Western Dental Says Denti-Cal is Broken, Starts Closing Doors to New Patients

May 26, 2015

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Source: Sacramento Business Journal

Western Dental will begin to close the door to new Denti-Cal patients next month – and will shut some offices altogether – as the company reassesses participation in the state dental program for the poor.

One of the largest providers of Denti-Cal services in the state, Western Dental says low reimbursement and increased demand makes the business untenable. The Southern California-based company serves between 650,000 and 700,000 a patients a year, including thousands in the Sacramento region.

Two weeks ago, Moody’s Investors Services downgraded the company’s parent because of weak financial performance related to growing numbers of low-margin patients. This is primarily due to growth in the Medi-Cal program under federal health reform and partial expansion of adult dental benefits last year. That’s caused a shift in Western Dental’s clientele to a higher proportion of low-margin patients who need a lot of care.

“Denti-Cal is broken and driving away providers,” Western Dental CEO Simon Castellanos told me. “Our company has served California over 50 years. For the first time, we are reassessing whether to continue.”

Dentists haven’t gotten a pay increase since fiscal 2000-2001 and rates were cut 10 percent in 2013, but salaries and other expenses continue to climb, Castellanos said. “It’s not a sustainable model.”

Western Dental will stop taking new Denti-Cal patients at 13 offices on June 1. The company plans to shut down two offices altogether. Where, Castellanos would not say. Western Dental operates at least six dental centers in the Sacramento region, but Castellanos would not disclose whether any local sites will be immediately affected.

”This is just the first wave. Every month, we’ll convert more (sites) to traditional insurance,” Castellanos said. “Our facilities are flooded and have caused a shift in financial situation at our clinics,” he added. “We we need to limit Denti-Cal to serve our existing patients.”

Western Dental is not alone in concern about the program.

The California State Auditor blasted the Denti-Cal program in a December report that says rates for the ten most common procedures in 2012 averaged $21.60, or 35 percent of the national average of $61.96.

A statewide coalition of health, education medical groups has launched a campaign to get the governor and state lawmakers to put more resources for dental care into the new state budget. And California’s Congressional delegation weighed in last week on low provider reimbursement in Denti-Cal.

“This has had a significantly negative impact on the number of dentists in California still willing and able to participate in the program, even those who have been long enrolled in Denti-Cal,” states a May 13 letter from the delegation to to Gov. Jerry Brown and state legislative leaders. “For Denti-Cal to be a meaningful benefit, enrollees must have access to care,” the letter adds. “We urge you to prioritize improvements to the Denti-Cal program in this year’s budget.”

“The department is very concerned about the potential impacts to Medi-Cal beneficiaries resulting from service reductions by Western Dental,” said spokesman Tony Cava at the California Department of Health Care Services, which oversees Medi-Cal and Denti-Cal. “We remain committed to working to ensure that our Medi-Cal members have access to quality dental care and are evaluating necessary steps to ensure those beneficiaries who have been receiving services from these providers are able to find new providers.”

State health officials are closely monitoring the situation and say they will act swiftly should it be necessary to ensure access. They also hope to get additional money from the federal government for new providers who agree to dedicate part of their practice to Medi-Cal patients and to existing providers who expand the number of Medi-Cal patients they will see.

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