Dentists take battle over regulations to the public

A battle over how large dental groups operate has spilled into the North Carolina legislature and onto the television.

Posted Updated
Mark Binker
RALEIGH, N.C. — One commercial warns that "out-of-state special interests" are going to put your local dentist out of business. Another 30-second spot says viewers should be concerned about "powerful lobbyists" pushing a bill that will close your local dental practice.

Given the similar style and claims, viewers might think the same group is behind both ads. But the 30-second spots actually come from different groups of dentists battling over how North Carolina regulates their profession. A legislative proposal likely to be heard this May would restrict contacts dentists can forge with dental service organizations. 

"The North Carolina Dental Board has denied my patients what I feel is the best dental care," said Dr. Gary Cameron, an Asheboro dentist who faced state sanctions after affiliating with an Illinois company. His case helped spark the push for the new law. 

Dental service organization proponents say the businesses allow dentists to focus on "in the mouth" work, while a specialized back-office support system handles billing, payroll and other administrative functions. But a lawyer for the dental board, an independent agency that enforces dentistry laws, and allied dentists worry the new model could allow corporations to usurp decision making in dentists' offices. 

Cameron and those who run dental service organizations say the more traditional dentists are using the powers of an unelected board to protect their current business model against what they see as a threat. 

What might have been an intramural fight among the profession now has all the trappings of a big-time political showdown, complete with campaign donations, hired lobbyists and competing claims about who is really looking out for the best interest of North Carolinians.

Compare the ads

Dental Society advocates for SB 655
 Alliance for Access to Dental Care opposes SB 655

A different model

On the outside, the 182 locations of Affordable Dentures, run by Kinston-based Affordable Care, may look similar. But each is a separate private practice owned by a dentist, linked to a larger company that provides help with purchasing and other administrative support.

"We do the accounting, the marketing, manage their payroll, provide the capital," Affordable Care CEO Doug Brown. "We do the things they don't want to do."

Centralizing billing, purchasing and the like, Brown said, allows affiliates in 38 states to cut patient costs and allows dentists to focus on providing care. It also makes it more likely a dentist affiliated with a management company will take insurance, including Medicaid. 

National groups like the American Dental Association have estimated that fewer than 9 percent of dentists choose to practice in such dental service arrangements. But the numbers are growing, Brown said, particularly due to the difficulties young dentists face in getting the $500,000 or more in financing typically needed to equip a new practice. 

Despite being based here and operating in North Carolina for more than 30 years, Brown said Affordable Care might look at unwinding its relationships here if Senate Bill 655 or something similar passes. The measure, which has already passed the state Senate, would make it hard for companies like his to ensure they can recoup their investments, Brown said.  

"We're not making additional investments in North Carolina until this is settled," Brown said.

Companies like Affordable Care have nothing to worry about under the bill, say private practice dentists pushing the measure. Rather, say dentists like Ronald Venezie, they are trying to stop unscrupulous practitioners from skirting a state law on who may own dental practices. 

"This is by no means a criticism of all dental management organizations," said Venezie, who is on the North Carolina Dental Society's board of trustees.

Under current North Carolina law, only dentists may own and operate a dental practice. That kind of restriction is common in other states, including neighbors like Tennessee and Virginia.

"An investor-owned corporation has a duty to maximize profit for their shareholders," Venezie said. "That can be at odds with protecting the health of patients." 

Venezie argues that dentists working with some large companies can be under pressure to maximize profits or performing extra work or prioritize patients with better insurance.

Brown scoffs at this notion.

"Show us a single case," Brown said. "Find a single dentist affiliated with us that believes we do that." He said the dental society is talking about a problem that doesn't exist in the state. 

"This has nothing to do with patient care," Brown said. "We have a better business model and that is perceived as a threat."

Legal battles

Just as there may be good and bad individual dentists, those on both sides of the issue say not all dental management companies are alike. In 2010, the U.S. Justice Department settled a case in which FORBA Holdings returned $24 million plus interest for over-billing Medicaid for medically unnecessary procedures performed on children at their "Small Smiles Centers."

