We've been getting inquires asking if there is a checklist a dentist can refer to when buying a dental practice.
And when asked, we deliver.
Dental Practice Purchase Checklist
Tuesday, March 11, 2014
Tuesday, February 18, 2014
Dental Associate Agreements
Here is a guest blog post from our friend Carl Guthrie from ETS Dental.
Associate Agreements (contracts) can suffocate us at a time we should be reveling in a new opportunity. However, many dentists don’t understand what is in their contracts, in turn complicating the process and turning this joy of new opportunity into a whirlwind of anxiety and trepidation.
This article is not intended to be legal advice.
ALWAYS consult an attorney or legal expert in your jurisdiction.
Here are a few points to pay attention to when reviewing your Associate Agreement:
1. Employee or Independent Contractor: Regardless of the debate on what is technically legal or acceptable by the IRS, make sure you know which status you are agreeing to. If taxes on income are not paid correctly, it could come back to bite both the associate and the practice. Consult a CPA or Attorney on what is correct for your situation.
2. Compensation: Are you going to be paid on collections or on production? These two do vary, but don’t get stuck in the mindset that production-based income is the only way you will accept to be paid. Keep in mind that even if you are paid on production, many practices will adjust your future paycheck if there are any unpaid patient balances or write-offs. In essence, you are being paid on collections anyway.
3. Notice Period: The length of termination periods are widely becoming 30 or more days long. We’re seeing more and more asking for 60 to 90 days notice. Understand what is required of you to terminate your employment with a practice.
4. Restrictive Covenants and Non-Compete Clauses: Dental practices will protect their interest by requiring you to agree to some sort of restrictions upon the termination of your employment. They will restrict you from practicing dentistry in any capacity within a certain distance for a specified length of time. There will be other language that restricts you from soliciting patients or staff for a specified time period. Distance varies upon geography. For example, rural areas can have 20 miles or more of a restricted zone, while a metro area will be 2 to 5 miles.
5. Lab Expenses: Most practices are paying these costs; however, make sure to ask if you will be paying for any lab expenses. There is no real standard on this in the industry. Practices will have associates pay for half or an amount equal to the Associate’s percentage of pay. Also, make sure you understand the formula for calculating your pay with lab expenses. You want the lab expense to be deducted from the total production prior to calculating your percent of pay. {Pay = % of production * (Production – Lab expense)}
These are just a few of the “biggies” that develop in contract negotiations. Again, refer to your attorney for precise legal advice.
Posted by Carl Guthrie, Senior Dentist Recruitment Consultant with ETS Dental. To find out more, call Carl at (540) 491-9104 or email at cguthrie@etsdental.com.
Friday, February 7, 2014
The Specialist and Dental Study Clubs
This is another guest post from our client Dr. Lurie.
It seems to me that the need and demand for continuing
education is extremely important to our profession. Obviously, so do the State Boards and
licensing folks. I would like to discuss
study clubs and how to gain the most value for the time and effort it takes to
begin a study club. How to begin and
maintain the viability of the entity is important but many other factors need
to be considered. I was fortunate enough
to start a study club that was in place for about 18 years and was most
successful and helpful to me personally as a specialist in Oral and
Maxillofacial Surgery. It was a venture
that was close to my heart as are many endeavors that one creates from
scratch. This is a companion article
which started from my recent post on the Specialist and Referrals.
Continuing education has many virtues but comes at a
price. The large and major professional
organizations have tons of meetings around the country and
internationally. The advantages are
obvious but some disadvantages are also obvious. One must leave the office for an extended
period of time. Some meetings are better
than others and have greater draw; thus the partners in a group practice may
bicker as to who gets to go and who stays and watches the store. In addition to the time involved, there is a
large expense for the meeting - food, hotel, transportation, tuition and time
lost in production at the office. There
is no doubt that these large meetings with their fantastic instructors have a
lot to offer. In addition, the large
attending group gives ample opportunity for exchange of ideas and
experience. Lunch time becomes an
additional course of study as folks discuss what they just heard and how it is
or is not applicable to them in their own particular situation. Even so, I feel there is a great opportunity
for the "Study Club" to
also be part of this ongoing quest for information, knowledge, practice growth
and expansion of referral base. For the
beginning specialist, it is a great supplement to the contacts and personal
exchanges with the referral base.
