Dental Practice Transitions

How Defining Your Goals Will Shape Your Dental Practice’s Business Succession Plan

How Buy-Sell Agreements Determine the Success of Your Transition

Most relationships, whether personal or professional, start with a certain level of mutual trust and respect, compatibility, and shared goals and priorities. But those characteristics don’t always last, and a once-promising partnership can devolve into disputes, distrust, or outright hostility. The dentist-patient relationship is not immune to such deterioration. There may come a day when the differences between a dentist and their patient make continued treatment undesirable or impractical. A patient, of course, is free to call it quits with their dentist at any time, or the patient and dentist can mutually agree to part ways. But when a dentist wants to stop treating a problematic or disruptive patient and terminate the relationship, things can be a bit stickier. It is crucial that a dentist handles the break-up carefully and in accordance with the law and ethical standards so as to avoid claims of patient abandonment that could threaten their professional license or expose them to liability. Are you interested in speaking with one of our attorneys? Click here to contact us now. Dentists Have a Right To Unilaterally Dismiss a Patient For Reasonable Cause As a preliminary matter, dentists may choose to responsibly end their relationship with a patient for any reasonable, legally permissible cause. As the American Dental Association (ADA) guidelines put it: The dentist has the right to dismiss a patient in situations where it is impossible to resolve differences or if the dentist cannot abide the patient’s behavior within the practice, as long as the dismissal is not for a legally impermissible discriminatory reason. Accordingly, a dentist may not end a patient relationship because of the patient’s race, religion, gender, color, age, national origin, disability, or other characteristics protected by federal and state anti-discrimination laws. Notably, political opinions are not a protected characteristic under the law. Common reasons a dentist may justifiably terminate a patient include: Hostility or abusive behavior toward the dentist, staff, or other patients Harassment or sexual abuse of dentist, staff, or other patients Repeatedly missing appointments Refusal to undergo recommended testing or treatment Lack of trust or confidence in the dentist’s abilities or recommendations Consistent failure to follow office policies Showing up to appointments under the influence of alcohol or drugs Refusing to adhere to infection-control precautions and policies, such as masking Nonpayment Patient Dismissal vs. Patient Abandonment A dentist who chooses to dismiss a patient can’t simply show them the door, send them a break-up text, or refuse to answer their calls. Dentists must end the relationship such that they avoid any claim that they have abandoned their patient. According to the ADA’s Principles of Ethics and Code of Professional Conduct Section 2.F.: Once a dentist has undertaken a course of treatment, the dentist should not discontinue that treatment without giving the patient adequate notice and the opportunity to obtain the services of another dentist. Care should be taken that the patient’s oral health is not jeopardized in the process. Patient abandonment is a serious ethical violation. For example, the Illinois Dental Practice Act lists “abandonment of a patient” as one of the many reasons the Illinois Department of Financial and Professional Regulation may revoke, suspend, refuse to issue or renew, reprimand, or take other disciplinary or non-disciplinary action against a dentist. A dentist also exposes themself to a malpractice claim if injuries result from their termination of the patient at the wrong time during the course of treatment or without proper notice. Best Practices For Terminating a Patient Relationship As noted, adequate notice, providing the patient an opportunity to find alternative care, and facilitating continuity of ongoing care are the keys to responsibly ending the dentist-patient relationship and avoiding a claim of abandonment. We suggest that dentists take the following steps to minimize the likelihood of any disputes or claims arising from the termination of the relationship: provide written notice to the patient, preferably by certified mail; provide the patient with the reasons for terminating the relationship; offer to continue treatment and access to services for a reasonable period (such as 30 days) to allow the patient to secure another dentist’s services; state that you will provide emergency services for a designated period; help the patient locate another dentist; and offer to transfer the patient’s records to a new dentist and/or advise the patient of their right to obtain a copy of their records for a fee. Additionally, a dentist experiencing issues with a patient should contemporaneously document all communications, incidents, statements, or behavior suggesting a breakdown in the relationship. Of course, while a dentist can control how they handle the end of a patient relationship, they can’t control how the patient will react to being “dumped.” Even when the dentist acts professionally and cordially, as they should, there is no guarantee that the patient will do the same. If a patient responds with hostility or anger, tread carefully and do not respond in kind. Contact Us With Any Questions or Concerns If you have any questions or concerns about ending a patient relationship, please give us a call. At Grogan, Hesse & Uditsky, P.C., we focus a substantial part of our practice on providing exceptional legal services for dentists and dental practices, as well as orthodontists, periodontists, endodontists, pediatric dentists, and oral surgeons. We bring unique insights and deep commitment to protecting the interests of dental professionals and their practices and welcome the opportunity to work with you. Please call us at (630) 833-5533 or contact us online to arrange for your free initial consultation. Jordan Uditsky, an accomplished businessman and seasoned attorney, combines his experience as a legal counselor and successful entrepreneur to advise dentists and other business owners in the Chicago area. Jordan grew up in a dental family, with his father, grandfather, and sister each owning their own dental practices, and this blend of legal, business, and personal experience provides Jordan with unique insight into his clients’ needs, concerns, and goals.

