Bette Robin, DDS, JD 877 DrRobin
SELECT PRACTICE SERVICES, INC. / DENTAL PRACTICE SALES
SELECT PRACTICE SERVICES, INC. / DENTAL PRACTICE SALES
DENTI-CAL PRACTICES, SHOULD I OR SHOULDN'T I?
Purchasing a Denti-cal based dental practice, that is a practice where
with special issues for a potential buyer. The analysis for prospective
purchase is also decidedly different. Sometimes starry-eyed new
dentists see only the money coming into the practice and do not realize
they may have to sell their soul to continue to get that money, if it is
possible at all. Once again, the bottom line is: Buyer Beware!
The first question potential purchasers must ask when evaluating a
Denti-cal practice is: Why is the owner selling? Most of the Denti-cal
practices on the market are being sold because the selling dentist is in
trouble with Denti-cal. Their pipeline to cash is about to be shut down.
Therefore, before a prospective purchaser proceeds any further and
spends a lot of time and money evaluating the practice, a written,
detailed declaration should be obtained from the seller stating the exact
situation with Denti-cal.
Next, find out where the patients come from. Look at cities the patients
come from. If the practice uses a Denti-cal referral service or
transportation, prospective purchasers should run, not walk, away from
the practice. If there are no problems with the practice as yet, there will
be soon. Also, be aware that collections from Denti-cal are frequently
misrepresented by unscrupulous sellers or brokers: ask for a copy of
the 1099’s from Denti-cal and copies of the checks or electronic
deposits to verify the exact receipts from Denti-cal. Check with the
Dental Board web site on-line as to the license status of the seller.
All this leads to the fact that Denti-cal based practices are valued very
differently and usually priced considerably lower than other dental
practices. Decision making is not the time for prospective purchasers
to save money: a competent attorney with experience in the dental
sales field is strongly advised when contemplating this sort of purchase.
UH OH, I ALREADY OWN ONE! . . .
Many dentists who own practices that are primarily Denti-cal are
outraged when they hear from Denti-cal and find Denti-cal is poking in
their business. A frequent response is to sell and get out. They tell me
“Denti-cal has no right!” “My office is private!” “How dare they?” Well, in
most cases, Denti-cal does have a right. When a dentist accepts Denti-
cal money from the federal and state governments, they are accepting
the many regulations that go along with the dough.
One dentist recently challenged Denti-cal’s authority up to the Court of
Appeals in Lin v. State of California. Dr. Lin had a dental practice that
was 85% Denti-cal. Denti-cal notified Dr. Lin that he must obtain prior
authorization for restorative treatment before doing those procedures
and proceeded to schedule an audit of his office. Predictably, the prior
authorization requirement effectively stopped most of the Denti-cal
business into Dr. Lin’s office, and thus, the majority of his income. The
audit claimed, among other things, that Dr. Lin had been billing and
receiving payment for unnecessary services and the services that were
performed did not meet the community standards of care.
Dr. Lin argued that Denti-cal could not come into his office without his
permission, could not take away his ability to bill without a hearing and
that Denti-cal was not specific in what they meant in unnecessary
services. The court found Denti-cal did have the right to come into his
office and examine Denti-cal charts, that Dr. Lin had no right to a
hearing and no entitlement to continue to participate in the Denti-cal
program, and that he had been provided information from Denti-cal with
sufficient specificity.
AND SO . . .
I do believe that Denti-cal lulls providers into a false sense of security
with the constant stream of cash they deliver on a weekly basis without
question. This process reminds me of when a dentist has been
cheating on his wife for years and getting away with it until one day the
shoe drops. She’s had enough. All that the dentist has been working
years for goes up in smoke: the wife gets the house, the boat is sold,
the retirement plan goes to the wife, the kids and relatives won’t talk to
him.
Denti-cal seems to let dentists ‘get away with it’ for long periods of
time. All the
while, they are collecting evidence. In the meantime, the dentist gets
more brazen in his billing techniques, he hires associate dentists, he
starts using ‘drivers’ to import patients to the office. The dentist thinks
he has the system mastered and the money is flowing. Then, the shoe
drops. First, may come the prior authorization requirement, or the audit,
or the on-site visit. The dentist may find his office has been under
surveillance for a period of time, he may find Denti-cal has talked to
many patients and employees. After all is said and done, the dentist
may have to pay back a substantial portion of the money he’s made
from Denti-cal. He may no longer be able participate in the system, or
may only participate under very strict guidelines. The dentist may face
administrative, civil and criminal allegations. Life is no longer good.
So, in conclusion, tread softly and think long and hard about buying a
Denti-cal practice. Be prepared to thoroughly know and follow all the
regulations. If you already own one, follow those rules - if you value your
life as you currently know it...
