Paxton sues dental providers for Medicaid fraud, unnecessary procedures

Detected March 31st, 2026

Summary

Texas Attorney General Ken Paxton filed suit against dental providers and marketers for allegedly bribing Medicaid patients with gift cards and performing medically unnecessary dental procedures, defrauding Texas Medicaid. The lawsuit, brought under the Texas Health Care Program Fraud Prevention Act, seeks full restitution, civil penalties, and all available remedies. The case was initially sealed and has now been unsealed.

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What changed

The Texas Attorney General filed suit against dental provider defendants and marketer defendants for violations of the Texas Health Care Program Fraud Prevention Act. The allegations include paying kickbacks to recruit Medicaid beneficiaries using gift card incentives, circulating patients between a network of clinics to maximize reimbursement, and performing unnecessary and high-risk dental procedures on patients including children while billing Texas Medicaid. The defendants are accused of false claims, concealment of material information, and unlawful kickback arrangements.

Healthcare providers participating in Texas Medicaid should immediately review their patient recruitment practices and referral relationships with marketers to ensure compliance with anti-kickback and patient inducement prohibitions. Any marketing arrangements involving gifts, payments, or incentives to attract Medicaid patients should be reviewed by legal counsel. Providers must ensure all billed procedures meet medical necessity documentation standards. The Office of the Attorney General is seeking full restitution and civil penalties.

What to do next

Review patient recruitment and referral arrangements for compliance with anti-kickback prohibitions
Ensure all billed procedures meet medical necessity documentation standards
Audit marketing relationships involving Medicaid patient referrals

Penalties

Full restitution, civil penalties, and all available remedies under the Texas Health Care Program Fraud Prevention Act

Source document (simplified)

Attorney General Ken Paxton has filed suit against a group of dental providers (“provider defendants”) and sham marketers (“marketer defendants”) for bribing Medicaid patients and for performing medically unnecessary procedures to defraud Texas Medicaid.

Evidence shows that the provider defendants paid marketer defendants to target Medicaid beneficiaries and their families by offering gift cards in exchange for becoming a patient. The marketer defendants would direct patients to schedule appointments with the provider defendants, and frequently circulated patients between this network of clinics to maximize Medicaid reimbursement. After securing these patients, the providers allegedly performed unnecessary and, in some cases, high-risk dental procedures, billing Texas Medicaid for services that were not medically justified. These actions not only defrauded taxpayers but also exploited vulnerable Texans, including children, by subjecting them to unnecessary medical treatments and risks.

Attorney General Paxton has brought this action under the Texas Health Care Program Fraud Prevention Act, which prohibits false claims, concealment of material information, and unlawful kickback arrangements involving Medicaid-funded services. The Office of the Attorney General is seeking full restitution, civil penalties, and all available remedies to hold the defendants accountable and recover taxpayer funds.

“It is malicious and unacceptable that these providers were performing dangerous, medically unnecessary procedures on patients in order to scam our Medicaid system,” said Attorney General Paxton. “Our Medicaid resources are in place to serve Texans in need, and my office will continue to fight fraud and abuse within that system.”

The Healthcare Program Enforcement Division of the Office of the Attorney General of Texas is committed to upholding the law, protecting the health of Texans, and holding fraudulent practices accountable for abuse of our state and federal resources.

To read the lawsuit, click here. While the case was initially sealed, it has now been unsealed.