For most of my career, the questions a dentist asked me before selling were about valuation. What multiple can I get on my EBITDA? Who pays the most for dental practices?
But starting in 2026, practice owners across the country are going to have to pay attention to their own state legislature. Whether they realize it or not.
Does the state I practice in change who can buy me?
It does. This year, a wave of state laws started reshaping dental practice sales before the letter of intent is ever signed. These laws usually do not touch your price. They touch your process. They decide which buyers can legally structure a deal in your state, whether your sale has to be reported to a state agency before it closes, and how many months that review can add. If you are within a few years of selling, this is worth understanding now.
None of this is exactly new. At this year’s Dykema DSO Conference, the industry premiered a short film on the history of dentistry and the rise of the DSO — the long arc from the solo practitioner to today’s private-equity-backed groups. At every turning point in that story, legislation was in the room. The rules a state wrote, or chose not to write, shaped who could own a practice, how they could own it, and what dentistry looked like for the next generation. That is not just a history lesson. It is exactly what is happening again right now, and it is the reason your state has quietly become part of your deal.
Key Regulatory Changes in Corporate Practice and Transaction Notification
Two things are happening at once, and it helps to keep them separate.
The first is corporate practice tightening. Most states have long had a doctrine called the corporate practice of dentistry, or the corporate practice of medicine on the physician side. The idea is simple. Clinical decisions belong to a licensed dentist, not to a corporation or an outside investor. Because of that rule, private equity and DSOs cannot simply buy your practice outright the way you would buy a competitor down the street. They use a structure. Your clinical practice stays inside a professional corporation, or PC, that a licensed dentist owns on paper. A separate management company, the MSO or DSO, contracts with that PC to run everything that is not clinical: billing, HR, staffing, marketing, real estate, compliance. The management company does not have to be dentist-owned, so it becomes the pathway for outside money to flow into dentistry. What changed is that several states have started rewriting the rules on what that management company is allowed to control.
The second is transaction notification. A growing number of states now require the parties to a healthcare deal to notify a state agency or the attorney general before closing, and to wait out a review window. Some of these laws add real time to a deal, and a few let the state attach conditions.
Neither trend is aimed at you as a seller. Both are aimed at the buyer’s structure and the buyer’s capital. But they land on your deal.
The Evolution of State Healthcare Transaction Review Laws
This did not happen overnight, and it is not only a 2026 story. The trend has been building for more than a decade, and it is accelerating. A rough timeline of how we got here:
- Early 2010s — Massachusetts. Among the first to require notice of material healthcare transactions.
- 2021–22 — Oregon. Enacts a pre-close notice-and-review law with a window that can run up to 180 days.
- 2023 — New York. Adds a material transaction notice requirement, effective that August.
- 2024 — Illinois, Indiana, Minnesota, and others. A cluster of new pre-close notice laws take effect, and California’s review regime begins for deals closing on or after April 1.
- 2025 — Oregon. Passes SB 951, widely called the strictest corporate practice law in the country — though it covers medicine and nursing, not dentistry.
- 2026 — California (SB 351 and AB 1415), Washington (HB 2548), and Kentucky (HB 776, dental-specific) all take effect.
For scale: as recently as 2024, roughly a dozen states had the authority to review healthcare transactions. By the end of 2025 that number was closer to thirty.
State-Specific Impacts on Dental Practice Transitions
California. Two laws took effect January 1, 2026, and both reach dentistry directly. SB 351, which the California Dental Association actually co-sponsored, codifies the corporate practice rules and bars a private equity group or hedge fund involved with a dental practice from interfering with clinical judgment. In plain terms, the buyer’s management company cannot decide your diagnostic tests, your referrals, how many patients you see, or how many hours you work, and it cannot control your billing and coding, own your patient records, or hire and fire your clinical staff based on clinical competency. It even voids noncompete and non-disparagement clauses in those investor contracts, including contracts already in place. Here is the part owners get wrong. SB 351 does not stop you from selling. The CDA was explicit that the law preserves your right to sell your practice and does not restrict private equity transactions. What it does is narrow how a buyer’s management company can be built and what it can control after the close.
