Delta Dental of Wisconsin’s Cherry Tree Dental Acquisition Faces Calls for Investigation

Merger Sparks Scrutiny

A recent merger between Delta Dental of Wisconsin (DDWI) and Cherry Tree Dental, a regional dental services organization, has prompted calls for investigation from two national watchdog groups.

The American Economic Liberties Project and the Alliance of Independent Dentists (AID) have asked the Federal Trade Commission, the Department of Justice Antitrust Division, and Wisconsin Attorney General Josh Kaul to review the deal, citing concerns over potential conflicts of interest and reduced competition.

The American Economic Liberties Project works to ensure America’s system of commerce is structured to advance, rather than undermine, economic liberty, fair commerce, and a secure, inclusive democracy. Economic Liberties believes true economic liberty means entrepreneurs and businesses large and small succeed on the merits of their ideas and hard work.

The Alliance of Independent Dentists (AID) is a national nonprofit organization dedicated exclusively to supporting independent, privately owned dental practices.

The ADA issued a statement saying, “When an insurance company becomes both health care provider and insurance payer, questions arise regarding potential conflict of interest. From a business standpoint, dental insurance companies seek to minimize cost and maximize profit. As a result, patients may find their treatment options limited to what is most cost-effective for the insurer, not necessarily what is most effective for their oral health. The ADA believes that the health interests of patients are best protected when dental practices and other private facilities for the delivery of dental care are owned and controlled by a dentist licensed in the jurisdiction where the practice is located.”

Likewise, The Wisconsin Dental Association (WDA)’s Executive Director, Mark Paget, is raising concerns over Delta Dental of Wisconsin’s (DDWI) recent purchase of Cherry Tree Dental, citing potential conflicts of interest as DDWI now acts as both insurer and dental service provider. The WDA questions whether the acquisition misuses consumer premiums and whether the proposed corporate restructuring adequately addresses these conflicts. The association is urging the Office of the Commissioner of Insurance (OCI) to thoroughly review the transaction to protect patients, ensure fair treatment options, and maintain a competitive insurance market.

A First in Wisconsin

The transaction marks the first time in Wisconsin that a dental insurer has purchased a chain of dental practices. DDWI is the state’s leading dental insurer, covering more than 2.6 million residents and contracting with over 90 percent of Wisconsin dentists. Its parent company, Delta Dental, dominates many state markets nationwide, with an average market share of up to 65 percent in recent years.

Cherry Tree Dental, backed by private equity, operates more than 40 practices across Wisconsin, Illinois, Michigan, and Minnesota. The sale gives DDWI control over both dental coverage and the direct delivery of care in the region.

“DDWI’s acquisition of Cherry Tree Dental brings one of the most harmful trends in American health care to Wisconsin’s dentistry market,” said Emma Freer, Sr. Policy Analyst for Healthcare at the American Economic Liberties Project. “Vertical integration between insurers and care providers poses serious conflicts of interest, endangers public health, unfairly drives independent care providers out of business, and drives up costs. These dangers are evidently present with respect to DDWI, Wisconsin’s dominant dental insurer, acquiring a leading regional dentistry provider, and antitrust enforcers should investigate without delay.”

Concerns Raised

In their joint letter, Economic Liberties and AID outlined potential risks tied to the merger. They argue that insurer ownership of dental practices could lead to:

Reduced patient choice if members are steered toward affiliated practices.
Pressure on independent providers to sell or risk losing access to DDWI’s network.
Conflicts of interest if insurers influence clinical decisions to lower costs.
Employment concerns for dentists tied to reimbursement rates and job security.

Dr. Jill Tanzi , president of the Alliance of Independent Dentists, said the arrangement could erode trust between patients and providers. “Dental care should be guided by licensed professionals, not by insurers whose profits increase when patients receive fewer services. Allowing insurance companies or private equity firms to control healthcare delivery undermines clinical judgment and erodes trust. To protect patients, all states should prohibit such ownership arrangements and eliminate these conflicts of interest that are detrimental to public health.”

Possible Legal Implications

The watchdog groups argue that the deal may run afoul of federal antitrust law. Their letter highlights possible violations of Section 7 of the Clayton Act and notes that the merger should be evaluated under the 2023 Merger Guidelines issued by the FTC and DOJ.

A Broader Pattern

The merger comes amid a wider wave of consolidation in both medical and dental care nationwide. Critics warn that vertical integration between insurers and providers can reshape local markets, reduce competition, and alter the patient experience.

Regulators have not yet announced whether they will formally investigate the acquisition.