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 “Astroturfing is the practice of masking the sponsors of a message or organization (e.g., political, advertising, religious or public relations) to make it appear as though it originates from and is supported by grassroots participant(s).”1. -Wikipedia
Introduction
It is imperative the so-called “dental support organization industry” (DSO industry) employ astroturfing techniques, as their entire business model is formulated on gross misrepresentations.2-12 In order to obfuscate the rule of law relating to the unlicensed and unlawful practice of dentistry, these corporate entities must misrepresent themselves as only providing limited nonclinical support services for their chains of dental practices. This is patently false, and has been challenged by numbers of legal rulings and studies. In reality, DSOs either represent the true beneficial owners and clinical management for vast numbers of dental clinics, or they provide management for the private equity beneficial ownership. Doctors only serve in a limited role as facade nominee owners. The word “support” is intentionally designed to deceive. The lies go on.
Forms of DSO Astroturfing
There are four basic designs of astroturfing utilized by the DSO industry. At the most basic level is DSOs placing bogus positive patient reviews with online rating services or their website. The next astroturfing technique involves individual dentists who openly advocate for the DSO industry. The third method employs hired public relations and public advocacy specialists. The final level, and often most challenging to prove, is hired lobbyists who direct public policy through directly influencing government agencies and government elected officials.
Bogus online Patient Reviews
Although this form of deceptive advertising is unlawful, violators are rarely discovered or sanctioned.13 The DSO utilizes existing employees or a retained service to generate positive patient reviews for dental services with online review sites, and/or their own website. Often the specific language utilized in the review is a tip-off, that the bogus reviewer is truly not a clinical dental patient, but working in the dental field. Certain DSOs have such a disturbingly high degree of employee turnover and negative staff retention rates, they now resort to posting bogus positive reviews of current or former employees on employment websites such as Glassdoor.com and Indeed.com. One will generally see multiple low rated “one-star” reviews, intermixed with over-the-top glowing “five-star” reviews. Obviously, corporate astroturfing is in play.
Individual Dentists Espousing the DSO Agenda
On occasion, state legislatures will take up the cause of regulating and restricting the DSO industry to benefit the public interest. Bills will be presented to establish enhanced transparency in true beneficial clinic ownership. Clarification will be added to protect the doctor/patient relationship (contract), and patient rights such as the informed consent process, and always holding the patient’s interests paramount in clinical decisions. Truth in advertising and lending will be advocated. Mechanisms for bait-and-switch schemes will be discouraged.
In order to fight these legislative and regulatory changes, which would damage the fiscal bottom line of corporate healthcare owners, individual doctors are engaged to support the DSO industry. These dentists are invariably employees of the DSO industry. They generally are holding junk-grade private securities, for the companies they truly represent, after the sale of their former dental practice to a specific DSO. The financial future of these doctors depends in large part, upon the success of these privately traded stocks and bonds in the DSO industry, which is fully unregulated and unmonitored by the US Securities and Exchange Commission. These doctors are holding very tenuous investments, which usually represents a large percentage of their personal assets. When these dentists write an op-ed piece in their local newspaper, or a full story in the business section of a media outlet, the public has no idea the dental practice which the doctor professes to own, is truly beneficially owned and operated by an outside and undisclosed corporate entity. Full disclosure on the doctor’s assets is not released. Thereby, the myth of a dentist-owned practice and the DSO as only a practice support vendor is perpetuated. All this violates Federal Trade Commission (FTC) guidelines for truth in advertising with misrepresentations of expert endorsements and lack of full disclosures of material contents.14. In fact, numbers of DSOs operate under the business concept of “stealth branding”.15. They fully realize the public has a bad taste towards corporate directed and owned healthcare providers. Thus, the corporate name which owns the clinic isn’t disclosed. Seemingly, clinic ownership is retained by “Dr. Smith” or “Dr. Jones”, which is a misrepresentation. This deceit permits an employee doctor of the DSO to allege, how important the nonclinical services of the DSO are to the operation of “his” or “her” business, which they legally don’t own. These doctors laud the benefits of being able to solely focus on clinical practice, and reducing overhead costs. It’s all a sham.
