California ACT 1519- Are DTC Aligner Companies Dead?

I’ve been following ACT 1519 carefully throughout this legislative session. Today it was signed into law by Governor Gavin Newsom.

As a California orthodontist who has successfully written and lobbied dental legislation and one of the founding members of SmileDirectClub, I believe I am qualified to opine if this really is the end of the reign of the opulent era of DTC aligners companies. Should we anticipate a pivot? Is this a good time to buy SDC stock? Actually, I think it is and I just invested in SDC shares today! I still believe in this unicorn and I am willing to put my money where my mouth is.

This blog piece is an opinion piece based on my knowledge and understanding of this industry. Please read the bill yourself and extract your own interpretation. This is a complicated bill which has quite a lot of “pork” that is unrelated to the topic of DTC aligners so

for your convenience, I’ve taken the liberty to extract the relevant language below.

FACTS:

1.         This bill doesn’t take effect until Q1 2020

2.         This bill has a sunset of Q1 2024

3.         This bill doesn’t stop DTC aligner companies in California, but it does put more responsibility and risk on the treatment planning doctor. This is not retroactive so the doctors are “safe” with their old cases.

4.         This bill will not only affect the bottom line of Candid, SmileDirectClub, Byte, Orthly and other DTC companies doing business in California but it will also directly affect many privately-owned dental offices and DSO’s. It is now standard-of-care to have x-rays taken and interpreted for orthodontic treatment. Over my years practicing in California, I’ve seen hundreds of private practice patients who neither had a panoramic x-ray taken before orthodontic treatment nor interpreted by the treating dentist. I think DSOs like Western Dental, SmileBrands and Coast Dental will need to button-up their practices and QC a little bit. I applaud this. Honestly, I’ve seen tens of thousands of orthodontic cases over the past 15 years in treatment and there are far worse outcomes from those DSOs I’ve mentioned above than I’ve ever seen through tele-orthodontics. Honestly, I’ve seen hundreds, if not thousands of DTC aligner outcomes and for the most part, I think the outcomes are pretty incredible! 

5.         This bill has several flaws:

It fails to designate what kind of x-ray is considered acceptable and also how aged the x-ray can be. Does this mean that bitewings from 3 years ago is acceptable and standard-of-care? How will this be relevant? It will be very easy for every DTC Aligner company to just have the patients sign a release to retrieve their xrays from their general dentist. This is your right as a patient and consumer.

6.         It will be very easy to put a panoramic machine in a scan shop and to have the dentist of record review the panoramic x-ray. I don’t believe this will slow down the DTC movement at all. What a great opportunity for the x-ray industry!

7.         This bill does allow DTC aligner patients to file complaints with the Dental Board of California. As someone who has been on both sides of the CADB Peer Review process, this is the biggest stumbling block. Doctors who are doing remote treatment plans are now going to be held accountable for inferior treatment plans. I believe companies like Uniform Teeth and OrthoFx may have a leg-up on this issue. Case selection is key.

8.         This bill doesn’t say that this is retroactive so I believe that only treatment plans approved in 2020 will be subject to the new legislation. I imagine historical cases are grandfathered in. By estimation, there are almost 1 million DTC aligner cases completed to date that wouldn’t be affected.

9.         I imagine there will be a big push in the next 10 weeks to push through pending cases.

10.    This bill does not prohibit scan shops from operating without direct supervision of a dentist.

11.    Licensed Dental Assistants with their radiography license can take x-rays under general supervision of a dentist, that means the dentist doesn’t need to be in the room. This means that scan shops can continue to operate as-is but the x-ray equipment will need to be licensed to a managing dentist.

If you have questions about ACT 1519 or would like to interview Dr. Wilson, please visit www.straightsmilesolutions.com or info@straightsmilesolutions.com

The following are direct excerpts from California Assembly Bill 1519

This bill would provide that the failure by the treating dentist to review diagnostic digital or conventional radiographs for orthodontia prior to the initial diagnosis and correction of malposition of human teeth or the initial use of orthodontic appliances is unprofessional conduct under the act. The bill would require an individual, partnership, corporation, or other entity providing dental services through telehealth to make available the name, telephone number, practice address, and California state license number of any dentist who will be involved in the provision of services to a patient, and would require a violation of that provision to constitute unprofessional conduct. The bill would prohibit a provider of dental services from requiring a patient to sign an agreement limiting the patient’s ability to file a complaint with the board.

Existing law requires health care providers using telehealth to comply with specified provisions, including informing the patient about the use of telehealth and obtaining verbal or written consent from the patient for the use of telehealth prior to the delivery of health care services via telehealth, and makes a violation of these provisions unprofessional conduct.

This bill would specify that all laws and regulations governing professional responsibility, unprofessional conduct, and standards of practice shall apply to health care providers who provide telehealth services.

 Dentistry is the diagnosis or treatment, by surgery or other method, of diseases and lesions and the correction of malposition of the human teeth, alveolar process, gums, jaws, or associated structures; and such diagnosis or treatment may include all necessary related procedures as well as the use of drugs, anesthetic agents, and physical evaluation. Without limiting the foregoing, a person practices dentistry within the meaning of this chapter who does any one or more of the following:

(a) By card, circular, pamphlet, newspaper, internet website, social media, or in any other way advertises themselves or represents themselves to be a dentist.

(b) Performs, or offers to perform, an operation or diagnosis of any kind, or treats diseases or lesions of the human teeth, alveolar process, gums, jaws, or associated structures, or corrects malposed positions thereof.

(c) In any way indicates that the person will perform by themselves or their agents or servants any operation upon the human teeth, alveolar process, gums, jaws, or associated structures, or in any way indicates that the person will construct, alter, repair, or sell any bridge, crown, denture, or other prosthetic appliance or orthodontic appliance.

(d) Makes, or offers to make, an examination of, with the intent to perform or cause to be performed any operation on the human teeth, alveolar process, gums, jaws, or associated structures.

(e) Manages or conducts as manager, proprietor, conductor, lessor, or otherwise, a place where dental operations are performed.

 A provider of dental services shall not require a patient to sign an agreement that limits the patient’s ability to file a complaint with the board.

“Telehealth” means the mode of delivering health care services and public health via information and communication technologies to facilitate the diagnosis, consultation, treatment, education, care management, and self-management of a patient’s health care while the patient is at the originating site and the health care provider is at a distant site. Telehealth facilitates patient self-management and caregiver support for patients and includes synchronous interactions and asynchronous store and forward transfers.

(b) Prior to the delivery of health care via telehealth, the health care provider initiating the use of telehealth shall inform the patient about the use of telehealth and obtain verbal or written consent from the patient for the use of telehealth as an acceptable mode of delivering health care services and public health. The consent shall be documented.

(c) Nothing in this section shall preclude a patient from receiving in-person health care delivery services during a specified course of health care and treatment after agreeing to receive services via telehealth.

(d) The failure of a health care provider to comply with this section shall constitute unprofessional conduct. Section 2314 shall not apply to this section.

(e) This section shall not be construed to alter the scope of practice of any health care provider or authorize the delivery of health care services in a setting, or in a manner, not otherwise authorized by law.

(f) All laws regarding the confidentiality of health care information and a patient’s rights to that patient’s medical information shall apply to telehealth interactions.

(g) All laws and regulations governing professional responsibility, unprofessional conduct, and standards of practice that apply to a health care provider under the health care provider’s license shall apply to that health care provider while providing telehealth services.