Enacted, 2023–2026
California, SB 351 (2025)
What it does: Prohibits a private equity group or hedge fund from interfering with professional dental judgment, including diagnostic-test decisions, referrals, treatment options, and ultimate responsibility for care. It also bars control over patient volume, appointment quotas, provider schedules, patient records, clinical hiring and firing, payer contracting, coding and billing decisions, and the selection of dental equipment and supplies. Section 1191 voids certain noncompete and non-disparagement clauses, with exceptions for sale-of-business covenants and confidentiality. Hospitals and health systems, public agencies, and pure debt financiers such as banks are excluded.1
Practical impact: Compare the statute’s enumerated prohibitions directly with the clinical carve-out in the MSA. See MSA clause anatomy. DSO ownership now matters under this California statute because it reaches private equity groups and hedge funds acting through management entities. The California attorney general’s 2026 Aspen Dental settlement separately applied the existing Dental Practice Act to related structural features. See the enforcement tracker.
Colorado, SB 25-194 and Dental Board Rule 1.7 (2025–2027)
What it does: Under the amended Rule 1.7, a DSO may not serve as the proprietor of a dental practice, lease real property to a dental practice, provide dental materials or equipment for clinical use, or influence licensees’ professional judgment. Dentists working with a DSO that functions as a proprietor face discipline. DSOs may still provide administrative, operational, and other non-clinical support. The rules impose prohibitions rather than a registration regime.2
Practical impact: Colorado moved from strict-on-paper to strict-in-enforcement. The real-property-lease and clinical-equipment bans strike at two standard DSO asset arrangements, so Colorado structures need the practice entity, not the DSO, holding the lease and the operatories. Note the effective-date split between the June 30, 2026 and January 1, 2027 provisions before sequencing any restructuring.
Kentucky, KRS 313.075 (2026)
What it does: Confirms that a non-dentist entity may own and operate a dental practice if board-licensed personnel perform the dentistry. Subsection (2) bars an unlicensed person or entity from controlling clinical decisions, diagnosis or treatment planning, patient records, supervision of licensed dental personnel, or a dentist’s professional judgment. The dentist must retain final authority for all clinical decisions. Subsection (3) prohibits direct or indirect control of clinical operations by an entity that sets reimbursement rates for dental services. The statute regulates clinical autonomy, not registration.3
Practical impact: One of the newest DSO statutes in the country and a template for the current drafting direction: enumerate clinical-control prohibitions rather than restrict ownership. The reimbursement-rate clause makes payer-affiliated DSO ownership a Kentucky-specific diligence question.
North Carolina, S.B. 257 (2026)
What it does: According to the North Carolina State Board of Dental Examiners, the bill eliminated mandatory Board review of management arrangements. Parties no longer need to submit agreements for mandatory review. The Board has published an example management services agreement that it deems compliant.4
Practical impact: North Carolina no longer requires Board review of dental MSAs, but the substantive restrictions remain. Section 90-29(b)(11) still treats owning or controlling a dental enterprise as practicing dentistry, and 21 NCAC 16X .0101 still bars revenue-linked fees and management-company control of clinical operations. This page does not confirm whether S.B. 257 amended other parts of § 90-40.2, including the conspicuous legal-review warning for management arrangements executed on or after January 1, 2013. Verify the session law on ncleg.gov before drafting.
Arizona, SB 1226 (2023)
What it does: Shifts patient-record maintenance responsibility to “the owner of a dental practice or a registered business entity,” adds a designated records custodian requirement with 30-day notice of changes, expands Board records-inspection powers, and requires the business-entity seat on the Board to be filled by an employee or owner of a registered business entity.5
Practical impact: Arizona permits lay entities to own dental practices if they register with the Board. For a registered entity, confirm that a current records custodian is on file and calendar the 30-day notice required for a custodian change.
The installed base: DSO statutes already on the books
Newer laws build on DSO statutes enacted from 2009 through 2017. Those earlier statutes remain the compliance baseline in their states, and several require recurring filings. Filing mechanics: Register a DSO.
These statutes supply much of the vocabulary used in newer laws. The Kansas contract limits and Washington’s ten prohibitions, for example, predate Kentucky’s 2026 list and California’s SB 351 enumeration. The filing regimes also cover different people and entities. Nevada’s dental-business-manager filing, Kansas’s business-entity registration, Texas’s DSO disclosure, Arizona’s care-delivery entity registration, and New Mexico’s non-dentist-owner license are not interchangeable. The full state-by-state comparison is on DSO laws by state.
