Associate Dentists Face Risks When Their Employer Closes Business (Part 2)

Michael W. Davis, DDS


The dental service organization (DSO) model may be on shaky ground. So if you’re a young dentist looking for a job, what should you do to protect yourself from potential lawsuits, mismanagement, and company closure? The ADA offers some advice: 

  • Read your (employment) contract carefully and see what the “exit” strategies are on both sides of the contract before you sign.
  • Do your research on the employer. How long has it been in business? What are its business growth plans? How are its finances, reviews, and other factors? The ADA’s Health Policy Institute has helpful data and trends to consider.
  • What’s the general economic outlook for the location?
  • Owning your own practice (or in partnership) is the best preventative to being unexpectedly terminated, but that is not always practical or desirable for everyone. The ADA also outlines additional career paths for dentists.
  • Do good work. Dentists should consider ethical principles, the patient’s needs and interests, and all applicable laws.

Do Your Homework

The ADA’s recommendations have merit. However, there are essential caveats. 

First, the contingency strategy for the employment contract’s exit plan is vital. It must be thoroughly reviewed with legal counsel who is expert in healthcare employment contracts prior to entering into any agreement.

Expert legal contract review costs may range from $2,000 to 3,000 initially. But if something goes awry later with an agreement never thoroughly vetted, the associate doctor may have to pay tens of thousands of dollars in legal fees. The ADA also offers a contract review service at no cost to members

Second, the finances, business plans, and other information about most DSOs are proprietary and not openly divulged. Industry insiders may be helpful for developing some transparency. However, the average associate doctor can’t access much of this data. It’s truly difficult or impossible to fully vet the financial stability of one’s employer.

Third, the economic forecast for a given region is of major importance. One might assume that a DSO with its vast access to resources would have thoroughly investigated such outlooks. Some do this well, and some don’t. Do your own checking.

Fourth, if you own the practice, or own a majority interest, you control your own destiny within that practice. Don’t be fooled by sham DSO contracts, which purport the doctor as owner, but with little to no actual control.

Finally, please provide your patients with the best care you can. However, as we have witnessed with other doctors, your employer may still throw you under the bus. Hope for the best, but plan for the worst. 

Patient Abandonment

Ed Marquette is an attorney with the law firm of Kutak Rock in Kansas City, Missouri. He has a legal expertise in intellectual property and franchise operations. He also has been involved in dentally related cases and has experience in dealing with patient abandonment, patient retention, and professional liability insurance.

“Although as you and I both know, dental boards are largely useless, they do become agitated over patient abandonment. So, if the dentist in question won’t land in a place where he or she can continue to care for his or her patients, some kind of alternative arrangement needs to be made. That won’t be all that easy,” Marquette said. 

“When dentists were professionals and not just cogs in the DSO money-making machine, dentists knew each other, participated in associations, and saw each other socially. In the DSO world, it is in the interest of the DSO to keep its dentists isolated from the outside,” he continued. 

“If the dentists in the DSO only know other DSO dentists, then it is easier for the DSO to control them. So, a dentist in a DSO ought to develop relationships with fellow dentists outside the DSO. That is healthy for a hundred reasons that have nothing to do with adequate placement of patients after the demise of the DSO,” Marquette continued.

“Developing such relationships is just plain healthy and furnishes much needed perspective. Often, dentists in a DSO exist in a near cult-like environment. They often think normal behavior that occurs outside the DSO is unhealthy, faulty, or somehow inferior. All their needs are met by the DSO. Thus, they lose touch with the outside world. That is a recipe for disaster on a number of fronts.”

Patient Retention

“State laws differ widely on who owns the patient records. Of course, ultimately, the patient is the final owner. But as among the dentist, the practice, and the DSO, state laws either vary widely or are just plain ambiguous. Plus, the complex and convoluted corporate structures that are invariably present in DSOs make things even more confusing,” Marquette said.  

“The practice entity—the entity that pays the rent, owns the furniture and equipment, and invoices the insurance or governmental payers—may have no employees or, at least, no dentist employees. All of the personnel may be employed by another entity entirely,” he said. 

