Corporate Dental Branding- What Dental Consumers Need to Know

Dr. Michael W. Davis maintains a general dental practice in Santa Fe, NM. He serves as chairperson for Santa Fe District Dental Society Peer-Review. Dr. Davis also provides a fair amount of dental expert legal work for attorneys. He may be contacted via email: MWDavisDDS@comcast.net
 

   

Corporate Dental Branding- What Dental Consumers Need to Know

A brand is a name, term or symbol which one company uses to differentiate its products and services, from that of another company.¹ Corporations employ numbers of different strategies in branding. Healthcare professionals are generally fairly ignorant on corporate branding practices, as this is not an element of their formal education. By contrast, those parties which beneficially own corporate dental practices retain individuals well-skilled and well educated in all forms of retail sales, marketing, and finance. Their abilities include a plethora of differing and complex branding methodology.

In its simplest form, a chain of corporate dental clinics may seek direct brand recognition by consumers. They may market “outstanding dental care at reasonable prices”, all associated with their brand. Branding may be part of a marketing program to generate public goodwill via broad mechanisms, ranging from well-publicized charitable events to sponsoring a NASCAR driver.² Branding may also be associated with the business model of dental Medicaid care.

Unfortunately for the corporate dental industry, many of their more established brands have become associated with abuses to the public welfare.^3-9  

(Author’s note: References only cite a mere handful of well reported abuses generated from corporate dentistry, disclosed by government officials.) 

Dental clinics managed and directed by non-doctor corporate management often have a troubling record, which the public is witnessing. Likewise, dentists who may be employed in such workplaces are also witnessing abuses to the public interest generated and facilitated by brand-name companies in corporate dentistry. As such, many in the public are avoiding dental services offered by branded corporate dental practices. Further, these branded corporate practices are finding employee/doctor attraction and retention increasingly challenging. One corporate chain recently reported over 10% loss in total dentist staff for a one-year period.¹⁰

Crowd Sourced Branding-

Numbers of branded corporate dental groups are increasingly discovering their branded identity has negative consequences. In fact, the term “corporate dentistry” is an example of “crowd sourced branding”, in which the public assigns a company a brand (positive or negative), versus the traditional method of branding, in which a company designs their branding scheme.

Some dental corporations have fought back by explicitly marketing their distance from “corporate dentistry”. One such ad from a corporate dental chain openly states, “You Hate Corporate Dentistry and So Do We”. The veracity of their claim seems highly suspect, especially when one views their multiple settlement agreements with multiple states’ attorney generals. However, corporate dental management is evidently far more concerned with negative fallout of crowd sourced branding, versus presenting truth in the public marketplace. 

To further counter the negative public impression of corporate dentistry generated by crowd sourced branding, numbers of corporate dental chains market the misrepresentation of doctors, and not faceless Wall Street types, as owning dental practices. The reality is very different and highly disturbing. 

Numbers of dental chain corporations establish specific individual doctors to act fully as sham-owners, who have no control of management, the sale of “their” asset of the dental practice, or control of clinic bank accounts. In fact, these shame-owner dentists have no idea how the funds generated by “their” dental clinics are allocated; depositions in the Small Smiles mass action lawsuit made that abundantly clear.

Other corporate dental chains establish a group of dentists acting as sham-owners, via the accounting mechanism of a professional corporation (PC). Again, these doctors have no true and valid ownership privileges of dental practices, as beneficial ownership passes to non-doctor corporations, often private equity investment firms. Some of the world’s largest and most well-known private equity firms currently are or formerly have been the beneficial holders of corporate dental chains, which direct patient dental care. Examples include Morgan Stanley¹¹, Valour Investments Ltd.¹², Carlyle Group¹³, American Capital Strategies¹³, FFL Partners¹⁴, Gryphon Investors¹⁵, MSD Capital (holdings of Michael Dell  family)^16,17, etc. 

Dr. Michael W. Davis on Corporate Dentistry at Dentistry Today

Dentistry Today Interview with Dr. Michael W. Davis

Business Service Agreements: A Tool for Deception within the Corporate Dental Support Industry

Business Service Agreements: A Tool for Deception within the Corporate Dental Support Industry
By Michael W. Davis, DDS

Business Service Agreements (BSAs), also called Business Service Contracts or Management Service Agreements (MSAs), are a tool created by the dental support industry (a/k/a dental support organizations) to mask their true business operational models. These contracts are generated between the unlicensed ownership (corporate beneficial owner) and the sham figurehead owner (nominee owner dentist(s)).
These agreements contain a variety of misrepresentations specifically designed to circumvent the rule of law. These BSAs serve as a lynchpin supporting the unlawful house of cards, of largely unlicensed and unregulated healthcare entities. Please note: the term “dental support organization” is also an intentional misrepresentation, to mask beneficial ownership.
Case precedent was established in federal Fifth Circuit ruling 07-30430)¹., in which the court determined a Dental Support (Service) Organization (DSO), Orthodontic Centers of America (beneficial owner of dental clinics), was engaged in the unlicensed and unlawful practice of dentistry. The court also ruled the business agreements with so-called “owner” dentists were unenforceable and non-severable (denying one part could be enforced while another could not), because elements in these contracts were unlawful, the entire contract was rendered unenforceable.
Nationally, every DSO has created different BSAs. And, within different states, different DSOs will produce different agreements. However, there exist common features worth examination in the vast majority of these contracts.

Dental Clinic Ownership
The DSO generally will deny ownership of the dental practice. Yet, the DSO usually owns the facility or is the landlord on the lease agreement. The DSO owns the dental equipment, supplies, and any possible leasehold improvements.
The DSO enjoys contract rights to control what dentists or entity may be artificially designated as “owners”. An owner dentist(s) may not freely sell “their” asset of a dental practice, and thus are merely façade nominee owners. The DSO controls the bank accounts of the “owners’” clinic bank accounts, which are swept out several times per week, or daily. These are central points in the lawsuit against Dental One Partners, DentalWorks, et al, by 14 duly licensed North Carolina dentists enjoined by the North Carolina Board of Dental Examiners, in 2013.^2.

