Clampdown on Dental Code : FTC Says Limits on Ads Hurt Consumers, but Dentists Say Charges Are Outdated

In a case that could ultimately affect the cost of routine dental care in the state, the Federal Trade Commission has charged the California Dental Assn. with illegally restricting competition among its 15,000 members.

The FTC has charged that the California Dental Assn.’s code of ethics illegally prevents members from advertising discounted prices and from making claims about quality. These restrictions make it hard for Californians to find low-cost, quality dental care, the FTC contends.

The CDA, which represents three-quarters of dentists in the state, maintains that the FTC’s charges are either out of date or off the mark.

The case has potential impact beyond California, since the CDA’s code of ethics is virtually identical to the American Dental Assn.’s code. The national organization has not interpreted its code to prevent price advertising, but it does prohibit claims about quality, such as “painless dentist” or “best dentist.”

“If the FTC prevails, you will see dental associations in other states fall in line and quickly adjust their codes of ethics to comply,” said John Kushman, professor of consumer economics at the University of Delaware.

Under FTC procedure, the case against the CDA will be heard by an administrative law judge, who will make a recommendation to the commission. The commission may accept, reject or modify the judge’s recommendation. No hearing date has been set.

The case against the CDA grew out of an eight-year investigation into the association’s practices. Among the allegations in the FTC’s complaint:

* A prohibition on certain phrases, such as senior citizen discount or reasonable prices .

* A prohibition on across-the-board discounts, such as $25-off coupons for new patients.

* A ban on claims about quality or superiority, including such phrases as special treatment for nervous patients and special care for cowards .

In addition, the FTC charged that the CDA discourages members from conducting free dental screenings for schoolchildren by prohibiting dentists from distributing their names and addresses on examination reports sent home to parents, the FTC said.

The FTC said the CDA enforces its rules by threatening members with dismissal. Dentists tossed out of the CDA lose useful privileges, such as professional newsletters, referral contacts and discounts on certain services, such as malpractice insurance.

In addition, a dentist cannot join the influential ADA without first joining the CDA.

Responding to the charges, CDA counsel Ben Allamano said no dentist is forced to belong to the CDA and that the organization does not attempt to impose its rules on non-members.

Allamano said the CDA no longer prohibits the phrase reasonable prices . In addition, he said the CDA permits advertising about discounts as long as the regular price is plainly stated. The organization maintains that its rules are consistent with state regulations and are designed to protect consumers from misleading claims.

“We are upholding the law,” Allamano said.

Dental advertising in California is regulated by the state Board of Dental Examiners, which licenses dentists and oversees other aspects of the profession. Georgetta Coleman, executive director of the state board, declined to comment on how state regulations compare to the CDA’s rules. The board is not named in the FTC’s action.

The case comes at a time when the dental profession, dominated by individual practitioners or partnerships, is coming under pressure from HMO-style dental corporations that offer discounted services. It also faces pressure from dental hygienists seeking to operate independently.

Kushman, a former FTC economist, said an FTC victory would create downward pressure on prices of routine dental services in California, such as examinations and cleanings. The extent that prices fall depends in part on how widely dentists advertise discounts, he said.

Kushman said consumers may not benefit if dentists adopt testimonial-style advertising used by lawyers to assert quality service. Such claims are difficult to assess, he said.

“The FTC is assuming consumers are rational and well enough informed to use advertising information in their own best interests,” Kushman said.