Buying a dental practice in Florida

A dental practice earns its money one appointment at a time, and much of it repeats. Patients come back for cleanings and exams on a regular schedule, and those hygiene visits lead to the fillings, crowns, root canals and implants that make up most of the revenue. Payment comes from dental insurance plans, patients paying directly and, in some practices, Medicaid through managed care dental plans. With each insurer, the practice is either "in network," accepting the plan's set fees, or bills out of network. Many also sell their own membership plan to patients without insurance.

A typical team is one or two dentists, a few hygienists, dental assistants, and a front desk that handles scheduling, insurance claims and collections. What you're really buying is the patients, the hygiene schedule, the staff, the location and the equipment: chairs, x-ray and digital imaging, and the practice software that holds every chart. Patients often feel loyal to the dentist who's selling, which is why many sales include a period when the seller stays on to introduce the new owner.

• A full hygiene schedule and patients who come back on time, not just a long list of names in the software.
• New patients every month from sources you can see: referrals, a visible location, online search, insurance directories.
• A clear picture of who pays. A practice that leans on one or two low-paying plans is at their mercy.
• Revenue that doesn't all come from the owner's own hands. An associate dentist or a strong hygiene team carries real weight.
• Long-serving hygienists and front desk staff, who can be hard to replace.
• Equipment and software that are reasonably current, and a lease with enough years and renewal options to stay put. Building out a dental office is expensive, so moving is a real cost.

Florida keeps dental practices in dentists' hands. Only a dentist licensed in Florida, or a professional corporation or limited liability company made up of dentists, may employ dentists or hygienists to run a dental office or control the dental equipment in use (section 466.0285 of the Florida Statutes). A non-dentist also may not control patient records, pricing, advertising, staffing or office hours through an arrangement with a dentist. A violation is a third-degree felony, and contracts that break the rule are void.

So you need a license from the Florida Board of Dentistry. If you're licensed elsewhere, ask the board how long a Florida license takes before you sign anything. If you aren't a dentist and are considering a management company structure, have a Florida health care attorney review it first.

Several things won't simply carry over. DEA registrations belong to individual dentists and can't be transferred without the DEA's written consent. X-ray machines are registered with the Department of Health's Bureau of Radiation Control. If you buy the assets, register the machines within 30 days and before using them; if you buy the company, report the changes within 30 days (rule 64E-5.511). Insurance plans and Medicaid usually have to approve you again (credentialing).

Ask for production (what the practice billed) next to collections (what it actually received after insurance adjustments), by provider and by month. The gap tells you how much the insurance contracts really pay. Count only recently seen patients as active, not every chart ever opened, and look at treatment plans never scheduled: they can be real upside or a sign of weak follow-through.

Get each insurance contract and find out how long credentialing under your name will take, because claims can stall in the meantime. Check how much of the work the seller does personally and how long they'll stay. Look up the seller's license and any public discipline on the Department of Health's license verification site, and ask about malpractice claims. Finally, have the equipment inspected, confirm which software licenses transfer, and check whether the lease needs the landlord's consent to pass to you.

• How many patients have you seen in the past year, and how many new ones in a typical month?
• Which insurance plans are you in network with, and have you joined or dropped any recently?
• How far out is the hygiene schedule booked right now?
• Which procedures do you send to specialists, and which do you do yourself?
• How long have your hygienists and front desk team been with you?
• How long would you be comfortable staying on to introduce patients to a new dentist?
• When did you last replace the main equipment, imaging and software?