Journa C A L I F O R N I A
D E N TA L
February 2021 Purchasing a Practice Associate Agreements Discrimination Lawsuits Negative Online Reviews
A S S O C I AT I O N
The Business of Dentistry ARTHUR W. CURLEY, JD
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d e pa r t m e n t s
59 The Editor/Reading and Eating 61 Impressions 103
RM Matters/COVID-19 Fatigue: Keeping Masks On and Office Morale Up
105 Regulatory Compliance/ Required Patient Notifications and Disclosures
108 Ethics/Judgment and Informed Consent 109 Tech Trends
61 f e at u r e s
65 The Business of Dentistry An introduction to the issue. Arthur W. Curley, JD
67 Your Dental Future: The Legal Path to Purchasing a Dental Practice Steven D. Barrabee, JD
77 Associate Agreements: Negotiating Hidden Pits Falls and Benefits Michael Kowalski, DDS, JD
85 Discrimination Claims: Avoiding ‘Drive-By’ and ‘Click-By’ Lawsuits Mark Gibson, LLB
93 What To Do About That Negative Online Review Peter F. Finn, JD
99 Workers’ Compensation: Timely Claims Reporting and Reducing Workplace Injuries Taiba Solaiman
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Journa C A L I F O R N I A
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Letters to the Editor
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Volume 49 Number 2 February 2021
Andrea LaMattina, CDE Publications Manager Kristi Parker Johnson Senior Communications Specialist
The Journal of the California Dental Association (ISSN 1942-4396) is published monthly by the California Dental Association, 1201 K St., 14th Floor, Sacramento, CA 95814, 916.554.5950. The California Dental Association holds the copyright for all articles and artwork published herein.
Steven W. Friedrichsen, DDS,professor and dean, Western University of Health Sciences College of Dental Medicine, Pomona, Calif. Mina Habibian, DMD, MSc, PhD,associate professor of clinical dentistry, Herman Ostrow School of Dentistry of USC, Los Angeles Robert Handysides, DDS,dean and associate professor, department of endodontics, Loma Linda University School of Dentistry, Loma Linda, Calif. Bradley Henson, DDS, PhD, associate dean for research and biomedical sciences and associate professor, Western University of Health Sciences College of Dental Medicine, Pomona, Calif. Paul Krebsbach, DDS, PhD,dean and professor, section of periodontics, University of California, Los Angeles, School of Dentistry Jayanth Kumar, DDS, MPH,state dental director, Sacramento, Calif. Lucinda J. Lyon, BSDH, DDS, EdD,associate dean, oral health education, University of the Pacific, Arthur A. Dugoni School of Dentistry, San Francisco Nader A. Nadershahi, DDS, MBA, EdD,dean, University of the Pacific, Arthur A. Dugoni School of Dentistry, San Francisco Francisco Ramos-Gomez, DDS, MS, MPH,professor, section of pediatric dentistry and director, UCLA Center for Children’s Oral Health, University of California, Los Angeles, School of Dentistry Michael Reddy, DMD, DMSc,dean, University of California, San Francisco, School of Dentistry
The Journal of the California Dental Association is published under the supervision of CDA’s editorial staff. Neither the editorial staff, the editor, nor the association are responsible for any expression of opinion or statement of fact, all of which are published solely on the authority of the author whose name is indicated. The association reserves the right to illustrate, reduce, revise or reject any manuscript submitted. Articles are considered for publication on condition that they are contributed solely to the Journal of the California Dental Association. The association does not assume liability for the content of advertisements, nor do advertisements constitute endorsement or approval of advertised products or services.
Avishai Sadan, DMD,dean, Herman Ostrow School of Dentistry of USC, Los Angeles
Copyright 2021 by the California Dental Association. All rights reserved.
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Harold Slavkin,DDS, dean and professor emeritus, division of biomedical sciences, Center for Craniofacial Molecular Biology, Herman Ostrow School of Dentistry of USC, Los Angeles
Richard W. Valachovic, DMD, MPH,president emeritus, American Dental Education Association, Washington, D.C.
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Reading and Eating Kerry Carney, DDS, CDE
here comes a time when what you thought of as a simple act is revealed to be quite complex. This is not a bad thing. Understanding the complexity of things means we are presented with more things to consider, more layers of relationships to examine and more opportunities to understand and appreciate life in a deeper sense. For example, consider the verb “to read.” It seems simple and straight forward. You are reading this editorial at this moment. But do we understand what it is to read a text? Reading is a little like eating; all the important things happen after the food moves past the lips. Though reading a text is a recently developed ability, it springs from that evolutionarily advantageous skill of reading our environment. Reading is not simply rolling your eyes over abstract figures of an alphabet. Reading is more than just scanning as much as you can as fast you can. Just as eating is more than just stuffing your face with consumables, reading is a complex activity. It involves perception, recognition, comprehension and, finally, true understanding. The media that has transmitted the information that we read has evolved: from stones, to clay tablets, from parchment to papyrus, from paper to digital screens. Each iteration has had advantages and disadvantages, but portability and economics have been primary drivers throughout the evolution of information media. Reading our environment, predicting a future and determining how best to succeed in that future is a relevant, existential endeavor. To some
As dentists, we read to become more effective in our service to our patients. We read to become more efficient in our practices.
extent, we read to succeed. As dentists, we read to become more effective in our service to our patients. We read to become more efficient in our practices. We read to succeed in our profession. As we transition from print to digital only, it might prove beneficial to consider some research that measures comprehension of text read on digital media (screen) and contrasts it with comprehension of text read on tangible media (paper). Research has shown that in the case of long, nonfiction texts “students of all ages, from elementary school to college, tend to absorb more when they’re reading on paper than on screens…”1 Some postulate that “working your way through a print volume leaves spatial impressions that stick in your mind (for instance, the lingering memory of where a certain passage or diagram appeared in a book)”2 in the way one remembers a hike in the woods as a series of discrete image episodes followed or preceded by other images (for example, you passed the red barn after you walked through the covered bridge but before you encountered the herd of goats). The ability to constantly update digital texts can have an unintended consequence: context and lineal confusion. Post-publication editing, which is easy to accomplish in digital
text, cannot be incorporated into a printed text. (For example, an article posted online in 2017 may include updated references to related articles published in 2019. This may be helpful for some, but the jumbling of dates can confuse the scholar reading for context and continuity.) The length and detail of a text are the critical factors. According to the research, if you are reading more than 500 words, your comprehension goes up if you read from paper rather than a screen. There is some speculation about why this appears to be the case. “Some experts think the glare and flicker of screens tax the brain more than paper. Others argue that spatial memory for the location of a passage or a chart on a physical paper page can help a student recall information … [the principal researcher suggested that] the problem might be one of rampant self-delusion by screen readers. In many of the lab studies, readers answered questions on how well they thought they had performed in the experiment. Screen readers consistently overestimated their reading comprehension. Paper readers were more accurate in their self-judgements.”1 The reason screen-reading students estimated they were performing better may have been FEBRUARY 2 0 2 1
EDITOR C D A J O U R N A L , V O L 4 9 , Nº 2
based on their confounding speed with comprehension. They felt they read the digital text faster and reading faster meant reading better to them. The researcher went on to hypothesize that “people who overestimate their abilities are likely to put in less effort. The less effort a person puts into a reading passage, the less they are likely to comprehend. That’s because reading comprehension, like all learning, isn’t easy and requires work.”1 This does not mean that reading from a screen is bad. These studies do not attempt to proclaim winners and losers in a world of electronic information. These investigations reflect that paper and digital media each have their own advantages and disadvantages. Whereas paper may prove more satisfying for devouring large amounts of detailed information, digital media may be more amenable to a number of smaller packets of information. It might be like the difference between enjoying a holiday feast as opposed to snacking between meals. Some research went on to speculate that there are other advantages to digital media that might improve reading comprehension of longer texts: organization, embedded links, eye movement recognition, font color and size, etc. However, one researcher’s take-home message was “pick the format you personally prefer,” and for her college-aged study subjects, that was paper.1 Several studies have agreed that reading comprehension of longer, nonfiction text is measurably better when read from paper than screens. This finding, however, directly counters textbook publishers’ stated aims to emphasize digital texts going forward.1 60 FEBRUARY
The obvious advantages of digital textbooks include cost, portability and accessibility. But these comparative studies seem to indicate that for some purposes, text rendered in print might provide a measurable advantage. So, what does this mean? Research emphasizes that both digital and paper have their place in our reading world. Snackable bits of easily understood information are reliably accessed on a screen. This might include abstracts and other items with a word count under 500 words. However, if you want to delve into a complex and lengthy text with a lot of detail, you may want to print that out and retreat to your couch to peruse the text on paper (remembering to recycle the paper afterward). This kind of information can help us prepare and present our communications in the most easily accessible and digestible form for our readers. The Journal of the California Dental Association fulfills many goals. One of our most important goals is to communicate comprehensive and comprehensible information. We strive to be a trusted source of relevant information for our members, educators, policymakers and the public. We are in the process of reinventing the Journal in order to respond to changing trends in reader habits and preferences as well as establishing our niche within the system of oral health information and the publishing world in general. We strive to make the information you need, the information you can use, available and easily accessible. So whether you are ready to sit down and devour an in-depth, detailed article or just snack on brief information pieces, take a place at our table. Join us here at the Journal of the California Association. Our mission is to help you read to succeed. n
RE F E RE N C E S 1. Barshay J. Evidence increases for reading on paper instead of screens; Aug. 12, 2019. hechingerreport.org/ evidence-increases-for-reading-on-paper-instead-of-screens. 2. Wallis C. A textbook dilemma: Digital or paper? Aug. 23, 2017. hechingerreport.org/textbook-dilemma-digital-paper.
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We reserve the right to edit all communications. Letters should discuss an item published in the Journal within the last two months or matters of general interest to our readership. Letters must be no more than 500 words and cite no more than five references. No illustrations will be accepted. Letters should be submitted at editorialmanager. com/jcaldentassoc. By sending the letter, the author certifies that neither the letter nor one with substantially similar content under the writer’s authorship has been published or is being considered for publication elsewhere, and the author acknowledges and agrees that the letter and all rights with regard to the letter become the property of CDA.
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Study Finds Variables in Mouth Bacteria Subpopulations
Environmental CO RE ACCE SSO RY
Metapangenome construction: The inner layers show the genomic representation of the pangenome, and the outer layer shows the environmental representation of the pangenome. This outer layer summarizes the fraction of genes in each gene cluster that was environmentally core or accessory in those metagenomes. (Credit: Utter et al. Creative Commons licenses.)
A new study published in the journal Genome Biology provides new insights on the role of oral microbes in human health. The study, led by Harvard University, examined the human oral microbiome and discovered impressive variability in bacterial subpopulations living in certain areas of the mouth. “As microbial ecologists, we are fascinated by how bacteria can seemingly divide up any habitat into various niches, but as humans ourselves, we also have this innate curiosity about how microbes pattern themselves within our bodies,” said lead author Daniel R. Utter, a PhD candidate in Harvard’s department of organismic and evolutionary biology. Mr. Utter and a team of researchers from Harvard, the Marine Biological Laboratory, Woods Hole, the University of Chicago and The Forsyth Institute applied these state-of-the-art sequencing and analysis approaches to get a better picture of the oral microbiome. The mouth contains a surprising number of site-specific microbes in different areas, according to the study. For instance, the microbes found on the tongue are very different from the microbes found in the plaque on teeth. The research team scoured public databases and downloaded 100 genomes that represented four species of bacteria commonly found in the mouth, Haemophilus parainfluenzae and the three oral species of the genus Rothia, and used them as references to investigate their relatives sampled in hundreds of volunteers’ mouths from the Human Microbiome Project (HMP). “We used these genomes as a starting point, but quickly moved beyond them to probe the total genetic variation among the trillions of bacterial cells living in our mouths,” said Mr. Utter. “Because, at the end of the day, that’s what we’re curious about, not the arbitrary few that have been sequenced.” Using this recently developed approach called metapangenomics, which combines pangenomes (the sum of all genes found in a set of related bacteria) with metagenomics (the study of the total DNA coming from all bacteria in a community), allowed the researchers to conduct an in-depth examination of the genomes of the microbes, which led to a shocking discovery. “We found a tremendous amount of variability,” said Mr. Utter. “But we were shocked by the patterning of that variability across the different parts of the mouth, specifically, between the tongue, cheek and tooth surfaces.” For example, within a single microbe species, the researchers found distinct genetic forms that were strongly associated to a single, different site within the mouth. In many cases, the team was able to identify a handful of genes that might explain a particular bacterial group’s specific habitat. Applying metapangenomics, the researchers were also able to identify specific ways free-living bacteria in people’s mouths differed from their lab-grown relatives. Learn more about this study in Genome Biology (2020); doi.org/10.1186/s13059-020-02200-2. n FEBRUARY 2 0 2 1
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Poor Oral Hygiene May Result in Metabolic Syndrome Bacteria Borrow Growth Molecules To Thrive The human body is filled with friendly bacteria. However, some of these microorganisms, such as Veillonella parvula, may be too nice. These peaceful bacteria engage in a one-sided relationship with the pathogen Porphyromonas gingivalis, helping the germ multiply and cause gum disease, according to a new University at Buffalo-led study. The research sought to understand how P. gingivalis colonizes the mouth. The pathogen is unable to produce its own growth molecules until it achieves a large population in the oral microbiome (the community of microorganisms that live on and inside the body). The answer: It borrows growth molecules from V. parvula, a common yet harmless bacteria in the mouth whose growth is not population dependent. In a healthy mouth, P. gingivalis makes up a miniscule amount of the bacteria in the oral microbiome and cannot replicate. But if dental plaque is allowed to grow unchecked due to poor oral hygiene, V. parvula will multiply and eventually produce enough growth molecules to also spur the reproduction of P. gingivalis. The study, which was published in December in the ISME Journal, tested the effects of growth molecules exuded by microorganisms in the mouth on P. gingivalis, including molecules from five species of bacteria that are prevalent in gingivitis. Of the bacteria examined, only growth molecules secreted by V. parvula enabled the replication of P. gingivalis, regardless of the strain of either microbe. When V. parvula was removed from the microbiome, 62 FEBRUARY
Periodontal disease is known to be a significant risk factor of metabolic syndrome, a group of conditions that increase the risk for heart disease and diabetes. In a new study, researchers from Tokyo Medical and Dental University discovered that infection with Porphyromonas gingivalis, the bacterium causing periodontal disease, causes skeletal muscle metabolic dysfunction, the precursor to metabolic syndrome, by altering the composition of the gut microbiome. The study was published in the FASEB Journal in December. For the study, researchers first investigated antibody titers to Porphyromonas gingivalis in the blood of patients with metabolic syndrome and found a positive correlation between antibody titers and increased insulin resistance. These results showed that patients with metabolic syndrome were likely to have undergone infection with Porphyromonas gingivalis and thus have mounted an immune response yielding antibodies against the germ. To understand the mechanism behind the clinical observation, the researchers then turned to an animal model. When they gave mice that were fed a high-fat diet (a prerequisite to developing metabolic syndrome) Porphyromonas gingivalis by mouth, the mice developed increased insulin resistance and fat infiltration and lower glucose uptake in the skeletal muscle compared with mice that did not receive the bacteria. But how was this bacterium capable of causing systemic inflammation and metabolic syndrome? To answer this question, the researchers focused on the gut microbiome, the network of bacteria present in the gut and with which the organism coexists symbiotically. They found that in mice administered with Porphyromonas gingivalis, the gut microbiome was significantly altered, which might decrease insulin sensitivity. Learn more of this study in the FASEB Journal (2020); doi.org/10.1096/ fj.202001158R. Co-occurrence network in the gut microbiome. (Credit: Watanabe et al. Creative Commons license.)
growth of P. gingivalis halted. However, the mere presence of any V. parvula was not enough to stimulate P. gingivalis, as the pathogen was only incited by a large population of V. parvula. Data suggest that the relationship is one-directional, as V. parvula received no obvious benefit from sharing its growth molecules, said Patricia Diaz, DDS,
PhD, lead investigator on the study. “P. gingivalis and V. parvula interact at many levels, but the beneficiary is P. gingivalis,” said Dr. Diaz, noting that V. parvula also produces heme, which is the preferred iron source for P. gingivalis. Read more of this study in the ISME Journal (2020); doi.org/10.1038/s41396020-00865-y.
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New Way Found To Remove Adhesives Tokyo Medical and Dental University researchers have developed a method of making adhesive dental materials easier to remove. Their findings were published in the journal ACS Applied Polymer Materials. Efforts to improve removal processes for nonpermanent adhesive materials have produced materials that are weakened by triggers such as heat or electric currents. However, approved sources of these stimuli are not
readily available in standard dental clinics. The researchers therefore focused on UV light-responsive materials that can be triggered by the UV sources widely used to cure resin cements and composites. The toughness of many dental cements is a result of mixing them with a cross-linker that locks the cement molecules to each other to form a stable network. The researchers have introduced a chemical “switch”
Researchers Develop Safer Teeth-Whitening Method Researchers at Nanchang University have developed a new, less destructive method for whitening teeth, according to a study published recently in the journal ACS Biomaterials Science & Engineering. Currently, the most common bleaching agent used as a noninvasive teeth whitening treatment is hydrogen peroxide, which steals electrons from the pigment molecules that cause teeth discoloration. This process can be sped up by exposing teeth to blue light. But high concentrations of hydrogen peroxide can break down a tooth’s enamel, causing sensitivity or cell death. Nanchang University colleagues Xiaolei Wang, PhD, and Lan Liao, PhD, and other researchers wanted to see if a different blue-light-activated compound could be a safer, but still effective, alternative. The team modified titanium dioxide nanoparticles with polydopamine (nano-TiO2@PDA) so they could be activated with blue light. In a proof-ofconcept experiment, the nano-TiO2@PDA particles were evenly coated on the surface of a tooth and irradiated with blue light. After four hours of treatment, the whitening level was similar to that obtained with hydrogen-peroxide-based agents. The research group notes that no significant enamel damage was found on the surface of the tooth, and the treatment was significantly less cytotoxic than hydrogen peroxide. In addition, the nano-TiO2@PDA therapy showed antibacterial activity against certain bacteria. Read more of this study at ACS Biomaterials Science & Engineering (2020); doi.org/10.1021/ acsbiomaterials.8b00548.
into a new cross-linker that opens when UV light is shined on it. “The cross-linker structure resembles rings threaded onto a piece of string with bulky stoppers at each end,” said study lead author Atsushi Tamura, PhD. “We have added a section to the string — an o-nitrobenzyl ester group — that breaks under UV light causing the rings to slide off. This has a significant effect on the stability of the cement material the cross-linker is holding in place.” The researchers used their crosslinker to stabilize a commercially available resin cement that was used to stick two polymer blocks together or to attach a polymer block to a bovine tooth. After shining UV light on the cross-linked cement for just two minutes, the cement showed a significant reduction in adhesion strength in both tests, meaning separation of the bonded materials was easier following UV treatment. “We are very encouraged by the initial findings using our cross-linker,” said Nobuhiko Yui, PhD, the study’s corresponding author. “Although the UV wavelength used to disrupt the material was not clinically appropriate in this case, we intend to develop the chemistry of our internal switch so that it can provide a facile and readily accessible method of removing adhesives in the clinic.” Learn more about this study in ACS Applied Polymer Materials (2020); doi.org/10.1021/acsbiomaterials.8b00548. FEBRUARY 2 0 2 1
introduction C D A J O U R N A L , V O L 4 9 , Nº 2
The Business of Dentistry Arthur W. Curley, JD
GUEST EDITOR Arthur W. Curley, JD, is a senior trial attorney in the California health care defense firm of Bradley, Curley, Barrabee & Kowalski PC. He is an assistant professor of dental jurisprudence at the University of the Pacific, Arthur A. Dugoni School of Dentistry in San Francisco and an adjunct faculty professor at the University of California, San Francisco. Mr. Curley has published several articles on risk management and authored chapters in numerous textbooks on oral surgery, endodontics and periodontics. Conflict of Interest Disclosure: None reported.
ost dentists who own their own practice are in fact engaged in many roles within their business of dentistry. They are the chief executive officer of their corporation, the human resources manager, the chief financial officer, the head of production, the regulatory compliance officer, the quality control and assurance manager, the chief operations officer, the head of sales and marketing and the primary source of labor for compensation. As such, the dentist is subject to various laws, regulations and guidelines for each of those jobs or roles in addition to the dental care obligations under the Dental Practice Act and the Code of Ethics. Understanding, planning and preparing for the obligations, regulations and guidelines of the business of dentistry is essential to success. Naiveté or ignorance as to the business of dentistry can result in conflicts, disputes, regulatory fines or penalties and, too often, costly litigation. The business of dentistry begins on the day the student graduates from dental school, continues as they transition to active dental practice and ends with retirement. There are critical business issues that must be considered along the way as the business begins, grows and then transitions toward retirement. In this issue of the Journal, four extensively trained and experienced authors discuss these issues and provide background and understanding as well as tips for business dispute avoidance. Steve Barrabee, JD, adjunct faculty at the Arthur A. Dugoni School of Dentistry
and an attorney who has represented dentists in business matters for 35 years, is the author of “Pathway to Your Dental Future, Road Map for Purchase of Your Dental Practice.” Michael Kowalski, DDS, JD, a dentist and an attorney, reviews the law in “The Law of Associate Agreements: Negotiating Around Pitfalls While Preserving Benefits.” Mark Gibson, JD, an attorney and barrister, provides background and guidance on the issues surrounding the explosion of discrimination claims and Americans with Disabilities Act lawsuits against dentists in “Avoiding ‘Drive-By’ and ‘Click-By’ ADA Lawsuits.” Peter Finn, JD, having represented numerous dentists involving intellectual property disputes, reviews the evolving area of social media and marketing, along with associated litigation and regulations in “What To Do About That Negative Online Review.” For over 45 years, I have had the opportunity to interact and defend dentists who have come face to face with the challenges discussed in this issue. One certainty I have come away with is that the well-informed dentist who prepares for the challenges of the business of dentistry more often than not avoids litigation and has a practice that prospers without the distractions of legal claims. In other words, that ounce of prevention is more valuable than that pound of cure. n (Note: In this issue, we do not cover employment law or dental board regulations, as those areas of law have been covered in other editions.)
