management arrangements

Submitting Management Arrangements for Review

Why does the Board review management arrangements entered into by its licensed dentists?

As the State’s dental regulatory agency, the Board has the responsibility of protecting the public by ensuring that only licensed dentists are engaging in the practice of dentistry in North Carolina.  The State Legislature has determined that the “practice of dentistry” not only includes a person who provides clinical dental care to patients but also extends to any person or entity that “owns, manages, supervises, controls or conducts any enterprise”wherein acts constituting the practice of dentistry are performed.   N.C. Gen. § 90-29(b)(11).  The Dental Practice Act is found in Chapter 90, Article 2 of the North Carolina General Statutes.  The Dental Board adopted a regulation, the Management Arrangements Rule ( “MAR”), to implement the above provision of the Dental Practice Act.  21 NCAC 16X .0101.

Licensed dentists must  ensure that they do not enter into any impermissible arrangements with unlicensed individuals or entities for the provision of any combination of management or business support services, including management companies as defined in N.C. Gen. Stat. 90-40.2(a)(4).  Otherwise, a licensed dentist may be subject to discipline by the Board for permitting his or her name to be used by an unlicensed individual or entity or for aiding, abetting or assisting the illegal practice of dentistry.

What agreements or arrangements must be submitted for review by the Dental Board?

The MAR requires that the Board review management arrangements, which is defined in N.C. Gen. Stat. 90-40.2(a)(3), to ensure that they comply with the law.  In general, this includes agreements with management companies for the provision of defined, bundled or other business or management services to assist in the development, promotion, delivery, financing, support, or administration of the dentist's or professional entity's dental practice.

It is the responsibility of both licensed dentists and management companies to submit all actual or proposed management arrangements to the Board for review.  Arrangements that must be reviewed by the Board include the following:

1. Any proposed management arrangement that has not been executed by the parties and has not previously been reviewed by the Board.

2. Any management arrangement executed by the parties but not previously reviewed by the Board that was entered into after April 1, 2001, the effective date of the MAR.

3. Any management arrangement that has been previously reviewed by the Board and is about to be or has been renewed or extended beyond its original terms by the parties, whether or not the extension requires actions by the parties or occurs automatically.

4. Any management arrangement previously reviewed by the Board that has subsequently been amended or is about to be amended.

5. Any management arrangement in which the professional entity, dentist or management company has changed, even if the arrangement was previously reviewed by the Board. 

6. Any executed management arrangement in which a practice location is being added or changed, even if the arrangement was previously reviewed by the Board. 

 

Licensed dentists and others are generally NOT required to submit the following type of agreements:

· Agreements for the provision of legal, financial or other services not related to the provision of management services for a fee;

· Employment arrangements (as defined by the MAR) between an employee and the licensed dentist.

To comply with the MAR, any licensed dentist submitting an actual or proposed arrangement to the Board for review must do so by providing a written summary setting forth “all material terms of the arrangement between or among the parties thereto.”  The Board will provide its determination regarding whether the arrangement complies with the law within a reasonable time and without undue delay once it receives a complete submission.  However, the Board will not begin its process of reviewing a management arrangement until it has received a complete submission.  If you have questions about whether a particular agreement must be submitted for review or what documentation to include, you may contact the Board's office for further guidance. 

What are the responsibilities of a licensed dentist and management company in submitting management arrangements to the Board for review?

The licensed dentist is responsible for ensuring that its contractual relationships, and the submission of management arrangements to the Board, comply with the requirements of the Dental Practice Act and the MAR.  In addition, the Board has statutory authority to seek relief in the courts to enjoin management companies or other third-party providers of business support or management services from entering into and operating under management arrangements in violation of State law.

Has the Board provided any guidance on management arrangements that comply with the Dental Laws?

Yes.  The Dental Board has reviewed and deemed an example management services agreement compliant with the Dental Practice Act and the MAR.  This document merely provides an example of a management arrangement that the Dental Board has concluded complies with its governing laws.  Other management arrangements, including variations of provisions contained in the example agreement, also may comply with the pertinent dental laws.  The Dental Board reviews each management arrangement on a case-by-case basis to determine its compliance.  The Dental Board cannot provide copies of other management arrangements submitted to it for review by parties because those documents, as well as any related investigative information, are privileged and confidential.  

