Business & Tech

Dentists accuse Delta Dental of violating nonprofit rules, seek investigation

SHUTTERSTOCK / WAVEBREAKMEDIA

A group of dentists at odds with the state’s largest dental insurer are accusing the company of violating nonprofit rules and engaging in anticompetitive behavior, and they’re asking Attorney General Maura Healey’s office to investigate.

The dentists detailed their complaints against Delta Dental of Massachusetts in an 11-page letter to Healey, penned by their lawyer, James C. Donnelly Jr. of the firm Mirick O’Connell in Worcester. They say that Delta Dental, whose parent company is a nonprofit, is moving assets to its for-profit subsidiaries “without required process.”

They also allege the company is improperly using the trademarks and goodwill from the nonprofit side of the business to make money on the for-profit side. And, they say, Delta is unfairly directing patients to dentists who have agreed to participate in the company’s proposed new lower-cost insurance plan.

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Delta Dental denies the allegations.

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The complaints represent the latest salvo between dentists and the company following its decision to offer a new preferred provider organization, or PPO, plan. The plan would be sold under a for-profit subsidiary, and many dentists say it would pay them as much as 30 percent less than they earn now under an existing Delta plan called Premier.

Dentists worry that the company will phase out the higher-paying Premier plan and aggressively grow the lower-paying PPO, costing them valuable income and time with patients.

Delta Dental executives argue that they must make changes to their offerings in order to remain competitive and control costs for consumers and employers. Business groups endorsed the company’s plans.

But many dentists feel differently. A group of dentists, now numbering about 25, teamed up to file the recent letter of complaints with Healey’s office. The group includes Dr. Jill A. Tanzi of Hopkinton.

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“Our main goal is to preserve the quality of care for patients in the state and have a strong doctor-patient relationship, without the insurance company being involved in our treatment decisions,” Tanzi said.

Among other issues, the dentists’ letter raises concerns about compensation of Delta Dental executives, which included a $7 million package for the company’s retiring president in 2015.

The attorney general’s office is responsible for overseeing nonprofit organizations. A spokeswoman said it is reviewing the dentists’ letter, along with other related complaints. The timeline of the review is unclear.

Delta Dental is run by a nonprofit company, Dental Service of Massachusetts Inc. That Boston-based parent company, which provides dental insurance to 24 million members in 30 states, also does business through many for-profit subsidiaries.

“The dentists ask the attorney general to fully investigate [Delta Dental’s] actions and respond as necessary and appropriate to protect the public interests related to use of charitable assets, access to dental healthcare, misuse of trademarks and deceptive advertising,” the dentists’ letter states.

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Delta Dental dismissed those concerns.

‘We are taking steps to offer a more affordable PPO coverage option, alongside our existing portfolio of products.’

“The claims made in the petition are without merit, and would only serve to maintain the unsustainable status quo of rising dental costs for all,” spokeswoman Kristin LaRoche said in a statement from the company’s public relations firm. “We are taking steps to offer a more affordable PPO coverage option, alongside our existing portfolio of products, to Massachusetts families and businesses. PPO plans are not new to Massachusetts, and ours is a further and necessary step to increase access and lower health care costs.”

The Massachusetts Dental Society also has complained about the company’s actions. The society has requested a hearing at the state Division of Insurance.

State insurance regulators have yet to decide whether to hold that hearing and have yet to approve Delta Dental’s proposed PPO insurance plan.

Priyanka Dayal McCluskey
can be reached at priyanka.mccluskey@globe.com. Follow her on Twitter @priyanka_dayal.