The Investor-Owned Smile Studio
Bright Smile Studio is owned by a non-dentist management company. The investor sets fees, hires staff, and pays hygienist Dana a 10% bonus on whitening sales. The advertisement says 'Painless dentistry guaranteed-lowest price in Nevada-free whitening for every referral.' The named dentist, Dr. Kim, sold the practice's goodwill but works one Saturday a month; she has not seen most patients and says the investor 'handles business.' A patient asks Dana whether the guarantee means she will feel nothing. Dana is also asked to tell patients that Dr. Kim is 'on site every day' when she is not. The practice is a Nevada professional limited liability company, but the investor is not licensed and the operating agreement gives him authority to terminate the dentist and set clinical hours. Dana's bonus is paid monthly and is based on the number of whitening referrals she generates, including referrals to an affiliated whitening lounge.
1. Identify the practice-entity and control issues in this arrangement. What risk does Dana face if she ignores them?
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Nevada limits ownership and control of dental practices to licensed dentists, typically through a professional corporation or professional limited liability company. A non-dentist investor who sets fees, hires staff, controls clinical hours, and can terminate the dentist may be exercising improper control over the practice. The dentist must retain independent clinical judgment and cannot simply rent her license to a business owner. Dana should not assume that Dr. Kim's name on the sign makes the arrangement lawful. If Dana participates in a prohibited arrangement, she risks Board discipline for aiding unprofessional conduct, as well as employment and liability exposure. She should ask for the ownership and management documents, raise the concern with Dr. Kim, and consider reporting to the Board if the investor continues to control clinical decisions.
2. Evaluate the advertisement and the 10% whitening bonus under Nevada advertising and fee-splitting rules.
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The advertisement contains several problems. 'Painless dentistry guaranteed' promises a result the practice cannot guarantee and may be misleading; 'lowest price in Nevada' must be verifiable and not a deceptive comparison; and 'free whitening for every referral' may be an improper inducement or fee-splitting arrangement. The 10% bonus based on whitening referrals, especially referrals to an affiliated lounge, creates a financial incentive tied to referrals rather than patient care and may violate the prohibition on paying for patient referrals. Dana should not make the guarantee statement to the patient. She should explain that results vary and that the office cannot promise no discomfort. She should ask that the advertisement be corrected and that the bonus structure be reviewed by the dentist and legal counsel.
3. How should Dana respond when asked to tell patients that Dr. Kim is on site every day? What supervision and truthfulness principles apply?
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Dana should not make a false statement. If Dr. Kim is present only one Saturday a month, saying she is on site every day is deceptive and could affect the patient's consent and the credibility of the practice. Dana should say accurately when the dentist is available and who will provide care. She should also confirm that the hygienist's supervision level matches Nevada requirements for the procedures being performed; a dentist who is absent most of the time may not satisfy direct supervision when it is required. Dana should raise the issue with Dr. Kim and document the correction. If the office insists on the false statement, she should refuse and consider whether continuing to work there creates unprofessional-conduct risk.