Washington State Dental Association files complaint against Delta Dental
February 26, 2019
Seattle — After years of friction, the Washington State Dental Association and three of its member dentists filed a legal complaint Feb. 20 against Delta Dental of Washington, alleging that the latter’s board repeatedly and unlawfully rejected bylaw amendments passed by members and cancelled annual meetings required by law.
Delta Dental is the state’s largest provider of dental benefits and was created in 1954, under the name Washington State Dental Service Corporation, by Washington dentists and with financial support from the Washington State Dental Association.
In a complaint filed in Seattle’s King County Superior Court, the dentists and Association allege that the Independent Directors of the organization’s board of directors have twice unlawfully rejected bylaw amendments passed by the organization’s member dentists that were intended to improve transparency into operations and make Delta Dental more patient-focused. The complaint also charges that Delta Dental has not held an annual meeting since November 2016, despite the fact that such a meeting is required by both Delta Dental’s bylaws and state law.
“Delta’s continued efforts to repeatedly block member proposals reflect a corporate culture that consistently puts its own profits ahead of legitimate concerns about how it could better support patient care and treatment decisions,” said Dr. Dennis L. Bradshaw, one of the member dentists who filed the complaint, in a news release issued by the association. “Over the past two years, Delta has repeatedly — and unlawfully — blocked proposals by member dentists aimed to improve patient care in Washington. The continued unwillingness of Delta’s board to work with its members has left us no choice but to take this action. Delta’s board says that it wants to work with the members, but those words ring hollow when the board fails to respond to the legitimate concerns of their members and fails to hold required meetings that are designed to foster member input into its operations.”
“[We have] received the complaint from the WSDA and it is currently being reviewed. We have no additional comment at this time,” said Kristi Ellefson, senior manager of public relations and brand for Delta Dental of Washington.
The legal filing was just the latest in a long series of back-and-forth between Delta Dental and the association, which claims it is advocating on behalf of dentists who are members of both organizations.
In January 2018, five provider dentists of Delta Dental — who are also on the Washington State Dental Association’s board of directors — filed a complaint against Delta Dental with the Washington State Office of the Insurance Commissioner. The five alleged that Delta Dental misled state regulators when it completed a corporate reorganization in 2013. The Delta Dental board has since cited that reorganization as the reason for vetoing some of bylaw amendments proposed by member dentists at a special meeting called by the dentists in September 2017. During that special meeting, the proposed amendments — which are allowed to be made under state law, the company’s governing documents and past practice, according to the dentists filing the complaint — were approved by 91 percent of the 2,300 votes cast. According to Dr. Cynthia Pauley, then-WSDA president, the bylaw amendments were meant to, among other things, improve Delta Dental’s patient focus and address how dentists could become more engaged stakeholders in Delta Dental’s corporate decisions and catalyze reforms.
At the time, Delta Dental sent a statement to the ADA News in response to inquiries: “We are aware that the Washington State Dental Association leadership has filed a complaint with the Office of the Insurance Commissioner regarding Delta Dental’s corporate structure. Our corporate structure changes were made in compliance with applicable law and OIC regulations; the heavily regulated nature of our industry also requires us to regularly file statements with the OIC. We feel confident in our continued ability to pursue our vision: that all people can enjoy good oral and overall health with no one left behind. And we pursue this vision, under our current corporate structure, in collaboration with the over 4,000 Delta Dental of Washington member dentists throughout the state.”
Subsequent to the 2017 special meeting and veto, Delta Dental members prepared another series of amendments focused on the composition and election of the board of directors, including a change to allow for open election of member dentists to sit on the board rather than having them hand-picked by company officials. At a special meeting called by the member dentists and held in November 2018, about 96 percent of the votes cast by member dentists were in favor of these amendments. In January 2019, the Delta Dental board once again announced that the Independent Directors had vetoed the bulk of these amendments, according to the complaint.
The Washington State Dental Association has more than 4,400 members from across the state. About 2,200 association members are also Delta Dental members, according to the complaint.
The plaintiffs filing the complaint are Drs. Dennis L. Bradshaw, Todd R. Irwin and Nathan G. Russell.
The complaint can be viewed at https://sitefinity.ada.org/docs/librariesprovider52/private-library-washington/final-complaint-(02-19-19).pdf?sfvrsn=2.