Can Two Dentists Share a Practice Without Partnering?
Two dentists may share office space, staff, and equipment without forming a legal partnership by structuring separate professional entities, maintaining independent billing and patient records, and documenting cost-sharing arrangements through subleases or management services agreements. Understanding corporate practice of dentistry rules, fee-splitting prohibitions, HIPAA compliance requirements, and liability allocation protects clinical autonomy while reducing overhead.
Planning a shared dental office? Call (800) 499-1474 to discuss space-sharing agreements, compliance frameworks, and entity structuring.
Key Takeaways for Dental Space-Sharing Without Partnership
- Each dentist maintains their own P.C. or PLLC, NPI numbers, payor contracts, bank accounts, and malpractice coverage
- Space-sharing agreements or subleases document rent allocation, operatory time-sharing schedules, equipment usage rights, and shared staff compensation formulas
- Fee-splitting prohibitions and corporate practice rules require careful structuring of referrals, management services fees, and cost-sharing formulas to avoid regulatory violations or unintended partnership characterization
What Is a Dental Space-Sharing Agreement?
A dental space-sharing agreement or cost-sharing arrangement allows two independent dentists to occupy the same office, share staff, and pool certain expenses without forming a partnership or commingling income. Each dentist maintains a separate professional corporation or PLLC, files independent tax returns, holds individual NPI numbers and payor contracts, and bills patients under their own name and license.
Common space-sharing structures include:
- Sublease Arrangements: One dentist holds the master lease and subleases operatory time or dedicated rooms to another dentist, allocating rent, CAM charges, and utilities proportionally
- Co-Tenancy with Shared Services: Both dentists sign the lease as co-tenants and execute a separate cost-sharing agreement for reception staff, hygienists, sterilization technicians, and equipment
- Management Services Agreement: One dentist or an affiliated MSO provides administrative support (billing, HR, IT) to the other dentist at fair market value fees, preserving clinical independence
- Operatory Time-Sharing: Dentists divide office hours by day or week, with exclusive use during assigned slots and shared access to common areas and equipment
Space-sharing agreements document rent and expense allocation formulas, scheduling protocols, equipment maintenance responsibilities, staff employment or shared-staffing arrangements, HIPAA and OSHA compliance duties, and indemnification for independent malpractice claims.
Space-Sharing vs. Partnership vs. Associate Models
There are several models for dental practices to choose from. Here is a breakdown of the key differences between the space-sharing partnership, and associate models:
| Aspect | Space-Sharing (Independent) | Partnership | Associate (Employment/IC) |
| Legal Structure | Two separate P.C./PLLCs; sublease or MSA | Single entity or joint venture; partnership agreement | One P.C. employs or contracts with associate |
| Billing & Collections | Separate NPIs, payer contracts, bank accounts | Unified billing; profit/loss sharing | Associate paid salary or production % by owner |
| Patient Records | Each dentist owns their own charts | Shared ownership per partnership agreement | Owner P.C. owns all records |
| Liability | Independent malpractice coverage; indemnification clauses | Joint and several liability for partnership debts/claims | Owner liable for associate acts within scope |
| Non-Compete | Negotiable for co-location period | Governs partner exits and dissolutions | Typically required post-employment |
| Buy-In/Exit | Optional ROFR or buy-in offer | Mandatory under buy-sell agreement | No ownership stake; at-will or contract term |
Keeping Practices Separate: Billing, Records, and Compliance
Maintaining separate billing, patient records, and compliance obligations prevents unintended partnership characterization and protects each dentist’s clinical autonomy and financial independence.
Separate Billing and Financial Systems
Each dentist operates under a unique tax ID (EIN), National Provider Identifier (NPI), and state license number. Payor contracts, bank accounts, credit card processing, and accounts receivable systems remain separate, with no commingling of patient payments or insurance reimbursements. Cost-sharing formulas allocate shared expenses, such as rent, utilities, front-desk staff, and supplies, based on operatory usage, patient volume, or fixed percentages documented in writing.
Patient Records Ownership and HIPAA Compliance
Each dentist owns the patient charts for individuals they treat, even when using shared practice management systems. HIPAA business associate agreements, access controls, and audit logs segregate records by treating provider, preventing unauthorized access to another dentist’s patient information. Shared electronic health record systems require user-level permissions, separate patient databases or filtering mechanisms, and distinct practice identifiers to maintain record ownership boundaries.
OSHA and Infection Control Responsibilities
Both dentists share responsibility for OSHA compliance, infection control protocols, and bloodborne pathogen training when staff or equipment are shared. Space-sharing agreements allocate duties for sterilization equipment maintenance, operatory cleaning schedules, sharps disposal, and annual compliance audits. Independent malpractice coverage and indemnification clauses protect each dentist from liability arising from the other’s clinical decisions, infection control lapses, or employment practices.