EXCLUSIVE: Dental Service Organizations (DSO’s): Truth Revealed by Financial Insider

June 25, 2015

By: Michael W. Davis, DDS

Dr. Michael W. Davis maintains a private general practice in Santa Fe, NM. He chairs the Santa Fe District Dental Society Peer-Review Committee. Dr. Davis is active in dental care for disadvantaged citizens, and expert legal work. His publications and lectures are on ethical and whistleblower issues within the dental profession, as well as numbers of clinical research papers. He may be contacted at: MWDavisDDS@comcast.net

Dr. Kevin Cain is an Assistant Professor of Management in the James M. Hull College of Business and guest lecturer in practice management in the College of Dental Medicine at Georgia Regents University. He teaches courses on strategy and entrepreneurship and does academic research in the fields of strategic management, organizational theory, and healthcare management. He also serves on a task force with the Georgia Dental Association and teaches continuing education courses focused on the business of dentistry. Additionally, he is a co-founder and board member of several companies serving the dental industry. He earned a PhD in Business Administration at the University of Georgia, an MBA from Wake Forest University and a BA in Economics from the University of North Carolina at Chapel Hill. He can be contacted at: kevin@kevinwcain.com.
 

Introduction from Dr. Michael Davis-

Dr. Kevin Cain has an interesting and established history in study of the dental industry, and particularly dental service organizations (DSOs). He does research and has given lectures on the risks this business model presents against the public welfare and the integrity of the dental profession. Dr. Cain effectively counters the private equity spin of unlicensed corporate managers keeping at arm’s length from clinical decisions, within the doctor/patient relationship. He confronts DSO industry misrepresentations, of which there are many, head on.

Interview

Dr. Davis: Dr. Cain, please relay the personal story of your mother, a practicing nurse, and the degradation of her once honored profession by corporate health care. How did that affect you personally and influence your fields of academic research?
Dr. Cain: My mother has been a nurse within the same healthcare organization (and its predecessor hospitals) for 40 years. Since the late 1980s, she’s seen her role increasingly shift from being a caretaker to being part of a production line. The healthcare group she works for – mind you its a not-for-profit – sets performance benchmarks for pre- and post-operative care that her and her colleagues must meet. Additionally, her organization implemented EPIC Systems as its EMR provider last year and the time it takes to document patient care further decreases the quality of care she can provide patients.
She is no longer a happy nurse, and actually tried to dissuade my sister from majoring in nursing. At the center of her frustration with her company is its inability to treat patients as idiosyncratic. There are aspects of her job that, if not performed adequately, can jeopardize patient lives. However, her company pushes for efficiency and sets limits on the amount of time allocated for intake. When you generalize patients to the extent that her company has, and minimize the time nurses have to gather information about patients, it is inevitable that those nurses will miss something critical.
My mother’s frustrations with her organization have really shaped my perspective of the dental industry. She and many other healthcare professionals I have spoken with are disillusioned by the current state of their industry. The drive for growth and profitability in healthcare has superseded the drive for quality care, and I do not want to see the dental students I have the pleasure of interacting with here face the same disillusionment for their entire careers. It is imperative that the dental community protects the general dentist from becoming marginalized in the same manner as the primary care physician.
My research on the dental industry is driven, primarily, by the desire to help dentists remain clinically autonomous. In order for the dental profession to maintain its clinical autonomy, practitioners need to understand how institutional forces shape industries. In my field, we study institutional isomorphism – that organizations within an institutional environment look the same – because it helps explains how mimetic, coercive, and normative forces influence those organizations. There are currently no coercive (regulatory) forces preventing the DSO model from becoming the de facto dental model in the U.S., and there is very little normative pressure coming from private practice dentists to change that course.
With regards to mimetic forces, you have baby-boomers selling their practices to DSOs because a friend did and got more money than they would have in a private transition, and you have dental students – year after year – going to work for DSOs because they have been told that the high guaranteed salary is the quickest way to pay off student debt. Meanwhile, a few “business savvy” – or opportunistic – dentists are building their own DSOs and acquiring other practices because they see founders of the large DSOs driving twenty-five million dollar classic Ferraris and want in on that kind of wealth. These mimetic forces are shaping the industry, and the confluence of these forces is leading dentistry down a familiar path (i.e. optometry, pharmacy, primary care medicine).
 
Dr. Davis: We continually hear and read the misrepresentations from DSO private equity managers and their hired supporters that they keep at arm’s length from the practice of dentistry. Yet, we know they establish production quotas and bonuses upon employee dentists. Every doctor’s production metric is monitored on a daily basis. Each clinic’s bank account is swept clean, at least two to three times weekly. They determine clinic scheduling, staffing, as well as purchases for dental materials, dental laboratories, and dental equipment. State regulatory dental boards and even the Federal Trade Commission (FTC) seemingly have bought into these outlandish misrepresentations. (1) What private equity firm, whose sole responsibility is towards its shareholders and not patients, would not logically control every aspect of its business, inclusive of the practice of dentistry? (2) Why do we see so little regulatory enforcement for the unlicensed and unlawful practice of dentistry? Is it a matter of laziness, corruption, or some other factor?
Dr. Cain: The short answer is that private equity (PE) firms routinely leave control of their investments to the top management of those companies, but charge those managers with generating the best possible returns. The pressure of those expected financial returns can drive decision-making by managers of those companies, which is where you would see diffusion of pressure from top managers to the level of the organization at which revenues are generated. In the DSO model, that level is the dentist. To think that PE investments in the practice of dentistry, or the legal structure – where the DSO and the professional corporation that employs the dentists are connected only via a management service agreement (MSA) – keep DSO dentists immune to this pressure for financial returns is naïve. I would venture to guess that most dentists working for a DSO would tell you that they are not told to do certain procedures or pressured based on performance, but the psychology of seeing their production and their office’s production ranked against other associates and offices in the DSO probably provides enough of a catalyst to pressure driven, competitive individuals (generalizing here based on current crops of dental students) to alter treatment plans. That pressure might cause the best-intentioned dentists to compromise their training and ethics in order to climb rankings or achieve desired results (or bonuses). Because continuing education for DSO dentists is provided at corporate headquarters in some companies, treatment plans, labs, and materials used across the company probably begin looking very similar – and profitable – over time.

NY Attorney General says Aspen has to change it’s ways; or did he?

What apparently escaped the NY Attorney General is that the parent company is the actual owner of the dental practices and the "owner dentist” doesn’t own diddly-squat. 

Hey NY AG! The  "Dental Management Companies" hires individual dentists as salaried employees who then pretend to "own" the clinics!  But you know that, right?