I would suggest starting a study club that is narrow in its
field. This allows for expansion of
topics as the club develops but keeps the group focused on a particular subject
that can be creatively and exhaustively researched and expanded upon. In my case, we created a club that was
restricted to dental implants. You must
remember that this club was started at about the time that the first words of
implantology were first spoken. I was
one of the fortunate ones chosen to take post- graduate training in this new
field. Now it is taught in dental
school. This peaked my interest and
desire to share this with colleagues and referring doctors. We had to learn a new field as best we could
and take the courses that were out there - both good and bad. The study club enabled our group to discern
the good from the bad - what worked, was feasible, patient friendly and within
our ability to achieve good results.
This process was ongoing throughout my career until retirement. As the ability improved and the knowledge was
enhanced, the complex cases became more routine and the results were more
predictable. Thus, the study club became
an arena that open discussions, exchange of ideas, and special speakers embellished
the information obtained from the formal courses given around the country. So I would suggest that a beginning study
club be a special interest within a specialty connotation.
Invite prospective members who are within a 5 year
(approximately) time of graduation with you so that you can grow together both
educationally and socially. I must
comment on the wonderful relationships that the closeness of the club created.
I would also try to establish a membership that had other
specialists in fields besides my own area.
After all, I am trying to create a referral base. Input from ortho, perio, prosthetics,
occlusion, TMJ, etc. will add to the
discussion and I found this to be true.
Everyone benefitted when we discussed implants from an occlusal
standpoint for example. I might invite
another oral surgeon to present at a meeting but I certainly did not need one
as a competing member.
There are many ways to conduct a study club meeting. You can have a classic lecture followed by
question and answer. It can be an actual
hands-on class sponsored by one of the companies (with all their resources), a
round-table discussion where everyone will present on the subject (as notified
in advance) for 15 minutes per person, or even a field trip. The possibilities are only limited by your
imagination. I would suggest allowing
several minutes at every meeting for "good
and welfare" so that
logistics can be worked out and a consensus agreed upon.
We actually had an evening where a patient was brought in
(all consents signed), records, x-rays, treatment plans etc. presented, and the
ability to examine the patient, ask questions---including fees and so on. It was a fun night. So much so, that it was
repeated once a year with a different doctor getting a patient for us to
examine. It was also invaluable when one
of the patients was a problem from a treatment-plan standpoint and this gave
the entire group the opportunity to help the doctor with the optimum treatment
for his patient. His patient was
impressed with the help he was getting on his behalf and I think it was a
mutual stimulating evening for everyone.
Always send out an
agenda prior to the meeting. Try to
keep the meetings to an agreed upon time format (we used 2 hours). Try to meet at the same, convenient location
when possible with the exception being patient exams, field trips etc.
Keep the format inexpensive and simple. We started promptly at 7 PM. This gave everyone time to get home, grab a
bite, kiss the kids and get to the meeting.
We only met 6 times/year. There were
light refreshments in the back of the room at a convenient hotel in the area
which included fruit, cheese, coffee, soda and cookies. Thus, folks could go back and forth while
presentations were occurring and not interfere with the presentation. Our dues structure covered most of the cost
of these arrangements. I footed the bill
for mailings and any other special needs. This was done to keep expenses in
check. We started with 12 members and
ended with a mailing of 80 active folks.
As new members joined, we tried to get them to get their age-group peers
to join with them and this was successful.
So, I think I have given you an idea on how to begin and
your own imagination can do the rest. It
was a fun ride and I truly enjoyed every minute of it. Needless to say, the learning process
received was invaluable. A great way to
have "continuing education." with friends, and fellowship.
These are just a few ideas about "starting a study
club" and I hope they are of help.
Please do not hesitate to send me your thoughts and questions. It would be an honor to be of help.
More Mistakes Made and Lessons Learned next time.
Dr. Donald B. Lurie, DDS
email:
donald.lurie@att.net
Phone:
717-235-0764
Cell:
410-218-2228
Sunday, January 5, 2014
The Top Twelve Mistakes Dentists Make Filing Their Taxes
Lance Jacob of the Dental CPAs has compiled a list of the top
twelve most common tax filing mistakes that he sees his dental clients making. If
you don't have a dental CPA,
contact Lance.
Filling out tax forms with an incorrect Social Security number. The IRS computers will automatically reject
your deductions and credits if your Social Security number is wrong.[i] This mistake seems
careless and trivial, but it is paramount to have the right Social Security
number when filing your taxes. Your social security number is your tax ID
number, which is linked to numerous transactions such as income statements,
savings account interest, and retirement plan contributions. It is also vital
to claiming tax credits. Since the majority of returns are now being filed
electronically, a correct social security number is paramount. An incorrect
social security number will result in the reject of an e-filed return.
