California Settlement With Aspen Dental Sets Template for State Enforcement of DSO Limits

Posted: May 20, 2026

California Settlement With Aspen Dental Sets Template for State Enforcement of DSO Limits

Edited by Dentaltown staff

California Attorney General Rob Bonta announced May 7 a settlement with Aspen Dental Management Inc. over alleged violations of the state’s ban on the corporate practice of dentistry, a deal that includes injunctive terms his office described as “first-in-state” and “unprecedented” and that legal observers say could shape how other state attorneys general enforce corporate practice laws against dental support organizations.

The settlement, which remains subject to court approval, requires Aspen Dental to pay $2 million in penalties and $300,000 in patient restitution. The injunctive terms run substantially deeper, restricting how the company structures its relationships with affiliated dental practices in California.

Under the agreement, Aspen Dental cannot replace a practice owner with a dentist of its choosing, require practice owners to give up ownership upon terminating their contractual relationship with the company, own the property where a practice operates, or own or manage any dental office. The settlement also prohibits Aspen Dental from basing its service fees on practice revenue, sales, or profits, and from compensating its employees or any non-owner clinicians based on practice sales or revenue. Direct incentive payments to clinical staff are also barred.

The attorney general’s office alleged that when Aspen Dental entered California in 2019, the company did not contract with existing dental offices but instead selected, purchased, staffed, and advertised offices without clearly identifying independent dentist-owners. The complaint also alleged that Aspen Dental developed a clear aligner incentive program offering dental hygienists $50 per sale to new patients and $100 per sale to existing patients, and that company advertisements contained misleading testimonials, ambiguous cost claims, and inexact pricing language, including representations that offices accepted all insurance when they did not accept state or federally funded insurance programs.

Aspen Dental operates 19 offices in California and reports more than 1,000 offices nationwide. The company is owned by private equity firms and describes itself as a dental support organization providing business management and administrative services to affiliated practices.

In a statement to FOX40, an Aspen Dental spokesperson said the agreement “formalizes many of the best practices already in place across the network” and “concludes the AG’s review and provides clarity for [Aspen Dental] operations moving forward.” The company stated it is “fully prepared to implement the remaining terms.”

Legal analysts have flagged the settlement as a signal to the broader DSO industry. In a client advisory, the law firm Dykema wrote that while the settlement should not threaten the general viability of the DSO model, it confirms that DSOs must carefully review their contractual arrangements and protocols with affiliated dental practices to ensure compliance with state corporate practice of dentistry laws and advertising regulations.

The California action is Aspen Dental's third major state enforcement settlement. In June 2015, the New York attorney general's office settled with Aspen Dental for $450,000 over corporate-practice-of-dentistry and fee-splitting allegations, and in 2023 the company paid $3.5 million to resolve separate Massachusetts allegations of deceptive advertising and billing.

Roughly two-thirds of U.S. states have laws restricting the corporate practice of dentistry, with varying scopes and enforcement histories. The California settlement is the most detailed public enforcement action against a major DSO under such a law, and observers expect other state attorneys general to study its terms as they evaluate their own oversight of DSO-affiliated practices.

Sources:
California Office of the Attorney General, “Attorney General Bonta Announces Settlement with Aspen Dental,” May 7, 2026: oag.ca.gov/news/press-releases/attorney-general-bonta-announces-settlement-aspen-dental
ADA News, “California attorney general reaches settlement with Aspen Dental over corporate practice claims,” May 12, 2026: adanews.ada.org/ada-news/2026/may/california-attorney-general-reaches-settlement-with-aspen-dental
Dykema, “Aspen Dental Management, Inc. Settles California Corporate Practice of Dentistry Enforcement Action for $2 Million”: dykema.com/news-insights/aspen-dental-california-corporate-practice-of-dentistry-enforcement
FOX40, “Aspen Dental settles California lawsuit for $2 million,” May 7, 2026: fox40.com/news/aspen-dental-lawsuit-california-false-advertising
Insurance Journal, “California AG Settles with Aspen Dental for $2M Over False Advertising,” May 8, 2026: insurancejournal.com/news/west/2026/05/08/869014
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