Considering a Concierge Dentistry Practice? Consider These Issues First.
Jordan Uditsky • April 3, 2024
Rare is the dental practitioner who enjoys the paperwork, bureaucracy, and other time-consuming hassles of dealing with and obtaining reimbursement from their patients’ dental insurers. Ask any dentist whether they would prefer having more patients or whether they would rather make more money providing fewer patients with more attentive, responsive, and personalized care, and the odds are pretty good they would take the latter option.
This appealing combination of fewer insurance burdens, better patient care, and greater revenue is why an increasing number of practices are offering “concierge dentistry” programs in addition to or instead of the traditional pay-for-service model.
Concierge dentistry, sometimes called boutique or retainer dentistry or “in-office membership care” practices, involves a direct financial relationship between patients and dentists in which patients typically pay an annual fee, membership fee, or retainer to a practice in exchange for enhanced, specified services, personalized care, and increased access.
While this seems like a win-win for practices and patients alike – and often is – dentists interested in launching a concierge dentistry practice need to understand the unique legal issues and considerations involved in doing so. While you should consult with experienced counsel before offering concierge services, here are some of the issues raised by such arrangements:
Legal and Regulatory Requirements
Obviously, the most important consideration when starting a concierge practice is ensuring that doing so does not violate any applicable state and federal laws and regulations. While concierge dentistry is generally allowable, many of the same laws that apply to traditional fee-for-service care financed through health insurance are equally applicable to concierge practices, including anti-kickback and Stark Law (for any Medicare/Medicaid billing), HIPAA, and prohibitions on the corporate practice of dentistry.
In 2019 Illinois, for example, passed a law specifically addressing and allowing for what it defines as “in-office membership” agreements and services in dentistry. The primary purpose of the In-Office Membership Care Act was to clarify that such arrangements do not constitute insurance and, therefore, are not a violation of nor subject to the Illinois Insurance Code. Other states may have similar laws.
The Act sets forth detailed requirements as to what patient membership agreements must contain. Specifically, the agreement must identify:
- the dental care provider or providers and the patient or patients;
- the general scope of services as well as the specific services to be provided by the dental care provider as part of the in-office membership care agreement;
- the location or locations where services are to be provided;
- the amount of the direct fee and the time interval at which it is to be paid; and
- the term of the in-office membership care agreement and the conditions upon which the dental care provider may terminate it.
The Act also requires in-office membership care agreements to be terminable at will upon written notice from the patient and that the dental care provider may refund to the patient all unearned direct fees associated with the covered services under the in-office membership care agreement.
Insurance and Third-Party Payer Considerations
Since one of the significant upsides of a concierge practice is the lack of insurance involvement, most are set up to only accept direct payments from patients. However, some practices may want to continue accepting insurance for covered services while charging patients for other non-covered aspects of concierge care. Similarly, while some practices may switch to a concierge model exclusively, others will want to establish a program alongside their traditional practice.
In all of these cases, practice owners need to consider the implications that adopting a concierge model may have on any existing provider participation agreements and other policies of third-party payors. For example, many participation agreements mandate that providers must accept payment for covered services from the insurance company as “payment in full” and cannot seek prepayments “of any kind” from patients. Practices should have counsel review any participation agreements to ensure that their concierge efforts do not run afoul of their terms or threaten their relationships with insurers.
Patient Abandonment
If a dental practice decides to transition from a traditional pay-for-service practice to a concierge model, it must provide existing patients with adequate notice of the change and ensure continuity of care for those patients who elect not to join their concierge program. Additionally, practices can accommodate patients who may not be able to afford a concierge membership by offering a limited-time discounted rate so that they have more time to locate a new provider.
As noted, concierge dental arrangements offer dentists the opportunity to increase the rewards and reduce many of the burdens involved in practicing. But taking this leap without thoughtful consideration and consultation with counsel could result in avoidable legal issues. If you would like to discuss or need assistance with establishing a concierge practice, please contact Grogan Hesse & Uditsky today.
We focus a substantial part of our practice on providing exceptional legal services for dentists and dental practices, as well as orthodontists, periodontists, endodontists, pediatric dentists, and oral surgeons. We bring unique insights and deep commitment to protecting the interests of dental professionals and their practices and welcome the opportunity to work with you.