The second California law, AB 1415, is the timing one. It requires certain investor entities to give California’s Office of Health Care Affordability at least 90 days of notice before closing a covered deal. That office cannot block your sale, but it can open a cost-and-market-impact review, and that review can push a closing out by several months.
And California is not just writing rules — it is enforcing them. In May 2026 the state attorney general reached a settlement with Aspen Dental, a private-equity-backed DSO, over alleged violations of the corporate practice of dentistry and misleading advertising: $2 million in penalties, $300,000 in patient restitution, and a 36-month independent compliance monitor. Whatever you make of the case, the message to buyers is that these rules now have teeth. A sophisticated buyer already knows it, which is one more reason your structure will get real scrutiny.
Washington. HB 2548 was signed March 25, 2026, and took effect June 11, 2026. Washington did not pass a broad corporate practice law this year — that bill failed in the Senate — but it widened its transaction notice rule. The state already required about 60 days of notice to the attorney general for material changes. Now a material change also covers changes in majority ownership or control, transfers of a majority of assets including real estate sale-leasebacks, and nonprofit-to-for-profit conversions. The mechanic that matters for your timeline is the standstill. If the attorney general asks for more information, your deal cannot proceed until 30 days after the parties certify they have substantially complied. Washington’s own insurance regulator counted 551 healthcare acquisitions in the state since 2015, and dental was among the most-targeted sectors by deal count.
Kentucky. This one is dental-specific. In April 2026 the governor signed HB 776 as an emergency measure, so it took effect immediately, amending Kentucky’s Dental Practice Act. It bars anyone not licensed to practice dentistry, and any entity that sets dental reimbursement rates, from controlling clinical decisions. It takes a grandfathering approach. Existing contractual arrangements can continue, but new or expanded ones of that type are prohibited. If you are a Kentucky owner weighing a DSO deal, the structure your buyer can offer you now looks different than it did a year ago.
Illinois. Illinois has required 30 days of advance notice to the attorney general before closing certain healthcare deals since the start of 2024. The important detail for most dentists is the threshold. The notice requirement applies to provider organizations of 20 or more providers, and it specifically carves out practices operated as part of a licensed professional’s own practice, whether solo, in a PC, or in a partnership. Most single-location dental practices fall below that line. A larger group or a DSO rollup does not. The attorney general can request more information within 30 days, and the deal cannot proceed until 30 days after substantial compliance. Illinois is also weighing a 2026 expansion that would let the attorney general reach the private equity ownership layer above the practice, so this is a state to keep watching.
A word on Oregon. You will read about Oregon, so let me be precise. Oregon passed what is widely called the strictest corporate practice law in the country in 2025, and it is a real preview of where this is heading. But it applies to the practice of medicine and nursing. It expressly does not cover dentistry. If you are a dentist, Oregon does not change your deal today. It changes the physician world, and it tells you which way the wind is blowing.
The watch list. Beyond the states already on the books, a 2026 wave is moving through legislatures. Hawaii, Pennsylvania, Rhode Island, New York, Indiana, and Vermont all have proposals in some stage. A few would matter if they pass. Pennsylvania’s bill would require 120 days of notice and defines a covered provider organization as low as two practitioners, which would sweep in small groups. Hawaii’s would require 180 days of notice and, for larger deals, state approval. None of these are law yet, so treat them as a forecast, not a rulebook.
The Good News: North Carolina Just Cleared A Path For Buyers
Historically, before a DSO could enter into a management arrangement with a practice in the North Carolina, the parties had to submit that agreement to the North Carolina State Board of Dental Examiners for advance review and wait on a deemed-compliance letter before moving forward. It delayed deals, added cost, and made some DSOs think twice about coming into the state at all. On July 7, 2026, that gate came down. Under Session Law 2026-41, parties can now enter a dental management arrangement without first obtaining board review or sign-off.
