Christine Ellis reveals a Second Qui Tam Suit; this one is Bigger and Badder, and Involves Many, Many Dental Practices

As was reported in the media, on June 25th, 2012, Texas orthodontist Christine Ellis filed a qui tam suit against dental chain All Smiles with the Dallas firm of Waters and Kraus acting on her behalf. Ellis has been one of the prime actors in professing large amounts of Medicaid fraud by orthodontic dentists and firms in Texas. Before the suit was filed, in April, Ellis appeared before the US. Congress Committee On Oversight and Government Reform on a panel with other qui tam relators and Claire Sylvia, J.D., Partner, Phillips & Cohen, LLP, a qui tam lawyer.

However that suit against All Smiles, which is currently pending in the 126^th District Court in Travis County (CAUSE NO. D-1-GV-12-000863), is not her only whistleblower lawsuit. TDMR has learned that there is a second, broader, sealed qui tam lawsuit.  That suit, which is pending in the 98^th District Court in Travis County (CAUSE NO. D-1-GV-12 -000435) has recently come to light. Again, Ellis is represented by the law firm of Water and Kraus and filed this second lawsuit on April 24, 2012. We don’t know how many dental practices are affected, and the actually charges are only hinted at, but a partially redacted copy of that qui tam suit reveals 46 pages (from page 3 to page 49) of defendants. The civil lawsuit was only partially unsealed, and only one defendant was revealed.

Speculation is that the lawsuit was unsealed for that one defendant because that dental practice is scheduled for an administrative hearing on OIG charges and the law firm of Water and Kraus wanted to help the State prevail.  A source close to the matter, who spoke on condition of anonymity, said “It’s pretty well known that if a dentist wins his administrative hearing regarding the same charges, then it would be extremely difficult for Ellis to win a qui tam lawsuit against them.  Ellis’ move in unsealing the case just prior to the administrative hearing was pure legal gamesmanship. She doesn’t want to see her qui tam case go down the toilet, so she is trying to get her attorneys to jump into the administrative case and shore it up for the OIG.”

The lawsuit, which is over 100 pages, is highly censored, but the disclosed allegations are numerous and broad-reaching: improper orthodontic treatment, improper billing, illegal upcoding, kickbacks and solicitation, engaging in the corporate practice of dentistry, breaches of the standard of care, billing for medically unnecessary appliances and procedures, as well as more mundane claims such as having unqualified or uncredentialed staff provide services. For each violation, Ellis is seeking to have the providers (named and unnamed):

1)  repay Medicaid in full for the procedure, plus interest,
2) pay a civil penalty ranging from $5,000 to $15,000 for each unlawful act, and
3) pay an additional two times the amount paid to the provider for the procedure.

TDMR has reported in the past that the AG targeted 31 dental practices for investigation. Some believe that Ellis’ lawsuit is the result of that investigation. With 46 pages of named defendants, the latest lawsuit is large enough to fit those 31 providers, and then some.

The moral of the story is that if an orthodontist is under a “credible allegation of fraud” payment hold, that provider has more to worry about than just the OIG. Ellis and her attorneys are  probably coming to knock at his or her door as well.