Top Qs
Timeline
Chat
Perspective
Kool Smiles
American dental support organization From Wikipedia, the free encyclopedia
Remove ads
Kool Smiles was a large and controversial American dental services provider that, at its peak, operated a network of over 120 clinics across 16 states. Founded in 2002 with the stated mission of providing accessible dental care to underserved communities, the company became one of the largest dental providers for children and adults enrolled in the government-funded Medicaid program. The clinics were managed by a dental support organization (DSO), Benevis LLC (formerly known as NCDR, LLC), and were headquartered in Marietta, Georgia, a suburb of Atlanta.
The company's business model was built on establishing high-volume clinics in "dental deserts"—areas with a significant shortage of dentists willing to treat Medicaid patients. Kool Smiles clinics were known for their child-friendly environments, featuring colorful waiting rooms and play areas. However, while the company demonstrably increased access to dental care for millions of low-income families, its practices came under intense scrutiny from federal investigators, state dental boards, and the media.
This scrutiny culminated in a series of damaging events, including a $23.9 million settlement with the U.S. Department of Justice in 2018 to resolve allegations of Medicaid fraud, involving medically unnecessary procedures on children. The company also faced high-profile lawsuits related to patient safety, including the death of a toddler at one of its Arizona clinics. In the aftermath of these events, many Kool Smiles clinics were quietly rebranded under new names, and its parent company, Benevis, filed for Chapter 11 bankruptcy in 2020, effectively marking the end of the Kool Smiles brand as a major national entity. The story of Kool Smiles remains a significant case study in the complexities and potential pitfalls of for-profit, private equity-backed corporate dentistry in the United States.
Remove ads
History
Summarize
Perspective
The history of Kool Smiles is a narrative of rapid growth fueled by a clear market need, followed by a precipitous fall driven by allegations of unethical business practices and critical patient safety failures.
1. Founding and Mission (2002)
The first Kool Smiles clinic opened its doors in August 2002 in East Lake, a neighborhood of Atlanta, Georgia. The founders, Dr. Tu Tran and Dr. Thien Pham, identified a critical gap in the American healthcare system: a severe lack of dental providers for low-income families. In the early 2000s, a very small percentage of private dentists accepted Medicaid patients due to low reimbursement rates, high administrative burdens, and high patient no-show rates. This created vast "dental deserts" where children and adults on government assistance had virtually no access to oral healthcare, leading to widespread untreated decay and other dental diseases.
The initial clinic in East Lake was established to exclusively serve patients on Medicaid and Georgia's state-level Children's Health Insurance Program (CHIP), known as PeachCare. The response from the community was immediate and overwhelming. A company official later described the initial demand as "unbelievable," noting that "these kids had nowhere to go for years and years."[2] This initial success validated the business model and set the stage for an aggressive national expansion.
2. Period of Rapid Expansion (2003–2012)
Leveraging the clear market demand, Kool Smiles embarked on a period of explosive growth. The model was replicable: identify an underserved community with a high Medicaid-eligible population, open a large, child-friendly clinic, and operate on a high-volume basis.
By 2005, the company had expanded to six clinics in its home state of Georgia and opened its first out-of-state locations in Indianapolis, Indiana. It had also begun planning entries into Massachusetts and Virginia.[3]
By 2007, it operated 10 clinics in Georgia alone, serving over 71,000 children annually in that state.[4]
By 2009, the network had grown to 84 clinics across the United States.
This rapid growth attracted significant attention from private equity investors, who saw a lucrative opportunity in the stable, government-funded revenue stream of Medicaid. In 2010, Kool Smiles was reported to be generating around $80 million in annual EBITDA. The company engaged an investment bank to explore a sale, with reports valuing the company at as much as $700 million. Private equity firm American Securities LLC was reported to be a lead bidder, but a sale was not completed at that time, and the company continued its expansion under its existing ownership structure.[5]
3. Growing Scrutiny and Media Investigations
The company's high-volume, for-profit model began to attract criticism from former employees, patient advocates, and journalists. The central question was whether the corporate pressure to maximize revenue was compromising clinical judgment and patient care.
