Tuesday, July 05, 2011

North Carolina Bill Would Regulate Dentist Contractual Relationships with Dental Management Companies

As if North Carolina dentists and their state dental board don't have enough on their plate. But, this legislation won't be considered for adoption until next summer anyway.
In what is being described as a measure to protect dental practices from being taken over by corporations that are more interested in profits than patient care, North Carolina lawmakers are considering legislation that would give the state dental board the authority to oversee all contracts entered into by dentists.

But opponents of the bill -- including dentists and a legislator who is also an orthodonist -- say that the measure is overreaching and an intrusion into practice management.

SB 655 calls for the North Carolina Board of Dental Examiners to examine and approve all business contracts entered into by dental practices in the state. It has been approved by the state Senate but won't be taken up again until next May.

"The Board has become increasingly concerned about the expanding scope and nature of management company services and agreements and their impact on the control of dental practices by the licensed dentists," according to a position statement on the dental board's website.

The bundled services offered by management companies typically involve some combination of administrative management services and financial management services, the board noted.

"Based on its knowledge of the operations of dental practices, and after reviewing management arrangements with dental practices for almost ten (10) years, the Board has identified features of management arrangements which it has determined to be highly likely to create a situation where the ownership, management, supervision or control of a dental practice is impermissibly conveyed to an unlicensed person or organization because either separately or when bundled, those features interfere with the licensed dentists' professional decision-making and their exercise of clinical skill, judgment and supervision in the dental practice," the board states on its website.
Read the entire piece.

Even if the legislation passes the North Carolina Legislature and is signed by their Governor, I doubt this will be the end of the issue. Dental management companies would immediately sue in federal court and claim the law is an unconstitutional attempt at a restraint of trade.

There is a lot at stake here, including the role of others in the ownership and management of dental practices. This is a turf war between dentists and non-dentist owned corporations.

My sense is that the federal courts will prohibit states from preventing non-dentists from contracting with dentists for their services. Now, whether states can place some limitations on the relationships, where the contract constructively gives the non-dentist a direct patient management stake will be litigated. Then, it will be up to the state legislatures.

Watch for a long legal battle, ending up in the federal appeals court and perhaps the Supreme Court of the United Sates.

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