Owning dental practices

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March 22, 2024

by a searcher in Montréal, QC, Canada

I want to know if corporate entities can own dental practices in the US ? Is there any regulations ?

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Reply by a professional
from Harvard University in Lynbrook, NY 11563, USA
I presume you're asking whether corporate entities which are not owned by dentists can own dental practices. As others have said, rules vary by state. Currently 34 states have some form of "corporate practice of medicine" doctrine (CPOM) which prohibits or limits ownership of medical practices by non-licensed practitioners. Some states are stricter, some less so, and states vary on which forms of licensed professionals are covered by the doctrine (e.g., occupational therapists, psychologists etc.).

The common "workaround" is to split out the non-clinical ops into a separate entity that serves as a "management" or "service" organization (a DSO in the dental world, MSO in the medical world) and charges the clinical entity for all the back office services it provides (e.g., operations, non-clinical staff, marketing, billing, recruiting, leasing space, equipment purchasing/maintenance...). In many states the charges can't be a percentage of revenue/profit so you can't just hide the ball. In these states people tend to charge cost-plus or a fixed fee that can be adjusted yearly. If you're doing this really cleanly, people will often get an FMV analysis from a specialist to support the fact that the fees from the practice to the DSO are actually FMV for what's provided.

You can see a 50 state summary of which states have CPOM doctrines here:
https://ndlegis.gov/assembly/###-###-#### /testimony/SHUMSER###-###-#### 3125-F-TRAYNOR_PAT.pdf
And here: https://www.permithealth.com/post/the-corporate-practice-of-medicine-50-state-guide
commentor profile
Reply by a professional
from University of Michigan in Detroit, MI, USA
As others have stated, the exact rules will vary by state. I imagine in most (if not all) a corporate entity can own a dental practice. However, there will be restrictions on what type of corporate entity and who can by the equity owners. Even if you are looking at an acquisition in a state where only dentists can own dental practices (and assuming you are not a dentist) there are likely work arounds. Let me know if I can help. DM me here or email me at redacted
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