What Lies Beneath

Like every other business, dental offices are vulnerable to criminal acts or disruptions that could put both people and property at risk. Whether it be burglary or vandalism that costs a practice tens of thousands of dollars or a random act of violence that causes incalculable losses, the potential for such incidents has led most dental practices to institute a variety of security measures to protect their patients, employees, and facilities. For many practices, this includes the installation of video surveillance cameras inside and outside their offices. But the added security provided by these cameras can also come with unanticipated risks if they violate the privacy of patients and/or their medical records. The danger that security cameras may run afoul of patient privacy rights is most acute if those cameras record audio as well as video, and if they are placed in areas where patients reasonably expect privacy, including in treatment areas. While laws regarding video and audio recordings vary from state to state, the fundamental concerns regarding surveillance cameras are the same everywhere and are two-fold: Violating a patient’s (and employee’s) reasonable expectation of privacy Violating HIPAA and other obligations regarding protected health information (PHI) Are you interested in speaking with one of our attorneys? Click here to contact us now. Patient Expectations of Privacy There are some areas of a dental office where a “reasonable expectation of privacy” is a no-brainer, such as restrooms and changing rooms. Do not install cameras in such locations. But patients likely have a similar expectation in private treatment rooms or operatories. If cameras are to be used in these areas, the patient should be advised in advance and sign a consent and release form agreeing to their use. If a patient, for whatever reason, does not consent, disable the camera or cease recording during the course of treatment. Employees also have a reasonable expectation of privacy, at least in areas like breakrooms or lunch rooms. Inform all employees, in writing, that cameras are in use. You do not need their permission, but you do need a signed acknowledgment, which you should keep in their employee file. In all circumstances, patients and employees alike should be given notice that your office is under video surveillance; surreptitious recordings or hidden cameras are ill-advised. In common areas like reception areas and waiting rooms, place signage stating that there is a nearby security camera in use. This discourages claims that someone reasonably expected the area to be private and supports a legitimate purpose — safety and security. Additionally, have a consistent policy on how recordings may be used and how long they will be kept. Many states have strict laws against eavesdropping such that audio recordings present particularly tricky issues. Some states require the consent of both parties before making an audio recording, while others permit recording with only one party’s consent. Given the legal risks associated with audio recordings, and the limited additional security benefits audio provides, the most prudent course is to make video recordings only. Potential HIPAA Violations Critically, dental practice owners should consider HIPAA and data privacy rules when installing cameras in their offices. Ensure that cameras are not able to capture a computer screen or charts that contain a patient’s PHI. But PHI extends beyond records and includes the mere fact that a patient is at your office for treatment. As such, recordings from exterior cameras as well as those inside must be protected from dissemination or disclosure. You can disclose any such recordings to law enforcement if they request the information by subpoena. The bottom line is that dental practice owners have every right to take the steps needed to protect their facilities, patients, and employees, including installing and using video cameras. But they should do so in ways that ensure that those being recorded are aware of and consent to that fact, that the cameras do not impinge on personal expectations or privacy, and that all PHI is sufficiently shielded from unauthorized disclosure. If you have any questions regarding the use of video surveillance cameras in your offices, please call Grogan Hesse & Uditsky today. We Focus on You So You Can Focus on Your Patients At Grogan Hesse & Uditsky, P.C., we focus a substantial part of our practice on providing exceptional legal services for dentists and dental practices, as well as orthodontists, periodontists, endodontists, pediatric dentists, and oral surgeons. We bring unique insights and deep commitment to protecting the interests of dental professionals and their practices and welcome the opportunity to work with you. Please call us at (630) 833-5533 or contact us online to arrange for your free initial consultation. Jordan Uditsky, an accomplished businessman and seasoned attorney, combines his experience as a legal counselor and successful entrepreneur to advise dentists and other business owners in the Chicago area. Jordan grew up in a dental family, with his father, grandfather, and sister each owning their own dental practices. This blend of legal, business, and personal experience provides Jordan with unique insight into his clients’ needs, concerns, and goals.

