Can Non-Dentists Own a Dental Office?

Learn how non-dentists can participate financially in owning a dental office from an expert's perspective.

Can Non-Dentists Own a Dental Office?

Although a non-dentist may be prohibited from owning a dental office, there is a way to get involved financially. Most dental offices are owned by individual dentists or a collective of dentists who can operate from one office or multiple sites. As mentioned, the Dental Service Organization (DSO) and Management Services Agreement (MSA) should be structured in accordance with the applicable state's dental corporate practice regulations. Generally, a dental office can only be owned by a licensed dentist. Therefore, non-dental investors can only own the DSO, and their primary connection to the dental practice business is through the MSA.

As stated, only a dentist or Professional Corporation (PC) can own the professional dental goodwill of a dental office. However, non-dentists may own the practice's other assets. This creates opportunities for dentists to expand the reach of family members who can participate in direct or, more commonly, indirect ownership of the practice. Dentists have to attend many classes, usually more than 10 years (at least). As such, only those with a true passion for dentistry will be able to succeed in this type of business.

From a legal perspective, the starting point is to understand what only a dentist or PC can possess; and that is the professional dental goodwill of a dental office. This goodwill includes the custody and control of all patient records and files (including patient billing records and treatment plans), patient medical records, x-rays and models, patient lists, and the use of any office name. In many cases, larger equipment (the chair, compressors, autoclaves, etc.) can be leased to equipment supply companies and there would be nothing wrong with a commercial owner renting a fully equipped dental office and building to a dental business owner. Most importantly, the DSO and your dental office agreement should be structured in a way that complies with applicable state corporate practice of dental restrictions and federal and state fraud and abuse laws. The topic has been hotly debated in court, with the profit motive of dental management corporations challenged by dentists and patients due to interference with treatment decisions and the quality of dentist care. DSO's participation in dental practice and the services provided by the DSO will vary depending on the parties' objectives, as well as the applicable state regulations governing these types of agreements and the corporate practice of dentistry.

In practice, by awarding Dental NHS contracts, area teams will favor clinical dentists over other clinical specialists. Typically, a DSO will enter into a long-term Management Services Agreement (MSA) with the dental office, under which the DSO provides certain non-clinical administrative management services for the office in exchange for an administration fee. If they pay directly under this agreement, they pay a copayment amount and the rest is billed to the dental or health insurance company. If a dental office or DSO is financially attractive enough to become the basis of a “platform” or be incorporated into an existing platform, then the entity can go to market and attempt to conduct a sale or affiliation transaction. At its most basic level, a DSO is a separate and distinct legal entity from a dental office that provides certain administrative or management services to the dental office. Almost everyone needs general dental cleaning, so dentists operate in local communities and provide basic preventive dental services to those communities.

A DSO can participate in almost every non-clinical aspect of the dental clinic business and offer a full suite of administrative and management services, including billing and collections, IT support, human resources, professional administration, payer hiring services, financial accounting, and evaluation comparative. Charges are generally fixed or fixed for services provided and may include dental hardware for services such as braces, fillings and caps, crowns and bridges. The open marketing of dental clinics as dental offices can be considered a violation of these rules since any advertisement for dental services must include the name of at least one office owner who is licensed to practice dentistry. This structure is an excellent way for non-dentists to participate in dental office ownership.