Divided Court Wipes Out Dentist’s $16M Medicaid Fraud Penalty

The Texas Supreme Court on Friday determined that a $16.5 million civil penalty the State of Texas leveled against a dentist in the wake of a summary judgment win in a Medicaid fraud lawsuit cannot stand based on the plain language of the statute used to bring the lawsuit.

The ruling frees Dr. Richard Malouf, owner of All Smiles Dental Clinic, from the civil penalty tied to 1,842 claims for reimbursement he submitted to Medicaid. After Texas was granted an early win by Travis County District Judge Catherine Mauzy, Malouf appealed and a three-justice panel affirmed the holding in October 2022. He took his fight to the Texas Supreme Court in January 2023, and in January of this year, the court heard oral arguments in the case.