FTC Staff Comment Before the Louisiana House of Representatives Concerning Amendments to Louisiana House Bill 687 on the Practice of In-School Dentistry

UNITED STATES OF AMERICA
FEDERAL TRADE COMMISSION
WASHINGTON, D.C. 	20580
Office of Policy Planning
Bureau of Economics
Bureau of Competition
May 22, 2009
Hon. Sam Jones
State Representative - District 50
Louisiana House of Representatives
900 Third Street
Baton Rouge, LA 70804
Re: 	Amendments to Louisiana House Bill 687
Dear Representative Jones:
House Bill 687 will restrict competition among dentists and does not appear to
provide any countervailing benefits to consumers. Further, the recent bill amendments
appear to exacerbate the competition concerns by restricting the market only to present
incumbents in many circumstances and raise concerns over the role of competitors in
regulating and potentially raising their rivals’ operating costs in the Louisiana dental
market. If enacted, HB 687 is likely to make the most vulnerable of Louisiana’s children
worse off by denying many the opportunity to receive dental care. Accordingly, the Staff
of the Federal Trade Commission urges the Louisiana Legislature to reject HB 687.
This letter follows our recent correspondence to Representative Tim Burns
regarding his inquiry about the likely competitive effects of Louisiana House Bill 687
(“HB 687,” “the Bill” or “the proposed legislation”).1 We understand that after we
provided our comments, amendments were made to the bill.2 The Staff of the Federal
1 This letter expresses the views of the Federal Trade Commission’s Office of Policy Planning, Bureau of
Economics, and Bureau of Competition. The letter does not necessarily represent the views of the Federal
Trade Commission or of any individual Commissioner. The Commission has, however, voted to authorize
us to submit these comments. The letter to Representative Burns, dated May 1, 2009, is available at
http://www.ftc.gov/os/2009/05/V090009louisianadentistry.pdf
2 The proposed legislation is available at http://www.legis.state.la.us/billdata/streamdocument.asp?
did=645549, and the committee and House floor amendments are available at
http://www.legis.state.la.us/billdata/byinst.asp?sessionid=09rs&billtype=HB&billno=687. We also
understand that on May 19, 2009, HB 687 was put to vote by the Louisiana House, and failed to pass.
Currently pending is a motion for reconsideration, and we understand that the House will reconsider the bill
on or about May 26, 2009.

Hon. Sam Jones
May 22, 2009
Page 2 of 5
Trade Commission’s Office of Policy Planning, Bureau of Economics, and Bureau of
Competition are pleased to provide the following comments to supplement our previous
letter regarding House Bill 687.
We are concerned that Amendment 8 from the Health and Welfare Committee
will impose additional restraints on competition. That amendment contains the following
restrictions on how in-school dental services in Louisiana must be provided:
(3) The dentistry is practiced within a mobile dental unit owned and
operated by the state or local government, within a federally qualified
health center with permanent or mobile dental facilities, or within a
school-based health clinic with permanent dental facilities, provided such
government mobile dental unit service, federally qualified health center or
school-based health clinic has been providing dental services on the
property of a Louisiana elementary or secondary school for at least six
months total time during the five years immediately prior to the effective
date of this legislation.
Qualifying providers under paragraph (3) will be limited to those who have
provided these services for at least six months during the last five years. This restriction
will limit new market entry for in-school services, and will have a deterrent effect on
potential price and quality innovations and improvements that would benefit the children
who could receive in-school dental care. Indeed, to the extent the Bill’s sponsors are
concerned with remedying any ongoing adverse effects of in-school dentistry, evidence
of which we have not seen, this restriction will serve only to maintain those effects and
insulate these providers from competition that could bring improvements to all dental
services.
Paragraph (4) of the Committee Amendment states:
(4) The dentistry is practiced within any rural community or other
communities, with the approval of the superintendent of the respective
elementary or secondary school districts, with a shortage or inadequate
number of permanent dental offices as designated and determined by the
Louisiana State Board of Dentistry to be an underserved area for dental
care.
Under paragraph (4), the Bill will permit the practice of in-school dentistry by
non-incumbent dentists only in communities that are “underserved” by dentists. By
restricting entry of in-school dentistry only to these areas, the bill thereby prohibits many
children from receiving the benefits of competition among providers. In addition, under
paragraphs (3) and (4) combined, in-school dental services may be provided in non-rural
and non-underserved schools only if such services are already performed. This means
that only those children who potentially may receive in-school dental services (except for

