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Washington State Dental Association

DSO Legislation: A Conversation with Mellani McAleenan & Emily Studebaker

Over the past few years, one of WSDA’s top legislative priorities has been to clarify the rules under which Dental Support Organizations (DSOs) can provide services to dentists in our state. Government Affairs Director Mellani McAleenan sat down to discuss some big developments from the 2017 legislative session with attorney Emily Studebaker of Hall, Render, Killian, Heath & Lyman. Studebaker specializes in healthcare law.

Mellani McAleenan: We spend a lot of time talking about DSOs. What exactly is a DSO? 

Emily Studebaker: According to the Association of Dental Support Organizations (ADSO), DSOs, or dental service organizations, “contract with dental practices to provide critical business management and support, including nonclinical operations.” Basically, DSOs provide “back office” or administrative support to dental practices. 

There was a time when dentists simply started their own independent dental practices after graduating. However, a one-size- fits-all practice model doesn’t work as well in today’s society. Dentists today need to have the flexibility to contract for support, work for another dentist, or create or join a group practice of dentists. 

MM: What has been the concern with DSOs? 

ES: Some DSOs operate exactly as they should by providing the support a dentist needs to effectively run his or her practice. But experience in other states and here in Washington has shown that, if left unchecked, some DSOs cross the line from providing support to, essentially, employing the dentist and dictating the terms of how the dentist provides care. When profit motives are put ahead of patient care and safety, and corporate judgment interferes with the independent judgment of the licensed dentist, that should be cause for concern.

MM: In the past, WSDA has been accused of being anticompetitive. What’s your perspective about comments like that?

ES: Having worked with WSDA members and staff for a few years now, I know that WSDA supports choice in how dentists manage their practices, as long as proper patient safeguards are in place. Government reports, legal settlements, and firsthand patient and provider experiences provide many examples of interference from third-party for-profit corporations placing corporate profit ahead of patient care. 

MM: This is the third legislative session in which both ADSO and WSDA have proposed competing legislation. What changed this year to foster compromise now? 

ES: WSDA has been advocating for legislation that provides stronger patient safeguards that restrict third parties from interfering with the dentist/patient relationship for the past three years. A strong advocacy effort and increasing media attention brought this issue to the forefront during the 2017 legislative session. 

As I understand it, legislators wanted to find a solution this year, and helped facilitate a compromise that ended up passing the Legislature unanimously. 

MM: You and I, and many others, spent countless hours reading, drafting, and redrafting potential legislation. Talk about what happened this session.

ES: Legislators who had been hearing emphatically from both sides for the last three years were ready to find a resolution, resulting in pressure to bring both sides to the table. While there were several legislators who were deeply engaged in the issue and deserve thanks, Sen. Curtis King and Rep. Michelle Caldier put in dozens of hours on top of their other legislative responsibilities to convene a series of meetings during which the issues were hashed out and a compromise bill was drafted. 

MM: That compromise bill, Senate Bill 5322, passed the Legislature unanimously and was signed into law by Gov. Inslee on May 16. It becomes effective on July 23, 2017. What does this bill allow a DSO to do?

ES: The bill addresses a practice that has been going on in Washington and other states for years without much oversight or enforcement. This new law authorizes DSOs to provide business support and management services to a dental practice and to receive fees for these services, as agreed to by the dental practice owner or owners. 

DSOs may own or lease assets used by a dental practice, including real property, furnishings, equipment, instruments, materials, supplies, and inventory. However, DSOs may not own patient dental records.

DSOs are also allowed to employ or contract for the services of personnel, but the DSO cannot employ or contract for services with licensed dentists, licensed dental hygienists, licensed expanded function dental auxiliaries, certified dental anesthesia assistants, or registered dental assistants. Only a dentist licensed to practice in Washington may employ such staff.

MM: This new law clarifies that a person must have a Washington license to practice dentistry in order to own, maintain, or operate a dental practice. At what point can providing supportive services cross the line into the unlawful practice of dentistry? 

ES: The new law makes clear that a DSO — or any other nondentist — cannot interfere with a licensed dentist’s independent clinical judgment. 

A nondentist third party cannot interfere with a dentist’s right to access patient records or a dentist’s decision to refund any payment made by a patient for dental services performed by the dentist. 

Nondentists, including DSOs, may not limit or impose requirements on:

• The length of time a dentist spends with a patient
• Performing dental services
• The number of patients a dentist treats in a certain period of time
• The number of certain types of procedures a dentist completes in a certain time period
• A dentist’s decision regarding the course of treatment for a patient
• The manner in which a course of treatment is carried out by a dentist
• The manner in which a dentist uses dental equipment or materials
• The use of a laboratory or the materials, supplies, instruments, or equipment deemed reasonably necessary by a dentist to provide diagnoses and treatment consistent with the standard of care.

MM: If dentists find themselves in a situation where these kinds of limits from a DSO or other corporate entity interfere with the clinical judgment of the dentist, what should the dentist do? 

ES: Senate Bill 5322 makes it clear that state “whistleblower” protections apply to these kinds of circumstances. If a dentist, patient, or other person is aware of undue influence over a dentist by a nondentist, that person can and should make a complaint to the Washington State Department of Health concerning the unlawful practice of dentistry. The department of health has enforcement power, can subpoena contracts or other evidence, and can hold the nondentist legally accountable, including seeking action by the Attorney General. 

MM: Does the new law offer any additional protections to the patients who are being treated by dentists working with DSOs?

ES: The new law clarifies that an attending dentist, regardless of employment status, is prohibited, without reasonable cause, from neglecting, ignoring, abandoning, or refusing to complete the current procedure for a patient. If a dentist chooses to withdraw responsibility for a patient, the dentist must advise the patient of the termination and that the dentist will remain reasonably available for up to 15 days, but the patient should seek other care. A dental practice owner who is discontinuing or moving a practice must also comply with these requirements. 

DSOs are prohibited from intentionally preventing a dental practice owner from complying. If the dentist provides services on an employee or contract basis, the law clarifies that it is the employing dentist or entity that maintains responsibility for the patient, so the employed dentist will not be deemed to have abandoned the patient. 

MM: This new law doesn’t exist in a vacuum. What other existing rules and laws will help guide the enforcement of these new provisions? 

ES: While the compromise may not include every safeguard envisioned in WSDA’s original bill, this legislation, along with existing state and federal law related to fraud and abuse, provides the state with strong enforcement that can more clearly shine a light on third-party activities that interfere with the dentist-patient relationship. 

To sum up, Senate Bill 5322 clarifies, in law, a practice that has been happening for many years. That is, nondentists have already been providing supportive services, equipment, and facilities to dentists. But the new law sets parameters around when those services cross the line into the unlicensed practice of dentistry, and it outlines what should happen if that line is crossed. 

MM: The bill becomes law on July 23, 2017. What happens next?

ES: This new law should serve as a deterrent against unlicensed practice and undue influence in DSO settings. However, any law is only as good as its enforcement. WSDA will continue to work with enforcement agencies, including the Department of Health, Office of the Attorney General, and the Dental Quality Assurance Commission, on the significance of this new legislation, and ensure that they are made aware of any instances WSDA discovers where third parties have negatively influenced the dentist-patient relationship. 

WSDA will also embark on a robust education effort to ensure that dentists are fully aware of all relevant laws that affect the contractual relationships they may enter into with third parties, and will continue to work diligently to safeguard the dentist-patient relationship. 

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