Pending legislation to verify
A bill that fails one session frequently returns.
The Arizona bill and Kentucky’s KRS 313.075(3) point the same direction: legislatures are beginning to treat payer ownership of dental practices as a distinct problem from lay ownership generally.
Dentistry under recent medical CPOM laws
Most corporate-practice-of-medicine laws enacted in 2025 and 2026 do not cover dentistry. Read each law’s professional and entity definitions before applying it to a DSO.
Do not read a medical carve-out as dental permission. Oregon’s dental ownership statute predates SB 951 and is harder-edged than the new medical law. Watch for follow-on bills extending medical-MSO concepts to other professions in the 2026–2027 sessions.
The federal picture
What to do about all of this
1
Scan quarterly
Review every state in which you operate. Useful sources include law firm alerts, the state dental board’s site, and the legislature’s bill tracker. North Carolina’s 2026 change appeared on the Board’s management-arrangements page before most alerts covered it.
2
Review the agreement stack annually, and immediately on a change
An MSA drafted before 2025 is very likely out of date in California and Colorado, and its clinical carve-out predates Kentucky’s enumerated list. See Get agreements reviewed.
3
Track hard compliance dates
Track Colorado’s DSO provisions, which are reported effective January 1, 2027, and the attachments-rule compliance date of May 26, 2028. Colorado may require operational restructuring, including moving leases and equipment between entities, rather than changes to documents alone.
4
Keep the registration calendar
Texas ch. 73 filings by January 31 annually; Kansas registration within 30 days of contract execution and updates within 30 days of changes; Nevada manager registration; Arizona business-entity registration with a current records custodian. Penalties accrue per day in Texas.
5
Map grandfathering before restructuring
Kentucky grandfathers arrangements lawfully in existence on April 13, 2026, including expansion and modification. Ask counsel before signing whether a contemplated change remains within the grandfather clause.
6
Draft the clinical carve-out as a union
Cover the enumerated functions in every state where you operate. That may include California’s SB 351 list, Kentucky’s § 313.075(2) list, Washington’s ten prohibitions, Kansas’s § 65-1471 terms, and additional state provisions. See MSA clause anatomy.
Sources
- Cal. S.B. 351 (2025), adding Health & Safety Code §§ 1190–1191. Bill text; Benesch, California enacts SB 351.
- Colo. S.B. 25-194 (2025); Colorado Dental Association, rulemaking update: some rules effective June 30; Dykema, Colorado Dental Board promulgates regulations on DSOs effective January 1, 2027.
- KRS 313.075 (official text), created by 2026 Ky. Acts ch. 131, § 12, effective April 13, 2026.
- NC State Board of Dental Examiners, Management Arrangements (S.B. 257 statement and example MSA); N.C. Gen. Stat. § 90-40.2; 21 NCAC 16X .0101.
- S.B. 1226, Laws 2023, ch. 118; Senate fact sheet; A.R.S. § 32-1213.
- NRS 631.215; NRS 631.388 (both added to NRS by 2009 session laws).
- K.S.A. 65-1470; K.S.A. 65-1471 (L. 2011, ch. 114).
- Tex. Bus. & Com. Code ch. 73: § 73.001; S.B. 519 enrolled text; McGuireWoods, Texas to require registration of DSOs (2015).
- RCW 18.32.675; RCW 18.32.677; SSB 5322 session law (2017).
- H.B. 2308 (2026), House engrossed.
- Nixon Peabody, Oregon SB 951 explained; McGuireWoods, Oregon enhances CPOM restrictions (both confirming the act does not apply to dental practices); ORS ch. 679.
- FTC, Federal Trade Commission Files to Accede to Vacatur of Non-Compete Clause Rule (Sept. 5, 2025); removal of 16 C.F.R. pt. 910, Federal Register (Feb. 12, 2026). Aspen settlement noncompete terms: see the enforcement tracker.
- CMS, Administrative Simplification: Adoption of Standards for Health Care Claims Attachments Transactions and Electronic Signatures, 91 FR 14350 (Mar. 24, 2026).