The DSOs Strike Back: Colorado’s New Rule Restricting Dental Service Organizations Put On Hold After Lawsuit

Recently, we discussed a rule adopted by the Colorado Dental Board earlier this year that, while explicitly allowing dental service organizations (DSOs) to operate in the state, places several important limitations on DSO ownership of practices, real property, and equipment, as well as restrictions on their involvement in clinical decisions. Rule 1.7, which was scheduled to take effect January 1, 2027, reflects a broader trend of state-level laws and regulations designed to limit DSO activities and draw a clearer distinction between what does and does not constitute the corporate practice of dentistry in the context of DSO ownership and operation.

For the trade group that represents the interests of DSOs, however, this greater regulatory scrutiny is an unwelcome development. That is why the Association of Dental Service Organizations (ADSO) filed a lawsuit in July challenging Colorado’s new rule and the board’s authority to adopt it.

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“The Dental Board clearly overstepped its authority in this rulemaking, risking patient access to dental care in Colorado, particularly for the communities across the state that need more access and greater affordability,” ADSO CEO Andrew Smith wrote in a press release. “DSO support of dental offices helps increase access to quality, affordable care; gives dentists greater access to the latest dental technology and the ability to offer better patient experience and outcomes.”

In response to the lawsuit, the Colorado Dental Board voted on August 24 to temporarily block enforcement of the new rule, putting any further action on hold while the litigation proceeds.

“We applaud the dental board’s decision to stay Rule 1.7,” ADSO’s CEO Smith said after the stay of enforcement was announced. “This much-needed pause will allow the courts to consider the rule’s validity and give the Board time to work with Colorado dentists and patients to ensure any final rule protects access to care without imposing undue compliance burdens on the practices working to provide it.”

We will continue to monitor developments in Colorado as well as other efforts to rein in DSOs and shore up corporate practice of dentistry prohibitions. This includes model legislation introduced in December 2025 -the Independent Dental Practice Act - that would, if enacted, restrict DSO ownership and the scope of their allowable activities. While no state has yet considered the model legislation, some are either drafting or have published regulations specifically designed to prevent DSOs from overstepping their bounds. 

Given that the overwhelming majority of states already prohibit the corporate practice of dentistry, practice owners, regardless of location, should be cognizant of how their relationship with a DSO manifests in ownership and operations to avoid regulatory and licensure issues.

If you have questions or concerns about DSOs or are considering selling your practice to one, please call Grogan Hesse & Uditsky at (630) 833-5533 or contact us online to arrange for your free initial consultation.

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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, and this blend of legal, business, and personal experience provides Jordan with unique insight into his clients’ needs, concerns, and goals.