In a much different case, the Federal Trade Commission and Alabama's governor intervened on behalf of Sarrell Dental, a nonprofit company praised for serving low-income patients that had run into problem with the Alabama Board of Dental Examiners. 

North Carolina has had its own litigation. 

In the latter part of 2009, Cameron started an affiliation with Hartland Dental Care, an Illinois company, to take over certain parts of his business. Hartland would buy his company's equipment and manage his practice, while Cameron would continue treating patients.

Court filings show Cameron signed a series of agreements with Hartland, including a non-compete clause that would have kept him from operating a dental practice within 15 miles for five years if he broke his arrangement with Hartland.

In court proceedings, the North Carolina Dental Board contended that this arrangement amounted to Cameron selling his practice in all but name to Hartland, an out-of-state company. 

"They begin to look and feel like they have the kind of rights and interest an owner or partner or an employer would have," said Ken Burgess, a lawyer with Poyner Spruill who serves as counsel to the North Carolina Dental Board, an independent agency that enforces North Carolina dentistry laws.

Cameron said that the non-compete agreement is similar to agreements that dentists would sign when they agreed to be an associated partner of a single practitioner. Steve Bilt, president of the Group Dental Practice Association trade group, said such non-compete clauses are often there to protect dentists who later come into the practice.

And while Hartland sold his practice's equipment, Cameron said he still owned the practice and called the shots both in the exam room and in the front office. 

"If a (dental service organization) can allow me to be more efficient and allow me to focus on patient care, where's the harm?" Cameron asked.

Court records show that that the case involving Cameron and Hartland ended with the dentist and the company agreeing to unwind their relationship. In addition, Hartland agreed not work in the state any more. Cameron said he is now running his business as he did before affiliating with Hartland, which involves more time dealing with administration and less time handling patients. 

Many of the questions at the center of the Cameron-Hartland case would be codified in Senate Bill 655. Brown, of Affordable Dentures, say if the restrictions placed on Cameron applied to all dental service organizations, few companies would bother to invest in North Carolina practices. 

Dental Board lawyer Burgess said the kind of legal action involved in the Hartland case is time consuming and difficult. And while the Dental Board can't lobby on its own behalf, the North Carolina Dental Society is pushing S 655, which the group says would "clarify" the state of the law and give the dental board tools to avoid similar showdowns.

Pending legislation

"This bill is partly in response to some of the management companies saying, 'We don't know what's permitted and what's not,'" Burgess said.

As he and dentists affiliated with the Dental Society explain it, the measure would merely codify into law a set of administrative rules that the dental society has been using to examine these dentist-corporate arrangements. Cameron, he said, faced problems because he ran afoul of existing regulations. This law would make those regulations that much clearer, Burges said.

But the bill goes much further, say Davis and others who work in the dental management field. They have banded together to form the Alliance for Access to Dental Care, a group lobbying the legislature to stop the bill.

"It is a tremendous regulatory over-reach," said Tom Fetzer, a lobbyist hired by the group. The bill, he said, would give the Dental Board the right to demand business documents, review agreements and reject arrangements with which board members don't agree. 

Cameron and Fetzer said this is all the more troubling because the dental board appoints its own members. Most state regulatory boards, they point out, are appointed by the governor and/or lawmakers, making them more accountable to elected officials. 

In its current form, the bill lays out 23 separate paragraphs of things dental management companies may not do, some of which could make existing dental management agreements impossible to continue, Fetzer said. Those same legal guidelines don't exist in other states.

"North Carolina is a massive outlier," Bilt said. In other states, he said, questions about ownership interests had come up but been clarified without a major conflict.   

Tennessee, for example, has the same law requiring dentists to own dental practices. But there aren't rules that would allow the state Board of Dentistry to review management contracts ahead of time.

"There hasn't been any movement in that direction in Tennessee," said David Horvat, executive director of the Tennessee Dental Association. His group represents dentists both in smaller practices or those run through management companies like Aspen Dental, a national chain. 

