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States differ on regulations regarding practice ownership

April 09, 2012

States regulate who can own and operate a dental practice, what entities may employ a dentist and what level of control nondentist owners and managers may have over a dental practice. In order to find out what the laws in any individual state require, contact your state dental board.

A key area of concern regarding practice ownership is the succession of ownership in the death or disability of a dentist, and several states have laws that allow survivors or legal representatives to continue ownership for a time in order to sell or liquidate a practice.

However, as the number of large dental group practices continues to increase, the ADA Department of State Government Affairs is tracking information about state laws governing practice ownership issues.

Dental management companies enter into agreements with dentists that define a relationship. According to the DSGA, some state dental boards are finding it challenging to understand and be definitive as to what provisions of these agreements and activities of these companies result in managing, controlling and perhaps interfering with a dental practice to the point of essentially owning the practice.

Many states (25 plus the District of Columbia) attempt to restrict nondentist interference or ownership by making the act of owning a dental practice a defining element of practicing dentistry. Five states prohibit nondentists from operating dental practices, and four states have either no laws addressing the issue or provisions that provide no guidance on how to classify those states when it comes to ownership.

However, individual states have regulations that allow a person or legal entity not licensed as a dentist to participate in practice ownership, and laws that preempt the dental practice act to allow nondentist ownership if the dental practice is part of a provider network. The DSGA emphasizes that despite statutory or regulatory provisions on ownership, there is little case law to provide guidance. Some states do not appear to be enforcing the laws for a variety of reasons, and the regulations are interpreted differently in other states.

The ADA adopted policy addressing practice ownership in 2000, Ownership of Dental Practices (2000:462):

“Resolved that the Association supports the conviction long held by society 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, and be it further

“Resolved that in the case of a deceased or incapacitated dentist, in order to protect the interest and the oral health of the patients in that practice, the dentist’s nondentist surviving spouse, heir(s) or legal representative(s), as appropriate, should be allowed to maintain ownership of the dental practice for two years to allow for continuity of care during the orderly transition to a new owner.”