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.

Ben Carson Wants Jail Time For Health Care Fraud -- Except For Dentist Friend

"We became friends about a decade ago because we discovered that we were so much alike and shared the same values and principles that govern our lives."

 

"…Pittsburgh dentist Alfonso A. Costa pleaded guilty to a felony count of health care fraud after an FBI probe into his oral surgery practice found he had charged for procedures he never performed, according to court records."

"At Costa's 2008 sentencing hearing, Carson described the dentist as "one my closest, if not my very closest friend...”

"We became friends about a decade ago because we discovered that we were so much alike and shared the same values and principles that govern our lives," Carson told the judge, adding that their families vacationed together and that they were involved in "joint projects."

"Next to my wife of 32 years, there is no one on this planet that I trust more than Al Costa," Carson said."

Read The Entire Story Here

AOL Accuses Dr. Richard Malouf of Gaming The Texas Judicial System

Everyone remember the Texas dentist, Dr. Richard Malouf, who sued nearly everyone in sight that had the gall to report or offer comment on the “House That Medicaid Built”?  The place got so big he had to purchase the house next door and he installed his own personal waterpark; dubbed here as 6 Flags Over Malouf.

The story won investigative reporter Byron Harris and WFAA a 2013 Edward R. Murror Award:

WFAA won a 2013 Edward R. Murrow Award for its investigation of Texas Medicaid fraud, including the allegation that Malouf used taxpayer money to build his personal waterpark. Texas law generally prohibits the seizure of one's home, even in the event of wrongdoing, but there is a loophole.
"If that home is purchased with stolen money, or that home is purchased based on money that has been earned by falsehood or deceit, then that home is not protected at all," attorney Jim Moriarity told WFAA.

Malouf sued a long list of folks, including actor Owen Wilson’s mom, who lived next door, for trespassing, invasion of privacy, and defamation which included America Online (AOL) for publishing the story.
Apparently Malouf , and his wife LeAnne find themselves in the 11th hour of trial without legal representation in his defamation suit which continues with AOL, Graham Wood and Candace Evans. 
AOL is basically calling “bullshit”, saying Richard and Leanne Malouf have a pool of a dozen or more attorney’s across Texas and should not need 4 months to hire another one.
I agree!
This is a must read! Enjoy!

PS. That is not the only system Mr. and Mrs. Richard Malouf gamed.  Just saying.

Malouf v AOL_Wood - Response to Motion for Continuance

Grassley Welcomes Exclusion of Two Pediatric Dentists from Federal Health Care Programs

Nov 06, 2015

Earlier this year, Sen. Chuck Grassley of Iowa asked key government agencies what they’re doing to prevent and punish Medicaid dental fraud, including billing for unnecessary and painful treatments for children, in light of inspector general audits and related media reports documenting worrisome practices.  This week, the Department of Health and Human Services Office of Inspector General notified Grassley that it has excluded two pediatric dentists from federal health programs.  One dentist is in Florida.  The other dentist is in Colorado.  Grassley made the following comment on the exclusions.

“The taxpayers pay for quality health care services.  If doctors and dentists are bilking the taxpayers and mistreating patients, they need to be shut out of Medicare and Medicaid, period.    The inspector general is right to use this tool whenever it’s appropriate.”

The Department of Health and Human Services Office of Inspector General provided the following details of the two newly excluded dentists:

On September 30, 2015, OIG excluded Howard Sheldon Schneider, DDS, from participation in all Federal health care programs because his license to practice in the State of Florida was revoked, suspended, or otherwise lost for reasons bearing on his professional competence, professional performance, or financial integrity.  OIG conducted an investigation of Dr. Schneider which revealed that the State of Florida Board of Dentistry issued a Final Order for a Disciplinary Voluntary Relinquishment of his dental license after the Florida Department of Health opened an investigation into allegations of Dr. Schneider’s abuse of his pediatric dental patients.  Dr. Schneider cannot apply for reinstatement until his dental license is reissued by the State of Florida.  

On August 12, 2015, Dr. Robert E. Hackley, Jr., DDS, agreed to be excluded from participation in all Federal health care programs for a period of three years. OIG conducted an investigation of Dr. Hackley for dental care he provided to patients at Small Smiles Dentistry for Children in Colorado Springs, Colorado. OIG's investigation revealed that Dr. Hackley furnished dental services to patients of a quality which failed to meet professionally recognized standards of care, including: performing medically unnecessary dental procedures, failing to treat existing dental conditions, and performing dental procedures that were below professionally recognized standards of care.

Grassley’s letters to the Justice Department and the Department of Health and Human Services Office of Inspector General from June are available here and here.

In 2013, following a year-long investigation, Grassley and then-Finance Committee Chairman Max Baucus of Montana issued a report and recommendations urging the administration to ban dental clinics from participating in the Medicaid program if the dental clinics circumvent state laws designed to ensure only licensed dentists own dental practices to prevent substandard care.  In 2014, the inspector general moved to disqualify a firm from Medicaid. 

