Private Equity Dental Management Companies Come Under Fire

Private Equity Dental Management Companies Come Under FirePrivate Equity dental management companies are at the center of a U.S. Senate inquiry, audits, investigations and civil actions in six states over allegations of unnecessary procedures, low-quality treatment and the unlicensed practice of dentistry, according to a report released by Bloomberg News.

Federal lawmakers and state regulators are trying to determine whether a popular dental practice model funded by Wall Street is having a destructive influence on dentistry in the U.S.

The private equity dental companies only account for about 12,000, or 8%, of U.S. dental practices, according to Thomas A. Climo, a Las Vegas dental consultant.

In 2010, The Wealthy Dentist reported that All Smiles Dental Center Inc., a management company owned by Chicago-based Valor Equity Partners, filed for bankruptcy protection after a Texas Medicaid action cut off reimbursement payments because of their exorbitant amounts of orthodontic care at the expense of Texas taxpayers.

All Smiles was part of a state audit that discovered 90% of the Medicaid claims for orthodontic braces weren’t medically needed.

After years of criticism that the poor were being deprived of dental care under Medicaid, class-action lawsuits and public pressure forced Medicaid to change their health care reimbursements. As reported by The Wealthy Dentist in our story, Taxpayers Footing the Bill for Braces in Texas, some Texas’ dental practices went on to bill Medicaid $184 million for Medicaid orthodontics — more than the rest of the United States combined.

M. Alec Parker, executive director of the North Carolina Dental Society told Bloomberg News that the private equity industry stepped up its investments in dental management over the last 5 years partly because health care was one of the few areas that grew through the recession.

According to the Bloomberg report, Christine Ellis, a Dallas orthodontist, who testified before Congress in April of this year reported that the “flagrancy of the fraud” she found in audits she performed for Texas Medicaid “is truly unbelievable,” with only 10% of the paid claims she reviewed actually qualifying for Medicaid coverage.

Ellis told the U.S. House Committee on Oversight and Government Reform that Texas “has gained a lot of fraudulent orthodontic providers, including many private equity owned dental clinics engaged in the illegal practice of dentistry.”

Medicaid's Dental Boom - Bloomberg News

This May North Carolina is considering legislation that would subject agreements between dentists and the companies to state approval over concerns brought about by the the practices of private equity dental practices.

The Wealthy Dentist twice reported on the North Carolina Senate Bill 655 that would require the North Carolina Board of Dental Examiners to examine all business contracts entered into by dental practices in their state.

Our first article, Dentists Beware: The Government May Want To Tell You How To Manage Your Practice detailed information concerning inclusive authority over how dentists manage their business.

The second The Wealthy Dentist article, Dental Practice Management: North Carolina Senate Bill Wants Dentists To Do It Themselves discussed dentist responses to the impact this bill could have on their dental practices.

The measure has already passed the state Senate and has moved on to the House, where leaders have appointed a special interim committee to study the bill and its potential repercussions to dentists.

Reports have surfaced that the legislative proposal likely to be heard this month. The basics of the bill is intended to restrict contracts dentists can build with dental service organizations and give the Dental Board control of how dentists in North Carolina run their practices.

The North Carolina Dental Society supports the bill, stating that dental management companies often bill dental patients for unneeded care and opponents insist that passage of the bill will only drive up dental care costs.

What are your thoughts on private equity dental management practices?

For more on this story see: Dental Abuse Seen Driven by Private Equity Investments

Best Braces Dentist: A Family Dentist or an Orthodontist?

Should GPs do ortho? 74% of general dentists think so, but only 4% of orthodontists agreeIs the best braces dentist a GP or a specialist? It all depends on who you ask.

Three out of four general dentists think it’s appropriate for GPs to do orthodontics, but a mere 4% of orthodontists surveyed agree. In fact, 41% of orthodontists say they’re the ones who should be doing virtually all ortho work.

“The training is often minimal and results often are not retained,” said one dentist. “I just think it is better to leave the specialties to the specialists.”Should general dentists do ortho?

Here are some dentist comments on general dentists and orthodontics.