Hon. Sam Jones
May 22, 2009
Page 3 of 5
sealants) are children attending non-restricted schools where those services are already
provided.
Further, paragraph (4) gives responsibility to the Louisiana State Board of
Dentistry to decide whether or not an area is in fact “underserved.” It is our
understanding that the Louisiana State Board of Dentistry is a body composed primarily
(though not exclusively) of dentists. The Bill thus mandates that, prior to authorizing in-
school dental services, competitors on the Louisiana Board of Dentistry must first
determine, and then rely on, existing levels of market competition as the primary metric
for deciding whether or not in-school dentists may compete.
The FTC supports legitimate industry self regulation by such boards because,
when implemented properly, it can provide efficiencies and other benefits to consumers.3
However, there are risks to competition when one group of competitors is charged with
regulating another. For example, dentists on the board may have the incentive, and
would have the ability, to limit entry by in-school dentists in a way that would soften
competition and thereby adversely affect dental consumers. 4
Similar competition concerns were raised in the FTC matter brought against the
South Carolina State Board of Dentistry. The Commission’s complaint there charged the
South Carolina State Board of Dentistry with unlawfully restraining competition in the
provision of preventive dental care services in South Carolina, in violation of Section 5 of
the Federal Trade Commission Act. To aid you in your deliberations, we enclose the
FTC’s Complaint, Decision and Order, and Analysis to Aid Public Comment involving
the action brought against the South Carolina Board of Dentistry.5
Finally, Rep. Nowlin also proposed an amendment, which the floor adopted, and
which would add the following caveat:
Providers of dental services at elementary or secondary
schools shall provide copies of any medical record created
for a student patient to any dentist to whom a patient is
referred or from whom a request for such a record is
received within seventy-two hours of the referral or request
and at no cost to the dentist to whom the referral is made or
from whom the request is received.
3 See Deborah Platt Majoras, “Self Regulatory Organizations and the FTC,” Address to the Council of
Better Business Bureaus (April 11, 2005), available at http://www.ftc.gov/speeches/majoras/050411self
regorgs.pdf.
4 Under the law, even a rural dentist seeking to provide services in his local school system to meet a
community need could be prohibited from doing so because the fact of his mere presence may mean the
community does not qualify as underserved.
5 Copies of the Complaint, Decision and Order, and Analysis to Aid Public Comment , as well as all other
pleadings in the matter, are available at http://www.ftc.gov/os/adjpro/d9311/index.shtm.

Hon. Sam Jones
May 22, 2009
Page 4 of 5
Because the Nowlin Amendment appears to allow all dentists anywhere in
Louisiana to examine the records of any patient who receives in-school dental services,
regardless of who provided such services and under what circumstances, the amendment
raises privacy concerns with respect to these types of health care records.
In addition, this provision of the Nowlin Amendment could allow dentists
throughout Louisiana to raise the operating costs of their competitors who provide in-
school dental care. Requiring in-school providers to prepare, copy, and deliver medical
records within 72 hours of any request by any dentist, and bear the cost of such, could
raise the costs of providing such in-school services. Further, such a provision may invite
collusion among licensed dentists insofar as developing a scheme, tacit or otherwise, that
would punish rival dentists who provide in-school services. Indeed, such activity if
undertaken by dentists individually or collectively, could be in violation of the Sherman
Act, 15 U.S.C. §1 and §2, and the FTC Act, 15 U.S.C. §45, et seq., both of which prohibit
attempts to monopolize and engage in unfair trade practices.
We recognize that the Nowlin Amendment could prevent duplication of services
by requiring transparency through access to records, and that some may have concerns
about patients becoming locked-in to a dentist providing services for free at a school if
records cannot be accessed by other dentists. However, that concern could be addressed
in a less anticompetitive way by requiring the release of the patient’s records at the
request of the patient and allowing a nominal charge for duplication and processing.
We appreciate your consideration of these issues.
Respectfully submitted,
Susan S. DeSanti
Director
Office of Policy Planning
Richard A. Feinstein
Director
Bureau of Competition

Hon. Sam Jones
May 22, 2009
Page 5 of 5
Pauline Ippolito
Acting Director
Bureau of Economics