When looking to buy a dental practice, there are seven red flags potential buyers should consider, the California Dental Association reported March 21.
Katie Fornelli, senior practice management analyst at CDA Practice Support, and CJ Williams, vice president and regional business development officer at Bank of America Practice Solutions, answered the question, "What are some red flags when evaluating a practice to purchase?"
Red flags are usually uncovered during the due diligence process when advisers evaluate all elements of the practice, Ms. Fornelli and Mr. Williams wrote.
Common practice management red flags:
- Improper dental benefit plan billing or billing procedure inconsistencies
- Excessive patient credits or extensive outstanding patient balances
- Low treatment acceptance for diagnosed restorative procedures
- Low hygiene-recall scheduling percentage
Common employment red flags:
- Not having an employee policy manual and job descriptions
- Poorly managed employee personnel records
- High employee turnover (though this has been less scrutinized amid the pandemic)