It’s a very troubling matter when any dental clinic closes without notice, but especially when it’s a clinic run by a dental service organization (DSO).
Patients may be abandoned in mid-treatment. Many of these patients have advanced funds and desire timely completion of their dental care. Patients also may have difficulty accessing their records for transfer to another provider. The regular care and services of their specific selected doctor often are denied with little recourse.
Even staff and doctors are frequently locked out of their workplace with minimal to no notice. Access to wages and benefits may be uncertain. The ability to secure the data of patients of record may prevented. Doctors constrained by employment contracts may face added financial roadblocks and necessary legal fees. These same doctors may also be forced to deal with legal challenges from former patients who only wish to have their dental care completed and/or money refunded.
Vendors including landlords, dental suppliers, and dental laboratories are hit with fiscal uncertainty too. At what point do they bring legal action? Do they simply wait for the DSO to file for bankruptcy?
In the corporate world, business closures, bankruptcies, and operational downsizing are accepted tools and relatively commonplace. But in healthcare, patient abandonment is a serious ethical and legal breach. So when the corporate world enters healthcare delivery, significant problems can and do occur.
Texas Corporate Clinic Closures
Texas is no stranger to terminated DSOs facilities. Its dental Medicaid fraud debacle sparked the closures of many dental clinics inclusive of All Smiles Dental Centers in 2012. Other clinics focused on treating Medicaid patients also ceased operations or elected to abandon patients upon corporate directives.
In 2014, Small Smiles Dental and Wild Smiles Dental parent company CSHM was formally excluded from participaing in dental Medicaid for a five-year period. This action by the United States Health and Human Services Office of Inspector General effectively closed down clinics in Texas and nationally.
CSHM allegedly had a consistent pattern of failure to meet minimal standards of professional care and provided medically unnecessary treatment. In a corporate sense, closings may have been disruptive to the marketplace. In human terms, doctors and patients lost jobs and the public lost access to care, even care of a highly dubious quality.
Xenith Practices beneficially owned and operated a number of Texas dental clinics at least through 2014. Most of these clinics closed in tragic manners, leaving patients abandoned in the middle of ongoing dental treatments. Staff and doctors were at wits end, as they were locked out of their workplace.
Unlicensed ownership personally contacted patients and advised them that their dentists were responsible for completing unfinished dental services. Yet these doctors had no access to the closed clinics, nor fiscal means to compensate dental labs or suppliers. Patient money had all been previously captured by the DSO.
FLOSS Dental, an apparently high-end Texas DSO, closed a number of its operations in 2018. FLOSS allegedly defrauded investors and misrepresented claims in marketing ads to consumers. The owner had previously surrendered his dental license in July 2016 and faced civil legal actions inclusive of fraud allegations.
By February of this year, Houston-based Stella Dental Care had also closed several locations in its DSO chain. This operation was primarily directed toward Medicaid beneficiaries and discounted orthodontics services. Patients were apparently abandoned in mid-treatment and left with no recourse to secure a financial refund.
Another Houston-based DSO closed down two of its clinics and a surgical center (for delivery of dental sedation services) very recently. Signature Smiles employees expressed their frustration with the DSO’s alleged patient abuse, saying it took patient money upfront and failed to deliver dental care. Requests to forward clinical records also have been denied, at least for the time being. Again, employees are awaiting late paychecks.
Boyd Bush, executive director of the Texas State Board of Dental Examiners (TSBDE), called the closures “pretty tragic” and “pretty rare.”
“The fact that they just walked away makes you wonder what’s really going on here. There has to be more underlying reasons than just one little thing. If this happens, there’s something serious going on,” said Bush.
Apparently, Bush and the TSBDE are unaware of Signature Smiles’ history. In December 2019, Signature Smiles’ owner Dr. Terry Lee filed for chapter 7 bankruptcy protection. More recently, on January 16, 2020, Dr. Kathy Nguyen filed a complaint against Lee, Signature Smiles-Humble, and Signature Smiles Surgical Center alleging they misappropriated her National Provider Identifier and state Medicaid provider number for services the associate doctor didn’t provide.