In the case of Small Smiles, the original "owner dentists" paid $10.00 per clinic or less. But when we caught on the price went up to a whopping $100. That's a pretty sweet,,, "owning" a business that generates millions of dollars a year, for $100.  Sign me up!

June 2016 New York State Attorney General Settlement Order With Aspen Dental

Rick Perry and Greg Abbott Culpable in Debacles of Corporate Dentistry DSO Poster-Boy, R. Kirk Huntsman

 

by Dr. Michael Davis

 

December 17, 2014

Soon to assume the Texas governor position, from his prior office of Texas state attorney general, will be Greg Abbott. Mr. Abbott takes over the governor’s office from another dental industry failure, current Governor Rick Perry. Mr. Perry is most noted in dentistry for his dubious appointments to the Texas State Board of Dental Examiners (TSBDE). The consumer protection group, Texans for Dental Reform, have highlighted a number of these self-serving and corrupt appointments. Members of the TSBDE included a number of notorious Medicaid fraudsters, and at least one convicted sex offender.

Hapless state watchdogs for Texas citizens extended not only to the TSBDE and their incompetent legal counsel, but also to the Texas Office of Inspector General. Despite the fact that Texas is currently the state most recognized for the severity and volume of dental Medicaid fraud, the Texas Office for Inspector General has so far failed to effectively prosecute violator after violator. These habitual failures go directly to the (in)activity of Greg Abbott and Rick Perry.

Federal Fifth Circuit Ruling 07-30430

Let’s examine a case in point. Federal Fifth Circuit Court ruling 07-30430, which is largely based on Texas state statutes, determined that non-dentist ownership of a dental practice in Texas represents the unlicensed and unlawful practice of dentistry. The ruling further stipulates that corporate violators are to receive the same legal penalties, as individual person violators, with no special treatment. The acts of establishing doctor production quotas and bonuses are an action only lawfully permitted by a licensed dentist. State dental regulatory boards are charged under this federal ruling with the responsibility and obligation, of disciplinary actions against both individual person violators and corporate violators. The federal court also determined OCA (f/k/a Orthodontic Centers of America) could not enforce employment contracts with duly licensed Texas doctors, because the corporate entity OCA was not in fact a licensed doctor. The dentist employment contracts were determined unlawful and unenforceable, in their entirety, without being severable.

The federal court clearly saw though the sham presented by OCA (a dental service organization, “DSO”). OCA presented licensed dentists, whom they retained to misrepresent themselves as clinic “owners”. OCA controlled the dental clinics’ bank accounts. OCA held the power to buy and sell assets, such as the doctor employment contracts and individual clinics. In reality, these “owner dentists” were merely nominee owners. OCA, like nearly all DSOs, was the true and unlawful beneficial owner.

In conflict with this federal ruling —and further, avoiding addressing this ruling —the TSBDE has repeatedly stated they have no mandate to enforce the unlicensed practice of dentistry by a corporate entity. This flagrant obfuscation of law by legal counsel for the TSBDE is highly disturbing. Even more troubling is watching Rick Perry and Greg Abbott hide under their desks. Additionally, Mr. Abbott further abandoned his duty as Attorney General by failing to provide a legal advisory opinion based on clear and current legal precedence.

Xenith Practices, LLC & Austin Cosmetic Dentistry

Let’s examine another case, where Mr. Abbott was asleep at the wheel leaving dental consumers in harm’s way. In October 2014, Austin Cosmetic Dentistry simply closed and locked their doors. No notice of the closure was given to patients or staff. The staff was left unexpectedly unemployed and patients were illegally abandoned. Many patients were in the middle of their treatment. Many others, who had pre-paid, were scheduled to begin or finalize their restorations.

Representatives of Xenith Practices purchased the now-failed Austin Cosmetic Dentistry clinic from Dr. John Schiro, a couple of years earlier. The highly disturbing public record of Dr. Schiro with the TSBDE must have been aware to Mr. Huntsman and principles of Xenith Practices. It’s easy to download from the TSBDE website, with the slightest due diligence check. The earlier legal disputes between Dr. Schiro and Dr. Douglas Terry, who openly spoke out about alleged improper clinical care by Dr. Schiro, were also of public record. I have no idea what matters the investors were informed, by way of a lawful full disclosure by Mr. Huntsman. None of this should have escaped the attention of the Texas attorney general’s office, governor’s office, nor the TSBDE.

Xenith Practices, LLC, a DSO, managed the failed Austin dental clinic. Mr. R. Kirk Huntsman, —a business executive with no formal dental education and unlicensed to practice dentistry—formerly served as CEO of Xenith. As we shall see, Mr. Huntsman has quite the storied history in the dental industry. As for the true beneficial ownership of Austin Cosmetic Dentistry, that will be for the courts to sort out. It is alleged that Mr. Huntsman’s son-in-law—a Texas licensed dentist who lives and works in Colorado— signed on as the figurehead, “owner dentist”. Mr. Abbott could not have missed this obvious violation to Fifth Circuit ruling 07-30430, and negative fallout to the public health and safety.

Myths, Rumors, and Bald Faced Lies- Truths Revealed about the DSO Industry

Myths, Rumors, and Bald Faced Lies- Truths Revealed about the DSO Industry

By: Michael W. Davis, DDS

There exists a great deal of misinformation, as well as intentional misrepresentations, within the dental service organization (DSO) industry. Much, if not most of this of this, is fostered by the DSO industry itself.

Historically in healthcare, dentists were held to ethical and legal standards within the doctor/patient relationship (legal contract) always placing their patient’s interest, above all other interests. Court rulings have determined that because of a doctor’s expert knowledge, which is not easily accessible to the general public, the patient is at a distinct disadvantage within this contract agreement. Obviously, the delivery of healthcare services is a very different matter, than the buying and selling of widgets.

A corporate third party, the DSO, may enter into this contract agreement (doctor/patient relationship). This is usually without the knowledge or consent of the patient. Such an action may invalidate as unlawful, the doctor/patient relationship. (Please reference Fifth Circuit Ruling: 07-30430.) DSOs, which utilize bonus systems and production quotas for professional providers, are engaging in the unlicensed and unlawful practice of dentistry. Such corporate violators are subject to the same regulatory sanctions and disciplinary actions, as individual violators. Unfortunately, too few government regulators have advanced past their current ineptitude and corruption. This must change.

