Texas AG sues dental network for Medicaid fraud kickbacks

Detected April 1st, 2026

Summary

Attorney General Ken Paxton's Healthcare Program Enforcement Division has sued two Texas dentists and their dental clinic network for orchestrating a Medicaid fraud scheme involving illegal kickbacks. The defendants allegedly paid outside marketers per patient to recruit Medicaid beneficiaries, including young children, using cash, gift cards, and Zelle payments disguised as survey and marketing fees. The lawsuit seeks civil remedies under the Texas Health Care Program Fraud Prevention Act, with all available remedies to ensure full restitution to taxpayers.

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What changed

The Texas Attorney General filed suit against two dentists and affiliated dental clinics and management entities for submitting thousands of Medicaid claims tainted by illegal kickback arrangements. The scheme involved paying outside marketers on a per-patient basis to recruit Medicaid patients, with payments disguised as surveys and marketing services that were never actually provided. Evidence cited includes written marketing agreements, invoices, patient spreadsheets, and annotated electronic payments documenting the kickbacks.

Healthcare providers in Texas who participate in Medicaid should immediately review their patient recruitment and marketing arrangements for compliance with anti-kickback statutes. Any arrangements involving payments to third parties for patient referrals must be scrutinized. The AG is seeking all available civil remedies including full restitution to the State of Texas. Providers should also note this follows a similar lawsuit against another group of Texas dentists for comparable conduct.

What to do next

Review all patient referral and marketing arrangements for compliance with anti-kickback laws
Audit any payments made to outside marketers or third parties for patient recruitment
Ensure compliance programs address the specific risks identified in this enforcement action

Penalties

All available civil remedies including full restitution to the State of Texas and taxpayers

Source document (simplified)

Attorney General Ken Paxton’s Healthcare Program Enforcement Division has sued two Texas dentists along with a network of related dental clinics and management entities (“Defendants”) for orchestrating a scheme to defraud Texas Medicaid by artificially increasing Medicaid patient volume through unlawful inducements.

Investigations have revealed that the dentists paid outside “marketers” on a per-patient basis to bring Medicaid patients, including very young children, into their clinics. These payments were disguised as “surveys” and “marketing,” but no real marketing services or survey results were ever provided. Instead, the marketers allegedly recruited patients by offering cash, gift cards, Zelle payments, and other things of value to Medicaid beneficiaries and their families in exchange for showing up at the clinics.

The defendants orchestrated this scheme to submit thousands of Medicaid claims for services that were tainted by these illegal kickbacks. Attorney General Paxton’s lawsuit points to written marketing agreements, invoices, patient spreadsheets, and annotated electronic payments to marketers as evidence of the scheme.

“My office will not tolerate dental providers engaging in illegal activity to enrich themselves at the expense of taxpayers,” said Attorney General Paxton. “This lawsuit sends a clear message: if you abuse the Medicaid program, violate the law, and profit off of illegal kickbacks, you will be held accountable.”

Attorney General Paxton has brought this lawsuit 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 all available civil remedies to ensure full restitution to taxpayers and the State of Texas.

This was filed in addition to a similar lawsuit brought by Attorney General Paxton against another group of Texas dentists and related entities that were running a comparable scheme to defraud Texas Medicaid.

To read the lawsuit, click here.