The Colorado Dental Board has officially adopted new regulations that provide a formal framework for how Dental Support Organizations (DSOs) can operate within the state. While the rules explicitly recognize the role of DSOs in providing administrative and operational support, they also establish strict boundaries regarding the ownership of dental practice real estate, equipment, and clinical decision-making.
These new regulations will officially take effect on January 1, 2027.
The New Boundaries of DSO Operations
Under the updated rules, DSOs are permitted to offer non-clinical business management and financial support services. However, the Board clarified that DSOs cannot serve as “Proprietors” of a practice—a definition that includes any entity that employs licensees, owns the physical dental office, or owns the clinical equipment.
The core requirements of the new regulations include:
- Lease and Real Estate Ownership: A DSO cannot hold the lease for a dental practice’s premises or lease real property to the practice. The dental practice entity must hold the lease.
- Equipment Ownership: DSOs are prohibited from owning or providing the dental materials and clinical equipment used to deliver patient services. Equipment must be owned directly by the practice.
- Operational & Financial Management: DSOs may handle business and patient account administration, provided that the arrangement does not influence the practitioner’s independent professional judgment or result in improper fee-sharing.
- Data and Billing Access: Licensees must maintain immediate access to all patient records, retain the ultimate authority to review and alter patient billing accounts for accuracy, and maintain sole control over clinical decisions.
Next Steps for Colorado Practices
As a general rule in Colorado, dental practice ownership is restricted to licensed dentists (and dental hygiene practices to dentists or hygienists), with limited exceptions for certain non-profits or political subdivisions. Practices operating under a DSO structure that do not align with these specific structural requirements by the 2027 deadline may face administrative review.
The new framework brings Colorado’s regulatory environment close to models seen in other states, such as New Jersey. DSOs and affiliated dental practices operating in Colorado should utilize the upcoming transition period to thoroughly review their corporate structures, administrative service agreements (ASAs), and real estate arrangements to ensure full alignment with the new standards.
Need Guidance?
For a comprehensive review of your organization’s contracts or to discuss how these upcoming changes impact your practice’s operational model, please contact our healthcare practice group.