Bush has served as executive director of the TSBDE since May 2018. His prior posting in Texas state government was as assistant chief of field operations for the Texas Department of Motor Vehicles. Although such background may seem meaningless and ineffectual, one must examine the efforts of the previous executive director of the TSBDE to obfuscate regulatory competency.
Doctor’s Personal Story in Texas
Arturo R. Garcia, DMD, is the founder of Smiles by Garcia in Austin.
“Unfortunately, I have experienced the personal and professional fallout from a DSO closing. Years ago, I worked for a fee-for-service (FFS) office in Austin that sold to a growing DSO. This DSO was run by a self-professed business genius who spent so much time telling people how great he was that nobody else could get a word in edgewise,” said Garcia.
“He couldn’t care less about the dentists or others that worked for the DSO or the patients they served. He was only interested in cobbling together a bunch of dental practices and selling them to some other group,” Garcia said.
“The dentist that owned the FFS practice and sold to the DSO couldn’t care less about the patients, team, or vendors. He was only concerned that he had finally found a dupe that would pay him what he needed to sell the practice. A match made in heaven!” he said.
“Long story short, the self-professed business genius DSO owner manages to implode all the offices he owns and closes them overnight and abandons all of the patients. The dentist that sold the practice to him got out with all of his money and no repercussions,” he continued.
“Now remember that the non-dentist DSO owner does not have a dental license. Therefore, the board cannot come after him. Guess who’s left?” Garcia asked.
“The treating dentists are thrown under the bus by all parties. They have a dental license, and even though the patients are not necessarily upset with them, the patients will eventually go after the treating dentists because they are the only ones left. The treating dentists bear the brunt of the outcry from patients, vendors, boards, and other groups,” said Garcia.
“Worst case scenario for the DSO—they fold their corporate umbrella, throw it away, and walk away safe and secure. Then, they just set up another DSO and continue on without repercussion,” Garcia said.
“Worst case scenario for the treating dentists—you get sued by the abandoned patients, vendors, etc. You may lose your license and your career. You will lose a lot of heart and stomach lining because of the ignorance and greed of others,” Garcia said. “You may wind up having to get a job flipping burgers or being a greeter at Walmart.”
The DSO Future in Texas
As stated by Garcia and many others, the TSBDE ignores statutes prohibiting the unlicensed corporate practice of dentistry by the DSO industry. Texas only apparently targets licensed doctors, and corporate dentistry is outside its regulatory purview.
By contrast, Texas will investigate unlicensed clinical operations conducted in a person’s home, trailer, or garage. This may include unlicensed operations in Plano, Houston, Crosby, and Brownsville.
Evidently, one standard of regulation for unlicensed practice of dentistry exists for economically challenged persons. Another more lenient hands-off standard exists for wealthy corporate dentistry.
On October 8, 2019, Governor Greg Abbott announced a Texas Enterprise Fund grant of $2.2 million to SmileDirectClub (SDC), which self-proclaims itself as a DSO, to establish a dental manufacturing laboratory in Kyle. Concurrently, SDC is facing multiple legal actionsfrom a vast variety of litigants.
One lawsuit filed by the State of California alleges that Dr. Jeffrey A. Sulitzer, SDC’s Chief Clinical Officer and licensed California dentist, violated numbers of statutes. California has legal concerns that patients are required to sign waivers of liability prior to receiving treatment. Sulitzer is directly accused of “aiding and abetting” the unlawful practice of dentistry by SDC.
SDC investors filed a lawsuit in Delaware against the company for allegedly concealing state regulatory enforcement actions, effectively artificially driving up initial stock prices. The ADA’s filings against SDC with the Federal Trade Commission and Food and Drug Administration remain in effect.
Regardless of these storm clouds, Texas officials are happy to invest substantial state funds into a DSO with a disturbing history.
“This exciting new expansion will bring even greater economic prosperity for this community, and the job creation and capital investment spurred by this announcement will create even more opportunities for Texans,” Abbott said.
