Attorney General Bonta Announces Settlement with Aspen Dental Over Corporate Practice of Dentistry and False Advertising

Settlement includes first-in-state injunctive terms, $2 million in penalties, and $300,000 in restitution

OAKLAND — California Attorney General Rob Bonta announced reaching a settlement with Aspen Dental Management, Inc. (Aspen Dental) for allegedly violating California’s ban on the corporate practice of dentistry and engaging in false and misleading advertising. Owned by private equity firms, Aspen Dental describes itself as a dental support organization that provides business management and administrative services to dental offices, each of which operates under the “Aspen Dental” name and branding. However, the company is alleged to have exceeded that role by, among other things, interfering with and unlawfully directing the practice, ownership, and management of dentistry in California. The settlement, which remains subject to court approval, includes unprecedented injunctive terms to protect California consumers and clinical staff, $2 million in penalties, and $300,000 in restitution funds for certain patients.  

“As Americans face an affordability crisis, there is no room for unlawful business practices that can increase healthcare costs or harm consumers. We allege that Aspen Dental went beyond providing business support services and became involved in managing dental operations, while also using advertising that misrepresented services to consumers,” said Attorney General Bonta. “With this settlement, my office is making clear that patient care must remain in the hands of licensed professionals. If you believe you are a victim of false or misleading advertising, please report it to oag.ca.gov/report.” 

Since its founding in 1998, Aspen Dental has expanded to more than a thousand offices nationwide. It entered California in 2019 and has since opened 19 offices and served tens of thousands of patients. As part of this expansion, it is alleged that Aspen Dental did not contract with existing dental offices, but rather selected, purchased, staffed, and advertised its offices without clearly identifying an independent dentist-owner. For example, Aspen Dental designed, built out, and furnished all of its offices and made detailed decisions about each location, down to the artwork in bathrooms. It also selected, purchased, and installed all dental equipment across offices.

Aspen Dental also encouraged the sale of particular products and services through direct incentives to practices’ clinical employees. For example, Aspen Dental developed and implemented an incentive program for hygienists to encourage the sale of clear aligners. The program offered hygienists $50 per sale to new patients or $100 per sale to existing patients. Business practices of this kind limited dentist-owners, restricted staff, misguided patients, and purportedly violated California’s ban on the corporate practice of dentistry and California’s Unfair Competition Law. 

Further, many advertisements that Aspen Dental created contained misleading and/or false representations, including misleading testimonials, ambiguity, misleading cost claims, and inexact pricing language. Some Aspen Dental advertisements represented that its offices worked with all insurance or no insurance. However, Aspen Dental offices did not accept state or federally funded insurance programs. Other advertisements described low prices for certain products or procedures without clearly disclosing the factors that affect the price or what’s provided.

As a part of the settlement, Aspen Dental has agreed to $2 million in penalties, $300,000 in restitution funds, and injunctive terms, including:

• Not replacing any practice owner with another dentist of its choosing.
• Not requiring practice owners to effectively give up ownership of any dental practices if they decide to terminate their contractual relationship with Aspen Dental.
• Not owning the property for any practice. 
• Not practicing dentistry, including but not limited to owning or managing any dental office.
• Not basing service fees on revenue, sales, or profits.
• Not suggesting, directing, or encouraging any licensed clinician, other than a practice owner, to sell or increase revenue for any service or product.
• Not compensating any of its employees based on the sales or revenue of practices.
• Not paying any practice employees incentives based on practice sales, revenue, or profit, including the sale of a particular service or product.
• Discontinuing the use of and not enforcing any existing contractual provision that restricts where any licensed clinician may practice or be employed. 
• Providing a written fee schedule for products and laboratory services.
• Registering with the Dental Board of California as a Dental Group Advertising and Referral Service. 
• Clearly and conspicuously identifying the practice owners name when creating, publishing, or disseminating advertisements.