Market Commentary and Intraday News
Lawsuit: Aspen Dental clinics operating illegally
212 days ago
By GEORGE M. WALSH
(AP:ALBANY, N.Y.) A federal lawsuit filed Thursday in New York alleges that Aspen Dental Management and the private equity firm that controls it illegally operate dental clinics across the country and engage in aggressive, misleading practices.
Aspen, based in East Syracuse, N.Y., and Leonard Green and Partners are violating laws that require clinics to be owned by dentists actively performing procedures onsite to prevent business interests from trumping those of patients, according to court papers filed at U.S. District Court in Albany.
The suit is on behalf of 11 people in 11 states. Their lawyers are seeking class-action status that could cover tens of thousands of current and former patients and unspecified monetary damages.
They argue that the structure of Aspen Dental puts a premium on getting patients to consent to expensive treatment plans through aggressive sales pitches after they've been attracted to the clinics by free exam and X-ray promotions.
Attorneys Brian Cohen and Jeffrey Norton said the goal is to maximize profits for the non-dentist owners of Aspen by using dentists as "sham" owners of clinics, some of which operate too far away, including in other states, for the dentists to practice there. That, they say, violates New York's law against "unlawful corporate practice of medicine."
Aspen's "so-called `Practice Owners' are nothing more than de facto employees and/or independent contractors" of the company, which controls its 358 clinics' marketing, credit offers, hiring, training and bookkeeping, according to the court papers.
Kasey Pickett, Aspen director of communication, said the company hadn't yet seen the lawsuit and she couldn't comment on details.
But she said Aspen doesn't employ dentists or control clinical care, instead providing management support.
A message left with Leonard Green and Partners, a $15 billion private equity firm based in Los Angeles, was not immediately returned. The court papers say the firm took a controlling interest in Aspen for $547 million in 2010.
There are Aspen clinics in 22 states; including Arizona, Connecticut, Florida, Illinois, Indiana, Iowa, Kentucky, Maine, Massachusetts, Michigan, Nebraska, New Hampshire, New York, Ohio, Oregon, Pennsylvania, Rhode Island, South Carolina, Tennessee, Vermont, Washington and Wisconsin.
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