The Ethical Way to Close a Dental Practice
The ADA has generated an outstanding paper on exactly how to close a dental practice. The Guide to Closing a Dental Practice covers issues in the event of a doctor’s retirement, death, or long-term illness. It emphasizes the proper handling of patient and billing records. Notifications to regulatory authorities is a particular highlight. Liability insurance is addressed. Staff matters are not ignored. Collections of outstanding accounts receivable and payable are at issue.
Included are a variety of sample letters to assist in the process. Contacts for resource and support organizations are also included.
The Texas Administrative Code for dentistry often mirrors the statutes of other states. TSBDE Rule 108.5 requires a 30-day notice sent to current patients prior to closing a dental practice. TSBDE Rule 108.8(e) “Requires a dentist to arrange for either the maintenance or the transfer to a succeeding dentist of a patient’s dental records when closing or leaving a practice.” Additionally, the state dental board must be notified within 15 days after the dentist closes or leaves the practice.
According to TSBDE Rule 108.8(d), Records of a Dentist,“Dental records are the sole property of the dentist who performs the dental service. However, ownership of original dental records may be transferred as provided in this section. Copies of dental records shall be made available to a dental patient in accordance with this section.”
TSBDE Rule 108.8(g) says that “A dentist shall furnish copies of dental records to a patient who requests his or her dental records. At the patient’s option, the copies may be submitted to the patient directly or to another Texas dental licensee who will provide treatment to the patient. Requested copies, including radiographs, shall be furnished within 30 days of the date of the request. The copies may be withheld until copying costs have been paid (These costs are nominal.) Records shall not be withheld based on a past due account for dental care or treatment previously rendered to the patient. Copies of dental records submitted in accordance with a request under this section shall be legible and all copies of dental x-rays shall be of diagnostic quality. Non-diagnostic quality copies of dental x-rays shall not fulfill the requirements of this section.”
Under TSBDE Rule 108.5(a), Patient Abandonment, “A dentist, without reasonable cause, shall not abandon a dental patient. Once a dentist has undertaken a course of treatment, the dentist, absent reasonable cause, shall not discontinue that treatment without giving the patient adequate notice and the opportunity to obtain the services of another dentist. A dentist shall exercise the level of care necessary to prevent jeopardizing the patient’s oral health during this process.”
Under TSBDE Rule 108.5(b), “a dentist shall give a minimum of 30 days written notice of his/her intent to discontinue undertaken treatment. Notice shall be either hand-delivered to the patient or sent via certified mail, return receipt requested to the patient’s last known address, with the dentist retaining a copy of the notice letter in the patient’s file along with proof of service.”
This adequate notice shall include:
- A short description of the patient’s current status, including the patient’s current diagnosis and a summary of the patient’s current treatment plan
- A short description of the patient’s present and future needs
- An explanation regarding the consequences of non-treatment
- A recommendation that the patient continue care with another dentist
- A clear statement emphasizing that the dentist is available to provide any emergency treatment necessary to prevent patient harm during the 30-day period.
Also, 108.5(b) says, “A dentist shall remain reasonably available to render any emergency treatment necessary under (b)(5) of this section for up to 30 days from the date of such notice.”
Clearly, patients have a right to access their records. Patient abandonment is unethical and unlawful.
Conclusion
Patient rights in dental healthcare are in direct conflict with the operational realities of corporate dentistry. Statutes are clearly designed to regulate doctors, not unlicensed DSO managers or private equity board members.
In dental healthcare, doctors must always place interests of patients to the fore. Patients are highly disadvantaged by not having the doctor’s expert training, experience, and knowledge. The welfare of patients must preclude all other factors in the doctor/patient relationship. This is generally reflected in state dental practice acts.
By contrast, capitalist corporate entities have a fiduciary obligation to place the interest of owners and shareholders first. Maximizing return on investment is the primary responsibility of any private company. Other factors are secondary.
The conflict of interest between doctor-owned and -operated dental practices versus corporate-owned and -operated dental practices is obvious. States have some ability to regulate the former, and little the later, in the public interest.
Without enforcement of codes against corporate practice of healthcare, and confinement of enforcement to doctors, the system collapses. Patient rights and their welfare will soon become historic anachronisms.
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 mwdavisdds@comcast.net or smilesofsantafe.com.
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