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Your Dental Future: The Legal Path to Purchasing a Dental Practice Steven D. Barrabee, JD
abstract The dental practice purchase process requires the dentist to utilize the resources of knowledgeable professionals to identify the preferred dental practice, assess its future potential, target the right price, then document the purchase to protect the parties and allow both the buyer and the seller to transition the practice for both their benefits.
AUTHOR Steven D. Barrabee, JD, has represented health care providers in business transactions, entity formations, lease negotiations, business and malpractice litigation for over 35 years. Over the last decade, he has lectured on dental business law matters at the University of the Pacific and the University of California, San Francisco, Dental Schools, made presentations to local and state dental societies and published on legal issues in dentistry. Conflict of Interest Disclosure: None reported.
or most dentists, their professional path begins with learning the craft of dentistry in dental school followed by the introduction to their profession as an associate in a dental practice either operated by an individual practitioner or, as is becoming more common, a multi-office dental enterprise. As an associate, a dentist will likely learn the skills necessary to work in private practice including the art of diagnosis, treatment planning, patient communication, rendering of treatment and management of treatment outcomes including complications. An associate dentist is commonly responsible for managing patients but not the responsibility to own and operate a small business. The associate, whether an employee or independent contractor, does not control their own dental destiny. The dental practice owner makes decisions for the practice that determine the patients to be treated, the days of work, the insurance plans accepted, the staff who provide assistance and the nature and extent of the associateâ€™s compensation. Formerly, most dentists desired to be their own boss and the ultimate goal was to purchase
their own practice. While that is not currently true for all dentists, for those dentists who have the entrepreneurial desire, the decisions made in a dental practice purchase will have a far-reaching impact on their ultimate professional fulfillment and financial success.
A Team Approach to the Purchase of Your Practice
To meet their goals and protect themselves from common pitfalls in the dental practice purchase process, the purchasing dentist must undertake a systematic approach to the practice purchase process. A successful dental practice purchase should not be an individual endeavor. A wise dentist will be the leader of a team of knowledgeable consultants who can assist in identifying the appropriate practice to purchase, undertaking the proper analysis of the practice to determine if it is the right practice to purchase followed by proper documentation to ensure they obtain the benefit of their purchase. Much like the decision to buy a house, the first consideration is the location of the dental practice. While it is â€ƒFEBRUARY 2 0 2 1
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understandable that many dentists (or their spouses) want to locate in popular and affluent cities or suburbs, the prospective purchaser must analyze whether that is the best business decision. Factors to consider when identifying the location of the dental practice should involve analysis of the number of competing dentists, income level of prospective patients, prospective fee schedules, treatment focus of the practice, likely population growth and the nature and extent of the anticipated commute. Dentists should also consider where they want to live, the cost of living and recreational opportunities. Other considerations include the availability of trained staff, ability to hire and retain professional staff including dentists and the ability to sell the practice and retire. While many dentists desire to work in major metropolitan areas, a dentist may enjoy a better standard of living with less stress in a smaller town rather than the more expensive, highly competitive major markets. One common refrain when working in a less-populated area is the greater difficulty in finding associate dentists and prospective purchasers when it is time to retire and/or sell the practice. In assessing a location for a practice, a purchasing dentist needs to evaluate the demographic and ethnic makeup of the community in which the practice is located. Changing patient populations, including the gender and ethnic status of the community members and purchasing dentist, may affect patients’ willingness to remain in the practice or the growth potential after sale. If a community has experienced an influx of certain ethnic groups, a purchaser of that same ethnic group may have a better chance to grow the practice population pool. Another factor in assessing location may be the availability and ability to attract and maintain well-trained staff members. In certain areas of California, particularly 68 FEBRUARY
affluent areas, it is difficult to find welltrained staff members who can afford to live in those areas. This makes recruitment and retention of front office staff, registered dental assistants and hygienists more difficult. Moreover, even if staff candidates can be identified, their salary expectations are much higher and will adversely affect the future financial success of the practice. Once a decision is made on a location or locations of the prospective dental practice, the dentist needs to decide whether to build a new practice, purchase an existing practice or purchase
The most common way to identify a practice is to consult with practice sales brokers who are retained by practice owners to market and sell dental practices. a share of an existing practice. Many associates may first discuss buying a portion of the practice in which they are currently employed. The dentist may also consider relocating in the same area as they have been working or looking for a new area to practice. Once the dentist chooses the location of the practice to purchase, the next step is to identify the dental practices for sale in that area. The most common way to identify a practice is to consult with practice sales brokers who are retained by practice owners to market and sell dental practices. Other sources of dental practices for sale are advertisements in local dental society newsletters, practice consultants, word of mouth, listings by lending institutions and resources offered by dental schools.
Practice Sales Brokers
Practice sales brokers are normally hired by the dental practice seller to assist in valuing and marketing the practice, ensuring proper documentation is provided by the seller to prospective buyers and at times providing initial drafts of sales documents. Practice sales brokers may also facilitate the transaction by providing prospective buyers the names of knowledgeable professionals including accountants, attorneys and lenders who can be part of the buyer’s team. A major caveat for all buyers is that despite all the expertise of the practice sales broker, the broker is an agent of the seller and owes fiduciary duties only to the seller and not the buyer.1 The practice sales broker as an agent owes fiduciary duties including duties of loyalty, disclosure and due care to the seller who is considered their principal.2 This means that a prudent dental practice purchaser should assemble their own team to obtain independent advice throughout the sale process. For a buyer it is better to obtain independent advice from trained professionals to ensure that these professionals owe allegiance solely to the buyer and not to the person or entity who refers a substantial amount of clients to that person.
The Remainder of the Buyer’s Team: Accountant and Attorney
The buyer’s team should include specialized financial advisors and dentalbusiness attorneys who can assist in performing the necessary analysis of the dental practice to assess the viability of the proposed purchase and the chance for long-term financial success. While there are many business lawyers and accountants, only a few specialize in representing dental practices. These specialists are more knowledgeable in the issues important for the dental practice sale and can work more efficiently to assist in the fact-finding and
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documentation process. The two essential professionals that need to be retained by a seller or purchaser are an attorney and an accountant. The attorney should assist in negotiation of the transaction terms including the sales price and then draft or evaluate the asset purchase agreements including the sales contract, lease or lease assignment, associate agreement and the business-entity documents. The accountant should assist in evaluating the sales price, undertaking cash-flow projections, allocating the sales price among different asset classes, setting up business systems after sale and advising on tax ramifications of the transaction. Another professional who can provide additional assistance is a dental practice consultant. These consultants can help analyze data concerning the practice presale, identify ways to increase revenue or decrease expenses, assist in establishing or refining the delivery of business services and perform marketing of the practice.
Evaluation of the Prospective Practice: Valuation Issues
The next step once a potential practice purchase opportunity is identified is to undertake initial evaluation of the information concerning the practice to determine the amount that should be offered for its purchase. Dental practices sold by practice sales brokers and most practices sold by individuals will have been appraised to determine a proposed sales price. Appraisals are commonly performed by the practice sales brokers who have experience in assessing the value of dental practices. Surprisingly, few practice sales brokers are licensed business appraisers. One important issue for valuation of dental practices is the assessment of past income generated by the dental practice and its potential for postexpense income, known as net income,
that can be maintained or controlled by the purchasing dentist. There are two elements in determining future net income — the revenue generated by the practice and the practice expenses. The first item frequently evaluated is the gross revenue generated by the dental treatment performed at the practice. It is easy to determine the selling dentist’s gross revenue. The selling dentist’s gross revenue will not necessarily be replicated by the purchasing dentist, as the fee schedule of the purchasing dentist may be less than that of the selling dentist.
One important issue for valuation is the assessment of past income generated by the dental practice and its potential for post-expense net income. This is particularly true for sellers who are approved providers by Delta Dental of California. Some Delta Dental member dentists, referred to as Premier providers, are authorized to bill all patients who have insurance plans denoted as Premier and Delta PPO patients at the higher Premier rates. The dentist will then be reimbursed by Delta Dental at the rate agreed to in the patient’s insurance plan and the patient will pay the balance of the fee up to the Premier plan rate. Dentists who are now purchasing dental practices and becoming Delta Dental approved providers or who are obtaining credentialing in new locations are required to bill patients at either the Premier or Delta PPO rates based on the patient’s insurance plan. A non-Premier dentist may only bill patients under the
fee schedule they have for the patient’s insurance plan and may not bill patients up to the Premier fee schedule rates. This results in reduced reimbursement for Delta PPO patients. The decrease in fees for the Delta PPO patients, compared to the previous Premier fee schedule, can result in reduced fees of 25% to 50% depending on the procedure compared to the fees that could be collected by a Premier dentist. A dental practice appraisal that solely relies on past production of Premier providers will overstate the amount of fees generated for the same treatments that may be generated after the sale and thus the value of the dental practice. If the selling dentist is a Premier provider, the purchasing dentist needs to obtain information concerning the number of patients who are Delta Dental patients, which of them are insured in PPO plans and the expected decrease in fee schedules that will likely ensue. It is possible with substantial effort to assess the likely revenue loss arising from the change in Delta Dental reimbursement rates arising from the loss of Premier status. In a recent transaction, an astute practice sales broker who believed it was in the best interest of both the seller and buyer performed a detailed analysis to assess the potential expected revenue loss by the elimination of the seller’s Premier status. This painstaking evaluation started with using features in Dentrix software to identify the insurance plan for each Delta Dental patient. The fee schedules for the Premier and the PPO plans were compared for each procedure and the percentage reimbursement loss was calculated. A further assessment was made as to copayment amounts and the individual dentist’s collection percentage to calculate the estimated fee revenue loss. In this particular practice, the estimate was that the average change in fees expected to be received by the FEBRUARY 2 0 2 1
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purchasing dentist were 32% less than that of the selling dentist. In this practice, with gross collections in a particular year of $1,093,000 of which 42% was billed for Delta Dental patients, the expected revenue loss due to the loss of Premier status was approximately $126,000. A prudent buyer should not expect that this analysis will be performed by the seller or its agent, as this assessment is normally considered the obligation of the purchasing dentist as part of their due diligence analysis. While a selling dentist or its representatives may not want to undertake this analysis to estimate future loss of insurance revenue, the disclosure of this information may result in a faster sale if it leads to the practice being appropriately priced and facilitates less uncertainty by purchasing dentists as to future revenue. The loss of revenue arising from decreased insurance reimbursement can be offset by undertaking additional procedures that were not performed by the selling dentist (e.g., implant placement and restoration, endodontics or extractions), educating patients as to the value of additional or different procedures or material that allow additional revenue or becoming more efficient in providing greater volume of patient care. A purchasing dentist should evaluate production summaries that include cross-coding to determine the type and volume of procedures performed by the selling dentist to determine what procedures they may perform that the selling dentist did not. They should also evaluate patient recall procedures and how to improve the number of recall visits to enhance revenue. Purchasing dentists who do not analyze insurance reimbursement levels and enhancement of patient revenue sources will overpay for the practice or not plan for future revenue growth, which will lead to decreased 70 FEBRUARY
satisfaction due to the need for increased work to generate the same production or revenue loss. Failure to compensate for lost revenue has resulted in practice bankruptcy in severe cases. Knowing the future expected gross revenue is only a part of the initial evaluation process to assess the propriety of the sales price. The second part of the valuation analysis is the assessment of the expenses incurred by the practice. Two practices that have similar levels of gross production may have widely varying expense ratios that greatly affect
The most important factor can be wholesale changes of staff and practice procedures, which should be minimized in the initial year after sale.
practice value. The overhead expenses of a practice may vary greatly, from 45% in an extremely efficiently run practice up to 70% in a smaller or more expensive practice. Increasing overhead expenses have made small practices less attractive to purchase. An expense analysis is an essential part of the due diligence process to assess net income after expenses, which is a better indicator of a practice’s value to the dentist than gross revenue. Before an offer is made on a dental practice, a purchasing dentist, usually with the help of an accountant or dental practice consultant, should evaluate profit and loss statements and tax returns to undertake a current cash flow analysis to project future net income the dentist can expect under different revenue scenarios. This analysis should be performed based on differing
assumptions as to the patient attrition percentages as patient loss invariably occurs after sale. The patient attrition percentage can range from 10% to 30% depending on a number of different factors. The most important factor can be wholesale changes of staff and practice procedures, which should be minimized in the initial year after sale. The cash flow models should assess the expected net income based on varying levels of patient retention and estimates of expected future revenue including the altered future insurance reimbursement levels. When assessing practice expense, the largest expense is normally salaries, benefits and payroll taxes, followed by rent and supply and lab expenses. Staff salaries should be compared to that of comparable offices in the same area and other localities. A dental accountant or consultant who has numerous clients throughout the region of the practice can provide guidance as to the reasonableness of staff salaries for that area. Assessment can be made if changes in personnel may eventually be warranted to increase revenue. Rent can vary greatly as well with rent payments ranging from $3,500 per month to as much as $8,000 per month, which can alter net income by over $30,000 to $50,000 per year. Supply ordering including the dental lab utilized may also result in changes in practice revenue. When assessing the selling dentist’s recent net income, the purchasing dentist will need to add the new expenses of debt service for a practice purchase loan and the projected cost, if any, of future equipment to be purchased to upgrade the office to the purchasing dentist’s desire. An assessment of future equipment purchases, particularly large items such as X-ray equipment, CERAC devices or upgrading to electronic records and video equipment, should be added to
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the expense projections to assess the true expected future expenses. When assessing the selling dentist’s net practice income, the purchasing dentist should calculate the salary, profit distribution, dividends, pension plan contributions and other discretionary expenses of the selling dentist. The discretionary expenses may include pension plan contributions, automobile purchase, continuing education, employment of family members, entertainment expenses, business travel, association dues and even country club memberships, all of which may be hidden in the tax return and profit and loss statements. This cash flow modeling of current expenses, projected expenses and revenue leading to projections of future net income is a true assessment of the potential value of the practice and can be used to determine the correct price to offer for the purchase of the practice. Once the cash flow analysis is performed, the buyer can then work with their attorney or other professional to negotiate the sales price. While the long-term effect of COVID-19 infections will be unknown at the time of the publication of this article, this pandemic is introducing substantial uncertainty in the valuation process. Newly instituted procedures to reduce the chance of infection in the dental office require greater expenses for personal protective equipment, changes in scheduling patients to reduce patient proximity, time needed for disinfecting operatories and reduction of the risk of residual aerosols in the office. These scheduling changes will have an unknown effect on profitability of the practice. The pandemic may also lead to patients foregoing dental treatment due to perceived health risks or seeking less dental care due to personal financial issues. Thus, the prior valuations based on past production levels may no longer be valid. Delaying practice sales until
the “new normal” for practice values is established may be necessary. Sales with a contingent purchase price based on post-sale production are not favored by sellers; lending institutions or buyers may require such contingent purchase mechanisms to reduce the risk of purchase in these uncertain times. In some practice purchase models, a maximum agreed purchase price is established but payment is made for the seller’s goodwill based on payment of a percentage of production that can range from 10% to 20% of production
Newly instituted procedures to reduce chances of infection in the dental office require greater expenses for personal protective equipment.
from the seller’s patients received by the buyer over an agreed period of time that is often from one to five years. In a more traditional practice sale, buyers may also seek to reduce risk by seeking discounts on purchase prices. Flexibility may be required in pricing mechanism to ameliorate the risk of future profitability in these uncertain times.
Letter of Intent
Everything is subject to negotiation, including the price and all essential terms of the transaction. Frequently, the parties with the assistance of financial specialists and attorneys will enter into initial negotiations to reach preliminary understanding of the basic terms of the transaction. Thereafter, a letter of intent to purchase may be entered into that
outlines the price, general terms of the asset purchase agreement and payment of a deposit toward the purchase price. It is essential to engage an attorney experienced in dental offices to assist in this process, as this document provides an outline for the eventual terms of the agreement. While normally the letter of intent is nonbinding and the deposit for the purchase is refundable if the sale is not consummated, the seller’s expectations are that the terms agreed to in the letter of intent will not be changed unless the due diligence process reveals significant unknown issues that substantially alter the value of the practice. Renegotiating terms previously agreed to as reflected in a letter of intent can lead to a discontinuation of the negotiation or loss of goodwill of the seller toward the buyer. If the letter of intent is meant to be a binding contract, it must contain the necessary contingencies or conditions that if not met can allow the buyer or seller to withdraw from the transaction without incurring any damages. Common contingencies include the right to examine financial and treatment records to complete the due diligence process, the ability to obtain a loan or seller financing to fund the purchase on terms agreeable to the buyer, the ability to obtain either a new lease for the dental office or assignment of the existing lease, and most importantly, the drafting and execution of an asset purchase agreement/sales contract agreeable to the parties. Buyers will also want a clause precluding the sellers from negotiating or selling the dental practice to a third party while the contingencies are being met.
Both before and after the execution of the letter of intent, the purchasing dentist needs to undertake the process of discovering and analyzing all necessary information to determine whether they want to purchase the practice and, if so, FEBRUARY 2 0 2 1
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the terms of such purchase. This process is known as due diligence. In addition to the initial due diligence assessment previously mentioned to evaluate an appropriate offer price, further assessment of the practice is recommended. Frequently, this analysis includes evaluation of tax returns, financial statements and practice management software reports. These evaluations should assess the dental practice’s current and historical collections from dental treatment, percentage of collections for treatment billed, procedures performed, accounts receivable, age of such accounts, practice expenses, fee schedules and patient payment options. A prospective buyer also needs to analyze the trends of the practice including numbers of patients, new patients, percentage of patients on recall and current appointments scheduled. Further information to analyze includes patient demographics (age, families, insurance status), seller’s practice style (procedures performed, referral patterns), age and condition of leasehold improvements and dental equipment, status of office lease and marketing efforts. A review of patient records should be undertaken to verify the adequacy of the treatment records maintained (progress notes and X-rays) and the practice style of the selling dentist. If a selling dentist is very conservative in the treatments performed, the existing patients may resist or reject a new dentist who is more aggressive in diagnosing the need for dental care. Notwithstanding, if introduced slowly with increased patient education, there may be an opportunity to identify the need for more dental treatments. If the selling dentist is more aggressive, there may be less dentistry to perform but more chance for replacement of existing restorations. The due diligence review should also assess if patients are paying their full portion 72 FEBRUARY
of the fees. Some dentists routinely provide discounts, promotional pricing, copayment waivers, barter arrangements or guarantees. If a selling dentist utilizes these types of practices, the purchasing dentist risks losing that patient if the same types of fee reductions are not offered. This is particularly important if patient copayments are routinely waived, as such practice is illegal3 and violates the insurance plan contractual obligations. A crucial issue in this due diligence analysis is the status of any dental associate in a practice. Under
A current or recent dental associate in the practice may hinder the transfer of the goodwill of the practice to the purchasing dentists.
California law, there can be no valid covenant not to compete against an employee or independent contractor.4 A current or recent dental associate in the practice may hinder the transfer of the goodwill of the practice to the purchasing dentists. While an associate dentist may be precluded from using patient lists or other trade secret information from the dental practice to solicit patients, they may still provide treatment at a dental practice that is a competitor of the selling dentist’s practice. In this era of online identities, a patient can easily identify a new location for a dentist through internet listings. The longer an associate has been affiliated with a practice, the greater risk there may be that the associate dentist has built up a relationship with the selling dentist’s
patients and could entice patients to seek treatment from them at another location simply by sending a notice. Serious consideration of the presence of an associate dentist, particular one who has worked at the practice for a substantial period of time, should be undertaken prior to making any offer to purchase a dental practice.
The Asset Purchase Agreement: Documenting Representations and Obligations
After undertaking initial due diligence and agreement on the letter of intent, the next step is the creation of the asset purchase agreement also known as the sales contract. The asset purchase agreement or sales contract should be a comprehensive document setting out the obligations of the parties for the present transfer and to govern future events after the purchase is completed. Common provisions include: ■ Description of the parties and precisely what is being purchased.5 ■ Price for the purchase and payment method (all cash or seller financing). ■ Allocation of the purchase price between the assets to be purchased. ■ Right to use seller’s name, telephone listing, referral sources and patient lists. ■ Collection of seller’s accounts receivable. ■ Covenants not to compete and not to solicit. ■ Retreatment provisions on handling failed or imperfect dental treatment rendered by the seller. ■ Completion of current treatment plans and patient scheduling following purchase.