  • “Case selection is critical and should be based upon the knowledge and skill of the GP.” (Florida dentist)
  • “Some orthodontists resent GPs doing their own ortho. Why is that? I have never met a single oral surgeon, endodontist, or prosthodontist that had a problem with my practice desires. It could be a matter of greed or pride. You make the call.” (Georgia dentist)
  • “Those who are doing it hopefully have a good lawyer on their side.” (Kentucky dental implant dentist)
  • Invisalign is becoming the latest malpractice issue. Too many GPs are doing it and getting into trouble!” (Florida dentist)
  • “General dentists don’t have the proper knowledge to perform orthodontics. ‘Little knowledge is dangerous.'” (New York dentist)
  • “Would you send your wife to a family physician for her brain surgery?” (Orthodontist)
  • “As long as they stay within their level of training and they refer when appropriate.” (Texas pediatric dentist)
  • “The quality of GP ortho is directly related to the quality and quantity of the dental CE. Most GP ortho CE courses are cursory and superficial. Only one or two are a true continuum that mimics an ortho residency.” (Alaska dentist)
  • “Diagnosis is the most difficult part. Once you have the background, the rest is easy.” (New York dentist)
  • “With proper training, any GP should be able to perform any procedure, whether it is endo, ortho, dental implants, etc.” (Prosthodontist)
  • “Every orthodontist is being asked to help or bail out GP cases as they often underestimate the complexity of cases and or are tackling more complex cases than they should due to economic pressures.” (California orthodontist)
  • “GPs see relapse on a regular basis after ‘specialist’ treatment.” (Maryland dentist)
  • “No different than a GP doing endodontics, prosthodontics, pedodontics, oral surgery or perio.” (Florida pediatric dentist)
  • “Bad ortho can ruin a patient’s dentition.” (Georgia periodontist)
  • “It’s not rocket science.” (Australia dentist)

Read more about dental braces: General Dentists Do Orthodontics, But Orthodontists Aren’t Sure They Should

The Average Cost of Braces: Orthodontists Charge More (video)

braces cost more from orthodontists videoThe Wealthy Dentist conducted a survey that asked dentists what they charge for braces, and how much dental braces cost on average. This survey found that general dentists charge an average of $5,040 for orthodontic work, while orthodontists charge about $5,600 dollars.

The cost of braces tends to be higher that what patients want to pay and lower than what dentists want to receive.

A Washington orthodontist wrote, “Over the past thirty years, the cost of braces has kept pace with cost of living increases. Thankfully, technology has allowed greater efficiency and consequently, reasonable profitability for the orthodontist and a good price for the consumer.”

Click on play to watch the video –

  • Do different orthodontic treatments cost different amounts?

Yes, but less than you might think. Adult braces and Invisalign costs were about equal in this survey. Teen braces (on average) cost a few hundred dollars more.

  • Are prices the same across the US?

You will find the most affordable braces in the American west. Dental braces cost the most in the Northeast, the Pacific and Canada. The reason is simply regional price differences.

For more on this survey see: Braces Cost More from an Orthodontist

Orthodontic Braces: Taxpayers Spent $424 Million for Children in Texas

Orthodontic Braces: Taxpayers Spent $424 Million for Children in TexasIn June of this year, The Wealthy Dentist published a story about Taxpayers footing the bill for orthodontic braces in Texas.

In Texas, Medicaid pays dentists for orthodontics per procedure, instead of a lump sum for the “finished mouth” of straight teeth.

This has made Medicaid orthodontia a lucrative dental business in Texas.

WFAA-TV of Texas has been investigating this story for the last six months and has uncovered hundreds of millions of dollars of questionable Medicaid spending on dental braces for children in Texas. Their news reports prompted federal investigators to now audit the Texas Health and Human Services Commission, which controls the Medicaid funds.

According to the WFAA website –

In a letter to the state, the Inspector General says it will examine the “authorization process for orthodontic treatment” under Texas Medicaid. “The objective of our audit,” the letter continues, “is to review the State’s controls to ensure that only medically necessary orthodontic cases are paid.” The time period covered by the audit is September 1, 2008 through May 28, 2011.

The new station’s investigation revealed that during that period, Texas taxpayers spent $424 million on orthodontic braces for children under Medicaid. Taxpayers spent $100 million in 2008, $140 million in 2009, and $184 million in 2010, state records show.

Texas dentist, Dr. Christine Ellis, who teaches at UT Southwestern Medical Center, has twice traveled to Washington in an attempt to convince lawmakers to scale back Texas Medicaid orthodontics payments and divert funds for more pressing dental needs.

Her attempts fell on deaf ears. According to the WFAA-TV article, Ellis said, “There’s no response. No one is putting the brakes on this thing.”

Billy Millwee of the Texas Health and Human Services Commission is now telling WFAA-TV that if taxpayers money has been lost, the Attorney General might take action to get it back. He went on to say that Texas will have a new managed care Medicaid dental program beginning next spring.

For more on this story see: Feds Investigate Texas Dental Medicaid Program and Taxpayers Footing the Bill for Braces in Texas.

Dental Braces: Are General Dentists Capable of Straightening Teeth? (video)

Dental Braces: Why Many General Dentists Prefer to Do Braces (video)Straight teeth are hugely desirable in our culture, but who is the right doctor to straighten a dental patient’s teeth with braces?

An orthodontist or a general dentist?

One general dentist, who refers out all orthodontia cases said, “I believe that only a good orthodontist can get really good, long-lasting results.”

Another general dentist, who refers out very few cases said, “I do all my own orthodontics and I believe the average general dentist is fully capable.  It’s just that at dental school it is instilled in us to refer and not touch it!”

The Wealthy Dentist conducted a survey that asked dentists what percentage of orthodontic patients they refer out.

To hear the results of the survey and how dentists responded, Click on Play —

What are your thoughts on general dentists placing braces?

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