Hamza Asumah, MD, MBA, MPH
The consolidation of dentistry over the past two decades is one of the great untold business stories in American healthcare. Twenty-five years ago, there were roughly 100 dental support organizations in the United States. Today the count sits closer to 3,100. Private equity has poured in — there were at least 161 PE deals in the dental sector in 2024, more than in any other corner of healthcare. The share of dentists affiliated with a DSO climbed from 7.4% in 2015 to 13.8% in 2023, and practice ownership fell from 85% of dentists in 2005 to 73% by 2023.
That kind of structural transformation does not happen quietly forever. In 2026, the backlash has arrived — and it is reshaping the legal ground beneath every DSO and PE-backed group in the country.
The line regulators care about
To understand the scrutiny, you have to understand the line it polices. Most states prohibit the corporate practice of dentistry — the principle that licensed dentists, not corporate entities, must control clinical decision-making. The DSO model is built to operate alongside that prohibition: the DSO provides administrative, billing, and operational support, while clinical judgment legally remains with the dentist.
For years, that structure operated with relatively little interference. State dental boards exist to license professionals and protect the public, and their concern with DSOs centers on a specific set of issues — corporate practice of dentistry, fee-splitting, and the management service agreements that define the DSO-practice relationship. The growing worry is corporate, and specifically private-equity, influence creeping across the line from administration into clinical control. Cross that line, and boards will step in. In 2026, they are stepping in.
California fires the warning shot
No development crystallized the new era more sharply than California’s $2.3 million settlement with Aspen Dental Management.
The state’s attorney general alleged that the DSO unlawfully controlled its affiliated dental practices and engaged in deceptive marketing. The complaint described the comprehensive suite of back-office services typical of the PC/MSO structure — bookkeeping, scheduling, billing, payroll, licensing, lab services, recruiting — and zeroed in on aspects suggesting the DSO had crossed from supporting the practices into controlling them, including control over practice space and equipment.
What makes this a genuine warning shot, rather than an isolated enforcement action, is the pattern around it. The settlement landed alongside new legislation, SB 351, and an unsolicited brief from the AG in a separate case. Together they signal that California is taking a serious, sustained look at private equity and its use of the PC/MSO model — and the implications reach well beyond dentistry into every PE-backed healthcare structure operating in the state.
The legislative teeth are specific. Effective January 1, 2026, California law bars private equity firms and hedge funds from imposing patient quotas, restricting which procedures a dentist can offer, interfering in referral decisions, dictating which diagnostic tests a dentist can order, and limiting the time a dentist spends with each patient. These are not abstract principles — they are concrete prohibitions on the exact operational levers some PE-backed models had been pulling.
A national pattern, not a California quirk
It would be a mistake to dismiss this as one progressive state’s idiosyncrasy. The movement is national and gaining structure.
Pennsylvania passed legislation expanding its attorney general’s authority to review and potentially block healthcare mergers and acquisitions. A growing number of states have enacted transaction review laws that may apply to DSO deals — laws that can require pre-closing notice, approval, or public disclosure depending on a transaction’s size, structure, and location. Kentucky modified its Dental Practice Act to bar non-licensed individuals and entities that set reimbursement rates from controlling clinical decisions. Illinois has weighed similar transaction-reporting requirements.
There is now even a model bill circulating. The Independent Dental Practice Act, released by an anti-monopoly organization, gives states a ready-made framework to reinforce corporate-practice laws and close the loopholes that permit indirect control. It targets the “friendly dentist” arrangements and restrictive management agreements that let insurers, DSOs, and PE firms exert de facto clinical control; it strengthens prohibitions on non-dentist ownership; it restricts transfer of control over staffing, scheduling, billing, coding, pricing, and payer contracting; and it voids most noncompete clauses affecting dentists. When model legislation exists, replication across states tends to accelerate.
Why the scrutiny is sharpening now
The regulatory concern is not purely structural — it is fueled by research on patient impact. Studies have found that private-equity-affiliated dental practices not only charge more for care but also tilt toward higher-cost restorative, specialty, and surgical procedures over diagnostic and preventive ones. That finding, accurate or not in any individual case, is precisely the kind of evidence that mobilizes regulators and dental societies, because it suggests corporate ownership may be bending clinical priorities toward profit. It is the empirical core of the case for the line that corporate-practice laws were written to defend.
What operators should take from this
For DSO leaders and PE-backed operators, the scrutiny era demands a posture shift — from optimizing structures for growth and tax efficiency toward defensibility under examination.
The first move is an honest structural audit. The Aspen settlement turned on specific features of the DSO-practice relationship — control of space, equipment, and the substance of clinical decisions. Every operator should be asking, with experienced counsel, whether their own management service agreements and operational practices would survive that same scrutiny. The arrangements that looked clever in a low-enforcement environment may look like liabilities in a high-enforcement one.
The second is to recognize that clinical autonomy is no longer just an ethical nicety or a recruiting talking point — it is a legal requirement with growing enforcement behind it. The specific levers California now prohibits, such as procedure restrictions, referral interference, and time-per-patient mandates, are worth treating as bright lines everywhere, not just where they are currently banned. Building genuine clinical independence into the operating model is now a compliance imperative.
The third is to engage rather than ignore. This legislative wave is being actively shaped, and the DSO industry’s credibility in that conversation depends on demonstrating that the model can deliver operational support and scale without compromising clinical judgment. Operators who can show that — in their structures and their outcomes — are positioned not just to survive the scrutiny but to help define what acceptable corporate dentistry looks like.
The bottom line
The growth of corporate dentistry outran the public and regulatory conversation about it. That gap is now closing, fast. The operators who treat the scrutiny era as a threat to evade will spend the next several years on the defensive. The ones who treat it as a standard to meet — building defensible structures and real clinical autonomy into how they operate — will find that compliance and good operations point in the same direction. In a consolidating industry under a regulatory microscope, being genuinely clean is not just safer. It is becoming a competitive advantage.
Dr. Hamza Asumah 
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