i. preambleany additional materials submitted by interdent pursuant to oig's request, whichever...

CORPORATE INTEGRITY AGREEMENTBETWEEN THE

OFFICE OF INSPECTOR GENERALOF THE

DEPARTMENT OF HEALTH AND HUMA SERVICESAND

INTERDENT, INC., INTERDENT SERVICE CORPORATION, AND DEDICATED DENTALSYSTEMS INCORPORATED

I. PREAMBLE

InterDent, Inc., InterDent Service Corporation, and Dedicated Dental SystemsIncorporated (hereinafter referred to collectively as InterDent) hereby enters into thisCorporate Integrity Agreement

(CIA) with the Office of Inspector General (OIG) of theUnited States Departent of Health and Human Services (HHS) to promote compliancewith the statutes, regulations, and written directives of Medicare, Medicaid, and all otherFederal health care programs (as defined in 42 U.S.C. § 1320a-7b(f)) (Federal health careprogram requirements). Except as provided herein, this CIA applies to InterDent as wellas any entity that InterDent owns or in which InterDent has a control interest, as definedin 42 U.S.c. § 1320a-3(a)(3). Contemporaneously with this CIA, InterDent is enteringinto a Settlement Agreement with the United States.

II. TERM AND SCOPE OF THE CIA

A. The period of the compliance obligations assumed by InterDent under this CIAshall be five (5) years from the effective date of this CIA ("Effective Date"), unlessotherwise specified. The effective date shall be the date on which the final signatory ofthis CIA executes this CIA, or the effective date of the Settlement Agreement into whichthis CIA is incorporated by reference, whichever is later. Each one-year period,beginning with the one (1) year period following the Effective Date, shall be referred toas a "Reporting Period."

B. Sections VII (OIG Inspection, Audit, and Review Rights), IX (Disclosures), X(Breach and Default Provisions), and XI (Effective and Binding Agreement) shall expireno later than 120 days after OIG's receipt of: (1) InterDents final annual report; or (2)

InterDent, Inc., InterDent Service Corporation, and Dedicated Dental Systems IncorporatedCorporate Integrity Agreement

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any additional materials submitted by InterDent pursuant to OIG's request, whichever islater.

C. The scope of this CIA shall be governed by the following definitions:

1. "Covered Persons" includes:

a. all owners, officers, directors, and employees of InterDent and allowners, officers, and directors of any entity with an ownershipinterest in InterDent. Notwithstanding the prior sentence, the term"Covered Persons" shall not include those limited partners (or theirparters, owners, officers, directors, or managers) who are notinvolved in the business operations of InterDent and who do nothave an ownership or control interest other than their interest as alimited partner in any entity with an ownership interest in InterDent;and

b. all contractors, subcontractors, agents, and other persons whoprovide patient care items or services to any Federal health careprogram beneficiary at any office owned, operated, managed, orsupported by InterDent, including without limitation, all employeesand contractors of all professional corporations contracting withInterDent. Notwithstanding the prior sentence, the term "CoveredPersons" does not include vendors whose sole connection withInterDent or any affiiated company is sellng supplies, materials orequipment, or providing indirect services that typically and actuallyoccur outside the dental or orthodontic office (e.g. independentdental or orthodontic laboratories).

c. all contractors, subcontractors, agents, and other persons whoperform biling or coding functions on behalf of InterDent,including without limitation, all employees and contractors of allprofessional corporations contracting with InterDent, and

d. all contractors, subcontractors, agents, and other persons whofurnish dental care items or services to any Federal health careprogram beneficiary at any office owned, operated, managed, or


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supported by InterDent, including without limitation, all employeesand contractors of all professional corporations contracting withInterDent. Notwithstanding the prior sentence, the term "CoveredPersons" does not include vendors whose sole connection withInterDent or any affiliated company is sellng supplies, materials orequipment, or providing indirect services that typically and actuallyoccur outside the dental or orthodontic office (e.g. independentdental or orthodontic laboratories).

Notwithstanding the above, this term does not include part-time or per diememployees, contractors, subcontractors, agents, and other persons who are not reasonablyexpected to work more than 160 hours per year, except that any such individuals shallbecome "Covered Persons" at the point when they work more than 160 hours during thecalendar year.

2. "Relevant Covered Persons" includes any owner, officer, director,contractor, subcontractor, agent, or employee working in, with, or forany dental or orthodontic office located in the State of California whichis owned, managed, or supported by any InterDent facilty or officewho:

a. participates in the provision of services to any beneficiary of any

Federal health care program, or

b. participates in the coding or biling of claims to any Federal

health care program.

III. CORPORATE INTEGRITY OBLIGATIONS

InterDent shall establish and maintain a Compliance Program that includes thefollowing. elements:

A. Compliance Officer and Committee.

1. Compliance Offcer. Within 90 days after the Effective Date, InterDentshall appoint an individual to serve as its Compliance Officer and shall maintain aCompliance Officer for the term of the CIA. The Compliance Officer shall be


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responsible for developing and implementing policies, procedures, and practices designedto ensure compliance with the requirements set forth in this CIA and with Federal healthcare program requirements. The Compliance Officer shall be a member of seniormanagement of InterDent, shall make periodic (at least quarterly) reports regardingcompliance matters directly to the Board of Directors of InterDent, and shall beauthorized to report on such matters to the Board of Directors at any time. TheCompliance Officer shall not be or be subordinate to the General Counselor ChiefFinancial Officer. The Compliance Officer shall be responsible for monitoring the day-to-day compliance activities engaged in by InterDent as well as for any reportingobligations created under this CIA.

InterDent shall report to OIG, in writing, any changes in the identity or positiondescription of the Compliance Officer, or any actions or changes that would affect theCompliance Officer's abilty to perform the duties necessary to meet the obligations inthis CIA, within 15 days after such a change.

2. Compliance Committee. Within 90 days after the Effective Date,InterDent shall appoint a Compliance Commttee. The Compliance Committee shall, at aminimum, include the Compliance Officer and other members of senior manag~mentnecessary to meet the requirements of this CIA (~, senior executives of relevantdepartments, such as biling, clinical, human resources, audit, and operations). TheCompliance Officer shall chair the Compliance Commttee and the Commttee shallsupport the Compliance Officer in fulfilling his/her responsibilties (~, shall assist inthe analysis of the organization's risk areas and shall oversee monitoring of internal andexternal audits and investigations).

InterDent shall report to OIG, in writing, any changes in the composition of theCompliance Commttee, or any actions or changes that would affect the ComplianceCommittee's ability to perform the duties necessary to meet the obligations in this CIA,within 15 days after such a change.

B. Written Standards.

1. Code of Conduct. Within 90 days after the Effective Date, InterDentshall develop, implement, and distribute a written Code of Conduct to all CoveredPersons. InterDent shall make the promotion of, and adherence to, the Code of Conduct


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an element in evaluating the performance of all employees. The Code of Conduct shall,at a minimum, set forth:

a. InterDents commtment to full compliance with all Federal healthcare program requirements, including its commtment to prepare andsubmit accurate claims consistent with such requirements;

b. InterDents requirement that all Covered Persons shall beexpected to comply with all Federal health care programrequirements and with InterDent s own Policies and Procedures asimplemented pursuant to Section III.B (including the requirements ofthis CIA);

c. the requirement that all Covered Persons shall be expected toreport to the Compliance Officer, or other appropriate individualdesignated by InterDent, suspected violations of any Federal healthcare program requirements or of InterDent s own Policies andProcedures;

d. the possible consequences to both InterDent and Covered Personsof failure to comply with Federal health care program requirementsand with InterDent s own Policies and Procedures and the failure toreport such noncompliance; and

e. the right of all individuals to use the Disclosure Programdescribed in Section III.E, and InterDents commitment tononretaliation and to maintain, as appropnate, confidentiality andanonymty with respect to such disclosures.

Within 90 days after the Effective Date, each Covered Person shall certify, inwriting, that he or she has received, read, understood, and shall abide by InterDents Codeof Conduct. New Covered Persons shall receive the Code of Conduct and shall completethe required certification within 30 days after becoming a Covered Person or within 90days after the Effective Date, whichever is later.

InterDent shall periodically review the Code of Conduct to determine if revisionsare appropriate and shall make any necessary revisions based on such review. Any


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revised Code of Conduct shall be distributed within 30 days after any revisions arefinalized. Each Covered Person shall certify, in writing, that he or she has received, read,understood, and shall abide by the revised Code of Conduct within 30 days after thedistribution of the revised Code of Conduct.

