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Lawmakers differ on dentist coverage under financial services legislation

Lawmakers differ on dentist coverage under financial services legislation
Dr. Eugene Shoemaker

Washington—Wall Street may have center stage in the financial services debate on Capitol Hill but dentists and dental practices may get caught up in the regulatory sweep of legislation.

That's the view of several bipartisan members of Congress and the Association concurs, notwithstanding a Senate report disclaimer that the banking committee intends to exempt "persons such as dentists" from the financial regulatory overhaul unless they are "engaged significantly in offering or providing consumer financial products or services."

For clarification, go to Section 1027(a)(2) subparagraphs (A), (B) and (C) of S. 3217 as reported March 22, 2010, by the Committee on Banking, Housing, and Urban Affairs and you may find the statutory language "very confusing" on whether dentistry is exempt, according to an Association analysis of the legislation. "The assertion that dentists are covered by it is more than likely," says the ADA.

Sen. Jon Kyl (R-Ariz.) took to the Senate floor April 19 and again April 21 to make the point, also asserted at his website, that "It [the legislation] even would cover a dentist’s office or an optometrist. If it takes more than four payments to take care of what he had to do, he would be covered by this."

It depends in no small part on how the legislation defines "creditor," and that has Rep. Nydia Velazquez (D-N.Y.), House Small Business Committee chair, seeing Red Flags. "Though Section 1027 does provide for businesses and entities subject to regulation, I am concerned that the current language could be interpreted as applying to small health care practitioners (such as dentists and physicians)," she said in a letter to Sen. Chris Dodd (D-Conn.), who chairs the banking committee, with copies to other key financial services legislators in the House and Senate.

"A recent determination by the Federal Trade Commission, which found that dental and law practices were creditors, highlights how agencies can have such broad interpretations," Rep. Velazquez wrote. The letter by footnote says she explicitly refers to the FTC's identity theft Red Flags Rule. "Given the scope and reach of the 'Restoring American Financial Stability Act,' the assertion that solo and small group practitioners would be covered by the legislation is more than likely." As for report language purporting to exempt dentists, Rep. Velazquez said "such language does not carry the force of law.

"The statute leaves open the possibility for varying interpretations and potentially creating unintended outcomes such as the recent FTC decision. As chair of the Small Business Committee, I urge legislative changes to be included making sure small health care practices are protected. I recognize that while the report language makes clear this is the intent, legislative text will guarantee clarity in this matter."

The number of installment payments allowed and interest requirements figure into the calculation of whether a "creditor" will be covered in the same way that the FTC's Red Flags Rule requires health care workers and other professional groups to develop, implement and monitor identity theft prevention programs.

Sen. Dodd is on record as characterizing as "not true" assertions that small businesses like dental practices will be subject to new financial services regulation. "These rules we have crafted apply only to firms engaged in offering consumer financial services or products, not the butcher, not the laundromat and not the dentist. Just because ... your dentist offers a payment plan doesn’t mean these rules apply." (Congressional Record Senate Procedural Matters, April 21).

Under the Red Flags Rule, the FTC says health care practices may be "creditors" as defined by a 2003 law to include "any entity that extends or renews credit—or arranges for others to do so—and includes all entities that regularly permit deferred payments for goods or services," and are thus subject to Red Flags regulation. The Association has challenged FTC’s interpretation of the Fair Credit law while seeking legislative remedy.

The pending financial services bill and the 2003 Fair Credit law use like definitions of "creditor" but different enforcement agencies.

Questions of dental impact from the financial services legislation are well below the public radar screen but starting to gain media visibility. Dr. Eugene Shoemaker, Wisconsin Dental Association president-elect, told the Milwaukee Journal Sentinel in response to an interview request that the ADA and WDA do not know how the legislation's proposed Consumer Financial Protection Agency specifically would affect dentists but that it could lead to dental practices being scrutinized "just like major financial institutions." The Journal Sentinel reporter wanted to know how Wisconsin dentists’ patient-credit programs might be impacted.

Dental practices could choose to stop offering payment options which, in turn, could discourage some patients from seeking care and needed treatment because they couldn’t pay in full, Dr. Shoemaker said.

A Washington, D.C. "insider" publication, Politico, quoted a U.S. Chamber of Commerce representative April 17 as saying that a local orthodontist who extends credit to help parents pay for their children's braces "would fall under the new regulatory regime."

The Association seeks legislative language exempting certain "creditors" such as dentists from the new agency's regulatory reach. "Our view is that the statute itself, not report language, is what governs and that we need clarity in the bill language itself," says the ADA analysis of the pending legislation. "If Congress means to exempt dentistry, they should put that in the law."