By Hani Al-Dajane
Selling a dental practice requires coordinating several moving parts to ensure a smooth transition to the purchaser. Although the closing date marks the official transfer of ownership, sellers must still complete important tasks after the closing date.
These post-closing steps will help ensure a successful transition of your practice in a manner that complies with applicable laws and regulations. With a dedicated legal team, dental practice sellers can manage the range of tasks they must complete following the closing date of their sale.
Below is a non-exhaustive post-closing checklist that dentists should consider when selling their dental practice.
(1) Transfer Patient Records to a New Health Information Custodian
Ensure that you transfer your patient records and other patient information in accordance with the Ontario Personal Health Information Protection Act. You should enter into a health information custodian agreement with the purchaser to formally transfer your patient records.
(2) Notify Patients about the Change in Ownership
Notice about the New Owner
The Royal College of Dental Surgeons of Ontario (RCDSO) requires that selling dentists notify patients about a change in ownership within a reasonable time. The outgoing dentist letter to patients must include certain information such as the identity and contact information of the new owner.
Notice about Patient Records
Patients must also be notified about who has custody of their patient records and how they can obtain copies of their records. The patient letter by the selling dentist should include the name and contact information of the new health information custodian along with some guidance on how patients can access and change their records.
Restrictive Clauses
Note that the non-competition, non-solicitation, or other restrictive clauses of your dental purchase agreement may restrict you from disclosing where you will be practicing unless asked by patients. If patients ask you where you are practicing, you are generally obliged to disclose your new practice location. It is essential to have your lawyer carefully review your dental purchase agreement to know what restrictions apply to you.
(3) Notify the Ontario Government of X-Ray Transfer
The selling dentist must advise the Ontario Ministry of Health and Long-Term Care about the transfer of ownership and location of any x-ray equipment. Write a letter to the Ministry informing it of the change and the name of the new owner.
(4) Lease Review
Reviewing your lease for any conditions of transferring your practice should occur well before the closing date. It is also advisable to review your lease to determine if you are obliged to notify your landlord of the completed sale.
(5) Digital Presence & Online Tools
Personal Accounts
Ensure to differentiate your accounts for online services (e.g., email) from accounts that are to be transferred to the purchaser as part of the dental purchase agreement.
CDAnet Integration
Invite the purchaser as a new owner on CDAnet so that the purchaser’s provider code can be added to the system.
(6) Patient Continuity of Care
Continuing Care Plan
Support the purchaser by providing information to plan for the continuity of patient care after the sale. The RCDSO requires that dentists do not allow the ongoing treatment of patients to be adversely affected.
The RCDSO recommends that transition terms be included in an associate agreement that specifies issues such as the completion of in-progress treatment, handling changes to a treatment plan, and/or how re-treatment needs will be addressed.
Specialized Treatment and Financial Arrangements
In determining patient care, note whether any patients require specialized treatment that the purchaser cannot provide. In this case, the purchaser may need to make a referral for the patient to a relevant specialist. Moreover, the purchaser should be informed of any patients with special financial arrangements.
(7) Staff
Before closing, you and the purchaser should have determined which staff, if any, will remain in the practice. If some staff are to be terminated, the dental purchase agreement should specify how these termination costs will be allocated between you and the purchaser.
(8) Notify the RCDSO of Resignation
If you are retiring from the practice of dentistry, notify the RCDSO of your resignation through your member portal.
(9) Other Post-Closing Notices
In addition to the above, some other important post-closing tasks include updating suppliers, vendors, and insurance providers about the change of practice ownership.
Selling your dental practice is both challenging and rewarding. By following a post-closing checklist, you can ensure that your transaction is successful. The team at Emerge Law can guide you through every step of selling your practice.
Thank you to Ephraim Barrera for his contribution to this article. The contents of this article are not to be construed as legal advice. Contact Emerge Law’s lawyers for legal assistance.