“At XYZ Dental, we allow you to focus on what you do best; provide excellent dental care for patients. We take care of all the rest.” is a common corporate dentist-recruiting message. Even the provider contracts include a proviso waiver that only licensed dentists provide dental care. Unfortunately, contract verbiage is far from the reality.

Unlicensed corporate managers, not doctors, very often make clinical decisions effecting direct patient care. This may include the quantity and quality of dental supplies for a dental clinic. It may include a very limited selection of utilization of dental laboratories, many of which are undisclosed offshore dental lab sweatshops. Unlicensed corporate clinic managers, who are not under any doctor’s supervision, may be utilizing arm-twisting sales techniques, to get patients to sign on for financing of unnecessary dental care. Similar arm-twisting may be used on doctors and hygienists, to increase clinic profits, by selling unneeded dental treatments to their patients.

Hygienists, who lawfully must be working under the direction and supervision of a duly licensed doctor, are today working for whomever writes their paycheck. Periodontal probing measurements are invented, to generate additional cases of unnecessary scaling and root planing (deep cleaning). Sulcular antibiotic therapy is sold to patients, even before assessment of results, to initial therapy of scaling and root planing. Adult cleaning visits are often restricted to 20-30 minutes, which nearly always leaves excessive disease-causing agents. In fact, often unlicensed dental assistants are providing hygiene services.

Generation of corporate profits trumps the interests of patients. Any dental professional employee who dares question the corporate model will soon be out the door. After all, a corporation’s first fiduciary responsibility is to generate maximal returns for shareholders. The interests of patients never enter the picture.

Upper management in the DSO industry will often argue, that numbers of non-corporate doctors are engaging in the same or similar patient abuses, within their smaller businesses. And, this justifies their grand scale abuses, how? It’s the old lame failed argument, of justifying bad behavior, with other examples of bad behavior. Reality: dental regulatory boards have reported a far greater percentage of statute violations originating from corporate dentistry, than from smaller doctor-controlled practices.

Another DSO fallacy often relates to doctor financial compensation. Verbally, their management and doctor-recruiters advise dentists of compensation, clearly based on a percentage of the doctor’s clinical production and/or hourly wage. Yet, the complex legalese of the employment contract, seemingly tells another story. These contracts are often so complicated, only a law firm concurrently expert in business law, contract law, and finance could hope to decipher the maze of legal verbiage.

Fortunately, any American Dental Association (ADA) member can have these contracts reviewed, as a benefit of membership. Few recent grads take advantage, as they not only lack finances to hire an appropriate attorney for contract review, but also are often not ADA members.

Dr. Chris Salierno: Good Dentists Can Make Bad Decisions

Interview with Dr. Chris Salierno

By Michael W. Davis, DDS | January 9, 2013

 

 

Dr. Chris Salierno Introduction

Education
Dr. Salierno received his B.S. from Muhlenberg College and his D.D.S. from SUNY Stony Brook School of Dental Medicine. He completed his formal training at Stony Brook Hospital’s General Practice Residency program where he focused on implant prosthetics. Dr. Salierno practices general dentistry in Melville, New York. 

Leadership
Early in his career Dr. Salierno served as president of the American Student Dental Association. He has continued to lend his leadership skills to serve his colleagues, as well as the public, by serving on a variety of committees that promotes enhanced professional ethics for the dental profession—including advocacy for new dentists.

His published professional papers and educational lectures have elevated quality care in dentistry. He writes and lectures internationally on a variety of subjects including, implants, occlusion, TMJ disorders, and practice management.

Much of his lecture content is available on his blog, The Curious Dentist, which also features candid discussions about everyday dentistry. Dr. Salierno is  co-editor of The Surgical-Restorative Resource, which focuses on the team approach to complex dental care. He is a past Chair of the ADA New Dentist Committee, and is currently the President of the Suffolk County Dental Society.

 

Interview Questions

Dr. Davis: Dr. Salierno, your blog, “The Curious Dentist”—directed at our junior colleagues— is very eye opening. It is troubling to see the minefield recent dental  graduates often must navigate. Senior doctors like myself often have no idea what challenges our next generation of doctors are facing with future employers.

One example, of course, is transferring the tax burden of federal FICA taxes from the employer, to the employee dentist, therefore increasing the employer’s bottoms line. Employers habitually misclassifying “employees”, as “independent contractors”. This, of course, is illegal and in direct contradiction to well established and routinely enforced IRS Guidelines.  

We have seen employers configure employee dentist compensation, using a convoluted structure of percentage of collections or billable services which would require a doctorate degree in economics and quantum mechanics to decipher. In numbers of cases, employee dentists are not getting a fair deal. 

There is also indisputable evidence of the pressure experienced by our junior colleagues to provide high-skill services, such as molar endodontic therapy in a rapid cut-rate manner. None of this serves the best interest of the patient, nor the dental profession.

Dr. Salierno, could you please highlight a few of these problem areas for dentist employees. In fact, I’d love for you to publish a paper specific to these issues, and give a lecture to every senior dental school class, prior to graduation.

Dr. Salierno: I’ve actually participated in an initiative just like you’ve suggested. The ADA’s Success Program brings leaders into dental schools to give presentations on subjects like ethics, practice management, and career choices. Programs are offered for first through fourth year and I’m happy to say that the majority of schools take us up on it. The main message to students is that they are not alone, no matter what challenges may face them in the years to come.

It’s hard to pin fraud on top executives in big complex companies! Poppycock, says Judge Jed Rakoff

This may seem to have nothing to do with corporate dentistry and fraud, but you would be wrong.

Judge Rakoff Blasts Breuer, Prosecution of Companies Rather than Individuals in Bar Speech

Thursday, November 14, 2013

Absent sitting on the Supreme Court, it is difficult for a single judge to effect much change. Yet Jed Rakoff, in sending the SEC back to the woodshed in two separate cases over its failure to get factual admissions, meaning admissions of misconduct, on civil settlements of SEC cases, singlehandedly embarrassed the SEC and the Department of Justice into seeking these statements (for instance, numerous media reports indicate that the Administration wants that sort of confession as part of its pending settlement with JP Morgan).

Rakoff threw down another gauntlet in a New York Bar Association speech on Tuesday. I’m taking the liberty of quoting it at length because his rebuke is a breath of fresh air and roused the Department of Justice to issue a “we really are doing our job” response.

