Did you know that in Texas, Dental Support Organizations (DSOs) must renew their registrations with state regulators every year?
Understanding Texas’ Annual DSO Registration Requirement
Per the Texas Business & Commerce Code, all DSOs in Texas are required to register and then renew their registrations annually with the Texas Secretary of State. This requirement was put in place by the Texas Legislature in 2015 as part of a broader program to permit, regulate, and oversee support organizations catering to the dental industry, and is meant to ensure transparency, accountability, and the protection of patient interests.
Under the current Texas DSO registration program, all active DSO registrations expire on December 31 and must be renewed by January 31of the following year to remain compliant.
As part of this registration renewal process, DSOs must:
- Complete the appropriate Dental Support Organization Registration form (Form 3801 & Form 3802).
- Disclose the name and business address of each dentist in this state with which the DSO has entered into an agreement.
- Disclose information of individuals who own 10 percent or more of the DSO.
- List the support services provided (i.e. marketing, accounting, billing, office space, and other staffing, regulatory, financial, or administrative services).
For DSOs that enter into agreements with dentists or dental practices to provide services after this January 31st deadline, there is a 90-day period from the date of the agreement’s execution to register with the Texas Secretary of State.
Failure to register can result in fines, continued penalties for continued noncompliance, and – perhaps most injuriously for both noncompliant DSOs and the dentists with whom they contract – greater scrutiny from the Texas State Board of Dental Examiners (TSBDE), which monitors all DSO arrangements in the state of Texas.
Key Regulatory Considerations for Texas Dentists with DSOs
Because dentists and dental groups are ultimately responsible for ensuring compliance with healthcare regulations that govern the practice of dentistry in Texas, all dentists and dental practices should be aware of the additional compliance risks when working with a DSO.
Ask your healthcare attorney to review your practice’s business model and compliance programs for compliance with these state or federal regulations:
- Texas’ Prohibition Against the Corporate Practice of Dentistry: Healthcare regulators are keen on rooting out improper relationships in which a dentist’s medical judgment is influenced by non-medical management services in violation of Texas’ Corporate Practice of Dentistry doctrine. Arrangements in which DSOs exert any amount of direction or control over a dentist’s professional judgment are illegal and can expose your practice to civil penalties and even criminal charges should the arrangement result in patient injury.
- Anti-Kickback Statute. DSOs can violate the Anti-Kickback Statute (AKS) in several ways if their arrangements with dentists involve offering remuneration to induce referrals for services covered by federal health care programs (like Medicare or Medicaid). For example, a DSO offering a dentist a bonus based on the total revenue generated by the practice could be seen as a violation if a significant portion of that revenue comes from federally covered services.
- Texas’ Solicitation of Patients Act. In 1999, Texas passed its Solicitation of Patients Act, a criminal provision that is roughly analogous to the federal Anti-Kickback Statute. This state law, however, takes it a step further – prohibiting remuneration for referrals involving private insurance companies or self-pay, as well as state-funded health programs. While the state Attorney General enforces this law, many insurance companies also conduct investigations that can lead to exclusion from the insurer’s covered network.
- Stark Law. Stark Law prohibits a physician or dentist from referring patients for Designated Health Services (DHS) – such as clinical laboratory services or maxillofacial surgery procedures – to a healthcare entity with which the dentist (or an immediate family member) has a financial relationship. There are a few ways this might implicate a DSO relationship. Here is one example: If a DSO has ownership interest (like partial ownership of the practice) or provides compensation (salary, bonuses) to a dentist, it creates a financial relationship. Then, if the DSO influences the dentist to refer patients for DHS provided by the DSO or a related entity, it can violate Stark Law.
Hendershot Cowart P.C. Helps Dentists & Dental Practices with DSOs
If you have concerns about your DSO arrangement or want to review your compliance program against Texas and federal healthcare regulations, get clarity with the help of the healthcare attorneys at Hendershot Cowart P.C.
Backed by decades of experience and extensive insight into the regulatory framework surrounding the practice of dentistry and medicine, we help dentists, dental groups, orthodontists, DSOs, and other healthcare providers structure and maintain compliant DSO arrangements. We also offer a range of responsive legal services for dentists and providers facing licensing issues, audits, investigations, and allegations of regulatory violations.
To discuss how we can help, call (713) 909-7323 or contact us online.