Grassroots Efforts of Texas Dentists Challenge Activities of the American Dental Association

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.
 
 


A newly formed group of grassroots Texas dentists has challenged activities of the American Dental Association (ADA), with the Association of Dental Support Organizations (ADSO). In an open letter to ADA House of Delegates members, Concerned Dentists of Texas, Inc. has expressed their concerns about ADA leading officials meeting with ADSO representatives. The ADSO has gone so far as to highlight these meetings in their public online marketing. Concerned Dentists of Texas contend these clandestine meetings were unsanctioned and violate established ADA rules and protocols.  They also express that the ADA’s appearance of collusion is highly evident and problematic.
Membership of the ADSO raised more than a few eyebrows. Of note in the ADSO membership is Aspen Dental Management, Inc. Aspen Dental in recent months has formally signed individual and separate legal settlement agreements, with the state attorney generals of Massachusetts, New York, and Indiana. These settlements allege specific violations ranging from unlicensed practice of dentistry, violations to consumer protection laws, false and misleading advertising, violations to full disclosures in consumer borrowing, bait-and-switch business schemes, etc.
Another ADSO member, Heartland Dental Care, Inc., in 2008 settled with the federal government for alleged Medicaid fraud for falsification and misappropriation of doctors’ Drug Enforcement Agency (DEA) numbers. This DSO also settled with the State of North Carolina in 2011, for alleged unlawful attempt to purchase a dental practice.
To follow is the open letter of Concerned Dentists of Texas, Inc. to ADA House of Delegates membership:

Concerned Dentists of Texas, Inc..

October 27, 2015
Dear ADA Delegates and Alternate Delegates,
Approximately 80% of ADA members practice as independent dentists in small local offices. We are a concerned part of that group. There is an effort by our ADA to support a corporate form of dentistry that we believe is counter to the best interests of our members and our patients. We must ask ourselves, will the ADA support its members or will it support organizations controlled and owned by hedge funds, private equity firms, and public pension plans? The increased proliferation of this type practice model poses serious risks to our 175 year established philosophy of patient care and the doctor-patient relationship.
By not taking a stand to inform and represent the majority of its current members the ADA actively supports the DSO philosophy. This is a membership gamble that the ADA cannot afford to take.
See attachments (pages numbered 1-4) documenting these major changes in the focus of ADA activities:
Page 1 &2. Breaking News Notable Joint Meeting: ADSO & ADA … Several workforce group meetings were held with ADSO (Association of Dental Support Organizations) and ADA representatives seeking a memorandum of understanding.
Page 2 & 3. The last 2 pages of a presentation asking for “collaboration”, “harmony”, and “input” between the ADA and DSOs given at the 2015 ADSO Summit that demonstrates the position ADA is taking regarding the DSOs mode of practice.
Page 1 & 4. The ADSO website screen shots showing proof of this presentation given by the ADA at the 2015 ADSO Summit and then subsequently removed from the website while the other presentations remained.
These changes are affecting the future of the private practice of dentistry and are occurring without bringing it before the House of Delegates for your vote or discussion.

• What does our House of Delegates want in regards to support of the private practice of dentistry?
• What do 80% of our practicing members want in support from their Association? Will the Tripartite support its members?
• What are our ADA candidates’ opinions and beliefs on the future models of dentistry?
• Will they be willing to support the majority of our ADA members and their autonomy?

Over five years of steadily decreasing membership will not be corrected by failing to inform and represent our current practicing members. Rather, the reversal of the trend will be affected by building relevancy and reason for belonging based on representation, transparency, accountability and adherence to long-established principles of professionalism, patient care, and enhancement of the traditional doctor-patient relationships.
Thank you for allowing us to express our concerns and personal opinions. Opinions are our own, but facts are facts. Please look forward to a blog, Concerned Dentists of Texas, which will further address these issues. The blog will serve as an informational source and reference site in order that members may stay informed. Please feel free to contact us at concerneddentistsoftexas@gmail.com.
Sincerely,
Concerned Dentists of Texas, Inc.
Attachments

Link to the entire letter including attachments

Agency Capture: Association of Dental Support Organizations (ADSO) main goal to get corporate dentists appointed to state dental boards

The Association of Dental Support Organizations, (ADSO) governmental affairs committee, chaired by non-dentist Heartland VP and 6 other non-dentist corporate guys decided that their number one priority is getting corporate/chain friendly dentists appointed to state dental boards.  

Read the article and tell me this isn't flat out corruption.  They are asking for volunteers in states where they have lobbyists.  They want to influence regulatory decisions.  And you've got to love the whole "often political preferences will apply to the candidate selection process".  

Government of the corporations, by the corporations and for the top dogs at the corporations.

---

October 2015 Association of Dental Support Organizations Quarterly Newsletter:

ADVOCACY UPDATE

The Importance of Getting DSO-supported Dentists on Dental Boards

The ADSO Government Affairs Committee was formed this summer.  The committee, chaired by John Pantazis, Heartland’s Vice President, General Counsel and Secretary with representatives from 6 other ADSO member companies, meets monthly and is charged with providing the ADSO with strategic guidance on state and federal legislative and regulatory issues.  Among the committee’s top priorities is promoting DSO-supported dentists for appointments to state dental boards. 