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Transition assistance including letters of announcement or introduction. ■ Seller’s representations and warranties.6 ■ Buyer’s representations and warranties.7 ■ Liability insurance. ■ Custodian of patient records. ■ Indemnification and holdharmless agreements.8 9 ■ Contingencies to purchase. ■ Transition obligations of seller. ■ Assumption of obligations of seller. ■ Handling of employees. ■ Dispute resolution. The designation and documentation of the assets being purchased, liabilities being assumed and excluded assets that are not being purchased are crucial. Many disagreements arise when the items to be purchased are not clearly disclosed, particularly as to excluded items. This includes not only tangible items, such as equipment and supplies, but also intangible items such as cash in bank accounts, telephone numbers, website domain names, internet sites such as Facebook, Yelp or Google and fictitious names used in the practice. The transfer of and use of intangible items has become more important, particularly for younger dentists. An important provision in the transfer of intangible assets involves the right to use the seller’s name after sale. This includes the use of the seller’s names that are imbedded in the practice’s domain name and on social media review sites. While there are no specific laws governing the length of time the seller’s name can be used, the general custom and practice is such use is limited to the time the seller remains working in the practice plus one year. Excessive use of the seller’s name beyond that time may be considered a deceptive advertising practice, which ■
violates state law and ethical obligations.10 California Business and Professionals Code and the CDA Code of Ethics limit deceptive advertising, and the use of a seller’s name who no longer works at the practice could be construed as deceptive or untruthful advertising. Buyers prefer to be provided the use of the seller’s domain name for the practice after sale, as they want patients searching for the seller to be directed toward the buyer’s website. Sellers understandably do not want to give up their domain names in perpetuity if they contain their own name. The same is true
Many disagreements arise when the items to be purchased are not clearly disclosed, particularly as to excluded items.
as to internet review sites, as the buyers want to use the seller’s reputation to steer patients to the practice after sale, and that is part of the goodwill that a buyer desires to purchase. If the seller’s domain name is based on a fictitious name for the practice, it is no problem for the seller to permanently relinquish their domain name. However, if the domain name contains the seller’s name, most sellers will only grant a license to the buyer to use their domain name for a set period of time (often for the same period of time the seller’s actual name is used in the practice) and then the buyer may set up their own domain name with an approved fictitious name or their own name. Domain names and uses of websites are important for the transition of goodwill from seller to buyer and for marketing purposes after sale.
The allocation of the purchase price among the assets to be purchased may have significant tax consequence for the parties, with some of the payment amount being taxed at capital gains rate and other portions as ordinary income. Unfortunately, what is best for the seller (amount allocated to goodwill) may not be optimum for the buyer (with longer depreciation time by the buyer). Payments allocated to equipment and supplies may be expensed or depreciated more quickly by the buyer but the amount received by the seller for those assets will normally be taxed to the seller at the higher ordinary income rate. Consultation among the parties’ accountants should be undertaken to establish an allocation that can be justified if challenged and that balances the desires of the parties for the best tax effect. Normally, at least 70% or more of the sales price is allocated to goodwill with the remainder allocated to equipment, supplies and the covenant not to compete.
Covenants Precluding Competition by Sellers
Restrictive covenants, including covenants not to compete for associates, while generally held to be invalid under California law are enforceable against the seller with the sale of a dental practice in which compensation is paid for the goodwill.11 Any such valid restrictive covenant requires that the asset purchase agreement clearly discloses the intent of the parties to sell the goodwill of the practice.12 The best way to do this is to specifically state that goodwill is being sold and allocate a specific value to the goodwill that is being purchased. A covenant not to compete is valid against a selling dentist so long as there is a specified geographical area and the restriction is for a reasonable duration.13 The specified geographical FEBRUARY 2 0 2 1
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area is usually consistent with the area in which most of the patients of the practice reside, which may only be three or four miles in a dense metropolitan area such as San Francisco or 25 to 30 miles in less populated areas of the state. The time duration usually ranges from three to seven years. Limited exclusions, if desired from the restrictive covenants, should be considered by the seller if they plan to undertake employment around the practice such as teaching, consulting in a dental-related industry, medical legal consultation, volunteer work or other dental-related employment in the covenant not to compete area. These exclusions need to be written into the contract to be binding. Other common restrictive covenants include covenants not to solicit or treat patients of the practice by the seller or any other dentist affiliated with the seller following the sale, preclusions on referring patients to dentists other than the buyer and covenants not to solicit employees of the practice.
Retreatment: Essential Terms
Retreatment clauses are designed to establish a mechanism by which the buyer can identify and handle retreatment of work performed by the seller that prematurely fails and requires the buyer to replace. A retreatment clause ensures the buyer does not lose the goodwill of the patients as a result of imperfect treatment performed by the seller that needs to be replaced and for which the buyer could lose goodwill if they charged the patient for such retreatment. A well-crafted retreatment clause does not force the buyer to lose money to perform retreatment of past treatment they did not originally perform and to avoid malpractice lawsuits against the seller. These provisions either allow the seller to perform retreatment at the buyer’s office 74 FEBRUARY
or allow the buyer to perform retreatment at the seller’s expense for a reduced fee to be paid by the seller and not the patient.
Promises That Must Be Kept: Warranties
Vitally important provisions of sales contracts are the representations and warranties made by each party. A welldrafted sales contract will contain an integration clause that states that the contract itself contains all enforceable provisions governing the parties and the transaction. Such a clause,
Other common restrictive covenants include covenants not to solicit or treat patients of the practice by the seller or any other dentist affiliated with the seller. with very limited exceptions, will be enforceable. It is essential for each party to make sure that all statements of fact or promises about the practice that a party wants to be enforced are included in the asset purchase agreement. The parties should assume that any oral promises or prepurchase discussions not included in the asset purchase agreement are unenforceable. Examples of the myriad important representations of the seller include: ■ All assets will be transferred without any liens or encumbrances on such assets (thus all loans on practice assets will be paid off and all liens removed). ■ The seller is not subject to any lawsuit concerning the assets being sold or their practice of dentistry.
The seller’s practice was conducted consistent with all laws, rules and regulations. ■ The practice assets being sold are operational and can be used for their expected purpose. ■ The seller complied with employment rules for their employees and the employees have no entitlement to make any claim for breach of such rules. ■ All billing for treatment has been performed consistent with insurance company rules. ■ Specific information provided by the seller to the buyer is materially true and correct. Presale noncompliance with wage and hour law or insurance company billing procedures should be disclosed during the sales process, which can make the practice more difficult to sell and could create post-sale liability for the seller. The most important representations of the buyer include their acknowledgment that they have undertaken their due diligence review of all items they desire to evaluate concerning the practice, have consulted with their advisors and are buying the practice based on such analysis and the representations made in the asset purchase agreement. Another important representation for buyers to acknowledge is that the seller is making no assurance that the buyer will be successful following the sale and there is no guarantee that the buyer will generate any specific revenue or income following the sale. It is possible that this normal representation may be altered for a period of time for sales following the COVID-19 pandemic to take into account some of the uncertainty arising from limited practice operations, and this representation may be modified to allow a different sales price based on the production generated ■
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after the sale. This will not be a preferred method, but some banks may require this type of arrangement before they will agree to loan money for the postCOVID-19 sale based on the substantial uncertainty of dental practice revenue.
Indemnification provisions are essential to allocate the responsibility for debts of the parties, damages for injuries to others or responsibility for taxes or other liabilities. These provisions usually require the seller to pay for any liability arising from their act or omission, provide a legal defense and protect the buyer from liability for the seller’s acts or omissions that occurred before or after the sale. The buyer is responsible to do the same for the seller for acts or omissions of the buyer after the sale is completed. The parties must be vigilant as to how such agreements are drafted, as the duty to indemnify and defend the other party arising out of litigation filed by a third party may not be covered by insurance maintained by the indemnifying party (i.e., the buyer or seller) unless that person is specifically named as a party to be insured under the insurance contract (most carriers do not offer such coverage). The unwary party may create personal responsibility to pay for defense or indemnity costs of another. Other documents normally required in a practice sale are a bill of sale documenting what was sold, consent of spouse demonstrating their assent to the sale of community property assets, assignment of a lease and, if applicable, employment contracts for any post-sale employments.
Prior to and following the sale, verification must be made that the buyer has all necessary insurance for professional
liability, premises liability for office contents, workers’ compensation, life insurance, disability, business interruption and health insurance. Both the buyer and seller should be obligated to maintain their professional liability insurance so that both potentially liable parties will have insurance coverage to handle any post-sale claims of malpractice by a patient who may sue both the buyer and seller. Following the purchase, there are myriad actions to be taken including notification of the dental board of the purchase, registering a fictitious name,
A dentist’s personal assets are subject to execution for unpaid debts or liabilities arising out of the operation of the noncorporate dental office. notifying vendors of the change in ownership, notifying the Drug Enforcement Agency, obtaining an anesthesia permit, obtaining radiation permits, transferring licenses for equipment purchased, obtaining a business license, obtaining state and federal tax identification numbers, ordering prescription pads, opening bank accounts and creating employee manuals, just to name a few. An experienced dental attorney or accountant will provide the buyer a checklist of post-sale steps necessary to properly set up the practice. If these actions are properly performed in the purchase of a practice, the purchasing dentist can concentrate on the other important aspects for the long-term success of the practice involving quality patient care and managing patients’ needs.
Choosing the Correct Business Entity
The owner of a dental practice has the choice to own a practice as a sole proprietor, as a partnership or as a corporation. California law prohibits dentists from owning a practice as a limited liability company or a limited liability partnership. Issues to consider concerning the correct entity include tax issues and limited liability to protect the personal assets of the owner-dentist. The tax issues involving entity ownership are beyond the scope of this article and should be discussed thoroughly with the dentist’s accountants. Owning a dental practice as a solo practitioner or with a partner provides no protection for the personal assets of the owner-dentist. A dentist’s personal assets are subject to execution for unpaid debts or liabilities arising out of the operation of the noncorporate dental office. This is particularly significant in a dental office owned as a partnership because each partner may bind the partnership and each partner is personally liable for the acts of the other partners that arise out of the operation of the partnership.14 The legal entity that allows a dentist to limit their liability in their dental practice is a dental corporation. A dental practice owned as a corporation may preclude personal liability of the dentist for the acts of other professionals, such as dentists who are co-shareholders or associates of the practice, for acts not performed by the owner that are not covered by insurance, which include fraud, employment wrongful termination or employment harassment. However, the personal assets of a dentist rendering treatment not adequately covered by insurance may be a source of payment arising from the treating dentist’s own malpractice regardless of incorporation.15 FEBRUARY 2 0 2 1
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Most dentists maintain malpractice and general/premises liability insurance on the dental practice. More and more dentists recognize the benefit of employee liability insurance to provide some limited protection related to employment acts. However, under California law, insurance cannot cover intentional acts. Therefore, if your partner or an associate commits intentional acts such as sexual harassment, improper touching or battery, these actions cannot be insured against. Moreover, the limits of typical coverage for employee liability insurance may be inadequate in the event of a large claim in excess of the insurance policy limits, leaving the risk of personal liability for the acts of others. In such cases, a corporate form of ownership would be beneficial. If two or more dentists own a practice together and do not have a contract to establish the form of ownership, by statute they will be considered a partnership, which is governed by California law.16 Partnerships allow more flexibility in fashioning the working arrangements between the dentists and may allow differential allocation of profits. Partnership limitations include no limitation in liability for acts of the other partner or employees and the ability of one partner to bind the other partner. Corporations allow limited liability protection but require compliance with corporate formalities and limit how profits are shared between the shareholders. Limited liability can be created in a partnership if a partnership of professional corporations is established, i.e., each partner is a dental corporation. Whether a corporation or partnership is created, it is prudent for owner-dentists to enter into a comprehensive written agreement to outline their ownership of assets, management, expenses, profits and 76 FEBRUARY
future potential, target the right price, then document the purchase to protect the parties and allow both the buyer and seller to transition the practice for both their benefits. Quality presale assessment and well-drafted contracts can allow the selling and purchasing dentist to avoid pitfalls in the transition process and provide a win-win transition for the dentists and their patients. n
losses and managing partner withdrawals or practice dissolutions. The terms of a partnership agreement or shareholders agreement with a stock restriction agreement need to be set out in the agreement. Whenever a dentist decides to open their own practice or hire another dentist, it is beneficial to speak with experienced dental attorneys and accountants to evaluate the appropriate form of entity for your practice. Another form of ownership that is becoming more prevalent is the ownership of a practice with the assistance of a management service organization. The nature and extent to which the management service organization assists the owner-dentist varies based on the contract between the parties. It is important for the dentist who receives assistance from a management service organization to understand that only a dentist may own a dental practice. The practice of dentistry includes the diagnosis or treatment of conditions of the teeth, gums, alveolar process, jaws and associate structures but also includes the management of a dental practice.17 Thus, the dentist owner or dentist-owned management service organization must maintain ultimate control of the clinical dental practice including the management of the dental practice. Carefully drawn contracts and maintenance of proper roles and responsibilities among the participants in a dental practice receiving the assistance of a management service organization are paramount to protect all parties to such agreements.
RE F E RE N C E S 1. Civil Code Section 2295. An agent is one who represents another, a principal in dealings with third parties. 2. Civil Code Section 2322, an agent has duties of a trustee. Witkin’s California Law vol. 3 Agency Section 97 p. 143–144. 3. California Insurance Code Section 1871 et seq.; California Penal Code Section 550. 4. California Business and Professions Code Section 16600; Edwards v. Arthur Andersen LLP (2008). 44 Cal. 4th 937. 5. Common assets to be purchased include dental equipment, supplies, goodwill of the practice, patient records, covenant not to compete, transition assistance from seller, telephone number, trade name and leasehold interest. 6. Representations normally made include status of seller, absence of defects or encumbrances on assets being sold, absence of conditions that would affect goodwill, truth of disclosed documents, absence of litigation or threatened litigation, condition of practice assets, current status of office lease, status of past billing practices and truth of all representations being made. 7. Buyer’s status, performance of due diligence, ability to review all requested documents and acknowledgment that there is no guarantee of success in future practice. 8. These agreements allocate responsibility presale and post-sale. 9. Including obtaining bank loan, lease assignment, passage of state boards, analysis of records and inspection and repair of nonworking equipment. 10. California Business and Professions Code Section 650; California Dental Association Code of Ethics Section 6A. 11. California Business and Professions Code sections 16600 and 16601 allow valid covenant noncompete following sale of goodwill of a business. 12. See Hill Medical Corporation v. Wycoff (2001) 86 Cal. App. 4th 895. 13. California Business and Professions Code Section 16601. 14. California Corporation Code 16305. 15. California Civil Code Section 2343(3). 16. California Corporation Code Section 16202(a). 17. California Business and Professions Code Section 1625.
T HE AU T HOR , Steven D. Barrabee, JD, can be reached at SBarrabee@professionals-law.com.
The dental practice purchase process requires the dentist to utilize the resources of knowledgeable professionals to identify the preferred dental practice, assess its
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Associate Agreements: Negotiating Hidden Pitfalls and Benefits Michael Kowalski, DDS, JD
abstract Some of the significant factors to consider with an associate agreement are whether the associate dentist will be classified as an independent contractor or employee, provisions to protect the trade secrets of the practice and a workable method of dispute resolution.
AUTHOR Michael Kowalski, DDS, JD, has lectured and authored numerous peer-reviewed professional journal articles and textbook chapters on risk management, professional liability and dental licensing issues. Dr. Kowalski has defended doctors for over 20 years in the areas of professional liability, administrative licensing board actions, business law and estate planning. Conflict of Interest Disclosure: None reported.
e all deal with contracts in our lives. Dentists are no different. However, the business of dentistry is changing. In particular, due to the significantly higher cost of a dental education, fewer new dental school graduates are buying existing dental practices. More dental school graduates are looking for jobs as associates in existing practices because they cannot afford to purchase an established practice. Moreover, there has been a recent fluctuation in California law concerning independent contractors. This article provides an overview of associate agreements, with the spotlight on classifying an associate as either an independent contractor or an employee. Written contracts provide structure and stability to a dental practice. Errors or poor judgment in contractual relationships can seriously harm a practice. Dentists emphasize prevention to their patients. Prevention in the form of knowledge and guidance from legal professionals allows dentists a way to avoid some of the common pitfalls of working with contracts and can make a smooth and profitable associateship.
One of the first contracts a new dental school graduate or specialist will enter into upon completion of a residency is an agreement to be an associate dentist for an owner-dentist of an established practice. The associate arrangement is a contract. Like any other contract, it can be oral or in writing. Basically, a contract is a set of mutual promises that the law will enforce. The elements of any contract include terms that were bargained for by both parties. There is a meeting of the minds where each party understands what they must give up to get what they want from the agreement, which results in an agreement where the parties have realistic expectations. Two prime issues come up with associate agreements. The first is whether the associate dentist should be treated as an employee or an independent contractor. The second has to do with protecting the practice from competition by the associate after separating from the practice. In California law, the default is generally that an associate is an at-will employee, unless altered otherwise by an agreement between the parties. At-will employment is defined in the â€ƒFEBRUARY 2 0 2 1
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California Labor Code as employment having no specific term and that it may be terminated at the will of either party without notice to the other party.1 However, under the California Unemployment Insurance Code, the definition of employment does not include professional services performed by a consultant working as an independent contractor. In fact, there is a rebuttable presumption that a dentist is an independent contractor when providing professional services.2
The California Labor Code defines an independent contractor as “any person who renders service for a specified recompense for a specified result, under the control of his principal as to the result of his work only and not as to the means by which such result is accomplished.”3 Practice owners often find it attractive to have their associate dentist classified as an independent contractor because the owner will pay less in withholding taxes, will not have to provide benefits, including a 401k profit sharing plan, will not need workers’ compensation insurance and will be insulated from liability for any negligent or intentional acts of the associate dentist. In April 2018, the holding in a California Supreme Court case, Dynamex Operations v. Superior Court (Dynamex),4 appeared to make it impossible to classify an associate dentist as an independent contractor. The court established an “ABC” test. To avoid being considered an employee, a worker must A) be free of the hirer’s control; B) do work that is “outside the usual course of the hiring entity’s business;” and C) be established in a trade similar to the work being performed. A worker must satisfy all three criteria. It is the second prong that precludes associate dentists working in a dental practice from being classified as independent 78 FEBRUARY
contractors. Moreover, in Vazquez v. Jan-Pro Franchising International Inc., the 9th Circuit, in May 2019, concluded that Dynamex applies retroactively.5 The decision confirmed that employers were exposed to liability for failing to comply with the ABC test, which employers claimed they had no reason to believe that they had to comply with because it had not previously existed under California law.
Exemption for Dentists
The California Legislature sought to codify Dynamex with California
In California law, the default is generally that an associate is an at-will employee, unless altered otherwise by an agreement between the parties. Assembly Bill 5 (AB 5). However, included in AB 5 is an express exemption for dentists (among others). The bill’s exemption for dentists provides: “Subdivision (a) and the holding in Dynamex Operations West Inc. v. Superior Court of Los Angeles (2018) 4 Cal.5th 903 (Dynamex), do not apply to the following occupations as defined in the paragraphs below, and instead, the determination of employee or independent contractor status for individuals in those occupations shall be governed by Borello. (1) A person or organization who is licensed by the Department of Insurance pursuant to Chapter 5 (commencing with Section 1621), Chapter 6 (commencing with Section 1760), or Chapter 8 (commencing with Section 1831) of Part
2 of Division 1 of the Insurance Code. (2) A physician and surgeon, dentist, podiatrist, psychologist, or veterinarian licensed by the State of California pursuant to Division 2 (commencing with Section 500) of the Business and Professions Code, performing professional or medical services provided to or by a health care entity, including an entity organized as a sole proprietorship, partnership, or professional corporation as defined in Section 13401 of the Corporations Code.” (Emphasis added.) Gov. Gavin Newsom signed AB 5 in September 2019, and it took effect Jan. 1, 2020. It should be noted that the exemption applies to dentists and not to registered dental hygienists nor to registered dental assistants. Now with the passage of AB 5, Dynamex and its ABC test are inapplicable to licensed dentists in California. Thus, what we are left with is the common law test as to whether an associate dentist can be classified as an employee or independent contractor. To establish an associate’s status as an independent contractor, it was never enough to simply label the associate an independent contractor even in a written contract.6 The most important common law factor in determining whether an employment or independent contractor relationship exists is the right of control in determining the method and means of accomplishing the desired results.7 What has been known as the control test looks at how much right the employer has to direct and control the manner and means by which the job is performed. Factors to consider include whether the owner provides instruction and supervision, how and when the work is done, materials used, who furnishes the instruments, equipment and supplies, billing, authority to hire and fire staff and who owns the patient records.
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Although the issue of determining whether an associate has employee or independent contractor status is a fact-specific determination, there is no one dispositive checklist to make the determination. For years, the IRS has used a 20-factor test ( TA BLE ) , often termed the “right-of-control” test, to determine if an employee can truly be classified as an independent contractor. Under the IRS rules, an independent contractor controls the manner and means by which contracted services, products or results are achieved. The more control a business exercises over the how, when, where and by whom the work is performed, the more likely the worker will be found to be an employee and not an independent contractor. Associate dentists are not a good fit with the IRS factors. In fact, it is estimated that as many as 80% to 90% of independent contractors in California are misclassified. Such misclassification can have serious consequences for the owner of a dental practice, as it may result in government audits by the Employment Development Department (EDD) and other agencies where penalties and back taxes might be assessed. Although a worker does not have to meet all 20 factors to qualify as an independent contractor and no single factor is determinative, the key issues in determining independent contractor status is who controls the means and manner of work. Other important factors include who provides equipment and instruments, if the worker is integrated into the employer’s business, if taxes are withheld, if benefits are paid and the degree of control of assistants. It is instructive to look at the 20 factors and see how independent contractor classification of an associate in the private dental practice setting is problematic ( TA BLE ) . For a dental practice owner who prefers to have their associate dentists
classified as independent contractors, being aware of these 20 factors is essential. The dental practice owner must attempt to structure an independent contractor agreement that is more likely to be upheld under IRS scrutiny by taking into careful consideration these 20 factors. The IRS usually classifies workers as employees whenever their status is not clearcut. Moreover, the IRS has traditionally maintained that a written independent contractor agreement between the parties is not sufficient evidence to determine independent contractor status, especially if
Under the IRS rules, an independent contractor controls the manner and means by which contracted services, products or results are achieved. facts indicate otherwise. For tax collection purposes, the IRS has a strong incentive to find that a worker is an employee. Employers, including dental practice owners, who are uncertain about how to classify a worker can request an IRS determination by filing Form SS-88, “Determination of Employee Work Status for Purposes of Federal Employment Taxes and Income Tax Withholding.” Requesting a work status determination means the owner of a business is asking the IRS to establish if the services the associate provides to the business are those of an employee or independent contractor.
