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Did dentists fuel their private jets with Medicaid money?

WFAA's Byron Harris has investigated dental organizations that have charged the government millions for children's braces. Here is the latest from the on-going News 8 investigation.

WFAA's Byron Harris has investigated dental organizations that have charged the government millions for children's braces. Here is the latest from the on-going News 8 investigation.

They might be called the All Smiles Air Force. Two sumptuously outfitted Gulfstream corporate jets, with sticker prices in the tens of millions of dollars. They are the same kind of planes the Warren Buffet group fancies, and they belong to the founder of All Smiles dental clinics of Dallas.

FAA records show the All Smiles Air Force has flown to destinations such as Hilton Head and Telluride in recent weeks, evidence of some of the money All Smiles has collected from Texas taxpayers for putting braces on kids' teeth under Medicaid.

Last year alone, All Smiles collected more than $10 million under the Texas Medicaid Orthodontic program, according to state records obtained by News 8. That is nearly five times as much as the entire state of Florida paid out for children's braces under Medicaid.

The amount of money that Texas spends on Medicaid, just on Medicaid dental this year, will be about $1.5 to $1.6 billion, at a time when we're starving for tax revenue, said Houston attorney Jim Moriarty.

Orthodontic payouts are included in that number.

Moriarty has questions about who is really running some of the dental chains that are collecting millions under Medicaid.

It is illegal for a corporation to practice dentistry in Texas.

Moriarty has two lawsuits against a dental chain called Small Smiles, which has clinics across the country, including Texas. Moriarty alleges Small Smiles practices dentistry with the bottom line, not patients' welfare, in mind. Small Smiles is partly controlled by a firm called FORBA holdings.

The law says that only human beings, only people who have gone to dental school, honoring the ethics rules and what is essentially a fiduciary duty between a dentists and a patient--only a human being can practice dentistry, Moriarty said. No corporation is allowed in Texas to practice dentistry.

Moriarty is not suing All Smiles, but he questions who's making the dental decisions there.

The founder of All Smiles is Dr. Richard Malouf, a dentist. Despite his material flamboyance--Malouf owns a huge French chateau in Dallas as well as the Gulfstreams--he is a hard man to find. He declined to be interviewed and referred News 8 to his attorney, who did not return phone calls.

All Smiles corporate headquarters is located in a multi-story building near the Galleria in Dallas, owned by Dr. Richard Malouf's family trust. But All Smiles corporate said Malouf no longer works here .

All Smiles corporate told News 8 that Chris Roussos now runs the company. Roussos can be found on You Tube in his previous job, saying his role in dentistry is to help dentists grow their business. Roussos has not returned phone calls.

Thirty-two clinics now bear the All Smiles trademark in Texas. They became part of the portfolio of Valor Equity Partners, a $300 million hedge fund in Chicago, last year. At that time, in a press release Valor described All Smiles not as a chain of dentists' offices but as a provider of administrative and support services to dental providers. Valor did not return News 8 phone calls.

State records obtained by News 8 under the Texas Public Information Act show All Smiles clinics put braces on more than 1,000 children under twelve years of age last year. Many kids under twelve don't even have their permanent teeth yet, so the state of Texas requires special approval for each child.

After a News 8 investigation, federal and state inspectors are reviewing that approval process. News 8 discovered Texas pays out more in Medicaid Orthodontics that the rest of the nation combined.

Many dentists question whether orthodontics should even be included in Medicaid, since braces are an essentially cosmetic, not a therapeutic, treatment.

All Smiles is one of the four biggest billers for braces in Texas. One question is whether All Smiles' decision to put braces on 1,000 children under twelve years of age was driven by corporate policy or dental necessity.

States and the Federal government are taking a new look at Medicaid dental claims. Last year, twenty-two attorneys general and the Federal government fined FORBA holdings $24 million for miss billing for dental work on children under Medicaid. FORBA is the owner of Small Smiles, which Jim Moriarty is suing in separate proceedings.

Should the regulators be doing a better job? Absolutely, no question, Moriarty said. We're putting braces on kids that don't even need braces, let alone aren't qualified for braces, let alone not entitled to bill Medicaid for it. The economic numbers are staggering.

The Texas Dental Board, the Texas Attorney General, and U.S. Attorneys could all prosecute corporations for practicing dentistry. So far none has taken a bite.

E-mail bharris@wfaa.com

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