Why TODAY Is The Time To Prepare Your Practice – and Yourself - For an Uncertain Tomorrow

There are many reasons why a dentist may want to sell their practice - retirement, relocation, a desire to step back from the responsibilities of ownership, or an offer too good to refuse. Whatever the motivation, one goal is always the same: maximizing the financial benefits of the transaction. Those benefits – today and far into the future - depend on many factors, but few have as much impact as how the Internal Revenue Service treats the gains you realize from the sale of your practice. How you structure the sale, the nature of the entity you’re selling, the specific assets involved in the sale, and any special considerations like earnouts or deferred payments will determine how much winds up in your pocket vs. how much you’ll be sending to Uncle Sam. Here are some fundamental tax considerations to understand if you are looking to sell your dental practice in 2026: Are you interested in speaking with one of our attorneys? Click here to contact us now. What Type of Entity Are You Selling? As noted in the title of this post, how you structure the sale of your practice is as important as the nature and value of the practice you’re selling. However, the entity structure you chose when you formed your practice still has a significant impact on how you’ll be taxed when you walk away. If you organized your practice as a C corporation, all proceeds from the sale of the corporation’s assets will be taxed on the corporate level. This means these proceeds may be taxed twice: once at the corporate level and again when you distribute those monies to yourself. If, however, your practice is a regular partnership (such as a limited liability company or a limited liability partnership) or an S Corporation, you may pay tax on both ordinary and/or capital gains income on your personal income tax return, depending on the structure of the sale. Capital Gains v. Ordinary Income If you make a profit when you sell an asset, you make a capital gain. But not all such gains are subject to capital gains tax. Sometimes, the IRS taxes profits as ordinary income at the taxpayer’s individual rate. Since the current individual rate is around 37 percent, sellers would rather pay the currently lower capital gains rate (the maximum of which is 20%) to the extent possible. Notably, the capital gains tax only applies to profits on assets held for more than 12 months. Unless a dental practice goes from zero to 60 or acquisition to sale in less than a year, which is rarely the case, the sale will implicate the capital gains tax. Accordingly, structuring your deal to maximize the amounts taxed as capital gains vs. ordinary income is one of the most significant considerations in minimizing your tax liabilities. This depends, to a large degree, on how you allocate and treat the assets you are selling. Asset Allocation Most sales of dental practices are structured as asset sales, meaning the purchaser is acquiring specific assets of the practice rather than its stock. Dental practices are comprised of several different kinds of assets—equipment, supplies, real property, goodwill—and separate accounting and tax rules apply to each type of asset. Tangible Assets : These include equipment, furniture, office and medical supplies, and other physical assets. Typically, tangible assets are treated as depreciated property, so gains on the sale of these assets are usually subject to recapture rules, where depreciation deductions taken in prior years may be "recaptured" and taxed as ordinary income. Accounts Receivable : Any outstanding accounts receivable can be part of the sale. For cash-basis taxpayers (the most common for dental practices), accounts receivable are taxed as ordinary income since they represent payments for services already rendered but not yet received. Goodwill and Intangible Assets : The goodwill of your dental practice, which includes the value of your brand, client base, and reputation, is generally taxed at the capital gains rate. This is advantageous because the long-term capital gains rate is often lower than the ordinary income rate. Other intangible assets may also qualify for capital gains treatment, depending on how they are classified. If you have taken depreciation deductions on your practice’s equipment or real property, the IRS requires that depreciation be "recaptured" and taxed as ordinary income up to the amount of prior depreciation. While this applies to equipment and other depreciable assets, goodwill, and certain intangibles do not face depreciation recapture. Earnouts: Deferred Purchase Price Payment or Compensation? From