DSO Retained Public Relations or Public Advocacy Firms for Astroturfing
These firms are “hired guns” or front groups paid for by the DSO industry, to push forth an agenda benefiting their industry. Professional writers place articles in selected media outlets, especially in business news, political news, and policy papers. These are not unsolicited reports, but paid advertising masquerading as honest journalism and policy review. The so-called corporate donor class of the Republican Party (Wall Street and private equity types) are especially notorious for this dishonest form of astroturfing. Grover Norquist’s public policy group, Americans for Tax Reform (ATR), was one such group which was exposed funneling money in the Jack Abramoff scandal16.. Patrick Gleason, director of state affairs at Norquist’s ATR, recently wrote a position piece advocating for the DSO industry in Forbes Magazine17.Gleason wrote in part, “The bill in question, Assembly Bill 368, would grant the Wisconsin Dentistry Examining Board unnecessary and inappropriate powers to regulate Dental Service Organizations (DSOs), despite the fact that DSOs do not practice dentistry.” DSOs do in fact practice unlicensed and unlawful dentistry2-12. The DSO business model is completely dependent on the unlicensed and unlawful practice of dentistry. By court rulings, doctors must place the interests of patients above all other interests. By contrast, for-profit corporate entities must place the interests of shareholders and generation of profits above all other interests. This conflict of interest is clear involving corporate practice of healthcare. Perhaps these facts escaped Mr. Gleason and ATR? Perhaps the spin talking points of the DSO industry were simply regurgitated for “considerations”? Another darling of the donor class of the Republican Party to promote astroturfing is Dr. Author Laffer’s group. Dr. Laffer produced a study reviewing Texas dental Medicaid for the fiscal year 2011.18 While the actual data figures were not disputed, the conclusions of the report were held in question by many very familiar with Medicaid fraud, waste and abuse.19,20 This report which espoused the delivery of dental Medicaid services by DSOs was paid for by a corporate entity, Kool Smiles Dental (owned by private equity firm, Friedman, Fleischer & Lowe), for $100,000, which was not disclosed in the Laffer report. Detractors of the Laffer study noted that Texas is so rife with an established and pervasive business model of dental Medicaid fraud, comparisons between groups of fraudsters is invalid. To counter advocates for dental Medicaid reform, and support a business model of abuses facilitated by the DSO industry, was Lawrence Meyers writing in Breitbart.21 Mr. Meyers is well known as an advocate for hire. He has espoused for groups as diverse as the payday loan industry; to Brazilian Blowout cosmetic products.22-23 This form of paid advocacy astroturfing by the DSO industry appears clumsy at best. When the child abuse taking place nearly all Small Smiles Dental Centers across the county was exposed in 2007, their DSO FORBA hired Rubin-Meyer Communications, with Don Meyer leading the offensive. Mr. Meyer set up a blog, Facebook page and became their spokes person. As their website states they are there to “Stake out a position among policymakers, or manage a crisis. Earn press when you want it and avoid it when you don’t.”
