Iowa dental company pays settlement over false Medicaid billings

An Iowa dental company with practices across the state, including one in Cedar Rapids, settled a lawsuit this month for more than $300,000 with two employees who were fired after they reported the submission of false Medicaid claims for dental procedures that were unnecessary or didn't exist.

Todd Willson, former chief financial officer, and Peggy Lemley, former financial coordinator with Lifepoint Dental Group LLC, brought the 'qui tam” or whistleblower lawsuit against the company in January for false claims of dental procedures submitted between April 1 and Oct. 1, 2015, the complaint filed in U.S. District Court showed.

This suit was brought under the False Claims Act and the whistleblower provisions, which allow individuals, such as employees who have direct knowledge of fraud, to file a suit on behalf of the government and then share in any financial settlement.

Willson and Lemley each will receive a share of $45,209, or 15 percent of the total amount recovered, according to the settlement, Adam Zenor, Willson's Des Moines attorney, said this week.

'These cases foster responsible billing practices and endeavor to ensure the government does not fall victim to fraud,” Zenor said Thursday. 'It is impossible to overestimate the important role a private citizen plays as a watchdog for unlawful billing practices.”

Melissa Hasso, Lemley's West Des Moines attorney, agreed, saying Lemley and Willson, unfortunately lost their jobs after reporting the fraud, but this 'law is designed to encourage employees like them to take that risk.”

'We are confident that through the settlement and pending litigation over Ms. Lemley's wrongful termination, Lifepoint will have learned an expensive lesson, and that other providers will take notice,” Hasso said Thursday.

Sarah K. Franklin, Des Moines attorney for Lifepoint Dental, said in a statement Thursday this investigation involved two former employees at the Cedar Rapids office, which resulted in the settlement with the government.

'There is no admission of liability in the settlement agreement,” Franklin said in the statement. 'Lifepoint is proud of the work it does, including its service to Iowa's Medicaid population.”

The complaint shows Willson and Lemley became 'aware of multiple instances of fraud, including false claims to Medicaid” that Aaron Blass, president and CEO, and Leann Sou, vice president of operations, knew about and approved.

Each of the offices in Cedar Rapids, West Des Moines, Des Moines Ankeny, Marshalltown and Ames entered their own Medicaid charges or were handled by Sou, according to the lawsuit. The Marshalltown office closed in 2015.

Lemley told Willson about several 'questionable” billings to Medicaid and other insurance companies on April 30, 2014. Willson then found numerous charges were billed for no services provided.

On May 5, 2014, Willson sent six emails to Blass telling him about the discrepancies, but Blass, in person, told Willson he would 'fix any illegitimate charges.” The next day, Blass told Willson to 'drop it” and that the 'matter had been resolved.”

Less than a month later, Blass came into Willson's office and accused Willson of failing to identify fraud and embezzlement out of the Marshalltown office totaling about $70,000, and he fired Willson, the suit shows.

Lemley continued to complain about fraudulent practices after Willson was fired. She then was fired, on Jan. 6 of this year, the suit claims.

U.S. Attorney Kevin Techau said these types of lawsuits brought under the whistleblower provisions are another 'key way” that offices across the country have traditionally learned about Medicare and Medicaid fraud.

The U.S. Department of Justice recovered $2.9 billion in qui tam suits in fiscal year 2016, according a news release on Wednesday. The government awarded whistleblowers $519 million during the same period.

l Comments: (319) 398-8318; trish.mehaffey@thegazette.com