Taxpayers Footing the Bill for Braces in Texas

the house that braces built WFAA-TVThe business of charging taxpayers for putting braces on kids’ teeth has exploded in Texas over the last three years according to a story by WFAA-TV in Dallas.

In 2010, Texas spent $184 million on Medicaid orthodonticsmore than the rest of the United States combined.

I want you to understand, right up front, that I’m tremendous proponent of just about any program that put dollars in dentist’s pocket for providing quality dental care. Time to be honest, this level of government pork could only have been arranged in a smoked filled back room in the dead of night.

While Texas struggles with its Medicaid budget, 34 dental organizations collected more than $1 million in Medicaid orthodontics last year.

Orthodontic treatment for children is generally an elective cosmetic procedure that many parents spend thousands of dollars on for their children. Very few dental insurance carriers cover orthodontics or elective procedures such as teeth whitening.

But in Texas, Medicaid pays dentists for orthodontics per procedure, instead of a lump sum for the “finished mouth” of straight teeth, according to WFAA-TV. This has made Medicaid orthodontia a lucrative dental business in Texas.

So much so that just three years ago, dentist Richard Malouf’s All Smiles Dental Centers of Texas collected $5.4 million from Medicaid orthodontics. Since that time, All Smiles’ Medicaid orthodontics billings nearly doubled to $10.2 million. This caught the interest of Chicago-based hedge fund Equity Partners who recently acquired All Smiles Dental for an undisclosed sum.

Now Texas dental clinics are being bought up by hedge funds, making Wall Street the ultimate destination for millions of taxpayer dollars as reported by WFAA.

The following is a video of WFAA’s investigative report -

Nowhere is the lucrative business of Medicaid braces more evident than with dentist Richard Malouf’s mansion in Dallas. It is a massive French chateau with a pool house, big enough for the average American family of four to live in. The Maloufs also own the mansion next door. According to tax records the combined value of the two properties is more than $14 million.

It is known as the house that braces built.

Dr. Malouf isn’t alone in offering Medicaid braces; there are five other dentists’ offices that provide Medicaid orthodontia on the same half-mile street in Dallas. Many of them advertise free braces under Medicaid. Jefferson Dental is one such dental operation and, according to WFAA, it is owned by hedge fund Black Canyon Capital of California.

During a struggling economy, many question whether this is the best use of taxpayer dollars. A Medicaid dollar that is spent on braces is a Medicaid dollar not being spent on fighting cavities and procedures most dentists feel are necessary.

It will be interesting to see how this story unfolds. I really want to see the which legislators initiated and signed off on this this piece of legislation and who the lobbyist where who pushed it through.

I not sure other state dental boards should hire them or hang them?

For more on this story see: Tax Money for Unneeded Braces Goes to Hedge Funds

About Jim Du Molin

+Jim Du Molin is a leading Internet marketing expert for dentists in North America. He has helped hundreds of doctors make more money in their practices using his proven Internet marketing techniques.

  • Snbdds

    I don’t agree that orthodontics is “generally an elective cosmetic procedure”, at least I don’t see it that way.  If there is malocclusion, that’s a problem.  I DO agree, however that no one died from malocclusion.  And I agree that Medicaid should not be paying for orthodontics, unless the malocclusion will lead to physiologic problems later.  I wish I could exploit the system and do what’s legal even if it’s not the most moral thing and buy a mansion in the process, but I’m not wired that way.  Pun intended. And, I think that this type of practice makes all of dentistry look bad, greedy, unprofessional and worst of all untrustworthy.

  • Jroverland

    This story is very unsettling. In Texas, we have schools in crisis, schools closing, teachers losing jobs, etc. My hope is that Dr Malouf is fully investigated. The taxpayers (hard working people) have paid for his mansion and lifestyle and this is extremely unsettling. Please do not stop with this story.

  • Anon

    I know these Malouf’s and it would also displease people to know he bought Jim Carys Lear Jet for 5 million and purchased all the propertys for all smiles to rent from him before he sold the business to the hedge fund company’s . I said along time ago I don’t believe in what hes doing and it will not last forever I thought they would have put a end to it years ago but here it is still going going going like the energizer bunny.

  • Catherine

    Thank you all for your comments and feedback on this story.  We too, were amazed by this story.  Jim Carey’s Lear Jet?  All I can say is wow.

  • Dolledup89

    I agree. I work in the dental field and I see this type of stuff all the time. Not just orthodontics. There’s also unneeded fillings, crowns, deep cleanings and etc. being completed. There’s no such thing as “free braces”. We, the hardworking taxpayers are paying for these “free braces”. I would also question why the majority of these patients are Hispanics?

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  • Dawede

    I agree with the statement that, “no one has died with crooked teeth”…and also agree with the statement, “its not  a primary concern,’ when monetary funds need to be properly allocated to the general  overall health of the teeth not how straight they located in their respective bony housing. What some these “experts” i.e. general dentists lack is knowledge of the gnathological system and detailed treatment philosophy of the tempormandibular joint; and how improved occlusion can help the overall masticatory system perform efficiently. In addition there is clear link between psychological distress and malocclusion; they’re right no one died of crooked teeth; well you can also claim no one has also died of autism, bipolar disorder, post traumatic stress disorder, and psychological distress as the direct cause of  body deterioration; which can be caused by a malignant tumor or a severe bacterial/viral infection.  “Children covered by Medicaid have access to psychological services as part of the Early and Periodic Screening, Diagnostic and Treatment (EPSDT) benefits. EPSDT services, which include screening and treatment for mental conditions, are mandatory. States must offer EPSDT services to all Medicaid-eligible children under age 21.” 
     If these general dentists took time to do some research rather than report to the news and open an orthodontic textbook the profound statements they make wouldn’t seem so ignorant to a specialist. Why is it that if a general dentist places braces he/she held to the same standard of care as a specialist; its because if any poor clinical choices have been made they are held liable in front of a committee with an “expert” orthodontist badgering the dentist’s testimony; so these dentist want to make claims about a speciality …do your homework read a little bit more, it may help in acknowledging your claims and make you sound less ignorant than you already do.

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