Jordan Uditsky, an accomplished businessman and seasoned attorney, combines his experience as a legal counselor and successful entrepreneur to advise dentists and other business owners in the Chicago area. Jordan grew up in a dental family, with his father, grandfather, and sister each owning their own dental practices, and this blend of legal, business, and personal experience provides Jordan with unique insight into his clients’ needs, concerns, and goals.
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Selling a dental practice is a lengthy and involved process that involves due diligence, negotiation, drafting, financing, and other elements, culminating in the seller handing over the keys to the business to the buyer. But the parties’ signatures on the final purchase agreement and ancillary documents hardly mean that the now-former owner can ride off into the sunset without a care in the world. That is because the purchaser will want and require the seller to be responsible for any undisclosed or undiscovered problems with the practice they just bought. For this reason, every dental practice purchase agreement will inevitably contain indemnification provisions that address what happens if problems emerge after closing. These clauses determine who bears the risk for post-closing discoveries and how much exposure each party faces. While the purchaser wants the assurances and protections that come from the contract’s indemnification provisions, the seller doesn’t want to make an open-ended, potentially limitless promise that could eviscerate the financial upsides of the transaction and leave them forever on the hook for millions of dollars in possible liability. That is why deal savvy dental practice attorneys usually require that the purchase and sale agreement’s indemnification provisions include “caps” and “baskets” that establish the maximum exposure a seller will face as well as the minimum amount that must be at issue before any indemnification obligations are triggered. Given the significance that these maximums and minimums have for both parties, it is critical that buyers and sellers understand how caps and baskets work and the best ways to protect their respective interests in a dental practice sale. It All Starts With the Seller’s Representations and Warranties In any dental practice sale, the seller makes certain representations and warranties about the practice and its current condition. These disclosures might include assurances that all patient records are accurate, all equipment is in good working order, the practice has no pending lawsuits or liabilities, all taxes have been paid, and certain personnel matters are in order. If any such representations prove to be false, the indemnification provisions give the buyer the right to seek compensation from the seller for any losses incurred. Liability Caps Establish the Seller’s Maximum Indemnification Exposure A liability cap limits the total amount a seller must pay for breaches of representations and warranties. In dental practice transactions, caps can range from 10% on longer transactions to 100% of the purchase price on practices trending below $1,000,000, with 25% to 50% being most common for middle-market acquisitions. Where the parties ultimately land as to that percentage is a factor of each party’s risk tolerance and the practice's characteristics. A well-established practice with meticulous records, abundant goodwill, and comprehensive due diligence might justify a lower cap. Conversely, a practice with a limited or checkered financial history or significant operational complexity might warrant a higher cap to protect the buyer. Most liability caps exclude certain matters for which the seller remains on the hook for an unlimited amount. Such issues can include overt fraud or fundamental misrepresentations regarding the seller's authority to sell the practice or having clear title to assets. Tax obligations, environmental issues, and employee-related liabilities might also receive special treatment with separate, higher caps than provided for other matters. Baskets Are Like Deductibles While caps address maximum liability, baskets establish minimum thresholds before indemnification obligations arise. Think of a basket like a deductible in an insurance policy. Just as an insured is responsible for paying amounts up to the deductible before the insurer’s obligations kick in, a basket establishes the threshold below which the purchaser must bear any costs or liabilities for post-closing problems, even for matters covered by the contract’s indemnification provisions. Dental practice sales typically include one of two basket types: · A “true deductible” basket provides that the buyer absorbs all losses until reaching the threshold amount, after which they are entitled to recover all sums above it. For example, with a $25,000 true deductible basket, if the buyer’s losses total $30,000, the seller pays only $5,000. · A “tipping” basket , sometimes called a dollar-one basket, provides that once the buyer’s losses exceed the designated threshold, the seller pays from dollar one. Using the same example, the seller would pay the entire $30,000 once that threshold is crossed. Basket amounts in dental practice sales typically range from $5,000 to $25,000, depending on deal size. A $500,000 practice might have a $5,000 basket, while a $3 million practice might see a $25,000 threshold, for example. How Caps and Baskets Impact the Parties After Closing These provisions significantly impact post-closing dynamics. A seller who negotiates a low cap and high basket will minimize their exposure, while a buyer who secures a high cap and low basket gains significant protection and reassurance. Since negotiations over indemnification caps and baskets aren’t conducted in a vacuum, a party that secures an advantageous cap and basket arrangement can expect more challenging negotiations when discussing other aspects of the transaction, such as a higher purchase price or less favorable payment terms. Unanticipated liabilities can wreak havoc for dental practice buyers and sellers alike long after the ink has dried on their agreement. Dentists on either side of a practice sale should work closely with experienced legal counsel to negotiate terms that strike an appropriate balance between protection and practicality. Contact Grogan, Hesse & Uditsky Today If you are a practice owner anticipating a sale or transition, please contact Grogan, Hesse & Uditsky today. We focus a substantial part of our practice on providing exceptional legal services for dentists and dental practices, as well as orthodontists, periodontists, endodontists, pediatric dentists, and oral surgeons. We bring unique insights and deep commitment to protecting the interests of dental professionals and their practices and welcome the opportunity to work with you. Jordan Uditsky, an accomplished businessman and seasoned attorney, combines his experience as a legal counselor and successful entrepreneur to advise dentists and other business owners in the Chicago area. Jordan grew up in a dental family, with his father, grandfather, and sister each owning their own dental practices, and this blend of legal, business, and personal experience provides Jordan with unique insight into his clients’ needs, concerns, and goals.
