In a recent vote, the Federal Trade Commission (FTC) moved to ban most noncompete clauses, regardless of industry. If implemented as it has been proposed, this could put a halt to any future associate agreements in dental practices and remove current associate agreements, as they would not be legally binding. What was the goal of this noncompete ban, and how might it impact your dental practice?
The FTC’s Goals
The FTC’s noncompete ban was designed to help lower patient healthcare spending. It is anticipated that the ban will decrease annual healthcare costs by $148 billion and dramatically increase the number of new companies being created. While this means lower costs and more options for patients, it might mean lower income and more competition for dentists.
How Will It Impact Associates?
The biggest impact of the noncompete ban is likely going to be on associates, as they will have more options for employment or purchasing their own practices. Noncompete agreements are often used as a tool to stop associates from being able to open a practice in a similar area for an extended period of time after leaving yours. With the noncompete ban, associates will be able to leave your practice and buy a new one or open their own. They can also open this practice close to yours and potentially take patients from your practice whom they worked with.
How Will It Impact Practice Owners or Sellers?
Practice owners who do not have associates will likely not be impacted in the short term. However, as competition increases, they may start to experience lower practice value and need to work harder to attract and retain patients. If you are a practice owner interested in selling your practice, the noncompete ban may be great news for you, as there will potentially be a bigger pool of potential buyers.
How Will It Impact Practice Owners With Associates?
Some states already have a noncompete ban in place, like Alabama and California. In order to get around the ban, dental practice owners need to be very specific in their contracts. When creating your contract, make sure that you use extensive descriptions of what things count as your intellectual property and include clauses about not soliciting patients or staff.
When Does the Noncompete Ban Go Into Effect?
In January 2023, the FTC published the first notice about the noncompete ban rule changing. The commission received many comments from businesses, dental practices, healthcare organizations, and lawyers about the proposed change. This April, the FTC is expected to vote on the final version of the noncompete ban. The ban will not go into effect immediately if approved. Instead, it will go into effect after 60 days. Employers will also have up to 180 days to become compliant.
Improve Your Dental Practice with APEX Reimbursement Specialists
Whether you’re looking for a way to make the insurance verification process easier or hoping to improve your overall patient communication plan, APEX Reimbursement Specialists is here to help. Contact our team today by calling (410) 710-6005. We look forward to working with you to make your practice a more profitable place.