Lobbyists Hired Directly by the DSO industryThese vultures came out in full force when North Carolina was considering legislative changes to protect citizens from corporate dentistry abuses, in 2012.24 In support of corporate DSO dentistry were hired lobbyists Jeb Bush, William Frist, Tommy Thompson and Haley Barbour. All are stalwart lobbyist supporters of the donor class of the Republican Party. The efforts of the aforementioned Grover Norquist were also in evidence. Money of the private equity industry, which owns a large percentage of the DSO industry, was put into full effect for lobbying efforts. The full force of the establishment old-boy Republican Party (big business/ big government) came down upon local state Republican legislators (small business/ small government), all to push the corporate dentistry agenda. The October 6. 2014 letter by Federal Trade Commission (FTC) officials to the general counsel for the Texas State Board of Dental Examiners was particularly alarming.25 The wording from the FTC utilized corporate spin verbiage taken directly from the DSO industry. Alleged facts were obviously distorted or patently false. It was almost as if the DSO industry had ghost-written this letter (and probably did). For example directly from the FTC’s letter it reads, “Proposed 22 TEX. ADMIN. CODE § 108.70 imposes new restrictions on the ability of Texas dentists to enter into contracts with “unlicensed persons” for the provision of nonclinical services, such as administrative support and business functions.” As previously referenced, federal Fifth Circuit ruling 07-30430 which is largely based on existing Texas statutes, ruled that DSOs were actively engaged in the unlicensed and unlawful practice of dentistry. As such, these corporate entities should be sanctioned by state regulatory agencies the same as individual persons. The term “nonclinical services” is a ruse. Further, “The rules would restrict the choices dentists have when deciding upon the most efficient way to organize the nonclinical aspects of their practices…” is fully based on a gross misrepresentation.3 Reality is that non-dentist corporate entities own and operate these dental clinics, not the doctors working there and providing patient services. Doctors only serve as figurehead nominee owners. Dentists aren’t controlling the decision making process of these clinics. If doctors truly did own and manage these clinics, they would seek vendors for non-clinical services at far more reasonable terms, as was demonstrated in North Carolina with the DentalOne settlement.4 The statement, “Recent audits by the U.S. Department of Health and Human Service’s Office of Inspector General (OIG), however, did not identify the DSO model or any particular business model as a culprit” is patently false. HHS-OIG investigations for dental Medicaid “outlier billings” in LA, IN, CA and NY specifically cited “large group practices” as problematic in from 25-50% with dental Medicaid billings (depending upon the state reviewed).26-29 The specific term “large group practices” in fact designates interstate DSOs as problematic for dental Medicaid fraud, waste and abuse. This level of “error” by the FTC is highly suspicious. Of further concern, FTC officials state, “…Proposed rules, if they are adopted and if they discourage dentists from affiliating with DSOs, may deny consumers of dental services the benefits of competition spurred by the efficiencies that DSOs can offer.” This comment is almost laughable, if it weren’t from an oversight agency of the federal government.
The greatest “efficiencies” of the DSO industry specifically, and private equity generally, involve tax dodging.30,31 State taxes on business profits are avoided by daily sweeping clinic bank accounts and moving money to Delaware banks. Taxation is circumvented by calling profits, overhead operating costs of the DSO. Federal earned income tax of (38%) is reduced to capital gains (25%), by positioning the beneficial owners as first lien creditors or mezzanine financiers. ConclusionEthically and legally, the DSO industry is built upon a foundation of weak sand. It thrives via misrepresentations, deceptions, and trickery. One tool which perpetuates their lies and