Tips for Independent Contractor Status Currently, the first factor analyzed during an EDD audit is whether the associate dentist is incorporated, because
a professional corporation cannot be an employee. Therefore, owner-dentists should have their associate dentists form a professional corporation. The practice owner then enters into an independent contractor agreement with the professional corporation with the professional services being provided by the associate as an employee of their professional corporation. Even without the new Dynamex ABC test, an associate dentist often does not fit well into the IRS determination factors; in addition, there is a real concern that classifying the associate as an independent contractor could possibly be considered fee splitting, which is in violation of the California Dental Practice Act.8 The danger of running afoul of the fee splitting prohibition is that a percentage fee agreement means the owner will share fees with the independent contractor. The owner is referring patients to the independent contractor and receiving a fee.
Additionally, classifying an associate dentist as an independent contractor may not provide the protection from liability as hoped for by the practice owner. To obtain as much protection as possible for the acts of the associate dentist, the practice owner will have to, at a minimum, inform in writing all patients treated by the associate of the associate’s independent contractor status. Otherwise, the practice owner could still be held liable for the actions of the independent contractor under the theory of ostensible agency. The theory states that there is an implied or presumptive agency where the owner either intentionally or from want of ordinary care induces another to believe that a third person is the owner’s agent. Moreover, if the dentist owns two or more dental practices, classifying associates as independent contractors provides no protection from liability, even with an FEBRUARY 2 0 2 1
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Factors Used To Evaluate Right To Control and the Validity of Independent Contractor Classifications Level of instruction
If the owner directs when, where and how work is done, such control is indicative of an employment relationship.
Amount of training
If the owner requests workers to undergo company-provided training, an employment relationship is suggested.
Degree of business integration
Workers whose services are integrated into the business operations or significantly affect the success of the business are more likely to be considered employees.
Extent of personal services
Businesses that insist on a particular person to perform the task assert a degree of control whereas independent contractors are typically free to assign work to anyone.
Control of assistants
If the owner of the business hires, supervises and pays a worker’s assistants, such control suggests an employee relationship. Typically, independent contractors have the control of hiring, supervising and paying assistants.
Continuity of relationship
Although an independent contractor relationship can involve an ongoing relationship for multiple and/or sequential projects, a continuous relationship between the business and worker indicates a possible employee relationship.
Flexibility of schedule
When the owner dictates peoples’ hours or days of work, such workers are typically considered employees.
Demands for full-time work
Supports an employee relationship because it gives the business control over most of the person’s time.
Need for on-site services
Particularly if the work can be performed elsewhere, requiring it to be performed at the business premises indicates an employee relationship.
Sequence of work
An employment relationship is suggested if a business requires work be performed in a specific order.
Requirements for reports
A worker must regularly provide written or oral reports on the status of a project. Such a requirement indicates an employee relationship.
Method of payment
Hourly, weekly or monthly pay schedules are characteristic of employer-employee relationships. However, if the payments are simply a convenient way of distributing a lump-sum fee, an independent contractor relationship could be supported. Independent contractor relationships are characteristically a payment or commission upon project completion.
Payment of business or travel expenses
Independent contractors usually pay their own business expenses and set their fees high enough to cover those expenses. An employee relationship is suggested when the owner covers all business expenses.
Provision of tools and materials
Workers who perform most of their tasks with instruments provided by the owner of the business are typically considered employees.
Investment in facilities
Independent contractors typically invest in and maintain their own work facilities.
Realization of profit or loss
Receiving predetermined earnings, with little chance of realizing significant profits or losses, is typical of an employee relationship.
Work for multiple companies
Working simultaneously for several unrelated companies is more likely an independent contractor relationship.
Availability to public
Making the worker’s services available to the general public supports an independent contractor relationship.
Control over discharge
A business’s ability to terminate an independent contractor relationship is generally dependent on contract terms. On the other hand, if the business has the unilateral right to discharge a worker, it suggests an employment relationship (California at-will employment).
Right of termination
Most employees can terminate their own employment for a business at any time (California at-will employment). Independent contractors may not be able to terminate services without liability depending on the terms of their contract.
(Credit: Internal Revenue Service.)
indemnification provision9 in the associate agreement, as the owner has strict statutory liability for all dental services rendered in each office owned pursuant to the California Dental Practice Act.10 In fact, when a dentist owns more than one practice, the dentist must apply to the Dental Board of California for an Additional Office Permit and declare, under the penalty of perjury, in the application that the dentist 80 FEBRUARY
is accepting legal responsibility and liability for dental services rendered in each office maintained by the dentist.11 The public policy behind this statutory strict liability is to ensure the owner-dentist maintains reasonably close and direct supervision of professionals, employees and operations. Classifying an associate dentist as an independent contractor has some potential pitfalls. It may be more prudent to classify the
associate as an employee to avoid possible violations and penalties.
Another common concern for practice owners is protecting their practices from competition when an associate separates and moves on to open their own practice or work for another office. Often, a covenant not to compete is incorporated in the
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associate agreement. The practice owner may believe that as long as the covenant is reasonable as to length of time and geographic distance of the prohibitions, that it is enforceable. Unfortunately, California law is unambiguously clear that a covenant not to compete is illegal and unenforceable. California Business and Professions Code section 16600 states, “Except as provided in this chapter, every contract by which anyone is restrained from engaging in a lawful profession, trade or business of any kind is to that extent void.” The policy consideration behind the statute is the promotion of open competition, which has been the rule in California since at least 1872.12 The law does provide an exception when the goodwill of the business, which has been defined as the expectation of continued public patronage, is sold.13 Therefore, a covenant not to compete that is reasonable as to time duration (three to five years) and geographic distance (depending on whether the practice is in an urban or rural community) in a dental practice purchase contract is enforceable because the purchase price includes an allocation for the intangible but valuable property of the goodwill. In the associate agreement where there is no compensation for goodwill, any restrictive covenant is therefore void. The alternative to a nonenforceable covenant not to compete, to give the practice owner some protection, is incorporating trade secret provisions into the associate agreement. A trade secret is defined under the Uniform Trade Secret Act14 as “information, including a formula, pattern, compilation, program, device, method, technique or process that … derives independent economic value actual or potential, from not being generally known to the public or other persons who can obtain economic value from its disclosure or use.”15 A trade secret
does not have to be copyrighted, patented or even novel to be kept as trade secrets by the user. As long as they are kept secret by the user by limiting access and right thereto and are obtained improperly, then a tort, for which there is a legal remedy, has been committed. Trade secret law, however, does not protect against discovery by fair and honest means such as independent invention, accidental disclosure or reverse engineering (starting with the known product and working backward to figure out the process that aided in its development or manufacture).16
Another common concern for practice owners is protecting their practices from competition when an associate separates and moves on.
Protected information, such as patient records, computer data, patient ledgers, promotional material, patient lists, appointment calendars and holiday/ Christmas or promotional lists, are protected as trade secrets of the practice. A former associate, however, would still be able to make a general announcement of their new practice without it being a violation of trade secret law. Also, patients seeking out the former associate cannot be prohibited from doing so.
Alternative Dispute Resolution
In the vast majority of contracts between owner and associate dentists, the result is a smooth working relationship or transition. In the associate agreements we have analyzed in this article, a new graduate, for example, obtains their first job practicing
dentistry while an established practitioner grows their practice. The initial professional relationship may lead to a practice buy-in and/or partnership. However, dentists, like all people, may have disputes with each other. While we may hope people can work out their own differences, sometimes they simply cannot. Then they must either turn to the court system or some form of alternative dispute resolution (ADR) to assist them in reaching a resolution. ADR became popular 30 or so years ago as a way to unclog a jammed court system where it was not uncommon to take five years for a case to go to trial. ADR has proved to be an effective way to resolve disputes and, thus, provisions for ADR should be incorporated in associate agreements. However, ADR is not without its drawbacks and so ADR clauses must be carefully scrutinized. The two forms of ADR that are typically placed in contracts between owner and associate dentists are mediation and binding arbitration. The first form of ADR in mediation is a private informal dispute resolution process. A neutral third party, the mediator, helps the parties reach a mutually acceptable agreement. No formal evidence is presented at the mediation, the mediator does not hear sworn testimony, does not make evidentiary rulings and has no power to impose a decision upon the parties. The process is confidential and is not admissible as evidence in a later proceeding, such as a civil action or arbitration.17 Mediation is particularly well suited when the parties have an ongoing relationship such as an associateship or partnership. For example, many landlords are becoming more sophisticated and incorporating mediation provisions in their dental office leases. In contrast, when a dispute is venued in civil court or arbitration, it results in a winner and a loser versus a compromise. It is often difficult to continue a civil relationship FEBRUARY 2 0 2 1
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after going through such an adversarial process. The aftermath could result in the dissolution of an otherwise profitable associateship or partnership. Usually the costs of mediation, which are mostly the mediator’s fees, are equally split between the parties. If mediation fails to resolve the dispute, a more formal means of dispute resolution will be required. The second form of ADR, binding arbitration, has been offered as one option to the civil court system. Some of the advantages of binding arbitration include lower court expenses, reduced expense and time of the parties, speedy settlements that lessen the disruption of the parties’ lives, enforceability, privacy, choice of applicable norms and accessible forums for people with disputes.18 A binding arbitration clause inserted in a contract provides for compulsory binding arbitration to resolve disputes as to rights or liabilities under the contract. The skill of the attorney drafting the arbitration provisions is a critical factor in whether the arbitration will be an effective and efficient dispute resolution method or an expensive and time-consuming quagmire. The arbitration clause will state what rules of arbitration will apply, such as the rules of the American Arbitration Association (AAA) or the California Arbitration Act.19 Provisions in the arbitration clause for selection of an arbitrator and the number of arbitrators are key factors in how smoothly and how cost-effective the arbitration will be for the parties. The arbitrator is typically a retired judge or a retired or practicing attorney. Unlike the judge in civil court, whose salary is paid by the county, the arbitrator’s fees are paid by the parties and are typically $400 to $500 per hour or more. Some arbitration clauses call for a panel of three arbitrators to hear the matter, costing at least $1,200 to $1,500 per hour, which would make the arbitrators’ fees alone cost prohibitive for most disputes. Because the 82 FEBRUARY
parties contemplating arbitration are already in a dispute, it would not be surprising that they will not be able to agree upon an arbitrator to hear their dispute. Thus, a well-drafted arbitration clause will have a provision for such a contingency. Often, the default provision will be to defer to the chief administrator of an arbitration service such as AAA or JAMS-ENDISPUTE to select the arbitrator. If no provision is made for selection of the arbitrator, the parties will have to engage in the costly endeavor of filing a petition with the superior court and have a judge appoint the arbitrator.
Some of the advantages of binding arbitration include lower court expenses, reduced expense and time of the parties and speedy settlements. Another factor that will greatly influence the costs and, perhaps, the outcome of arbitration is whether or not there is a provision in the arbitration clause to allow for discovery (fact gathering) by the parties to do such things as take depositions and subpoena records. Discovery will significantly increase the costs of arbitration. However, the cost must be balanced against the fact that without adequate discovery, a party may not have sufficient evidence to put on an effective case. One clear advantage of arbitration is the expediency of the arbitration process, and the resulting decrease in stress, that might alone make arbitration worthwhile for busy dentists. A jury trial could easily last one or two weeks whereas an arbitration might be completed in one or two days. Again, expediency of the
process depends on the skill of the attorney who drafted the arbitration clause. Disadvantages include the common complaint that arbitrators tend to find a compromise, a sort of “splitting the baby,” just for settlement sake rather than producing a decision on the merits. Following arbitration, there are exceedingly limited grounds for appealing the arbitrator’s decision. Finally, the parties waive their rights to a jury trial by engaging in binding arbitration.
Some of the significant factors to consider with an associate agreement are whether the associate dentist will be classified as an independent contractor or employee, provisions to protect the trade secrets of the practice and a workable method of dispute resolution. Personal relationships are governed by a complex, and typically unwritten, set of social rules and norms. Some behaviors are encouraged, others required and some forbidden. The same is true in dental business relationships. Usually the difference, whether the business relationship is short term or long term, is that it should be governed by a written contract. A written contract provides structure and efficiency to the business relationship. It removes the risk of differences in recollection. The initial cost in time and effort in drafting the associate dentist agreement is outweighed by the reduction of negotiations and disputes during the term of the agreement. n RE F E RE N C E S 1. Labor Code § 2922. 2. Unemp Ins Code § 656, which states in pertinent part: “ … there shall be a rebuttable presumption that services provided by an individual engaged in work requiring specialized knowledge and skills attained through completion of recognized courses of instruction or experience are rendered as an independent contractor. These services shall be limited to those provided by attorneys, physicians, dentists, engineers, architects, accountants, chiropractors … .” 3. Labor Code § 3353.
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4. Dynamex Operations v. Superior Court, (2018) 4 Cal.5th 903. 5. Vazquez v. Jan-Pro Franchising International Inc., No. 17-16096 (9th Cir. 2019). 6. Kowalski v. Shell Oil Co. (1979) 23 Cal.3d 168,176. 7. Empire Star Mines Co. v. California Employment Comm. (1949) 28 Cal. 2d 33; S. G. Borello & Sons Inc. v. Department of Industrial Relations, (1989) 48 Cal.3d 341. 8. Business & Professions Code § 650 makes it unlawful for one licensed in the healing arts to receive or accept “any rebate, refund, commission, preference, patronage dividend, discount, or other consideration, whether in the form of money or otherwise,” as compensation or inducement for the referral of patients. The statute was intended to prevent “the referring person [from being tempted] to suggest or prescribe extra, or more expensive services by the person to whom the patient is referred because the referring person’s income is a function of the business he generates by referral.” (53 Ops.Cal.Atty.Gen. 117, 118 (1970.) The evil to be proscribed by section 650 “is not just the payment for the referral, but also any relationship where the referral may be induced by considerations other than
the best interests of the patient. ” (63 Ops.Cal.Atty.Gen. 89, 92 (1980); fn. omitted.) “Certainly a sick patient deserves to be free of any reasonable suspicion that his doctor’s judgment is influenced by a profit motive.” (Magan Medical Clinic v. Cal. State Bd. of Medical Examiners (1967) 249 Cal.App.2d 124, 132, 57 Cal.Rptr. 256.) 9. An indemnity agreement is a contract that “holds a business or company harmless” for any burden, loss or damage. An indemnity agreement also ensures proper compensation is available for such loss or damage. 10. Business & Professions Code § 1658.1, which states: Nothing in this chapter shall be construed to prohibit a licensed dentist from maintaining more than one dental office in this state if all of the following conditions are met: (a) In addition to any existing legal responsibility or liability, a dentist maintaining more than one office shall assume legal responsibility and liability for the dental services rendered in each of the offices maintained by the dentist. (b) A dentist maintaining more than one office shall ensure that each office is in compliance with the supervision requirements of this chapter. (c) A dentist maintaining more than one office shall post, in an area which is
likely to be seen by all patients who use the facility, a sign with the dentist’s name, mailing address, telephone number, and dental license number. 11. Title 16 CCR 1045-1048; 1057. 12. Edwards v. Arthur Andersen LLP (2008) 44 Cal. 4th 937, 945. 13. Business & Professions Code § 16601; Hill Medical Corporation v. Russell R. Wycoff (2001) 86 Cal. App. 4th 895, 902. 14. Civil Code §§ 3426 et seq. Uniform Trade Secrets Act. 15. Civil Code § 3426.1(d)(1). 16. Witkin 13 Equity, § 81. 17. Evidence Code §§ 1115 et seq. 18. Paths to Justice: Major Public Policy Issues of Dispute Resolution, National Institute for Dispute Resolution, Appendix I Table 4. 19. Civil Procedure Code §§ 1285 et seq. T HE AU T HOR , Michael Kowalski, DDS, JD, can be reached at MKowalski@professionals-law.com.
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TOGETHER WE ARE LIMITLESS
A strong future takes all of us. Together, CDA members are navigating unprecedented challenges in dentistry. Be a part of the community that fiercely advocates for you and your profession. And benefit from remarkable protection, expertise, education and resources to be ready for what’s next. Say that you’re with us by renewing today at cda.org/renew.
Desiree Liu, DDS Member since 2012
IT’S A VERB.
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Discrimination Claims: Avoiding ‘Drive-By’ and ‘Click-By’ Lawsuits Mark Gibson, LLB
abstract As well-intentioned as the Americans with Disabilities Act was, it has been and will continue to be abused for financial gain by predatory plaintiffs and attorneys.
AUTHOR Mark Gibson, LLB, a native of the U.K., had a private practice in England before moving to California in 2000. His practice is focused almost exclusively on the area of professional liability, defending health care providers in state and federal courts in actions for malpractice, civil rights actions under the Americans with Disabilities Act and actions before the state licensing boards. Conflict of Interest Disclosure: None reported.
he Americans with Disabilities Act1 (AwDA) became law in 1990. The stated aim of the AwDA was certainly a noble one: to address discrimination against disabled persons to ensure equal rights for disabled persons and opportunities to participate in public life. It addressed discrimination in several contexts including employment and participation in state and local government programs and services. Title III2 of the act sought to improve access to goods and services, including those offered at dental offices. At the time the AwDA was signed into law by President George H. W. Bush, critics voiced concern that it would lead to an “explosion” of litigation. President Bush dismissed that concern, insisting that it would instead provide clear guidance to the business community. Over the last 30 years, the AwDA has to a large degree been successful in achieving its goal and has undoubtedly improved the lives of persons with disabilities by increasing access. But,
unfortunately, those critics who anticipated an “explosion” of litigation have been proven correct, nowhere more so than in California, where we now have dentists and other small-business owners routinely targeted by “professional” AwDA plaintiffs filing lawsuits based upon manufactured grounds. This article explains what Title III of the AwDA is and how it applies to the dental office; describes how the AwDA has been abused leading to the phenomenon of manufactured “driveby” lawsuits by professional plaintiffs; identifies the tactics used by professional plaintiffs and the reasons why those tactics are so effective; explores some of the myths and misconceptions surrounding AwDA lawsuits; and lists some steps that can be taken to reduce the risk of being targeted by these professional plaintiffs.
Title III of the AwDA
Title III of the AwDA applies to any business that provides goods or services to the public, such as stores, restaurants, FEBRUARY 2 0 2 1
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theaters, shopping malls and doctors’ and dentists’ offices. A business covered by Title III of the AwDA is required to take steps to comply in several ways. First, it must modify its policies and procedures when necessary to provide access to customers with disabilities.3 An example of modifying a policy or procedure would be allowing a disabled patient to be accompanied by a service animal notwithstanding a “no pets” policy. Second, the business must take steps to communicate effectively with disabled customers.4 The method of providing effective communication will depend upon the nature of the communication as well as the nature of the disability and will vary with the complexity of the information exchanged. For instance, effective communication with a deaf patient might require only the provision of written materials when conveying a limited amount of basic information. But if one were engaging in an informed consent discussion with that same patient prior to oral surgery, then a sign language interpreter may have to be provided in order to communicate effectively. Last, Title III requires that the business remove architectural barriers in existing buildings5 and that newly built or altered facilities be constructed so as to be accessible to individuals with disabilities.6 Architectural barriers are those parts of the built environment in and around the business that limit or prevent access to the goods or services offered. Examples of exterior barriers commonly seen include parking stalls with no access aisle to allow deployment of a van’s wheelchair lift or the lack of ramping to provide an accessible route otherwise blocked by one or two steps. Common examples of interior barriers include doorways that are too narrow for 86 FEBRUARY
a wheelchair to pass through (minimum 32 inches required) or restrooms that lack adequate wheelchair turning space or grab bars and accessible dispensers. The existence of one or more of these barriers to access can give rise to an AwDA lawsuit.
The Explosion of Title III Litigation in California Title III of the AwDA has spawned a cottage industry, with
Title III requires that the business remove architectural barriers in existing buildings and that newly built facilities be constructed to be accessible.
increasingly large numbers of lawsuits filed each year ( FIGURE 1) .7 This has been particularly true in California where the legal landscape has allowed and perhaps even encouraged a volume of lawsuits not seen elsewhere. Indeed, approximately 40% of all AwDA cases nationwide are filed in California ( FIGURE 2 ) .8 Of those, a majority were filed by just a handful of law firms. The business model often employed by these attorneys is to target the smallbusiness owner, against whom the cost of litigation can be more easily leveraged to coerce an early settlement, and then to quickly move on to the next case. The ease with which an AwDA lawsuit can be filed (there is no screening process) and then leveraged
to force a settlement has given rise to a phenomenon referred to as a “drive-by” lawsuit where the plaintiff does not even enter the business to attempt to make a purchase of goods or services, but merely drives by, identifies an alleged exterior violation (such as the absence of an access aisle or ramp) and then sues the business without giving prior notice.9 This low-cost, highly profitable, fast-turnover model used by plaintiffs’ attorneys has been made possible by virtue of the following facts.
