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Washington State Dental Association to state attorney general: investigate Delta Dental

July 19, 2018

By Michelle Manchir

Photo of Cynthia Pauley
Dr. Pauley
Seattle — The Washington State Dental Association has asked the state's attorney general to launch an investigation of Delta Dental of Washington, alleging that the insurance provider engages in practices that may violate antitrust laws.

In a blog post on its website summarizing the complaint filed in June, the association states that in Delta Dental's position as the state's dominant purchaser of dental services, it practices "monopsonist" power and coercive behaviors in a way that shortchanges Washington dental care providers and dental patients.

While monopolists dominates a market by controlling the supply side of a good or product, the WSDA said in the blog post, "a monopsonist holds sway over the market through dominance of demand."

"We believe Delta Dental's position and practices in Washington inappropriately leverage monopsony power for its corporate benefit, to the detriment of both dental service providers and their patients," said Dr. Cynthia Pauley, WSDA president. "We are optimistic that a careful examination of the facts will lead the Attorney General's Office to reach the same conclusion."

"Monopsony market power in and of itself is not illegal," the blog post says, however, "if the monopsity maintains buy-side market power through anticompetitive or predatory conduct, the monopsonist can be found just as guilty as a monopolist in violating antitrust statutes."
 
The request to the attorney general is the latest in a conflict between the state association and Delta Dental, which contracts with approximately 90 percent of the state's licensed, practicing dentists, according to WSDA.

In January, the WSDA filed a complaint with the state's insurance commissioner, alleging the third-party payer misled state regulators and overlooked the legal interests of its members when it completed a corporate reorganization in 2013. The WSDA has received confirmation that the insurance commissioner's office is currently investigating the matter.

In the most recent complaint, WSDA alleges that Delta Dental "offers its contracts to dental providers on a 'take it or leave it' basis, with no room for negotiation, and with complete control of rates and terms."

WSDA said that Delta reduced its reimbursement rates for network dentists by about 15 percent in 2011, while also increasing its benefit plan enrollees by 27 percent, its premium revenue by 30 percent and its premium revenue per patient by two percent. Meanwhile, during the same time period, Delta's CEO compensation increased by 127 percent and its board chairman's increased by 115 percent.

"It appears Delta retained the bulk of its savings for corporate benefit, rather than passing these savings along to the dental patients covered by its plans," said Bracken Killpack, WSDA executive director. "There is concern that patients are losing access to care as a result of Delta's reimbursements rate and what many perceive as predatory behavior."

The WSDA hopes the state attorney general's office will compete a "thorough and factually-intense investigation," according to its blog post.

"When you sit down and review all of the available data about Delta in the context of a monopsony, you begin to appreciate the impact it's having not only on dental practices, but even more importantly on patient care in our state," said Dr. Christopher Delecki, WSDA president-elect.

Delta Dental of Washington did not respond to inquiries from the ADA News for comment on WSDA's allegations.

To read the WSDA's blog post about the antitrust filing, click here.