But if, by contrast, the Great Recession was in material part the product of intentional fraud, the failure to prosecute those responsible must be judged one of the more egregious failures of the criminal justice system in many years.

Rakoff then pointed to the fact that the FCIC and numerous government officials had discussed fraud in connection with the crisis and went further:

While officials of the Department of Justice have been more circumspect in describing the roots of the financial crisis than have the various commissions of inquiry and other government agencies, I have seen nothing to indicate their disagreement with the widespread conclusion that fraud at every level permeated the bubble in mortgage-backed securities.

He then goes through their litany of excuses (his word). Ooh, it’s hard to pin fraud on top executives in big complex companies! Poppycock, says Rakoff:

Who, for example, were generating the so-called “suspicious activity” reports of mortgage fraud that, as mentioned, increased so hugely in the years leading up to the crisis? Why, the banks themselves. A top level banker, one might argue, confronted with increasing evidence from his own and other banks that mortgage fraud was increasing, might have inquired as to why his bank’s mortgage-based securities continued to receive triple-A ratings? And if, despite these and other reports of suspicious activity, the executive failed to make such inquiries, might it be because he did not want to know what such inquiries would reveal?

This, of course, is what is known in the law as “willful blindness” or “conscious disregard.” It is a well-established basis on which federal prosecutors have asked juries to infer intent, in cases involving complexities, such as accounting treatments, at least as esoteric as those involved in the events leading up to the financial crisis. And while some federal courts have occasionally expressed qualifications about the use of the willful blindness approach to prove intent, the Supreme Court has consistently approved it.

The second, “weaker” excuse came out of Lanny Breuer’s mouth in his notorious Frontline interview: that the investors in mortgage-backed securities were sophisticated; it would be hard to prove they relied on ratings and fraudulent misrepresentation. Rakoff basically says that Breuer is a crappy lawyer:

Actually, given the fact that these securities were bought and sold at lightning speed, it is by no means obvious that even a sophisticated counterparty would have detected the problems with the arcane, convoluted mortgage-backed derivatives they were being asked to purchase. But there is a more fundamental problem with the above-quoted statement from the former head of the Criminal Division, which is that it totally misstates the law. In actuality, in a criminal fraud case the Government is never required to prove reliance, ever. The reason, of course, is that would give a crooked seller a license to lie whenever he was dealing with a sophisticated counterparty. The law, however, says that society is harmed when a seller purposely lies about a material fact, even if the immediate purchaser does not rely on that particular fact, because such misrepresentations create problems for the market as a whole.

The third excuse is that prosecution might hurt the economy. Rakoff indicated his discomfort with the “too big to jail” idea, but used that to lambaste the notion of prosecuting institutions as opposed to individuals. No institution would perish if an executive were prosecuted.

Rakoff carefully and pointedly says he’s not accusing prosecutors of revolving-door corruptions and that prosecutors maximize their value in the post-government service market by collecting scalps. Whether of not he actually believes that to be true, he has to say that or risk never hearing a big securities case ever again, in that both defendants and regulators could ask to have cases assigned to other judges based on the notion that Rakoff had said that prosecutors were soft of big corporate crime because they were currying favor with prospective future employers. Notice, by contrast, the cautionary example of Judge Shira Scheindlin, who had a ruling opposing New York City’s stop and frisk rules overturned because she violated the code of conduct for Federal judges by showing partiality.

But he point out other reasons why no one could be bothered to go after the conduct that wrecked the economy. The best US Attorney’s office, the Southern District of New York, was busy on the Rajaratnam case. Any smart prosecutor would ride that horse, which was ready to go, rather than take on the slog of a case that was years away from being files. So basically, with Congress starving the SEC of budget and making it capable only of handing out parking tickets in the form of insider trading cases, SDNY staffers were incentivized to go after the comparatively easy cases the SEC threw over the transom rather than pursue far more important crisis-related cases. Rakoff argues the other reason for the government’s reticence to prosecute is that it would embarrass government officials and expose policy failings.

And Rakoff described why prosecuting companies, rather than targeting individuals, produces lame outcomes:

But if your priority is prosecuting the company, a different scenario takes place. Early in the investigation, you invite in counsel to the company and explain to him or her why you suspect fraud. He or she responds by assuring you that the company wants to cooperate and do the right thing, and to that end the company has hired a former Assistant U.S. Attorney, now a partner at a respected law firm, to do an internal investigation. The company’s counsel asks you to defer your investigation until the company’s own internal investigation is completed, on the condition that the company will share its results with you. In order to save time and resources, you agree. Six months later the company’s counsel returns, with a detailed report showing that mistakes were made but that the company is now intent on correcting them. You and the company then agree that the company will enter into a deferred prosecution agreement that couples some immediate fines with the imposition of expensive but internal prophylactic measures. For all practical purposes the case is now over. You are happy because you believe that you have helped prevent future crimes; the company is happy because it has avoided a devastating indictment; and perhaps the happiest of all are the executives, or former executives, who actually committed the underlying misconduct, for they are left untouched.

WARNING to all crooked dentists - 29 patients receive $35 million dollar award for unnecessary root canals–Read it and weep!

 

$35 million awarded to 29 Seattle-area patients for root canals

SEATTLE — More than two dozen patients of a former Seattle-area dentist accused of performing hundreds of unnecessary root canals have been awarded $35 million in an arbitration proceeding.
Former King County Superior Court Judge Paris Kallas issued that award Wednesday.

The judge found that Henri Duyzend was negligent, failed to obtain informed consent from patients, committed fraud and violated the Washington Consumer Protection Act, The Seattle Times reported.
A sworn affidavit from Dr. David To said Duyzend performed nearly 2,200 root canals on about 500 patients in the five years before he retired in 2007. To purchased Duyzend’s practice and says a typical patient has fewer than two root canals.

State Health Department spokesman Donn Moyer said his agency has received 76 complaints about the man.

Duyzend started practicing dentistry in Shoreline, north of Seattle, in 1977, the Health Department said.

Moyer said the man surrendered his license in 2010 after negotiations, agreeing to never practice dentistry in the state again.

Both The Times and KING-TV said calls for comment to Duyzend and his lawyer were not returned. An Associated Press call to his home was not returned Wednesday night. Court documents show that in 2012 he denied any wrongdoing.