AwDA Lawsuits Are Lucrative and Low Risk
Perhaps the two most important factors behind the explosion of Title III lawsuits are that they are extremely lucrative for plaintiffs’ attorneys and very low risk. When the legislature enacted the AwDA, it provided for enforcement by the Department of Justice (DOJ). But, realizing that limited DOJ resources would be inadequate to enable the type of enforcement necessary for widespread change, it also allowed private enforcement by any individual impacted by a lack of access. Understanding that attorneys would not litigate such cases unless there was financial incentive to do so, the legislature also provided that the prevailing party would recover its legal fees. The result is a situation in which many AwDA lawsuits are used not to improve access for the disabled, but purely as a way of generating huge fees. Indeed, in the author’s experience, many cases that resolve do so by way of a monetary settlement only and do not involve architectural changes. One would have hoped that the same fee recovery provision would have also discouraged the filing of frivolous lawsuits. After all, no reasonable plaintiff would
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expose themselves to the risk of having to pay the defendant’s legal fees by filing a lawsuit the plaintiff was likely to lose. The practical reality, however, is that even after filing a seemingly frivolous lawsuit, the plaintiff assumes almost no risk of being ordered to pay the defendant’s fees. While defendants do of course prevail, they will not be awarded their attorneys’ fees unless they can prove that the plaintiff’s lawsuit was filed purely to harass or embarrass them,10 an almost impossible standard to meet. This lack of consistency in how the fee recovery rule is applied gives plaintiffs the upper hand in any Title III case because they have nothing to lose and everything to gain, while defendants have nothing to gain and everything to lose.
allowed or that an accessible parking space lacked the requisite signage. With many businesses likely having at least one minor technical access violation, it can therefore be relatively easy for professional plaintiffs to find businesses to sue.
The AwDA Use of Nebulous Criteria Has Been Unhelpful to Businesses
Compounding the difficulty is the AwDA’s use of nebulous terms to describe
A minor violation of any one of the thousands of requirements can give rise to liability, no matter how seemingly insignificant.
of the business as well as of any parent corporation or entity. In addition, “safety requirements that are necessary for safe operation” and other unspecified impacts upon operations should be considered.17 Naturally, the larger the business, the more likely such construction would be considered “readily achievable,” but in the absence of any bright-line guidance, there will always be potential for differing interpretations. This means that plaintiffs’ attorneys can and will argue that virtually all barrier removal is readily achievable and there is always potential for a jury to accept that argument.
Liability Under the AwDA Is Strict
Not only can liability under Title III be shown by identifying any one of Absolute Compliance With the AwDA thousands of construction variances, it also does not require the plaintiff to Regulations Is Difficult Another issue for the business owner is prove any level of culpability on the part that maintaining full compliance with the of the business. Proving liability can be AwDA can be quite challenging. While the based upon a single, very minor technical AwDA promised that it would make it easy violation of the regulations, such as an for businesses to comply by providing clear a business owner’s obligations. For instance, otherwise accessible parking stall being a guidance, that promise has not been fulfilled. the AwDA dictates that a business owner few inches too narrow, an incorrect style The problem has not been the lack of access must do what is “readily achievable” in of door hardware or a restroom mirror regulations, but more so the fact that the terms of removing barriers to access, a placed at the wrong height. There is no regulations have become overwhelming in phrase which means “easily accomplishable requirement that a plaintiff must show their expanse and level of detail. Indeed, without much difficulty or expense.”16 But that a defendant intended to discriminate the current regulations are contained in a difficulty and expense are relative and or even that the defendant was aware 279-page manual11 containing thousands of highly subjective terms. They can be (and of the existence of a barrier to access. requirements spanning from the appropriate are) interpreted by different people (as well Liability is strict, and being a good person, thickness of carpeting,12 the maximum as by jurors) to mean different things. If providing exceptional care for patients force required to open a door,13 the height making a restroom accessible would involve and acting in good faith is never a defense. of a restroom mirror,14 the dimensions and knocking down a wall and moving fixtures location of restroom grab bars15 and so on. at a cost of $7,500, is it “readily achievable?” Plaintiffs in California Are Entitled A minor violation of any one of Certainly, the nature and cost of the work to Damages Even When No Injury the thousands of requirements can would suggest otherwise. But those are only Is Alleged give rise to liability, no matter how two of several factors to be considered in While the federal AwDA law does not seemingly insignificant. For instance, making the determination. Other factors provide for a plaintiff to recover damages, liability might be established by showing include the “overall financial resources,” related California law does.18 In fact, a that a restroom mirror or paper towel “number of persons employed” by and successful plaintiff in California will be dispenser was placed slightly higher than “the effect on expenses and resources” awarded damages whether or not injury FEBRUARY 2 0 2 1
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is alleged and regardless of whether the plaintiff was prevented from accessing the business. To recover damages, merely alleging “difficulty, discomfort or embarrassment” is sufficient.19 While some states have enacted similar legislation, none are as generous as California’s laws, which provide for a minimum award of $4,000 per visit.20 Needless to say, this has encouraged the filing of AwDA lawsuits by those persons who may see the law as a quick and easy way to make money. Indeed, it has contributed to the rise of the “professional” plaintiff in California who, with a sufficient volume of lawsuits, can easily generate a six-figure annual income. Some of the more well-known professional plaintiffs have filed thousands of AwDA lawsuits over the years.21
No Prelawsuit Notice Is Required
Many business owners would argue that if they were aware of a potential AwDA violation, they would gladly fix it, not only to avoid being sued, but also to improve customer service. It is unfortunate then that the law does not require plaintiffs to warn business owners or provide them with an opportunity to correct alleged violations before filing a lawsuit. Nor is there much incentive for plaintiffs’ attorneys to provide a notice of intention to sue because allowing the business owner to fix the barrier would deprive them of the chance to generate those huge fees.
Business Owners Often Settle Lawsuits as a Matter of Economic Expediency
While plaintiffs and their attorneys are incentivized to file AwDA lawsuits, defendants are usually motivated to settle them as soon as possible. That is because unless an early dismissal can be secured (which is very rare), it will usually require going to trial to secure a favorable result, 88 FEBRUARY
63% increase over 2013
8% increase over 2014
38% increase over 2015
16% increase over 2016
33% increase over 2017
9% increase over 2018
FIGURE 1. Total number of ADA Title III federal lawsuits filed each year Jan. 1, 2013, to Dec. 31, 2020. (Graph provided by jdsupra.com.)
which can cost a minimum of $50,000 in legal defense fees, expert witness fees and court costs. As discussed, the defendant has no realistic prospect of recovering those costs from the plaintiff. Therefore, even when the defendant prevails, it will almost certainly be a pyrrhic victory. With nothing to be gained from standing on principle and going to trial, the financial realities of AwDA litigation often will dictate that even a nonmeritorious case be settled at an early juncture in order to minimize defense costs. Of course, if the plaintiff’s case has merit, then the defendant also assumes the risk of losing at trial, in which event the defendant will pay the prevailing plaintiff’s fees and costs — which will run into the tens of thousands of dollars.
Misconceptions Surrounding AwDA Lawsuits
Despite the ever-increasing threat of AwDA lawsuits as well as the uneven playing field heavily favoring plaintiffs, it is still common for business owners to feel that they have no potential liability or are somehow insulated from being sued. Some of the commonly held, but incorrect, beliefs include the following examples.
As a Tenant, Not an Owner, I Have No Responsibility for Barriers to Access
The AwDA is a civil rights law, not a building code law. It expressly applies to the owners, the tenants and anyone operating the business,22 making all equally responsible for any barriers to access. It is also very important to note that many leases include provisions shifting all financial responsibility for AwDA liability to the tenant. Therefore, the reality is that the tenant often faces greater exposure to AwDA liability than does the owner.
My Building Is Old, Therefore It Is “Grandfathered” Into the Pre-AwDA Law
While “grandfather” provisions are often found in local building codes, they are not included in the AwDA and do not provide a defense to an AwDA lawsuit. All dental offices are subject to the requirements of the AwDA regardless of when those offices were constructed. The myth of an AwDA grandfather provision often arises because the nature and extent of obligations under the AwDA can vary according to the date of construction, and it is true that older buildings do not necessarily
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4,000 3,500 3,000 2,635 2,500
2,338 1,941 1,885
2,000 1,500 1,000
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Te xa s
G eo rg ia
Flo rid a
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Ca lif or ni a
80 79 Al ab am a
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FIGURE 2 . Top 10 states for ADA Title III federal lawsuits, 2018 compared to 2019. (Graph provided by jdsupra.com.)
have to provide the same level of access that a new building does. However, buildings of all ages are subject to the ongoing AwDA obligation to remove barriers to access if doing so is readily achievable.23 This means that relatively easy and inexpensive fixes, such as creating accessible parking spaces, ramping one or two steps, widening doorways, installing restroom grab bars and repositioning restroom dispensers are required regardless of the age of the dental office.24 Moreover, regardless of the date of construction, if alterations25 have taken place, then the area altered must be made accessible. If the alteration was to an area of primary function, such as the reception area or exam room, then not only the area renovated but the path of travel to it and any sanitary facility supporting it must also be made accessible.26
When My Office Was Built or Altered Recently, City Permits Were Issued Which Guarantee That It Complies With the AwDA Building officials provide approval only for local and state requirements — not federal requirements such as the
AwDA.27 They are not authorized nor responsible for enforcement of federal access requirements.28 Therefore, a building permit does not guarantee compliance with the AwDA.
I Don’t Need To Fix the Building Because My Staff and I Always Help Our Disabled Patients Get Around Any Barriers to Access
Assisting a patient (e.g., by carrying or lifting) rather than removing a barrier to access does not comply with the AwDA or state law. Moreover, doing so can expose the dentist to other claims, such as a worker’s compensation claim if an employee is injured while providing physical assistance to a patient or to a personal injury claim if the patient is injured while being helped.
The New AwDA Frontier: “Click-By” Lawsuits
While thousands of AwDA lawsuits regarding physical barriers to access have been filed every year for many years now, a new wave of AwDA litigation is beginning to take off. This new frontier relates to e-commerce, with the same tried-and-true tactics being used to target
commercial (including dental) websites for not being fully accessible to those with hearing, vision or learning impairments. While the AwDA does not mention website accessibility, recent court decisions have made it clear that the AwDA requirement for equal access also applies to websites, provided there is a connection between the website and the brick-andmortar business.29 Typical allegations are that video content is not closedcaptioned for the hearing impaired or that text content is not compatible with a screen reader for the visually impaired. As with physical barriers to access, website access violations are quite easy to find. Many websites are not fully compliant due to both a lack of awareness of the need to be compliant and a lack of guidance on the ways in which compliance is met. While the DOJ has issued regulations for physical access30 (albeit complex regulations), it has so far refused to issue similar regulations to provide guidance on website accessibility. Instead, the courts generally look to a set of nongovernmental website accessibility guidelines as the standard.31 Those guidelines are quite stringent, and this has made it easier for plaintiffs to argue noncompliance. The number of websites that can be visited on a single day (hundreds — all from the comfort of one’s home) compared to the rather more time-consuming efforts required to visit commercial properties has also contributed to the rise in the number of website-access lawsuits filed. COVID-19 has also accelerated this rise. Professional plaintiffs are having to switch targets due to travel restrictions and the temporary closures of many businesses preventing or limiting their ability to claim a denial of physical access. FEBRUARY 2 0 2 1
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As a result of these factors, it is anticipated that the frequency of website lawsuits may soon far outpace that of physical access lawsuits.
Strategies for Minimizing Exposure Consult With Knowledgeable Attorney and/or Expert
It is advisable to seek advice from an attorney who has experience in advising on AwDA obligations and minimizing potential exposure to AwDA lawsuits. This can be an extremely difficult subject to navigate, so choosing an attorney with the requisite knowledge and experience is critical. An experienced attorney will also, when necessary, be able to help with retaining appropriate consultants. This will be either a certified access specialist (CASp) or architect to address physical access and/or a website designer to address e-commerce compliance. These experts can assist with determining the extent to which removal of physical or online barriers to access are required and formulate a plan for remediating any such barriers.
Prioritize Remediation of “Low-Hanging Fruit”
In determining how to prioritize removal of barriers, it is worth noting that the low-cost, high-turnover, high-profit business model of the unscrupulous plaintiff involves targeting the most easily identified barriers to access. It is for this reason that lack of properly configured and signed accessible parking is the most common allegation seen in AwDA lawsuits. If an accessible space is a few inches too narrow or if it lacks the appropriate signage or adjacent access aisle, it represents an invitation for a drive-by plaintiff to sue. On the other hand, if the drive-by plaintiff cannot readily identify an obvious target, they will typically move on. Therefore, 90 FEBRUARY
the low-hanging fruit of nonaccessible parking should be addressed first. Next, give priority to providing access to the building from the parking lot or sidewalk. This will be accomplished with curb cuts, an entrance ramp and widening the entrance if necessary. Once inside, adequate space for a wheelchair to maneuver, minimum doorway width (32 inches) and an accessible (lowered) portion of the reception counter are all areas that are commonly litigated and which are usually deemed “readily achievable” to fix.
Give priority to providing access to the building from the parking lot or sidewalk.
Restroom accessibility is another issue that is very frequently the subject of a lawsuit. To the extent that accessibility can be improved with grab bars and repositioning of mirrors and dispensers, this should be done immediately. If the restroom doorway is less than 32-inches wide, it should be widened if possible. Other renovations involving significant construction or expense might not be required, and as discussed, this will be a relative question. However, the following examples of barrier removal illustrate the type of step that will usually be deemed “readily achievable” and therefore required: installing ramps; rearranging tables, chairs, display racks and other furniture; widening doors or installing offset hinges to widen doorways; installing accessible door hardware; installing grab bars in
toilet stalls; rearranging toilet partitions to increase maneuvering space; insulating lavatory pipes under sinks to prevent burns; installing a raised toilet seat; installing a fulllength bathroom mirror; repositioning the paper towel dispenser in a bathroom; and removing high-pile, low-density carpeting.32 As for website compliance, generally speaking, the more content that appears on the website, the more likely it will be in violation. Again, there will be certain low-hanging fruit on a website that can be fixed relatively easily and inexpensively and, while doing so will not eliminate all risk of a lawsuit, it will greatly reduce exposure to the click-by lawsuit. In this context, that means taking steps such as providing alternative text so that a text description is included for any images, providing closed captioning on video and ensuring that the website is easily navigable and fully usable with only a keyboard. This will typically involve editing the code and will require installation of software or employing a website developer who is familiar with the Web Content Accessibility Guidelines.
In addition to the legal reasons to remediate barriers to access, consideration should also be given to the business reasons for doing so, including the following.
The Cost of Compliance vs. the Cost of Being Sued
It is important to note that regardless of whether the AwDA has been abused, it is the law, and the best strategy to avoid a lawsuit is to be compliant. While compliance can be expensive, many steps can be taken to improve access, many of which are far less costly than the legal fees that will be incurred in defending a lawsuit, even one without merit. One should also consider the loss of revenue that can result in a dental
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practice from being sued. Being involved in litigation can be time-consuming and distracting and much of what is required from the dentist in dealing with litigation cannot be delegated. There will be the inevitable voluminous discovery requests from the plaintiff’s attorney, the day-long deposition, the day spent in a court-ordered mediation or possibly an entire week out of the office spent sitting in a courtroom during the trial.
Can the Dental Office Afford Not To Comply With the AwDA?
Compliance with the AwDA just makes good business sense. There are 56.7 million people with disabilities in the U.S. (almost 20% of the population), which is “a significant market of consumers, representing more than $200 billion in discretionary spending.”33 No business can afford to exclude 20% of its potential customers. Moreover, the typical dental office will already have a similar proportion of disabled patients. Improving their experience will have a positive impact on the relationships with those patients and will likely attract other potential disabled patients.
The Availability of Tax Break
To assist small businesses to comply with the AwDA, the Internal Revenue Service (IRS) code includes a disabledaccess credit of up to $5,125 for businesses with 30 or fewer full-time employees or with total revenues of $1 million or less in the previous tax year.34 Eligible expenses may include the cost of undertaking barrier removal and alterations to improve accessibility, providing sign language interpreters or making material available in accessible formats such as Braille, audiotape or large print.35 In addition, the IRS code provides a tax deduction of up to $15,000 per year for businesses of all sizes for costs incurred
in removing architectural barriers in existing facilities or alterations.36
Insurance Coverage Issues
Last, an effort should be made to determine whether insurance is available for a potential AwDA claim. The business owner should check with their liability insurer(s) to see if coverage exists and, if so, the limits of coverage. While many insurance companies expressly exclude coverage for AwDA claims, some CDA members, for instance those insured with TDIC, may have coverage. The type of available coverage may vary. It might extend only to coverage for legal defense costs. It might also include coverage for the legal fees recovered by the plaintiff and/or to the damages awarded to the plaintiff. In no event, however, will it extend to the cost of remedial construction to the business or its website. If the business is sued, the lawsuit must be reported to any liability insurers immediately. Any significant delay in reporting might be in breach of the policy and can result in denial of coverage.
While the AwDA is well-intentioned, it has been and will continue to be abused for financial gain by predatory plaintiffs and attorneys. With typical settlements of AwDA lawsuits ranging from $10,000 to $50,000, it would be prudent to assess one’s risk and take appropriate steps to minimize exposure. Consult with a knowledgeable attorney and an access consultant to help identify the steps that need to be taken to improve access and how best to prioritize those steps, thereby minimizing the risk of being the victim of a drive-by or click-by lawsuit. n RE FE RE N C E S 1. 42 U.S. Code sections 12101, et seq. 2. 42 U.S. Code sections 12181-12189. 3. 42 U.S. Code section 12182(b)(2)(ii).
4. 42 U.S. Code section 12182(b)(2)(iii). 5. 42 U.S. Code section 12182(b)(2)(iv). 6. 42 U.S. Code section 12183(a)(1), and (a)(2). 7. Graph provided by jdsupra.com. 8. Graph provided by jdsupra.com. 9. It has been speculated that some professional plaintiffs are even dispensing with the “drive-by” part of this routine by identifying alleged violations using technology such as Google Earth without even leaving home. 10. See, e.g., Mitchell v. City of Moore, Okla., 218 F.3d 1190, 1203 (10th Cir. 2000). 11. 2010 ADA Standards for Accessible Design, published by the Department of Justice. 12. ADA Access Regulation 4.5.3. 13. ADA Access Regulation 4.13.11. 14. ADA Access Regulation 4.19.6. 15. ADA Access Regulation 4.26.2. 16. 28 CFR section 36.304(a). 17. 28 CFR section 36.104. 18. Unruh Civil Rights Act (California Civil Code sections 51, et seq.) and California Disabled Persons Act (California Civil Code sections 54, et seq.). 19. California Civil Code section 55.56(c). 20. California Civil Code section 52(a). 21. For instance, as of June 2020, well-known Carmichael, Calif., based plaintiff Scott Johnson had filed 3,809 ADA cases in the Northern and Eastern California U.S. District Courts. 22. 42 U.S. Code section 12182(a). 23. 28 CFR section 36.304(a). 24. 28 CFR section 36.304(b). 25. “Alterations” include remodeling, renovation, rehabilitation, reconstruction, restoration, resurfacing of circulation paths or vehicular ways and changes or rearrangement of structural parts, elements or walls. Normal maintenance, reroofing, painting or wallpapering or changes to mechanical and electrical systems are not considered alterations unless they affect a facility’s usability. For example, a project limited to an HVAC system that includes the addition of thermostats would affect a facility’s usability because it involves elements (operable parts) covered by the standards. (United States Access Board Guide to the AwDA Standards, section 202.3.). 26. 42 U.S. Code section 12183(a)(2). 27. California Health and Safety Code section 19958. 28. Department of Justice Civil Rights Division Information and Technical Assistance on the Americans with Disabilities Act. 29. See, e.g., Thurston v. Midvale Corp. (2019) 39 Cal. App.5th 634. 30. 2010 ADA Standards for Accessible Design, published by the Department of Justice. 31. Web Content Accessibility Guidelines. www.w3.org/TR/ WCAG20. 32. 28 CFR section 36.304(b). 33. US Census Bureau’s 2010 Survey of Income and Program Participation. 34. IRS Code section 44, subdivisions (a) and (b). 35. IRS Code section 44(c)(2). 36. IRS Code section 190. T HE AU T HOR , Mark Gibson, LLB, can be reached at MGibson@professionals-law.com.
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What To Do About That Negative Online Review Peter F. Finn, JD
abstract The posting of a negative online review regarding your dental treatment, office and/or staff is undoubtedly a blow that could have significant repercussions on your practice. Options for responding exist, including a brief and generic professional reply to the review itself, “flagging” the post using Yelp’s internal process or pursuing a defamation claim in court.
