Dr. Raj Arya discusses emerging legal issues in dentistry, such as teledentistry’s regulatory compliance, insurance reimbursement transparency, and practice acquisitions. He also underscores the importance of proactive communication, clear financial policies, and prompt handling of complaints to avoid College complaints.
Read the audio transcript below:
Dr. Jordan Soll (JS): Hi everyone. Welcome to Brush Up on Business presented by Oral Health Group, a special Brush Up podcast series focused on the business of dentistry. I’m Dr. Jordan Soll, Chairman of Oral Health’s Editorial Board, and today I’m joined by Dr. Raj Arya. Raj is both a lawyer and a dentist. He has been practicing law now for almost 25 years, and as a former prosecution counsel for the RCDSO, he currently assists dentists in buying and selling dental practices and assisting dentists facing college complaints. Welcome, Raj.
Dr. Raj Arya (RA): Hi. Thank you. Nice to meet you.
JS: Nice to see you. Alright, let’s jump right into it. Tell me, what’s some of the emerging legal issues in dentistry, and what’s their legal implications? What’s the hot button today?
Dr. Raj Arya (RA): Hot buttons? Yeah, so teledentistry is a topic now that’s quite forthcoming. Now, in dentistry, teledentistry, essentially, is the use of a sort of platform or media in which you can do consultations, appointments over some video type of conferencing, and that’s because of COVID and a few other things that have become increasingly popular. Issues to consider when you’re using teledentistry are obviously regulatory compliance. You want to make sure that the platform you’re using is compliant with all the encryptions and privacy and all that sort of stuff. But there’s other things, like, for example, jurisdiction. Say you’re an Ontario dentist and you are working or going to consult with a patient that’s in Manitoba. So, there’s cross border provincial issues, so you need to be familiar with that. Does teledentistry, the laws there, work in Manitoba for you, so that needs to be sorted out before you do your consult. Informed consent, just like in every other aspect of dentistry, is important. There are limitations to teledentistry. In teledentistry, you are limited by you cannot do a clinical exam, for example. You cannot touch and feel the patient, and so that needs to be conveyed in the informed consent that, look, your ability to conduct a certain type of examination is just not feasible, and so you’re expected to meet the standard of care. So, if you choose to use teledentistry in a particular situation, you still must meet the standard of care. So if you view a lesion, let’s say, on a patient, through the lens, and it’s in your clinical opinion that it needs a biopsy, then you are held to that standard, and you should refer the patient for a biopsy, whether it’s done at your clinic or whether it’s done at the pathologist, et cetera, et cetera. So that is critical that you have to maintain the standards as expected from you, from whatever province you’re in. Insurance reimbursement, some teledentistry services, consultation may not be covered by insurance, so it’s probably a good idea for your patient to be informed what’s covered, what’s not covered. And then, of course, confidentiality and data integrity is critical whenever you’re dealing with teledentistry. Data that’s going across has to meet the standards that are expected from you. So that’s teledentistry.
JS: Okay, alright, so let me jump in and ask you, what’s some of the key documents that dentists and dental practices should have?
RA: So, when I advise my clients, I tell them to create folders or sub folders, almost like in their computer system. So, one folder I call, let’s do all your corporate documents. So that’s your articles, that’s your annual filings, your shareholders’ agreements. That’s one. The second folder is your insurance. Put all your insurance documents in there, your practice liability. There’s lots of new insurances, which dentists should be familiar with, employment law, insurance, cyber security insurance, which I know you and I spoke about, or you referred to. That’s something. There’s the regulatory folder, you put all your licenses, your X ray HARP, all that sort of stuff in there, your Occupational Health Safety stuff in there. Create an employment folder. Put all your employment contracts in there, put your HR manuals in there, your office procedure manuals in there. Put all of your discussions with your employees in terms of improvements or reprimands and all this sort of stuff. You create an HR file for them. Create a sub folder for that. Another folder that you should have is your financial. And with your accountant, he’ll tell you, he or she will tell you all your tax returns, your financial statements, your balance statements, all of that sort of stuff. A lease folder is great to have. A lease is essential, whether that could be your premises lease in which where you’re renting from. A lot of dentists are renting. All your renewals, your options to extend, all the paperwork with respect to your rent. All of that should be in there, your leasing materials, with respect to equipment. A lot of dentists are leasing equipment. When the lease is due, when it’s up, so you don’t forget your renewals. So, you don’t forget that you have an option to extend, for example, so you don’t miss that and then get put on the eight ball, that sort of stuff. I’ve talked about the employment. Another folder I would suggest is patient-related documents. So, I would put my informed consent, specific and general consent, your financial policies, how you deal with collections with your patients, so your office is aware. Create a folder for all the patient related matters that come up.
JS: Okay. So that seems to be a pretty exhaustive list. And I like that idea of creating, you know, folders, digital folders that you have everything sort of correlated together.
RA: Absolutely, because then you can update them as well as things evolve.
