Daniel Schulte discusses whether inaccurate claims submitted to a dental plan constitute fraud in the latest issue of The Journal of the Michigan Dental Association (July 2023).

Question: I am under audit by a dental plan I participate with. The audit has identified a few issues in connection with how my billing employees have been submitting claims for payment. For example, the name of the treating dentist was sometimes incorrect, dates of treatment are off, claim forms were submitted prior to treatment being complete, etc. The dental plan is seeking repayment of many of these incorrect claims. This audit has made me realize I have not been as attentive to my claims preparation and submission as I should have. I also realize that I need to educate myself on billing and claim-filing rules of each of the dental plans I participate in. However inattentive I may have been to the business aspects of my practice, I didn’t deliberately do anything wrong. The dental plan representative keeps saying that I have committed fraud, and has even suggested that I may have committed a crime. Is this true?

Answer: Inattention to detail, failing to check the work of your employees who are submitting claims, not understanding and/or misinterpreting a dental plan’s billing requirements does not, in and of itself, constitute fraud. In order for your actions or inactions to constitute fraud, it would have to be established that you listed the treating provider incorrectly, put down the incorrect dates, etc., and that:

• You knew what you were doing incorrectly was a breach of the participation agreement or a policy applicable to you.
• You intended the dental plan to rely on this information you knew to be wrong and misleading when you submitted your claim for payment.
• The dental plan was damaged by either paying a higher amount or paying something when it otherwise would have had to pay nothing.

Obviously, you intend the dental plan to rely on the information included on the claim form when determining whether it will pay you, and the amount to be paid. I can only assume that the dental plan would not be seeking repayment if it did not feel it had paid claims it should not have, or that it paid higher amounts than it should have. Even though there may be damages, to establish fraud the dental plan still must prove you knew you were doing the wrong things and did so intentionally with the purpose to get something you otherwise would not have gotten. These knowledge and intent requirements will be difficult to prove in the situation you describe. There must be proof you knew the specifics of how the claim forms were being incorrectly prepared.

Convincing a prosecutor or other enforcement agency to pursue a criminal action for fraud on the facts you describe would be even more difficult. To successfully prosecute an allegation under a criminal fraud statute, the government has the burden of proving that a knowingly false material representation was made. This is like proving a civil fraud case. The difference is that under the criminal statutes the government’s burden of proof is much higher. In a criminal case, the government must prove “beyond a reasonable doubt” that the false representation was knowingly and intentionally made. This is the highest standard of proof that the law requires. In a civil case the plaintiff must meet a much lower legal standard of proof — showing that a false representation was knowingly and intentionally made by “a preponderance of the evidence.”

Based on the facts as you describe, I doubt fraud can be proven. This is the case most of the time. The worst-case scenario is that you will be found to be in breach of your participation agreement. Obviously, this situation is a good reminder to be aware of what you are billing, and to make sure both you and your staff understand and correctly bill claims for payment.