2. Policies and Procedures. Within 90 days after the Effective Date,InterDent shall implement written Policies and Procedures regarding the operation ofInterDents compliance program and its compliance with Federal health care programrequirements. At a minimum, the Policies and Procedures shall address:

a. the subjects relating to the Code of Conduct identified in SectionIII.B. 1; .

b. the requirement that InterDent shall appropriately provide and

bil services in accordance with all applicable State and Federal

laws, regulations, manual provisions, program requirements, anddirectives, including but not limited to 31 U.S.C. §§ 3729-3733,22 C.C.R. Chapter 3, CaL. Gov.'t Code §§ 12650-12656, andDenti-Ca1 Manual §§ 2,4 and 5;

c. the requirement that InterDent shall assure that only CaliforniaMedi-Ca1 (Denti-Ca1) enrolled providers on active status (notsuspended) treat patients for whom payment wil be made underDenti-Ca1, in accordance with all applicable State and Federallaws, regulations, manual provisions, program requirements, anddirectives, including but not limited to 22 C.C.R. Chapter 3, andDenti -Ca1 Manual § 2;

d. the requirement that InterDent shall assure that only enrolledDenti-Ca1 participating, certified orthodontists on active status

(not suspended) provide orthodontic treatments to Denti-Ca1patients in accordance with all applicable State and Federa11aws,regulations, manual provisions, program requirements, anddirectives, including but not limited to 22 C.C.R. Chapter 3, andDenti-Ca1 Manual §§ 2, 4 and 5


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e. the requirement that InterDent shall only collect the appropriateco-payments, particularly recognizing the age of the patient, inaccordance with all applicable State and Federal laws,regulations, manual provisions, program requirements, anddirectives; and

f. the requirement that InterDent shall not hire, employ, or

otherwise engage as contractors any individual or entitywho/which: (i) is currently suspended, deactivated, excluded,debarred, or otherwise ineligible to participate in Federal healthcare programs; or (ii) has been convicted of a criminal offensethat falls within the ambit of 42 U.S.C. § 1320a-7(a), but has notyet been suspended, deactivated, excluded, debarred, or otherwisedeclared ineligible to participate in any Federally fundedprograms.

Within 90 days after the Effective Date, the relevant portions of the Policies andProcedures shall be distributed to all individuals whose job functions relate to thosePolicies and Procedures. Appropriate and knowledgeable staff shall be available toexplain the Policies and Procedures.

At least annually (and more frequently, if appropriate), InterDent shall assess andupdate, as necessary, the Policies and Procedures. Within 30 days after the effective dateof any revisions, the relevant portions of any such revised Policies and Procedures shallbe distributed to all individuals whose job functions relate to those Policies andProcedures.

C. Training and Education.

1. General Training. Within 90 days after the Effective Date, InterDentshall provide at least two (2) hours of General Training to each Covered Person. Thistraining, at a minimum, shall explain:

a. InterDents CIA requirements; and


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b. InterDents Compliance Program (including the Code of Conductand the Policies and Procedures as they pertain to generalcompliance issues).

New Covered Persons shall receive the General Training described above within30 days after becoming a Covered Person or within 90 days after the Effective Date,whichever is later. After receiving the initial General Training described above, eachCovered Person shall receive at least one hour of General Training in each subsequentReporting Period.

2. Specifc Training. Within 90 days after the Effective Date, eachRelevant Covered Person shall receive at least four (4) hours of Specific Training inaddition to the General Training required above. This Specific Training shall include adiscussion of:

a. the Federal health care program requirements regarding theaccurate coding and submission of claims;

b. policies, procedures, and other requirements applicable to thedocumentation of medical records;

c. the personal obligation of each individual involved in the claimssubmission process to ensure that such claims are accurate;

d. applicable reimbursement statutes, regulations, and programrequirements and directives;

e. the legal sanctions for violations of the Federal health careprogram requirements; and

f. examples of proper and improper claims submission practices.

New Relevant Covered Persons shall receive this training within 30 days after thebeginning of their employment or becoming Relevant Covered Persons, or within 90 daysafter the Effective Date, whichever is later. An InterDent employee who has completedthe Specific Training shall review a new Relevant Covered Person's work, to the extentthat the work relates to the delivery of patient care items or services and/or the


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preparation or submission of claims for reimbursement from any Federal health careprogram, until such time as the new Relevant Covered Person completes his or herSpecific Training.

After receiving the initial Specific Training described in this Section, eachRelevant Covered Person shall receive at least four (4) hours of Specific Training in eachsubsequent Reporting Period.

3. Certifcation. Each individual who is required to attend training shallcertify, in writing, or in electronic form, if applicable, that he or she has received therequired training. The certification shall specify the tye of training received and the datereceived. The Compliance Officer ( or designee) shall retain the certifications, along withall course materials. These shall be made available to OIG, upon request.

4. Qualifcations of Trainer. Persons providing the training shall beknowledgeable about the subject area.

5. Update of Training. InterDent shall review the training annually, and,where appropriate, update the training to reflect changes in Federal health care programrequirements, any issues discovered during internal audits or the Claims Review, and anyother relevant information.

6. Computer-based Training. InterDent may provide the training requiredunder this CIA through appropriate computer-based training approaches. If InterDentchooses to provide computer-based training, it shall make available appropriatelyqualified and knowledgeable staff or trainers to answer questions or provide additionalinformation to the individuals receiving such training.

D. Review Procedures.

1. General Description.

a. Engagement of Independent Review Organization. Within 90. days after the Effective Date, InterDent shall engage an entity (orentities), such as an accounting, auditing, or consulting firm(hereinafter uIndependent Review Organization" or "IRO"), toperform reviews to assist InterDent in assessing and evaluating its


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biling and coding practices and certain other obligations pursuant tothis CIA and the Settlement Agreement. The applicablerequirements relating to the IRO are outlined in Appendix A to thisCIA, which is incorporated by reference.

The IRO shall evaluate and analyze InterDent s coding, biling, andclaims submission to the Federal health care programs and thereimbursement received (Claims Review), and shall, if applicable,analyze whether InterDent sought payment for certain unallowablecosts (Unallowable Cost Review).

b. Frequency of Claims Review. The Claims Review shall beperformed annually and shall cover each of the Reporting Periods.The IRO(s) shall perform all components of each annual ClaimsReview.

c. Frequency of Unallowable Cost Review. If applicable, the IROshall perform the Unallowable Cost Review for the first ReportingPeriod.

d. Retention of Records. The IRO and InterDent shall retain andmake available to OIG, upon request, all work papers, supportingdocumentation, correspondence, and draft reports (those exchangedbetween the IRO and InterDent) related to the reviews.

2. Claims Review. The Claims Review shall include three DiscoverySamples, each of 50 Paid Claims (as described further in Appendix B) and, if the ErrorRate for any Discovery Sample is 5% or greater, a Full Sample and Systems Review.The applicable definitions, procedures, and reporting requirements are outlined inAppendix B to this CIA, which is incorporated by reference.

3. Claims Review Report. The IRO shall prepare a report based upon theClaims Review performed (Claims Review Report). Information to be included in theClaims Review Report is described in Appendix B.

4. Repayment of Identifed Overpayments. In accordance with SectionIII.H.1, InterDent shall repay within 30 days any Overpayment(s) identified in the


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Discovery Samples or the Full Sample(s) (if applicable), regardless ofthe Error Rate, tothe appropriate payor and in accordance with payor refund policies. InterDent shall makeavailable to OIG all documentation that reflects the refund of the Overpayment(s) to thepayor.

5. Unallowable Cost Review. If applicable, the IRO shall conduct areview of InterDent s compliance with the unallowable cost provisions of the SettlementAgreement. The IRO shall determne whether InterDent has complied with its obligationsnot to charge to, or otherwise seek payment from, federal or state payors for unallowablecosts (as defined in the Settlement Agreement) and its obligation to identify to applicablefederal or state payors any unallowable costs included in payments previously soughtfrom the United States, or any state Medicaid program. This unallowable cost analysisshall include, but not be limited to, payments sought in any cost reports, cost statements,information reports, or payment requests already submitted by InterDent or any affiliates.To the extent that such cost reports, cost statements, information reports, or payment

requests, even if already settled, have been adjusted to account for the effect of theinclusion of the unallowable costs, the IRO shall determne if such adjustments wereproper. In making this determination, the IRO may need to review cost reports and/orfinancial statements from the year in which the Settlement Agreement was executed, aswell as from previous years.

6. Unallowable Cost Review Report. If applicable, the IRO shall prepare areport based upon the Unallowable Cost Review performed. The Unallowable CostReview Report shall include the IRO's findings and supporting rationale regarding theUnallowable Costs Review and whether InterDent has complied with its obligation not tocharge to, or otherwise seek payment from, federal or state payors for unallowable costs(as defined in the Settlement Agreement) and its obligation to identify to applicablefederal or state payors any unallowable costs included in payments previously soughtfrom such payor.