The care that dentists need to provide their patients doesn’t end when they get up from the chair. Dental offices, and the computers, networks, servers, and files maintained within (and outside of) their walls, contain patient files and information that must be kept protected from data breaches and unauthorized disclosure. Failure to handle these records properly can not only breach patient trust, but it can also create regulatory and licensing headaches for dentists and practice owners. That’s why ensuring that patient records are transferred securely and appropriately is of the utmost importance when a dental practice changes hands from one owner to the next. When selling a dental practice, one of the most critical yet often overlooked aspects of the transaction involves the proper handling of patient records. As an attorney who has advised numerous healthcare providers through practice transitions, I can tell you that mishandling patient records can expose both the selling and buying dentists to significant legal liability, regulatory penalties, and damage to professional reputation. Understanding your obligations under federal and state law is essential to protecting yourself and your patients during this transition. HIPAA Considerations Are the Highest Priority Patient dental records are governed by both federal regulations, primarily the Health Insurance Portability and Accountability Act (HIPAA), and state-specific laws that vary considerably across jurisdictions. Under HIPAA, patient records are protected health information (PHI), and any transfer of a patient’s protected health information (PHI) must comply with the law’s strict privacy and security requirements. Additionally, most states have dental practice acts and regulations that impose specific recordkeeping and transfer obligations on licensed dentists. The downsides of failing to thoroughly and carefully follow these requirements arguably represent the biggest potential legal threat to buyers and sellers alike in a practice sale. The selling dentist remains the legal custodian of patient records until the practice sale is complete and proper transfer protocols have been followed. This means that the practice owner cannot simply hand over file cabinets or hard drives to the buyer without taking appropriate legal steps. The seller’s fiduciary duty to their patients continues through the transition period and beyond. Notifying Patients Obviously, patients want and deserve to know that their dentist’s office is changing hands. While HIPAA does not explicitly require advance notice of a practice sale, it does require that patients be informed about who has access to their records. More importantly, many state laws explicitly require written notification to patients when a practice changes hands. The seller should inform patients of the new practice owner's identity, the date of the transition, their options regarding their records, and how they can obtain copies of their records if they choose to seek care elsewhere. Typically, this notification should be sent 30 to 60 days prior to the sale closing, allowing patients sufficient time to make informed decisions about their care. The Actual Transfer Itself The purchase agreement should clearly specify how the records will be transferred, who will bear the costs of transfer, and in what format the records will be transferred. For electronic health records (EHRs), the seller may need to coordinate with their EHR vendor to ensure the proper migration of data to the buyer's system or to maintain access if the buyer intends to use the same platform. For practices that still maintain paper records, the physical transfer must be handled securely to prevent unauthorized access or data breaches. Consider using a secure courier service and keeping a detailed inventory of all records transferred. Record Retention Obligations Generally, upon closing, the buyer assumes the responsibility for maintaining patient records going forward and must retain them for the period required by state law, which typically ranges from five to ten years from the last date of treatment. However, the seller may retain copies of records for their own protection, particularly if there's potential for future liability claims related to treatment provided before the sale. For patients who choose not to continue with the new owner and who do not request their records be sent to another provider, the buyer typically assumes responsibility for storing these inactive records for the required retention period. The purchase agreement should clearly allocate these ongoing obligations and any associated costs. Selling a dental practice is often the culmination of decades of hard work and the start of a new chapter in which the now-former practice owner can reap the benefits of those efforts. However, missteps in the handling of patient records could compromise those plans and leave the seller vulnerable to potential liability. By working closely with experienced counsel throughout the sales