Source: https://www.scribd.com/document/98313129/Castillo-Qui-Tam-Lawsuit
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Matched Legal Cases: ['§ 36', '§ 354', '§ 354', '§ 371', '§ 1396', '§ 33', '§ 36', '§ 36', '§ 36', '§ 36', '§ 36', '§ 36', '§ 36', '§ 36', '§ 36', '§ 36', '§ 36', '§ 36', '§ 36', '§ 36', '§ 2001']

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RICHARD J. MALOUF; RICHARD J. MALOUF, D.D.S., P.C.; RICHARD J. MALOUF, D.D.S., P.A.; 2009 STRAIGHT FAMILY LANE FAMILY, L.P.; CAMELIA FAMILY LIMITED PARTNERSHIP; FORT WORTH SMILES BY WIRE, PLLC; GARLAND ROADS SMILES, PLLC; GARLAND ROADS SMILES BY WIRE, PLLC; HALTHOM CITY SMILES, PLLC; JACKSBORO SMILES, PLLC; JACKSBORO SMILES BY WIRE, PLLC; LEWISVILLE SMILES, PLLC; NORTHWEST HIGHWAY SMILES, PLLC; PLANO MINYARD SMILES, PLLC; ST. FRANCIS SMILES, PLLC;VALLEYVIEW SMILES, PLLC; RGS DENTAL MANAGEMENT SERVICE, LLC; RMAL HOLDINGS, LLC; DISCOUNT DENTAL SUPPLY, LLC; AS PROPERTY HOLDINGS, LLC; MS HOLDINGS, LLC;
Filed fn The District Co urt of Travis County, Texas
JUN 2 5 2012 AMC At � : () Amalia Rodriguez-Mendoz a Clerk
: �-rut:J\(�
HOLDINGS L.P., LLC; and Dr. RAFFY KOUYOUMDJIAN
TO THE HONORABLE JUDGE: The State of Texas ("State"), by and through the Attorney General of Texas, Greg Abbott, brings this cause of action under the Texas Medicaid Fraud Prevention Act, ("the Act" or "TMFPA"), TEX. HuM. REs. CODE chapter 36. The State has primary responsibility for prosecuting this action under section 36.107(a) of the TMFPA. Private Person Plaintiff/Relator Madelayne Castillo ("Relator Castillo") is the Relator in this case and as such is a· named party Plaintiff. The State and Relator Castillo will be collectively referred to as "Texas." The action from which this case was severed was filed under seal on or about the 23d day of May 2012, by Relator Castillo under section 36.102 of the TMFPA. On or about the 251h day of June 2012, the State exercised its prerogative under section 36.104 of the TMFPA and formally filed its Notice of intervention. On or about June 25, 2012, the Court granted leave to Texas to sever and unseal the claims against theseDefendants from the original case.
Plaintiffs designate this case as a Level 3 case requiring a discovery control plan
tailored to the circumstances of this specific suit.
This court has subject-matter jurisdiction over this case pursuant to section 36.052(d)
of the TMFPA, which provides statutory remedies to redress the conduct of theDefendants.
The TMFPA provides authority for this action to be brought by the Attorney General and by Rel&tor Castillo. TEX. HUM. REs. CODE§§ 36.052, 36.102. 2.2 This Court hasjurisdiction over each of theDefendants named in this Petition because
eachDefendant does business in the State of Texas and committed the unlawful acts alleged in whole or in part in the State. 2.3 Venue is proper in Travis County under section 36.052(d) of the Texas Human
Resources Code and additionally because many of the unlawful acts committed by the Defendants were committed in Travis County, including the making of the false statements and misrepresentations of material fact to the Texas Medicaid Program. III. PARTIES PLAINTIFFS 3.1 Plaintiff THE STATE OF TEXAS, represented by the Attorney General,
authorized to bring this action under section 36.052 of the Texas Human Resources Code. 3.2 Relator I PlaintiffMADELAYNE CASTILLO, is an individual authorized to bring
this action under section 36.102 of the Texas Human Resources Code. Relator Castillo worked in the Jacksboro Highway location of All Smiles in 2008. DEFENDANTS 3 .3 Defendant RICHARD J.MALOUF is a dentist licensed (#16206) by the Texas State
Board ofDental Examiners and may be served with process at his principal place of business, 9090 Skillman Street, Suite 200C, Dallas, Texas 75243.
