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The state attorney general has told a Puget Sound-area health-care provider to pay $72 million for allegedly making improper Medicaid claims for dental care to children and young adults.

Officials of the provider, Sea Mar Community Health Centers, reject the allegations, and on Monday its attorneys filed a complaint in U.S. District Court in Seattle asking the court to decide if the billing was proper.

The amount that Sea Mar charged Medicaid for the services in question is $7 million since 2006.

Because of new rules associated with the Affordable Care Act meant to reduce Medicaid fraud, the attorney general was able to add $51 million in civil penalties, plus a $21 million penalty allowed by previous rules.

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What’s in dispute is whether Sea Mar billed appropriately for more than 43,000 fluoride treatments and dental exams. While the health-care provider was charging Medicaid for an “encounter” that included fluoride, as well as a visual exam, the attorney general asserts that the procedure technically involved only a less expensive fluoride treatment.

The penalty ordered by the state “is excessive and callous and just not warranted,” said Ricardo Sanchez, spokesman for Sea Mar. “We intend to defend our practice and billings rigorously.”

Sea Mar has approximately 60 health facilities in Western Washington, including 13 dental clinics. The nonprofit organization serves primarily low-income residents and its annual revenue is roughly $160 million.

The health-care provider charges $19 for a fluoride treatment, which can be administered by a dental assistant or hygienist. A visit that includes an exam by a dentist, who can diagnose disease and provide additional care, costs about $160.

“Our patients, 90 percent of whom are low-income, they can expect the same kind of dental care as you or I might expect,” Sanchez said. “We treat them with the same standard of care.”

In Washington, the state’s Health Care Authority (HCA) administers the Medicaid program and reimbursements to health-care providers. An HCA spokesman declined to comment on this case.

The Attorney General’s Office on Tuesday also would not comment on the situation because it had not formally been served with Sea Mar’s suit. As a policy, the office does not confirm or deny investigations, spokeswoman Janelle Guthrie said by email.

In 2010 the federal Affordable Care Act strengthened the ability of the government to go after cases of Medicaid fraud. Two years later, state lawmakers approved the Medicaid Fraud False Claims Act, which further bolstered efforts to prevent abuse of the Medicaid program.

This April, a Tacoma-based physicians group agreed to pay nearly $260,000 after facing similar charges of billing Medicaid for more expensive services than were provided. The case was brought by the Attorney General’s Office under the state’s new act.

“Providers who participate in our state’s Medicaid program must accurately bill for services provided and accurately document those services in the patient record,” Attorney General Bob Ferguson said in a news release issued in response to the Tacoma case. “If you participate in the Medicaid program, you must play by the rules.”

In a letter to Sea Mar sent in May, the attorney general claimed that the organization’s dental director improperly proposed a policy in which health-care providers would bundle exams in combination with fluoride treatments to qualify for a higher level of reimbursement. The letter acknowledged that the director ultimately rescinded the proposal when Sea Mar’s providers objected to the practice.

The letter also explains that the HCA requires that a “health service must be recorded in the client’s health record” for the procedure to qualify as an encounter. The letter alleges that in many cases Sea Mar dentists were not providing the proper documentation to meet the standard for an encounter.

Sanchez countered that the dentists did document their recommendation of fluoride and sometimes suggested additional treatment, which was sufficient to meet the guideline.

He said the HCA and the Department of Social and Health Services, which used to manage Medicaid for the state, have reviewed Sea Mar’s practices over the years and had not found fault with its billing approach. A 2005 audit by the state specifically reviewed its claims for dental costs, and Sea Mar has never been told that it was doing it incorrectly, according to the complaint filed in court by the health center.

Sea Mar has stopped billing Medicaid for fluoride treatments and exams until the issue is resolved.

Lisa Stiffler, a freelance writer in Seattle, can be reached at This story was produced through a partnership with Kaiser Health News, an editorially independent part of the Kaiser Family Foundation.

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