process, practice owners can wrap up their careers with clarity, confidence, and conclusiveness. If you are a practice owner anticipating a sale or transition, please contact Grogan, Hesse & Uditsky today. Contact Grogan, Hesse & Uditsky Today If you are a practice owner anticipating a sale or transition, please contact Grogan, Hesse & Uditsky today. We focus a substantial part of our practice on providing exceptional legal services for dentists and dental practices, as well as orthodontists, periodontists, endodontists, pediatric dentists, and oral surgeons. We bring unique insights and deep commitment to protecting the interests of dental professionals and their practices and welcome the opportunity to work with you. Jordan Uditsky, an accomplished businessman and seasoned attorney, combines his experience as a legal counselor and successful entrepreneur to advise dentists and other business owners in the Chicago area. Jordan grew up in a dental family, with his father, grandfather, and sister each owning their own dental practices, and this blend of legal, business, and personal experience provides Jordan with unique insight into his clients’ needs, concerns, and goals.
Whatever shortcomings and deficiencies there may be in the dynamic between dental practices and insurance companies, their distinct roles in patient care are not among them. While dentists certainly want to maximize reimbursements for the services they provide, they are not beholden to insurers and remain in a position to advocate for their patients and challenge an insurer’s cost-related decisions without fear of retribution. But a recent unprecedented move by Delta Dental in Wisconsin threatens to upend this relationship model and has raised serious concerns among industry groups, patient advocates, and regulators about conflicts of interest, competition, and provider independence. Over the summer, Delta Dental announced that it had acquired Cherry Tree Dental, which owns and operates 31 clinics, 25 of which are in Wisconsin. The American Dental Association (ADA) is among several organizations that have vocally opposed the transaction. As the ADA wrote shortly after the deal was announced: When an insurance company becomes both health care provider and insurance payer, questions arise regarding potential conflict of interest. From a business standpoint, dental insurance companies seek to minimize cost and maximize profit. As a result, patients may find their treatment options limited to what is most cost-effective for the insurer, not necessarily what is most effective for their oral health. The ADA believes 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. In November, the ADA filed a letter with the Wisconsin Office of the Commissioner of Insurance expanding on its concerns and opposition, including worries about provider independence in making care decisions: Direct ownership by Delta Dental could compromise dentists’ ability to advocate for patients. In traditional arrangements, dentists can appeal plan decisions regarding patient care or choose to leave a network if plan policies are overly restrictive. However, the ADA warned that when dentists are employed by the payer, challenging cost-related decisions could label them as “problem employees,” potentially discouraging proper patient care. The potentially anti-competitive effects of such arrangements were also raised by the ADA, which noted that “Delta Dental’s acquisition could influence agreements, business practices, and fee schedules between Cherry Tree and other payers, potentially creating unfair competition.” In addition to the ADA, the acquisition has drawn concerns from the Wisconsin Dental Association, the American Economic Liberties Project, and the Alliance of Independent Dentists. The fallout of this acquisition, if consummated, could ripple through other markets, potentially leading to a seismic shift in the provider-insurer landscape. We will continue to monitor developments and provide updates as warranted. We Focus on You So You Can Focus on Your Patients At Grogan Hesse & Uditsky, P.C., we focus a substantial part of our practice on providing exceptional legal services for dentists and dental practices, as well as orthodontists, periodontists, endodontists, pediatric dentists, and oral surgeons. We bring unique insights and deep commitment to protecting the interests of dental professionals and their practices and welcome the opportunity to work with you. Please call us at (630) 833-5533 or contact us online to arrange for your free initial consultation. Jordan Uditsky, an accomplished businessman and seasoned attorney, combines his experience as a legal counselor and successful entrepreneur to advise dentists and other business owners in the Chicago area. Jordan grew up in a dental family, with his father, grandfather, and sister each owning their own dental practices. This blend of legal, business, and personal experience provides Jordan with unique insight into his clients’ needs, concerns, and goals.
