We have seen an increase in audits of dentists by private insurers. Big data and updated computer systems have made it easier for insurance carriers to flag suspicious billings.
If intentional billing for services not provided is found, it can be referred for criminal prosecution and/or to the Dental Board. This is one reason to handle audits very carefully and to address any billing errors or other issues in a way that does not create additional problems.
A Los Angeles dentist, Carlos Maria Vallarta Fausto, self-surrendered on a case filed by Los Angeles District Attorney's Office after he was charged with two felony counts of insurance fraud for allegedly charging insurers more than $31,000 in billings for services not performed on patients in his Los Angeles area dental practice between January 1, 2007 and December 31, 2014. Dr. Fausto is presumed innocent and a felony complaint is not evidence. The bail on this case was set at $25,000 and he was released immediately.
After an audit, an insurer filed a complaint against him with the California Department of Insurance which launched its own investigation, which allegedly revealed Dr. Fausto billed multiple insurance companies for dental treatment he did not render to his patients over this seven-year period. The case has also been referred to the Dental Board of California, which is responsible for licensing dentists in California.
Attorney Commentary: There are several things to note from this case. First, even with a loss amount of $31,000 over a seven-year period, the case was referred criminally. Years ago, low loss amounts were not filed. Prosecutors are getting more aggressive about smaller cases especially where they believe there is "ghost" billing or billing for services not provided.
Second, these allegations are from years ago but the statute of limitation continues to run where the alleged fraud is not discovered. Thus, even though some of the services were 10 years old (2007), charges were just filed. It takes years for these cases to be investigated and the alleged misconduct stopped in 2014. The state statute of limitation is 4 years from date of discovery.
Third, it should be remembered that even if the criminal case is dismissed or won, the dentist will still need to address the Dental Board which has a lower burden of proof and usually waits until the criminal case is concluded. The Dental Board can be very aggressive and the dental license is the tail that wags the dog in this type of case.
Finally, periodic self-audits, compliance and making sure that insurance billing is accurate is good business. When you bill insurance companies or the government, you need to be extra careful. The old saying of it's better to ask forgiveness than permission doesn't work in government or insurance billing.
Even a $30,000 billing issue over seven years does not always just go away by paying the funds back in today's world. I have seen cases where repayment upon discovery of erroneous billing helped avoid criminal and Dental Board referrals but these cases need to be handled carefully and with a view of the big picture at 40,000 feet.
Posted by Tracy Green, Esq.