Dental Insurance Fraud: Where Honest Errors End and Real Liability Begins

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Categories: Practice Management, HR and Accounting;
Posted: July 11, 2026
By Howard Farran, DDS, MBA

Dental Insurance Fraud: Where Honest Errors End and Real Liability Begins

Dental insurance fraud is one of those subjects that becomes distorted almost immediately.

Patients hear about a dentist drilling healthy teeth for profit. Dentists hear about insurers using artificial intelligence to hunt for mistakes. DSOs blame rogue clinicians. Solo dentists blame corporate production pressure. Insurance companies emphasize abuse to justify tighter controls. Consultants promise coding strategies that recover hidden revenue.

The result is noise.

The evidence supports a more measured conclusion. Dental insurance fraud is real, sometimes serious, and often concentrated among a relatively small number of providers. Most improper claims, however, are not criminal fraud. They are caused by poor documentation, coding errors, administrative mistakes, missing records, or disagreements over medical necessity.

That distinction matters because fraud requires deception.

A claim can be wrong without being fraudulent. A wrong tooth number entered once is an error. A tooth number repeatedly changed to bypass a benefit limitation may be fraud. A denied scaling and root planing claim may reflect inadequate periodontal documentation. Creating charting after the fact to support the claim is something entirely different.

The Centers for Medicare and Medicaid Services has repeatedly warned that improper payments should not be treated as estimates of fraud. In its Fiscal Year 2024 Improper Payments Fact Sheet, CMS reported that most Medicaid improper payments resulted from insufficient documentation. The treatment may have occurred, but the record did not prove that the payment complied with program requirements.

Poor documentation is not harmless. Insurers can still recoup payment when a chart fails to support the claim. Repeated deficiencies can also trigger wider audits, credentialing action, board complaints, or investigations. But a weak note and an invented procedure are not the same offense.

The cases that reach federal court usually involve something much larger than a disputed code.

Wisconsin dentist Scott Charmoli was convicted after prosecutors proved that he intentionally damaged patients’ teeth, photographed the damage, and used those images to justify unnecessary crowns. Calgary dentist Alena Smadych admitted submitting hundreds of thousands of dollars in claims for procedures that were never performed, including root canals, fillings, and extractions, sometimes supported by falsified records and radiographs.

The Houston Floss Family Dental Care case involved phantom pediatric procedures, treatment by unlicensed personnel, kickbacks for recruiting Medicaid patients, and money laundering. The Benevis and Kool Smiles settlement focused on allegations of medically unnecessary pediatric pulpotomies, stainless steel crowns, and extractions, combined with production incentives that allegedly rewarded higher treatment volume.

These are not stories about one accidental comprehensive examination code.

They are sustained systems of conduct.

Government investigators increasingly find those systems through claims analytics. They look for impossible daily production, unusually high rates of crowns or extractions, repeated use of uncommon procedures, abnormal surface patterns, extreme treatment per patient, and billing performed under providers who were absent.

An outlier is not automatically guilty. A referral practice, safety net clinic, specialist, or unusual patient population may legitimately differ from peers. Analytics identify who gets examined. Records, radiographs, patient interviews, laboratory invoices, schedules, and financial data determine whether the explanation holds up.

That is why the most useful question is not, “Could my receptionist commit fraud?”

Of course an employee can submit false claims, alter codes, misuse a dentist’s National Provider Identifier, redirect payments, create false refunds, or manipulate adjustments without the dentist’s approval.

The better question is, “What kind of practice would allow one person to do that for years without detection?”

The American Dental Association’s guidance is direct. Billing may be delegated, but accountability cannot be delegated away. The treating dentist remains responsible for assuring that claims submitted under the dentist’s name accurately describe the care provided.

Criminal liability generally requires proof that the dentist knowingly participated, directed the conduct, concealed it, or deliberately avoided learning the truth. Civil exposure can be broader. Under the False Claims Act, knowledge includes actual knowledge, deliberate ignorance, and reckless disregard.

A dentist who maintains reasonable controls, reviews reports, protects credentials, and promptly corrects an employee’s misconduct is in a much stronger position than a dentist who says, “The front desk handles all of that.”

The greatest practical danger often lies between obvious honesty and obvious fraud.

Consider local anesthesia code D9215. Documenting that anesthesia was administered is not fraud. Submitting the code is not automatically fraud merely because the payer denies it. The real questions are whether the service occurred, whether the claim accurately represents it, whether the payer treats it as separately payable, and whether the provider contract permits the patient to be charged.

The existence of a CDT code does not guarantee insurance payment. CDT describes treatment. The benefit plan determines coverage.

The same principle applies to unbundling. Charging separately for a genuinely optional upgrade may be permissible when it is clearly explained, documented, and allowed by contract. Creating anesthesia fees, temporary crown fees, facility fees, or material surcharges simply to recover a PPO write off may violate the participation agreement and may become deceptive if the patient or insurer is misled.