AUTHOR Peter F. Finn, JD, has a practice that includes advising dentists on employment and internetrelated and intellectualproperty issues and representing dentists in malpractice actions. During law school, he interned for the Employee Benefits Security Administration, part of the U.S. Department of Labor, with a focus on employment law matters. Mr. Finn is admitted to all courts, including the California Courts of Appeal. Conflict of Interest Disclosure: None reported.
he negative online review: We have all seen them on websites such as Yelp1 when deciding what restaurant to choose for dinner, what store to shop for a particular item, what hotel to stay in on an upcoming vacation or, as is pertinent here, from what health care provider to seek a medical or dental evaluation. Indeed, most dentists have been the subject of at least one negative online review. And those who have been fortunate to escape their reach, likely will in the future. In today’s society, where traditional word-of-mouth recommendations have largely been transplanted by smartphones, social media and the internet, the harm a single negative online review can cause to a dental practice — regardless of size and longevity in the community — can be substantial, especially for those offices lacking a large number of prior reviews or an otherwise robust digital presence. An overall Yelp rating of four stars could readily slide with a single post from a disgruntled
patient, regardless of the accuracy of its content, with that one-star negative review standing out like a sore thumb when potential new patients quickly scroll through a practice’s Yelp page. The natural reaction of most people — dentists included — who see something negative written about them in any forum, especially one as public as the internet, is to want to act immediately by responding to that review to set the record straight, demanding that Yelp (or whatever website the review is on) delete the post and seeking legal recourse against the reviewer. To this end, the questions we often encounter in our legal practice include the following: ■ Should I respond to the review and correct the misstatements it contains? ■ How can I get that negative review taken down? ■ What are my legal rights in going after the reviewer for hurting my reputation? Presenting an outline of potential options, including legal risks, is the FEBRUARY 2 0 2 1
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purpose of this article. In brief, as with many things in life, patience, prudence and professionalism are most often the best courses to follow.
Responder Beware — HIPAA and Other Patient Privacy Rights
Surely, a patient who goes online and posts a purported detailed account of their dental treatment at your office on a public forum like Yelp has invited you, the dentist, to correct the record by describing what really occurred, right? The answer, unfortunately, is “no.” And doing so can get you in significant legal trouble. The federal Health Insurance Portability and Accountability Act (HIPAA) of 1996 includes a privacy rule that establishes national standards to protect individuals’ medical records and other personal health information (PHI). It requires health care providers (and others) to implement appropriate safeguards to protect the privacy of PHI and sets limits and conditions on the uses and disclosures that may be made of such information without patient authorization.2 PHI is defined broadly as information, including demographic data, that relates to: ■ The individual’s past, present or future physical or mental health or condition. ■ The provision of health care to the individual. ■ The past, present or future payment for the provision of health care to the individual and that identifies the individual or for which there is a reasonable basis to believe it can be used to identify the individual. PHI includes many common identifiers (e.g., name, address, birth date, Social Security number).3 94 FEBRUARY
The Privacy Rule permits a health care provider to use and disclose PHI, without the patient’s express written authorization, in a limited number of situations. For example, no written authorization is required for a dentist to discuss PHI with the patient or with other health care providers treating the patient.4 However, in those limited situations in which an express written authorization from the patient is not required, do not include disclosing PHI about a patient on a public forum like Yelp. Accordingly, absent the
Social media is not the place for providers to discuss a patient’s care. Dentists must think carefully about patient privacy before responding to online reviews. patient’s express written authorization, a dentist may not use or disclose a patient’s PHI in an internet forum.5 Moreover, the federal government has made it clear that a patient does not waive their HIPAA rights by posting their own PHI in an online review on a forum like Yelp. The Office of Civil Rights (OCR), which is part of the U.S. Department of Health and Human Services (HHS), is responsible for enforcing HIPAA and investigating alleged violations. Recently, a Dallas dental office was required to pay $10,000 to the OCR and adopt a corrective action plan after it was found by the OCR to have impermissibly disclosed PHI of multiple patients in response to patient reviews on its Yelp page. Roger Severino, the OCR’s director, explained
in a news release, “Social media is not the place for providers to discuss a patient’s care. Doctors and dentists must think carefully about patient privacy before responding to online reviews.”6 In addition to HIPAA, dentists must also be cognizant of California’s own patient privacy laws. The California Confidentiality of Medical Information Act (CMIA) includes similar restrictions on the disclosure of a patient’s medical information without first obtaining a written authorization from the patient or the patient’s representative.7 A patient whose medical information has been disclosed by a health care provider in violation of the CMIA may bring legal action and recover compensatory damages, punitive damages (up to $3,000), attorney’s fees (up to $1,000) and the costs of litigation.8 Furthermore, such a violation is punishable as a misdemeanor and subject to an administrative fine or civil penalty of up to $25,000 per violation, depending on whether the unlawful disclosure was made negligently or knowingly and intentionally, or up to $250,000 per violation if done for financial gain.9 The forgoing discussion mandates that any response you might make (one is not required) to any online review — negative or positive — must be generic, not indicate that the person who posted the review is or was a patient, exclude any identifying information of the reviewer and never include any PHI. The simplest response — if any — is often the best. Be respectful and professional, acknowledge the reviewer’s concerns and that you have read the review carefully, explain that privacy laws (such as HIPAA) prevent you from disclosing information in response and invite the reviewer to contact you offline to discuss further (again, without
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explicitly or implicitly identifying the reviewer as a current or former patient). A sample generic response to a negative online review (or any review) could read: Thank you for your submitting your review. As with all reviews, we have read your post carefully and take the issues you have raised seriously. However, due to federal and state privacy laws, we cannot comment further here on Yelp. Our office welcomes an opportunity to discuss any concerns privately. You may contact us at [phone number and/or email address]. Such a response may open the line of positive and productive communication with the reviewer (patient) as well as show other potential patients who visit your Yelp site that you are both conscientious of concerns raised by the reviewer and cognizant of protecting privacy. In this sense, the negativity of the contents of the review may be subsumed (at least to a degree) by the positivity of your response.
Let’s Just Get the Review Removed: Not as Easy as It Sounds
There is a mechanism to request websites like Yelp to remove reviews. While routinely unsuccessful, simply reporting a review to Yelp has little legal risk — particularly in comparison to a public response to a post — and can be completed quickly and easily. When you come across a negative review on your Yelp page, you can “flag” the post by clicking the “Report Review” icon located within the “More Options” tab. This triggers an evaluation of the review by one of Yelp’s “moderators” who then determines whether the review will remain or be removed.10 If no action is taken by the moderator, you then have the option of requesting a “second review” by contacting Yelp’s support
team.11 Unlike the initial “flagging” of the review, which does not offer you an opportunity to describe why the review should be removed, this second review enables you to complete a “comments” section.12 Of course, any “comments” you provide must be HIPAA and CMIA compliant. Unfortunately, that is where Yelp’s review process ends. For better or for worse, Yelp is unlikely to take any action unless the review violates one of its content guidelines13 or there is a court order stating that the review
There is no legal recourse against websites like Yelp that post reviews, regardless of how defamatory those reviews may be. is defamatory.14 As Yelp makes clear, “removing photos, reviews or other user content is not something we take lightly — we generally allow users to stand behind what they write.”15 And, assuming you disagree with Yelp’s decision, “going after Yelp” is not the answer. The U.S. Communications Decency Act of 1996 (Communications Decency Act) immunizes websites from liability for hosting (i.e., allowing to be posted and published) comments written by another person, such as a review on Yelp.16 One California dentist found this out the hard (financial) way. Yvonne Wong, DDS, a pediatric dentist, filed a lawsuit against the parents of a patient who posted a review on Yelp that criticized the dental care Dr. Wong had provided to their son and
Yelp for allowing the review to be posted on its website.17 Dr. Wong alleged that the review contained false assertions (“slanderous complaints”), including that she had “not warned [the parents] about the mercury [contained in a silver amalgam filling], had misdiagnosed their son’s case and had improperly used a general anesthetic ‘that is outside her scope of practice’ and for which she could ‘lose her license.’”18 Dr. Wong brought claims for libel per se (a form of defamation) and intentional and negligent infliction of emotional distress. However, Dr. Wong quickly dismissed Yelp from the action in the face of an anti-strategic lawsuit against public participation (SLAPP) motion to strike the lawsuit,19 which was brought on the grounds that Yelp was immunized from liability by the Communications Decency Act. Yelp then went after Dr. Wong for its attorney’s fees and costs, ultimately winning a judgment against Dr. Wong.20 The California Supreme Court has recently extended the protections afforded by the Communications Decency Act by holding that websites such as Yelp are not required to remove from their websites certain reviews that have already been judicially determined to be defamatory.21 As a result, the prospects of successfully getting Yelp to remove a post on its own have likely diminished substantially. The moral of the story is there is no legal recourse against websites like Yelp that post reviews, regardless of how defamatory those reviews may be. However, you can and should utilize Yelp’s internal mechanism, described above, to report negative reviews. Just understand that if and when Yelp decides it will not remove the review following the completion of its evaluation (and second look), your options against Yelp are spent. FEBRUARY 2 0 2 1
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What About Suing the Reviewer? Defamation, Anti-SLAPP Pitfall
If a generic response to the negative post is unsatisfactory and pursuing Yelp is a nonstarter, what about a legal claim directly against the author of the review (assuming the identity of the reviewer is known)? The most obvious legal avenue that a dentist could pursue against an online reviewer is a claim for defamation.22 Defamation comes in two forms: libel and slander.23 The basic difference between libel and slander is that the former is a written statement, while the latter is an oral statement.24 Because an online review is a written publication, libel is the form of defamation potentially at issue. Libel is defined by California law as “a false and unprivileged publication by writing, printing, picture, effigy or other fixed representation to the eye, which exposes any person to hatred, contempt, ridicule or obloquy or which causes him to be shunned or avoided or which has a tendency to injure him in his occupation.”25 Stated plainly, a false statement on an online review that attacks a dentist’s reputation, which is made negligently, knowingly or recklessly,26 is subject to a legal attack by the dentist via a claim for libel. Importantly, because of freedom of speech principles enshrined by the First Amendment, the law distinguishes between statements of fact (which are provably false) and statements of opinion (which are not provably false).27 The United States Supreme Court held long ago: “Under the First Amendment there is no such thing as a false idea. However pernicious an opinion may seem, we depend for its correction not on the conscience of judges and juries but on the competition of other ideas.”28 Thus, “courts apply the 96 FEBRUARY
Constitution by carefully distinguishing between statements of opinion and fact, treating the one [statements of opinion] as constitutionally protected and imposing on the other [statements of fact] civil liability for its abuse.”29 Indeed, “‘rhetorical hyperbole,’ ‘vigorous epithet[s],’ ‘lusty and imaginative expression[s] contempt’ and language used ‘in a loose, figurative sense’” are not actionable statements of fact.30 For example, calling an employee a “local loser,” an attorney a “whore’s son” and “a joke” or a teacher the “worst teacher”
The basic difference between libel and slander is that the former is a written statement, while the latter is an oral statement.
and a “babbler,” have all been deemed to be nonactionable opinion.31 On the other hand, posting on a website that a doctor is only a student who has no training in a particular area of medicine are provably false statements of fact and therefore actionable when untrue.32 So too are blog posts falsely accusing a family court counselor of corruption, fraud, lying under oath, prescribing medicine illegally and extorting money for services not performed.33 As the foregoing analysis demonstrates, there are certain trigger areas to be “on the lookout for” when determining whether a review is libelous: ■ Does the review claim you lack training or experience? ■ Does the review accuse you of engaging in criminal conduct?
Does the review assert you committed fraud? ■ Does the review state your treatment was substandard (negligent)? Undertaking this analysis is critical before rushing to the courtroom because, as Dr. Wong learned, bringing an unmeritorious libel claim against a reviewer can result in you being required to pay the reviewer’s often substantial attorney’s fees and costs. Specifically, as happened with Dr. Wong, the reviewer can respond to the lawsuit by filing an anti-SLAPP motion to strike under California Code of Civil Procedure § 425.16, which, if successful (in part or in full), automatically entitles the reviewer to an award of attorney’s fees and costs.34 The California Legislature developed the anti-SLAPP statutory scheme due to “a disturbing increase in lawsuits brought primarily to chill the valid exercise of the constitutional rights of freedom of speech and petition for the redress of grievances.”35 An antiSLAPP motion attacks a claim, such as one for libel, by asserting that (1) the challenged statement arises from constitutionally protected activity (i.e., free speech in connection with a public issue), and (2) the plaintiff (you, the dentist) does not have a probability of prevailing on the cause of action (i.e., the challenged statement was not defamatory).36 The pertinent language of the statute reads: A cause of action against a person arising from any act of that person in furtherance of the person’s right of petition or free speech under the United States or California constitutions in connection with a public issue shall be subject to a special motion to strike, unless the court determines that the plaintiff has established that there is a probability the plaintiff will prevail on the claim.37 ■
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As it relates to an internet forum such as Yelp, an “act in furtherance of a person’s right of petition or free speech” under the United States or California constitutions is defined to include (1) any statement made in a public forum in connection with an issue of public interest or (2) any other conduct in furtherance of the exercise of the constitutional right of petition or the constitutional right of free speech in connection with a public issue or an issue of public interest.38 Significantly, the anti-SLAPP statute is construed broadly.39 “[The] critical consideration is whether the cause of action is based on the defendant’s [the reviewer’s] protected free speech or petitioning activity.”40 Similarly, a “public issue” or an “issue of public interest” includes “not only governmental matters, but also private conduct that impacts a broad segment of society and/or that affects a community in a manner similar to that of a governmental entity.”41 This definition extends to issues that are not necessarily of interest to the entire public, but rather to a limited, definable portion of the public, so long as the protected activity occurs “in the context of an ongoing controversy, dispute or discussion.”42 A cursory review of the anti-SLAPP statute demonstrates its inherent application to the defamation context. As such, if you decide to file a legal claim for libel against the author of a negative online review, you can expect the reviewer to counterattack by way of an anti-SLAPP motion to strike. Given the broad construction of the anti-SLAPP statute and public policy considerations that favor freedom of speech and the exchange of ideas, it is imperative that caution be employed in analyzing whether the contents of the
review actually include false statements of fact or simply a disgruntled patient’s opinions of the dental services provided.
Practical Steps To Minimize the Impact of the Negative Review Not Removed
In many cases, nothing you may try to do will be successful in getting the negative review physically removed from Yelp. However, even when the negative review remains posted, there are practical steps you can take to minimize its prominence on your
Create an official website for your practice and market the website so it’s the first “hit” on a Google search of your name.
Yelp page and, in turn, the potential impact it has on your practice. Perhaps the most obvious solution is to grow your positive reviews. Encourage patients who have good experiences in your office to post on Yelp.43 The more positive reviews you cultivate, the less focus visitors to your Yelp page will pay to the outlier bad review. Not only will positive reviews diminish the substantive statements contained in a negative review, but they will visually improve the appearance of your Yelp page and may result in the negative review being “pushed down” toward the bottom of your page. In a similar fashion, be mindful of drawing unwanted attention to the negative review. If you typically do not respond to positive reviews,
a reply to a negative review will stand out and simply increase the “space” the negative review takes on your Yelp page. Sometimes ignoring the negative review is the best option, thereby allowing it to become stale and drowned out by the positive reviews that are posted. As a corollary to both of the above, increase your online and social media presence in other forums. If you do not already have one, create an official website for your practice and market the website so it’s the first “hit” on a Google search of your name.44 Establish and promote Facebook and Google+ pages with news and updates about your practice that potential patients can access in lieu of viewing the negative Yelp review, which they must now actively look for because it is the fourth or fifth “hit” on a Google search. Although taking these practical steps may not eliminate a negative Yelp review, they should help greatly decrease any deleterious effects it might otherwise cause.
The posting of a negative online review regarding your dental treatment, office or staff is undoubtedly a blow that could have significant repercussions on your practice. Options for responding certainly exist, including a brief and generic professional reply to the review itself, “flagging” the post using Yelp’s internal process or pursuing a defamation claim in court. The instinct to want to respond immediately, however, must be tempered by careful consideration of patient privacy laws, the protections afforded to websites like Yelp that provide a forum for such reviews to be posted and the perils of attacking what may be deemed speech protected by the Constitution. FEBRUARY 2 0 2 1
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Oftentimes, taking practical steps to minimize the prominence of the negative review on your online and social media presence is the most appropriate course to follow. n RE FEREN CE S 1. This article focuses on Yelp reviews, but the legal issues identified herein apply to reviews posted on any internet forum. 2. The Privacy Rule is located at 45 CFR Part 160 and of Part 164(A) and (E). The U.S. Department of Health & Human Services provides a good overview of the legal requirements of each component of HIPAA. www.hhs.gov/ocr/privacy/ hipaa/administrative/privacyrule/index.html. 3. 45 CFR Part 160.103. 4. See 45 CFR Part 164.502(a)(1) for a complete list of permitted uses and disclosures of PHI. 5. 45 CFR Part 164.508(a) states that a health care provider must obtain the individual’s written authorization for any use or disclosure of PHI that does not fall under one of the permitted circumstances enumerated by the Privacy Rule (i.e., in 45 CFR Part 164.502(a)(1)). 6. Office of Civil Rights. Dental Practice Pays $10,000 to Settle Social Media Disclosures of Patients’ Protected Health Information; Oct. 2, 2019. www.hhs.gov/about/ news/2019/10/02/dental-practice-pays-10000-settlesocial-media-disclosures-of-patients-phi.html. 7. The CMIA is codified at California Civil Code §§ 56 et seq. 8. California Civil Code § 56.35. 9. California Civil Code § 56.36. 10. www.yelp-support.com/article/How-do-I-report-areview?l=en_US. 11. www.yelp-support.com/article/Can-I-request-asecond-evaluation-of-something-I-reported-that-did-not-getremoved?l=en_US. 12. www.yelp.com/support/contact/flagged_content?src_ article_id=000005274. 13. www.yelp.com/guidelines. 14. www.yelp-support.com/article/Will-Yelp-remove-afalse-or-defamatory-review?l=en_US. See discussion below regarding the U.S. Communications Decency Act of 1996 and the California Supreme Court’s decision in Hassell v. Bird (2018) 5 Cal.5th 522. 15. www.yelp-support.com/article/How-do-I-report-areview?l=en_US. 16. 47 U.S.C. § 230(c)(1) provides: “No provider or user of an interactive computer service shall be treated as the publisher or speaker of any information provided by another information content provider.” In addition, 47 U.S.C. § 230(e)(3) prohibits inconsistent State or local laws: “No cause of action may be brought and no liability may be imposed under any State or local law that is inconsistent with this section.” 17. Wong v. Jing (2010) 189 Cal.App.4th 1354. 18. Id. at 1360-1361. The opinion includes the actual contents of the review at issue.
19. California Code of Civil Procedure § 425.16. “SLAPP” stands for “strategic lawsuit against public participation.” AntiSLAPP motions are discussed in more detail, below. 20. Santa Clara County Superior Court Register of Actions, Case No. 2008-1-CV-129971, portal.scscourt. org/search. See also, Enos R, Dentist Must Pay $80K in Yelp Review Case, May 19, 2011, blogs.findlaw.com/ free_enterprise/2011/05/dentist-must-pay-80k-in-yelp-reviewcase.html. It appears that Yelp’s attorney’s fees and costs were about $8,000, while the parents’ portion (they also prevailed) totaled more than $72,000. See Goldman E, Dentist Pays Sizable Penalty for Not Knowing 47 USC 230-Wong v. Jing, May 22, 2011, blog.ericgoldman.org/archives/2011/05/ dentist_pays_fi.htm. 21. Hassell v. Bird (2018) 5 Cal.5th 522. 22. Dr. Wong also pursued claims for negligent and intentional infliction of emotional distress, but those causes of action got nowhere because Dr. Wong was unable to show that the review at issue caused her “serious” or “severe” emotional distress as legally required. Wong, 189 Cal. App.4th at 1376-1378. 23. California Civil Code § 44. 24. California Civil Code §§ 45 and 46. 25. California Civil Code § 45 [italics added]. 26. Different standards regarding the author’s mindset when publishing the false statement apply depending on whether (1) the person defamed is a “public” (i.e., someone in the public spotlight, such as a celebrity or politician) or “private” individual and (2) the statement concerns a matter of “public” or “private” concern. An issue of “public” concern is one that is being openly debates and has substantial ramifications for persons beyond those participating in the debate. NizamAldine v. City of Oakland (1996) 47 Cal.App.4th 364, 376-378; Gallagher v. Connell (2004) 123 Cal.App.4th 1260, 1275. The more stringent state of mind standards (knowingly and recklessly) are required for “public” figures and matters of “public” concern, while the lower standard (negligence) is required for “private” figures and matters of “private” concern. For an overview of the specific elements of a defamation (libel or slander) claim, see Judicial Council of California Civil Jury Instructions (“CACI”) Nos. 1700, et al. www.courts.ca.gov/partners/documents/Judicial_Council_ of_California_Civil_Jury_Instructions.pdf. 27. Gregory v. McDonnel Douglas Corp. (1976) 17 Cal.3d 596, 600. 28. Gertz v. Robert Welch Inc. (1974) 418 U.S. 323, 339340. 29. Gregory, 17 Cal.3d at 601. 30. Ferlauto v. Hamsher (1999) 74 Cal.App.4th 1394, 1401. 31. Seelig v. Infinity Broadcasting Corp. (2002) 97 Cal. App.4th 798, 810-812; Ferlauto, 74 Cal.App.4th at 13971398 and 1403-1404; Moyer v. Amador Valley Joint Union High School Dist. (1990) 225 Cal.App.3d 720, 725-726. 32. Del Junco v. Hufnagel (2007) 150 Cal.App.4th 789, 797-799 [“Accusing a physician of being untrained and lacking the proper credentials are not statements of opinion. They are statements of fact.”] 33. Burrill v. Nair (2013) 217 Cal.App.4th 357, 383-386 [disapproved on other grounds in Baral v. Schnitt (2016) 1 Cal.5th 376].