The PBS Frontline Report
In June 2012, this scrutiny reached a national audience with the broadcast of "Dollars and Dentists," an investigative report by PBS's Frontline and the Center for Public Integrity. The report featured interviews with former Kool Smiles dentists and assistants who alleged a corporate culture focused on production targets. Specific allegations included:
Overtreatment: The report claimed that Kool Smiles dentists were pressured to perform medically unnecessary procedures, particularly stainless steel crowns on baby teeth, because they had a much higher Medicaid reimbursement rate than simple fillings.
Use of Restraints: The investigation highlighted the use of physical restraints, such as papoose boards, to immobilize young children during procedures, a practice that is controversial in pediatric dentistry.
Lack of Clinical Autonomy: Former dentists claimed that non-clinical managers would review treatment plans and pressure them to adopt more aggressive, and more profitable, approaches.
Kool Smiles issued a strong rebuttal to the Frontline report. The company denied that it used production targets for dentists and argued that its patient population often presented with advanced dental decay requiring more extensive interventions like crowns. They also challenged the credibility of some of Frontlines sources and presented the Laffer study, which suggested their treatment patterns were more conservative than other Texas Medicaid providers.[6] Despite the company's defense, the documentary cemented a negative public perception and triggered increased governmental oversight.
4. Landmark Controversies and Corporate Decline (2017–2020)
U.S. Department of Justice Settlement
The allegations of unnecessary procedures eventually led to a multi-state investigation by the U.S. Department of Justice. In January 2018, the DOJ announced a landmark settlement. Kool Smiles and its parent DSO, Benevis, agreed to pay $23.9 million to resolve allegations that they had violated the False Claims Act.
The federal government contended that the companies had knowingly submitted false claims to state Medicaid programs for a range of medically unnecessary dental procedures performed on children. The specific allegations detailed in the settlement included:
Performing unnecessary pulpotomies (baby root canals).
Placing unnecessary stainless steel crowns.
Billing for the extraction of baby teeth when it was not medically necessary.
Billing for services that were never actually rendered.
The settlement required Benevis and Kool Smiles to enter into a stringent, multi-year "Corporate Integrity Agreement" with the Office of Inspector General, mandating independent audits and oversight of their billing and clinical practices. While the company did not admit wrongdoing as part of the settlement, the massive financial penalty and the details of the allegations dealt a severe blow to its reputation.[7]
Patient Safety Incidents and the Death of Zion Gastelum
Concurrent with the fraud investigation, Kool Smiles faced its most severe crisis related to patient safety. In December 2017, two-year-old Zion Gastelum was brought to a Kool Smiles clinic in Yuma, Arizona, for what his parents believed would be a routine procedure for crowns and fillings. During the administration of anesthesia, Zion suffered a medical emergency, became unresponsive, and was rushed to the hospital. He was later found to have suffered severe brain damage due to lack of oxygen and died four days later.
The subsequent lawsuit filed by the Gastelum family leveled devastating allegations against the clinic and its staff. The suit claimed:
The planned treatment of six root canals and crowns was grossly unnecessary.
A staff member had intentionally silenced an alarm on the pulse oximeter, a device that monitors a patient's heart rate and oxygen levels.
The child was left unattended in a recovery room.
The oxygen tank connected to the child was either empty or not functioning correctly.
The case gained national media attention, particularly after it was revealed that this was the second death of a child linked to the same Yuma dental office.[8]
Corporate Rebranding and Bankruptcy
The combination of the massive fraud settlement and the horrific details of the patient deaths made the "Kool Smiles" brand toxic. In response, the parent company Benevis initiated a covert, nationwide rebranding campaign. Throughout 2018 and 2019, Kool Smiles clinics across the country began operating under new, generic-sounding names in an attempt to distance themselves from the controversy.
Examples of rebranded clinics included:
Manzana Dental (Arizona)
Pippin Dental (Indiana)
Elstar Dental & Pinova Dental (Texas)
Creston Dental and Braces (South Carolina)
Pine Dental (Maryland & Virginia)
This strategy was exposed by media outlets, leading to further criticism of the company's lack of transparency.[9] The financial strain of the settlement, ongoing litigation, and damage to its brand, compounded by the operational shutdown during the COVID-19 pandemic, proved to be insurmountable. On August 13, 2020, Benevis LLC filed for Chapter 11 bankruptcy protection.[10]
Remove ads
Business Model and Operations
Summarize
Perspective
Kool Smiles' operations were managed through a Dental Support Organization (DSO) structure, which has become prevalent in the U.S. dental industry.
The DSO Structure
Under this model, the clinical practice itself is officially owned by a licensed dentist, as required by law in many states. However, the DSO (in this case, Benevis) enters into a comprehensive management agreement with the dentist-owner. Benevis handled all non-clinical aspects of the business, including:
Real Estate and Facilities: Selecting locations, leasing property, and equipping clinics.
Marketing and Advertising: Running national and local campaigns to attract Medicaid patients.
Billing and Administration: Managing the complex process of Medicaid reimbursement.
Human Resources and Staffing: Recruiting dentists, hygienists, and support staff.
Compliance and IT: Providing electronic health record (EHR) systems and ensuring regulatory compliance.
This model allows for economies of scale and standardized operations across a large network. However, critics argue that it can create a power dynamic where the DSO's financial interests override the clinical autonomy of the dentist-owner.
Focus on the Medicaid Population
The entire business was engineered to serve the Medicaid demographic efficiently. Clinics were located in accessible retail centers in low-income neighborhoods. To manage the high no-show rate common among this population, clinics often overbooked appointments. The child-friendly decor was a key part of the branding, designed to make dental visits less intimidating for young children and their parents. The company also provided free educational materials on oral health to families and schools.
Remove ads
Industry Impact and Criticism
Summarize
Perspective
Impact on Dental Care Access
Proponents of the Kool Smiles model, including the company itself, argued that it played a crucial role in addressing a public health crisis. By creating a financially viable model for treating Medicaid patients, the company provided care to millions of children who otherwise would have gone without. In states like South Carolina, the entry of Kool Smiles was correlated with a measurable increase in the percentage of Medicaid-enrolled children receiving dental services, rising from 46.9% to 51.9% after the company established a presence.[11]
Systemic Criticisms of the For-Profit Model
The controversies surrounding Kool Smiles are often cited as a case study in the potential dangers of for-profit, private equity-driven healthcare. The core criticism is that when the primary goal is maximizing shareholder return, it can create incentives that are misaligned with patient well-being. Allegations of "production quotas" and rewarding dentists based on the revenue they generate, rather than on quality of care, were central to the critiques leveled against Kool Smiles and other similar corporate dental chains.
Global Context and Alternative Care Models
The intense scrutiny and widely publicized problems associated with some U.S. corporate dental chains have contributed to a growing lack of trust among some American healthcare consumers. This, combined with the high cost of private dental care for those without adequate insurance, has prompted a subset of patients to explore options outside the traditional domestic system. In this context, the phenomenon of dental tourism has become a notable alternative. Patients are increasingly researching international healthcare destinations where a different operational model for a dental clinic turkey, for example, may focus on transparent, all-inclusive pricing for complex procedures, attracting those seeking to bypass the complexities and perceived risks of their local corporate dental options.
Philanthropic and Community Initiatives
To counterbalance its business operations and improve its public image, Kool Smiles engaged in several community and philanthropic efforts. The most prominent of these was "Sharing Smiles Day," an annual event where clinics across the country provided a day of entirely free dental care to uninsured and underinsured children. This included examinations, cleanings, fillings, and extractions.
The company also reported providing over $100 million in uncompensated care between 2005 and 2016 for patients who were not eligible for government programs but could not afford treatment. Additionally, Kool Smiles partnered with community health centers and state governments, such as on Maryland Governor Martin O'Malley's "Healthy Smiles Tour," to promote dental health education and improve access to care.[12]
Remove ads
Legacy
The legacy of Kool Smiles is complex and polarizing. On one hand, the company undeniably provided a vital service to millions of America's most vulnerable children, bringing dental care to communities long neglected by the traditional healthcare system. On the other hand, its history is permanently marred by a massive federal fraud settlement and tragic patient safety failures, making it a cautionary tale about the potential conflicts of interest in for-profit healthcare. The rebranding and subsequent bankruptcy of its parent company effectively ended the Kool Smiles era, but the debate over the role and regulation of corporate dentistry in the U.S. continues.
Remove ads
See also
References
Wikiwand - on
Seamless Wikipedia browsing. On steroids.
Remove ads