KING reports that more than 200 patients filed malpractice claims against the dentist but the arbitration award benefits a smaller group of 29 who declined to settle their claims.
Construction worker Dan O’Neal had 20 root canals; he was awarded more than $2 million, KING reported.

Laurel Stuart told The Times she was Duyzend’s patient from the early days of his practice.
“We thought he was fabulous,” she said Wednesday, adding he made patients feel comfortable.
She said she started questioning his work about 15 years ago because “of all the root canals.” She had four, plus “lots of crowns” and said she had to go to a specialist to have implants when she lost four teeth.

Seattle dentist Dr. Fred Quarnstrom looked at records of Duyzend’s former patients and sat in on testimony earlier this month.

He told The Times that root canals are not uncommon, but a patient with four root canals is unusual.
--The Associated Press

Nothing out of DC, or anywhere else, on Organized Criminal Dentistry - Why? When?

It's October 2, 2012. Organized criminal dentistry continues with as much vigor today as in 2007. Still, only silence out of Washington.

On November 4 it will be 5 years since the public saw the first video of what these Medicaid dental mills were doing to children. It's been 5 years since I learned of this abuse and I'm still fighting mad over it. It shakes me to my core to think what would be happening if i weren't. As a select few of other Americans, I devote every day to squashing this, dead in its tracks. Does anyone, besides these few  give a shit care?

How many times in the last five years have we heard the cry of corporations at the feet of Congress pleading for more money, citing the death of one child over a tooth infection that migrated to his brain – Deamonte Driver? Too many! This poor child’s death is being used, by corporations and associations, as a tool to abuse other children and be paid by the taxpayer to do so.

How many times have we heard the cry of corporations at the feet of Congress over the abuse of Miguel, seen in the exclusive video? None! N.O.N.E! None! Has any company, or association for that matter, been to Congress pleading for someone to stop the practice of children being tied up in straight jackets, held by 3 or 4 misguided dental assistants only to receive what can only be called barbaric dental treatment? No!

It was 2003 - 9 YEARS ago - when a young reporter – Stuart Watson- in North Carolina first reported about the DeRose family's child abuse for tax dollars scheme. Most enduringly referred to as - "serving the underserved."

It's 2012. The abuse continues daily. The only real thing to change is one, the companies playing the game, more folks want in on the action. Two, the changed the terms used to describe the crimes. “Quota” was changed to “Goals”, the “Goals” changed to “Targets” and “Targets” to “Forecasts”. It’s hard to find new words for abuse a child for a dollar, though.

There are mounds of evidence detailing this criminal behavior which has landed on the desks (or trash cans) of Attorney Generals, Senators and Congressmen - both Federal and State levels. More than enough to make sweeping arrests and stop this child abuse and raping of every taxpayer this very day. Yet, another day will pass and no one stops it. No one closes the doors of the dungeons or arrests the dungeon masters.

You've seen what these children are subjected to - the videos, the testimony, the documents, the first hand accounts from employees, patients and parents!

You've seen testimony of a small child being "waterboarded" by Small Smiles corporate dentist - Megann Scott. Yet, only a "waterboarded" terrorist gets your attention!

You've been shown, just recently, that children are literally kidnapped at bus stops, taken thru the back doors of clinics, then coerced into forging their parents signature! Yet, you do nothing!

You've allowed the chop shops to set up in every poor neighborhood in the country. Even given them our tax dollars to do so.  If allowing these predators this much access to our babies and children was not enough, you've allowed them access to children in our public schools, via gypsy style mobile dental clinics. You have been shown the devastation children are enduring because of this practice - Isaac Gagnon.

You've seen the deaths of babies sedated for over-treatment of dental procedures, yet, you do nothing!

It is a disgrace, crime against humanity, and a black mark on the entire county, to continue to allow this to happen another day. In my opinion, a much bigger than the Fast and Furious debacle.

It's worse than disgraceful this is still happening, 5 years after first being alerted to these children being abused. I am saddened at what is becoming the biggest disgrace of all - the lack of action!

I'm embarrassed nothing is being done - other than a few token arrests of a dentist here and there. Only one, that I'm aware of from the criminal organizations themselves - dentist and inventor Robin Lockwood in Oklahoma.

The companies who have perfected this madness don't even try to defend their actions any longer. Kool Smiles - NCDR for example. The best they can do at this point combat their disgusting behavior is to hire someone that in essence said, "we can abuse and mangle more children for less" My GOD! Are we all insane?!

Are lawmakers and law enforcement hoping the pool of patients will just run dry if it's ignored long enough? I'm note sure. They wouldn't have to bite the hands that feed their campaign coffers, would they? These abused children are growing up, they have not and will not forget the horrors bestowed upon them by these brutal dentists. Nor, will they forget those who sat idly by and let, if not encouraged, it to happen. I doubt they will subject their own children to these abuses, though it may mean no dental care at all for future generations. (This could explain why there is always a crisis in dental health here in America.)

This very day – Tuesday, October 2, 2012- thousands more children will be abused in these clinics, it will happen again tomorrow. What will it take to stop this? Tell me, please. What do you need?

Millions of tax dollars dollars will be paid to companies today to physically abuse, mangle children faces and mouths and leave crippling emotional scars. One such child who suffered these horrors well over a year ago, just this past weekend, gained the courage to leave her mom and spend a few short hours with her grandparents! How is doing nothing about this, OK?

This week, I’m spending my time nurturing a grandchild or two or three. We will be decorating pumpkins, and doing anything else I can think of to give them loving memories. Hopefully they will carry these moments in their hearts and minds, long after I’m gone.

Prosecutors, Attorney Generals, everyone on Capitol Hill, this is to you:

Will you stop the barbaric child abuse and torture by greedy dentists today?

Will you please end this nightmarish treatment that is emotionally crippling our most vulnerable – our children, our grandchildren?

The millions of children who have been permanently scared by abusive dentistry can’t enjoy “Kodak moments”, as above. Their  minds, emotions, as well as their mouths are forever damaged. We as parents and grandparents can’t give them enough loving memories to erase these horrors from their minds.

Do something today?

