Delta Dental Faces Federal Antitrust Class Action Litigation

Michael W. Davis, DDS


Eleven independent antitrust class action lawsuits have been filed against various Delta Dental insurance entities, which operate in all 50 states and Puerto Rico. Cases have been filed in the United States Seventh District Court in the Northern District of Illinois (see the Appendix). 

Review of One Pleading

The pending lawsuits argue that the Delta Dental entitites engaged in several forms of antitrust violations. Kaufman & Kaufman Smile Design Studio v. Delta Dental Insurance Company et al presents one especially insightful pleading.  

The complaint alleges that various Delta Dental companies are involved in a market allocation conspiracy, price fixing conspiracy, and revenue restriction conspiracy. Allegedly, the complaint says, Delta Dental entities do not operate independently but as a concerted common entity.

As such, “the Delta Dental state insurers have each secured monosopony control within their assigned territories, and defendants as a group have secured monosopony control over the market for dental insurance across the U.S.,” the pleading states.   

Also, the “defendants’ price fixing conspiracy takes the form of defendants agreeing among themselves upon the rates at which they will reimburse the Delta Dental providers for the services the providers offer to Delta Dental insureds,” the pleading alleges. 

“By conspiratorial agreement, defendants set these prices at lower than market rates, and then abuse their monopsony control of the dental insurance market to force these rates onto the Delta Dental providers,” it continues.

“The Delta Dental providers, faced with an overwhelming majority of patients who have purchased Delta Dental insurance (and naturally wish to be treated by a provider that accepts it) have little or no choice but to acquiesce to defendants’ non-competitive and artificially low reimbursement rates,” it further says.   

The pleading additionally addresses Delta Dental’s nonprofit IRS 501c classification and alleged abuse of that tax classification. 

“While defendants are predominantly non-profit entities, they have reaped the benefits of their anticompetitive conspiracies in the form of lavish executive compensation and by building up excessive capital reserves,” it says.  

The pleading then spells out the dominating market share, in specific percentage numbers, controlled by each of the defendant Delta Dental groups. Dentist providers face a difficult conundrum, the pleading says.

“Defendants similarly set up further disincentives to ensure that dental service providers in the Delta Dental state insurers’ territories are faced with the Hobson’s choice of either (1) accepting Delta Dental patients at discounted reimbursement rates pursuant to a Delta Dental Provider Agreement, or (2) accepting those patients on economic terms that are even more punitive for the providers,” it says.

The pleading also specifies that “the market allocation conspiracy is an agreement between the Delta Dental state insurers to provide dental insurance exclusively in the territories where the Delta Dental state insurers are located, and amounts to an unlawful conspiracy of horizontal allocation of the market for dental insurance within each of those territories and across the United States.”

Additionally, “competition between the Delta Dental state insurers would benefit dental plan sponsors and members by driving down the premium prices that members as patients are required to pay for such insurance, or by increasing the scope of the coverage offered under an insurance policy for the same premium price,” the plaintiffs contend.  

“Such competition would also give the Delta Dental providers greater choice in respect of the dental insurance plans they could accept from potential dental patients. This choice would free the providers from the monopsony control and below-market reimbursement rates imposed upon them by whichever Delta Dental state insurer is allocated exclusive control of the territory in which the provider was based,” the pleading says.   

“The price fixing conspiracy is a collusive agreement reached among defendants and implemented through the Delta Dental Provider Agreement entered between the Delta Dental state insurers and the Delta Dental providers. Defendants draw upon their access to market rates data for dental goods and services across the U.S. via the records obtained and held by Delta Dental Plans Association, and use these to determine the sub-market rates they will impose upon the Delta Dental providers pursuant to the Delta Dental Provider Agreement,” the pleading alleges.  

The plaintiffs’ claim also notes that 14 Delta Dental officers and directors have annual salaries between $1 million and $9.2 million. In addition to those named, Delta Dental employs many more such highly compensated officers and directors. One must also remember that these companies are 501c nonprofit entities. The plaintiffs take issue with these salaries. 

“These figures do not represent typical compensation in the non-profit industry. The average Delta Dental state insurer CEO’s compensation (across the 31 entities who report the relevant data) in 2016 was $3,145,912, whereas the average U.S. nonprofit CEO’s compensation during the same time period was $146,653. The average Delta Dental state insurer CEO thus earned more than 20 times the amount of the average nonprofit CEO in the U.S.,” the pleading says.   