Double dipping on dependents for divorced taxpayers. Ill repercussions could result such as
additional taxes, penalties, and interest charged.[ii]
A child can ultimately meet the rules to be a qualifying child of only one
person.[iii] Once divorced, your
children do not duplicate out of thin air; therefore they cannot be claimed
twice in taxes. The IRS does not allow both divorced taxpayers to claim a
child as a dependent.
Not reporting non-deductible IRA contributions. Any contribution to an IRA, whether it is
deductible or non-deductible, should be reported on Form 8606, so when you
withdraw it you are not taxed on it. Plain and simple, all contributions
to an IRA must be reported.
Incorrectly reported estimated tax payments. If your accountant instructed you to make
quarterly estimated tax payments, be sure to let him or her know the details of
the payment for each installment. Provide the check numbers, dates of
payment, and the amount of each payment. What often happens is people
claim they made the payments as their accountant told them, but did not keep
any records and inadvertently forgot a payment or two. If the accountant
includes all of the estimated payments on the return when they all were not
really made, the IRS or state government will send a notice of tax due with
penalties and interest.
Incorrect Federal ID number used on 1099 MISC. Although your accountant can easily fix this,
the less the IRS has to contact you, the better it is. The IRS matches 1099MISC
and the Social Security number or Federal Identification number used. If you
provide services, and the client you did the work for issues a 1099MISC, be
sure they know to use the federal identification number of your business and
not your social security number. If they use the wrong number the IRS
will send you a notice that you did not report income on your personal return,
when in fact it was reported correctly on your business return.
Exceeding the mortgage interest deduction limit on Mortgage and
home equity debt in excess of $1.1million. This error commonly falls as the fault of both
the taxpayer and accountant. They only deduct the amount reported of the
mortgage interest statement, Form 1098, and do not bother to check the amount
of mortgage the taxpayer has. The tax laws limit the amount of deductible
interest to the interest on the first $1,000,000 of home mortgage debt and
$100,000 of home equity debt[iv]. So if you have a mortgage of $2
million, you can only deduct mortgage interest related to the first $1.1
million in total debt.
Standard mileage vs. actual expenses. Mistakes in this area come from inconsistent
use of methods. If your car is for business purposes only, then the
entire cost of its operation can be deducted. However, if the car is used
for both business and personal use, only the cost of its business use can be
deducted. The amount of your deductible car expense can be found using either
the standard mileage rate method or the actual expense method. [v]
Some people will qualify for both methods but you must choose only one method
when you start using the vehicle and continue with that method until you
replace the vehicle. Be sure to figure your deduction with both methods
initially to see which gives you the larger of the deductions.
First-Time Homebuyer Credit recipients unaware of the fine
print. Those who received a
First-Time Homebuyers’ Credit towards their purchase of a home settled on prior
to 12/31/08 must begin repaying that money on 2010 tax returns. Now is the time
to take a good hard look at the details of this credit. Many who accepted the
$7,500 credit may not realize that it was in fact a loan, and the government
will begin not-so-politely asking for the money back over the course of the
next 15 years starting with 2010 individual tax returns. As with any federal
money however, there is a lot of fine print to read into on this one. Use form 5405. [vi]
Forgetting to tell your tax preparer you took an early
distribution on an IRA; therefore, failing to calculate the early distribution
penalty of 10%. If you are under the
age of 59.5, a distribution on an IRA (including employer matching and profit
sharing) is considered early, and subject to a 10% additional tax. This
tax is in addition of other taxes that apply to the distribution.[vii]
Forgetting your
signature on your return! If you were an artist,
you wouldn’t forget to sign your masterpiece upon its completion, would you?
You must sign your taxes for the IRS to process your taxes. Filing your
taxes electronically is a foolproof way to ensure your taxes will not go
unsigned. These software packages do not allow documents to be sent
unless every step is completed.
Incorrect bank account information for refund. If
you are having your accountant file your returns electronically and want your
refunds directly deposited (or payments automatically) withdrawn from your
checking or savings account, provide the correct account information including
name of bank, bank routing number, and account number. This will avoid delays
in processing your refunds and/or payments
Forgetting
to file a Form 1099 for rental property or a
business as a sole proprietor.
The
IRS now requires you to answer the following questions
1.
“Did
you make payments during the tax year that would require you to file Form(s)
1099? (these are forms used for rents, non-employee compensation, interest, and
other income).
2.
“If
yes have you or will you file all required Form(s) 1099?
It
is important for your accountant to ask this question of the client and also
important for the taxpayer to be aware when a 1099 is needed. You can see the
problem you might have if you answer yes to the first question and no to the
second.