JS: And easily reference too. And don’t have to worry about being destroyed and what you have, you have everything for many years
RA: And back them up.
JS: Alright, everybody’s well aware there’s certainly more purchasers than there are sellers today. What’s some of the general legal questions or issues to consider if you’re one of those purchasers, trying to find the ideal practice?
RA: So, I have been predicting the market wrong for a good 20 years, in the sense that it’s been a vendor’s market, and each time we think the interest rates or this or that are going to change—2008 economic calamity that occurred there, the pandemic—each time, dentistry has bounced back quite, quite impressively. And so, a purchaser these days has to be on the ball, and the more you know going into a practice acquisition situation, the better off you’re going to be, and the more efficient you’re going to be. So, what I would look from a legal perspective, and again, with the assistance of your lawyer, is that I would first look at what type of deal is this? Is this an asset deal? Is it a share deal? They each have different tax repercussions, but you want to get that out of the way. You’ll eventually look to see if there’s any liens and stuff on assets, because you do not want to inherit any of that. You look to lease agreements. The lease for those dentists who do not own their premises is an extremely important issue, and increasingly so. Most deals or acquisitions these days are bank financed, and banks will require the purchasing dentist to have a lease of at least nowadays, about 12 years. So, which, not coincidentally, corresponds to length of the loan. 12 years loan, 12 years they want on the lease. So, if you’re looking at the lease and it’s only got seven years, you’re going to have an issue financing the practice. If the lease has these danger clauses, like a demolition clause or a relocation clause, which I’m sure your audience is aware of, may affect financing. You may not get the money. You may be prematurely relocated, or you may be prematurely having to find another place to work or relocate your practice, which is a considerable expense. You look to those things. You also look to not only the negative things. You look to the benefit. For example, is there an exclusivity clause in this entire plaza or building? You want to perhaps be the only dentist, perhaps the only dentist specialist, perhaps the only one that can provide any form of oral health care, etc, etc. So that’s an important document to look at. Another thing that I would look at is whether the practice has employment contracts or solid, independent associate contracts. As a practice owner, as someone who’s acquiring, you assume all of this. And if there’s a saying in law, you assume the warts and all. And so you want to make sure that everything is up to speed.
JS: I want to jump in and ask you a question about that. I’m a pretty avid reader of ROB in the Financial Post. And it seems like almost every month I’m reading, not obviously, not so much dentistry, but the courts are striking down these contracts. I can tell you I have very current contracts, but I always wonder. Please enlighten me.
RA: I think you’re quite astute on this point, and you’re reflecting the uncertainty in the current state of Canadian/Ontario law in terms of what is a valid employment agreement these days. And the truthful answer to that is that it’s very difficult to know any contract, even the most recently drafted contract, which is taking in all the new recent cases, can be or can withhold judicial scrutiny. I tell each of my clients that I like this contract, if I do like the contract when we’re purchasing the practice, but I cannot guarantee you that it’s going to be bulletproof. It looks like it will. And I’d like to think that the contracts we use do, but in all certainty you cannot, unfortunately, in today’s climate and today’s milieu, so to speak, you cannot. You cannot predict with 100% certainty the enforceability of a contract. You’re absolutely right on that.
JS: Are there any other, you know, when you’re purchasing the practice, anything else that you can think of that sticks out.
RA: I think two things for efficiency purposes, I think that are really important that I would recommend or suggest that one looks in. One is non-competition agreements. So, when you’re purchasing a practice, could be out laying a substantial amount of money, and the last thing you wish to do is to pay this money and have the vendor compete with you literally the day after, with his or her patients all migrating over to you. So, you want to be able to get that non-compete parameters out of the way. There’s been a lot of talk about the unenforceability of non-competition agreements over the years. In other words, courts are striking down these non-competitions; however, as the law currently stands as of now, in a buy-sell arrangement for a dentist where there’s adequate consideration being paid, a reasonable non-competition, non-solicitation clause will withhold judicial scrutiny. And these non-competition clauses are beyond just a radiation protection, radius protection. In other words, the dentist can’t just work x kilometers away for y number of years. It also prevents soliciting of patients, of staff, your key staff, goodwill. That’s what you essentially have purchased, your patient list, but the goodwill of the staff.
JS: You know, and just to support that. And for a purely lay persons, it’s my understanding, as a lay person, that if an associate, a purely associate, has worked with you, and they leave your practice as the principal, you don’t have much hope. They can really, you know, raid your practice. But if you come and buy my practice, and there is an exchange benefit, money, then a year later, or two years later, I go to somebody else, and I notify the patients, my former patients, I’m in real hot water in the court system.
RA: You’ve captured accurately, and you have a job at my firm.
JS: Okay, yeah, no, I’m aware of what’s happening in that area.
RA: Yeah, no, you’re right on. You’re right on. Maybe the last thing, not the last thing, but an important thing to ask when you’re looking to purchase a practice is, how the transition is going to look like. In other words, day one after the sale, and say, for example, I was purchasing your practice. Now I know you’ve been there for 40 years plus, and a tremendous amount of goodwill resides with you the doc, Dr. Soll. So, what I would want for the benefit of my practice is that I would want you to stay, and I would want you to stay for as long as you wanted.