RICHARD J. MALOUF, D.D.S., P.C.
is a Texas limited liability
company. It may be served with process by serving its registered agent, Richard J. Malouf, at 3100 Matlock, Suite 101, Arlington. TX 76015. 3.5 Defendant
RICHARD J. MALOUF. D.D.S., P.A.
association. It may be served with process by serving its registered agent, Richard J. Malouf, at 9090 Skillman St., Suite 200, Dallas, Texas 75243. 3.6 Defendant
2009 STRAIT LANE FAMILY, L.P.
is a Texas limited partnership. It
may be served with process by serving its registered agent, Richard J. Malouf, at 9090 Skillman St., Suite 200, Dallas, Texas 75243. 3.7 Defendant
CAMELIA FAMILY LIMITED PARTNERSHIP
is a Texas limited
partnership. It may be served with process by serving its registered agent, Richard J. Malouf, at 9090 Skillman St,. Suite 200, Dallas, Texas 75243. 3.8 Defendant FORT WORTH SMILES BY WIRE, PLLC is a Texas limited liability
company with its principal place of business at 4901 LBJ Freeway, Suite 400, Dallas, Texas 75244. It may be served with process by serving its registered agent, Adrian Codel, at 4901 LBJ Freeway, Suite 400, Dallas, Texas 75244. 3.9 Defendant GARLAND ROAD SMILES, PLLC is a Texas limited liability company
with its principal place of business at 4901 LBJ Freeway, Suite 400, Dallas, Texas 75244. It may be served with process by serving its registered agent, Adrian Codel, at 4901 LBJ Freeway, Suite 400, Dallas, Texas 75244.
3.10 Defendant
GARLAND ROAD SMILES BY WIRE, PLLC
liability company with its principal place of business at 4901 LBJ Freeway, Suite 400, Dallas, Texas 75244. It may be served with process by serving its registered agent, Adrian Codel, at 4901 LBJ Freeway, Suite 400, Dallas, Texas 75244. 3.11 Defendant HALTOM CITY SMILES, PLLC is a Texas professional limited liability company with its principal place of business at 4901 LBJ Freeway, Suite 100, Dallas, Texas 75244. It may be served with process by serving its registered agent, Adrian Codel, at 4901 LBJ Freeway, Suite 400, Dallas, Texas 75244. 3.12 Defendant JACKSBORO SMILES, PLLC is a Texas professional limited liability company with its principal place of business at 4901 LBJ Freeway, Suite 100, Dallas, Texas 75244. It may be served with process by serving its registered agent, Adrian Codel, at 4901 LBJ Freeway, Suite 400, Dallas, Texas 75244. 3.13 Defendant
JACKSBORO SMILES BY WIRE, PLLC
is a Texas professional
limited liability company with its principal place of business at 4901 LBJ Freeway, Suite 100, Dallas, Texas 75244. It may be served with process by serving its registered agent, Adrian Codel, at 4901 LBJ Freeway, Suite 400, Dallas, Texas 75244. 3.14 Defendant LEWISVILLE SMILES, PLLC is a Texas professional limited liability company with its principal place of business at 4901 LBJ Freeway, Suite 100, Dallas, Texas 75244. It may be served with process by serving its registered agent, Adrian Codel, at 4901 LBJ Freeway, Suite 400, Dallas, Texas 75244.
