TAG - The Aspen Dental Group's dental service organization (DSO) Aspen Dental Management has agreed to pay $2 million in penalties plus restitution to settle claims of engaging in false, misleading advertising and corporate dentistry.
Additionally, Aspen Dental has agreed to pay $300,000 in restitution to specific patients. The settlement still requires court approval, according to a press release dated May 7 from the State of California’s Office of the Attorney General.
As a DSO, Aspen Dental states that it provides business management and administrative services to dental offices. The state claims that Aspen Dental exceeded that role by interfering and unlawfully directing the practice, ownership, and management of dentistry within the state.
In 1998, Aspen Dental was founded and has expanded to more than 1,000 offices across the U.S. In 2019, it entered California, opening two dozen offices and serving thousands of patients. During this expansion, the state claims Aspen Dental selected, bought, staffed, and advertised its offices without clearly identifying independent dentist-owners. For example, the DSO reportedly designed and furnished each office and chose and purchased the dental equipment, according to the press release.
Furthermore, Aspen Dental allegedly incentivized employees to sell specific products and services. For instance, the company purportedly created a clear aligner incentive program in which dental hygienists received $50 for every new patient who bought aligners and $100 for every existing patient. These occurrences violate California’s ban on the practice of corporate dentistry, as well as the state’s Unfair Competition Law, according to the press release.
Also, the state accused Aspen Dental of creating advertisements that contained false or misleading information, including deceptive testimonials and cost claims and inexact pricing language. For example, Aspen Dental reportedly advertised that it accepted all types of insurance and no insurance, but it did not accept state- or U.S.-funded insurance programs. Additionally, other advertisements reportedly promoted low costs for specific products or procedures without including factors that could affect the final price, according to the press release.
In attention to paying penalties and restitution, the DSO has agreed to several other terms, including:
- Not replacing any practice owner with another dentist of its choice
- Not owning the property of any practice
- Not basing fees on revenues, sales, and profits
- Not suggesting, directing, or encouraging any licensed clinician, other than a practice owner, to sell or increase revenue for any service or product
- Not compensating any of its employees based on practice sales or revenue
- Not paying employees incentives based on practice sales, revenue, or profit, including the sale of a specific service or product
- Providing a written fee schedule for products and laboratory services
- Registering as a dental group advertising and referral service with the state dental board
- Clearly and conspicuously identifying the practice owners’ names when creating, publishing, or disseminating advertisements
“As Americans face an affordability crisis, there is no room for unlawful business practices that can increase healthcare costs or harm consumers,” Attorney General Rob Bonta said in the press release. “We allege that Aspen Dental went beyond providing business support services and became involved in managing dental operations, while also using advertising that misrepresented services to consumers.”
In 2023, Aspen Dental settled a similar case in Massachusetts. The DSO agreed to pay $3.5 million to Massachusetts to resolve claims that it cheated thousands of consumers in the state through bait-and-switch advertising.