Unethical Private-Equity-Owned Dental Clinics Receive Well Deserved Attention

Unethical Private-Equity-Owned Dental Clinics Receive Well Deserved Attention

It’s been a bad few weeks in the limelight for private equity investors masquerading on the down-low as charity dentists when what they’re really after is making millions by performing unnecessary dental work on poor kids and then getting Medicaid to pay for it. With the way everyone’s acting, you’d think it was the mortgage crisis all over again – as if working class and poor folk were nothing more than pawns in a game played by Wall Street investors, but financed with American tax dollars.

Download the pdf.

Kool Smiles Dental–NCDR,LLC-FFL Partners’ written response to Senators Grassley and Baucus

Anyone buying this load of crap? Of course not. I can’t imagine sitting in my office reading this fairy tale and not getting angry as a wet hen (whatever that is). My blood would be boiling.

Kool Smiles Dental Centers Letter to Senators Grassley and Baucus 02-03-2012

Limiting Private Equity Dentistry: A Report by Michael Davis, DDS

The full report with all referenced materials and index can be download here.  A handy tool for fighting these crimes against humanity.

Support for Limiting Private Equity Dentistry- made to New Mexico Board of Dental Health Care

Report submitted in response to request of
Dr. Robert Gherardi, New Mexico Board of Dental Health Care-
June 13, 2012

By: Michael Davis, DDS
Background

It is important to get up to speed, with specific nomenclature of Interstate Corporate Dentistry, and specific factors of related Case Law.

A Dental Management Service Organization (DMSO) controls the operations of their subordinate dental clinics. They pay staff salaries, including doctors’ salaries. They control the supplies available to each dental clinic. They (not the individual dentist) select the laboratory to be employed for lab services (dentures, crowns, bridges, etc.). They set production quotas and bonuses for individual doctors & individual clinics. They monitor and evaluate each clinical service provided, by each Provider they employ. They control the bank accounts of each individual dental clinic, and sweep those bank accounts on a very regular basis. They pay rent on real estate, of the clinic facilities. They select & maintain dental equipment for each subordinate clinic. They are responsible for the Licensure & Accreditation of each employee. They generally supply the Malpractice Insurance for their Employee Dentists, but often will not purchase “Tail Coverage”.

On paper, the DMSO owns very few hard assets, but actually pulls the strings, of the Practice of Dentistry. Their most valuable assets are their contractual obligations, which have been demonstrated by the Fifth Circuit in re: OCA, Inc. December 12 2008 (07-30430), to represent the “Unlicensed and Unlawful Practice of Dentistry”. Increasingly, we are today seeing more DMSOs, which are offshore registered corporations, versus Delaware incorporation.

Bloomberg article on private equity firms abusing children with unnecessary and intrusive dental treatment has spurred several articles on the web

Here are some highlights:

Bloomberg – Business Week

• Dental Abuse Seen Driven by Private Equity Investments

• http://www.bloomberg.com/news/2012-05-17/dental-abuse-seen-driven-by-private-equity-investments.html#disqus_thread

Deal Book – New York Times:

• Is Private Equity Contributing to Dental Abuse? Federal and state
  regulators are looking into whether dentistry companies backed by
  private equity are being encouraged to perform unnecessary procedures,
  Bloomberg News reports
  
• http://dealbook.nytimes.com/2012/05/17/morning-take-out-486

San Fransisco Chronicle

• Dental Abuse Seen Driven by Private Equity Exploiting Care Firms

• 
  http://www.sfgate.com/cgi-bin/article.cgi?f=/g/a/2012/05/17/bloomberg_articlesM42NGH1A74E901-M4596.DTL

BoingBoing 40 comments or more:

• http://boingboing.net/2012/05/17/private-equity-driven-dentists.html

Compliance Search

• Private Equity Responsible For Massive Dental Medicare Fraud, According to New Report
  by Beth Connolly on May 17, 2012
  
• http://compliancesearch.com/compliancex/private-equity-responsible-for-massive-dental-medicare-fraud-according-to-new-report/

 

Physicians for National Health Program

• Private equity investors moving into dentistry
  

• http://pnhp.org/blog/2012/05/17/private-equity-investors-moving-into-dentistry/

 

Global Post

• Private equity, profits and aggressive dentistry
  

• http://www.globalpost.com/dispatches/globalpost-blogs/macro/private-equity-profits-and-aggressive-dentistry

 

Watchdog Bytes

• Texas taxpayers soaked for unneeded dental work

• http://blogs.star-telegram.com/investigations/2012/05/speaking-of-texas-teeth-combine-devious-dentists-with-dubious-private-equity-firms-and-what-do-you-get-soaked-taxpayers-ac.html

Huffington Post

• Private Equity Firms Push Dentists To Detrimentally Overtreat Patients:

• http://www.huffingtonpost.com/2012/05/17/private-equity-firms-dental_n_1524342.html

•  

 

Meta Filter

 

• "The dentist man got me" (lot of comments)
  

• http://www.metafilter.com/116030/The-dentist-man-got-me

Weblog

• Dental Abuse Seen Driven by Private Equity Investments
  Munchausen by profit.
  
• http://weblog.sinteur.com/index.php/2012/05/17/dental-abuse-seen-driven-by-private-equity-investments/

Protect Quality Dental Care

• Bloomberg News on Dental Management Corporations: Patient Abuse,
  Private-Equity Funds & Medicaid Fraud - Wall Street Money Fuels Coalition Against SB655 in North Carolina
  
• http://www.protectqualitydentalcare.org/bloomberg-patient-abuse-private-equity-funds-and-medicaid-fraud-mark-dental-management-corporations/

Bangor Maine Daily News:

• Dental abuse seen driven by private equity exploiting care firms
  

• http://bangordailynews.com/2012/05/20/health/dental-abuse-seen-driven-by-private-equity-exploiting-care-firms/?ref=latest

Charleston Daily Mail

• Dental service accused of abuse
  
• http://www.dailymail.com/Business/201205200102

Democratic Underground

• Now Wall Street is f**king with our teeth.......
  

• http://www.democraticunderground.com/1002707485

Summary of Twitter links:

• http://topsy.com/www.bloomberg.com/news/2012-05-17/dental-abuse-seen-driven-by-private-equity-investments.html

 

Happy Birthday to me… Happy Birthday to me….

Private equity, profits and aggressive dentistry

 

Global Post

Bloomberg has published an article today that you just have to read.

