Western Dental will stop accepting new patients from the Denti-Cal, which is a state-run program for low-income residents. The stoppage of its services will not affect all patients, however, while the reason behind it is due to the inadequate reimbursement, plus the surge of clients who have gained coverage by the Obamacare reform.
The CEO if Western Dental Simon Castellanos said that on June 1, the dental company would not accept new patients in 13 locations, including 7 clinics in the operating in the county. It has 150 offices statewide, while Denti-Cal is the largest dental care provider. The program also covers 5 million children and 7 million adults who have enrolled in Medi-Cal, which is the state’s variety of Medicaid for low-income individuals.
Castellanos said the company has served the underserved communities for more than 50 years, statewide, but with the given situation, the company was forced to question its continued participation. He added that the low rates have not been increased since the year 2001, and in 2013 they had an additional rate cut, while rents and salaries go up annually, he said.
The previous year, the Western Dental was able to provide care to about 562,672 Medi-Cal recipients all over the state, according to the Health Care Services Department. Through an email, Tony Cava, a spokesman for the department said they are working on ensuring that everyone impacted Medi-Cal members would have access towards quality dental care.
Earlier this month, however, the Premier Dental Services, the parent company of Western Dental was downgraded by the Moody’s Investors Services. The reason behind the downgrade was due to the decreasing levels of reimbursements from the government, along with the increasing numbers of adult Denti-Cal members mainly because of Obamacare. Moody’s Investors also reported a low average reimbursement rate of Denti-Cal’s services.
Castellanos explained that Denti-Cal patients account for about half of the entire company’s business, saying that the concentration of patients in its facilities is overwhelming. Hence, the transformation might affect the local nonprofit providers of dental care services if the Denti-Cal patients are unable to find new dentists.
A nonprofit dental care provider Gary Center’s executive director Pamela Austin said the reason why people go to community clinics is obvious because there is nowhere else to go, while commercial companies are uncertain if they could provide such services. Austin said the reimbursement is very poor, considering the money lost at the moment patients walk in the door.
Castellanos is now expecting that other Western Dental offices would be forced to reject Denti-Cal patients, while the company is still evaluating its finances. In order to cut costs further, 2 undisclosed clinics will also shut down in the state.
Last week, the company made an announcement that nearly 200 employees in the state will be laid off as well. The entire Western Dental employs 3,600 individuals throughout the state. Castellanos added that the company will continue to accept Medicaid patients in other areas where it operates, mainly because the reimbursement rates in other states are higher.