Oct 05 2011: The effect of CQC on buying and selling a dental practice
Since 1 April 2011, all dental professionals have had to be registered with the Care Quality Commission (CQC). The Health Select Committee’s report on the 14 September 2011 has scrutinised the way CQC has performed and as dental lawyers here at Ironmonger Curtis LLP we are watching this area with increased interest.
CQC is an independent regulator of health and social care in England, which includes the provision of dental services, whether that be dentists, dental nurses, hygienists, therapists, dental technicians or orthodontic therapists. Whilst the application to register is a form-filling exercise together with an up to date criminal records bureau check and a self-declaration that the dental practice complies, the recent report by the Health Select Committee details that only 75% of dental professional (and ambulance providers) were registered by the end of June 2011. As a result, the registration of GP Practices has been postponed until April 2013.
Without CQC registration a dental sale can lead to a reduction in the purchase price, the imposition of conditions (or both) or even an aborted sale.
Following the implementation of CQC registration for dental professionals, as dental solicitors we are increasingly becoming aware of its importance to the sale and purchase process and the timing required to ensure that the Practice continues to be CQC registered prior to the sale and after the purchase.
CQC presently say that it can take 8 weeks for an application to be processed. However, our recent experience shows that 8 weeks can sometimes result in 12 or so weeks. The Health Select Committee cite a lack of funding and staffing at CQC as a reason for the delays. But as the application itself can be costly and the burden heavy on dental professionals, we are finding that the majority of dental professionals have little sympathy for CQC.
Consequently, dentists looking to sell their practice and in turn dentists looking to buy a practice therefore need to have a lot more patience as a sale and purchase is no longer a quick process.
This is also an issue for more simple changes to practice ownership and partner changes.
For the buyer (and indeed their lender) they must ensure that on completion of the purchase they are fully compliant and CQC registered, whether that is a new application or an addition of a new location to their current CQC registration. Lenders will hold back the finance for a purchase until CQC registration is finalised. For a seller, they will need to look to either cancel their application or remove that location from their CQC registration. A seller will also need to consider whether they are entitled to a refund. If a seller has paid his or her annual invoice for the CQC fees, and has cancelled his or her registration part way through the year, then as a seller you are entitled to a refund. To obtain that refund, we understand that you need to write separately to CQC. If a seller hasn’t paid any fees yet, then CQC normally send an invoice on cancellation which shall be pro-rated for the year.
We like many other dental lawyers are however perplexed as to what real effect the CQC regulatory framework will have on dental professionals and the sale and purchase of dental practices. Many have argued that the CQC regulation of dental professionals is a waste of cost and time, and will burden dental professionals of all sizes (whether it be a large dental corporation or a small individual practitioner) with an extra layer of administration and financial expense. This argument is supported by BDA who have welcomed the opportunity to work with CQC to ensure that continued compliance is based on reasonable and practical requirements.
At Ironmonger Curtis LLP our dental solicitors can advise on all aspects of selling a dental practice. Our Dental Team recognises that every transaction is different and our experience has shown us that there are several factors including CQC registration which if dealt with correctly from the start, can ensure a stress free transaction.
For furthe
r information on the contents of this article or any other dental law queries please contact our dental solicitors on 0845 225 2635.
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