Dental service organizations have grown in popularity over the past few decades. Many dentists value the benefits of working with DSOs because they can take on the administrative aspects of running a dental practice. With this kind of help, dental practitioners can focus on what they do best: patient care.
However, dental practices that choose to work with dental service organizations must comply with state and federal laws and regulations specific to the dental and healthcare industries. These restrictions affect the relationship between a practice and a dental service organization.
Understanding Dental Service Organizations (DSOs)
A dental service organization (DSO) is a company that primarily provides business and administrative support to dental practices. DSOs traditionally assist dentists by handling the non-clinical aspects of operating a dental practice. Examples of services offered by DSOs include:
- Marketing and advertising, including SEO practices for online marketing and social media
- Business operations, including managing commercial leases, equipment leases, or supplier agreements
- Human resources, including staff scheduling, background checks for prospective employees, and handling worker complaints or grievances
- Financial management, including bookkeeping, billing, or tax preparation
- Technology and IT services, including website development or managing patient records systems
Legal Issues Involving DSOs
Some of the top legal concerns and challenges for dental practices and their DSOs include:
- Corporate practice of dentistry laws: Many states have laws that restrict non-dentists from owning or having any beneficial interest in a dental practice.
- Contractual arrangements: Dental practices and DSOs may encounter complicated legal issues when negotiating their contractual relationships.
- Regulatory compliance requirements: State laws impose strict requirements for the operation of dental practices and the provision of dental care to patients.
- Fraud or abuse concerns: Practices that partner with DSOs should consider potential problems related to illegal fee splitting, kickbacks, or fraudulent insurance claims.
- Mergers and acquisitions: Legal issues may arise when dentists seek to place their practices under the umbrella of a DSO.
How Our Firm Helps Dentists and DSOs
The legal team at Mahan Law – Dental Attorney helps dental practices and DSOs with the legal issues that arise from partnerships between parties. These issues could include:
- Reviewing and negotiating service agreements or partnership contracts between practices and DSOs
- Regulatory compliance, including restrictions on the corporate practice of dentistry, Stark Law requirements, and HIPAA
- Mergers and acquisitions and management or ownership transitions involving dental practices and DSOs
- Dispute resolution for legal issues or claims that arise in relationships between dental practices and DSOs
Benefits and Challenges of Working with a DSO
Some of the advantages a dental practice could realize from collaborating with a DSO include:
- Relief from the burden of business management: Working with a DSO allows a dentist to focus on clinical practice and providing the highest quality treatment to patients, as the DSO can handle “back office” tasks like HR, accounting, and marketing.
- Increased resources for marketing and administrative support: DSOs can provide individual practices with greater resources for advertising and administrative support, allowing a practice to reach a broader range of potential patients and support a larger patient list.
- Leveraging economies of scale: Partnering with a DSO enables dental practices to benefit from economies of scale, as DSOs can distribute the cost of utilizing cutting-edge marketing strategies or administrative support technology across multiple practices, making it more affordable for individual practices to stay at the forefront of dental industry developments.
Common Questions About DSOs
Frequently asked questions that dentists have about dental service organizations include:
Are DSOs legal in every state?
The legality of a DSO’s operations can vary from state to state. Some states have corporate practice of dentistry rules that prohibit non-dentists, including DSOs, from owning dental practices or controlling patient care in a dentistry practice. In states with more restrictive regulations for DSOs, these organizations may only handle non-clinical tasks for dental practices, such as bookkeeping, appointment scheduling, billing, marketing, and advertising.
Can a non-dentist own a dental practice through DSO?
The answer to this question depends on where you live. Many states have rules that prohibit non-dentists from holding equity ownership in a dental practice or having any legal authority to control a dental practice’s provision of clinical services. In these states, licensed dentists must retain the ability to direct a patient’s care. Dentists can outsource non-clinical aspects of running a practice to a third party, like a DSO.
In five states, a non-dentist may own a dental practice through a DSO.
What should I consider before selling my dental practice to a DSO?
Before you consider selling your dental practice to a DSO, review your state’s rules regarding corporate practice of dentistry. Your sale must be lawful, and you need to know how to structure a deal with a DSO.
Why Choose Our Firm?
Turn to the attorneys at Mahan Law – Dental Attorney for legal guidance and support regarding DSOs because:
- Our firm provides comprehensive counsel and advocacy to dental professionals nationwide. We have handled practice formation, regulatory compliance, and business transactions like service agreements, real estate deals, and mergers and acquisitions.
- We understand the unique legal challenges that dental professionals face. Our attorneys can guide you and your practice through the ongoing evolution of the dental industry.
- Our ability to collaborate with a respected network of dental attorneys nationwide enables us to assist practices of all sizes.
Contact Us Today for Legal Assistance
When your practice has an opportunity to work with a dental service organization, an experienced attorney can explain more about these organizations and how they may be of service to you. Contact Mahan Law – Dental Attorney today for a free, confidential consultation with a dental lawyer. We can discuss DSOs and the legal issues and considerations you should keep in mind when evaluating whether to have your practice work with or partner with a DSO.