“Together, Delta Dental’s fat salaries and bulging reserves demonstrate that its ‘not-for-profit’ companies are in fact motivated to and do derive significant supra-competitive profits from their anticompetitive practices,” it says.   

Washington State Dental Groups in Opposition

Groups of dentists have long contended antitrust violations and monopsony control by Delta Dental insurance companies. Two of the more vocal organizations in opposition to Delta Dental’s alleged abusive actions have been the Concerned Dentists of Washington State (CDWS) and the Washington State Dental Association (WSDA).   

The irony should be lost on no one that Dental Service of Washington (DSW, doing business as Delta Dental of Washington) has said that organized groups of dentists attempting to reform Delta Dental potentially risk litigation for antitrust violations in a less than veiled threat.

In a letter to WSDA board members (see attachment, above), the DSW notes that disagreement with its policies previously was “presented by either individual dentists or small groups of dentists, outside the realm of WSDA, allowing WSDA to avoid involvement in fee setting and potential violations of anti-trust laws,” implying that WSDA’s opposition to those policies may lead to legal consequences. 

“We were not at all surprised to learn a class action antitrust lawsuit had been filed against the entire Delta Dental network,” said William Hooe, DDS, of CDWS.

“A Seattle law firm participating in the legal action informed the local dental community that ‘Recent evidence has been uncovered that suggests that Delta Dental and its affiliates operating outside of Washington may have unlawfully agreed to suppress competition in violation of the federal antitrust laws by keeping reimbursement rates artificially low,’” Hooe said. 

“What was striking was the irony of the situation. Delta Dental of Washington has been using the threat of antitrust litigation as a scare tactic against its member dentists since we began taking organized action in 2011,” Hooe said.

“After member dentists successfully passed amendments to Delta Dental of Washington’s bylaws to help create a more transparent, patient-focused organization, four member dentists on Delta Dental of Washington’s board went so far as to circulate a letter implicating our state dental association in a sort of conspiracy,” said Hooe.

“Delta took the position of arguing the WSDA worked to avoid antitrust violations by having grassroots organizations such as Concerned Dentists of Washington State do the talking in voicing grievances against Delta Dental,” Hooe said.  

“Delta’s letter stated that unfavorable opinions against Delta Dental ‘have been presented by individual dentists or small groups of dentists, outside the realm of the Washington State Dental Association, allowing WSDA to avoid involvement in fee setting and potential violations of anti-trust laws,’” Hooe said.

“Delta’s letter closed by saying, ‘we encourage the WSDA board to reconsider their fiscal responsibility, anti-trust limitations, and the mutual pursuit of the greater good before driving this forward any further,’” Hooe said.

“Hundreds of thousands of Washington State citizens have had their dental care restricted by Delta Dental’s policies. Thousands of dental practices and tens of thousands of dental practice employees have been negatively affected by Delta’s near monopoly (monopsony) and poor reimbursements,” Hooe said. 

“Given the level of Delta Dental’s corporate greed, it seems more likely that the Delta Dental Network has conspired across the country to suppress reasonable and rational reimbursement to the dental community. We are eager to see how this federal legal action plays out,” said Hooe.

Massachusetts Dentists Alliance 

The Massachusetts Dentists Alliance (MDA) has been very active in opposing the alleged abuses of Delta Dental of Massachusetts (DDM). 

For example, the Commonwealth of Massachusetts Division of Insurance recently approved a fee schedule decrease of about 8.8% for Delta Dental Premier Providers, prompting many doctors to stop participating in DDM plans. 

DDM then began sending its patients letters instructing them that their dentist no longer would be part of the Delta Detnal network, meaning they would have to pay more to get treatment from their dentist or find a new dentist in the network if they want to continue their benefits.

The MDA has asked DDM to stop sending this letter to these patients, calling the letter incomplete and misleading.

“For several years, many dentists bullied by Delta Dental have had no realistic recourse against such a wealthy corporation,” said MDA organizer and activist Jill Tanzi, DDS. 

“Dentists alone usually cannot afford a suit against Delta Dental, but as these antitrust suits are filed, dentists may have their chance to air their grievances in court,” said Tanzi. 

Delta Dental representatives did not respond to a request for comment about this litigation. 


Dr. Davis practices general dentistry in Santa Fe, NM. He assists as an expert witness in dental fraud and malpractice legal cases. He currently chairs the Santa Fe District Dental Society Peer-Review Committee and serves as a state dental association member to its house of delegates. He extensively writes and lectures on related matters. He may be reached at or

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