7. Validation Review. In the event OIG has reason to believe that: (a)InterDents Claims Review or Unallowable Cost Review fails to conform to therequirements of this CIA; or (b) the IRO's findings or Claims Review results orUnallowable Cost Review results are inaccurate, OIG may, at its sole discretion, conductits own review to determine whether the Claims Review or Unallowable Cost Reviewcomplied with the requirements of the CIA and/or the findings or Claims Review resultsor Unallowable Cost Review results are inaccurate (Validation Review). InterDent shall


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pay for the reasonable cost of any such review performed by OIG or any of its designatedagents. Any Validation Review of Reports submitted as part of InterDent s final AnnualReport shall be initiated no later than one year after InterDent s final submission (asdescribed in Section II) is received by OIG.

Prior to initiating a Validation Review, OIG shall hotify InterDent of itsintent to do so and provide a written explanation of why OIG believes such a review isnecessary. To resolve any concerns raised by OIG, InterDent may request a meeting withOIG to: (a) discuss the results of any Claims Review or Unallowable Cost Reviewsubmissions or findings; (b) present any additional information to clarify the results of theClaims Review or Unallowable Cost Review or to correct the inaccuracy of the ClaimsReview or Unallowable Cost Review; and/or (c) propose alternatives to the proposedValidation Review. InterDent agrees to provide any additional information as may berequested by OIG under this Section III.D.6 in an expedited manner. OIG wil attempt ingood faith to resolve any Claims Review or Unallowable Cost Review issues withInterDent prior to conducting a Validation Review. However, the final determnation asto whether or not to proceed with a Validation Review shall be made at the sole discretionofOIG.

8. Independence and Objectivity Certifcation. The IRO shall include in itsreport(s) to InterDent a certification or sworn affidavit that it has evaluated itsprofessional independence and objectivity, as appropriate to the nature of theengagement, with regard to the Claims Review or Unallowable Cost Review and that ithas concluded that it is, in fact, independent and objective.

E. Disclosure Program.

Within 90 days after the Effective Date, InterDent shall establish a DisclosureProgram that includes a mechanism (~, a toll-free compliance telephone line) to enableindividuals to disclose, to the Compliance Officer or some other person who is not in thedisclosing individual's chain of command, any identified issues or questions associatedwith InterDents policies, conduct, practices, or procedures with respect to a Federalhealth care program believed by the individual to be a potential violation of criminal,civil, or administrative law. Int~rDent shall appropriately publicize the existence of thedisclosure mechanism (~, via periodic e-maI1s to employees or by posting theinformation in prominent common areas).


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The Disclosure Program shall emphasize a nonretribution, nonretaliation policy,and shall include a reporting mechanism for anonymous communications for whichappropriate confidentiality shall be maintained. Upon receipt of a disclosure, theCompliance Officer ( or designee) shall gather all relevant information from the disclosingindividuaL. The Compliance Officer (or designee) shall make a preliminary, good faithinquiry into the allegations set forth in every disclosure to ensure that he or she hasobtained all of the information necessary to determne whether a further review should beconducted. For any disclosure that is sufficiently specific so that it reasonably:(1) permts a determnation of the appropriateness of the alleged improper practice; and(2) provides an opportity for taking corrective action, InterDent shall conduct aninternal review of the allegations set forth in the disclosure and ensure that proper follow-up is conducted.

The Compliance Officer (or designee) shall maintain a disclosure log, which shallinclude a record and summary of each disclosure received (whether anonymous or not),the status of the respective internal reviews, and any corrective action taken in response tothe internal reviews. The disclosure log shall be made available to OIG upon request.

F. Ineligible Persons.

1. Definitions. For purposes of this CIA:

a. an "Ineligible Person" shall include an individual or entity who:

i. is currently excluded, debarred, suspended, or otherwiseineligible to participate in the Federal health care programs orin Federal procurement or nonprocurement programs; or

ii. has been convicted of a criminal offense that falls withinthe ambit of 42 U.S.C. § 1320a-7(a), but has not yet beenexcluded, debarred, suspended, or otherwise declaredineligible.

b. "Exclusion Lists" include:

i. the HHS/OIG List of Excluded Individuals/Entities(available through the Internet at htt://www.oig.hhs.gov);


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and

ii. the General Services Administration's List of PartiesExcluded from Federal Programs (available through theInternet at htt://www.ep1s.gov).

c. "Screened Persons" include prospective and current owners,

officers, directors, employees, contractors, and agents ofInterDent.

2. Screening Requirements. InterDent shall ensure that all ScreenedPersons are not Ineligible Persons, by implementing the following screeningrequirements.

a. InterDent shall screen all Screened Persons against the ExclusionLists prior to engaging their services and, as part of the hiring orcontracting process, shall require such Screened Persons to disclosewhether they are Ineligible Persons.

b. InterDent shall screen all Screened Persons against the ExclusionLists within 90 days after the Effective Date and on an annual basisthereafter.

c. InterDent shall implement a policy requiring all Screened Personsto disclose immediately any debarment, exclusion, suspension, orother event that makes that person an Ineligible Person.

Nothing in this Section affects the responsibility of (or liabilty for) InterDent torefrain from biling Federal health care programs for items or services furnished, ordered,or prescribed by an Ineligible Person. InterDent understands that items or servicesfushed by excluded persons are not payable by Federal health care programs and thatInterDent may be liable for overpayments and/or criminal, civil, and administrativesanctions for employing or contracting with an excluded person regardless of whetherInterDent meets the requirements of Section III.F.

3. Removal Requirement. If InterDent has actual notice that a ScreenedPerson has become an Ineligible Person, InterDent shall remove such Screened Person


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from responsibilty for, or involvement with, InterDents business operations related tothe Federal health care programs and shall remove such Screened Person from anyposition for which the Screened Person's compensation or the items or services furnished,ordered, or prescribed by the Screened Person are paid in whole or part, directly orindirectly, by Federal health care programs or otherwise with Federal funds at least untilsuch time as the Screened Person is reinstated into participation in the Federal health careprograms.

4. Pending Charges and Proposed Exclusions. If InterDent has actualnotice that a Screened Person is charged with a criminal offense that falls within theambit of 42 U.S.C. §§ 1320a-7(a), 1320a-7(b)(1)-(3), or is proposed for exclusion duringthe Screened Person's employment or contract term, InterDent shall take all appropriateactions to ensure that the responsibilities of that Screened Person have not and shall notadversely affect the quality of care rendered to any beneficiary, patient, or resident, or anyclaims submitted to any Federal health care program.

G. Notification of Governent Investigation or Legal Proceedings.

Within 30 days after discovery, InterDent shall notify OIG, in writing, of anyongoing investigation or legal proceeding known to InterDent conducted or brought by agovernental entity or its agents involving an allegation that InterDent has committed acrime or has engaged in fraudulent activities. This notification shall include a descriptionof the allegation, the identity of the investigating or prosecuting agency, and the status ofsuch investigation or legal proceeding. InterDent shall also provide written notice to OIGwithin 30 days after the resolution of the matter, and shall provide OIG with a descriptionof the findings and/or results of the investigation or proceedings, if any.

H. Reporting.

1. Overpayments.

a. Definition of Overpayments. F or purposes of this CIA, an"Overpayment" shall mean the amount of money InterDent hasreceived in excess of the amount due and payable under any Federalhealth care program requirements.


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b. Reporting of Overpayments. If, at any time, InterDent identifiesor learns of any Overpayment, InterDent shall notify the payor (~,Medicare fiscal intermediary or carrer) within 30 days afteridentification of the Overpayment and take remedial steps within 60days after identification (or such additional time as may be agreed toby the payor) to correct the problem, including preventing theunderlying problem and the Overpayment from recurrng. Also,within 30 days after identification of the Overpayment, InterDentshall repay the Overpayment to the appropriate payor to the extentsuch Overpayment has been quantified. If not yet quantified, within30 days after identification, InterDent shall notify the payor of itsefforts to quantify the Overpayment amount along with a schedule ofwhen such work is expected to be completed. Notification andrepayment to the payor shall be done in accordance with the payor'spolicies, and, for Medicare contractors, shall include the informationcontained on the Overpayment Refund Form, provided as AppendixC to this CIA. Notwithstanding the above, notification andrepayment of any Overpayment amount that routinely is reconciledor adjusted pursuant to policies and procedures established by thepayor should be handled in accordance with such policies andprocedures.

2. Reportable Events.

a. Definition of Reportable Event. For purposes of this CIA, a"Reportable Event" means anything that involves:

1. a substantial Overpayment;

11. a matter that a reasonable person would consider a

probable violation of criminal, civil, or administrativelaws applicable to any Federal health care program forwhich penalties or exclusion may be authorized; or,

11. the filing of a bankptcy petition by InterDent.


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A Reportable Event may be the result of an isolated event or a seriesof occurrences.

b. Reporting of Reportable Events. If InterDent determnes (after areasonable opportnity to conduct an appropriate review orinvestigation of the allegations) through any means that there is aReportable Event, InterDent shall notify OIG, in writing, within 30days after making the determination that the Reportable Event exists.The report to OIG shall include the following information:

i. If the Reportable Event results in an Overpayment, thereport to OIG shall be made at the same time as thenotification to the payor required in Section III.H.1, and shallinclude all of the information on the Overpayment RefundForm, as well as:

(A) the payor's name, address, and contact person towhom the Overpayment was sent; and

(B) the date of the check and identification number (orelectronic transaction mimber) by which theOverpayment was repaid/refunded;

ii. a complete description of the Reportable Event, includingthe relevant facts, persons involved, and legal and Federalhealth care program authorities implicated;

iii. a description of InterDent s actions taken to correct theReportable Event; and

iv. any further steps InterDent plans to take to address the

Reportable Event and prevent it from recurrng.

v. If the Reportable Event involves the fiing ofa bankptcypetition, the report to the OIG shall include documentation ofthe filing and a description of any Federal health care programauthorities implicated.


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IV. CHANGES TO BUSINESS UNITS OR LOCATIONS

A. Change or Closure of Unit or Location. In the event that, after the EffectiveDate, InterDent changes locations or closes a business unit or location related to thefurnishing of items or services that may be reimbursed by Federal health care programs,InterDent shall notify OIG of this fact as soon as possible, but no later than within 30days after the date of change or closure of the location.

B. Purchase or Establishment of New Unit or Location. In the event that, after theEffective Date, InterDent purchases or establishes a new business unit or location relatedto the furnishing of items or services that may be reimbursed by Federal health careprograms, InterDent shall notify OIG at least 30 days prior to such purchase or theoperation of the new business unit or location. This notification shall include the addressof the new business unit or location, phone number, fax number, Medicare Providernumber, provider identification number and/or supplier number, and the name andaddress of the contractor that issued each number. Each new business unit or location andall Covered Persons at each new business unit or location shall be subject to theapplicable requirements of this CIA.

C. Sale of Unit or Location. In the event that, after the Effective Date, InterDentproposes to sell any or all of its business units or locations that are subject to this CIA,InterDent shall notify OIG of the proposed sale at least 30 days prior to the sale of suchbusiness unit or location. This notification shall include a description of the business unitor location to be sold, a brief description of the terms of the sale, and the name andcontact information of the prospective purchaser. This CIA shall be binding on thepurchaser of such business unit or location, uness otherwise determined and agreed to inwriting by the OIG.

V. IMPLEMENTATION AND ANNUAL REpORTS

A. Implementation Report. Within 120 days after the Effective Date, InterDentshall submit a written report to OIG summarizing the status of its implementation of therequirements of this CIA (Implementation Report). The Implementation Report shall, at aminimum, include:


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1. the name, address, phone number, and position description of theCompliance Officer required by Section III.A, and a sumary of other noncompliance jobresponsibilities the Compliance Officer may have;

2. the names and positions of the members of the Compliance Commtteerequired by Section III.A;

3. a copy of InterDent s Code of Conduct required by Section III.B.1;

4. a copy of all Policies and Procedures required by Section III.B.2;

5. the number of individuals required to complete the Code of Conductcertification required by Section III.B. 1, the percentage of individuals who havecompleted such certification, and an explanation of any exceptions (the documentationsupporting this information shall be available to OIG, upon request);

6. the following information regarding each tye of training required bySection III.C:

a. a description of such training, including a summary of the topics

covered, the length of sessions, and a schedule of training sessions;

b. the number of individuals required to be trained, percentage ofindividuals actually trained, and an explanation of any exceptions.

A copy of all training materials and the documentation supporting this informationshall be available to OIG, upon request.

7. a description of the Disclosure Program required by Section III.E;

8. the following information regarding the IRO(s): (a) identity, address, andphone number; (b) a copy of the engagement letter; and (c) a summary and description ofany and all current and prior engagements and agreements between InterDent and theIRO;

9. a certification from the IRO regarding its professional independence andobjectivity with respect to InterDent;


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10. a description of the process by which InterDent fulfills therequirements of Section III.F regarding Ineligible Persons;

1 1. the name, title, and responsibilties of any person who is determned tobe an Ineligible Person under Section III.F; the actions taken in response to the screeningand removal obligations set forth in Section III.F; and the actions taken to identify,quantify, and repay any overpayments to Federal health care programs relating to items orservices furnshed, ordered or prescribed by an Ineligible Person;

12. a list of all of InterDents locations (including locations and mailngaddresses); the corresponding name under which each location is doing business; thecorresponding phone numbers and fax numbers; each location's Medicare Providernumber( s), the volume and type of services provided at each location, provideridentification number(s), and/or supplier number(s); and the name and address of eachMedicare contractor to which InterDent currently submits claims;

13. a description of InterDent s corporate structure, including identificationof any parent and sister companies, subsidiaries, and their respective lines of business;and

14. the certifications required by Section V.C.

B. Annual Reports. InterDent shall submit to OIG annually a report with respectto the status of, and findings regarding, InterDents compliance activities for each of thefive (5) Reporting Periods (Annual Report).Each Annual Report shall include, at a minimum:

1. any change in the identity, position description, or other noncompliancejob responsibilities of the Compliance Officer and any change in the membership of theCompliance Committee described in Section III.A;

2. a summary of any significant changes or amendments to the Policies andProcedures required by Section III.B and the reasons for such changes (~, change incontractor policy);


20

3. the number of individuals required to complete the Code of Conductcertification required by Section III.B. 1, the percentage of individuals who havecompleted such certification, and an explanation of any exceptions (the documentationsupporting this information shall be available to OIG, upon request);

4. the following information regarding each tye of training required bySection III.C:

a. a description of such training, including a summary of the topicscovered, the length of sessions, and a schedule of training sessions;

b. the number of individuals required to be trained, percentage ofindividuals actually trained, and an explanation of any exceptions.

A copy of all training materials and the documentation supporting this information shallbe available to OIG, upon request.

5. a complete copy of all reports prepared pursuant to Section III.D, alongwith a copy of the IRO's engagement letter (if applicable);

6. InterDents response and corrective action p1an(s) related to any issuesraised by the reports prepared pursuant to Section III.D;

7. a. summary and description of any and all current and prior engagementsand agreements between InterDent and the IRO, if different from what was submitted aspart of the Implementation Report;

8. a certification from the IRO regarding its professional independence andobjectivity with respect to InterDent;

9. a summary of Reportable Events (as defined in Section III.H) identifiedduring the Reporting Period and the status of any corrective and preventative actionrelating to all such Reportable Events;

10. a report of the aggregate Overpayments that have been returned to theFederal health care programs. Overpayment amounts shall be broken down into thefollowing categories: inpatient Medicare, outpatient Medicare, Medicaid (report each


21

applicable state separately, if applicable), and other Federal health care programs.Overpayment amounts that are routinely reconciled or adjusted pursuant to policies andprocedures established by the payor do not need to be included in this aggregateOverpayment report;

1 1. a summary of the disclosures in the disclosure log required by SectionIII.E that: (a) relate to Federal health care programs; or (b) allege abuse or neglect ofpatients;

12. any changes to the process by which InterDent fulfills the requirementsof Section III.F regarding Ineligible Persons;

13. the name, title, and responsibilties of any person who is determned tobe an Ineligible Person under Section III.F; the actions taken by InterDent in response tothe screening and removal obligations set forth in Section III.F; and the actions taken toidentify, quantify, and repay any overpayments to Federal health care programs relating toitems or services furnished, ordered or prescribed by an Ineligible Person;

14. a summary describing any ongoing investigation or legal proceedingrequired to have been reported pursuant to Section III.G. The summary shall include adescription of the allegation, the identity of the investigating or prosecuting agency, andthe status of such investigation or legal proceeding;

15. a description of all changes to the most recently provided list ofInterDenCs locations (including addresses) as required by Section V.A.l2; thecorresponding name under which each location is doing business; the correspondingphone numbers and fax numbers; each location's Medicare Provider number(s), the tyeand volume of service provided at each location, provider identification number(s), and/orsupplier number(s); and the name and address of each Medicare contractor to whichInterDent currently submits claims; and

16. the certifications required by Section V.C.

The first Annual Report shall be received by OIG no later than 60 days after theend of the first Reporting Period. Subsequent Annual Reports shall be received by OIGno later than the anniversary date of the due date of the first Annual Report.

InterDent, Inc., InterDent Service Corporation, and Dedicated Dental Systems IncorporatedCórporate Integrity Agreement

22

C. Certifications. The Implementation Report and Annual Reports shall include acertification by the Compliance Officer that:

i. to the best of his or her knowledge, except as otherwise described in theapplicable report, InterDent is in compliance with all of the requirements of this CIA;

2. he or she has reviewed the Report and has made reasonable inquiryregarding its content and believes that the information in the Report is accurate andtruthful; and

3. to the best of his or her knowledge, InterDent has complied with itsobligations under the Settlement Agreement: (a) not to resubmit to any Federal healthcare program payors any previously denied claims related to the Covered Conductaddressed in the Settlement Agreement, and not to appeal any such denials of claims; (b)not to charge to or otherwise seek payment from federal or state payors for unallowablecosts (as defined in the Settlement Agreement); and (c) to identify and adjust any pastcharges or claims for unallowable costs;

D. Designation of Information. InterDent shall clearly identify any portions of itssubmissions that it believes are trade secrets, or information that is commercial orfinancial and privI1eged or confidential, and therefore potentially exempt from disclosureunder the Freedom of Information Act (FOIA), 5 U.S.C. § 552. InterDent shall refrainfrom identifying any information as exempt from disclosure if that information does notmeet the criteria for exemption from disclosure under FOIA.

VI. NOTIFICATIONS AND SUBMISSION OF REPORTS

Unless otherwise stated in writing after the Effective Date, all notifications andreports required under this CIA shall be submitted to the following entities:

OIG:Administrative and Civil Remedies BranchOffice of Counsel to the Inspector GeneralOffice of Inspector GeneralU.S. Department of Health and Human ServicesCohen Building, Room 5527


23

330 Independence Avenue, S.W.Washington, DC 20201Telephone: 202.619.2078

Facsimile: 202.205.0604

InterDent:Karen Feldman, DDSVice President,Quality Improvement and Regulatory AffairsInterDent, Inc. .222 North Sepulveda Boulevard, #740EI Segundo, CA 90245Direct Dial Phone Number: 310-765-3518Fax Number: 310-765-2456e-Mail: feldmankúVInterDent.com

Unless otherwise specified, all notifications and reports required by this CIA maybe made by certified mail, overnight mail, hand delivery, or other means, provided thatthere is proofthat such notification was received. For purposes of this requirement,internal facsimile confirmation sheets do not constitute proof of receipt. Upon request byOIG, InterDent may be required to provide OIG with an electronic copy of eachnotification or report required by this CIA in searchable portable document format (pdt),either instead of or in addition to, a paper copy.

VII. OIG INSPECTION. AUDIT. AND REVIEW RIGHTS

In addition to any other rights OIG may have by statute, regulation, or contract,010 or its duly authorized representative(s) may examine or request copies of InterDentsbooks, records, and other documents and supporting materials and/or conduct on-sitereviews of any of InterDents locations for the purpose of verifying and evaluating: (a)InterDents compliance with the terms of this CIA; and (b) InterDents compliance withthe requirements of the Federal health care programs in which it participates. Thedocumentation described above shall be made available by InterDent to OIG or its dulyauthorized representative(s) at all reasonable times for inspection, audit, or reproduction.Furthermore, for purposes of this provision, OIG or its duly authorized representative(s)may interview any of InterDents employees, contractors, or agents who consent to beinterviewed at the individual's place of business during normal business hours or at such


24

other place and time as may be mutually agreed upon between the individual and OIG.InterDent shall assist OIG or its duly authorized representative(s) in contacting andarranging interviews with such individuals upon OIG's request. InterDents employeesmay elect to be interviewed with or without a representative of InterDent present.

VIII. DOCUMENT AND RECORD RETENTION

InterDent shall maintain for inspection all documents and records relating toreimbursement from the Federal health care programs, or to compliance with this CIA, forsix (6) years (or longer if otherwise required by law) from the Effective Date.

IX. DISCLOSURES

Consistent with HHS's FOIA procedures, set forth in 45 C.F.R. Part 5, OIG shallmake a reasonable effort to notify InterDent prior to any release by OIG of informationsubmitted by InterDent pursuant to its obligations under this CIA and identified uponsubmission by InterDent as trade secrets, or information that is commercial or financialand privileged or confidential, under the FOIA rules. With respect to such releases,InterDent shall have the rights set forth at 45 C.F.R. § 5.65(d).

X. BREACH AND DEFAULT PROVISIONS

InterDent is expected to fully and timely comply with all of its CIA obligations.

A. Stipulated Penalties for Failure to Comply with Certain Obligations. As acontractual remedy, InterDent and OIG hereby agree that faI1ure to comply with certainobligations as set forth in this CIA may lead to the imposition of the following monetarypenalties (hereinafter referred to as "Stipulated Penalties") in accordance with thefollowing provisions.

1. A Stipulated Penalty of $2,500 (which shall begin to accrue on the dayafter the date the obligation became due) for each day InterDent faI1s to establish andimplement any of the following obligations as described in Section III:

a. a Compliance Officer;

b. a Compliance Committee;


25

c. a written Code of Conduct;

d. written Policies and Procedures;

e. the training of Covered Persons;

f. a Disclosure Program;

g. Ineligible Persons screening and removal requirements; and

h. notification of Governent investigations or legal proceedings.

2. A Stipulated Penalty of $2,500 (which shall begin to accrue on the dayafter the date the obligation became due) for each day InterDent fails to engage an IRO,as required in Section III.D and Appendix A.

3. A Stipulated Penalty of$2,500 (which shall begin to accrue on the dayafter the date the obligation became due) for each day InterDent fails to submit theImplementation Report or any Annual Reports to OIG in accordance with therequirements of Section V by the deadlines for submission.

4. A Stipulated Penalty of$2,500 (which shall begin to accrue on the dayafter the date the obligation became due) for each day InterDent fails to submit the annualClaims Review Report, and any other required review, in accordance with therequirements of Section III.D and Appendix B.

5. A Stipulated Penalty of$1,500 for each day InterDent fails to grantaccess as required in Section VII. (This Stipulated Penalty shall begin to accrue on the

date InterDent fails to grant access.)

6. A Stipulated Penalty of $5,000 for each false certification submitted byor on behalf of InterDent as part of its Implementation Report, Annual Report, additionaldocumentation to a report (as requested by the OIG), or otherwise required by this CIA.

7. A Stipulated Penalty of $ 1 ,000 for each day InterDent faI1s to complyfully and adequately with any obligation of this CIA. OIG shall provide notice to


26

InterDent stating the specific grounds for its determination that InterDent has failed tocomply fully and adequately with the CIA obligation(s) at issue and steps InterDent shalltake to comply with the CIA. (This Stipulated Penalty shall begin to accrue 10 days afterInterDent receives this notice from OIG of the failure to comply.) A Stipulated Penalty asdescribed in this Subsection shall not be demanded for any violation for which OIG hassought a Stipulated Penalty under Subsections 1 -6 of this Section.

B. Timely Written Requests for Extensions. InterDent may, in advance of the duedate, submit a timely written request for an extension of time to perform any act or fileany notification or report required by this CIA. Notwithstanding any other provision inthis Section, if OIG grants the timely written request with respect to an act, notification,or report, Stipulated Penalties for failure to perform the act or file the notification orreport shall not begin to accrue until one day after InterDent fails to meet the reviseddeadline set by OIG. Notwithstanding any other provision in this Section, if OIG deniessuch a timely written request, Stipulated Penalties for failure to perform the act or fie thenotification or report shall not begin to accrue untI1 three business days after InterDentreceives OIG's written denial of such request or the original due date, whichever is later.A "timely written request" is defined as a request in writing received by OIG at least fivebusiness days prior to the date by which any act is due to be performed or any notificationor report is due to be fied.

C. Payment of Stipulated Penalties.

1. Demand Letter. Upon a finding that InterDent has faI1ed to comply withany of the obligations described in Section X.A and after determning that StipulatedPenalties are appropriate, OIG shall notify InterDent of: (a) InterDents failure tocomply; and (b) OIG's exercise of its contractual right to demand payment of theStipulated Penalties (this notification is referred to as the "Demand Letter").

2. Response to Demand Letter. Within 10 days after the receipt of theDemand Letter, InterDent shall either: (a) cure the breach to OIG's satisfaction and paythe applicable Stipulated Penalties or (b) request a hearing before an HHS administrativelaw judge (ALJ) to dispute OIG's determination of noncompliance, pursuant to the agreedupon provisions set forth below in Section X.E. In the event InterDent elects to requestan ALJ hearing, the Stipulated Penalties shall continue to accrue until InterDent cures, toOIG's satisfaction, the alleged breach in dispute. FaI1ure to respond to the Demand Letter


27

in one of these two manners within the allowed time period shall be considered a materialbreach of this CIA and shall be grounds for exclusion under Section X.D.

3. Form of Payment. Payment of the Stipulated Penalties shall be made bycertified or cashier's check, payable to: "Secretary of the Departent of Health andHuman Services," and submitted to OIG at the address set forth in Section VI.

4. Independence from Material Breach Determination. Except as set forthin Section X.D.1.c, these provisions for payment of Stipulated Penaltes shall not affect orotherwise set a standard for OIG's decision that InterDent has materially breached thisCIA, which decision shall be made at OIG's discretion and shall be governed by theprovisions in Section X.D, below.