Fee-Splitting Prohibitions and Referral Arrangements
Fee-splitting rules prohibit dentists from paying or receiving compensation for patient referrals based on volume or value of services ordered, protecting against kickback schemes and maintaining clinical independence. Co-located dentists may refer patients to one another for specialty services without violating fee-splitting prohibitions if referrals are based on clinical need, patient convenience, and professional judgment rather than financial incentives.
Space-sharing arrangements must avoid disguised fee-splitting through inflated rent, equipment usage fees, or management services charges tied to referral volume. Fair market value analysis supports defensible cost-sharing formulas during regulatory review or dispute resolution, demonstrating that expenses reflect actual resource consumption rather than referral compensation.
Management services agreements between co-located dentists or affiliated MSOs require clear documentation of services rendered, fee justification at market rates, and governance provisions preserving clinical independence to comply with corporate practice of dentistry rules and anti-kickback statutes.
Non-Compete and Non-Solicitation Provisions
Non-compete and non-solicitation clauses in space-sharing agreements protect each dentist’s patient base and staff relationships when the arrangement terminates. Reasonable restrictions might limit one dentist from opening a competing practice within a defined radius for a specified period after leaving the shared office, or prohibit solicitation of patients treated exclusively by the other provider.
Courts scrutinize non-compete provisions in space-sharing contexts more closely than partnership or employment settings, requiring narrow geographic scope, short duration, and protection of legitimate business interests without unduly restraining a dentist’s ability to practice. Non-solicitation covenants addressing staff recruitment, patient record access, and vendor relationships may be more enforceable than broad practice restrictions.
Buy-in options and rights of first refusal provisions give co-located dentists opportunities to purchase the other’s practice or assume the master lease if one dentist exits, converting space-sharing arrangements into ownership pathways without mandatory partnership obligations.
When to Consider Partnership or Buy-In Instead
Space-sharing works well for dentists seeking overhead reduction, testing new markets, or transitioning toward retirement without immediate buy-in commitments. Partnerships make more sense when dentists plan long-term collaboration, want unified branding and patient experience, or seek to pool capital for expansion, equipment upgrades, or DSO affiliation.
Partnership structures enable profit-sharing, joint strategic decisions, and collective bargaining power with payors and vendors, but create joint liability, require buy-sell agreements, and demand aligned practice philosophies and work ethics.
Associate employment or independent contractor arrangements offer middle-ground options, where established dentists hire newer clinicians for fixed compensation or production percentages without granting ownership stakes or partnership rights, retaining control over branding, patient records, and strategic direction.
How Dental Transaction Attorneys Support Space-Sharing Arrangements
Wood & Delgado guides dentists through space-sharing agreement drafting, compliance framework development, and dispute resolution for co-located independent practices.
Legal support for dental space-sharing includes:
- Space-Sharing and Sublease Agreements: Documenting rent allocation, operatory schedules, equipment usage rights, shared staff arrangements, and cost-sharing formulas while preserving separate practice entities
- Compliance Frameworks: Drafting HIPAA policies, OSHA protocols, fee-splitting analyses, and corporate practice of dentistry opinions for independent co-located practices
- MSA and PSA Review: Structuring management services or professional services agreements at fair market value with governance provisions protecting clinical independence
- Non-Compete and ROFR Provisions: Negotiating reasonable restrictive covenants, buy-in options, and exit procedures that balance protection of patient relationships with practice mobility
- Dispute Resolution: Mediating cost allocation disagreements, lease assignment issues, or patient record access conflicts between co-located dentists
Coordination with CPAs addresses separate tax filings, expense allocation documentation, and independent contractor classification issues for shared staff.
FAQ for Dental Space-Sharing Without Partnership
Can We Sublease Operatories or Time-Share Certain Days?
Dentists may sublease dedicated operatories or time-share rooms by dividing office hours through written subleases or space-sharing agreements that allocate rent, utilities, equipment usage, and cleaning responsibilities proportionally while preserving independent practice operations.
Who Owns Patient Charts and How Do We Handle HIPAA in Shared Systems?
Each dentist owns charts for patients they treat, even in shared practice management systems, with HIPAA business associate agreements, user-level access controls, and written policies segregating records by treating provider and addressing chart transfer procedures if patients switch dentists within the shared office.
When Should We Consider a Partnership Instead?
Partnerships make sense for long-term collaboration with unified branding, profit-sharing, and joint strategic decisions. Space-sharing works better for dentists seeking overhead reduction, market testing, or retirement transitions.
Structure Your Shared Office for Success
Space-sharing arrangements offer cost savings and operational flexibility without partnership obligations when properly structured with separate entities, clear cost allocation, and compliance safeguards. Call (800) 499-1474 to discuss space-sharing agreements, sublease terms, and regulatory compliance frameworks that protect your independence and patient relationships.