“Someone other than the individual dentist or an entity he or she controls will inevitably be the licensee of the practice software. At the first sign of trouble, the DSO, which ultimately controls the computers and their practice software, will lock the dentist out of the system. After being locked out, it is too late to take remedial measures,” said Marquette. 

“It has been famously said that possession is nine-tenths of the law, and there is some truth to that. A smart dentist should keep shadow records, even if it is just on a spreadsheet, on his or her home computer. This includes patient contact information, revenue, treatments, procedures, costs, and so on,” Marquette said.

“Having the data to protect oneself; to file a claim with the state Workforce Commission, Labor Board, or like entity; to contact patients (even if just to refer them); and to identify funds or other assets will be of incredible importance. Being left in the dark and at the mercy of the DSO, I know for a fact, is undesirable,” he said. 

“In following the above advice, caution is definitely warranted. Be sure the data, if it contains personally identifying health information, is handled in a way that complies with HIPAA. Also, scan through the applicable agreements to make sure there is no explicit prohibition on copying data to a remote location,” he said.

Professional Liability Insurance

“This is easy to overlook. There are two basic kinds of professional liability insurance: occurrence and claims made. The cost may be significantly different,” Marquette said. 

“The wrong timing with the wrong kind of insurance can leave the doctor vulnerable. If the dentist is covered by ‘claims made’ insurance while working with the DSO, all is well while the dentist is employed by the DSO, even if the event precipitating liability occurred before the dentist started working for the DSO. Once the DSO is out of the picture and the dentist has to get different insurance, coverage is definitely needed,” he said.  

“If the dentist gets occurrence insurance, there will be a potential gap. If a liability-producing event occurred while the dentist was employed by the DSO, the policy that the dentist had while part of the DSO won’t cover the claim, because the claim was not made during the term of the insurance. At the same time, because the event occurred prior to the time the occurrence-based insurance was purchased, the second policy, the occurrence policy, won’t cover the claim either,” said Marquette.   


It can be a wonderful workplace environment when employers treat associate doctors like trusted, venerated professionals. The workplace ideally might be highly collegial, and patients’ interests placed to the fore. Unfortunately, that’s become a pipe dream for much of corporate healthcare. A negative philosophy of “profits before patients” has unfortunately spread throughout much of the healthcare industry.

Decisions impacting modern dental clinics too often are based on quarterly profits or on the performance of a plethora of companies in the portfolio of a private equity investment firm. Clinic closures or downsizing of operations are often decisions made outside the doctor/patient relationship. Doctors and patients may be simply cogs in a machine that generates revenues for investors. 

Closures of chain clinics in the dental industry have come with pain. Patients have been abandoned. Clinical staff has been frustrated, confused, and vulnerable to liabilities. Further, economic forecasts portend more of the same in our future. 

If states truly enforced violations against the unlicensed practice of medicine by corporate entities, the same as by unlicensed individual persons, many of these issues could be mitigated in advance. That probably won’t happen. Too much big-business money is in play.

Doctors must protect themselves and their patients’ welfare. If they don’t truly own and control the means of capitol (clinics, equipment, supplies, staffing, etc), decisions impacting patient care will be left to others. One day a doctor will be providing care for patients. The next day, that same doctor may be locked out of the practice and patients abandoned.  

An angry public won’t see dentists as just another victim. Doctors have already been, and will continue to be, targets of the public’s feelings of betrayal and abandonment. Doctors must take steps to protect themselves, and ultimately their patients. A healthcare employer’s claim of “You do what you do best and provide quality dentistry, and we’ll take care of the rest” may be a setup for extensive frustration, legal liabilities, and financial heartache. 

Dr. Davis practices general dentistry in Santa Fe, NM. He assists as an expert witness in dental fraud and malpractice legal cases. He currently chairs the Santa Fe District Dental Society Peer-Review Committee and serves as a state dental association member to its house of delegates. He extensively writes and lectures on related matters. He may be reached at or

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