D. Exclusion for Material Breach of this CIA.

1. Definition of Material Breach. A material breach of this CIA means:

a. a failure by InterDent to report a Reportable Event, takecorrective action, and make the appropriate refunds, as required inSection III.H;

b. a repeated or flagrant violation of the obligations under this CIA,including, but not limited to, the obligations addressed in SectionX.A;

c. a failure to respond to a Demand Letter concerning the paymentof Stipulated Penaltes in accordance with Section X.C; or

d. a faI1ure to engage and use an IRO in accordance with SectionIII.D.

2. Notice of Material Breach and Intent to Exclude. The parties agree thata material breach of this CIA by InterDent constitutes an independent basis forInterDents exclusion from participation in the Federal health care programs. Upon adetermination by OIG that InterDent has materially breached this CIA and that exclusionis the appropriate remedy, OIG shall notify InterDent of: (a) InterDents material breach;


28

and (b) OIG's intent to exercise its contractual right to impose exclusion (this notificationis hereinafter referred to as the "Notice of Material Breach and Intent to Exclude").

3. Opportunity to Cure. InterDent shall have 30 days from the date of

receipt of the Notice of Material Breach and Intent to Exclude to demonstrate to OIG'ssatisfaction that:

a. InterDent is in compliance with the obligations of the CIA citedby OIG as being the basis for the material breach;

b. the alleged material breach has been cured; or

c. the alleged material breach cannot be cured within the 30-dayperiod, but that: (i) InterDent has begun to take action to cure thematerial breach; (ii) InterDent is pursuing such action with duediligence; and (iii) InterDent has provided to OIG a reasonabletimetable for curng the material breach.

4. Exclusion Letter. If, at the conclusion of the 30-day period, InterDentfails to satisfy the requirements of Section X.D.3, OIG may exclude InterDent fromparticipation in the Federal health care programs. OIG shall notify InterDent in writing ofits determnation to exclude InterDent (this letter shall be referred to hereinafter as the"Exclusion Letter"). Subject to the Dispute Resolution provisions in Section X.E, below,

the exclusion shall go into effect 30 days after the date of InterDent s receipt of theExclusion Letter. The exclusion shall have national effect and shall also apply to all otherFederal procurement and nonprocurement programs. Reinstatement to programparticipation is not automatic. After the end of the period of exclusion, InterDent mayapply for reinstatement by submitting a written request for reinstatement in accordancewith the provisions at 42 C.F.R. §§ 1001.3001-.3004.

E. Dispute Resolution

1. Review Rights. Upon OIG's delivery to InterDent of its Demand Letteror of its Exclusion Letter, and as an agreed-upon contractual remedy for the resolution ofdisputes arising under this CIA, InterDent shall be afforded certain review rightscomparable to the ones that are provided in 42 U.S.C. § 1320a-7(t) and 42 C.F.R. Part1005 as if they applied to the Stipulated Penalties or exclusion sought pursuant to this


29

CIA. Specifically, OIG's determnation to demand payment of Stipulated Penalties or toseek exclusion shall be subject to review by an HHS ALl and, in the event of an appeal,the HHS Departmental Appeals Board (DAB), in a manner consistent with the provisionsin 42 C.F.R. § 1005.2-1005.21. Notwithstanding the language in 42 C.F.R. § 1005.2(c),the request for a hearing involving Stipulated Penalties shall be made within 10 days afterreceipt of the Demand Letter and the request for a hearing involving exclusion shall bemade within 25 days after receipt of the Exclusion Letter.

2. Stipulated Penalties Review. Notwithstanding any provision of Title 42of the United States Code or Title 42 of the Code of Federal Regulations, the only issuesin a proceeding for Stipulated Penalties under this CIA shall be: (a) whether InterDentwas in full and timely compliance with the obligations of this CIA for which OIGdemands payment; and (b) the period of noncompliance. InterDent shall have the burdenof proving its full and timely compliance and the steps taken to cure the noncompliance,if any. OIG shall not have the right to appeal to the DAB an adverse ALl decision relatedto Stipulated Penalties. If the ALl agrees with OIG with regard to a finding ofa breachof this CIA and orders InterDent to pay Stipulated Penalties, such Stipulated Penaltiesshall become due and payable 20 days after the ALl issues such a decision unlessInterDent requests review of the ALl decision by the DAB. If the ALl decision isproperly appealed to the DAB and the DAB upholds the determination ofOIG, theStipulated Penalties shall become due and payable 20 days after the DAB issues itsdecision.

3. Exclusion Review. Notwithstanding any provision of Title 42 of theUnited States Code or Title 42 of the Code of Federal Regulations, the only issues in aproceeding for exclusion based on a material breach of this CIA shall be:

a. whether InterDent was in material breach of this CIA;

b. whether such breach was continuing on the date of the ExclusionLetter; and

c. whether the alleged material breach could not have been curedwithin the 30-day period, but that: (i) InterDent had begun to takeaction to cure the material breach within that period; (ii) InterDenthas pursued and is pursuing such action with due dilgence; and (iii)InterDent provided to OIG within that period a reasonable timetable


30

for curing the material breach and InterDent has followed thetimetable.

For puroses of the exclusion herein, exclusion shall take effect only afteran ALl decision favorable to OIG, or, if the ALl rules for InterDent, only after a DABdecision in favor ofOIG. InterDents election of its contractual right to appeal to theDAB shall not abrogate OIG's authority to exclude InterDent upon the issuance of anALl's decision in favor ofOIG. If the ALl sustains the determnation ofOIG anddetermnes that exclusion is authorized, such exclusion shall take effect 20 days after theALl issues such a decision, notwithstanding that InterDent may request review of the ALldecision by the DAB. If the DAB finds in favor ofOIG after an ALl decision adverse toOIG, the exclusion shall take effect 20 days after the DAB decision. InterDent shallwaive its right to any notice of such an exclusion if a decision upholding the exclusion isrendered by the ALlor DAB. If the DAB finds in favor of InterDent, InterDent shall bereinstated effective on the date of the original exclusion.

4. Finality of Decision. The review by an ALlor DAB provided for aboveshall not be considered to be an appeal right arising under any statutes or regulations.Consequently, the parties to this CIA agree that the DAB's decision (or the ALl'sdecision if not appealed) shall be considered final for all puroses under this CIA.

Xl. EFFECTIVE AND BINDING AGREEMENT

InterDent and OIG agree as follows:

A. This CIA shall be binding on the successors, assigns, and transferees ofInterDent;

B. This CIA shall become final and binding on the date the final signature isobtained on the CIA;

C. This CIA constitutes the complete agreement between the parties and may notbe amended except by written consent of the parties to this CIA;

D. OIG may agree to a suspension of InterDents obligations under the CIA in theevent of InterDents cessation of participation in Federal health care programs. IfInterDent withdraws from participation in Federal health care programs and is relieved of


31

its CIA obligations by OIG, InterDent shall notify OIG at least 30 days in advance ofInterDents intent to reapply as a participating provider or supplier with any Federalhealth care program. Upon receipt of such notification, OIG shall evaluate whether theCIA should be reactivated or modified.

E. The undersigned InterDent, Inc., InterDent Service Corporation, and DedicatedDental Systems Incorporated signatories represent and warrant that they are authorized toexecute this CIA. The undersigned OIG signatory represents that he is signing this CIAin his official capacity and that he is authorized to execute this CIA.

F. This CIA may be executed in counterparts, each of which constitutes anoriginal and all of which constitute one and the same CIA. Facsimiles of signatures shallconstitute acceptable, binding signatures for purposes of this CIA.


32

ON BEHALF OF INIERDENI, INC.

00A1 1' ßØ;AtkßfJ~ STEINBRUNPresident and Chief Executive OffcerInterDent Inc.

¡; /iß /aB(

DATE

ON BEHAF OF INIERDENI SERVICE CORPORA lION

!lø f ~ÆßrAlM.J(IHN STEINRUNPresident and Chief Executive OffceiIntelDent Seivice Coipoiation

51zaeDATE

ON BEHALF OF DEDICATED DENIAL SYSTEMS INCORPORAIED

SC~~President and Chief Executive OffceiDedicated Dental Systems Incorporated

s / 2. ,lOf:

DATE

ON BEHALF OF INIERDENT, INc., lNIERDENI SERVICE CORPORA lION, ANDEDICATED DENIAL SYSTEMS INÓ)RPORATED

Approved as to Foim and Content:

WILIA C. HAHESY DATECounel for the Defendants, InteiDent, Inc.,InterDent Seivice Corporation, and Dedicated Dental Systems Incorporated

InterDent, Inc., InterDent Service Corporation, and Dedicated Dental Systems IncorporatedCoiporat:: Integi it: Agreement

~~

33

.." II IJ,," ...." .;-~.; .." ".." 'I " .. .. .. .. ".. " " ., " .. .. ,. .." .. " .. .. .. .. ".. ,. .. "' ." .. .. .. ... .. .. .. ., .. ., II

~."..."..."...,. ... .. .. .. .. .... .. .. .. I' , .. ., ".. .. . .. .. , .. ... ., .. .. , 1-' " ".. " .. ., .. " .. ... .. .. .. i:i . " ".. .. " " I " .. ..

.r " .. .. , " " " ..

. '

ON BEHALF OF INTERDENT, INC.

JOHN STEINRUNPresident and Chief Executive OffcerInterDent Inc.

DATE

ON BEHALF OF INTERDENT SERVICE CORPORATION

JOHN STEINRUNPresident and Chief Executive OffcerInterDent Service Corporation

DATE

ON BEHALF OF DEDICATED DENTAL SYSTEMS INCORPORATED

SCOTT BREMANPresident and Chief Executive OffcerDedicated Dental Systems Incorporated

DATE

ON BEHALF OF INTERDENT, INC., INTERDENT SERVICE CORPORATION, ANDEDICATED DENTAL SYSTEMS INCORPORATED

Approved as to Form and Content:

~I u-; .ÙAtWILLIAM C. HAHE y r-ECounsel for the Defe dants, InterDent, Inc.,Intel'Dent Service Corporation, and Dedicated Dental Systems Incorporated

InterDcnt, Inc., InterDent Service Corporation, and Dedicated Dental Systems IncorporatedCorporate Integrity Agreement

33

ON BEHALF OF THE OFFICE OF INSPECTOR GENERALOF THE DEPARTMENT OF HEALTH AND HUMAN SERVICES

(" l lUffDATEGREGORY E. DEMSKE

Assistant Inspector General for Legal AffairsOffice of Inspector GeneralU. S. Department of Health and Human Services


34

APPENDIX A

INDEPENDENT REVIEW ORGANIZATION

This Appendix contains the requirements relating to the Independent ReviewOrganization (IRO) required by Section III.D of the CIA.

A. IRO Engagement.

InterDent shall engage an IRO that possesses the qualifications set forth inParagraph B, below, to perform the responsibilities in Paragraph C, below. The IROshall conduct the review in a professionally independent and objective fashion, as setforth in Paragraph D. Within 30 days after OIG receives written notice of the identity ofthe selected IRO, OIG will notify InterDent if the IRO is unacceptable. Absentnotification from OIG that the IRO is unacceptable, InterDent may continue to engage theIRO.

If InterDent engages a new IRO during the term of the CIA, this IRO shall alsomeet the requirements of this Appendix. If a new IRO is engaged, InterDent shall submitthe information identified in Section V.A.8 of the CIA to OIG within 30 days ofengagement of the IRO. Within 30 days after OIG receives written notice of the identity

of the selected IRO, OIG wil notify InterDent if the IRO is unacceptable. Absentnotification from OIG that the IRO is unacceptable, InterDent may continue to engage theIRO.

B. IRO Qualifications.

The IRO shall:

1. assign individuals to conduct the Claims Review and Unallowable Cost Reviewengagement who have expertise in the biling, coding, reporting, and other requirementsof dental and orthodontic claims and in the general requirements of the State and Federalhealth care program(s) from which InterDent seeks reimbursement;

2. assign individuals to design and select the Claims Review sample who areknowledgeable about the appropriate statistical sampling techniques;

3. assign individuals to conduct the coding review portions of the Claims Reviewwho have a nationally recognized coding certification~, CCA, CCS, CCS-P, CPC,RR, etc.) and who have maintained this certification~, completed applicablecontinuing education requirements); and

4. have sufficient staff and resources to conduct the reviews required by the CIAon a timely basis.

C. IRO Responsibilities.

The IRO shall:

1. perform each Claim Review in accordance with the specific requirements of theCIA;

2. follow all applicable Medicare, Medicaid, Denti-Cal, and Medi-Cal rules andreimbursement guidelines in making assessments in the Claims Review;

3. if in doubt of the application of a particular Medicare, Medicaid, Denti-Ca1, orMedi-Cal policy or regulation, request clarification from the appropriate authority (~,

fiscal intermediary or carrier);

4. respond to all OIG inquires in a prompt, objective, and factual manner; and

5. prepare timely, clear, well-written reports that include all the informationrequired by Appendix B to the CIA.

D. IRO Independence and Objectivity.

The IRO must perform the Claims Review in a professionally independent and objectivefashion, as appropriate to the nature of the engagement, taking into account any otherbusiness relationships or engagements that may exist between the IRO and InterDent.

E. IRO Removal/Termination.

1. Provider. If InterDent terminates its IRO during the course of the engagement,InterDent must submit a notice explaining its reasons to OIG no later than 30 days aftertermination. InterDent must engage a new IRO in accordance with Paragraph A of thisAppendix.

2. OIG Removal of IRO. In the event OIG has reason to believe that the IRO doesnot possess the qualifications described in Paragraph B, is not independent and/orobjective as set forth in Paragraph D, or has failed to carr out its responsibilities asdescribed in Paragraph C, OIG may, at its sole discretion, require InterDent to engage anew IRO in accordance with Paragraph A of this Appendix.

2

Appendix A to Corporate Integrity AgreementInterdent, Inc., Interdent Service Corporation, and Dedicated Dental Systems Incorporated

Prior to requiring InterDent to engage a new IRO, OIG shall notify InterDent of itsintent to do so and provide a written explanation of why OIG believes such a step isnecessary. To resolve any concerns raised by OIG, InterDent may request a meeting withOIG to discuss any aspect of the IRO's qualifications, independence or performance of itsresponsibilities and to present additional information regarding these matters. InterDentshall provide any additional information as may be requested by OIG under thisParagraph in an expedited manner. OIG will attempt in good faith to resolve anydifferences regarding the IRO with InterDent prior to requiring InterDent to terminate theIRO. However, the final determination as to whether or not to require InterDent toengage a new IRO shall be made at the sole discretion of OIG.

3

Appendix A to Corporate Integrity AgreementInterdent, Inc., Interdent Service Corporation, and Dedicated Dental Systems Incorporated

APPENDIX BCLAIMS REVIEW

A. Claims Review.

1. Definitions. For the purposes of the Claims Review, the following definitionsshall be used:

a. Overoavment: The amount of money InterDent has received in excess ofthe amount due and payable under any State or Federal health care programrequirements.

b. Item: Any discrete unit that can be sampled ~, code, line item,

beneficiary, patient encounter, etc.).

c. Paid Claim: A code or line item submitted by InterDent and for whichInterDent has received reimbursement from any State or Federal health careprogram, including but not limited to Medicare, Medicaid, Denti-Cal, andMedi-CaL.

d. Population: For the first Reporting Period, the Population shall be definedas all Items for which a code or line item has been submitted by or on behalf ofInterDent and for which InterDent has received reimbursement from any Stateor Federal health care program, including but not limited to Medicare,Medicaid, Denti-Cal, and Medi-Ca1 (i.e., Paid Claim) during the 12-monthperiod covered by the first Claims Review.

For the remaining Reporting Periods, the Population shall be defined as allItems for which InterDent has received reimbursement from any State orFederal health care program, including but not limited to Medicare, Medicaid,Denti-Ca1, and Medi-Cal (i.e., Paid Claim) during the 12-month period coveredby the Claims Review.

To be included in the Population, an Item must have resulted in at least onePaid Claim.

e. Error Rate: The Error Rate shall be the percentage of net Overpaymentsidentified in the sample. The net Overpayments shall be calculated bysubtracting all underpayments identified in the sample from all grossOverpayments identified in the sample. (Note: Any potential cost settlementsor other supplemental payments should not be included in the net Overpayment

Appendix B to Corporate Integrity AgreementInterdent, Inc., Interdent Service Corporation, and Dedicated Dental Systems Incorporated

calculation. Rather, only underpayments identified as part of the DiscoverySample shall be included as part of the net Overpayment calculation.)

The Error Rate is calculated by dividing the net Overpayment identified in thesample by the total dollar amount associated with the Items in the sample.

2. Discovery Sample. Within 15 days after the end of the reporting period,InterDent wil provide OIG with a list of all of its dental and orthodontic facilities,including the volume and type of services provided at each facility as well as any Federalhealth care reimbursement for each facility. OIG shall select three facilities located in theState of California from the list. The IRO wil review a sample of 50 Paid Claimssubmitted by or on behalf oflnterDent at each ofthe three facilities selected by OIG(Discovery Sample). The Paid Claims shall be reviewed based on the supportingdocumentation available at InterDents offce or under InterDents control and applicablebiling and coding regulations and guidance to determine whether the claim was correctly

coded, submitted, and reimbursed.

