After you begin to practice dentistry, you will seek advice from advisors in all kinds of arenas: legal, accounting, financial and more. You will rely on the advice of these key advisors to make wise and beneficial decisions. Therefore, not only is it important that you form a “team” of dental-specific advisors to help guide you during your entire career, but it is important to understand the areas in which risk management will be imperative to you as a practitioner.
1. Incorporation: If you are an independent contractor or you own your practice, for the most complete liability protection, it is often wise to form an entity (LLC or corporation) under which you operate. If you purchase a building with a practice, set up a separate entity to own the building that is separate from ownership of your dental practice. This is helpful in the event that someone is injured on the premises and not in the dental chair or if you ever decide to relocate the practice but intend to maintain ownership of the building and lease it out.
2. Insurance: It is your best protection against lawsuits. Many new dentists I have worked with have been advised to set up an LLC or S-corporation when they practice as protection from liability purposes, as we discussed above. While this entity protection is certainly helpful, if a dentist is sued for malpractice, he or she always remains personally liable for their actions. This makes carrying adequate malpractice, personal umbrella and business insurance of unmatched importance.
3. Disability insurance and emergency funds: Disability insurance, especially if you are the sole income producer in your household, becomes important if you are unable to work or unable to work to your greatest potential because of a sickness or injury. Most policies have waiting periods (typically three to six months) so that you will not collect benefits until the waiting period has passed. This makes it a necessity to accumulate at least three months of fixed expenses for your household in an emergency fund. You can access these funds in the event you are unable to work and are waiting for your disability insurance to pay benefits.
4. In-office care: Once you are protected from a liability and insurance standpoint, it is also crucial to establish in-office care procedures with your staff and patients. Early recognition of potential issues with a patient are key to resolving them before they present significant risk to your practice. Proper documentation of any recognized issues with a patient, whether it is failure to pay for services provided or documenting when a patient has been formally released from your care, is critical.
Where are some other areas you think risk management is important to a dental practice?
~Megan Mathers, JD, Mathers Law
About Megan Mathers
Megan is an accountant and tax attorney with Mathers Law, a firm focused on providing accounting, tax, business advisory and legal services to the dental and medical communities. Megan earned her Bachelor’s Degree in Accounting from Marquette University and her law degree from Loyola University Chicago School of Law. Megan’s practice focuses on tax compliance, tax planning and wealth and estate planning.