the IRS’ perspective, how and when you receive payment for the sale of your practice will determine its tax treatment. If those payments come in the form of earnouts, the key issue is whether the IRS views each payment as a deferred purchase price payment or the payment of compensation. Earnout provisions are often included in practice sale agreements and provide for contingent additional payments from the buyer to the seller upon the practice meeting specified financial targets or other milestones in the future. Earnout payments are generally treated as part of a deferred purchase price so long as the seller is not performing services for the buyer and the practice after the consummation of the sale. The earnout payments may be treated as compensation income if the seller provides services for the buyer or target company after the acquisition or, in some cases, if the purchase agreement includes a non-competition provision. If the IRS treats earnout payments as deferred purchase price payments (for a non-corporate seller), they will be capital gains, which, as noted, are taxed at a much lower rate than ordinary income. However, if the IRS determines that the earnout constitutes compensation to the seller, the IRS will consider it ordinary income that can be subject to tax rates as high as 37 percent, along with employment taxes (such as Social Security and Medicare taxes). Accordingly, the sale agreement should specifically refer to earnout payments as part of the purchase price to support the treatment of such payments as capital gains rather than ordinary income. However, what you call the payments in the documentation is far from determinative, as the IRS will look beyond the language of the agreement to consider several substantive factors when deciding how earnout payments should be classified. This is where careful structuring and documentation can play an outcome-determinative role in how these substantial sums will be treated for tax purposes. You put a lot into your dental practice over the years. How much you take out and whether your sale will reap the benefits you anticipate depends on how well your professional team of attorneys, accounting professionals, and financial advisors do their jobs when crafting your transaction. That is one of many reasons why you should consult with an experienced dental practice sale and acquisition attorney to discuss and understand your options. We Focus on You So You Can Focus on Your Patients At Grogan Hesse & Uditsky, P.C., we focus a substantial part of our practice on providing exceptional legal services for dentists and dental practices, as well as orthodontists, periodontists, endodontists, pediatric dentists, and oral surgeons. We bring unique insights and deep commitment to protecting the interests of dental professionals and their practices and welcome the opportunity to work with you. Please call us at (630) 833-5533 or contact us online to arrange for your free initial consultation. Jordan Uditsky, an accomplished businessman and seasoned attorney, combines his experience as a legal counselor and successful entrepreneur to advise dentists and other business owners in the Chicago area. Jordan grew up in a dental family, with his father, grandfather, and sister each owning their own dental practices. This blend of legal, business, and personal experience provides Jordan with unique insight into his clients’ needs, concerns, and goals.

Bogus ADA Claims Regarding Dental Practice Websites Are Rampant. Your Lawyer Can Help You Tell the Difference Between a Real Problem and a Real Shakedown. Over 25 years have passed since the Americans with Disabilities Act (ADA) quite literally reshaped the landscape for people with disabilities. From building entrances to parking lots to restrooms to elevators, from hiring and employment opportunities to restaurants, stores, and websites, disabled Americans have far greater access to the same facilities, services, and opportunities as everyone else. Harassment at Best, Extortion at Worst For all the good it has accomplished, however, the ADA has also been abused by opportunistic individuals and attorneys who have used the law in bad faith to shake down small businesses, including dental practices, for alleged violations that have not actually caused any harm or infringed upon any rights afforded by the act. These self-appointed ADA compliance "testers" have filed thousands of nuisance ADA suits that have cost American businesses millions of dollars. According to one analysis, ADA lawsuits have increased by 320% since 2013, with over 4,000 suits filed in 2024 alone. Many plaintiff's law firms file