What documents must be submitted to the Dental Board for it to begin reviewing a management arrangement?

The Board will not consider a management agreement submitted for review complete and ready for review unless it contains at least the following documents:

1. A copy of all actual, proposed or anticipated contracts and other written documents, which contain all the terms of any arrangement between the licensed dentist/professional entity, or anyone working in the dental practice, and the management company or any of its affiliates.  

2. A notarized verification from the licensed dentist that the Board has been provided all required information and that the information is accurate.

3. A notarized verification from the management company with whom the licensed dentists will contract or has contracted that the Board has been provided all required information and that the information is accurate.  

4. A waiver of limited ex parte communication from the licensed dentist and the management company allowing the Board’s staff, the Investigative Panel and its counsel, to submit documentation to and discuss with the Board members a recommendation that the proposed management arrangement is compliant with the DPA and MAR.  This waiver will only be utilized if the IP recommends that the management arrangement is compliant.       

Sample verification forms and waiver may be downloaded from this site using Adobe Acrobat Reader. The Acrobat Reader can be downloaded from the site.

Download Licensed Dentist Sample Verification Form

Download Management Company Sample Verification Form

Download Waiver of Limited Ex-Parte Communication Form

Submitting all the above documents, including executed, notarized verification forms from both the licensed dentists and the management company and signed waivers by all parties, will shorten the time period necessary for the Board’s review of the arrangement. 

Based on the complexity and nature of the management arrangement, the Board may determine that it requires information in addition to that listed above in order to conduct its review. In such cases, the Board will notify the licensed dentist and management company of any additional information that is required. A list of the information and documentation that the IP requires or most often requests may be downloaded from this site.

Download Due Diligence List of Required and Requested Information

 

What is the Board’s process for reviewing a management arrangement once it has been submitted?

The Board’s process in reviewing a management arrangement is summarized in the following five steps:

1. Submission - Upon the receipt by the Board of a management arrangement for review, the information will be assigned to an Investigation Panel (IP) of the Board, which includes a Board member serving as the Case Officer.  The IP will ascertain if the licensed dentist and management company appear to have submitted all the information needed to conduct a full review, including the information listed above.  If the IP determines that more information is required, it will notify the licensed dentist and the management company regarding what additional information is required.

2. Initial Review - Once the IP has received all required information, the IP will begin its review.  This initial review typically is completed within forty-five (45) days after receipt of a complete submission.  Once the IP completes its review, it will notify the licensed dentist and management company of its findings and conclusions.  If the IP believes that the management arrangement complies with the Dental Practice Act and the MAR, the matter will be submitted to the full Board for its review and determination with a written closure report with the names redacted (“closure procedure”)  The executed waivers of limited ex parte communication will allow the matter to be considered by the Board Hearing Panel using the closure procedure without the need for a hearing or conference. 

3. Right to Resubmit Revised Arrangement - If the IP concludes that the management arrangement does not comply with the Dental Practice Act and the MAR, it will provide the licensed dentist and management company an explanation of the reasons for its finding of noncompliance.  The licensed dentist and the management company will be afforded the opportunity to submit a revised version of the management arrangement or other response to the IP for review. If the IP believes that the revised version is compliant, it will follow the closure procedure discussed in number 2 above.  If not, the matter will be reviewed by the Board hearing panel. 

4. Review by Board Hearing Panel - The IP thereafter will present its findings and recommendations concerning the management arrangement (or revised management arrangement) to a Hearing Panel of the Board at an Investigatory Review Conference (IRC). The Board member serving as the Case Officer on the IP will not serve on the Hearing Panel at the IRC.  The licensed dentist and the management company have the opportunity to offer their position and argument at the IRC. The IRC will typically be scheduled within sixty (60) days after the IP completes its initial review and provides written notification of the management arrangement being non-compliant, unless the parties consent to extend that time frame. 

