Americans continue to experience an increase in the cost of healthcare, a trend largely advanced by the massive expansion of regulation triggered by implementation of the Affordable Care Act (ACA).
As a result, providers are continuously seeking market-based solutions to increase access and quality, while bringing down the cost of care. This week, the American Legislative Exchange Council (ALEC), released its latest analysis Overregulation Threatens Market-Driven Solutions in Dentistry, which outlines policies impacting state licensing regulations and educates on the benefits Dental Support Organizations bring to healthcare.
This business model provides the ability to accept a greater number of health insurance plans, and ultimately serve a greater number of patients, while the non-clinical administrative services DSOs provide sort out complex regulatory and compliance issues.
Until recently, there was very little interest in how a dentist might organize their non-clinical needs. Almost every state makes clear that only licensed individuals can provide clinical care to patients, and through regulatory oversight dictates how non-licensed entities provide non-clinical administrative and support services.
Despite the many benefits DSOs provide to a dental practice, some state dental licensing boards have either directly via their regulatory authority, or through the legislative process, sought to restrict a dentist’s ability to contract with a DSO for non-clinical support services. This has led to both legal and public policy concerns about anti-competitive behavior.
A notable example is with the North Carolina (NC) State Board of Dental Examiners. The Board, consisting of mostly licensed dentists, sought to limit competition in the name of public safety until the Federal Trade Commission (FTC) challenged that claim.
In 2015, the United States Supreme Court ultimately ruled that a licensing board made up of “active market participants” must have active state supervision or a clear legislative directive when undertaking anti-competitive action. The Court notes that failing to do so will otherwise create an environment favoring some market participants over their competitors. Thus, in this case, the Supreme Court supported lower court decisions that the NC Board of Dental Examiners unreasonably restrained trade in violation of the federal antitrust laws.
When considering oversight of occupational licensing boards elected officials should account for the following factors:
Always consider regulatory oversight that increases economic opportunity, promotes competition and encourages the growth of free market enterprises;
Use the least restrictive regulations necessary to protect consumers from present, significant and potential harms that threaten public health and safety;
Ensure occupational licensing boards determine a non-transferable authorization for an individual to perform a lawful occupation for compensation based on meeting personal qualifications established by the legislature; and
Use highly restrictive and burdensome occupational licensing only as the option of last resort after considering lesser regulations that will protect public safety.
Active supervision of occupational licensing boards is also a key piece of regulatory oversight of free-market enterprises. ALEC policies support independent supervision of state licensing entities, by a designee of either the legislature or by the state Attorney General, that determine board’s rules and policies, ensuring they benefit consumers, not serve the private interests of providers of goods and services who the board regulates.
Regulatory overreach in our healthcare system can impact the market by discouraging new market entrants, decrease access and increase the cost of care.
Governing authority over state licensing boards should always consider incentives that will have the effect of encouraging free-market innovation and growth of free-market interests. Promoting anything less will hinder innovative solutions to the challenges we face in health and dental care in the U.S.
Mia Palmieri Heck is the Director of the Health and Human Services Task Force at the American Legislative Exchange Council (ALEC).
The views of contributors are their own and not the views of The Hill.