hundreds of cookie-cutter ADA lawsuits each year. One person can visit multiple businesses or websites in a single day solely to identify even the slightest accessibility transgressions in order to generate claims. While these suits can focus on any number of alleged ADA shortcomings, those relating to website accessibility (discussed in detail in this earlier post ) filed by a handful of law firms and serial plaintiffs have earned the scorn of small businesses and practices across the country. That's because these "testers" and the lawyers who represent them specifically target small businesses, as they typically have limited means to defend themselves, may not be able to discern between legitimate and bogus claims, and often see a quick payoff as the path of least resistance. Here’s how the shakedown typically goes down: A plaintiff or their attorney sends the practice a demand letter in which they claim that the practice’s website is inaccessible to people with disabilities (e.g., missing image alt text, inaccessible forms, incompatible with screen readers). They cite a violation of Title III of the ADA. They make a demand for a cash settlement, often ranging from $2,500 to $25,000, alongside a request for accessibility fixes. The business/practice cuts a check in exchange for a release of any ADA claims by that plaintiff related to the website. The business/practice may then receive more demand letters, often from the same firm, on behalf of other plaintiffs who make the same claim, and the extortion continues. Don’t Act Impulsively – Do This Instead All this is not to say that dental practice owners should consider all such claims and demands to be frivolous or ignore their ADA obligations relating to their website. To be sure, a meritorious ADA lawsuit can indeed expose a practice to significant financial and reputational damage. Before reflexively giving in to an ADA demand letter and settling a supposed claim, practice owners should take the following steps: · Don't Panic, But Don't Ignore It. As noted, a demand letter with legalese and ominous language doesn’t mean that you’ve done anything wrong or actually violated the law. While your immediate reaction may include fear, confusion, or anger, don’t act impulsively. By the same token, don’t assume it is a bogus threat; crumble up the letter and throw it in the recycling. Deadlines in these letters are real, and failing to respond appropriately to a viable claim could lead to litigation. · Contact Your Attorney Immediately. This is not a DIY situation. Before responding to the letter or contacting the sender, consult with an attorney experienced in ADA compliance and website accessibility issues. Your lawyer can evaluate the demand letter or complaint, the validity of the claim, and the law firm behind it before formulating an appropriate response. Testers send many cookie-cutter letters that may contain boilerplate allegations of deficiencies that do not actually exist. · Evaluate Your Actual Compliance. Work with your attorney and website accessibility experts to have your website assessed against the Web Content Accessibility Guidelines (WCAG) , which courts often reference in ADA website cases. Understanding your site's actual accessibility helps inform whether settlement, remediation, or another approach makes sense and whether you need to take additional steps to avoid future claims. Keep in mind that this isn't just about legal compliance—it's good business. An accessible website serves all patients better and demonstrates your commitment to inclusivity. If you have questions about your business's ADA obligations and how to protect it from accessibility complaints, please call Grogan, Hesse & Uditsky at (630) 833-5533 or contact us online to arrange for your free initial consultation. At Grogan Hesse & Uditsky, P.C., we focus a substantial part of our practice on providing exceptional legal services for dentists and dental practices, as well as orthodontists, periodontists, endodontists, pediatric dentists, and oral surgeons. We bring unique insights and deep commitment to protecting the interests of dental professionals and their practices and welcome the opportunity to work with you. Jordan Uditsky, an accomplished businessman and seasoned attorney, combines his experience as a legal counselor and successful entrepreneur to advise dentists and other business owners in the Chicago area. Jordan grew up in a dental family, with his father, grandfather, and sister each owning their own dental practices. This blend of legal, business, and personal experience provides Jordan with unique insight into his clients’ needs, concerns, and goals.

