Aspen Dental: California's $2 Million Wake-Up Call for DSOs

The California Attorney General just settled a corporate practice of dentistry case against Aspen Dental Management, Inc. for $2 million in penalties and $300,000 in restitution. The injunctive terms that came with it are worth paying close attention to.

It is also not the first time Aspen Dental has faced state AG enforcement. The company settled a similar case with the New York AG in 2015 and with the Massachusetts AG in 2023. California is the third.

What Happened Between Aspen Dental Management and the California Attorney General

The AG alleged that Aspen unlawfully interfered with and controlled the clinical and business decisions of its affiliated dental practices. Specifically, Aspen allegedly offered direct payments to clinical staff to incentivize the sale of products and services, a direct violation of California's corporate practice of dentistry (CPOD) doctrine.

The AG also alleged that Aspen ran false and misleading advertising: deceptive testimonials, vague pricing language (terms like "starting at" and "as low as"), and misleading representations about which insurance plans were accepted.

The settlement is pending court approval.

Injunctive Terms 

The $2 million financial penalties are notable, but the injunctive terms list even more repercussions. Under the settlement, Aspen agreed to a sweeping set of restrictions on how it operates in California. Among the highlights:

• No revenue-tied service fees. Aspen cannot tie its management fees to practice revenue, sales, or profits.

• No compensation tied to sales. Neither Aspen employees nor practice employees can be compensated based on incentives tied to sales or revenue.

• No control over clinical staff. Aspen cannot determine the salary, compensation, or work schedules of any practice employee.

• No vendor restrictions. Practices must be free to choose their own vendors, labs, and suppliers.

• No noncompetes. No noncompete provisions with any licensed clinician, and no overly restrictive non-solicitation clauses.

• No equipment or real property ownership. Aspen cannot own the real property for any affiliated practice, and departing owners must be able to assume leases and purchase equipment at fair market value.

• No insurance plan mandates. Aspen cannot require practices to accept or refuse specific insurance plans.

  
  

On the advertising side, Aspen agreed to exact pricing in all ads, full disclosure on any "free" service promotions, authentic patient testimonials only, and clear identification of the practice owner in all marketing.

Going forward, Aspen must also obtain quarterly written preapproval from practice owners for all marketing campaigns and renegotiate service fees annually in writing.

Why This Matters Beyond California

California has some of the most aggressively enforced CPOD laws in the country, but it is not alone. Virtually all states have some version of the corporate practice of medicine or dentistry doctrine on the books, and regulators in those states are watching cases like this one. California only recently signed SB 351 into law in October 2025, signaling that the state's focus on PE influence in healthcare is not slowing down.

For DSOs and their affiliated practices, the takeaway is clear: the structural arrangements that have become standard in the industry are under scrutiny. Revenue-sharing fee models, incentive compensation structures, vendor exclusivity requirements, and management control over clinical operations are all potential exposure points.

This settlement doesn't mean the DSO model is broken. Rather, it emphasizes the importance of correct structure and CPOD compliance in a DSO. 

What Practice Owners Should Know

If you are a practice owner affiliated with a DSO, or evaluating a DSO transaction, this case is a useful lens for reviewing your own management services agreement. Key questions to ask:

• Are your management fees tied to revenue or profits?

• Does your MSA restrict your ability to choose vendors, labs, or insurance plans?

• Does anyone outside your practice control how your clinical staff is compensated or scheduled?

• Do you have noncompete or non-solicitation obligations that restrict where your clinicians can work?

  
  

If the answer to any of these is yes, it's worth having a legal review before regulators ask the same questions.

At Marti Law Group, we work with dental and healthcare practice owners navigating DSO transactions, MSA reviews, and compliance questions at every stage. Contact us to connect with our team.