Can a Non-Dentist Own a Dental Practice?
Non-dentists generally cannot own or control a dental practice directly in states that follow the corporate practice of dentistry doctrine. However, many states allow non-dentists to participate legally through management service organizations (MSOs) or related business structures. Understanding your state’s rules is essential before investing in a dental business.
Entrepreneurs and investors are increasingly drawn to the dental industry because dental practices often receive direct patient payment rather than relying heavily on insurance. Yet ownership is not always straightforward. Below is a clear breakdown of how non-dentists may or may not participate in dental practices depending on state laws.
Understanding the Corporate Practice of Dentistry Doctrine
What Is the Corporate Practice of Dentistry Doctrine?
The corporate practice of dentistry doctrine prohibits non-dentists and non-professional corporations from owning or controlling dental practices. The goal is to protect the clinical independence of licensed dentists and prevent business owners from influencing patient care decisions.
Under this doctrine, only licensed dentists may control:
- Treatment decisions
- Diagnostic evaluations
- Clinical care recommendations
- Supervision of licensed dental personnel
States that enforce this doctrine aim to ensure dentists remain free to provide patient-centered care without pressure from non-clinical owners.
State-by-State Variations in Dental Practice Ownership
How Do Dental Ownership Rules Differ by State?
States vary widely in how they regulate dental practice ownership. Some impose strict limits that restrict ownership only to licensed dentists. Others take a more flexible approach and allow non-dentists to participate through ancillary business structures.
States may:
- Limit ownership only to licensed dentists
- Allow non-dentists to own non-clinical entities connected to dental practices
- Permit revenue participation through MSOs
- Require specific registrations for management entities
- Impose strict penalties for unauthorized clinical control
Because rules differ significantly, non-dentists must evaluate state-specific regulations before investing.
Management Service Organizations as a Legal Pathway
How Can MSOs Allow Non-Dentists to Participate Legally?
A management service organization (MSO) allows non-dentists to participate in the dental industry by providing administrative and business services to licensed dental practices. MSOs handle non-clinical tasks, while dentists retain full control over patient care.
MSOs typically provide:
- Office and staff management
- HR support for non-licensed personnel
- Billing and collections
- IT systems and data security
- Marketing and advertising
- Payroll and benefits administration
- Vendor and supply coordination
Licensed dentists retain exclusive authority over:
- Diagnosing and treating patients
- Creating treatment plans
- Maintaining clinical records
- Hiring and firing licensed dental professionals
How Are MSOs Paid?
Most states prohibit MSOs from fee-splitting or revenue-sharing. Instead, MSOs must charge rates that meet fair market value standards, such as:
- Flat monthly fees
- Hourly rates
- Per-service administrative charges
These pricing structures help avoid arrangements that could be interpreted as influencing clinical decision-making.
Legal Risks for Non-Dentists in the Dental Industry
What Are the Main Legal Risks for MSOs and Non-Dentist Investors?
Non-dentists face legal exposure if their business activities cross into clinical control or violate state regulatory requirements. Common risks include:
1. Failure to Comply With MSO Registration Requirements
Some states require MSOs to register or file administrative notices before contracting with dental practices.
2. Unauthorized Practice of Dentistry
Non-dentists can face serious penalties if they influence or participate in clinical decisions.
3. Improper Revenue Sharing
Fee structures that resemble profit-sharing with a dental practice may be treated as unlicensed ownership.
Potential consequences include:
- Civil fines
- Loss of business licenses
- Forced dissolution of the MSO
- Criminal prosecution in serious cases
Because these risks carry high penalties, early legal guidance is essential.
Contact Our Dental Law Attorneys
If you are a non-dentist interested in owning or operating a dental practice, you need legal guidance to ensure compliance with state laws. Mahan Law can help you structure your investment, form an MSO, or acquire a dental business safely and legally. Contact our dental law attorneys today to schedule an initial consultation.
FAQs
What is the safest way for a non-dentist to be involved in a dental practice?
Most non-dentists participate through an MSO that provides administrative services. This structure allows involvement in the business side of dentistry while keeping clinical control with licensed dentists.
Can a non-dentist share in the profits of a dental practice?
Generally no. Most states prohibit non-dentists from sharing in clinical revenue. Instead, MSOs charge fair market value administrative fees.
Can an MSO be considered the unauthorized practice of dentistry?
Yes, if the MSO influences or participates in clinical decision-making. MSOs must avoid any involvement in diagnosis, treatment planning, or supervision of licensed dental professionals.
