14 NC dentists, dental board sue DentalWorks

The North Carolina dental board and a group of dentists have filed lawsuits against DentalWorks, alleging that the dental chain pressured dentists and dental workers to give patients expensive, unnecessary treatments.

The North Carolina State Board of Dental Examiners' lawsuit also claims DentalWorks is illegally practicing dentistry because only dentists licensed in North Carolina can own dental practices in the state. The partnerships are "legal shells" to give the appearance that they are lawfully complying with the state's Dental Practice Act (DPA), the plaintiffs claim. The management agreements allow DentalWorks to charge the dentists for two monthly fees of up to $130,000, plus overhead fees of up to 10% of the practices' revenues, they added.

The two complaints were filed February 18 in Wake County Superior Court against DentalCare Partners (DCP), which owns DentalWorks. The lawsuit by the dental board claims DCP violated the state's Dental Practice Act (DPA), which prohibits corporations from owning a dental practice or practicing dentistry.

The other lawsuit, which was filed by 14 dentists with partnership interests in 20 DentalWorks practices in North Carolina, claims breach of contract by DCP.

"We took our concerns to the dental board to put a stop to DCP's illegal management practices and coercive attempts to influence patient care," wrote Eric Roman, DDS, a partner in three DentalWorks locations in Fayetteville, NC, and the spokesperson for the 14 plaintiffs, in a statement sent to DrBicuspid.com. "Our lawsuit charges that DCP exceeded its legal authority by exercising excessive control over our practices' finances and operations, and, in some instances, interfered with our ability to make independent decisions regarding patient care by aggressively promoting cosmetic and clinical treatments."

DentalCare Partners also withheld and concealed key documents from the dental board during the board's prior review of the relations with the dental practices, according to a statement the board sent to DrBicuspid.com. "The documents and evidence disclosed by the dentists revealed convoluted contractual arrangements designed to conceal the corporate defendants' unlawful ownership and control of the dental practices," the board wrote. "Layers of duplicative, unnecessary fees in these arrangements conceal their illegal diversion of the practices' revenues, profits and cash assets."

The dentists' complaint alleges that DCP gave financial incentives to nonclinical employees for copay collections at or above 90%, the statement said. This resulted in nonclinical employees giving preferential scheduling or refusing to schedule patients based on their ability to pay, the dentists said.

The 14 dentists are defendants in the dental board's lawsuit because they were licensed by the board. The board investigated after the dentists came forward with complaints in 2012, according to lawsuit.

DCP's attorney did not respond to calls from DrBicuspid.com seeking comment.

Scheduling errors, improper billing

The dentists' lawsuit also alleges the following:

• Consistent scheduling errors caused delays in treatment and increased patient wait times.
• Improper billing practices resulted in numerous disputes over charges.
• DCP exercised such tight control over expenditures that it failed to replace defective equipment, purchase new clinical equipment, and upgrade lighting and furniture.
• DCP had direct and indirect control over the hiring and firing of clinical personnel and distribution of the practices' revenues.
• DCP had exclusive control over patient records and scheduling through the company's proprietary software.
• DCP failed to provide capital for growth of dental practices and expressed unwillingness to invest in North Carolina in light of the dental board's aggressive enforcement of the DPA.
• DCP had complete control of finances, including billing, accounting, and bank accounts, a violation of the DPA, which threatened the growth and stability of the dentists' practices.
• DCP failed to provide coherent, professionally executed financial reports, including tax returns, to dentists in a timely manner.

In addition, DCP used internal recommendations, warnings of malpractice lawsuits, and other pressure to push dentists and hygienists to falsely diagnose patients with periodontal disease, the complaints allege.

As part of DCP's aggressive promotion of Arestin, a product used to treat periodontal disease, hygienists were told to "force the probe, if necessary, to achieve the 5-mm reading accepted as the standard for scaling and root planing and the application of Arestin," the complaints state.

The dentists' lawsuit also accuses DentalWorks of pushing them to give patients unneeded veneers and ceramic crowns in order to boost revenues.

State records show that five dentists and a hygienist have been disciplined for their involvement in the periodontal disease diagnoses and treatments, the Fayetteville Observer reported.

Private equity investor

In 2008, MSD Capital, a private equity firm, bought a controlling interest in DCP, according to the lawsuits. Private equity buyout firms have been attracted to dental practices because they are less regulated than physician groups. Currently, there are 24 large dental practice management companies in the U.S., with annual revenues of more than $100 million. Several of these chains are now being investigated for Medicaid fraud and overbilling, or have gone bankrupt amid government investigations. Critics are calling for more regulation of these businesses, citing unnecessary procedures and quotas for dentists.

DentalWorks has more than 150 locations in 14 states, including 30 in North Carolina. DentalWorks is also the trade name for Dental One of Ohio and Texas.

The DPA for North Carolina was amended a few years ago to provide regulatory oversight of dental service organizations' (DSOs) financial and clinical practices. The law is designed to ensure that patient care takes precedence over profit, according to the dental board.

When DCP launched an aggressive lobbying effort against increased oversight, the dentists began to question the legitimacy and legality of their contracts with DCP, their statement said. They subsequently reviewed their service agreements and determined that DCP's management practices violated the Dental Practice Act.

The dentists said they entered into service agreements with DCP based on false representations and assurances of the legality of the arrangements. They also said that DCP assured them that the agreements had been approved by the dental board, which was not true.

The dentists want their management agreements ruled null and void, leaving them in charge of the practices. Their lawsuit should not inconvenience patients or affect day-to-day operations at the practices, their statement said.

"Our dentists are singularly focused on running high-quality dental practices that provide the highest quality of care to our patients and an ideal work environment for our employees," they wrote. "Our No. 1 commitment is to our patients, and that will remain the same throughout this process. We are confident that the filing of this lawsuit is in our patients' and employees' best interest."