Court overturns multimillion-dollar settlement against dentist

The Texas Supreme Court has reversed a four-year-old, $16 million summary judgment in a Medicaid fraud case against a dentist and former owner of All Smiles Dental Center, a dental chain that has since rebranded as South Texas Dental.

In a 6-to-2 vote, the court ruled on June 21 to reverse the 2020 summary judgment against Dr. Richard Malouf and granted his motion to end the prosecution in the case that the lower and appeals courts had denied, according to the opinion.

The court found that the state had presented no evidence that Malouf violated the Texas Medicaid Fraud Prevention Act based on the wording of this law. Malouf appealed his case to the state Supreme Court after a state district court found him responsible for a $16.5 million in civil penalties in 2020.

“We thus reverse the court of appeals’ judgment, and we render judgment in Malouf’s favor,” according to an opinion delivered by Justice Jeffrey Boyd on behalf of the court.

Texas had accused All Smiles, a dental chain of 51 offices, of submitting 1,842 claims to Medicaid that listed Malouf’s Texas Provider Identifier (TPI) even though another dentist provided the billed-for services to patients. Based on this, the state sought summary judgment, according to the opinion.

Malouf never disputed the submittal of these claims or that a dentist other than himself provided the care, but said that he never failed to “knowingly” not include the other provider’s TPI. Malouf stated that he thought he was supposed to use his TPI number whenever he supervised a person providing the service, and whenever Medicaid experienced a glitch that prevented a practice from properly submitting a claim.

Furthermore, the dentist claimed that he was unaware that his staff was submitting claims using his TPI under any other circumstances. Therefore, Malouf argued that the 1,842 claims submitted did not constitute unlawful acts based on the fact issues his points created, according to the opinion.

In March 2012, Malouf and the dental chain agreed to pay $1.2 million as part of a settlement agreement for the fraud charges. Malouf did not admit any wrongdoing.

In May 2012, All Smiles filed for bankruptcy. In 2013, All Smiles rebranded as South Texas Dental.