A “perfect storm” has struck Texas’ dental community that serves some of the state’s neediest patients – those on Medicaid. With a major state budget shortfall, charges of Medicaid fraud and now trial lawyers scurrying to stake their claim, it’s a wonder that any Texas dentists are willing to be part of the Medicaid program.
Historically, many dentists have been unwilling to treat Medicaid patients, because Medicaid has low reimbursement rates and can create additional administrative burden for already overstrained providers. This low dentist participation shouldn’t come as a surprise — low-price, high-cost programs rarely spur involvement. Yet the long-term cost to taxpayers can be extremely high if early, preventative dental intervention for the underserved is not available. Research has shown that adults with poor dental health have worsened job prospects, and emergency room dental treatments cost about 10 times as much as the same treatment at a dentist’s office.
Five years ago, when the Frew settlement forced Texas to raise Medicaid reimbursement rates in the hopes of increasing access to dental care for the state’s low-income families, it had the desired effect. One positive transformation was the growth in Dental Service Organizations, which provide administrative and other support services to dentists or groups of dentists. Through group buying power, centralization and the use of best practices, Dental Service Organizations create efficiencies that allow dentists to provide cost-effective care to children and families on Medicaid.
Thanks in part to these reforms, low-income children and families in Texas have access to dental care. But instead of celebrating this achievement, some state lawmakers are panicking at the short-term outcome of increased utilization of services.
So although DSOs are doing just what was intended by the state’s Medicaid enhancements, they now find themselves under attack. The negative storyline put forth is that DSOs, backed by private-equity financiers, are interested only in profit and are inappropriately increasing the number of patient procedures they perform to maximize government reimbursement.
In my view, the burden of proof should be on the accuser to show that this story is accurate beyond a few anecdotes. Accusers would need undeniable evidence to show wanton misuse of the doctor-patient relationship in order to level such strong accusations. We have yet to see that proof. False accusations are far more damaging to patient, doctor, and taxpayer alike than are failures to root out infractions. No matter how much effort is spent, if these unproven accusations continue, a lot more than access to these vital services will be destroyed.
Recently, I analyzed every single Medicaid claim paid for the state of Texas in FY2011—some 25.9 million procedures. The data includes the nation’s largest DSO serving children on Medicaid, Kool Smiles. (Kool Smiles sponsored my study and provided the raw data, obtained via a Freedom of Information Act request, but had no control over the results of the study.) The simple facts are as follows:
• Across the entire state of Texas in 2011, dentists affiliated with Kool Smiles performed 8.24 procedures per patient and dentists belonging to DSOs performed 10.15 procedures per patient, versus 12.39 procedures per patient at non-DSOs.
• The cost per patient per year was $345.45 at Kool Smiles offices and $483.89 at DSO clinics, compared with $711.54 for non-DSO dental offices.
The same pattern emerges no matter how you slice the data: those DSOs that provide services to the Medicaid population performed conservatively compared with non-DSOs.
Although DSOs performed fewer overall procedures per patient, a critic could argue that they could still be engaging in fraudulent billing practices — for example, manipulating the types of procedures they performed or how they billed for them. The most common allegations made against DSOs claim that DSOs perform unnecessary tooth extractions, pulpotomies (removal of infected tooth pulp) and crowns to increase their reimbursement income. My analysis showed that in each case, however, dentists at DSOs performed fewer of these procedures per patient than did dentists at non-DSOs, and the nation’s largest DSO, Kool Smiles, performed fewer still.
All of the data we have suggest that DSOs provide conservative, low-cost treatment to a previously underserved population, thus improving the dental health of Texas’ low-income children and families. Today, DSOs are doing just what we need: providing a critically important health service to people who desperately need it, ultimately at a lower cost to the taxpayer.
Laffer: Bridging the dental divide
September 29, 2012
The Austin American-Statesman