© Bette Robin, DDS, JD 12/01
with special issues for a potential buyer. The analysis for prospective
purchase is also decidedly different. Sometimes starry-eyed new
dentists see only the money coming into the practice and do not realize
they may have to sell their soul to continue to get that money, if it is
possible at all. Once again, the bottom line is: Buyer Beware!
The first question potential purchasers must ask when evaluating a
Denti-cal practice is: Why is the owner selling? Most of the Denti-cal
practices on the market are being sold because the selling dentist is in
trouble with Denti-cal. Their pipeline to cash is about to be shut down.
Therefore, before a prospective purchaser proceeds any further and
spends a lot of time and money evaluating the practice, a written,
detailed declaration should be obtained from the seller stating the exact
situation with Denti-cal.
Next, find out where the patients come from. Look at cities the patients
come from. If the practice uses a Denti-cal referral service or
transportation, prospective purchasers should run, not walk, away from
the practice. If there are no problems with the practice as yet, there will
be soon. Also, be aware that collections from Denti-cal are frequently
misrepresented by unscrupulous sellers or brokers: ask for a copy of
the 1099’s from Denti-cal and copies of the checks or electronic
deposits to verify the exact receipts from Denti-cal. Check with the
Dental Board web site on-line as to the license status of the seller.
All this leads to the fact that Denti-cal based practices are valued very
differently and usually priced considerably lower than other dental
practices. Decision making is not the time for prospective purchasers
to save money: a competent attorney with experience in the dental
sales field is strongly advised when contemplating this sort of purchase.
UH OH, I ALREADY OWN ONE! . . .
Many dentists who own practices that are primarily Denti-cal are
outraged when they hear from Denti-cal and find Denti-cal is poking in
their business. A frequent response is to sell and get out. They tell me
“Denti-cal has no right!” “My office is private!” “How dare they?” Well, in
most cases, Denti-cal does have a right. When a dentist accepts Denti-
cal money from the federal and state governments, they are accepting
the many regulations that go along with the dough.
One dentist recently challenged Denti-cal’s authority up to the Court of
Appeals in Lin v. State of California. Dr. Lin had a dental practice that
was 85% Denti-cal. Denti-cal notified Dr. Lin that he must obtain prior
authorization for restorative treatment before doing those procedures
and proceeded to schedule an audit of his office. Predictably, the prior
authorization requirement effectively stopped most of the Denti-cal
business into Dr. Lin’s office, and thus, the majority of his income. The
audit claimed, among other things, that Dr. Lin had been billing and
receiving payment for unnecessary services and the services that were
performed did not meet the community standards of care.
Dr. Lin argued that Denti-cal could not come into his office without his
permission, could not take away his ability to bill without a hearing and
that Denti-cal was not specific in what they meant in unnecessary
services. The court found Denti-cal did have the right to come into his
office and examine Denti-cal charts, that Dr. Lin had no right to a
hearing and no entitlement to continue to participate in the Denti-cal
program, and that he had been provided information from Denti-cal with
sufficient specificity.
AND SO . . .
I do believe that Denti-cal lulls providers into a false sense of security
with the constant stream of cash they deliver on a weekly basis without
question. This process reminds me of when a dentist has been
cheating on his wife for years and getting away with it until one day the
shoe drops. She’s had enough. All that the dentist has been working
years for goes up in smoke: the wife gets the house, the boat is sold,
the retirement plan goes to the wife, the kids and relatives won’t talk to
him.
Denti-cal seems to let dentists ‘get away with it’ for long periods of
time. All the
while, they are collecting evidence. In the meantime, the dentist gets
more brazen in his billing techniques, he hires associate dentists, he
starts using ‘drivers’ to import patients to the office. The dentist thinks
he has the system mastered and the money is flowing. Then, the shoe
drops. First, may come the prior authorization requirement, or the audit,
or the on-site visit. The dentist may find his office has been under
surveillance for a period of time, he may find Denti-cal has talked to
many patients and employees. After all is said and done, the dentist
may have to pay back a substantial portion of the money he’s made
from Denti-cal. He may no longer be able participate in the system, or
may only participate under very strict guidelines. The dentist may face
administrative, civil and criminal allegations. Life is no longer good.
So, in conclusion, tread softly and think long and hard about buying a
Denti-cal practice. Be prepared to thoroughly know and follow all the
regulations. If you already own one, follow those rules - if you value your
life as you currently know it...
© Bette Robin, DDS, JD 12/01
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DrRobin@BetteRobin.com
17482 Irvine Blvd., Suite E
Tustin, CA 92780
Tustin, CA 92780
877 DrRobin
Tele:
714.421.4407
Fax:
714.398.8808