Today (12/12/08,) the Fifth Circuit Court of Appeals released their ruling on the legality of the OCA/OrthAlliance/PedoAlliance contract. The previous ruling by the bankruptcy court in New Orleans that the contract was illegal under Texas law was AFFIRMED.

 

By my count, the case orginally involved 14 doctor appellees, with at least 5 others affected by the outcome.  3 of the original docs settled under some sort of new agreement with OCA/Orthosynetics prior to oral arguments last April, and were dismissed from the case.  But given the number of offices, and possible affect on Texas affiliates who were not litigating, I'd think the effect of the loss on OCA would be very significant. 

 

Since OrthoSynetics is now privately held, they do not have to offer public disclosure of their business condition. However, given what I beleive to be a relative lack of success in recruiting new affiliates, plus the attrition of existing affiliates, I wonder how much longer they can hang on?  I understand via the grapevine that they're now writing or re-writing contracts which unlike the old Business Services Agreements  have a 7 year lifespan and allow the doctor to retain ownership of the office, fixtures and equipment, plus pay significantly lower fees.  If they could offer a level of service which keeps docs on board and improves their reputation in the orthodontic community, plus charge a reasonable management fee, there may be a chance they can eventually survive and grow?  Only time will tell.

 

Entirely my own, personal opinion based on facts I hope are reliable.  For further information, contact the Ninth Circuit ruling and/or a licensed attorney.