The Texas Coalition of Dental Support Organizations (TCDSO), which includes several large dental service organizations (DSOs), says legislative discussions about increased oversight of their businesses could produce regulations that are unnecessary and anticompetitive.
The TCDSO criticized the comments of Richard Black, DDS, an El Paso orthodontist who testified October 15 before the Texas House Public Health Committee in October on behalf of the Texas Dental Association (TDA). Noting that the hearing was called to discuss fraud within the state Medicaid dental program and solutions to strengthen the program, the TCDSO called Dr. Black's "TDA-sanctioned" testimony "a significant departure" from the focus of the hearing.
In a letter sent to the TDA on November 21 and signed by more than 60 dentists, the group called Dr. Black's testimony "troubling" and said it included "unsubstantiated statements" regarding DSOs, which have operated in Texas for 30 years. The TCDSO called proposals for additional regulations a "thinly veiled deflection from the real issues confronting the Legislature: ensuring future Medicaid fraud does not happen."
The letter also noted that "although the hundreds of dentists who contract for administrative support services from TCDSO members perform little or no Medicaid dental care, we strongly oppose the fraud that was perpetrated by bad actors on Texas Medicaid and believe it is essential that action be taken to safeguard the program and the communities it serves."
The group asserted that "targeting dental service organizations is not warranted because the Texas State Board of Dental Examiners already has extensive existing authority to assure that dentists' clinical judgment is not influenced by unlicensed third parties."
In an email to DrBicuspid.com, the TDA stated, "As the oral health leaders in the state, the Texas Dental Association continues to represent our members and their patients on issues surrounding ethics, education, and patient safety. We are committed to protecting the health of patients throughout Texas."
DSOs enable dentists to devote more time with patients and less time on administrative duties, while allowing such practices to benefit from economies of scale, the TCDSO stated in a press release. Legislative proposals being discussed in committee at the state level would "negatively impact business and oral healthcare in Texas."
Growing DSO presence
Currently, there are 24 large dental practice management companies in the U.S., with annual revenues of more than $100 million. Some of the private equity firms that own DSOs have benefited from the increase in Medicaid payments for dental care, which rose 63% to $7.3 billion between 2007 and 2010, according to the U.S. Center for Medicare and Medicaid Services.
TCDSO membership comprises several large DSOs, including Affordable Care, Aspen Dental, DentalOne Partners, Dental Group Practice Association, Great Expressions, Heartland Dental Care, Pacific Dental Services, and Smile Brands. At present there are 243 TCDSO-supported dental offices in Texas with nearly 3,000 employees, dentists, and dental professionals, according to the group.
Controversy over DSOs has been brewing in several states, with concerns that DSOs perform unnecessary and higher-cost procedures to inflate Medicaid billing. Critics also say some DSOs are illegal because they violate state Dental Practice Acts, which say only licensed dentists can own or operate dental offices and clinics.
In June of this year, North Carolina passed a law adding more regulatory oversight to contracts between DSOs. The legislation followed complaints by North Carolina Dental Society officials who said DSO company policies often included overtreatment and quotas that pressured dentists to meet certain production goals and upsell.
Several DSOs have been the subject of investigations by Sen. Charles Grassley (R-IA) and officials in many states, including Texas, Connecticut, Georgia, and Massachusetts -- in each case for allegedly performing unnecessary procedures and pressuring dentists to perform higher-cost treatments such as stainless steel crowns and pulpotomies.
In October, a federal lawsuit was filed in New York against Aspen Dental Management and the private equity firm that controls it. The suit claims that Aspen Dental illegally operates dental clinics across the U.S. because it violates laws that require clinics to be owned and operated by dentists. It was filed on behalf of 11 patients in 11 states, but the petitioning lawyers are seeking class-action status that could cover tens of thousands of current and former patients.
In an email to DrBicuspid.com, Aspen Dental said the suit was "entirely without merit" and the company is committed to do "what’s right for their patients."
"ADMI is proud that the business support services that it provides allow dentists to spend more time focusing on patient care, rather than accounting, IT, and the other administrative responsibilities associated with running a dental practice," the statement said.
In 2010, Aspen Dental paid a $175,000 settlement following an investigation by Pennsylvania state investigators over misleading information about discounts, coupons, and interest-free financing.
That same year, Forba Holdings, the dental management company that then operated dozens of Small Smiles clinics in the U.S., agreed to a $24 million settlement after a federal investigation found that many of its dentists were performing unnecessary procedures on children to profit from Medicaid.