New Colorado Regulations Just Drew a Clear Line Around DSOs

The Colorado Dental Board has adopted new regulations that for the first time explicitly address dental service organizations (DSOs) and their role in Colorado dental practices. The rules, adopted as part of the Board's rulemaking process implementing the Dental Practice Act Sunset Bill (SB25-194), take effect January 1, 2027. 

If you own a dental practice, are considering a DSO affiliation, or are in the middle of buying or selling a practice, we explain what changed and how it impacts you.

The Colorado Dental Board’s Regulations for DSOs

DSOs are confirmed as permissible in Colorado, but the rules around how they can operate are specific and, for some existing arrangements, potentially disruptive.

Here is what the new regulations establish:

DSOs may provide:

• Administrative and operational support

• Business management services (so long as the DSO does not influence the dentist's clinical decisions)

• Financial management and patient account administration (so long as the dentist reviews the accuracy of all procedures billed and retains the ability to correct errors)

  
  

DSOs may NOT:

• Own or serve as the "Proprietor" of a dental practice or dental hygiene practice

• Hold the lease on any dental practice's physical premises; the practice itself must hold the lease

• Own or provide dental equipment or materials used in delivering patient care; the practice must own its own equipment

• Exercise any influence over a dentist's professional judgment or clinical decisions

• Engage in fee-sharing arrangements with affiliated practices

  
  

It is important to define "Proprietor" in this situation. Under the regulations, the term covers any person or entity that employs licensees, owns a dental office, or owns the dental equipment used to provide dental services. Proprietors are legally considered to be practicing dentistry, a role limited to licensed dentists.

The ownership rule has not changed. Only a licensed Colorado dentist may own a dental practice, and only a licensed dentist or dental hygienist may own a dental hygiene practice. There are narrow statutory exceptions for certain nonprofit organizations and political subdivisions, but the corporate practice prohibition is firmly in place.

Context and Compliance Stakes

Colorado is not the first state to formalize these restrictions. The new rules closely parallel regulations that have been in place in New Jersey for several years. But for Colorado dentists and DSOs, this is new and specific regulatory ground.

The Board made clear that licensees practicing in noncompliant DSO arrangements may be subject to disciplinary action. Individual dentists, not just the DSO entity, can face consequences if their practice is structured in a way that violates these rules.

A second rulemaking hearing is scheduled for July 8, 2026, to address additional topics including teledentistry, infection control, and anesthesia rules. The Colorado Dental Association has been actively involved in both rulemaking sessions.

For Practice Owners

If you are an independent practice owner with no DSO affiliation, these rules largely confirm what you already know: dentist ownership is the law, and the practice must hold its own lease and equipment. One practical takeaway is the Board's new requirement that a Practice Ownership Form must be available on request during business hours, alongside a licensee's license.

If you are considering a DSO affiliation or a sale to a DSO-affiliated buyer, now is the time to have that transaction reviewed with these regulations in mind. Specifically:

• Who will hold the real property lease after the deal closes?

• Who owns the dental equipment?

• Does the management services agreement give the DSO any influence over clinical decisions or billing in ways that now run afoul of the rules?

  
  

These are the precise issues the Board's new rules are designed to address.

For DSOs and Groups

If you operate a DSO or multi-practice group in Colorado, your management services agreements, real estate structures, and equipment ownership arrangements need to be reviewed before January 1, 2027. Arrangements that may have been common in the past, such as DSO-held leases, equipment provided by the management company, or consolidated billing handled without dentist review, are now explicitly prohibited or significantly constrained.

There is still time to restructure before the effective date, but less than seven months to do it.

Does this reinforce a broader regulatory trend? 

Colorado's move fits into a national pattern. Regulatory bodies across the country are drawing clearer lines between permissible management services and impermissible corporate practice. Earlier this year, the California Attorney General reached a $2 million settlement with Aspen Dental Management over alleged violations of California's corporate practice of dentistry laws, a signal that enforcement is real and not merely theoretical.

DSOs and dental groups operating under the assumption that "we haven't had specific rules, so we're fine" should take this as a cue to reassess.

Marti Law Group advises dental practice owners, buyers, sellers, DSOs, and dental groups on practice transactions and more. If you have questions about how Colorado's new DSO regulations affect your practice or pending transaction, contact our team.