Dental Practices NAICS 621210

Nov 3, 2025 - California Legislation Targets Private Equity And Hedge Fund Activity

• Two new California laws formalize restrictions on dental and medical practice management platforms operated by private equity groups and hedge funds and increase the state’s oversight of certain healthcare transactions. Transactions in other states may be impacted if similar legislation is passed in those jurisdictions. SB 351 prohibits private equity groups or hedge funds from engaging in certain matters of professional judgment with respect to dental or physician practices in the state, including dictating which diagnostic tests are ordered, determining the necessity of outside provider referrals or consultations, controlling how many patients a physician or dentist treats, and maintaining responsibility for a patient’s overall care. SB 351 carves out the following administrative functions that cannot be delegated to an unlicensed entity: Owning or determining the content of patient medical records. Selecting, hiring, or firing of providers when that decision relates to clinical competency or proficiency. Setting parameters on entrance into payer contracts. Setting parameters specific to clinical competency or proficiency in contractual relationships with outside providers that relate to the delivery of patient care. Decision-making regarding billing and coding practices. Approving the selection of medical equipment and supplies for the practice.
• Dentists’ confidence in the economy was stable in the third quarter of 2025 but still down from a high point in late 2024, according to the ADA Health Policy Institute. Dental practices are still experiencing a “fiscal squeeze” brought on by increasing costs and lower demand for care. Dental practice costs are increasing faster than inflation, according to the ADA Health Policy Institute, and two-thirds of dentists reported that they have increased their fees since the beginning of the year. Difficulty filling open positions, especially dental hygienists, continues to impact dental practices.

• Many dental practices are passing credit card processing fees onto their patients to protect their margins against rising operating costs, according to Dentistry Today. There are compliance issues, however, as not every state allows surcharging, and card networks like Visa and Mastercard have strict rules about how surcharges are disclosed, how they’re calculated, and when they can be applied. Dental Economics notes that while passing card processing fees to patients might seem like a simple fix, the financial and tax implications are often more complex than they appear. Missteps in how surcharges are recorded or taxed can trigger red flags with the IRS, potentially leading to audits, penalties, and administrative headaches. A common oversight is failure to account for surcharges accurately when filing taxes. For example, if a dentist charges a 3% surcharge on a $200 procedure, bringing the total to $206, that $6 must either be reported as income or offset as a processing expense. If it’s not addressed properly, even small discrepancies between what’s reported on tax returns and the amounts shown on 1099-K forms from processors can raise red flags. Rules about taxing surcharges differ by state. Some require the surcharge to be taxed; others do not. If a dental office taxes the base service but omits sales tax on the surcharge, or vice versa, they could find themselves out of compliance. Dental practices must also consider their contracts with insurance providers, which may include clauses regulating how payments are processed, if there are ceilings or set prices for covered services or products, and whether additional fees can be passed on to patients. Violating these contracts could lead to reimbursement issues or even termination of the provider relationship.
• Dental practice employment and average wages for nonsupervisory employees increased slightly during the first seven months of 2025, according to the US Bureau of Labor Statistics (BLS). Dental Practices slightly raised their prices during the first eight months of 2025, according to the BLS. Dental practice sales are projected to grow at a compound annual growth rate of 4.98% from 2025 to 2029, faster than the growth of the overall economy, according to Inforum and the Interindustry Economic Research Fund. The Producer Price Index for dental practices increased 2.02% year over year in May, according to the BLS.