Dental chain violated New York law, settlement says

Introduction

One of the nation’s largest dental management chains, Aspen Dental, violated New York law by making decisions that should have been left to dentists and sharing profits with dental clinics, according to a settlement with the state’s attorney general.

New York Attorney General Eric T. Schneiderman launched an investigation of the chain in 2013 after an investigative report by the Center for Public Integrity and PBS Frontline. The news report found that Aspen Dental, which targets low-income patients, pressured dentists to increase revenue by using high-pressure sales techniques. Many patients complained of being overcharged or given unnecessary treatments.

The attorney general investigation reached the same conclusions. He cited 300 consumer complaints since 2005 and internal company documents. The settlement calls for Aspen Dental to pay a $450,000 civil penalty and to overhaul the way it does business in New York.

Aspen Dental, based in East Syracuse, New York, serves nearly 500 dental practices in 30 states and reported annual revenue of $645 million. Forty of those clinics are in New York.

The company says it provides back-office support for dentists, who own the practices. But the attorney general found that Aspen Dental was coaching dentists on patient care issues and pressuring the offices to push additional treatments. Office managers and hygienists were paid bonuses to sell more treatments.

If offices didn’t meet revenue targets, they were scolded by Aspen Dental. One internal Aspen Dental document released by the attorney general showed the company complaining that hygienists were falling short of their revenue targets and instructing them to sell more products and services to patients.

Aspen Dental chief executive officer Robert Fontana signed the settlement, which outlines the findings of the attorney general.

However, Aspen Dental issued a statement last week criticizing Schneiderman for saying in a press release that the settlement “bars company from making decisions about patient care in New York clinics.”

The company contends that it never made decisions about patient care, or that the dentists who own Aspen Dental clinics were mere puppets.

“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,” Fontana said in the statement.

This isn’t the first time Aspen Dental has settled with a state attorney general. The Pennsylvania attorney general sued the chain in 2010, alleging that it advertises “free” exams but still charges patients’ insurance companies. The state also alleged that Aspen Dental failed to reveal that the “no-interest” credit cards it pushes have steep penalties – 29.9 percent interest on the entire amount of the original loan — if a patient misses payments. Aspen Dental settled, paying $175,000 in restitution without admitting wrongdoing.

In December, Aspen Dental settled a case with the Massachusetts attorney general, agreeing to pay at least $990,000. The attorney general found that Aspen Dental engaged in deceptive advertising and marketing practices and failed to give refunds to patients charged for services that were never provided.