34. California Code of Civil Procedure § 425.16(c)(1). 35. California Code of Civil Procedure § 425.16(a). 36. Navellier v. Sletten (2003) 106 Cal.App.4th 763, 766 and 768; Kyle v. Carmon (1999) 71 Cal.App.4th 901, 907. 37. California Code of Civil Procedure § 425.16(b)(1). 38. California Code of Civil Procedure § 425.16(e)(3)-(4). 39. California Code of Civil Procedure § 425.16(a); Equilon Enterprises v. Consumer Cause Inc. (2002) 29 Cal.4th 53, 60, fn. 3. 40. Navellier v. Sletten (2002) 29 Cal.4th 82, 89. 41. Damon v. Ocean Hills Journalism Club (2000) 85 Cal. App.4th 468, 479. 42. Du Charme v. International Broth. of Elec. Workers, Local 45 (2003) 110 Cal.App.4th 107, 118-119. 43. Do not create fake positive reviews by having staff post on your behalf. Fake reviews can often be spotted by their content, the user’s information and the date they are written. Publishing fake reviews also raises a host of legal issues, including illegal advertising, unprofessional conduct and unfair business practices. 44. A website is a form of advertisement, so be mindful of its contents to ensure it complies with limitations imposed by the California Dental Practice Act and related laws. See California Business & Professions Code §§ 651 and 1680(h), (i), (k), and (l); 16 C.C.R. § 1050, et seq. T HE AU T HOR , Peter F. Finn, JD, can be reached at PFinn@professionals-law.com.
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Workers’ Compensation: Timely Claims Reporting and Reducing Workplace Injuries Taiba Solaiman
abstract Dental practice owners might have complex feelings about workers’ compensation, and they would not be alone. While workers’ compensation coverage is an indispensable part of owning and running a business, it adds cost and impacts time management. But what is the alternative?
AUTHOR Taiba Solaiman has been a TDIC Risk Management analyst since 2007. She speaks nationally representing the company and advises dentists on professional liability risk management.
orkers’ compensation insurance provides benefits to employees who suffer work-related injuries and illnesses. It helps pay for medical treatment, temporary disability payments, permanent disability benefits, supplemental job displacement vouchers, vocational rehabilitation and death benefits. In California, workers’ compensation came into effect more than a century ago. In January 1918, liability for compensation was imposed on employers “without regard to negligence,” creating what is known as a “no-fault system.” That change provided a specific benefit: Even if an employee caused their own workplace injury, they would still be eligible to
receive workers’ compensation benefits. The change also protected employers from employer-liability civil suits related to workplace injuries or illnesses. Most common workplace injuries are preventable. Repetitive motion or ergonomic-type injuries and slips or falls are common, but by far the most frequent types of injuries in the dental office are cuts, punctures, scrapes and needlesticks. Sharps incidents put the injured employee at risk for exposure to bloodborne pathogens such as hepatitis B, hepatitis C and HIV. According to a recent claims analysis at The Dentists Insurance Company, more than 70% of injuries reported fell into the needlestick category, making it the one of the greatest occupational hazards in the dental office. FEBRUARY 2 0 2 1
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Untimely Claims Reporting Results in Greater Indemnity Payout
How can a dental practice potentially impact the frequency and severity of workers’ compensation claims? Consider the following claims statistics. From April 2019 to March 2020, 712 workers’ compensation claims were reported to TDIC. Of those, 442 claims were reported on time, within one day, to TDIC. Below is a breakdown of the cost associated with handling these claims: ■ 136 claims involved a total indemnity payment totaling $1,609,946.02. • 58 litigated, totaling $1,233,188.85. • 78 nonlitigated totaling $376,757.17. ■ 5 were incidents only (no cost). ■ 301 claims involved medicalonly1 costs totaling $210,301.30.2 Nonlitigated claims reported in an untimely manner cost more in total paid than those reported on time. A total of 270 claims were reported in an untimely manner, later than one day, to TDIC between April 2019 and March 2020. Below is a breakdown of the cost associated with handling these claims: ■ 83 claims with total indemnity of $1,106,849.64 paid. • 24 litigated, totaling $625,247.47. • 59 nonlitigated, totaling $481,602.17. ■ 4 incidents ($0) ■ 183 claims involved medical only1, costs totaling $112,196.47.2 Overall, the claims that were not reported on time resulted, on average, a 13% greater indemnity payout (a difference of $1,497.70 more per claim). 100 FEBRUARY
Litigation Resulting From Delayed Reporting Increases Costs
One reason for the increased payout: litigation costs. Delays in reporting often lead to litigation, which increases the costs exponentially. Costs of litigating claims can run from $10,000 to $20,000 per claim, and regardless of the claim’s merit or lack of, it must be defended and proceed through the workers’ compensation claims process. Early reporting aids with cost containment and reduced exposure. The claims adjuster can work with the employee to coordinate any necessary evaluations and associated treatment early in the process with the goal of returning the employee to the workplace. Doing so keeps the employee engaged and reduces costs associated with hiring temporary staff.
California Law Requires Employers To Carry Workers’ Compensation With Some Exemptions
State laws for workers’ compensation can vary depending on the location of the business. Each state sets its premium amounts and benefits based on the state’s economy and the risks its businesses face. In most states, the requirements are based on the number of employees and type of business. Therefore, factors such as size, type and location can affect the cost for workers’ compensation coverage. Rates are calculated based on worker classification codes, payroll and experience modification number. California employers who have at least one full- or part-time employee must carry workers’ compensation coverage. The state defines an employee as a person working for an employer, where the arrangement is expressed or implied, oral or written, for lawful or unlawful unemployment.
Certain exemptions from the requirement to have workers’ compensation coverage in California exist and include sole proprietors (who can elect to have coverage), executive officers and directors (if they fully own the business), LLC members (who don’t work in the business) and independent contractors.
Claim Reporting Requirements in California
Requirements for reporting a workrelated injury can vary from state to state and are dictated by the workers’ compensation laws within that state. Most states generally require an employer to provide a workers’ compensation claim form to the employee within one working day after becoming aware of the workrelated injury or illness. In California, for example, Labor Code section 5401 states that once an employer has knowledge of an injury, they have only 24 hours to provide the employee with a DWC-1 claim form. (More information on state-specific workers’ compensation laws is available on the U.S. Department of Labor’s website.) The workers’ compensation system is designed to provide an employee with the necessary treatment and evaluations to assist them with returning to the workforce as soon as reasonably prudent. An employer should not attempt to determine whether an employee should receive a medical evaluation following an incident. Failure to report an injury is a violation of the workers’ compensation regulations and can result in substantial penalties to the employer. Reporting an injury on time is important for cost containment and exposure purposes. If not reported, an employee may see their own physician, who may make a diagnosis and provide
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opinions on causation that may not be accurate or necessarily work related.
Reducing Potential Workplace Injuries
An injured employee can require time off work, potentially resulting in a loss of productivity, the necessity of hiring a temporary replacement and low staff morale if additional duties need to be covered while the injured employee is out. While a single workplace accident can have a big impact on your practice, workers’ compensation isn’t the only obligation when it comes to protecting staff. Managing risk in dental offices is critical to contributing to their health and safety, and the best way to avoid costs is by avoiding an injury. The following recommendations can help practices increase their focus on safety and reduce potential workplace injuries: ■ Develop a safety and wellness plan. This plan should cover all levels of employee safety and health with the encouragement to report hazardous practices or behavior. ■ Educate staff. Train staff about the importance of following safety measures. ■ Research safety vulnerabilities. Pay attention to common accidents and develop strategies to keep them from recurring. ■ Provide personal protective equipment (PPE). PPE is required and must be enforced during hiring and in meetings and spontaneous monitoring. ■ Have adequate staffing. Overworked employees may suffer from exhaustion and cut corners to meet or exceed expected duties. ■ Don’t take shortcuts. Most
accidents happen when staff members are being rushed. ■ Inspect and maintain all equipment. Small repairs intended as temporary “fixes” may unnecessarily put staff and patients at risk when the equipment eventually fails. ■ Monitor safety measures. Reinforce safety measures at every opportunity, in staff meetings and when hiring a new employee. ■ Keep an orderly workplace. Poor housekeeping can ultimately cause serious health and safety hazards. TDIC provides “Safety Best Practice Recommendations,” an online resource to guide dental offices with additional details.
hesitant to add more “work” to anyone’s schedule by reporting an incident at the end of a long day. Ongoing training, monitoring of safety measures and addressing potential hazards or workplace injuries promptly will set clear expectations and go a long way toward establishing a culture of safety. That culture, like the workers’ compensation system, equally benefits the employer and employee. The alternative is just too costly for all. n REFERENCES 1. Medical only: Medical-only claims are those that involve an injury where the employee only receives medical care and treatment. 2. These costs are not included in the indemnity payment amounts. THE AUTHOR, Taiba Solaiman, can be reached at Taiba.Solaiman@tdicins.com.
Creating a Workplace Culture of Safety
Developing a safety culture may significantly reduce workplace accidents. Understanding the potential causes of workplace injuries is a dentist’s first step in helping to prevent them. The practice owner can then take an active role in the prevention of workplace mishaps. Creating an environment in which employees are comfortable reporting a workplace injury also provides the opportunity to address the issue before the injury worsens or escalates into a more serious problem. Employees who understand the practice’s safety and wellness plan are better prepared to follow it and take responsibility for their own safety and that of their co-workers, especially when they are confident that their employer prioritizes their safety too. Employees may be fearful that reporting an injury will reflect poorly on them — perhaps indicating inattentiveness. Or they might be FEBRUARY 2 0 2 1
Business loan options Patient screening Practice interruptions Local ordinances & regulations Leaves of absence Infection control Dental billing &time telehealth Paid & unpaid off Patient communication Employeevs. communication Mandates recommendations Termination & unemployment Rescheduling appointments License Sick leaverenewal policies& C.E. HIPAA considerations Informed consent forms
NEW & COMPLEX QUESTIONS? Today, the countless sources and rapid pace of news make it more challenging than ever to navigate the business side of dentistry. That’s why CDA’s Practice Support analysts have developed new tools to guide members through the COVID-19 crisis and toward practice recovery. Access 24/7 online resources and tap into specialized expertise on practice management, compliance, employment and dental benefits.
TRUSTED ANSWERS. cda.org/practicesupport
TOGETHER WE ARE LIMITLESS
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COVID-19 Fatigue: Keeping Masks On and Office Morale Up TDIC Risk Management Staff
fter nearly a year of compliance with complicated, and sometimes uncomfortable, COVID-19 protocols, many dental professionals are exhausted. And practice owners are conscientiously taking steps to show their teams compassion and empathy. However, fatigue with wearing mandatory personal protective equipment (PPE) doesn’t change the regulations or the potential for serious risks. Letting your guard down, even when the intention is to accommodate employees’ comfort, can create health risks for all patients and staff as well as liability risks for the practice. This past winter, The Dentists Insurance Company’s Risk Management Advice Line received calls from practice owners with questions about the risks of serving alcohol at staff parties. These ■ https://www.tdicinsurance. callers were no longer thinking about com/Seminars/Current-Riskpreserving social distancing or wearing Management-Seminar masks when it came to staff gatherings. With good hearts but poor judgement, they just wanted their teams to have a nice, relaxing time. In fact, the Advice Line recently received a call from a dentist who found out that one of his employees had tested positive for COVID-19. The employee attended a team meeting the day before and wasn’t experiencing any symptoms. Unfortunately, the entire team was without PPE during this meeting. In situations without patients present, the team had become lax about PPE compliance. Over time, the young and generally healthy staff had become jaded about wearing PPE — and the dentist had not been consistently enforcing guidelines. The dentist and TDIC’s Risk Management analyst discussed the workers’ compensation reporting
guidelines that are now required. The analyst cautioned the dentist that by not following and enforcing guidelines set by the Centers for Disease Control and Prevention, OSHA and the CDPH, his conduct could be perceived as lacking regard for the safety of his patients, therefore he could potentially face issues beyond a workers’ compensation claim. In California, Cal/OSHA regulations mandate wearing appropriate PPE. A dental office that does not discipline a staff member for failing to follow infection prevention policies could be viewed by
Cal/OSHA as an employer that is not serious about preventing the spread of infection. Noncompliant employees put patients and peers at risk. Their choices should be viewed as disciplinary issues, leading up to and including termination.
How can practices stay vigilant and combat COVID-19 fatigue? ■
Foster an atmosphere of trust. Being a compassionate employer means listening to employees and finding safe, practical ways to meet their needs.
From one-on-one risk management advice by phone to informed consent forms to expert-led seminars, we’re here to help you practice with confidence. We are The Dentists Insurance Company. Learn more at tdicinsurance.com/rm
Protecting dentists. It’s all we do.
800.733.0633 | tdicinsurance.com | Insurance Lic. #0652783
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RM MAT TERS C D A J O U R N A L , V O L 4 9 , Nº 2
• Is the PPE fitted properly to the employee and are compliant mask options available that are more comfortable to wear? • Are employees taking regularly scheduled breaks and having socially distanced opportunities to rest? • Do they feel they can tell you if they observe another employee being noncompliant? ■
adjustments, so you are able to come to work rested and ready? • Have you recognized your own signs of fatigue and sought ways to be optimistic and engaged with your team? ■
Model the behavior you seek. As a practice leader, you’re likely fatigued as well. However, your role is to demonstrate best practices, clinical protocols and healthy ways to manage stress. • Are you wearing your own mask consistently, even when no patients are present and you’re conversing with an employee? • Have you been attentive to your own sleep and health needs, or even made shift
Be direct in your response. Despite ongoing education and awareness about PPE requirements, some employees will still fail to comply. In this event: • Review practice expectations and regulatory requirements during staff huddles, but don’t wait for the next huddle to address noncompliance issues. • Address any issues immediately and in person with the employee. Whether the action necessitates a friendly reminder or a more serious discussion, don’t put it off until a repeated instance or “give them a break” before interceding.
• Document your interaction and be clear about disciplinary consequences for noncompliance. Every team member should be committed to creating a safe practice environment, which means they make conscientious, consistent efforts to preserve the health of peers, patients and the community even when they feel exhausted. Keep your chin up and consult an experienced Risk Management analyst for trusted guidance navigating practice challenges. n The Dentists Insurance Company’s Risk Management Advice Line is a benefit available at no cost to CDA members, as well as to policyholders protected by TDIC. To schedule a consultation, visit tdicinsurance.com/RMconsult or call 800.733.0633.
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C D A J O U R N A L , V O L 4 9 , Nº 2
Required Patient Notifications and Disclosures CDA Practice Support
dental practice is required to provide certain notifications and disclosures to patients as well as to the public. Other health professions have similar requirements.
Many cities and counties require posting a business license in a conspicuous location.
Notice of Licensure
Post the notice accessible to public view in all facilities where dental services are provided. The notice must state in 48-point type: NOTICE Dentists are licensed and regulated by the Dental Board of California 877.729.7789 www.dbc.ca.gov
Name, License Type and Academic Degree
Comply with the requirement to notify patients of clinical staff names, licenses and academic degrees by doing each of the following: ■ Clinical staff wear name tag or have license or certificate posted. ■ Prominently post the name, license type and highest level of academic degree of each licensed individual or provide the information in writing in 24-point type to the patient at the initial visit. ■ Prominently display the name, license type and highest level of academic degree of each licensed individual on the practice website.
The advertisement of a discount must: ■ Include the dollar amount of the nondiscounted fee for the service. ■ Include either the dollar amount of the discounted fee or the percentage of the discount for the specific service. ■ Inform the public of the length of time the discount will be honored. ■ Include verifiable fees. ■ Identify specific groups who qualify for the discount or any other terms, conditions or restrictions for qualifying for the discount.
Any fee advertised must be exact and must not use certain limiting words or phrases, for example, “as low as,” “and up” and “lowest prices.” Any advertisement that refers to services or costs for services and that uses words of comparison shall be based on verifiable data substantiating the comparison. Fee advertising should not be fraudulent, deceitful or misleading. The fee for each product or service must be clearly identifiable. The fee advertised for products must include charges for any related professional services, including dispensing and fitting services, unless the advertisement specifically and clearly indicates otherwise. Fee advertising for a dental service must fully disclose all services customarily included by the dental profession as part of the advertised service, including but not limited
to necessary diagnosis, radiographs, restorative treatment, drugs, local anesthesia or analgesia, materials, laboratory fees and postoperative care. The advertisement must also disclose any additional services that are not part of the procedure but for which the patient will be charged, together with the fees for such services. For example, an advertisement for “free teeth whitening” for new patients must mention the requirement for a dental exam and X-rays along with the cost of those services. Refer to “Dental Practice Marketing and Advertising 101” on cda.org/practicesupport for additional information on other marketing rules and restrictions.
Obtaining informed consent is required for general anesthesia and conscious sedation procedures. Obtaining informed consent for other dental procedures is not required but is standard risk management protocol. It should be documented in the patient record. Informed consent is a process and the use of a written form can be helpful to the patient’s understanding of the procedure. Forms are available on cda.org/practicesupport.
Opioid Prescription to a Minor
A dentist must discuss risks with a minor and the minor’s parent or guardian before issuing the first opioid prescription in a single course of treatment. “Consent to Prescribe Opioid to a Minor” is on cda.org/practicesupport. FEBRUARY 2 0 2 1
REGUL ATORY COMPLIANCE C D A J O U R N A L , V O L 4 9 , Nº 2
Prior to delivery of health care via telehealth, a health care provider at the originating site must inform the patient that telehealth may be used and obtain verbal or written consent from the patient for this use. The verbal consent shall be documented in the patient’s medical record. See “Teledentistry Consent and Notice” on cda.org/ practicesupport.
When dispensing a drug, provide the patient with a written disclosure that the patient has a choice between obtaining the prescribed drug from the dispensing prescriber or from the pharmacy of the patient’s choice.
A patient must be presented with a written treatment plan prior to the dental practice offering them a commercial credit financing product such as a credit card, line of credit or loan. The treatment plan must indicate whether a patient’s dental benefit plan or Medi-Cal coverage includes the proposed treatment, whether the dental practice takes assignment of benefits and an estimate of the patient’s share of cost. The dental practice must obtain a patient signature on a disclosure notice. For additional information, refer to “Offering Commercial Credit to Patients” on cda.org/practicesupport.
Dental Materials Fact Sheet
Provide this dental board-required fact sheet to a patient at least once prior to performing a restorative procedure and obtain an acknowledgment of receipt. The fact sheet is available on the dental board website. 106 FEBRUARY
Notice of Privacy Practices
A HIPAA-covered entity must provide patients with a notice that explains the entity’s responsibilities and patient rights regarding the use or disclosure of patient information and obtain patient acknowledgment of receipt of the notice. The notice also must be posted at the entity’s facility and on the entity’s website. When updating the notice, it is not required to obtain a new acknowledgment of receipt from current patients. A sample notice is on cda.org/ practicesupport.
Notice of Nondiscrimination
Dental practices that receive payments from certain types of government programs, such as Medi-Cal, Healthy Families, Medicare or electronic health records incentive (“meaningful use”), must comply with the nondiscrimination rules of the Affordable Care Act Section 1557. This notice must be posted in a facility where patients may easily see it. This notice also must be prominently posted on the dental practice website. See “Nondiscrimination Requirements Under the Affordable Care Act (Section 1557)” on cda.org/ practicesupport.
Referrals to Other Organizations
When a dentist refers a patient to an organization in which the dentist or their immediate family has a significant beneficial interest, this interest must be disclosed in writing to the patient. The dentist must advise that the patient may choose any organization for the purpose of obtaining the service ordered or requested. Such disclosure and advice also must be provided when a dentist charges, bills or otherwise solicits payment from a patient on behalf of an
organization in which the dentist or their immediate family has a significant beneficial interest. The disclosure requirement can be met by posting a conspicuous sign or by providing the patient with a written statement.
In areas where X-ray machines are operated, post a sign or signs that state: CAUTION X-RAY
Businesses with nine or more employees must provide “clear and reasonable warning” prior to exposing any person to a chemical on the Proposition 65 list. Several chemicals used in dentistry, for example mercury, nitrous oxide and chloroform, are on the list. Refer to “Proposition 65 FAQ” on cda.org/ practicesupport for more information and to download the required warning notices. n Regulatory Compliance appears monthly and features resources about laws that impact dental practices. Visit cda.org/ practicesupport for more than 600 practice support resources, including practice management, employment practices, dental benefit plans and regulatory compliance.
Making your transition a reality.