3.15 Defendant
NORTHWEST HIGHWAY SMILES, PLLC
limited liability company with its principal place of business at 4901 LBJ Freeway, Suite 100, Dallas, Texas 75244. It may be served with process by serving its registered agent, Adrian Codel, at 4901 BJ Freeway, Suite 400, Dallas, Texas 75244. 3.16 Defendant PLANO MINYARDS SMILES, PLLC is a Texas professional limited liability company with its principal place of business at 4901 LBJ Freeway, Suite 100,Dallas, Texas 75244. It may be served with process by serving its registered agent, Adrian Codel, at 4901 LBJ Freeway, Suite 400, Dallas, Texas 75244. 3.17 Defendant ST. FRANCIS SMILES, PLLC is a Texas professional limited liability company with its principal place of business at 4901 LBJ Freeway, Suite 100, Dallas, Texas 75244. It may be served with process by serving its registered agent, Adrian Codel, at 4901 LBJ Freeway, Suite 400, Dallas, Texas 75244. 3.18 Defendant VALLEYVIEW SMILES, PLLC is a Texas professional limited liability company with its principal place of business at 4901 LBJ Freeway, Suite 100, Dallas, Texas 75244. It may be served with process by serving its registered agent, Adrian Codel, at 4901 LBJ Freeway, Suite 400, Dallas, Texas 75244. 3.19 Defendant
RGS DENTAL MANAGEMENT SERVICES, LLC
professional limited liability company. It may be served with process by serving its registered agent for process, Richard J. Malouf, at 9090 Skillman St, Suite 200, Dallas, Texas 75243.
3.20 Defendant
RMAL HOLDINGS, LLC
is a Texas professional limited liability
company. It may be served with process by serving its registered agent for process, Richard J. Malouf, at 9090 Skillman St, Suite 200, Dallas, Texas 75243. 3.21 Defendant
DISCOUNT DENTAL SUPPLY, LLC
is a Texas professional limited
liability company. It may be served with process by serving its registered agent for process, Richard J. Malouf, at 9090 Skillman St, Suite 200, Dallas, Texas 75243. 3.22 Defendant
AS PROPERTY HOLDINGS, LLC
liability company. It may be served with process by serving its registered agent for process, Richard J. Malouf, at 9090 Skillman St, Suite 200, Dallas, Texas 75243. 3.23 Defendant M5 HOLDINGS, LLC is a Texas professional limited liability company. It may be served with process by serving its registered agent for process, Richard J. Malouf, at 4570 Westgrove Dr., Suite 240, Addison, TX 75001. 3.24 Defendant
HYPERMART LOT 6, LLC
company. It may be served with process by serving its registered agent for process, Richard J. Malouf, at 9090 Skillman St, Suite 200, Dallas, Texas 75243. 3.25 Defendant DR. RAFFY KOUYOUMDJIAN is is a dentist licensed (#23066) by the Texas State Board ofDental Examiners and may be served with process at his principal place of business, 2319 Clark St., Dallas, TX 75204.
IV. PRELIMINARY STATEMENT AND NATURE OF THIS ACTION
This is a law enforcement action brought under the TMFPA. Plaintiffs seek to
recover: (1) the amount of any payments or the value of any monetary or in-kind benefits provided under the Medicaid program, directly or indirectly, as a result of the Defendants' unlawful acts; (2) pre-judgment interest on the amount of the payments or the value of such payments; (3) two times the amount of the payments or the value of such payments; (4) civil penalties in an amount not less than $5,500 or more than $15,000 for each unlawful act committed by the defendants; (5) the costs, attorneys' fees, and expenses incurred by the State and Relator Castillo in obtaining relief under the TMFPA; and (6) any and all other remedies that may be allowed under chapter 36 of the TEXAS HUMAN RESOURCES CODE. Additionally, the State seeks injunctive relief pursuant to section 36.051 of the TEXAS HUMAN RESOURCES CODE. 4.2 Medicaid dental/orthodontic providers who treat Texas Medicaid recipients are
entitled to be reimbursed by the Texas Medicaid Program for their services. 1 TEX. ADMIN. CODE§ 354.1221. 4.3 Defendant Medicaid dental/orthodontic providers voluntarily and affirmatively sought
and attained participation in the Medicaid program. To do this, they enrolled and signed a provider agreement with Texas Medicaid.