Tuesday, December 10, 2013
The Dental Specialist and Referrals
Here is another guest post from our client Dr. Lurie. We are so fortunate to have him share the wisdom he gained for five decades as a dental specialist.
It seems to
me that the dynamic of a specialist obtaining referrals has changed. As we have all noted, private solo practice
in the specialties has greatly decreased.
I have heard estimates of less than 7%.
As a retired Oral and Maxillofacial Surgeon, I have personally noted the
change in referral patterns and, I think, understand what must be done to
encourage referrals. This wisdom comes
from fifty years of practice. No longer
is it enough to take a generalist to lunch, or to have an annual Christmas
party. I think that the whole picture
has to be viewed and rearranged.
Firstly, the
specialist has to be extremely well trained. He has to be able to get the
"word out" about how well trained he is. I would suggest a curriculum vitae be sent with the
announcement of the opening of his practice.
This is important and should be of the highest standards befitting the
degree of their excellent training.
While it is important to let folks know where you are located, phone,
email etc…, it is paramount to let them understand your qualifications. This should be updated periodically as new
honors and leadership positions occur.
Obviously, with social networking as keen as it is, it is imperative to
have the correct team to help in this initial matter. I have discussed the team concept in one of
my previous articles (The Team of Retirement).
This is the first impact that you will have on your referring base.
It is to be
assumed that most specialists will be joining an existing practice. I would still recommend that this initial
information (CV and other marketing) get out there so that the new
"person" is not relying on the reputation of the existing
practice. Obviously, if the doctor is
solo, then it speaks for itself.
Incidentally, most of these ideas
would apply to a generalist starting practice with the obvious difference being
that his target marketing prospects would be different.
In the
beginning of the practice, personal visits to the referral base is
mandatory. Now the doctor can place the
name with the face. I would also suggest that care be taken to
find a convenient time to visit the doctor----check with his front desk and get
to know them well. Lunch is always good
if it is possible but a coffee break at an off-time can usually be
arranged. You might want to stop in
unannounced just to meet the front office, introduce yourself and make the
appointment with them in person. These first
months will require a great deal of leg work and it is wise to plan this out so
that you still have proper time to cover your new office and schedule (keep in
mind the new IRS standard mileage rates as well – note all of your travel in a
journal regularly). It will be also
mandatory that your new staff be well versed in what you are doing so that
things run smoothly while you are out and about. Again, the proper team will be helpful in
putting that staff together. Nobody said
it would be easy.
As time
progresses, I would suggest a series of "Munch and Learn" sessions in
your office. This now completes the
circle of announcement, face to face, and seeing your office location. There should be a wall that displays your
credentials-----do not make it obnoxiously obvious, but it is a must.
These sessions should be an hour or less and eventually may lead to
further interactions (study clubs, etc…) which I will discuss in another
article. Keep them low-key with simple
refreshments. You might want to invite a
speaker, present yourself, or even have one of the detail persons from a
company at these gatherings. It does not
always have to be about your specialty per se, but could be a practice
management tidbit, accounting novelty, equipment demonstration etc.
I invented a
little item that was a big hit and I will share it with you. After a patient was seen, treated and
eventually discharged, I sent them a thank-you note. What?!? A thank-you note from a surgeon to a
patient. At the same time, a reminder
note went to the generalist so that his patient could be kept in his system for
recall and follow-up. Too often, these
patients were late in there general check-up because the referring office
thought the patient was still under treatment.
Just a little tidbit but it was effective for me. The marketing angle is to engage the patients
to refer to you directly. Obviously, you
then have an opportunity to reciprocate with your referral base if the patient
is not "attached" to a GP.
Always, always, always, try to market with your patients.
I think that
the specialist should take a look at the reports that he sends to the referring
doctor so that they are sent in good time and are relevant. I had a personal, handwritten quick note that
went out the same day the patient was treated so that the doctor knew that
treatment was on-going and active. If it
was a major case, this was followed by a complete operative note etc. so that
it could be filed in the patient’s permanent chart. This is just another means to get your name
in front of the generalist and to establish good lines of communication. This obviously can be done by email, fax
etc. The important thing is to document
the treatment clearly and always ask for his feedback if necessary.
These are
just a few ideas about getting started and I hope they are of help. Please do not hesitate to send me you
thoughts or questions. It would be my
honor to be of help.
More
Mistakes Made and Lessons Learned next time.
Dr. Donald
B. Lurie, DDS
email: donald.lurie@att.net
Phone: 717-235-0764
Cell: 410-218-2228
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