public ignorance and confusion is astroturfing. Money provides the means to purchase astroturfing. Government officials are seemingly always craving money, like an addicted crack whore. Similarly, both groups will do nearly anything to obtain money. To counter self-serving corporate healthcare, the public must work to arm itself with information. Please, never take what I say as an author at face value. Read and review references cited in this report. Ask a doctor or dental hygienist you trust, to provide insights. You must do your own homework. Government won’t protect you, and has been incentivized to not do so. Start asking officials and policymakers your own questions, and demand honest direct answers. When public regulators from state dental boards, to attorney generals, to governors fail to deliver on appropriate protections and enforcement in the public welfare, hold their feet to the fire. Expose their failures and demand better government. Currently, we have the “best government which money can buy”. That fact puts Wall Street and the private equity honchos in the driver’s seat with their astroturfing misrepresentations and abuses of the DSO industry. They value money above all else, inclusive of a patient’s welfare. Your choice is to fight or roll over. References:
1. “Astroturfing” definition. Wikipedia November 2015. https://en.wikipedia.org/wiki/Astroturfing
2. Federal Fifth Circuit Court Ruling 07-30430. http://www.ca5.uscourts.gov/opinions%5Cpub%5C07/07-30430-CV0.wpd.pdf
3. Davis MW. Business Service Agreements: a Tool for Deception within the Corporate Dental Support Industry. Dentist the Menace dental news blog; Nov 16, 2015. http://blog.dentistthemenace.com/2015/11/business-service-agreements-tool-for.html
4. ADA News. “N.C. Dental Board and Dentists File Suits against DentalCare Partners Inc”. March 21, 2013.http://www.ada.org/en/publications/ada-news/2013-archive/march/nc-dental-board-and-dentists-file-suits-against-dentalcare-partners-inc
5. North Carolina Board of Dental Examiners. Consent Order with Gary L. Cameron, DDS. Aug 30, 2011.http://www.ncdentalboard.org/pdf/Cameron%20Gary%20-%20CO%20Aug%2011.pdf
6. Settlement Agreement- Commonwealth of Pennsylvania versus Aspen Dental Management Inc. Oct 13, 2010.https://www.documentcloud.org/documents/372853-aspen-dental-settlement-with-pennsylvania.htm
7. Media release- Attorney General for Commonwealth of Massachusetts for Settlement of Commonwealth of Massachusetts versus Aspen Dental Management Inc et al. Dec 22, 2014. http://www.mass.gov/ago/news-and-updates/press-releases/2014/2014-12-22-aspen-dental-aod.html
8. Media release- Attorney General for New York State- “A.G. Schneiderman Announces Settlement with Aspen Dental Management That Bars Company from Making Decisions about Patient Care in New York Clinics”. Jun 18, 2015.http://www.ag.ny.gov/press-release/ag-schneiderman-announces-settlement-aspen-dental-management-bars-company-making
9. ADA News. Indiana Attorney General Takes Action Against Aspen Dental”. (highlights of settlement agreement) Oct 23, 2015. http://www.ada.org/en/publications/ada-news/2015-archive/october/indiana-attorney-general-takes-action-against-aspen-dental ).
10. Media release- USDOJ- “National Dental Management Company Pays $24 Million to Resolve Fraud Allegations” (USDOJ versus FORBA Holdings LLC d/b/a Small Smiles Dental) Jan 20, 2010. http://www.justice.gov/opa/pr/national-dental-management-company-pays-24-million-resolve-fraud-allegations
11. Media release- USDOJ- “Oklahoma Dental Clinics Pay Over $5 Million to Settle Allegations of False Medicaid Claims for Dental Restoration Procedure”. (USDOJ versus Ocean Dental P.C.) Oct 30, 2014. http://www.justice.gov/usao-wdok/pr/oklahoma-dental-clinics-pay-over-5-million-settle-allegations-false-medicaid-claims
12. Joint Staff Report on the Corporate Practice of Dentistry in the Medicaid Program. Joint US Senate Finance and Judiciary Committees. July 2013. http://www.scribd.com/doc/157218706/Senate-Report-on-Corporate-Dentistry
13. "A.G. Schneiderman Announces Agreement With 19 Companies To Stop Writing Fake Online Reviews And Pay More Than $350,000 In Fines". New York State Office of the Attorney General. Retrieved February 20, 2014.