Defendant Medicaid dental/orthodontic providers are required by law to "maintain all
records necessary to fully disclose the services provided." 1 TEX. ADMIN. CODE§ 354.1004. Defendants are required to retain these records for either "five years from the date of the service, or until all audit questions are resolved, whichever is longer." 4.5
As a matter of law, by becoming participants in the Medicaid program theDefendants
are charged with the duty to know the statutes, rules, and regulations of the United States and of the State of Texas pertinent to the Medicaid program.. 1 TEX. ADMIN. CODE§ 371.1615;
see also: Heckler v. Cmty HealthServs. ofCrawfordCounty, Inc., 467 U.S. 51, North Mem 'l Med. Ctr. v. Gomez,
64-5 (1984);
59 F.3d 735 (8th Cir. 1995). Defendants knowingly or
intentionally made false representations, including misrepresentations by silence and omission, to the Texas Medicaid Program about dental/orthodontic services. 4.6 As a result ofDefendants' misrepresentations of their provision of dental/orthodontic
services, Texas Medicaid overpaid those Defendants. Defendants' misrepresentations, failures to disclose, and false representations caused the Texas Medicaid Program to pay far more for dental/orthodontic services than was authorized by law.
The federal government enacted the Medicaid program in 1965 as a cooperative
undertaking between the federal and state governments to help the states provide medical care to lower income individuals. Each state administers its own Medicaid program. Medicaid is funded jointly by the federal and state governments. 42 U.S.C. § 1396.
The Texas Medicaid Program reimburses dental/orthodontic providers who provide
dental/orthodontic services to Medicaid clients. This reimbursement is based on criteria set out in state and federal law. 5.3 Orthodontic services may only be reimbursed if the providers obtained prior approval
from Medicaid. 25 TEX. ADMIN CODE§ 33. 71. This prior authorization requires significant documentation. Additionally, orthodontic services are limited to strict criteria spelled out in.the Texas Medicaid Providers Procedure Manual, the Texas Administrative Code, and other state and federal law. 5.4 Defendants did not follow the proper criteria set out in state and federal law, which
resulted in overpayments to Defendants and others.
VI. ACTIONABLE CONDUCT OF DEFENDANTS
When Defendants applied for prior approval of orthodontic services and when
Defendants filed Medicaid claims and other documentation, Defendants had a duty to report the true nature of the services which they provide to Medicaid clients. The Defendants knowingly or intentionally submitted false information, and misrepresented material facts, when seeking prior approval for orthodontic services. Defendants also submitted false information and misrepresented material facts when they submitted other Medicaid documentation. Defendants submitted claims for services which they did not provide, and misrepresented or concealed the true nature of the services which they provided. Defendants
thus committed unlawful acts under the TMFPA that resulted in the payment of excessive reimbursement to Medicaid providers for the dental/orthodontic services. 6.2 Defendants knowingly misrepresented that they were providing: medically necessary dental/orthodontic services as defined by Medicaid criteria, proper documentation of dental/orthodontic services, appropriate and qualified providers to provide dental/orthodontic services, and billing only for dental/orthodontic services which were actually provided. 6.3 In one or more of the following ways, theDefendants acted knowingly in making false
statements and misrepresentations of material fact to the Texas Medicaid program, and in concealing, or failing to disclose, the truth to the Texas Medicaid program: A. By providing dental/orthodontic services or products which were not medically necessary as defined by Medicaid criteria; By providing dental/orthodontic services or products which failed to meet the appropriate Medicaid standards; By failing to properly document- as to medical necessity as defined by Medicaid criteria and otherwise - the dental/orthodontic services or products which were provided; By allowing unqualified persons to perform dental/orthodontic services for which they were not legally allowed to perform, because those persons lacked the required qualifications, certification, or credentials; By billing for dental/orthodontic services or products which were simply not provided; By upcoding, or billing for dental/orthodontic services or products which were more expensive than those which were actually provided; and
By otherwise failing to follow applicable law, including the Texas Medicaid Providers Procedure Manual, the Texas Administrative Code, and other state and federal law.