JS: What does that look like now? Is it a year or six months? A year, year and a half?
RA: It can be even much longer than that. And so, it all depends on the vendor. Depends on the person selling because it’s their mark.
JS: Does that affect the selling price? If the vendor says, Ah, no, I want to be gone in a month from now.
RA: That was a good question. I think for certain practices, it will decrease the price somewhat, a little bit, if the goodwill is particularly on you, solely. If you’re doing all the procedures, you’re doing the implants, you’re doing the extractions, then it will have an effect. Say, an associate driven practice where there’s sort of five or six practitioners, sometimes the patient doesn’t know who they’re seeing.
JS: Case by case basis.
RA: Case by case basis. But in my situation, in your practice, say, for example, I use yours specifically, I would love for you to stay.
JS: I’ll plan on staying. I’ll have to plan on sticking around. Okay, alright. So, hot button topic we’re all aware of, what are the best ways a practicing dentist can do to avoid a complaint with the College? And how to, basically, how do we make sure we’re not the frog in the hot soup, right?
RA: Okay, so a large component of my practice is assisting dentists when they have received a College complaint, and I can tell you that each dentist reacts quite differently to the complaint. I have what I call frequent flyer clients who don’t react in any negative fashion. Really, it’s just the cost of business, and I wish I had that sort of fortitude, but the bulk of them react as if under the bed, shivering. This is the worst thing that could have happened to them. And often, College complaints take over a year, maybe previously, up to two years, to resolve. So that’s a lot of sleepless nights for a lot of these clients. The first thing I would say is the best complaint is no complaint, always. In the sense that results are always unpredictable whenever you have a human adjudicating the facts, and what can be a slam dunk case in 2018, may fall the other way in 2024. And so, I’m a proponent of proactive problem solving. And how does that look like? What are, like, some real ways to deal with that? And one broad way is communication, but that’s such a nebulous, broad term. What does that mean? Communication, effective, good communication, clear communication. What does that mean? In my view, it looks practically something like this. When you explain your treatment plans, let’s say, use visual aids, be clear. Use multi-modal ways to explain things. Talk about what to expect when you do your informed consent. It’s not just a simple sheet. Sign it. It should be a meaningful dialog. Underline things, talk to them. Ask open-ended questions is really another way to do it. Be clear about what to expect after treatment. So for example, if you’ve done some surgery on me, tell me that it’s normal for the swelling to occur for this much time, or it’s not normal for me to feel a fever or something to that effect. Because the more I know as a patient, and yeah, I remember the doc telling me this, so I think that communication in all aspects is critical. That extends over to the financial aspects. Dentistry in Canada is interesting, because a lot of it is, you know, patients pay either themselves or through insurance. That can be a blessing and a curse. The curse part of it is that a lot of our complaints, unfortunately, are centered around the financial components. And so, the clear communication, again, spills over to that. Have clear financial policies. Tell them how much it’s going to cost. How much, if you know it’s not going to be covered by insurance or covered by insurance. And this extends to not just financial but to any complaint, if there’s a complaint raised or if there is some form of dissatisfaction raised, deal with it promptly. This promptness, I cannot tell you how many clients I’ve served, just the dentist did not get back to them, and in turn, there’s a College complaint. And if the dentist had just gotten back to them a little bit earlier, or the staff member had dealt with them a little more proactively, could have avoided the complaint, could have avoided the uncertainty, could avoid the stress. So, promptness is key to me.
JS: And in the end, document, document, document.
RA: So that’s really the most important. And not only do you document what you’ve done, you also document what you suggested, why they declined, because that will sometimes come up a bit later. It could be because of monetary reasons. It could be because of time issues. The other thing is that there’s a concept called patient autonomy, and we always have to respect what the patient wants. We could be offering them, say, five treatment plans, and they didn’t pick the best one. So, we have to respect that the patient has the right to choose which treatment to choose. That’s fine. That’s clear. I think a lot of dentists are aware and follow that. But if we continue on that spectrum, there comes a time when we’re doing something for the patient, despite the fact that they want it, is not the right thing to do. And when you let the patient sometimes dictate the treatment, past that point where you know that this treatment is just going to fail or just is not good, and if a complaint arises, then it is a very difficult hole to walk out of because you did something that everyone knows you shouldn’t have done.
JS: You know, I’ll end there, but there’s an old expression that I keep in the back of my mind. Some of the best cases are the ones I never do, right? Great advice. Raj, it was great for you to stop by. I really enjoyed your insights, and I can’t thank you enough for helping us out at the Oral Health Group.
RA: It’s been a pleasure. Thank you very much.
JS: Thank you. Be sure to subscribe to Brush Up’s email alerts, on Spotify or YouTube, to be notified every time we post a new episode. Please remember to keep brushing up!