to maintain key quality policies, perform internal quality and compliance reviews, keep a log of compliance disclosures and provide required training.

The compliance certification was part of the problem too. OIG said CSHM submitted a false certification from its compliance officer about compliance with the agreement. CSHM disputed that it had seriously broken the agreement.

We see the absurdity: the company allegedly gave a false assurance about the very system meant to catch and correct its problems. We would want to compare what staff reported, what the company did in response and what the compliance officer certified. Each concerns a different decision inside the same organization.

This was also an oversight effort with people on the ground. An independent quality monitor conducted more than 90 site visits and reviews. The Inspector General’s office said it repeatedly cited CSHM after the settlement, imposed financial penalties and forced divestiture of one clinic. The Inspector General still found the agreement broken. So much for the promised fixes.

Why Was CSHM Excluded?

CSHM agreed to exclusion after the HHS Office of Inspector General concluded that it had failed to fix serious breaches of its integrity agreement. The company had promised corrections, but the Inspector General found the problems remained. The agreement barred CSHM from Medicare, Medicaid and all other federal healthcare programs for five years, effective September 30, 2014.

What Did Exclusion Mean for the Clinics?

The Inspector General’s office delayed the effective date to reduce disruption for children receiving care and allow an orderly shutdown of the company or divestiture of its assets. Until exclusion took effect, an independent monitor was to continue overseeing patient care. CSHM also had to notify patients before closing a clinic.

A separate voluntary exclusion of a Colorado Springs Small Smiles dentist followed in 2015 over allegations concerning unnecessary, omitted or substandard care. That individual action concerned the dentist’s care. CSHM’s company-wide action concerned its integrity agreement.

What Evidence Is Needed to Prove Fraud?

For a dental case like this, we look for connections between the treatment, the Medicaid claim, management decisions and what the company knew about problems. The treatment record addresses the child’s condition. The billing record shows what was charged. Internal reviews, reports of care problems, training records and certifications can show how concerns traveled through the organization and what management said in response.

A finding from outside dentistry explains why those connections matter. Harvard Kennedy School’s 1999 report, Controlling Fraud and Abuse in Medicaid: Innovations and Obstacles, identified the need to check whether a claim was true, beyond whether it was properly billed and processed. It also addressed schemes spread across multiple provider numbers and many patients:

For a dental management business, we apply that insight by looking across clinics and provider numbers for the decisions connecting them. An employee who understands how instructions, billing and clinical review fit together can help explain a pattern that looks fragmented when each provider is examined separately.

The 2012 Journal of Information Systems Applied Research paper Applying Business Intelligence Concepts to Medicaid Claim Fraud Detection showed how existing payment data could be reorganized and analyzed to flag unusual providers. Its method depended on people who understood Medicaid claims.

That is where the employee’s knowledge belongs. We use it to understand what a pattern means inside the business: who set the expectations, who questioned the treatment and whether the company’s compliance account matched what staff saw. The Small Smiles history gives those questions substance, from the original claims allegations through the Inspector General’s later findings about reports, reviews and certification.

You Know What Reached the Compliance Office

If you saw unnecessary dental work, billing pressure or care complaints disappear from the company’s compliance account, speak with our whistleblower experts about what happened in your clinic. We build the case around what you know, bring in Medicaid dental fraud whistleblower lawyers who understand treatment and billing evidence, and stay beside you through the case.