California attorney general reaches settlement with Aspen Dental over corporate practice claims

Company allegedly exceeded administrative support role

California Attorney General Rob Bonta announced May 7 that his office had reached a settlement with Aspen Dental Management Inc. for allegedly violating the state’s ban on the corporate practice of dentistry and engaging in false and misleading advertising.

Aspen Dental, which is a dental support organization owned by private equity firms, provides business management and administrative services to dental offices that operate under the “Aspen Dental” name and branding. However, the DSO is accused of exceeding that role by interfering with and unlawfully directing the practice, ownership and management of dentistry in California, according to a news release from the attorney general’s office.

The attorney general alleges that when Aspen Dental entered California in 2019, it did not contract with existing dental offices but instead selected, purchased, staffed and advertised its offices without clearly identifying an independent dentist-owner, the release stated. The company also allegedly selected, purchased and installed all dental equipment across offices.

The attorney general further alleges Aspen Dental encouraged the sale of particular products and services through direct incentives to practices’ clinical employees, including offering dental hygienists $50 per sale of clear aligners to new patients and $100 per sale to existing patients, according to the release.

It is also alleged that Aspen Dental advertisements contained misleading or false representations, including misleading testimonials, ambiguity, misleading cost claims and inexact pricing language, the release stated.

The settlement remains subject to court approval and includes $2 million in penalties, $300,000 in restitution funds for certain patients and several injunctive terms. These terms include:

• Not replacing any practice owner with another dentist of its choosing.
• Not requiring practice owners to effectively give up ownership of any dental practices if they decide to terminate their contractual relationship with Aspen Dental.
• Not owning the property for any practice. 
• Not practicing dentistry, including, but not limited to, owning or managing any dental office.
• Not basing service fees on revenue, sales or profits.
• Not suggesting, directing or encouraging any licensed clinician, other than a practice owner, to sell or increase revenue for any service or product.
• Not compensating any of its employees based on the sales or revenue of practices.
• Not paying any practice employees incentives based on practice sales, revenue or profit, including the sale of a particular service or product.
• Discontinuing the use of and not enforcing any existing contractual provision that restricts where any licensed clinician may practice or be employed. 
• Providing a written fee schedule for products and laboratory services.
• Registering with the Dental Board of California as a dental group advertising and referral service. 
• Clearly and conspicuously identifying the practice owner’s name when creating, publishing or disseminating advertisements.

Aspen Dental previously reached a settlement in 2015 with the Office of the New York State Attorney General that barred it from making patient care decisions at its locations in New York. The company had been accused of incentivizing and pressuring staff to increase sales of dental services and products; implementing revenue-oriented patient scheduling systems; hiring and overseeing clinical staff, including associate dentists and dental hygienists; and taking a pre-set percentage of each dental office’s monthly gross profit.