Selling a dental practice is a lengthy and involved process that involves due diligence, negotiation, drafting, financing, and other elements, culminating in the seller handing over the keys to the business to the buyer. But the parties’ signatures on the final purchase agreement and ancillary documents hardly mean that the now-former owner can ride off into the sunset without a care in the world. That is because the purchaser will want and require the seller to be responsible for any undisclosed or undiscovered problems with the practice they just bought. For this reason, every dental practice purchase agreement will inevitably contain indemnification provisions that address what happens if problems emerge after closing. These clauses determine who bears the risk for post-closing discoveries and how much exposure each party faces. While the purchaser wants the assurances and protections that come from the contract’s indemnification provisions, the seller doesn’t want to make an open-ended, potentially limitless promise that could eviscerate the financial upsides of the transaction and leave them forever on the hook for millions of dollars in possible liability. That is why deal savvy dental practice attorneys usually require that the purchase and sale agreement’s indemnification provisions include “caps” and “baskets” that establish the maximum exposure a seller will face as well as the minimum amount that must be at issue before any indemnification obligations are triggered. Given the significance that these maximums and minimums have for both parties, it is critical that buyers and sellers understand how caps and baskets work and the best ways to protect their respective interests in a dental practice sale. It All Starts With the Seller’s Representations and Warranties In any dental practice sale, the seller makes certain representations and warranties about the practice and its current condition. These disclosures might include assurances that all patient records are accurate, all equipment is in good working order, the practice has no pending lawsuits or liabilities, all taxes have been paid, and certain personnel matters are in order. If any such representations prove to be false, the indemnification provisions give the buyer the right to seek compensation from the seller for any losses incurred. Liability Caps Establish the Seller’s Maximum Indemnification Exposure A liability cap limits the total amount a seller must pay for breaches of representations and warranties. In dental practice transactions, caps can range from 10% on longer transactions to 100% of the purchase price on practices trending below $1,000,000, with 25% to 50% being most common for middle-market acquisitions. Where the parties ultimately land as to that percentage is a factor of each party’s risk tolerance and the practice's characteristics. A well-established practice with meticulous records, abundant goodwill, and comprehensive due diligence might justify a lower cap. Conversely, a practice with a limited or checkered financial history or significant operational complexity might warrant a higher cap to protect the buyer. Most liability caps exclude certain matters for which the seller remains on the hook for an unlimited amount. Such issues can include overt fraud or fundamental misrepresentations regarding the seller's authority to sell the practice or having clear title to assets. Tax obligations, environmental issues, and employee-related liabilities might also receive special treatment with separate, higher caps than provided for other matters. Baskets Are Like Deductibles While caps address maximum liability, baskets establish minimum thresholds before indemnification obligations arise. Think of a basket like a deductible in an insurance policy. Just as an insured is responsible for paying amounts up to the deductible before the insurer’s obligations kick in, a basket establishes the threshold below which the purchaser must bear any costs or liabilities for post-closing problems, even for matters covered by the contract’s indemnification provisions. Dental practice sales typically include one of two basket types: · A “true deductible” basket provides that the buyer absorbs all losses until reaching the threshold amount, after which they are entitled to recover all sums above it. For example, with a $25,000 true deductible basket, if the buyer’s losses total $30,000, the seller pays only $5,000. · A “tipping” basket , sometimes called a dollar-one basket, provides that once the buyer’s losses exceed the designated threshold, the seller pays from dollar one. Using the same example, the seller would pay the entire $30,000 once that threshold is crossed. Basket amounts in dental practice sales typically range from $5,000 to $25,000, depending on deal size. A $500,000 practice might have a $5,000 basket, while a $3 million practice might see a $25,000 threshold, for example. How Caps and Baskets Impact the Parties After Closing These provisions significantly impact post-closing dynamics. A seller who negotiates a low cap and high basket will minimize their exposure, while a buyer who secures a high cap and low basket gains significant protection and reassurance. Since negotiations over indemnification caps and baskets aren’t conducted in a vacuum, a party that secures an advantageous cap and basket arrangement can expect more challenging negotiations when discussing other aspects of the transaction, such as a higher purchase price or less favorable payment terms. Unanticipated liabilities can wreak havoc for dental practice buyers and sellers alike long after the ink has dried on their agreement. Dentists on either side of a practice sale should work closely with experienced legal counsel to negotiate terms that strike an appropriate balance between protection and practicality. Contact Grogan, Hesse & Uditsky Today If you are a practice owner anticipating a sale or transition, please contact Grogan, Hesse & Uditsky today. We focus a substantial part of our practice on providing exceptional legal services for dentists and dental practices, as well as orthodontists, periodontists, endodontists, pediatric dentists, and oral surgeons. We bring unique insights and deep commitment to protecting the interests of dental professionals and their practices and welcome the opportunity to work with you. Jordan Uditsky, an accomplished businessman and seasoned attorney, combines his experience as a legal counselor and successful entrepreneur to advise dentists and other business owners in the Chicago area. Jordan grew up in a dental family, with his father, grandfather, and sister each owning their own dental practices, and this blend of legal, business, and personal experience provides Jordan with unique insight into his clients’ needs, concerns, and goals.
