Dental practice management by private equity firms is being legally challenged in U.S. court.
Last week, a class action complaint was filed in New York against Aspen Dental Management and private equity firm Leonard Green and Partners LP for allegedly illegally operating dental clinics in 22 U.S. states that engage in aggressive, misleading, profit-driven practices that cause patients economic harm, reports ABC News.
The lawsuit further contends that Aspen Dental Management violates laws that require clinics to be owned by dentists performing dental treatments at the clinics.
Attorneys for 11 people in 11 states filed the lawsuit in U.S. District Court in Albany, but are looking to receive class action status so that they can include thousands more patients in the lawsuit. The lawyers allege that Aspen Dental Management dental practices placed a premium on securing expensive dental treatments from dental patients by using aggressive sales techniques which ultimately resulted in “unlawful fee-splitting with non-dentists.”
Court documents assert that Aspen Dental Management’s corporate structure and business model engages in the unlawful corporate practice of medicine, and in doing so, induces consumers into purchasing dental services and products.
They further claim that many of the dental practices involved are “owned” by sham owner-dentists who do not engage in the practice of dentistry through the professional corporations they formed. The attorneys in the case state that this type of dental practice management violates New York’s law against “unlawful corporate practice of medicine” as outlined by the ABC News report.
In 2011, Aspen Dental Management dental practices recorded more than 2.2 million patient visits, including visits from more that 490,000 new patients. Court documents reveal that their business model only “allows dentists to focus on providing great clinical care to their patients, with the support of a team of experts who offer back-end business and administrative support,” including “training and professional development, benefits administration, dental marketing and advertising, insurance processing, procurement, facilities and equipment.”
According to Robert Fontana, president and CEO of Aspen Dental Management, “the business services ADMI offers dentists enables them to focus on patient care and relieve them from the everyday business requirements of the practice.”
Fontana points out in the complaint that, “In communities with an aging population, access to dental care can be a true challenge. Because Aspen-served practices are conveniently located, work with most private dental insurance plans, are open all weekdays and select evenings and Saturdays, and charge affordable fees, they are an attractive option for patients.”
Fontana insists that dentists own and control all of the ADMI practices nationwide.
Dentists, what are your thoughts on large dental practice management companies?
For more on this story see: Lawsuit: Aspen Dental Clinics Operating Illegally
To review the formal complaint, click here.