Dentist Accused of Fraud for Waiving Amounts Due After Insurance
Marc Leffler, DDS, Esq.
May 9, 2023
Reading time: 6 minutes
Dr. F was a restorative dentistry solo practitioner who had been in the same practice location for many years, so he grew his patient population primarily by word of mouth. A new patient, Bob, worked for a local retail business where he was a close friend of one of Dr. F’s patients. The business provided its employees with a very generous dental insurance policy, with a small deductible that Bob met early in the calendar year with his dentist who recently retired. Bob’s co-worker encouraged him to see Dr. F for the dental work that Bob knew he needed.
As a result, Bob came to see Dr. F to look into having 3 crowns that the prior dentist said he needed. Bob explained to Dr. F that he had good insurance but not a lot of discretionary money, so he asked if Dr. F would accept his insurance as payment in full. Dr. F normally charged $1850 per crown, but agreed to accept the plan’s allowance, which was 80% of the area’s usual and customary (U&C) fee.
Upon completion of the treatment, about which Bob had some concerns with the way they fit at the gum line, Dr. F submitted an insurance billing form, listing $1850 for each of the crowns performed, totaling $5550. A few weeks later, the dental insurer issued a check to Dr. F in the amount of $3600 with an accompanying Explanation of Benefits (EOB): the U&C fee for crowns in Dr. F’s zip code, according to the insurer, was $1500 each, of which it covered 80%, or $1200. As Dr. F had previously agreed to do, he waived the $1950 difference between the $3600 paid and the $5550 billed.
Bob remained unhappy with the crowns, so he visited another dentist who found open gingival margins on all of the crowns, and therefore recommended re-doing the crowns. This new dentist, Dr. Y, submitted an insurance pre-authorization because she knew that Bob had only recently had the 3 crowns inserted. The insurer responded that Bob had exhausted his yearly benefits except for $50, so he was eligible for only $50 in benefits for the current year but, more importantly, would not be eligible for benefits for crowns on the same teeth for 5 years, pursuant to plan limitations. Bob brought the paperwork to the HR department at work, seeking advice; the suggestion made to Bob by the office’s insurance administrator, who was unaware of the financial arrangement that Bob and Dr. F had, was that he should ask Dr. F for a refund of $5500, which was the amount he billed. Bob did exactly that.
Dr. F’s office responded in writing that Dr. F was confident that the crowns were properly made, with the letter asking Bob to return for any adjustments that might be needed, at no cost. Bob had lost confidence in Dr. F, so he refused the offer. Instead, he returned to HR to explain the response and to explain that he could not afford Dr. Y’s even higher fee of $6000, which would now be entirely out-of-pocket, even though, as Bob now explained, he had no out-of-pocket expenses to Dr. F, as he had accepted the insurance amount as payment in full. The HR representative told Bob that, in the state where they were located, as generous as Dr. F had been, it was illegal for him not to have “balanced bill”, meaning not to have charged Bob for the difference between what he had billed and what he was paid by the insurer.
“Legal” Steps Taken
Armed with this knowledge, Bob contacted Dr. F directly and told him that Dr. F had committed insurance fraud because he had billed the insurance company for an amount he had no intention of collecting and that he would contact the “authorities”. Dr. F became infuriated before ending the call, and then immediately contacted his malpractice carrier, which assigned counsel to him under a liberal interpretation of the policy provisions.
During their first discussion, the attorney explained to Dr. F that Bob was theoretically correct in his assessment because Dr. F charged less for the services, and knew all along that he would be doing so, than he reported to the dental insurance company. The attorney also advised Dr. F that disgruntled patients like Bob have an increased likelihood of filing dental malpractice lawsuits and Board complaints, so he suggested resolving the dispute as quickly as possible, thereby minimizing the chances of allowing the issues to escalate. Dr. F agreed.
The attorney then began, effectively as a mediator, to work with the insurance company and with Bob, separately but with a common goal. Initially, he contacted the insurance company to advise that Dr. F would be returning the $3600 it had paid for the 3 crowns, explaining that this was to help to satisfy a patient who was displeased with the work performed; the insurance representative said that a return of that amount would make that amount again available for Bob to use for dentistry during that calendar year, and would void out the fact that a payment had been made for those crowns, which would also eliminate the 5-year waiting period for new crowns on those teeth. In then speaking with Bob, the attorney explained what the insurance company had agreed to do, and also passed on Dr. F’s regret that Bob felt that the dentistry provided for him was less than what he had expected. Dr. F also offered, through the attorney, to provide Bob’s co-worker with his next examination and set of radiographs at no charge, in appreciation for trying to add a new patient to Dr. F’s practice. Bob joked that his friend might then be willing to take him to a baseball game with the money he would save on that dental visit, and he was satisfied to place the entire incident behind him. Dr. F’s attorney documented the events in letters to both the insurance carrier and Bob.
The adage, “no good deed goes unpunished”, is exemplified in this case study, but it is not meant to dissuade dentists from being magnanimous in their dealings with patients, so long as they act within the confines of the law; in fact, in the great majority of situations in which dentists maintain positive relationships with their patients, those patients are traditionally less likely to “go after” their dentists, even when results are worse than anticipated. Here, Dr. F lost not only the money for the time he spent treating Bob, but also the material and laboratory costs associated with the fabrication of the crowns. But it was Dr. F’s ultimate willingness to accept that monetary loss that led to a resolution which did not involve formal accusations of insurance fraud or a complaint to the Dental Board.
Regarding the substantive issue of “balance billing”, dentists should be aware that the various States have very different statutes and case law on the issue of whether dentists and other healthcare practitioners may waive balancing bills, or are not permitted to do so, or are confined to some other approach altogether. It is always a good idea for dentists to know what their state laws are regarding this and other aspects of their practices. Dentists are not expected to be attorneys, so they need not have the same depth of knowledge, but consulting with an attorney when something seems unclear is never a bad idea.
We close with a brief discussion about the roles that attorneys can play in the dental practice arena. In addition to drafting practice buy/sell/employee contracts, defending dentists in malpractice lawsuits and Board complaints, and providing risk management education to dentists and their practice staffs, attorneys who are experienced having dentists as clients can help to smooth over some situations before they ever reach the litigation or complaint stage. As a general proposition, it is often times far easier to address disputes at their early stages, and in a collegial manner, than to manage them later on when an adversarial approach controls.
Note that this case presentation includes circumstances from several different closed cases, in order to demonstrate certain legal and risk management principles, and that identifying facts and personal characteristics were modified to protect identities. The content within is not the original work of MedPro Group but has been published with consent of the author. Nothing contained in this article should be construed as legal, medical, or dental advice. Because the facts applicable to your situation may vary, or the laws applicable in your jurisdiction may differ, please contact your attorney or other professional advisors if you have any questions related to your legal or medical obligations or rights, state or federal laws, contract interpretation, or other legal questions.
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