It starts with a mom in Arizona picking up her (sobbing) 4 year old after school, only to learn that a dentist had installed steel crowns on two of his back teeth — "pulpotomies" according to a note in his backpack. Baby root canals.

The mother hadn't even been consulted. "I was absolutely horrified," she said.

No, this wasn't Marathon Man for toddlers. So why this aggressive act of dentistry?

It was about money. Profits. Private equity. And a new plague known as "dental abuse."

Bloomberg explains:

Isaac’s dentist was dispatched to his school by ReachOut Healthcare America, a dental management services company that’s in the portfolio of Morgan Stanley Private Equity, operates in 22 states and has dealt with 1.5 million patients. Management companies are at the center of a US Senate inquiry, and audits, investigations and civil actions in six states over allegations of unnecessary procedures, low-quality treatment and the unlicensed practice of dentistry.

ReachOut, Bloomberg reports, is one of just 25 dental management services "bought or backed by private-equity firms in the last decade." The management services take care of the business side, leaving the dentists to focus on teeth. The trouble started when the profit-driven businesses began seeing opportunity in your tax dollars: Medicaid.

Maybe that's why there's a big cavity in the US government's budget?

A former physician once counseled me that dentists were "a bunch of crooks, out to get rich." At the time, I took that with a grain of salt. Thanks to Bloomberg, I won't even floss without exercising caution.

Click here, and read on. 

And if there's a dentist nearby, keep your mouth closed. 

American’s Dental Health is at Risk: The true crisis in dentistry

As Bloomberg reported today, Private Equity is seen as the driving force behind abusive dentistry and Medicaid fraud. Little Isaac Gagnon, is still suffering from night terror from the abuse he endured while he was supposed to be safe at school.

The Fort Worth Star Telegram followed saying Texas taxpayer are getting hosed for unneeded dental procedures which amounts to Medicaid fraud.

Byron Harris of WFAA in Dallas has been reporting about this for months.

However, it is “We The People” who are picking up the tab and enriching Private Equity firms coffers into the billions of dollars. But that is not the biggest price being paid.

The biggest price of all is the dental health of each and every American!

This is not a Medicaid patient only problem. The same driving force is behind places like Heartland, MidWest, Pacific Dental, BrightNow, Aspen Dental, Affordable Dentures, Comfort Dental and now Wal-Mart is getting in on the action. The list goes on.

American Dental Association asks Centers for Medicare and Medicaid Services to back off the audits. Seriously! While, upstairs, the Academy of General Dentistry wants more taxpayer funding. Seriously!

The American Dental Association sent this letter to Centers for Medicare and Medicaid:

ADA Letter to CMS July 2011

American Dental Association,211 East Chicago Ave.,Chicago, IL 60611-2678

Then ABC ran this, by Chris Como, (his brother is NY Governor Andrew Como who said a month or so ago Medicaid audits were just way to hard on corporations.)

By CHRIS CUOMO (@ChrisCuomo) , GITIKA AHUJA (@gitgirl) and ENJOLI FRANCIS

April 24, 2012

With more than 16 million low-income U.S. children on Medicaid not receiving dental care -- or even a routine exam -- in 2009, according to the Pew Center on the States, dentists and ERs say they are treating very young patients with teeth blackened from decay and bacteria and multiple cavities.

"I see it in their eyes before they tell me it's that way," Dr. Gregory Folse told ABC News. "We are able to intervene and take the pain away from their teeth and it brings the spark back. And that's my goal."

Folse's Outreach Dentistry mobile clinic travels to schools around Louisiana, filling cavities and teaching children and parents about the importance of oral hygiene.

In 2007, Congress held a hearing on the issue of children's dental health after Deamonte Driver, a 12-year-old Maryland boy, died when a tooth infection spread to his brain. His mother, Alyce Driver, had been unable to find a dentist to treat him on Medicaid and could not afford to pay out of pocket.

At the time, Leslie Norwalk, then-acting administrator for the Centers for Medicare and Medicaid Services, called his death "a failure on many levels."

Ayman Risha–not a dentist, but neither is Midwest Dental Corporation, but it appears that’s not an issue

Star Tribune

St. Cloud dental clinic owner denied license

• Updated: April 21, 2012 - 5:16 PM

An unlicensed St. Cloud dental clinic owner who altered billing codes and directed staff to perform unnecessary procedures was denied a license last month, according to an order by the Minnesota Board of Dentistry.
In 2009, the board received a complaint about Ayman Risha, who holds a foreign-issued Bachelor of Dental Surgery degree.
In addition to finding Risha unlicensed as a clinic owner and a practitioner, a board investigation determined that he had "engaged in fraud or deception ... by providing diagnoses and preparing treatment plans that were not warranted," the order stated. Risha directed staff to follow the plans, falsify periodontal probing numbers and take unnecessary X-rays, as well as scratching expiration dates off products and changing billing codes to justify procedures, the order said.
The investigation also determined that Risha's clinic lacked adequate infection control procedures, including a disposal program and a plan to handle exposure to infection.
In March 2010 the board ordered Risha to cease his unlicensed activities. Two months later, he applied for a license by examination.
After a board committee recommended in 2010 that he be denied a license, Risha contested the decision but lost by default when he missed a 2011 hearing, the order stated.
The board ordered Risha to pay $8,794 in costs, including expenses for an administrative law judge.

ROTFL–Aspen Dental propaganda quoting the group who promotes illegal practice of dentistry; The DGPA

From the Aspen Dental Blog

Dispelling misconceptions about Dental Service Organizations

March 5, 2012 by Bethany Tuzzolino

A recent online article¹ based on the results of an August 2011 survey of 1,500 dentists asked participants to rank what they consider to be their highest concerns as practitioners and small business owners. They identified “Growth and Influence of Corporate Dentistry Companies that Hire Dentists” as a high priority challenge to their success. The respondents ranked this “frustration” about the current state of the profession the third highest category in the Priority 1 section of the survey, right behind “Third-Party Dictation of Treatment Plans and Setting Fees” and mid-level or expanded-function dental practitioners, and right above “Overpopulation of Dentists and Hygienists.” The author notes that “some of these firms have moved into geographic areas already saturated with dentists.”¹ This situation is understandably concerning to private practitioners, who are essentially entrepreneurs trying to establish a territory and stable patient base. It is, however, a well-known fact that dental school does not teach graduates how to successfully find the ideal location for, or run, a private practice.