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Lightning Strikes! How Unintended Billing Errors Helped Send Me To Prison. by Roy S. Shelburne, DDS


n October 24th, 2003, while at the ADA convention in San Francisco, I received news that the FBI executed a search and seizure warrant on me and my practice. They battered down the back door to my office, and a team of agents carried out every patient and business record I had. I was shocked and terrified. Then things quickly moved from bad to worse. There has never been much that scares me, but one thing that scares me now is the thought of going back to prison. “Things like this don’t happen to people like me,” I told myself. After graduating from dental school in May 1981, I opened a private solo practice in my grandfather’s hardware store building in the small southwestern Virginia town where I grew up (population 1,800). There was one traffic light, and it was just down the block from my office. My grandfather was superintendent of schools, my father taught in the local high school, and my mother was a nurse in the local hospital. Growing up on a farm, I learned from an early age two important lessons: 1) how to work hard, and 2) that I wanted to do something else. Farming was too hard and paid too little. I chose dentistry and was excited to come back home to “hang my shingle.” I saw my first patient July 27, 1981. I don’t know whether my success was a result of the great people in my hometown or from being part of a family with a long-standing community presence and good reputation, but the practice grew every year. We went from two employees (my wife at the front desk plus

“ ‘Things like this don’t happen to people like me,’ I told myself” 4

Dental Explorer | Four th Quar ter 2012

one assistant) to having two business staff people, three chairside assistants, and two hygienists. We worked hard to provide excellent dental care as gently as we could. My practice was located in one of the poorest counties in Virginia. Over 85% of the children in the school system qualified for free or reduced lunches, and most had Medicaid. Oral hygiene was often neglected. Children with rampant decay were the rule not the exception. We were needed and felt appreciated. Eventually, practice management consultants helped us implement business and clinical systems that increased both our productivity and the quality of our services. I was living the dream. Everything I had worked and planned for had come to fruition. Then lightning struck, and it all came crashing in around me. The criminal investigation was not initiated by Medicaid. In fact, Medicaid conducted two audits during the course of the three-year probe and determined that they did not have a problem with me, the care provided, or the billing of the work done. But once a complaint was made, Medicaid had to investigate. My Medicaid billing records were sent to a dental consultant for review (a non-practicing dentist in Kentucky). She determined that there was possible cause for further review and offered her services for the expanding investigation. It didn’t matter that I had never had a complaint to Medicaid or the Virginia Board of Dentistry or that according to Medicaid, “I wasn’t even on their radar.” The investigation expanded. My patients were examined and then my records seized. It was like a snowball had been set into motion and was rolling downhill, gathering speed and size. It was just a matter of time before criminal prosecutors gathered enough information to construct a case that they felt would convince a jury of my guilt. My fate was sealed. The search and seizure occurred the Friday before the yearly town festival, and it was in the newspaper the following day. The news spread like wildfire, and I thought I was ruined regardless of the outcome. Amazingly, I was wrong. In spite of the investigation, patients remained loyal, and the practice continued to grow and flourish, though it was difficult and slow-going. We had to provide the FBI with our daily schedule so

“ I learned ignorance is no excuse in the eyes of the law.” they could produce the original patient records, which we duplicated before seeing each scheduled patient. Agents were in the office almost every day. There were days when I left the office and would find agents or prosecutors talking with staff in the parking lot. The staff was shocked and confused; they were interviewed repeatedly. Most ended up leaving because of the stress of living under the microscope and having to deal with agents, prosecutors, and the pressures of working “in it” day-to-day. The investigation branched out into the community and into our personal lives. The FBI subpoenaed a video recording of a church service during which I addressed the issue following the search and seizure. I would get periodic calls from a business or a colleague who informed me that the agents were asking questions or subpoenaing records. Teams of agents questioned my three children appearing at their universities, presenting credentials to university authorities, and stopping my children or removing them from classes. Certain of my innocence, my thought again was that this doesn’t happen in the United States. A few days would pass without any new incidents, and we would hope that they had decided to give up the hunt. Then on October 24, 2006, our worst fear was realized. Multiple agents appeared at my home, arrested me, and confiscated all our vehicles. While being read my rights, the telephone rang. The agent in charge ordered my wife not to answer it. The answering machine picked up, and we heard my youngest daughter, distraught, explaining that agents were in Charlottesville, and they had taken her car. She needed reassurance that we were okay. She said, with a strength and determination in her voice that I can’t explain, “I’m okay. Don’t worry about me, but are you guys okay?” Again, that voice of reason in my head was saying, this can’t be real—but unfortunately it was. Further misfortune revealed that the government’s case against me was partially correct. We had made errors in billing and coding that should have never occurred and about which I was unaware. During our review I recognized the errors and offered to repay the overpayment and any penalty fine applicable. However, the government was not interested in this kind of resolution. They made it clear that they wanted prison

time in addition to any restitution and/or penalty due. I was unwilling to plead guilty and go to prison. The errors were not intentional, and I ignorantly believed this was an adequate defense. I learned ignorance is no excuse in the eyes of the law.