14. Guides Concerning the Use of Endorsements and Testimonials in Advertising (PDF), Federal Trade Commission, retrieved June 20, 2014
15. Interview of Kevin Cain PhD by Michael W Davis DDS. Dental Service Organizations (DSOs); Truth Revealed by Financial Insider. Dentist the Menace dental news blog; June 25, 2015: http://blog.dentistthemenace.com/2015/06/exclusive-dental-service-organizations.html
16. Schmidt, Susan; Grimaldi, James V. (June 25, 2006). "Nonprofit Groups Funneled Money For Abramoff". The Washington Post. Retrieved November 7, 2009. http://www.washingtonpost.com/wp-dyn/content/article/2006/06/24/AR2006062401080.html
17. Gleason, Patrick. Wisconsin is the Next State to Consider Protectionist Bill that Cuts Access to Care, Hikes Costs. Forbes. Nov 10, 2015; http://www.forbes.com/sites/patrickgleason/2015/11/10/wisconsin-the-next-state-to-consider-protectionist-bill-that-cuts-access-to-care-hikes-costs/
18. Laffer AB. Dental Service Organizations: a Comparative Review- Texas Medicaid Billing Patterns of Dental Service Organizations and Non-Dental Service Organization Providers in Fiscal Year 2011. Laffer Associates; Sept 9, 2012. http://www.pacificresearch.org/fileadmin/documents/Studies/PDFs/2013-2015/2012.09.19LafferDSOs.pdf
19. Domino, Donna. Study: DSOs Provide More Affordable Care for Underserved. DrBicuspid.com online dental journal; Oct 8, 2012. http://www.drbicuspid.com/index.aspx?sec=sup&sub=pmt&pag=dis&ItemID=311646
20. Heath D, Rosenbaum J. The Business behind the Dental Treatment for America’s Poorest Kids. The Center for Public Integrity; June 26, 2012 rev. May 19, 2014. http://www.publicintegrity.org/2012/06/26/9187/business-behind-dental-treatment-america-s-poorest-kids
21. Meyers L. PBS Prefers Kids Suffering over Private Healthcare Solution. Oct 1, 2012. http://www.breitbart.com/big-journalism/2012/10/01/media-prefers-suffering-kids-over-private-healthcare-solution/
22. Robberson T. Don’t Believe Industry Advocate’s Misinformation: Payday Lenders Need Tighter Regulation. The Dallas Morning News; Apr 11, 2013: http://dallasmorningviewsblog.dallasnews.com/2013/04/dont-believe-lobbyist-misinformation-payday-lenders-need-tighter-regulation.html/
23. Meyers L. The Brazilian Blowout Hoax Part 4: Politicians and The FDA Attack a Safe Product. Blogger News Network. Nov 24, 2011. http://www.bloggernews.net/127376
24. Friedberg SP, Kelly J. Republicans Hit Dental Bill That Private Equity Hates. Bloomberg Business News. May 30, 2012. http://www.bloomberg.com/news/articles/2012-05-31/republicans-target-dental-bill-that-private-equity-hates
25. Letter Federal Trade Commission by Gavil AI, Vita MG, Feinstein D to Salloum, Asst Gen Counsel TSBDE. Oct 6, 2014. https://www.ftc.gov/system/files/documents/advocacy_documents/ftc-staff-comment-texas-state-board-dental-examiners/141006tsbdecomment1.pdf
26. Department of Health and Human Services Office of Inspector General. Questionable Billing for Medicaid Pediatric Dental Services in Louisiana. Aug 2014. http://oig.hhs.gov/oei/reports/oei-02-14-00120.pdf
27. Department of Health and Human Services Office of Inspector General. Questionable Billing for Medicaid Pediatric Dental Services in Indiana. Nov 2014. http://oig.hhs.gov/oei/reports/oei-02-14-00250.pdf
28. Department of Health and Human Services Office of Inspector General. Questionable Billing for Medicaid Pediatric Dental Services in California. May 2015. http://oig.hhs.gov/oei/reports/oei-02-14-00480.pdf
29. Department of Health and Human Services Office of Inspector General. Questionable Billing for Medicaid Pediatric Dental Services in New York. Mar 2014. http://oig.hhs.gov/oei/reports/oei-02-12-00330.pdf
30. Davis MW. Myths, Rumors and Bald-Faced Lies: Truths Revealed about the DSO Industry. Dentist the Menace dental online news blog. Nov 24, 2014. http://blog.dentistthemenace.com/2014/11/myths-rumors-and-bald-faced-lies-truths.html
31. Roumeliotis G, Freifeld K. Analysis: New York AG’s Private Equity Probe May Have Little Bite. Reuters News Service. Sept 7, 2012. http://www.reuters.com/article/2012/09/07/us-private-equity-tax-idUSBRE88606E20120907#764rvbiwSTJkoZDU.97
