North American Dental Group (NADG), a dental services organization (DSO), is facing a lawsuit from a group of dentists who allege that the company diluted their ownership shares and may have negatively affected their retirement and other financial support.
The lawsuit, which was filed in the Delaware Court of Chancery in June 2023, accuses NADG of withholding information about transactions that involved the issuance of additional units that diluted the dentists’ equity position. The dentists are seeking documentation of these transactions, as well as other information that they say is necessary to evaluate the value of their equity interests and to assess potential legal claims.
NADG has not responded publicly to the lawsuit.
The lawsuit is the latest in a series of challenges facing DSOs, which have been growing in popularity in recent years. DSOs provide administrative and support services to dental practices, and they have been criticized by some dentists for reducing their autonomy and profits.
The outcome of the lawsuit against NADG is still uncertain, but it could have implications for the DSO industry as a whole. If the dentists are successful, it could lead to more scrutiny of DSOs and their practices. It could also make it more difficult for DSOs to attract and retain dentists.
Q: What is a DSO?
A DSO, or dental services organization, is a company that provides administrative and support services to dental practices. DSOs can help with tasks such as marketing, billing, and insurance processing.
Q: Why are DSOs becoming more popular?
DSO offer a number of advantages to dental practices, including economies of scale, access to capital, and expertise in non-clinical areas.
Q: What are the criticisms of DSOs?
Some dentists criticize DSOs for reducing their autonomy and profits. They also argue that DSOs can lead to lower quality care, as dentists may be pressured to see more patients and perform more procedures.
Q: What is the outcome of the lawsuit against NADG?
The outcome of the lawsuit is still uncertain. If the dentists are successful, it could have implications for the DSO industry as a whole.
Q: What should dentists do if they are considering selling their practice to a DSO?
Dentists should carefully consider the pros and cons of selling their practice to a DSO before making a decision. They should also get legal and financial advice to ensure that they are getting a fair deal.
Q: What should patients do if they are concerned about the quality of care at a DSO-owned dental practice?
Patients should ask questions about the dentists who will be providing their care and the practice’s policies and procedures. They should also get a second opinion if they are not comfortable with the care they are receiving.