How Lawsuits Can Damage Your Dental Practice

Ali Oromchian, JD, LLM
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Lawsuits can be major distractions for dental practices because of the range of negative consequences that come along with them. For example, they generally involve undesirable financial implications, as well as physical, psychological, and emotional side effects.

These lawsuits can stem from many issues and often result in headaches for all parties involved. While malpractice is one of the most common types of lawsuits in the dental field, four other types of disputes also frequently prompt legal action and can be just as damaging to your practice. 

Dental Board Complaints

When people feel that their dentist has wronged them in some way that may have violated professional dental responsibilities, they may file complaints with the dental board in their jurisdiction. These complaints can be made for any number of reasons, including, but not limited to, illegal activities, the unlicensed practice of dentistry, the use of dangerous or controlled substances, or gross negligence. 

These complaints are generally lodged soon after the patient feels that there has been a wrong. Once a complaint has been filed, the dental board will seek to investigate the patient’s claims and will attempt to determine if there is any merit to them. The investigation process can take lengthy amounts of time, which can be a major inconvenience for both the claimant and the dental practice that is involved.

Should a dental board decide that disciplinary action is in order, it has the authority to impose fines, monitor practices, and even revoke licenses. Dental boards can also suspend dentists from practicing for specific periods of time, as well as require them to post notice of their inability to perform certain procedures. 

Because of the potential seriousness of any complaint filed against a dentist and his or her practice, it is in your practice’s best interest to avoid behavior that could be construed as in violation of dental professional standards.

Insurance Provider Audits

When dental practices sign contracts with insurance providers, they are often agreeing to the right to be audited at any time. Insurance providers utilize the auditing process to ensure that the dentist and dental practice are meeting all contractual requirements and obligations.

Audits can be instigated for varying reasons, including inconsistent billing patterns, a high frequency of certain procedures being performed, or potentially fraudulent activity. Being flagged for a compliance audit can possibly lead to reimbursing insurance payouts or even prosecution by state or federal authorities. In the alternative, an audit may not identify any questionable activities at all.

Regardless of the outcome, the audit process tends to take a significant amount of time because of the level of detail that is being investigated. Because audits tend to consist of a giant headache, the best way to avoid one is to always comply with regulations and maintain proper and detailed records. Though your dental practice always has the possibility of being audited, being prepared ahead of time may be able to help mitigate any potential audit issues.

Employment Lawsuits

Lawsuits that involve human resources tend to be spurred by employees who believe they have dealt with some sort of discrimination or harassment. This can range from sexual harassment to unfair payment of wages and gender, age, or racial discrimination. Further, some of these types of claims rise to a federal level of review, which greatly increases the dollar amounts expended by all parties. If a dental board or insurance provider investigation sounds like a long-term endeavor, a federal lawsuit has the potential to significantly exceed that, and then some.

A dental practice involved in a federal lawsuit could be constricted on many levels, including via the gross expenditure of court costs and fees, as well as limitations on the ability of staff to continue working efficiently and effectively. In addition, the end of a lawsuit of this type often involves the separation of certain staff from the practice, whether it is the person who files suit or other staff who leave as a result. 

Overall, because of the complications that tend to arise from human resources lawsuits, there is incentive to lessen any potential issues in advance. Hiring a dental practice attorney to assist with developing a thorough employee handbook and to review existing HR processes is a great first step in the right direction. 

Partnership Disputes

Attempting to work out partnership disputes can make or break a dental practice. One of the biggest mistakes that a dentist can make is jumping into a partnership agreement without doing any research on the front end.

Because the ownership of a dental practice is a large asset, it can heavily affect a person’s livelihood or retirement. Even so, surprisingly many practitioners do not have a formal written agreement in place. This misstep often occurs when the decision to bring on an associate is made. 

Usually, a practice decides to recruit an associate, but lacks the foresight to plan long-term for any future or worst-case scenarios. This ambiguity can lead to disputes, especially when there is no written contract discussing responsibilities, accountability, or liabilities. Further, verbal agreements can be enforced, but they can leave significant room for interpretation.

While it may seem trivial to not have a written agreement in place, dentists have lost large sums of money, to the tune of hundreds of thousands of dollars, for failure to formalize a partnership contract. In some cases, this has even led to the complete loss of a practice. 

To keep your dental practice from experiencing any of these major losses, consulting with a dental practice attorney who is familiar with drafting and executing partnership contracts is of paramount importance.

An Ounce of Prevention

Being involved in a lawsuit, in general, can be very taxing for everyone. Being involved in a lawsuit where you are the defendant or other party can be a major impediment to the success of your dental practice, or even a threat to its very existence. By obtaining legal counsel with expertise in the dental field, you can rest assured that you have taken the best precautions possible to protect one of your most important assets. 

Mr. Oromchian, JD, LLM, is one of the nation’s leading dental lawyers on topics relevant to dentists. He is the founder of Dental and Medical Counsel PC, which is regarded as one of the preeminent dental law firms devoted to dental entrepreneurs. He is also recognized as an exceptional speaker and educator. Additionally, he is the author of The Strategic Dentist, which serves as a guide to dentists looking to purchase or start their own practice. He can be reached at ao@dmcounsel.com.

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