If the Error Rate (as defined above) for all three Discovery Samples is less than5%, no additional sampling is required, nor is the Systems Review required. (Note: Theguidelines listed above do not imply that this is an acceptable error rate. Accordingly,InterDent should, as appropriate, further analyze any errors identified in the DiscoverySamples. InterDent recognizes that OIG or other HHS component, in its discretion andas authorized by statute, regulation, or other appropriate authority, may also analyze orreview Paid Claims included, or errors identified, in the Discovery Samples or any othersegment of the universe.)

3. Full Sample. If any of the three Discovery Samples indicate that the Error Rateis 5% or greater, the IRO shall select an additional sample of Paid Claims only from thefacility or facilities with an Error Rate which is 5% or greater (Full Sample) usingcommonly accepted sampling methods. The Full Sample(s) shall be designed to: (1)estimate the actual Overpayment in the population with a 90% confidence level and witha maximum relative precision of 25% of the point estimate; and (2) conform with theCenters for Medicare and Medicaid Services' statistical sampling for overpaymentestimation guidelines. The Paid Claims selected for the Full Samp1e(s) shall be reviewedbased on supporting documentation available at InterDent or under InterDents controland applicable biling and coding regulations and guidance to determine whether the

claim was correctly coded, submitted, and reimbursed. For purposes of calculating thesize of the Full Sample(s), the Discovery Sample(s) may serve as the probe sample, ifstatistically appropriate. Additionally, InterDent may use the Items sampled as part ofeach of the three Discovery Samples, and the corresponding findings for those Items, aspart of its Full Sample( s), if: (1) statistically appropriate and (2) InterDent selects theFull Sample Items using the seed number generated by the Discovery Samp1e(s). OIG, in

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its sole discretion, may refer the findings of the Full Sample(s) (and any relatedworkpapers) received from InterDent to the appropriate State or Federal health careprogram payor, including the Medicare contractor~, carrier, fiscal intermediary, orDMERC), for appropriate follow-up by that payor.

4. Systems Review. If any oflnterDents Discovery Samples identifies an ErrorRate of 5% or greater, InterDents IRO shall also conduct a Systems Review.Specifically, for each claim in the Discovery Sample(s) and Full Sample(s) that resultedin an Overpayment, the IRO shall perform a "walk through" of the system(s) andprocess( es), that generated the claim to identify any problems or weaknesses that mayhave resulted in the identified Overpayments. The IRO shall provide its observations andrecommendations on suggested improvements to the system( s) and the process( es) thatgenerated the claim.

5. Other Requirements.

a. Paid Claims without Supporting Documentation. For the purpose ofappraising Items included in the Claims Review, any Paid Claim for whichInterDent cannot produce documentation sufficient to support the PaidClaim shall be considered an error and the total reimbursement received byInterDent for such Paid Claim shall be deemed an Overpayment.Replacement sampling for Paid Claims with missing documentation is notpermitted.

b. Replacement Sampling. Considering the Population shall consist onlyof Paid Claims and that Items with missing documentation cannot bereplaced, there is no need to utilize alternate or replacement sampling units.

c. Use of First Samples Drawn. For the purposes of all samples (DiscoverySample(s) and Full Samp1e(s)) discussed in this Appendix, the Paid Claimsassociated with the Items selected in each first sample (or first sample foreach strata, if applicable) shall be used (i.e., it is not permissible to generatemore than one list of random samples and then select one for use with theDiscovery Sample or Full Sample).

B. Claims Review Report. The following information shall be included in theClaims Review Report for each Discovery Sample and Full Sample (if applicable).

1. Claims Review Methodology.

a. Sampling Unit. A description of the Item as that term is utilized for theClaims Review.

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b. Claims Review Population. A description of the Population subject tothe Claims Review.

c. Claims Review Obiective. A clear statement ofthe objective intended tobe achieved by the Claims Review.

d. Sampling Frame. A description of the sampling frame, which is thetotality ofItems from which the Discovery Sample and, if any, Full Samplehas been selected and an explanation ofthe methodology used to identifythe sampling frame. In most circumstances, the sampling frame wil beidentical to the Population.

e. Source of Data. A description of the specific documentation relied uponby the IRO when performing the Claims Review ~, medical records,

physician orders, certificates of medical necessity, requisition forms, localmedical review policies (including title and policy number), CMS programmemoranda (including title and issuance number), Medicare carrier orintermediary manual or bulletins (including issue and date), other policies,regulations, or directives).

f. Review Protocol. A narrative description of how the Claims Reviewwas conducted and what was evaluated.

2. Statistical Sampling Documentation.

a. The number of Items appraised in each Discovery Sample and, ifapplicable, in the Full Samp1e(s).

b. A copy of the printout of the random numbers generated by the"Random Numbers" function of the statistical sampling software used bythe IRO.

c. A copy of the statistical software printout(s) estimating how many Itemsare to be included in each Full Sample, if applicable.

d. A description or identification of the statistical sampling softwarepackage used to select the sample and determine the Full Sample size, ifapplicable.

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3. Claims Review Findings.

a. Narrative Results.

i. A description ofInterDents biling and coding system(s),

including the identification, by position description, of the personnelinvolved in coding and biling.

ii. A narrative explanation of the IRO's findings and supportingrationale (including reasons for errors, patterns noted, etc.) regardingthe Claims Review, including the results of each Discovery Sample,and the results of each Full Sample (if any).

b. Ouantitative Results.

i. Total number and percentage of instances in which the IROdetermined that the Paid Claims submitted by InterDent (ClaimSubmitted) differed from what should have been the correct claim(Correct Claim), regardless of the effect on the payment.

ii. Total number and percentage of instances in which the ClaimSubmitted differed from the Correct Claim and in which suchdifference resulted in an Overpayment to InterDent.

iii. Total dollar amount of all Overpayments in each sample.

iv. Total dollar amount of paid Items included in each sample and thenet Overpayment associated with each sample.

v. Error Rate in each sample.

vi. Spreadsheets of the Claims Review results for each sample thatincludes the following information for each Paid Claim appraised:State or Federal health care program biled, beneficiary healthinsurance claim number, date of service, procedure code submitted,procedure code reimbursed, allowed amount reimbursed by payor,correct procedure code (as determined by the IRO), correct allowedamount (as determined by the IRO), dollar difference between allowedamount reimbursed by payor and the correct allowed amount. (SeeAttachment 1 to this Appendix.)

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4. Systems Review. Observations, findings, and recommendations on possibleimprovements to the system(s) and process(es) that generated the Overpayment(s).

5. Credentials. The names and credentials ofthe individuals who: (1) designedthe statistical sampling procedures and the review methodology utilized for the ClaimsReview; and (2) performed the Claims Review.

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APPENDIX C

OVERPAYMENT REFUND

TO BE COMPLETED BY MEDICARE CONTRACTORDate:Contractor Deposit Control #Contractor Contact Name:Contractor Address:Contractor Fax:

Date of Deposit:Phone #

TO BE COMPLETED BY PROVIDER/PHYSICIAN/SUPPLIERPlease complete and forward to Medicare Contractor. This form, or a similar document containing theIfollowinï if ormation, should accompany every voluntary refund so that receipt of check is properly recordedand~& ie .PRO ERIPHYSICIAN/SUPPLIERNAMEADDRESSPROVIDER/PHYSICIAN/SUPPLIER # CHECK N UMBER#CONTACT PERSON: PHONE # AMOUNT OF CHECK$ CHECK DATE

REFUND INFORMATION

For each Claim. provide the followin2::Patient Name HIC#Medicare Claim Number Claim Amount Refunded $Reason Code for Claim AdJustment:_ (Select reason code from list below. Use one reason per claim)

(Please list all claim numbers involved. Attach separate sheet, ifnecessary)

Note: If Specifc Patient/HIC/Claim #/Claim Amount data not available for all claims due to StatisticalSampling, please indicate methodology and formula used to determine amount and reason foroverpayment:

For Institutional Facilties Only:Cost Report Y ear( s)(Ifmultiple cost report years are mvolved, provide a breakdown by amount and corresponding cost report year.)For OIG Reportin2: Reauirements:Do vou have a Comorate Integritv Agreement with OIG? Yes NoReason Codes:Billing/Clerical Error MSP/Other Paver Involvement Miscellaneous01 - Corrected Date of Service 08 - MSP Group Health Plan Insurance 13 - Insuffcient Documentation02 - Duplicate 09 - MSP No Fault Insurance 14 - Patient Enrolled in an HMO03 - Corrected CPT Code 10 - MSP Liability Insurance 15 - Services Not Rendered04 - Not Our Patient(~ 11 - MSP, Workers Comp.(Inciuding 16 - Medical Necessity05 - Modifier Added! emoved Black LunÆ 17 - Other (Please Specify)06 - Biled in Error 12 - Veterans A ministration07 - Corrected CPT Code

Appendix C to Corporate Integrity AgreementInterdent, Inc., Interdent Service Corporation, and Dedicated Dental Systems Incorporated

i. preambleany additional materials submitted by interdent pursuant to oig's request, whichever...

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