Dr. Thomas Wagner
Dr. Russell Okihara
Dr. Rishi Salwan LIC #02085289
Jim Engel LIC #01898522
(916) 812-3255 (619) 694-7077 (925) 330-2207 (909) 239-2800 45 Years in Business 38 Years in Business 10 Years in Business 46 Years in Business
Jay Harter LIC #01008086
Kerri McCullough LIC #01382259
Gina Miller LIC #02015193
Steve Caudill LIC #00411157
Jaci Hardison LIC #01927713
Kim Ta LIC #02085576
Thinh Tran LIC #01863784
(916) 812-0500 (949) 300-0312 (707) 391-7048 (714) 318-4911 (951) 314-5542 (408) 687-5001 (949) 675-5578 36 Years in Business 35 Years in Business 30 Years in Business 30 Years in Business 26 Years in Business 16 Years in Business 11 Years in Business
PRACTICE SALES • VALUATIONS/APPRAISALS • TRANSITION PLANNING • PARTNERSHIPS • MERGERS • ASSOCIATESHIPS NORTHERN CALIFORNIA ALAMEDA: 4 Ops in busy shopping center. 29 yrs Goodwill. 2019 GR $246K on 27 hrs/wk. Room to grow!#CA1268 ALAMEDA: 4 Ops, Practice housed in a beautiful Victorian home. 2019 GR$1.4M+. Real estate also available if desired. #CA1287 CITRUS HEIGHTS/FAIR OAKS: New Listing! Hi-traffic retail location, 4 Ops, Digital and paperless. Doctor looking for a fast sale. 2019 GR $295K. #CA1832 FAIRFIELD AREA: New Listing! 7 Ops, Dentrix, Digital, Digital CB/Pano, newer equipment. 9+ hyg days/wk and specialties referred. GR $1.7M. #CA1824 FAIR OAKS/CITRUS HEIGHTS AREA: Successful practice w/ 38 yrs. Goodwill. Nice décor, Digital, 6 hyg days/wk. Growth potential with Ortho/Implants. 4 Ops in 1,100 sf. 2019 GR $970K+ on 32 hrs/wk. #CA656 GREATER SONORA AREA: New Listing! Rural lifestyle GP/Real Estate, 5 Ops, Dentrix, Strong hyg prog in stable community. 2019 GR $698K. #CA1713 DAVIS/WOODLAND: New Listing! GP practice/Condo with 37 yrs. Goodwill. 2019 GR $770K. 7 Ops, 5 Equipped, Digital Sensors and Pano in sought-after area. #CA1732 EAST BAY: 5 Ops, 4 equipped. Beautiful updated digital office with 23 yrs Goodwill, Digital, Pano, Lasers, and Nitrous Oxide-ready. Avg 30 NP/mo. Open 4 days, this is a CASH AND PPO office! 2019 GR $614K. #CA684 EAST BAY/CONTRA COSTA COUNTY: Central, beautiful location, 4 Ops in 1,350 sf. 2019 GR $659K on 4 Dr. days/wk. #CA644 FOLSOM/EL DORADO HILLS: 5 Ops, 4 Equip, 5 hyg days/wk w/ specialties referred. 2019 GR $530K. #CA1629 GREATER AUBURN AREA PERIO: New Listing! 4 Ops, Digital, PerioLase, W&H ImplantMed HP, Straumann CAD/CAM Scanner, so much more. GR $1M+. #CA2475 GREATER EL DORADO HILLS: Multidoctor, 3,000 sf office, 8 Ops, 7 Equip, I/O Cam, Digital X-rays & Pano. 2019 GR $2.2M. Sellers will consider working back P/T. #CA578 GREATER SACRAMENTO: Price Reduced by $50K! PPO Practice with 4 Ops, digital sensors, imaging system, I/O Cam. Practice open 33 yrs. 2017 GR $652K; Office Condo available for purchase. #CA561 GREATER SACRAMENTO: Great area w/ 38 yrs Goodwill. 4 Ops in 1,100 sf. 2018 GR of $1M+ on 32 hrs/wk. #CA656 LAKE TAHOE AREA: New Listing! 4 Ops, 37 + yrs Goodwill. Rural lifestyle GP in growing resort community. 2019 GR $760K. #CA1715 LAKE TAHOE AREA: GP practice with 5 Ops w/ 6th Open, Operatory views of Lake Tahoe, only 34 Delta Premier patients, 2,100 sf. 2019 GR $579K on 22 avg. Dr. hrs/wk. #CA608 MILLBRAE: Role Reversal, 5 Ops. 2019 GR $1M+ on 4 days/wk. and 6 hyg days. Seller offering 6 mo. employment and work back 6 mo. after sale. Digital, Pano, Waterlase & Periolase. #CA1139 NORTHERN CA PERIO: 4 Ops, Consult Rm, Upgraded Tech with Digital, LANAP, Paperless. 2019 GR $900K+. Draws from lg area with little competition. #CA1553 NORTHERN SACRAMENTO: New Listing! Busy location, Paperless, 3 Ops+4th shared, CEREC, Digital Pano. 2019 GR $671K on 24-32 hrs/wk. #CA1745
OAKLAND: 3 Ops, Room to expand, Digi X-rays, Paperless, 40+ yrs Goodwill. 2019 GR $675K w/ room to grow Specialties. Prime location, retiring doctor will help with a smooth transition. Sellerowned RE to purchase or lease. #CA1380 PLEASANTON FACILITY ONLY: New Listing! Desirable area. 5 Ops, X-rays, upgraded cabinets. 1/3 of price to build out your own. #CA1972 REDDING AREA: Modern practice in 1,600 sf with 4 equipped Ops, 1 additional plumbed. 2019 GR $558K on 32 hrs/wk. #CA648 SAN FRANCISCO FACILITY ONLY: 3 Ops in the heart of the city! Leasehold and equipment only, low rent. Asking $125K. #CA677 SAN FRANCISCO: Low Rent! 30+ yrs Goodwill. Beautiful 4 Op office w/ strong hyg program. 2019 GR $740K+. #CA657 SAN JOSE: Evergreen district, mixed-use bldg. 4 Ops, Digital, Film Pano. Seller will work back one day/wk. if wanted. 2019 GR $1.4M. #CA1817 SAN JOSE: Great cash flow in beautiful retail space with high traffic/visibility. Spacious 3,150 sf with 10 Ops, 6 Equip. 2019 GR $745K. #CA600 SAN JOSE: 6 Ops, Paperless, Digital, CAD/CAM, Digital Pano. Seller will stay on P/T, if desired. 2019 GR $1.3M+. #CA1140 SONOMA COUNTY: Stand-alone 3,000 sf, 72 NP/mo. & 10 hyg days. 6 Ops, Pano, Dexis, Cameras, Laser, Dentrix. Business & RE for sale or Lease. Doctor Retiring. 2019 GR $2.3M+.#CA544 SONOMA COUNTY: 2019 GR $948K with high profit. 3 Ops w/opportunity to expand. Paperless, Dentrix, Digital, I/O Cam. Selling both Practice and portion of dental building ownership. #CA594 VACAVILLE AREA: Centrally-located & hitraffic location with 25+ yrs Goodwill. 5 Ops in 1,700 sf. 2019 GR $556K on 32 hrs/wk. #CA645 VALLEJO/BENICIA/MARTINEZ: Downtown practice+RE with add’l tenants. 3 Ops with 4th available. Digital Pano, Laser. Most Specialties referred. #CA321
BAKERSFIELD: 6 Ops, 40 years goodwill, with a great reputation in the area. 6 days hyg./wk. and most specialty work referred. Digital pano, digital x-rays. 2019 GR $600K. RE also for sale. #CA1274 BAKERSFIELD: 7 Ops w/ high-end equipmentCEREC, Digital X-rays, Cone Beam, Implant motor. 7 hyg days/wk, room to grow. GR $1M+ with low overhead. Bldg for sale at $650K. #CA1120 BAKERSFIELD: Well-established, 5 Ops, 4 Equip. In-house dental lab, could be re-purposed. Main thoroughfare location w/ busy traffic flow. Wonderful reputation/internal referrals galore. Retiring doctor. Condo also for sale. 2019 GR $365K on 3 days/wk. 2019 GR $416K. #CA674 CORONA: New Listing! 4 Ops, Digital, excellent growth opportunity. Main street location in small strip center. 2019 GR $280K. #CA2002 EAST LOS ANGELES FACILITY ONLY: New Listing! 3 Ops, Great retail location in small neighborhood center, signage, on busy street. Seller moving. #CA1786 EL CENTRO: Great location with low rent. 4 Ops, 3 Equipped, Digital, 25 Yrs Goodwill. 2019 GR $850K. #CA680 HUNTINGTON BEACH: PRICE REDUCED FOR QUICK SALE! 5 Ops, desirable location, Digital, strong hyg prog. 2019 GR $604K. #CA685 HUNTINGTON BEACH: 4 Ops, located in a busy retail center with great visibility. Practice utilizes Digital X-rays and Easy Dental PMS. 2019 GR $466K. #CA673 LAGUNA BEACH: New Listing! 2 Ops, private practice, office bldg 2nd floor w/ elevator. Nice location, est. 1975 with low OH. 2019 GR $161K. #CA1499 LONG BEACH: RE ownership an option! Upper middle-class residential practice est. in 1950. Existing 4 Ops, 3 Equip, easy expansion next door to add another 3 Ops, 2 are equip. Digital. CENTRAL CALIFORNIA Most specialties referred. Strong post-COVID production. 2019 GR $696K. #CA671 CENTRAL COAST: 5 Ops, digital, 25+ yrs LOS ANGELES: New Listing! Associate-run, 6 Goodwill. Newly renovated, practice sees 30 NP/ mo. Strong hyg prog. 2019 GR $1.1M+. #CA1218 Ops, parking, room to grow. 2020 GR $1.4M+, Digital, Pano, modern, high quality care. FRESNO AREA: Price Reduced-under $150K! #CA1681 GP/Prosth Practice prime for a GP buyer. 4 Ops NORTH ORANGE COUNTY: 5 Ops, open with Digital Sensors, Film Pano, attractive office since 1965. Dentrix, digital Pano. Retiring seller building and space. 2019 GR $409K. #CA588 will assist w/ smooth transition. One-story prof. GREATER FRESNO: PRICE REDUCED bldg. 2018 GR $231K. Room to grow. Most $100K! 4 Ops, Digital, PPO/Denti-Cal, fastSpecialty procedures referred out. #CA558 growing area, 22 Yrs. Goodwill, Digital. Bldg ORANGE COUNTY: 5 Ops, Digital, Retiring available to purchase. 2019 GR $523K. #CA676 seller. Excellent reputation, affluent area, high MODESTO AREA: Established neighborhood quality care. Modern, welcoming office with with 60+ yrs Goodwill. 5 Ops, 1,450 sf. 2018 GR strong hyg prog. Room to grow specialties. 2019 $1.1M+ on 3 day/wk. Dental Condo also available GR $642K. #CA1676 for purchase or lease. #CA635 ORANGE COUNTY: New Listing! Beautiful MONTEREY: 4 Ops, 1,600 sf, desirable area w/ office located at a major intersection in a strip free parking. 32 hrs/wk. 2019 GR $938K. #CA650 center. 2019 GR $329K with low overhead and great take-home Net. 5 Ops, 3 equipped, seller SANTA CRUZ: New Listing! 3 Ops, Digital, works average 25 hrs./wk. Great potential, low Pano, Reasonable rent. 40+ yrs. goodwillMinutes asking price of $175K. A must-see! #CA1728 from beach. 2019 GR $592K. #CA4709 OXNARD: New Listing! 7 Ops, nice office, STOCKTON: 1/3-2/3 share of 3 GP partner paperless, digital, 11 days of hygiene/wk. 2019 practice. 2019 GR $508K on 32 hrs/wk. Digital, GR $1.55M. #CA1829 paperless. Most specialty referred. Add’l 1/3 ownership of separately listed practice in group OXNARD: 4 Ops, Digital X-rays, Est. 35+ yrs also avail, allowing 2/3 ownership. #CA1389 ago. Seller owned it for 3 yrs and has a primary office in LA. 2019 GR $662K. #CA1164 STOCKTON: PRICE REDUCED/WILL CONSIDER CHART SALE! Opportunity to buy 1/3 PALM SPRINGS AREA MULTIshare of GP, mostly PPO, partner practice. 2019 SPECIALTY: Priced to sell @ $775K! 5 Ops, GR $462K on 32 hrs/wk. Digital. Add’l 1/3 lecture room, 28 yrs Goodwill. Hi-end, mostly ownership of separately listed practice in group cash patient base. Dentrix, Digital, CT Scan & also avail, allowing 2/3 ownership. #CA1624 Gemini Dual Wave Laser. History of $1.2M+/yr on 4 days/wk. #CA604 STOCKTON AREA: Great opportunity to purchase practice/bldg, 3,000+ sf, 6 Ops, Good hyg recall. 2019 GR $1M+ on avg 37 hrs/wk. #CA616
Northern California Office
Henry Schein Corporate Broker #01230466
SAN GABRIEL VALLEY: 4 Ops, Digital X-rays, 65 yrs Goodwill. Most specialty work referred out, most PPO plans are accepted. Busy road with great visibility, open 4 days/wk. Nicely appointed; excellent opportunity. #CA596 SIMI VALLEY: 6 Ops, 5 Equip, Great location, low rent, 45 yrs goodwill. 2018 GR $297K w/ $89K Adj. Net. #CA637 SOUTH BAY LOS ANGELES PEDO: 3 Ops+ Recovery/Consult Room, Digital, well-run, RE also for sale. Potential upside with keeping Ortho inhouse. 2019 GR $668K #CA1653 SOUTH BAY LOS ANGELES: Ready to retire! 7 Ops, RE for sale. 50% Denti-Cal, some HMO/PPO. 2019 GR $568K. #CA1050 SOUTH ORANGE COUNTY PERIO: 4 Ops, 3 Equip, Coastal Community, Modern, Busy strip center location near hi-end residential. 2019 GR $845K. #CA643 SO CAL DESERT AREA: 4 Ops 27 yrs Goodwill. Strong hyg prog w/ hi-end patient base. 2019 GR $809K. #CA691 WEST HOLLYWOOD/BEVERLY HILLS ADJACENT: New Listing! 4 Ops in high foot traffic area near high-end residential. Digital, Itero CAD/CAM, Visiting Specialists. Chartless, strong Hyg. Room to grow by adding add’l specialties or expanding next door. 2019 GR $1.6M+. #CA1784
SAN DIEGO ENCINITAS: 4 Ops. Busy retail center. Remodeled 5 yrs. ago with new equipment. Dentrix, Digital, Pano, and Laser. 4 hyg days/wk. 2018 GR $813K. #CA574 LA JOLLA: UTC Area, Leasehold with patients. 7 Ops Digital in retail center with strong anchors. Priced to sell! #CA663 LA MESA: New Listing! 7 Ops, 4 Equip, Digital, Stand-alone office w/ freeway access. Room to grow with specialties. 2019 GR $696K. #CA1915 NATIONAL CITY: 6 Ops, 14 yrs Goodwill, strip mall with high visibility, Digital, loyal staff and patients. 2019 GR $754K. #CA1465 SAN DIEGO: 3 Ops, busy strip mall location, Digital, well-organized, office with stable patient base. 2019 GR $686K. #CA1905 SAN DIEGO: Rare opportunity in prime location. Solid practice with 17 yrs Goodwill. 5 hyg days/ wk. 6 Ops, 5 Equip, digital X-rays, Pano. Most specialty work referred out. 2019 GR $1.1M+. #CA1448 SAN DIEGO: 7 Ops, 5 Equipped, located in a large retail center. EagleSoft, PPO/Cash, 3 year average collections of $509K. #CA687
OUT OF CALIFORNIA HONOLULU, HAWAII: Highly desirable area, 40 yrs Goodwill, 3 Ops. Digital X-rays, DigiDoc, Planmeca E4D, Laser, Densys Operating System. Seller is retiring. #HI1112 SOUTHWEST PORTLAND, OR: 7 Ops, 6 Equip, Dentrix, Digital, Pano. Well-maintained leased space. 2019 GR $598K. #OR115 SOUTH OF PORTLAND, OR - ORTHO: New Listing! Growing community outside “Big City”. Well-estab near referring doctors. Updated, spacious, turnkey! 2019 GR $1.3M+ #OR1550 BURIEN AREA, WA: 3 Ops, Busy Area w/foot traffic. Very low overhead and good cash flow. Could relocate in Bldg to bigger suite. #WA102 TACOMA, WA: New Listing! 4 Ops in highly desirable area. MacPractice, Soft/hard Tissue Laser, E4D. Owner well-versed in same-day dentistry and will help transition using tech. #WA2436
Southern California Office
C D A J O U R N A L , V O L 4 9 , Nº 2
Judgment and Informed Consent Henrik Hansen, DDS
n interesting situation came up recently. A patient of mine was experiencing pain in tooth No. 19. I referred her to an endodontist, but the prognosis wasn’t good due to extensive distal root decay. After a discussion regarding the options if she had it extracted, I sent her to an oral surgeon due to an autoimmune disease and the difficulty involved in removing the tooth. After the consultation, I spoke to the oral surgeon who asked, “What about 30?” Ah, No. 30. Well, the patient and I had discussed that particular tooth on multiple occasions. It is floating in a sea of soft tissue without any bone support, but completely asymptomatic. The patient wanted to delay extraction until it hurt. I had discussed the medical and dental risks involved, including the danger to the adjacent teeth, which at the moment had minimal pocketing. The oral surgeon also went over the dangers it presented to her health and was quite strenuous in arguing to have both teeth removed at the same time. I agreed completely that it would be the best course of action and told the patient the same. However, she was adamant in denying permission. Since then, I have been thinking about the ethical principles involved. The ethical principal of veracity demands that we, as doctors, have a duty to fully inform our patients of the consequences of their treatment options, including no treatment. Competence means that in formulating those options, we must use our experience, training and best judgment. Beneficence and integrity mean we can’t allow a patient to dictate treatment that we know is below the standard level of care. However, this case is different, the patient is not allowing recommended treatment. We can’t perform treatment without informed consent; that could be considered the tort of battery. If we verbally push so hard that they give a reluctant OK, is this truly informed consent or coercion? And finally, there’s autonomy. 108 FEBRUARY
As long as the patient is competent to make decisions and is fully informed, they have a right to decide what is done to their body. In all of this is the issue of being fully informed. I think back many years ago to when a patient was considering orthodontics for herself. After the referral, the orthodontist asked if I wanted to attend the consultation with the patient, which I accepted. During the 30-minute session, the patient smiled, nodded and obviously understood nothing he said. He spoke about occlusion, maxillary protrusion and other terms that most nondental professionals would be clueless about. There was no informed consent here. I learned a valuable lesson that day. Since then, I always begin
a treatment discussion with, “As I present your options, if there’s anything that isn’t clear, please stop me and I will rephrase. It’s important that you fully understand what I’m saying.” If they say, “Gee, Doc, I trust you,” I tell them that I appreciate that and it’s very flattering to hear, but humor me. Being successful in our profession isn’t easy. It requires competence, dedication and a great amount of people skills, but the people make it worthwhile. n Henrik Hansen, DDS, is a general dentist practicing in Fairfield, Calif. He served on the CDA Judicial Council and is past chair of the Council on Peer Review and a past member of the ADA Council on Dental Benefit Programs.
2021 LDM_CDA_Journal_1.3_Square_LindaBrown_05_23_17.indd 1
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C D A J O U R N A L , V O L 4 9 , Nº 2
A look into the latest dental and general technology on the market
Anura (Free, Nuralogix) Nuralogix, a company based in Toronto, has developed a general wellness app called Anura, which uses its “affective” artificial intelligence (AI) technology based on transdermal optical imaging (TOI) to provide common health indicators with only a 30-second smartphone selfie from an iOS or Android device. Anura is not a substitute for a diagnosis from a qualified health care professional. However, with Anura, the power of AI can potentially provide some health insights for those unable to immediately see a health care professional. Signing up for an account, which unlocks all the features of the app, requires some personal profile health data and gives consent to collect data obtained to provide core services. The main screen shows live video from the selfie camera and a circular outline where users center their face. Once the app automatically locks in on the face, visual cues are provided as it starts analyzing facial characteristics to determine health indicators, which include heart rate, respiration, blood pressure and many other measurements. During the analysis, the circular outline becomes a timer indicating how long the user must maintain their face centered in the camera, which is 30 seconds or less. When the analysis is complete, data is sent to Nuralogix for processing and results are instantly returned on the screen. In addition to vital sign measurements, the app displays other wellness information from its analysis, including heart rate variability, cardiac workload, stress index, body mass index, facial skin age, waist-to-height ratio and body shape index. Users can reference a history of past measurements to track trends. A special mode can also be used to take measurements of friends on the same device without recording results to the logged in account profile. It is entirely the responsibility of the end user to decide how to use the wellness information provided by the app, but it is impressive to see how these metrics are easily obtained with only a 30-second selfie. — Hubert Chan, DDS
Microsoft Power Automate
(License starts at $15 per user per month, Microsoft) Microsoft has been at the forefront of productivity software for years thanks to its suite of Office products like Word, Excel and PowerPoint. While these applications are still and will most likely remain mainstays in professional settings, Microsoft has made a concerted effort to expand the usefulness of its products with modern offerings like PowerApps, Sharepoint and OneDrive. Tying all these applications (and many others) together is Microsoft Power Automate, a subscription-based service that helps users “create automated workflows between … apps and services to synchronize files, get notifications, collect data and more.” Power Automate is the integration point, the “middle person” who passes information from one to another. It is a challenging application to use, but the rewards are well worth the headaches. Formerly known as Microsoft Flow, Microsoft Power Automate is a pay-as-you-go web service that appears in the Microsoft Portal upon activation. It has a host of prebuilt capabilities out of the box such as sending emails when an entry in Excel is detected, requesting approval for items in a SharePoint list and instantly blocking out all calendars for a specific time range. These seemingly trivial actions can be chained together in Power Automate to moderate and perform complex tasks. For example, utilizing the aforementioned prebuilt capabilities, users create an Excel spreadsheet that controls their practice’s time-off requests. Power Automate monitors a spreadsheet, sends approval notifications to managers when a new entry is made or modified and then blocks out the employee if the request is approved. This information can then be attached to payroll processes and even electronic health records for greater utility. Unfortunately, Power Automate is not for the beginner, as a functional command of modern programming principles is required; in fact, Power Automate can overwhelm intermediate and advanced users due to its multitude of idiosyncrasies and bugs. — Alexander Lee, DMD
FEBRUARY 2 0 2 1
Simply brilliant. Save the dates for CDA Presents. Keep connected to CDA for news on upcoming conventions including schedules, new courses, amazing speakers and exciting learning platforms. Visit cda.org/cdapresents.
Earn C.E. online at any time. Take part in your choice of innovative webinars, web-based courses and audio learning options. Explore courses and learn at your convenience. Get started at cda.org/brightbox.
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