Agreement Requires Aspen Dental Management To Pay $450,000 In Civil Penalties After AG Investigation Found The Dental Management Company Was Engaged In The Unauthorized Practice of Dentistry and Dental Hygiene

Agreement Stops Illegal Fee Splitting between Aspen Dental and Dental Practices; Requires Aspen Dental Management To Be Clear It Is Not A Provider Of Dental Care

Attorney General Eric T. Schneiderman recently announced a settlement with Aspen Dental Management, Inc., an East Syracuse-based company that provides business support and administrative services to seven independently owned dental practices that maintain 40 offices in New York State. The settlement requires Aspen Dental Management, a company with a reported $645 million in annual revenue, which operates nationwide, to overhaul the way it does business in New York, so that it does not dictate the care provided by dentists and hygienists at dental practices, does not split patients’ fees with the clinics, which is illegal in New York, and makes clear to consumers that Aspen Dental Management is not a provider of dental services.

“Medical and dental decisions should be made by licensed providers using their best clinical judgment, and should not be influenced by management companies’ shared interest in potential profits,” said Attorney General Schneiderman. “By enforcing New York’s laws banning the corporate practice of medicine and fee-splitting between medical practitioners and non-licensed individuals and entities, today’s agreement ensures that New Yorkers receive quality dental care.”

The affected dental practices are Aspen Dental Associates of Central New York, Aspen Dental of Rochester, Dental Services of Western New York, Dental Services of Dunkirk, Aspen Dental Associates of Hudson Valley, Dental Health Services, and Judge Dental.

After receiving over 300 complaints since 2005 concerning consumers’ experiences at Aspen Dental offices across New York State, the Attorney General’s Health Care Bureau launched an investigation into the company. Consumers lodged complaints against what they thought were particular office locations of the Aspen Dental chain regarding quality of care, billing practices, misleading advertising, upselling of medical services and products the consumers felt were unnecessary, and unclear or incomplete terms for the financing of dental care.

The investigation revealed that Aspen Dental did not merely provide arms-length, back-end business and administrative support to independent dental practices. Rather, Aspen Dental Management has developed what amounts to a chain of dental practices technically owned by individual dentists but which, in violation of New York law, were subject to extensive control by Aspen Dental Management. That control included sharing individual clinic profits with the management company and the marketing by the management company under the shared Aspen Dental trade name. Through an array of business practices, Aspen Dental Management routinely makes business decisions for the clinics that directly impacted patient care. Those practices included incentivizing and otherwise pressuring staff to increase sales of dental services and products, implementing revenue-oriented patient scheduling systems, and hiring and oversight of clinical staff, including associate dentists and dental hygienists.

The Attorney General’s investigation showed that Aspen Dental Management dictated the dental practices’ care of patients, by, for example, sending “Hygiene Service Announcements” to dental hygienists, which directed the hygienists to sell more products and services to patients, and training office managers (non-licensed/non-clinical individuals responsible for managing an office’s overall operations) on how to talk to patients about their treatment plans and assist them in making decisions about treatment alternatives.

The investigation showed that Aspen Dental Management exercised undue control over the clinic’s finances by controlling substantially all of the dental practices’ bank accounts through a single consolidated account to which the clinic owners themselves did not have access. Aspen Dental Management took a pre-set percentage of each dental office’s monthly gross profit, an arrangement prohibited under New York law, and which created a financial incentive for Aspen Dental Management to pressure staff in the dental offices to generate revenue. Aspen Dental Management also subjected the dental practices to non-competition and non-solicitation agreements that effectively prevent the practices from competing with any other dental practice affiliated with Aspen Dental Management, regardless of location.

Under the agreement, Aspen Dental Management will cease to exercise any control over dental practices’ clinical decision-making and will not communicate directly with practices’ clinical staff concerning the provision of dental care, sales of services or products to patients, or the amount of revenue generated by services or products. The company will not be the employer of the practices’ clinical staff, and will not place limitations on dental practice owners’ practice of dentistry.

Aspen Dental Management has agreed not to share in the dental practices’ fees for professional services rendered, to keep the practices’ finances separate from its own, and to allow the practices to have full and complete control over their revenues, profits, incomes, disbursements, bank accounts, and other financial matters and decisions.

Aspen Dental Management will also reform its marketing practices, making clear to consumers on its website and elsewhere that Aspen Dental Management provides only administrative and business support services to dental practices that are independently owned and operated by licensed dentists. Aspen Dental Management will also take steps to ensure that the dental practices to which it provides services post their own legal name so it is easily visible by patients who enter those practices.

The agreement requires Aspen Dental Management to pay a $450,000 civil penalty, and to pay an independent monitor that will oversee the implementation of the settlement over a three-year period.

Consumers with questions or concerns about this settlement or other health care matters may call the Attorney General’s Health Care Bureau Helpline at 1-800-428-9071.

The investigation and resolution of this matter was handled by Assistant Attorneys General Elizabeth Chesler and Michael Reisman, both of the Attorney General’s Health Care Bureau, which is led by Bureau Chief Lisa Landau. The Health Care Bureau is a part of the Social Justice Division, led by Executive Deputy Attorney General for Social Justice Alvin Bragg.

A copy of the settlement can be read here.