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Corporate Dentistry Debate Looming in Kansas

Under Kansas law, only a licensed dentist can own and operate a dental clinic.

A corporation cannot. It’s illegal.

It’s been that way for as long as most dentists can remember.

“The law protects the public,” said Kansas Dental Board Executive Director Betty Wright. “It puts patient care ahead corporate profits.”

Some legislators aren’t so sure that allowing corporate clinics that are owned and operated by Kansas dentists would diminish the quality of care that patients received. During a recent meeting of the Joint Committee on Health Policy Oversight, several members noted that so-called franchise clinics tend to accept more Medicaid patients.

A recent Kansas Department of Health and Environment survey (PDF) found that less than one-third of the traditional dentist-owned clinics in the state see Medicaid patients.

“I think it’s pretty clear that we’ll be talking about this next year,” said Rep. Brenda Landwehr, R-Wichita, referring to the 2011 legislative session, which convenes Jan. 10.

Lobbying effort underway

Earlier this year, Comfort Dental, a Colorado-based company, sought the Kansas Dental Board’s permission to open dentist-owned franchises in Kansas. The request was denied.

Kansas law, Wright said, specifically forbids “...the franchise practice of dentistry.”

Company officials were taken aback by the ruling.

“They practically slammed the door in our face,” said Lawless Barrientos, a spokesman for Comfort Dental.

“A lot of states don’t allow corporate dentistry—that’s not unusual,” he said. “But as far as we can tell, Kansas is the only state in the nation that prohibits dentist-owned franchises, which is what we are.”

The law, Barrientos said, stifles competition.

“Everybody keeps talking about how healthcare costs keep going up and about how dental care is too expensive,” he said. “The way to fix that is competition, to make dentists compete, to make them find ways to bring down their costs, to let the free market work.”

Comfort Dental has almost 80 franchise practices, involving 286 “partner dentists,” in seven states: Missouri, Colorado, Wyoming, New Mexico, Texas, Kentucky and Ohio.

Typically, Barrientos said, Comfort Dental franchises are owned by two to five dentists.

The company has hired Federico Consulting, a Topeka-based lobbying firm headed by John Federico, to oversee its campaign to convince Kansas lawmakers to repeal the prohibition on dental franchises.

It’s about accountability

The Kansas Dental Association is expected to oppose efforts to repeal the restriction blocking franchise practices.

“At this point, there isn’t a specific proposal so it’s difficult to say whether we’re for it or against it,” said KDA Executive Director Kevin Robertson. “But, yes, we have a lot of concerns about corporate dentistry.

“Our position is that the person who owns a practice or a clinic ought to be a person who’s in contact with the patient,” Robertson said. “That person, that dentist, should not be having his or her arm twisted by some middle man who’s main concern is meeting their quota for the month.

“That,” he said, “can result in abuse and fraud, quite frankly.”

The nine-member Kansas Dental Board—six dentists, two dental hygienists, one lay representative—shares the association’s concerns.

“Once the dentist becomes simply an employee or an absentee owner, the office tends to focus on maximizing profits rather than on maximizing care for the patient,” Wright said.

Kansas law allows a clinic to have more than one owner, but each owner has to be a dentist. A dentist or a group of dentists can own more than one office, but each owner is required “ be present in the office a majority of the time the office is operating.”

Dave Hamel is one of three dentists in Marysville. He owns his own dental practice and is serving a stint as president of the state dental association.

Like the association he represents, Hamel has strong concerns about corporate dentistry.

“I think a dentist ought to be able to look at a patient and say, ‘What can I do for you? How can I be accountable for your care?’ I don’t know that you get that with corporate dentistry,” Hamel said.

“People want that accountability. All of us, I think, have had the experience of calling an insurance company or a government office and not being able to find anyone who’s accountable. We don’t have that in Kansas (dentistry) now, which I see as a strength.”

One exception already OK’d

In 2005, the Kansas Dental Board agreed to allow FORBA Holdings, a management company based in Nashville, Tenn., to market its services to dentists in Kansas.

Subsequently, three dentist-owned clinics entered enter contracts with FORBA to help them manage their practices. They are:

Topeka Dental Clinic, Topeka;
Indian Springs Dental Clinic, Kansas City;
and Small Smiles Dental Clinic, Wichita.

Nationally, FORBA-run clinics are marketed as Small Smiles Centers. But in Kansas, the restrictions on corporate ownership prohibit the three clinics from marketing themselves as part of a chain, consequently only one of the three calls itself Small Smiles.

In November 2007, ABC News reported several parents in Washington, D.C., accused a local Small Smiles clinic of mistreating their children.

Months later, The Wichita Eagle and KWCH TV Channel 12 ran similar stories on the Small Smiles clinic in Wichita. (Watch the 3-part video series on Small Smiles in Wichita).

In January 2010, the U.S. Department of Justice announced that FORBA had agreed to pay $24 million to “resolve allegations” that it had billed Medicaid for “medically unnecessary dental services.” FORBA agreed to alter its billing practices.

Kansas’ share of that settlement was $517,959.60.

Earlier this month, Brad Smoot, a Topeka attorney who represents FORBA, assured members of the Joint Committee on Health Policy Oversight that the accusations of impropriety involved FORBA clinics “on the East Coast” and were unrelated to the three in Kansas.

“FORBA did not admit wrongdoing,” he said.

Smoot, who also lobbies on behalf of Blue Cross Blue Shield of Kansas, said the FORBA clinics in Kansas were in full compliance with state law.

“Each of these clinics is owned by dentists who work there,” he said. “They are independent of each other—the dentist owns the building, the equipment ... everything. They also have management contracts (with FORBA).”

Smoot said that approximately 95 percent of the patients treated at the clinics are on Medicaid.

“These are exactly the people, the critically underserved population, you’re hoping will be served,” he said.

Barrientos, the spokesman for Comfort Dental, said the same would be true of his company’s franchise clinics if they were allowed to operate in Kansas.

“We are one of the largest Medicaid providers in Colorado,” Barrientos said. “Forty percent of our patients are either underinsured or uninsured. They come to us because we’re 40 to 60 percent cheaper than what other dentists’ charge.”

Distinction without a difference

Rep. Jim Ward, D-Wichita, a member of the health oversight committee, challenged Smoot’s assessment, saying he didn’t see much difference between a dentist signing a management agreement with FORBA and a franchise agreement with Comfort Dental.

“It sounds to me like you’ve created an exception that makes the (no-franchise) rule unnecessary,” he said, referring to the Smoot-crafted agreement with the Kansas Dental Board.

“This, for all practical purposes, is what a corporate practice would look like,” said Ward, who’s also an attorney.

After the FORBA settlement was announced, the Kansas Dental Board, Wright said, decided to take a second look at whether the management contracts comply with state law. The investigation, she said, is ongoing. She declined further comment.

The board rejected Comfort Dental’s request after it started its re-examination of the management contracts.

Dave Sanford runs one of the state’s largest safety-net clinics, GraceMed Health Clinic in Wichita. He, too, has concerns about corporate dentistry.

But he said the Kansas Dental Board may find it difficult to justify allowing the FORBA clinics while disallowing Comfort Dental.

“At some point, there needs to be an evaluation of the quality of care that a corporate model would produce and how it would compare to the model we have now,” Sanford said. “I don’t know that we know that.”

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