NJDA Seeks to Strengthen State’s Corporate Practice of Dentistry Laws

The New Jersey State Board of Dentistry received a petition late last year from New Jersey Dental Association (NJDA) requesting that additional rules be implemented to strengthen the corporate practice of dentistry laws in the State.

New Jersey already prohibits the corporate practice of dentistry. For example, not only are regular business corporations prohibited from performing professional dental services but the statute also limits the practice of dentistry to licensed dentists by specifying that “practicing dentistry” refers to any person who is a manager, proprietor, operator, or conductor of a place where dental operations are performed. The regulations further specify that only a dentist licensed in New Jersey and a closely allied professional can have an ownership interest in or be employed by a permissible business format (i.e., dental office organized as either a limited liability company, professional service corporation or other permissible formats).

NJDA’s concerns about the corporate practice of dentistry stem in part from a US Senate Committee on the Judiciary Joint Staff Report on the Corporate Practice of Dentistry in the Medicaid Program, which raised questions about practices with MSO-type arrangements. “[T]hrough the use of ‘fundamentally deceptive contracts that circumvent state laws passed to ensure licensed dentists own dental practices,'” the Joint Report found, “companies ‘operate dental clinics under the guise of providing administrative and/or financial management support.'” The Joint Report, noted NJDA, recommended that states “should enforce existing laws against the corporate practice of dentistry and, where appropriate, take enforcement action against those that violate the law.”

NJDA requested that the Board of Dentistry adopt laws that clarify the State’s corporate practice of dentistry laws. Pursuant to that, NJDA requested that the Board adopt the following rule:

Except as otherwise provided by law, every dental practice in New Jersey shall be wholly owned and controlled by one or more dentists duly licensed to practice dentistry in this State. Any contract made by, on behalf of, or for the benefit of a New Jersey dental practice shall provide that the owner or owners of the practice retain the absolute, unconditional right to make all final practice management and other decisions, including but not limited to those relating to compensation, hiring, firing, financing, borrowing, leasing, purchasing, claim submissions, billing, advertising, office policies and procedures, participation in and/or termination of all dental plans including Medicaid, and the establishment of patient fees and modification or waiver thereof.

April 13, 2015 Update: On February 3, 2015, the New Jersey Board of Dentistry received notification that the NJDA had withdrawn the petition for rulemaking.

If you have questions regarding corporate practice of dentistry or medicine laws, MSOs, Board of Dentistry, or have other questions concerning healthcare regulations, please contact our office.