DeWITT, N.Y. — Aspen Dental Management, Inc. (ADMI) has agreed to pay a $450,000 civil penalty after New York Attorney General Eric Schneiderman accused
Schneiderman had accused Aspen Dental Management of dictating “the care provided by dentists and hygienists at dental practices” and splitting patients’ fees with the clinics, “which is illegal in New York,” according to a news release distributed on Thursday.
In reaction, ADMI said it is “deeply disappointed with the characterization” of Aspen Dental Management, Inc. in Schneiderman’s news release.
Besides the $450,000 penalty, the firm has also agreed to pay an independent monitor that will oversee the implementation of the settlement over a three-year period, Schneiderman’s office said.
Aspen Dental Management is a DeWitt–based company that provides business-support and administrative services to seven independently owned dental practices that maintain 40 offices in New York.
The firm, that generates a reported $645 million in annual revenue and operates nationwide, has agreed to “overhaul the way it does business in New York,” Schneiderman’s office said.
That agreement includes an effort “that makes clear to consumers that Aspen Dental Management is not a provider of dental services,” it added.
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, according to the news release.
“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,” Schneiderman said in the news release. “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.”
Besides expressing its “disappointment,” the company also said “contrary to the headline of the press release, ADMI does not, nor has it ever, made decisions about clinical care for the 1.2 million patients who visited independently owned and operated Aspen Dental-branded practices in New York state over the past 10 years.”
The headline on the press release says the settlement “bars [the] company from making decisions about patient care in New York clinics.”
The Aspen Dental statement went on to say, “Contrary to the sensationalized allegations in the press release, ADMI has never employed clinical staff nor has it exercised any control over clinical care.”
“The attorney general demonstrates how unfriendly the business climate can be in New York State by mischaracterizing in their press release the very nature of the business we’ve built over the past 20 years,” Robert Fontana, CEO of ADMI, said in the firm’s statement.
The investigation
Schneiderman’s health-care bureau launched its investigation following 300 consumer complaints since 2005, his office said.
The complaints focused on 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, according to the news release.
The investigation found that Aspen Dental Management has developed what amounts to a chain of dental practices that “were subject to extensive control by Aspen Dental Management.”
That control violates New York law, Schneiderman’s office said.
It included sharing individual clinic profits with the management company and the marketing by the management company under the shared Aspen Dental trade name. Aspen Dental Management “routinely” makes business decisions for the clinics that “directly” impacts 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 investigation also found 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.”
The clinic owners did not have access to that account, Schneiderman’s office said.
Aspen Dental Management took a pre-set percentage of each dental office’s monthly gross profit, an arrangement “prohibited under New York law.”
It created a “financial incentive” for Aspen Dental Management to “pressure staff” in the dental offices to generate revenue, Schneiderman’s office said.
The settlement
Besides the $450,000 penalty, the agreement stipulates that 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, Schneiderman’s office said.
ADMI will not serve as 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,” according to Schneiderman’s news release.
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 licensed dentists independently own and operate, it added.
Contact Reinhardt at ereinhardt@cnybj.com