Will more DSOs lead to more legal violations?

By Alex Dagostino, DrBicuspid.com associate editor

July 22, 2022 -- The model of dental support organizations (DSO) and their increasing popularity may lead to more violations of the corporate practice of dentistry, according to a legal note published in the June issue of the DePaul Journal of Health Care Law.

In the article, author Angelina Campin, JD, a recent DePaul University College of Law graduate, reviews several historic legal cases that explored whether corporations illegally practice dentistry. She then uses these cases to argue that we can expect more cases involving DSOs violating practice laws in the future but that better regulation may prevent some disputes and protect patients.

"It may very well be true that an increase in the involvement of DSOs in the dental health industry will lead to more litigation regarding the corporate practice of dentistry and violations of the state statutes," Campin writes (DePaul J Health Care Law, June 2022, Vol. 23:2, pp.1-19).

When is corporate dentistry illegal?

Historically, corporations were not allowed to engage in "learned professions" like healthcare through the employment of licensed professionals unless under specific statutory or regulatory exceptions, writes Campin. This prohibition, often referred to as the "corporate practice of medicine doctrine," addressed healthcare fields, including dentistry, and was applied in many states to bring liability to corporations practicing medicine without proper licensing.

Dr. Allison, Dentist, Inc. v. Allison was a critical case in establishing violation of the corporate practice of dentistry doctrine, writes Campin. In the 1935 case, a dental corporation accused a dentist of breaching a contract, but the case was dismissed on the grounds that the corporation violated the dental practice act. The case was ultimately important because of its broad discussion about the ethics of dental practice, reasoning that fields like dentistry require "good moral character" for which "no corporation can qualify."

"A corporation cannot qualify because a corporation is an entity without the ability to have honesty, conscience, or loyalty, unlike an individual," Campin summarizes.

Fast-forward nearly 70 years, another legal case, Penny v. Orthalliance, Inc., highlighted the contractual relationship between owner-dentists and DSOs, notes Campin. The 2003 case arose from a contract claim in which three orthodontists successfully sued the orthodontic DSO claiming that the company failed to meet its contractual obligations. Importantly, the court found that the contracts allowed the company to illegally practice dentistry without a license.

Despite these court decisions, DSOs legally exist today and are growing. How? Prior to the above-mentioned 2003 Orthalliance case, a 2002 case against the company highlighted the type of DSO contracts that do not violate the doctrine, according to Campin.

In Orthodontic Affiliates v. OrthAlliance, the court's decision emphasized the importance of using literal language to determine the relationship between the parties in a contract. This focus on contractual language is a common theme throughout lawsuits involving the corporate practice of dentistry, writes Campin.

"The history of such cases indicates that to avoid implicating statutory violations, dental support organizations may simply alter how agreements are written and executed," wrote Campin.

More DSOs and more regulation

While the article may initially read as though Campin is arguing against DSOs, the text makes it clear that is not the case. Campin goes on to write that DSOs benefit patients by improving access to healthcare, as well as cost and quality, and that these corporations should remain part of the dental industry.

"It is within the interest of the state and its citizens that DSOs can function without risking violation of the corporate practice of dentistry statutes," she writes.

Generally, most judicial decisions regarding the corporate practice of dentistry surround contractual disputes between corporations and dentists. The danger is that the focus on the literal language of contracts can undermine the purpose of the corporate practice of medicine doctrines, which exists to protect patients, writes Campin. Her proposed solution is better regulation.

"Increased regulation would ensure patient safety as well as give dentists and other health professionals the ability to upgrade their practices to succeed in accordance with the changing standards of the new consumer generation," says Campin.

Campin argues that increased regulation shouldn't discourage relationships between dentists and DSOs but should better specify the legality and regulation of their contractual agreements. She also discourages DSOs from using a structure in which the company employs the dentist and uses a profit-sharing business model.

"These two areas increase the risk that dental service providers will be less motivated by patient care and more motivated by the DSO's bottom line," she wrote.

As the legal landscape exists today, an increase in DSOs may very well lead to more litigation, but that does not need to be the case, Campin concludes. Establishing new rules for contracts between dentists and companies may help avoid future disputes.

"Ultimately, dentists should not be anchored to the wishes of a corporation so that they can act in the best interest of their patients, which is why these statues were put into place," Campin says. "Despite the increase of technology and efficiency in medicine, it is important to remember what healthcare is all about: real people and their health."


Copyright © 2022 DrBicuspid.com
 

To read this and get access to all of the exclusive content on DrBicuspid.com create a free account or sign-in now.

Member Sign In:
MemberID or email address:  
Do you have a DrBicuspid.com password?
No, I want a free membership.
Yes, I have a password:  
Forgot your password?
Sign in using your social networking account:
Sign in using your social networking
account: