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District court rules Dallas-area dentist is responsible for Medicaid fraud

The WFAA series “Denticaid: Medicaid Dental Abuse in Texas” uncovered hundreds of millions of dollars in Medicaid billings for pediatric orthodontics.
Credit: WFAA
Dr. Richard Malouf, a file photo from 2013

DALLAS — Dallas-area dentist Dr. Richard Malouf, a former owner of All Smiles Dental Center, has been held responsible for 1,842 unlawful acts under the Texas Medicaid Fraud Prevention Act, according to a Travis County district court.

Malouf is one of several Texas orthodontists named in a WFAA investigation into questionable orthodontic billings, and liable for $16.5 million in penalties, interest and attorney fees, under the district court judgment.

“I applaud my litigation team, the court and the Health and Human Services Commission for stopping this misconduct and recovering taxpayer money,” Texas Attorney General Ken Paxton said in a news release. “Identifying and preventing Medicaid fraud continues to be a top priority for my office and I remain committed to ensuring that Medicaid dollars are preserved for those who most need them.” 

Malouf’s attorney, Jason Snell, told WFAA that they planned to appeal the judgment.

“We are disappointed in the judge’s decision for summary judgment,” Snell said. “We were looking forward for Dr. Malouf to defend this case before a Travis County jury and have a hearing into the actions of the state of Texas.”

Snell said Malouf relied on the guidance of the state’s Medicaid administrator, which approved and paid out Medicaid claims.  

The Travis County district court found Malouf fraudulently billed Medicaid for services that he did not deliver, including more than 100 claims he filed while he was vacationing out of the country, Paxton said. 

Snell, however, said Texas officials never alleged dental services were not provided. Instead, he said, state officials argued that the claims were not billed correctly. 

“The state of Texas wasn’t charged for services not performed or never rendered,” Snell said.

The WFAA series “Denticaid: Medicaid Dental Abuse in Texas” uncovered hundreds of millions of dollars in Medicaid billings for pediatric orthodontics that targeted low-income children for possibly unnecessary and even harmful dental work. 

The stories by former WFAA reporter Byron Harris prompted new state laws in 2013 aimed at curbing Medicaid dental abuses and earned WFAA the duPont-Columbia Award in 2014.

WFAA and Harris first broke the story in May 2011 focusing on the massive amount of Texas Medicaid orthodontic spending in comparison to other states. Medicaid records showed Texas spent $184 million on Medicaid orthodontics in 2010 -  nine times more than California, which spent $19.5 million.

In fact, records showed Texas spent more, for example, than nine of the most populous states combined, which included New York, California, Florida, Illinois, Michigan, Georgia, Ohio, Pennsylvania, and North Carolina.

Besides looking into Malouf and his practice, the WFAA investigation also found one Dallas-area dental clinic cruised poor neighborhoods, luring kids with food and cash before performing extensive, unnecessary and often harmful dental work all without parental consent. 

WFAA’s detailed reporting featured whistleblowers, and hidden camera video.

Because of this reporting, the Texas Medicaid commissioner and the state’s dental director resigned, and congressional hearings were held.

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