There were 140 acts and 10 counts charged in the indictment. The government used a shotgun approach charging one count of healthcare fraud, one count of racketeering, seven counts of money laundering, and one count of structuring. Everything, with the exception of structuring, hinged on being guilty of healthcare fraud. No healthcare fraud, then no racketeering and no money laundering. Though there were 140 acts outlined in the indictment, I was charged with a single count of healthcare fraud. However, the jury needed only to find guilt associated with a single act of the 140 alleged for a guilty verdict. The 140 acts included: • Upcoding and submitting services that were not provided. For example, during this period there were two codes for extractions performed at the same appointment. D7110 was the code to report the first extraction, and D7120 was the code to report additional extractions done at the same appointment. Instead of using both codes, D7110 was reported for multiple extractions at the same appointment resulting in an overpayment of a little less than $2.00. The Medicaid administrator who processed the claims did not catch the error, and we were paid more than we should have been paid. Additionally, there were instances where sealants were placed, and when investigative exams were conducted the sealant was missing. The examiner said the sealant service was therefore not provided.

• Submitting for services that were incomplete, medically unnecessary and which in many cases were detrimental to the patient. The prosecution alleged that many of the pulpotomies and stainless steel crowns placed were medically unnecessary and detrimental to the patient. The examiner from Kentucky indicated in her review that because caries were not evident on the x-ray or that widespread decay was not evident, the restorations placed were not necessary.

• Submitting billings for services performed in such a manner as to be the medical equivalent of no service having been performed at all. We had some root canals that failed. Although our overall success rate was better than 94%, it was alleged by the prosecution that our failures were due to inadequate treatment. (The prosecution had a dentist testify that he had never had an endodontic failure.) The jury, of course, believed if the treatment failed, it was because of the

Dental Explorer | Four th Quar ter 2012


dentist’s failure. The prosecution said that if a procedure had failed,payment should have been returned. Therefore, keeping payment for a failed procedure was fraud.

• Submitting inaccurate billings that were not supported by documentation in the patient’s chart. We did make some billing errors, and my documentation was not as complete as was necessary to support treatment decisions I made. I failed to record what diagnostic “test” I used to determine the need for treatment (occlusal stick with explorer, transillumination, x-ray, etc.). I had an intraoral camera but seldom kept copies of the pictures as documentation. An itemized treatment plan was not enough to establish need for treatment or to serve as justification to a jury as to why treatment was provided.

• Submitting billings which reflect abuse of billing for “emergency” treatment. The prosecution alleged that billing for emergency exams to determine the nature of the patient’s complaint was an abuse of the code. Prosecutors said exams should be included in the emergency treatment fee (e.g., D9110 fee), not separate from it. (Editor’s note: contrary to page 82 of the ADA’s CDT Coding Companion 2009/2010.)

• Billing DMAS (Virginia Medicaid) and private health insurance companies for services rendered in connection with a single procedure, collecting for both, and failing to reimburse either payor for fees collected. In essence, collecting double payment for services provided. Although we attached the EOB to the claim form submitted to DMAS and indicated that DMAS was secondary, DMAS processed the payment as if there was no primary insurance. We should have manually calculated the amount DMAS was supposed to pay and entered that information in the “administration only” column next to the procedure in order for DMAS to pay the claim properly. DMAS reimbursement being much less than UCR seldom resulted in a credit balance on the patient’s account. The business person at the front desk stated in her testimony that if she was aware that DMAS paid improperly, she never alerted me. The prosecution said that we should have caught DMAS’ mistake and returned the payment.

The government’s argument was that billing errors were made intentionally or with “blind disregard” or “blind indifference.” The prosecution argued that I was an intelligent, highly trained professional who bore the responsibility to see that systems and procedures were in place to identify and correct mistakes. They argued that I was being overpaid to my advantage and “probably” knew it, but even if I didn’t - I was still responsible. The truth is I was paid more than I was entitled. I am responsible. However, it was never my intent to receive any unjustified payment. I had no scheme to defraud the


Dental Explorer | Four th Quar ter 2012

government. Over the course of the six-and-a-half years that were the focus of the investigation, I was paid $17,889.57 more than I was entitled, or 0.5% of $3.5 million billed. I want to be clear that I believe that I should not have received any amount in error— no matter how small. Yet during the investigation we discovered a number of services that I could have billed to DMAS but didn’t. The fact that the total amount of these unbilled services exceeded what I was overpaid by DMAS was not taken into consideration.