Routine waiver of copayments creates similar risk. A dentist may offer legitimate hardship assistance or settle a genuinely uncollectible balance under appropriate circumstances. But routinely telling an insurer that the full fee is being charged while secretly accepting the insurer’s payment as payment in full misrepresents the actual price.

The common forms of dental fraud remain remarkably basic. Billing for procedures never performed. Upcoding. Changing dates of service. Reporting the wrong provider. Misrepresenting tooth numbers or surfaces. Reusing radiographs. Billing treatment after a cancellation. Fabricating narratives. Performing unnecessary treatment. Concealing routine discounts. Submitting the same procedure twice.

The best prevention is not fear. It is structure.

Every claim should connect to the appointment schedule, signed clinical note, treating provider, ledger, and supporting record. No employee should control claim creation, submission, payment posting, refunds, write offs, and bank reconciliation. Every team member should have a unique login. Audit trails should be preserved. Payer correspondence should reach the owner or compliance leader, not disappear inside the billing department.

Dentists should review procedure patterns by provider, including crown rates, extraction rates, buildup to crown ratios, periodontal treatment, radiograph frequency, adjustments, deleted transactions, changed service dates, and unusually high production days.

Random audits should begin with the insurer remittance report, not records selected by the employee being reviewed.

The final test is simple. Was the treatment actually performed? Does the record prove it? Does the code accurately describe it? Does the contract permit the charge? Would the dentist be comfortable defending the claim with the patient, payer, board, and prosecutor in the room?

Dental insurance fraud is not everywhere, but billing data now makes weak systems easier to see. The greatest protection is not perfect staff. It is a practice designed so that honesty can be verified.

Would your billing system protect you if one trusted employee stopped being trustworthy?

Join the Conversation!



Dental Insurance Fraud: Where Honest Errors End and Real Liability Begins


Federal enforcement and fraud cases

Houston dental clinic operator convicted in $6 million pediatric fraud scheme
https://www.justice.gov/usao-sdtx/pr/houston-dental-clinic-operator-convicted-6m-pediatric-fraud-scheme

Grafton dentist sentenced to 54 months’ imprisonment and ordered to pay more than $1 million in forfeiture
https://www.justice.gov/usao-edwi/pr/grafton-dentist-sentenced-54-months-imprisonment-and-ordered-pay-over-1-million

Local dentist and hygienist charged with offenses related to healthcare fraud and false claims to D.C. Medicaid
https://www.justice.gov/usao-dc/pr/local-dentist-and-hygienist-charged-offenses-related-healthcare-fraud-and-false-claims-dc

Dental management company Benevis and affiliated Kool Smiles clinics agree to $23.9 million False Claims Act settlement
https://oig.hhs.gov/fraud/enforcement/dental-management-company-benevis-and-its-affiliated-kool-smiles-dental-clinics-to-pay-239-million-to-settle-false-claims-act-allegations-relating-to-medically-unnecessary-pediatric-dental-services/

Government oversight and payment integrity

Fiscal Year 2024 Improper Payments Fact Sheet
https://www.cms.gov/newsroom/fact-sheets/fiscal-year-2024-improper-payments-fact-sheet

Health Care Fraud Unit, Criminal Division, U.S. Department of Justice
https://www.justice.gov/criminal/criminal-fraud/health-care-fraud-unit

Questionable billing for Medicaid pediatric dental services in California
https://oig.hhs.gov/reports/all/2015/questionable-billing-for-medicaid-pediatric-dental-services-in-california/

Questionable billing for Medicaid pediatric dental services in New York
https://oig.hhs.gov/reports/all/2014/questionable-billing-for-medicaid-pediatric-dental-services-in-new-york/

American Dental Association guidance

Responsibility for Billing Records and Accounting
https://www.ada.org/resources/practice/practice-management/responsibility-for-billing-records-and-accounting

Assuring Accuracy of Claims as a Treating Dentist
https://www.ada.org/-/media/project/ada-organization/ada/ada-org/files/resources/practice/dental-insurance/assuring_accuracy_of_claims_as_a_treating_dentist_93h_final_05132022.pdf

Frequently Asked Questions Regarding Dental Procedure Codes
https://www.ada.org/resources/practice/dental-insurance/frequently-asked-questions-regarding-dental-codes

Claims Submission: Scaling and Root Planing
https://www.ada.org/-/media/project/ada-organization/ada/ada-org/files/resources/practice/dental-insurance/ada_claims_submission_scaling_and_root_planing_longversion.pdf

Medicaid Provider Resource: Strategies to Reduce Denials and Improve Efficiency
https://www.ada.org/-/media/project/ada-organization/ada/ada-org/files/resources/research/hpi/medicaid_provider_resources_reduce_denials_improve_efficiency.pdf

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