5. Board Advisory Opinion - The Hearing Panel of the Board will issue an advisory opinion indicating whether the management arrangement at issue complies with applicable North Carolina law. Typically, the Hearing Panel will issue its advisory opinion concerning the arrangement within thirty (30) days of the IRC.  A copy of the advisory opinion will be provided to the licensed dentist and management company.       

The Board strives to meet the timeframes outlined above. The review time frames may be adjusted depending on a number of factors, such as the need for clarifying information, the complexity of the arrangement, and potentially the number and complexity of other management arrangements under review concurrently, among others.  Regardless, the Board shall complete the review of the management arrangement without undue delay.

What if the management arrangement is a renewal of a previous management arrangement?

The Investigative Panel will not conduct a substantive review of the management arrangement that is being renewed if the following conditions are met:

  1. The terms of the arrangement remain identical to the written agreement(s) previously submitted, reviewed and deemed compliant by the Board, except for the dates;
  2. There have been no changes in relevant statutes or rules and no significant changes in case law regarding management arrangements; and
  3. The dentist and management company both submit verifications stating that:
    1. they have provided the Board with all required information and that the information is accurate;
    2. the terms of the renewal management arrangement remain identical to the written agreement(s) previously reviewed and deemed compliant by the Board, except for the dates;
    3. they have disclosed to the Board currently and with any past submissions all of the management arrangements, contractual arrangements, stipulations, and legally binding instruments, both oral and written, between the parties and any affiliates or any related entities; and
    4. the management arrangement has been and will continue to be operated consistent with the written agreement(s) previously submitted to the Board and consistent with the Dental Practice Act and Management Arrangement Rule.

Sample Verification forms and waivers may be downloaded from this site using Adobe Acrobat Reader.  The Acrobat Reader can be downloaded from the site.

Download Licensed Dentist Sample Renewal Verification Form

Download Management Company Sample Renewal Verification Form

Download Waiver of Limited Ex-Parte Communication Form

If a renewal agreement has been changed or otherwise does not meet the above conditions, it will follow the process for a new management arrangement outlined above. However, submitting track change versions or other methods that demonstrate the changes made from the previous submitted agreements and the new renewal ones being submitted can expedite the normal review process and time frames.

What if the management arrangement involves a transfer of ownership only?

The Board will continue to review management arrangements when there is a transfer of ownership to any person or entity not a party to the existing management arrangement.  If the parties would like to avoid a review of the substantive terms of the management arrangement, the dentist and management company must submit signed verifications stating that:

  1. they have provided the Board with all required information and that the information is accurate;
  2. the terms of the submitted management arrangement remain identical to the written agreement(s) previously reviewed and deemed compliant by the Board, except for the new party, but including no extension of the term of the original arrangement;
  3. they have disclosed to the Board currently and with any past submissions all of the management arrangements, contractual arrangements, stipulations, and legally binding instruments, both oral and written, between the parties and any affiliates or any related entities; and
  4. the management arrangement has been and will continue to be operated consistent with the written agreement(s) previously submitted to the Board and consistent with the Dental Practice Act and Management Arrangement Rule.

If the Board receives this documentation, it will conduct a review of the individuals and companies involved in the transfer, rather than a substantive review of the arrangement.

Sample Verification forms and waiver may be downloaded from this site using Adobe Acrobat Reader.  The Acrobat Reader can be downloaded from the site.

Download Licensed Dentist Sample Transfer Verification Form

Download Management Company Sample Transfer Verification Form

Download Waiver of Limited Ex-Parte Communication Form

All correspondence and submissions should be directed to the Board office as follows:

North Carolina State Board of Dental Examiners
Management Arrangement Review
2000 Perimeter Park Drive, Suite 160
Morrisville, North Carolina 27560

Functions of the Board of Dental Examiners
The administration of licensure examinations for dentists and dental hygienists
The promulgation of rules and enforcement of laws and regulations governing the practice of dentistry and dental hygiene in this state
The issuance and renewal of licenses to dentists and dental hygienists