Washington, D.C. — The American Economic Liberties Project today released model state legislation, The Independent Dental Practice Act, giving lawmakers a ready-to-use framework to protect patients and independent dentists from the corporate takeover of dentistry. The model legislation comes amid accelerating consolidation in the dental industry, most recently illustrated by the acquisition of Delta Dental of Wisconsin by Cherry Tree Dental, a private equity–backed practice chain and dental service organization (DSO), which marked the first time in Wisconsin history that a dental insurer purchased a dental provider.

“Corporate ownership is reshaping dentistry in ways that hurt both patients and independent dentists. Patients are paying more out of pocket and struggling to get care, while dentists face declining reimbursement and increasing pressure from insurers and corporate owners,” said Laurel Kilgour, Research Manager at the American Economic Liberties Project. “Right now, private equity firms and other corporate actors can control dental practices through shady contractual workarounds that let them call the shots on staffing, billing, and business decisions that affect patient care. By banning non-dentist ownership and control and closing the loopholes that allow indirect control, this legislation will allow state lawmakers to protect patient care, preserve independent practices, and keep dental costs from continuing to spiral upward.”

While most states have corporate practice of dentistry laws on the books, the model legislation is designed to close the loopholes that let insurers, private equity, and dental support organizations (DSOs) exert de facto control over practices through “friendly dentist” arrangements and restrictive contracts. The Independent Dental Practice Act:

1. Strengthens bans on non-dentist ownership and control and targets common workarounds like DSOs;
2. Prohibits practices from transferring or relinquishing de facto control over core administrative, business, and clinical operations, explicitly including staffing, work schedules, diagnostic coding, billing and collections, pricing, and payer contracting;
3. Voids noncompete agreements in most dentist employment contexts and makes DSO nondisclosure/non-disparagement agreements unenforceable; and
4. Establishes advance notice and public posting requirements for “material change transactions,” including notice not fewer than 180 days before a deal closes and posting a public summary shortly after notice is received.

In addition, the appendix includes a 50-state survey of existing state laws relating to the corporate practice of dentistry (CPOD).

Read the full model legislation here.

For more background, read A Kick in the Teeth: How Consolidation Endangers Independent Dentists, here.

Learn more about Economic Liberties here.

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The American Economic Liberties Project works to ensure America’s system of commerce is structured to advance, rather than undermine, economic liberty, fair commerce, and a secure, inclusive democracy. Economic Liberties believes true economic liberty means entrepreneurs and businesses large and small succeed on the merits of their ideas and hard work; commerce empowers consumers, workers, farmers, and engineers instead of subjecting them to discrimination and abuse from financiers and monopolists; international trade arrangements that promote promote balanced trade and benefit workers, farmers and small businesses; and wealth is broadly distributed to support equitable political power.