Pay-Per-Head + Gift Cards to Induce Patients, Texas Sues Dentist and Multiple Associated Clinics

DentalGoodNews｜March 31, 2026, Texas Attorney General Ken Paxton filed a lawsuit regarding dental clinics defrauding the Texas Medicaid program. The suit alleges that multiple dentists and their associated clinics paid third parties based on patient volume and induced Medicaid beneficiaries to seek treatment through cash, gift cards, and other means, subsequently submitting claims influenced by kickbacks.

According to the official announcement from the Office of the Attorney General (OAG), the related "Provider Defendants" employed a group of so-called "Marketing Defendants" to distribute items of value such as gift cards to Medicaid beneficiaries and their families, thereby inducing them to visit designated clinics. The marketing defendants then cyclically allocated patients within the clinic network to maximize Medicaid reimbursement amounts. After securing the patient source, the Provider Defendants allegedly performed dental procedures lacking medical necessity on the patients, some of which were high-risk operations. The affected group included children.

Paxton brought this case under the Texas Health Care Program Fraud Prevention Act, which prohibits false claims, concealment of material information, and illegal kickback arrangements related to Medicaid funds. The OAG is asking the court to order the defendants to pay full restitution, civil penalties, and all other recoverable legal liabilities.

On March 31, 2026, Paxton filed a second lawsuit, targeting another dental clinic network and its associated management entities. According to the OAG announcement, the involved dentists paid marketers based on patient volume. The related payments were recorded under the names of "questionnaires" and "marketing services," but no actual services or survey results were provided. The marketers, in turn, compensated patients' families via cash, gift cards, Zelle transfers, and other forms in exchange for visiting the designated clinics. The defendants subsequently submitted thousands of fraudulent Medicaid claims.

In the second complaint, the OAG listed evidence such as written marketing agreements, invoices, patient spreadsheets, and payment records to prove the existence of the aforementioned kickback scheme.

Paxton stated in a declaration: "My office will not tolerate dental service providers enriching themselves through illegal acts at the expense of taxpayers. These two lawsuits send a clear signal: those who abuse Medicaid, violate the law, and profit from illegal kickbacks will be held accountable."

Both lawsuits are being advanced by the OAG's Healthcare Program Enforcement Division. As of press time, the cases are still being processed, and no public response has been seen from the defendants.