n March 6, 2008, I was found guilty on all ten counts after a nine-day trial by a jury. In our motion to set aside the verdict the Judge wrote, “The defendant argues that the evidence showed that he acted in good faith in his dental practice, with no intent to defraud. Similarly, he contends that he acted with a ‘legitimate medical purpose and within the bounds of accepted medical practice.’ I agree that his evidence supported such a defense, but there was substantial evidence to the contrary. A verdict in Dr. Shelburne’s favor certainly would have been plausible and equally supportable. Under our system of justice, however, the jury’s view of the evidence cannot be set aside where, as here, there was substantial evidence to support it.” The seven money laundering counts were dismissed as a result of a Supreme Court decision handed down four days before my sentencing. The racketeering and structuring convictions carried a forfeiture penalty that was determined to be $200,000. In addition to the $17,889.57 restitution, I was given a $75,000 penalty and was sentenced to 24 months in Federal prison with three years of supervised probation to follow release from prison. I voluntarily surrendered my license to the Virginia Board of Dentistry before going to prison. I was advised that a hearing would likely result in revocation. By this point I was completely beaten down and didn’t have the time, money, or energy to mount a fight, so I ran up the white flag. I will reapply for my license in July of 2011 and will throw myself on the mercy of the Board. In the meantime, I’m doing all I can do to remain current to help assure the Board that I am safe to provide dental services. However, my journey is not over. In November of 2009, I was served with a Civil Action while still in prison. The U.S. Government and the State of Virginia have brought a civil suit based on the same course of conduct as in the criminal action. Yes, they can do this, and lightning can strike twice in the same place.

“ ...lightning can strike twice in the same place.” So the looming question is...what “triggered” the investigation? We don’t know for sure. The consensus is that it began as a complaint from either a disgruntled employee or a jealous neighboring dentist—a “whistleblower.” Fortunately for the whistle-blower, his/her identity is protected by federal and state law. It will never be known. Honestly, I’m glad I don’t know who initiated the complaint. It does no good to bear ill will toward anyone. It just poisons your thoughts and feelings to the detriment of your health and attitude. People and situations only have as much power over you as you allow them to have. I’ve already been to prison. I refuse to let anything or anyone affect my mental freedom again. Today I work as a minimum wage dental lab tech while serving the three years of supervised probation. I can

never own a gun again. I can’t vote. I can’t leave the district without written permission from my probation officer. I will always have the stigma of being a convicted felon. I have very little left from a monetary standpoint (I filed for personal bankruptcy this past August), but life is good nonetheless. I am free physically, spiritually, and emotionally. I have many people who love me (family, friends), a roof over my head, and food on the table. Compared to the majority of human beings in this world I am wealthy beyond their wildest dreams. I am grateful to you, my colleagues, for your continued interest and concern for my family and me. We have an amazing profession with an unlimited ability to reach out and help. You didn’t slam the door on me. You opened your arms to me, and I appreciate it. I am determined to move forward, so I now write, speak, and consult in an effort to encourage others to protect and defend themselves and their practices. Please, don’t hesitate to contact me if I can help prevent you from going down the same road I am traveling.

Dr. Shelburne graduated from the University of Virginia (Charlottesville) with a double major in Biology and Religious Studies in 1977. He graduated with honors from Virginia Commonwealth University’s dental school and opened a private general practice in Pennington Gap, Virginia, in 1981. He has served as Secretary/Treasurer and President for Southwest Virginia’s Component 6 of the Virginia Dental Association and as a delegate to the Virginia Dental Association’s Annual Meeting. He and his family have served as short-term volunteer missionaries with the Baptist Medical Dental Missions International and with various Mission of Mercy projects in Virginia. In March 2008, he surrendered his dental license after being convicted of healthcare fraud. His son now owns the practice. Dr. Shelburne is eligible to apply for license reinstatement in July 2011. Dr. Shelburne now conducts confidential “mock chart audits” for private dental practices, helping them identify their areas of vulnerability. He also speaks to dental audiences about his mistakes and experiences and can be contacted by email at or by phone at 423-552-6111. Coding with Confidence was written specifically to predict, and therefore prevent, typical errors, misuse, and common mistakes in coding. A way to predict errors before you make them! Coding with Confidence: The “Go To” Dental Insurance Guide is a unique reference guidebook that goes beyond the typical “list and describe” coding manuals. This manual was developed using information compiled from thousands of interviews with doctors and staff just like you, the manual uses PREDICTIVE ERROR CORRECTION™ technology to help predict common mistakes before you make them! This manual provides expert assistance to practice staff who find it difficult to keep up with the frequent changes, revisions, and deletions in dentistry’s CDT codes. Reader-friendly graphics help dental practices prevent common coding errors and understand common reimbursement policies. The following is a list of the other great informational benefits you will get from Coding with Confidence: The “Go To” Dental Insurance Guide: • The four levels of coding compliance • Why compliance can be painful • The “f” (fraud) word • The insurance-independent practice Surviving an audit: the importance of good records and documentation • Why the insurance companies “march to a different drummer” • The importance of using the current and correct CDT codes. • Five easy steps to clean up your coding and reduce coding errors. ABOUT THE AUTHOR Dr. Charles Blair, the industry’s leading authority on insurance coding strategies, fee analysis and overhead control. With over a decade of personal experience as a practicing dentist, Dr. Charles Blair speaks from experience, not theory, when it comes to improving practice profitability and productivity. He has served as a consultant to thousands of doctors, including many of the most successful practices in America. In addition, Dr. Blair is a highly respected author and publisher as well as a nationally acclaimed speaker. Dr. Blair holds a doctorate of dental surgery from the University of North Carolina at Chapel Hill as well as degrees in accounting, business administration and mathematics.

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Dental Explorer | Four th Quar ter 2012


Lightning Strikes!  

How Unintended Billing Errors Helped Send Me to Prison by Roy S. Shellburne, DDS

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