The Texas Medicaid program used Defendants' false representations of the services
they provided as a basis for calculating payment to thoseDefendants. Defendants' unlawful conduct resulted in harm to the Texas Medicaid program, the beneficiaries thereof, and the taxpayers of Texas.
VII. THE DEFENDANTS' ACTIONS CONSTITUTE "UNLAWFUL ACTS" UNDER THE TEXAS MEDICAID FRAUD PREVENTION ACT
At various times in the past, and continuing through the present date, Defendants
knowingly or intentionally made false statements or misrepresentations to the Texas Medicaid Program regarding dental/orthodontic services they provided to Medicaid clients. 7.2 7.3 Defendants began committing these unlawful acts on September 7, 2007. Defendants committed unlawful acts by: A. Knowingly making or causing to be made a false statement or misrepresentation of a material fact to permit a person to receive a benefit or payment under the Medicaid program that is not authorized or that is greater than the benefit or payment that is authorized. TEX. HUM. REs. CODE § 36.002(1)(A) & (B). Knowingly concealing or failing to disclose information that permits a person to receive a benefit or payment under the Medicaid program that is not authorized or that is greater than the benefit or payment that is authorized. �EX. HUM. REs. CODE § 36.002(2). Knowingly making, causing to be made, inducing, or seeking to induce the making of a false statement or misrepresentation of material fact concerning information required to be provided by a federal or state law, rule, regulation,
or provider agreement pertaining to the Medicaid program. TEX. HUM. REs. CODE § 36.002(4)(B). D. Knowingly applying for and receiving benefits or payments on the behalf of other persons under the Medicaid program and converting any part of those benefits or payments to a use other than for the benefit of those persons. TEx. HUM. REs. CODE § 36.002(3). Knowingly paying or receiving consideration as a condition to the provision of a service if the cost of the service is paid for, in whole or in part, under the Medicaid program. TEX. HUM. REs. CODE §§ 36.002(5), 36.002(13). Knowingly paying, charging, soliciting, accepting, or receiving an unauthorized gift, money, donation or other consideration as a condition to the provision, or continued provision, of a service or product when that service or product was paid for, in whole or in part, under the Medicaid program. TEX. HUM. REs. CODE§ 36.002(5). Knowing presenting or causing to be presented a claim for payment under the Medicaid program for a service rendered by a person who is not licensed to render the service or is not licensed in the manner claimed. TEX. HUM. REs. CODE § 36.002(6). Knowing making or causing to be made a claim under the Medicaid program for a service that has not been approved or acquiesced in by a treating health care provider, or a service that is substantially inadequate or inappropriate when compared to generally recognized dental/orthodontic standards. TEX. HUM. REs. CODE § 36.002(7). Knowingly making a claim under the Medicaid program and knowingly failing to indicate the type of license and license identification number of the health care provider who provided the service. TEX. HUM. REs. CODE § 36.002(8). Knowingly entering into an agreement, combination, or conspiracy to defraud the state by obtaining or aiding another person in obtaining an unauthorized payment or benefit from the Medicaid program. TEx. HuM. REs. CODE § 36.002(9)
VIII. CIVIL REMEDIES UNDER THE TMFPA
Under the TMFPA, each Defendant is liable to the State of Texas for the amount of
any payment provided under the Medicaid program, directly or indirectly, as a result of its unlawful acts, plus interest from the date of the payment, two times the amount of the payment, and a civil penalty for each unlawful act committed, in addition to the fees, expenses, and costs of the Attorney General and the Relator in investigating and obtaining civil remedies and injunctive relief in this matter. TEX. HuM. REs. CODE§§ 36.052, 36.007, 36.110(c). 8.2 Plaintiffs invoke in the broadest sense all relief possible under § 36.052, whether
specified in this pleading or not. Plaintiffs will seek an amount as civil penalties that will be justified and appropriate under the facts and the law. 8.3 The amounts sought from eachDefendant are in excess of the minimum jurisdictional
limits of this Court. 8.4 The TMFPA is a statute of absolute liability. There are no statutory, equitable, or
common law defenses for any violation of its provisions. Further, Texas jurisprudence provides that the defenses of estoppel, laches, and limitations are not available against the State of Texas, as a Sovereign. 8.5