For employers and employees alike, in workplaces from restaurants to factories to dental practices, the specter of a visit from ICE, CBP, or other federal immigration forces looms large. Trepidation and fear are common feelings in this perilous climate, exacerbated by uncertainty as to one’s rights and how to respond when militarized agents arrive at a workplace. For dental practice owners, protecting their employees, patients, and business is a top priority, as is doing so in a legal, peaceful, and effective manner that doesn’t make a difficult situation worse. That is why it is so critical that you understand your rights and obligations in the face of such intrusions. While you should absolutely and immediately contact counsel if immigration agents show up at your practice, here is some practical guidance to help keep you and your employees safe. Different Responses to Different Types of ICE Actions Historically, ICE has conducted three types of workplace actions: I-9 audits (Notice of Inspection or “NOI”), which are administrative reviews of employment eligibility verification forms; worksite enforcement operations, which may include arrests; and searches pursuant to a warrant. Unfortunately, these customary practices have recently expanded to include warrantless, legally unauthorized, and sometimes violent entry into workplaces. The type of action the agency takes determines your obligations and your rights. An I-9 audit begins with a formal notice, typically giving you three business days to produce your I-9 forms and supporting documentation. A worksite enforcement operation or raid, however, often comes without warning. Understanding which situation you're facing is the critical first step. When ICE Arrives Without Notice – Keep Calm, Call Your Lawyer, and Ask For Authority If ICE agents appear at your workplace without prior notice, remain calm and follow these essential steps: · Keep calm , and don’t make any quick or impulsive decisions. Politely ask the agents to wait while you contact your attorney. You are not required to let agents enter non-public areas of your workplace without proper legal authority. While agents can enter your reception area or other common spaces as any member of the public could, they cannot access private areas such as treatment rooms, back offices, lunchrooms, or labs without your consent, a valid warrant, or an emergency. · Ask to see credentials and any warrants or legal documents. Scrutinize these thoroughly and understand this crucial distinction: an administrative warrant (Form I-200 or I-205) is not the same as a judicial warrant signed by a judge. Administrative warrants alone do not give ICE the authority to enter your private property or detain individuals. A judicial warrant, however, must be honored, though you should still speak with your lawyer who can help verify that it's properly signed, dated, and identifies the correct location and individuals. · Designate a single point of contact , ideally yourself as practice owner or an office manager, to communicate with the agents. Instruct other employees not to answer questions or provide information without guidance. This prevents confusion and minimizes the chances of miscommunication or escalation. Understanding Your Rights Employers have constitutional rights that apply during ICE encounters. The Fourth Amendment protects against unreasonable searches and seizures. As noted, without a judicial warrant or your consent, ICE generally cannot enter private areas of your practice, search filing cabinets or computer systems, or detain employees based solely on their immigration status. You have the right to refuse consent to a search. Exercise that right. If agents don't have a warrant, you can politely but firmly state: "I do not consent to a search of the premises. If you have a warrant signed by a judge, I would like to see it and have my attorney review it." If they have a warrant, verify it carefully to check that the address is correct, the signature is from a federal judge (not an ICE officer), and it's dated recently. Despite the recent rhetoric and actions of ICE agents and officials, you have an absolute right to observe, record, video, and document what's happening and what the agents are doing, so long as you do not interfere with or impede their operations. If ICE does enter your practice, you or your designated representative has the right to, and should, accompany agents to witness their actions. Protecting Your Employees Your employees also have rights, regardless of their immigration status. They have the right to remain silent and do not have to answer questions about their immigration status, where they were born, or how they entered the country. They have the right to refuse to show documents beyond what's necessary to demonstrate identity, unless they're under arrest. They should not lie or present false documents, as this can create additional legal problems. Before an ICE visit occurs, consider holding a "know your rights" training for employees. Inform them that if ICE arrives, they should remain calm, not run, and not present false documents. Provide them with a card that includes information about their rights and the contact information for your practice's attorney. You should never lie to federal agents or provide false information. However, you are not required to volunteer information or answer questions beyond what's legally necessary. If asked about specific employees, you can politely decline to answer and refer agents to your attorney. Once ICE agents leave, immediately document everything that occurred and save any videos or recordings so you can send them to your attorney. Preparing Before ICE Arrives The best time to prepare for an ICE visit is before it happens. Consider the following proactive steps: · Develop a written policy for your practice that designates who will handle ICE encounters, what steps to take, and how to contact your attorney. · Conduct an internal I-9 audit to identify and correct any paperwork errors or gaps. · Train office managers and supervisors on the protocol. Everyone should know not to consent to searches, not to answer questions without guidance, and to remain professional and calm. Post "know your rights" information for employees in common areas. If you have any questions or concerns regarding ICE or immigration enforcement activities at your practice, please contact Grogan, Hesse & Uditsky today. We focus a substantial part of our practice on providing exceptional legal services for dentists and dental practices, as well as orthodontists, periodontists, endodontists, pediatric dentists, and oral surgeons. We bring unique insights and deep commitment to protecting the interests of dental professionals and their practices and welcome the opportunity to work with you. Jordan Uditsky, an accomplished businessman and seasoned attorney, combines his experience as a legal counselor and successful entrepreneur to advise dentists and other business owners in the Chicago area. Jordan grew up in a dental family, with his father, grandfather, and sister each owning their own dental practices, and this blend of legal, business, and personal experience provides Jordan with unique insight into his clients’ needs, concerns, and goals.