California Attorney General Rob Bonta announced last week that his office has reached a settlement with Aspen Dental Management, Inc. over allegations that the private equity-backed dental support organization violated California's ban on the corporate practice of dentistry and engaged in false and misleading advertising directed at patients.

The settlement — still subject to court approval — carries significant weight for the dental industry nationwide: it includes what the AG's office is calling unprecedented first-in-state injunctive terms designed to protect California consumers and clinical staff, $2 million in civil penalties, and $300,000 in restitution funds for certain patients.

What California Alleged

Aspen Dental describes itself as a dental support organization that provides business management and administrative services to dental offices, each of which operates under the "Aspen Dental" name and branding. Under California law, that structure is permissible — DSOs can provide administrative and operational support. What is not permissible is crossing the line into clinical control.

The California DOJ alleged that the company exceeded that role by unlawfully directing the practice, ownership, and management of dentistry in California — limiting dentist-owners, restricting staff, and misguiding patients in ways that violated both California's ban on the corporate practice of dentistry and the state's Unfair Competition Law.

As part of its expansion, Aspen Dental allegedly did not contract with existing dental offices, but instead selected, purchased, staffed, and advertised its offices without clearly identifying an independent dentist-owner.

Perhaps the most striking allegation involves direct financial incentives to clinical staff for product sales. Aspen Dental implemented an incentive program for hygienists to encourage the sale of clear aligners — offering $50 per sale to new patients and $100 per sale to existing patients. Prosecutors said those incentives violated multiple California statutes.

On the advertising side, prosecutors alleged Aspen Dental engaged in false advertising, including misleading testimonials and cost estimates, along with false claims that its offices worked with all insurance — despite the fact that the business did not accept state or federally funded coverage.

What the Settlement Requires

The settlement's injunctive terms require major changes to Aspen Dental policy, including a requirement that the company not own the property of any of its practices and a prohibition against practicing dentistry or managing any dental office. If approved, the agreement would also block Aspen Dental from enforcing many restrictions on dentists and from requiring practice owners to surrender ownership if they leave the company.

Not the First Time

In 2023, Aspen Dental settled a similar case in Massachusetts. The California action, however, raises the stakes considerably — both in the scale of the injunctive relief and in the precedent it sets for how other states may approach DSO regulatory enforcement.

Aspen Dental reports more than 1,000 offices nationwide. As one of the largest DSOs in the country, the outcome of this settlement could prompt closer scrutiny of similar organizations operating in states that maintain corporate practice of dentistry prohibitions.

What This Means for the Profession

The California action arrives at a moment when DSO growth, private equity investment in dentistry, and patient affordability concerns are all converging in the policy conversation. Attorney General Bonta framed the enforcement action in precisely those terms: "As Americans face an affordability crisis, there is no room for unlawful business practices that can increase healthcare costs or harm consumers."

For independent dentists and practice owners, the case reinforces why corporate practice of dentistry laws exist — and why enforcement of those laws matters. The allegation that hygienists were financially incentivized to push clear aligner sales to patients will resonate with practitioners who have long raised concerns about production-driven models overriding clinical judgment.

The settlement is pending court approval. USA Dental Report will continue to follow developments as the case moves forward.

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