860 S.W.2d 63, 67 (Tex. 1993).
The Defendants' unlawful acts have cost the State of Texas many millions of dollars.
The State is unable, pending full discovery pursuant to the Texas Rules of Civil Procedure, to determine the total extent" of the overpayments caused byDefendants' fraudulent conduct.
IX. STATUTORY INJUNCTION UNDER§ 36.051 OF THE ACT
There is good reason for the Attorney General to believe the Defendants are
committing, have committed, or are about to commit unlawful acts as defined by the TMFPA. These illegal acts may be enjoined under § 36.051 of the Act, and under TEX.GOVT. CODE§ 2001.202.
10.1 216.
Plaintiffs respectfully request a trial by jury pursuant to Texas Rule of Civil Procedure
XI. REQUESTS FOR DISCLOSURE
11.1 Defendants are requested to disclose, within 50 days of the service of this request, all of the information or material described in Texas Rule of Civil Procedure 194.2(a)-(l).
Plaintiffs ask that judgment be entered upon trial of this case in favor of the State and
the Relator against Defendants to the maximum extent allowed by law. 12.2 The State of Texas asks that it recover from Defendants: (1) (2) (3) (4) restitution of overpayments, prejudgment interest, two times the amount of the overpayments, civil penalties, and
(5) 12.3
The Relator asks that it be awarded: (1) (2) its expenses, costs and attorneys' fees, Relator's share as provided by the TMFPA, currently 15% to 25% as provided by Section 36.110(a).
12.4 The State asks the Court to grant an injunction, ordering Defendants to immediately stop violating the TMFPA, as required by law. 12.5 Plaintiffs pray for such other and further relief to which they may show themselves entitled. Respectfully submitted, GREG ABBOTT Attorney General of Texas DANIEL T. HODGE First Assistant Attorney General JOHN B. SCOTT Deputy First Assistant Attorney General
State Bar No. 21791950 Chief, Civil Medicaid Fraud Division MARGARET MOORE State Bar No. 14360050 (512) 936-1319 direct dial Deputy Chief, Civil Medicaid Fraud Division MARK EINFALT State Bar No. 06502452 (512) 936-1703 direct dial
DAVIDDREW WRIGHT State Bar No. 00789965 (512) 936-1486 direct dial DAMON T. ONG State Bar No. 24065846 (512) 936-6615 direct dial MATTHEW MILLER State Bar No. 24051959 (512) 936-1420 direct dial BRADEN CIVINS State Bar No. 24080836 (512) 463-7975 direct dial Assistant Attorneys General P.O. Box 12548 Austin, Texas-78711-2548 (512) 499-0712 fax Attorneys for the State of Texas
State Bar No. 20272020 LAW OFFICES OF JAMES R. TUCKER, P.C. 3710 Villanova St., Suite 200 Dallas, TX 75225 214-740-3000 phone 214-740-3001 fax Attorneys for the Private Person Plaintiff, Madelayne Castillo
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