If North Carolina adopts the more strict requirements, Fetzer said, as many as 150 dentists could find themselves scrambling to re-order their practices. He contends this could aggravate a shortage of dentists in the state. 

Statistics and needs 

North Carolina ranks 47th among the 50 states in terms of the number of dentists available per 10,000 people. This has kept the rates dentists can charge patients high, say critics of the current system. 

Those who work with dental management companies say their business model can help bring more dentists, particularly recent dental school graduates, into the state. More dentists, they said, could help address problems such as large numbers of students showing up to kindergarten with untreated tooth decay. 

Dentists affiliated with the dental society say that numbers alone do not tell the tale.

"Most of the dentists in this state have empty chair time," said Gary Oyster, a Raleigh dentist who is involved with lobbying for the Dental Society. "I could see more patients. It's not a matter of the number of dentists. It's a matter of the economy. You can't see people for free."

He says that increased public health outreach about basic dental disease prevention could go far in addressing a lot of the problems in North Carolina. 

Julia Paradise, who studies dental issues with the Kaiser Family Foundation, said that increased emphasis on prevention and ensuring wider insurance coverage are among the things that could help address dental disparities. But, she said, low numbers of dentists do present a problem.

"To have access to dental care, you need a dental provider," Paradise said. "I don't think empty dental chairs say anything about people's access to dental care. They might not be in that chair because they can't afford the price of being there."

That said, Paradise cautioned, there isn't evidence one way or the other that dental management companies help bring more dentists where they're needed.

Oyster points out that as the same time dental management companies argue through their trade group that they'll help under-served populations, they're advertising to dentists about how lucrative the practices can be.

"How can they accuse us (of being greedy) and then say, 'Doctor, you'll make more money.' You can't have it both ways," Oyster said.

At the General Assembly

Neither side in this fight is seems to lack for money. In addition to airing television ads, both groups have been able to hire lobbyists and make campaign donations. The Dental Society's political action committee has been a regular contributor to legislative campaigns and made $57,900 in contributions to lawmakers last year. That doesn't count contributions directly from dentists to legislators.
The Alliance for Access to Dental Care made $82,000 in contributions in that last three months of 2011, including $25,000 to the House Republican Caucus committee and a $1,000 contribution to Keith Weatherly, the mayor of Apex who works as a staffer for House Majority Leader Paul "Skip" Stam. Lobbyists with the alliance said they wanted to even the playing field for their cause.  

Campaign donations don't sway minds, donors insist, but they do make lawmakers more likely to spend time listening to your opinions.

And after the bill breezed through the Senate last year, House leaders have appointed a special interim committee to study the bill and its consequences. 

"I've tried to get both sides to sit down," said Rep. Bert Jones, a Reidsville Republican who chairs the committee. He said he would like to see a compromise between the two groups, but he canceled the last scheduled meeting of his committee because he could see little progress on a consensus bill.

Those associated with either side accuse the other of making such a compromise impossible. 

Jones says campaign donations -- both sides have contributed to him -- haven't influenced his thinking. But it's worth noting that Jones is a dentist, as is at least one other member of his committee and one of the biggest supporters of the measure in the Senate. Fetzer said Jones has been "fair" and run an open committee.

The bill is also somewhat counter to the general trend of this year's General Assembly. Republicans who control the House and Senate have pledged to do away with regulations they see as harmful to businesses. Backers of dental service organizations say S 655 represents a regulatory expansion that could put them out of business.

"I don't see this bill as being at conflict with being a conservative," Jones said. "It's a conservative value to protect the people." 

For his part, Jones said that he thinks there ought to be some law passed this year, although he hopes some of the furor around the bill dies down. He said some of the ads on the issue have prompted confused constituent phone calls.

"I think there's been a lot of disappointment in the dental profession with se the dental profession has been portrayed," he said.

The General Assembly session will resume its normal business on May 16. 


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