Board appointments are a top priority for the ADSO government affairs team because many of the state issues the DSO industry faces grow out of dental board actions.  We strongly believe that having one or more DSO-supported dentists or strong public sector members on the board involved in discussions and rule-making will go a long way in mitigating state legislative and regulatory issues we have faced in recent years. 

While we are happy to promote candidates in any state, we recognize that we are much more likely to have success in one of the 13 states where we have a contract lobbyist on the ground to assist in shepherding the candidate(s) through the process. So make a committed effort when openings are coming up to reach out for potential candidates.  We include in our Government Affairs Weekly Round-up, which is distributed every Friday, the list of states with lobbyists where we need our members help to promote candidates (if you are not on the distribution list for the Round-up and would like to be, please contact Wendy Chew).  The lobbyists are able meet with the governors’ appointment staff and follow up throughout the decision-making process.  They can also assist the dentist in getting letters of support from state legislators or other recognized leaders in the state to support their nominations.

With few exceptions, Board appointments are made by the governor of the state.  Dental boards generally consist of dentists, hygienists, public sector (non-dental related) members and sometimes academics.  All states have rules around the appointments and can include: how long the term of service lasts; requirements on how long the candidate has been a resident of the state; how long the dentist/hygienist have practiced in the state; what area of the state the appointee needs to be from; as well as many other possible requirements.  Since the appointments are made by the governor of the state, often political preference will also apply to the candidate’s selection process.  

In the past year, the ADSO has helped get DSO-supported dentists on the dental boards in Colorado, Iowa and Florida and are actively working on appointments in every other state where we have lobbyists. In addition to supported dentists, the ADSO has also promoted public sector members for state dental board appointment.

If you haven’t already done so, please participate in the ADSO database project.  Your dentists’ information is confidential and will not be shared in any way, but having the information in the database allows us to identify potential candidates in states where there are openings on the dental board. Participation in the database also helps us when we have legislative issues in a state.  We are able to reach out through a contact at your company to activate supported dentists on issues of concern to our industry.

Dental Hygienists Struggle In Corporate Dentistry

Deborah Stewart is a dental hygienist, author, mentor, office manager, coach, consultant, and popular speaker for dental hygiene schools. She holds degrees in dental hygiene, organizational behavior and coaching as well as an MBA. She is author of the 2014 book “Perspectives on Dentistry: An Insider’s Guide to the Professional Business of Dental Hygiene (available here).

Deborah passionately promotes collaboration, ethical standards, and high achievement in both hygienists and the dental industry she loves. A proud member of The Daughters of the Republic of Texas, she is also an historian and a civic and community advocate. 

What Do Dental Hygienists Do to be Employed?
by Deborah Stewart

North Texas, the area where I live, was once roamed by Frank and Jesse James, and home to one of the top ten feuds in American history. The Lee-Peacock Feud was a continuation of the Civil War. North Texas was very prosperous with cotton agricultural growth after the Civil War, so a feud developed whether North Texas would continue to have slaves. Fighting a Civil War apparently was not enough for the additional 200 lives that were killed in the feud. 

To say North Texans are a bit hard headed is an understatement.  

One hundred fifty years later, North Texas dental hygienists are fighting another war. Striving to maintain respect for their profession, they fight the battles of what preventive dental hygiene services are to be performed and how they are to work in dental offices. Faced with very few options, what allies do dental hygienists develop in this fight to stay employed? 

What is obvious is disrespect and disregard for the dental hygiene profession by Texas dentists. This behavior by dentists provided a growth opportunity for corporate dentistry business models.  

You don’t have to have multiple offices and a logo to become corporate dentistry, you just have to have a mindset of disrespect. Texas dentists began disrespecting the profession of dental hygiene in the 1980s when the Texas Dental Association (TDA) decided that the Texas Dental Hygiene Association (TDHA) needed to have their own convention.

Since then, the industry has progressed to a corporate way of thinking that now thrives in North Texas. The “dental business” has a checklist for employment of dental hygienists.

Those items include: 

       1)  Businesses will set minimum production dollars per day 

       2)  “CREATE URGENCY” to pressure patients/parents to consent to procedures immediately

        3) Identify 3 patients that need SRP each day 

        4) Use intraoral camera to identify 3 patients per day that need dentistry with $1200-1900 per day. 

        5) All patients seven years and up need an orthodontic appointment    

        6) All patients 14-20 years of age need a wisdom tooth evaluation 

        7) All patients requiring Scaling and Root Planing (SRP) need to be referred to in-house Periodontist 

        8) Call 5 people per day to come into the clinic for treatment

        9) Clean the bathroom 

       10) No employment benefits with longevity  

       11) Hiring through temporary employment agencies; having no intention of providing full-time employment 

       12) Abusive employment policies.

Does anyone think this list of job duties is appropriate?