The care that dentists need to provide their patients doesn’t end when they get up from the chair. Dental offices, and the computers, networks, servers, and files maintained within (and outside of) their walls, contain patient files and information that must be kept protected from data breaches and unauthorized disclosure. Failure to handle these records properly can not only breach patient trust, but it can also create regulatory and licensing headaches for dentists and practice owners. That’s why ensuring that patient records are transferred securely and appropriately is of the utmost importance when a dental practice changes hands from one owner to the next. When selling a dental practice, one of the most critical yet often overlooked aspects of the transaction involves the proper handling of patient records. As an attorney who has advised numerous healthcare providers through practice transitions, I can tell you that mishandling patient records can expose both the selling and buying dentists to significant legal liability, regulatory penalties, and damage to professional reputation. Understanding your obligations under federal and state law is essential to protecting yourself and your patients during this transition. HIPAA Considerations Are the Highest Priority Patient dental records are governed by both federal regulations, primarily the Health Insurance Portability and Accountability Act (HIPAA), and state-specific laws that vary considerably across jurisdictions. Under HIPAA, patient records are protected health information (PHI), and any transfer of a patient’s protected health information (PHI) must comply with the law’s strict privacy and security requirements. Additionally, most states have dental practice acts and regulations that impose specific recordkeeping and transfer obligations on licensed dentists. The downsides of failing to thoroughly and carefully follow these requirements arguably represent the biggest potential legal threat to buyers and sellers alike in a practice sale. The selling dentist remains the legal custodian of patient records until the practice sale is complete and proper transfer protocols have been followed. This means that the practice owner cannot simply hand over file cabinets or hard drives to the buyer without taking appropriate legal steps. The seller’s fiduciary duty to their patients continues through the transition period and beyond. Notifying Patients Obviously, patients want and deserve to know that their dentist’s office is changing hands. While HIPAA does not explicitly require advance notice of a practice sale, it does require that patients be informed about who has access to their records. More importantly, many state laws explicitly require written notification to patients when a practice changes hands. The seller should inform patients of the new practice owner's identity, the date of the transition, their options regarding their records, and how they can obtain copies of their records if they choose to seek care elsewhere. Typically, this notification should be sent 30 to 60 days prior to the sale closing, allowing patients sufficient time to make informed decisions about their care. The Actual Transfer Itself The purchase agreement should clearly specify how the records will be transferred, who will bear the costs of transfer, and in what format the records will be transferred. For electronic health records (EHRs), the seller may need to coordinate with their EHR vendor to ensure the proper migration of data to the buyer's system or to maintain access if the buyer intends to use the same platform. For practices that still maintain paper records, the physical transfer must be handled securely to prevent unauthorized access or data breaches. Consider using a secure courier service and keeping a detailed inventory of all records transferred. Record Retention Obligations Generally, upon closing, the buyer assumes the responsibility for maintaining patient records going forward and must retain them for the period required by state law, which typically ranges from five to ten years from the last date of treatment. However, the seller may retain copies of records for their own protection, particularly if there's potential for future liability claims related to treatment provided before the sale. For patients who choose not to continue with the new owner and who do not request their records be sent to another provider, the buyer typically assumes responsibility for storing these inactive records for the required retention period. The purchase agreement should clearly allocate these ongoing obligations and any associated costs. Selling a dental practice is often the culmination of decades of hard work and the start of a new chapter in which the now-former practice owner can reap the benefits of those efforts. However, missteps in the handling of patient records could compromise those plans and leave the seller vulnerable to potential liability. By working closely with experienced counsel throughout the sales