Friday, March 20, 2020

Will the COVID-19 Pandemic Be The Demise Private Equity Owned and Operated Dental Chains?

Updated: March 21. 2020

With the COVID-19 Virus hitting every industry hard, and Wall Street crumbling, what will happen to places such as Heartland Dental, Aspen Dental, Kool Smiles, and the host of other dental chains across America that are backed by Private Equity firms and various other types of investors?

Rumor has it that Immiadent, operated by Samson Dental Partners, LLC,  has closed the doors to many, if not all, of their offices. As of today, their website shows only 12 offices still open, that's down from 33. However, I'm told that they closed several and were going to rebrand using the name Bright Tiger Dental until about the time the COVID-19 hit, then suddenly, they fired all employees and closed the doors to all their clinics. This has not been verified.

In 2018 Samson and Immiadent agreed to pay $5.1 million to settle claims that it improperly billed Indiana’s Medicaid program as well as breaking Indiana law that forbids nondental managers from compromising clinical judgments by rewarding or punishing dental staff based on productivity measures. Samson Dental Partners and their Immediadent offices were located in Indiana, Kentucky and Ohio. 

On March 18, 2020 the American Dental Association issued guidelines in response to the Covid-19 Virus, recommending emergency treatment only.  Click here for what the ADA considers Emergency Treatment.

New out of Nebraska reports some dental offices closing under the guidelines.
I suspect we will be seeing more headlines as the one below in the coming months. However, during the first stage I suspect there will be more pressure on working dentists to overtreat as the chains try to stay afloat.  I'll be watching.

Dental office’s abrupt closure leaves patients frowning

The Signature Smiles dental office in Garden Oaks.
Nothing seemed amiss on Jan. 17, when Amanda Leal took her two daughters to the Signature Smiles dental office in Garden Oaks. The Candlelight Estates resident said she joked with some of the employees there after her girls had their checkups, and then Leal made appointments for the following month.

Three days later, however, she got an email saying the office was non-operational.
“I’m just flabbergasted,” Leal said.

Several other Northwest Houston residents have had similar reactions since the local Signature Smiles office, located at 3800 N. Shepherd Dr., Suite 3A, abruptly closed Jan. 20. The business provided no warning, according to multiple patients, and some said they aren’t sure whether they can continue to receive treatment from the doctors who worked there or recoup payments they made for services that have yet to be provided.

Read the entire story here.