What that means for a North Carolina owner is refreshingly simple. Buyers can move faster, more of them can move at all, and a larger, quicker-moving buyer pool is exactly the kind of thing that tends to push valuations up for North Carolina dental practices. The board did not walk away entirely, and keeps the authority to investigate and challenge arrangements after the fact. The underlying rules on written agreements, fair compensation, and control of clinical decisions still apply. But the up-front review that used to slow a North Carolina sale is gone.
How This Actually Hits Your Deal
Strip away the statute numbers and three things change for a selling dentist.
Your buyer pool can narrow by state. A national DSO that structures cleanly in one state may have to rework its model, or its management agreement, to operate in California or Kentucky. It can change which buyers show up for your practice and how aggressive they are.
Your timeline can stretch. If your deal is large enough to trip a notice requirement, you are adding a defined waiting period before you can close. At TUSK, we have navigated these timelines by proactively working alongside the practice owner and the DSO to ensure we are actively working to close the deal while approval is processed from legislature.
Your structure gets more diligence. Buyers know these rules better than sellers do, and they will underwrite them. A clean, defensible PC and management-company structure is now part of what a sophisticated buyer is paying for. A messy one is a discount or a delay.
Here is the reassuring counterweight: State review usually means scrutiny and time, not a veto. Oregon reviewed 65 healthcare transactions over five years. It blocked none. It attached conditions to 15. That is the realistic picture almost everywhere. Well-structured deals still close. They just close under more eyes and on a longer clock.
What It Does Not Mean
If you own a single-location dental practice, most of the notice laws carry size thresholds you fall below, and the corporate practice laws are aimed at the investor’s conduct, not at your right to sell. The buyer appetite is still very much there. Private equity affiliation among dentists roughly doubled in six years, from 6.6 percent of dentists in 2015 to 12.8 percent in 2021, and DSO affiliation reached about 16 percent of dentists by 2024. TUSK Practice Sale’s Q2 2026 dental market read found 69 percent of DSOs plan to increase acquisition activity this year against a thinning supply of practices. This is not a market pulling back from dentistry. It is a market getting more rules around how the buying happens.
What To Do Before You Go To Market
- Get counsel who knows your state. The rules are not uniform, and the differences are the whole point. A transaction attorney who has closed deals under your state’s specific regime is worth more than a generalist.
- Make your structure legible. Clean corporate records, a defensible setup if you are already affiliated, and clarity on who controls what. Buyers pay for certainty.
- Understand your buyer’s structure before you sign. Ask a prospective DSO how it plans to operate legally in your state and what its management agreement controls. If they cannot answer clearly, that tells you something.
The Bottom Line
None of this is a reason to wait to sell your dental practice, and it is definitely not a reason to panic. It is one more reason to understand your position early. The dentists who get hurt are the ones who found out about the review window after they had already emotionally left the practice. Know the rules in your state. Fewer surprises, more control, on your terms rather than the buyer’s.
This article is educational and reflects laws as of mid-2026. It is not legal advice. State laws in this area are changing quickly, and how a rule applies depends on your specific practice and transaction. Talk to a healthcare transaction attorney licensed in your state before you act.
Frequently Asked Questions
Do these laws mean I cannot sell to a DSO or private equity anymore?
No. None of the 2026 laws prohibit selling a dental practice to a DSO or a private-equity-backed group. The laws limit what the buyer’s management company can control after the deal and, in some states, add a notice step before closing.
I own one location. Does any of this apply to me?
The corporate practice rules can affect the structure a buyer offers you regardless of size. The notice-and-review laws mostly kick in at a size threshold, and a solo or single-PC practice is frequently exempt.
My state is not on this list. Am I in the clear?
If you are planning a sale in the next couple of years, ask about your state’s current rules and anything on its legislative calendar.