process, practice owners can wrap up their careers with clarity, confidence, and conclusiveness. If you are a practice owner anticipating a sale or transition, please contact Grogan, Hesse & Uditsky today. Contact Grogan, Hesse & Uditsky Today If you are a practice owner anticipating a sale or transition, please contact Grogan, Hesse & Uditsky today. We focus a substantial part of our practice on providing exceptional legal services for dentists and dental practices, as well as orthodontists, periodontists, endodontists, pediatric dentists, and oral surgeons. We bring unique insights and deep commitment to protecting the interests of dental professionals and their practices and welcome the opportunity to work with you. Jordan Uditsky, an accomplished businessman and seasoned attorney, combines his experience as a legal counselor and successful entrepreneur to advise dentists and other business owners in the Chicago area. Jordan grew up in a dental family, with his father, grandfather, and sister each owning their own dental practices, and this blend of legal, business, and personal experience provides Jordan with unique insight into his clients’ needs, concerns, and goals.
Whatever shortcomings and deficiencies there may be in the dynamic between dental practices and insurance companies, their distinct roles in patient care are not among them. While dentists certainly want to maximize reimbursements for the services they provide, they are not beholden to insurers and remain in a position to advocate for their patients and challenge an insurer’s cost-related decisions without fear of retribution. But a recent unprecedented move by Delta Dental in Wisconsin threatens to upend this relationship model and has raised serious concerns among industry groups, patient advocates, and regulators about conflicts of interest, competition, and provider independence. Over the summer, Delta Dental announced that it had acquired Cherry Tree Dental, which owns and operates 31 clinics, 25 of which are in Wisconsin. The American Dental Association (ADA) is among several organizations that have vocally opposed the transaction. As the ADA wrote shortly after the deal was announced: When an insurance company becomes both health care provider and insurance payer, questions arise regarding potential conflict of interest. From a business standpoint, dental insurance companies seek to minimize cost and maximize profit. As a result, patients may find their treatment options limited to what is most cost-effective for the insurer, not necessarily what is most effective for their oral health. The ADA believes 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. In November, the ADA filed a letter with the Wisconsin Office of the Commissioner of Insurance expanding on its concerns and opposition, including worries about provider independence in making care decisions: Direct ownership by Delta Dental could compromise dentists’ ability to advocate for patients. In traditional arrangements, dentists can appeal plan decisions regarding patient care or choose to leave a network if plan policies are overly restrictive. However, the ADA warned that when dentists are employed by the payer, challenging cost-related decisions could label them as “problem employees,” potentially discouraging proper patient care. The potentially anti-competitive effects of such arrangements were also raised by the ADA, which noted that “Delta Dental’s acquisition could influence agreements, business practices, and fee schedules between Cherry Tree and other payers, potentially creating unfair competition.” In addition to the ADA, the acquisition has drawn concerns from the Wisconsin Dental Association, the American Economic Liberties Project, and the Alliance of Independent Dentists. The fallout of this acquisition, if consummated, could ripple through other markets, potentially leading to a seismic shift in the provider-insurer landscape. We will continue to monitor developments and provide updates as warranted. We Focus on You So You Can Focus on Your Patients At Grogan Hesse & Uditsky, P.C., we focus a substantial part of our practice on providing exceptional legal services for dentists and dental practices, as well as orthodontists, periodontists, endodontists, pediatric dentists, and oral surgeons. We bring unique insights and deep commitment to protecting the interests of dental professionals and their practices and welcome the opportunity to work with you. Please call us at (630) 833-5533 or contact us online to arrange for your free initial consultation. Jordan Uditsky, an accomplished businessman and seasoned attorney, combines his experience as a legal counselor and successful entrepreneur to advise dentists and other business owners in the Chicago area. Jordan grew up in a dental family, with his father, grandfather, and sister each owning their own dental practices. This blend of legal, business, and personal experience provides Jordan with unique insight into his clients’ needs, concerns, and goals.
