Key Takeaways
- North Carolina eliminated the requirement that dental management arrangements receive pre-approval from the State Board of Dental Examiners, effective July 7, 2026.
- DSOs and investors can now execute compliant management arrangements without Board review, reducing deal timelines and regulatory friction.
- Written agreement requirements remain in effect, and the Board retains complaint-based enforcement authority.
- Stakeholders should monitor the Board’s rulemaking process to confirm that conforming rules do not introduce additional requirements.
As of July 7, 2026, North Carolina eliminated the requirement that dental management arrangements between dental service organizations (DSOs) and dental practices receive pre-approval from the North Carolina State Board of Dental Examiners. Section 38A.2 of Session Law 2026-41 represents a significant deregulatory shift that removes a key barrier to entry and operational flexibility for DSOs, dental management companies and investors pursuing M&A transactions involving dental practices in North Carolina.
What Changed: Elimination of Board Pre-Approval
Under the prior regulatory framework, the Board’s Management Arrangement Rule (21 NCAC 16X .0101) required parties to submit dental management arrangements for Board review and approval before execution. This process created uncertainty, delays and added transaction costs, particularly for multistate DSOs and institutional investors unfamiliar with North Carolina’s prescriptive approach.
Section 38A.2 now provides that management arrangements are executable without pre-approval, approval, determination of compliance or review by the Board. The Board may no longer condition the validity or enforceability of a management arrangement on its prior consent.
What Remains: Enforcement Authority and Written Agreement Requirements
While the pre-approval requirement is gone, the statute preserves two important regulatory guardrails:
Complaint-Based Enforcement
The Board retains authority to review management arrangement documents during the normal course of an investigation pursuant to a valid complaint and may proceed under G.S. 90-40.1 for alleged violations of the Dental Practice Act.
Written Agreement Requirements
All management arrangements must still be memorialized in a written agreement that: (1) is signed by all parties; (2) sets forth all material terms; (3) describes all types of services and applicable time periods; and (4) sets forth aggregate compensation or a precise methodology for calculating it.
Practical Implications for DSOs, Investors and M&A Transactions
The elimination of Board pre-approval reduces regulatory friction for new market entrants and simplifies deal timelines for acquisitions, affiliations and management arrangements involving North Carolina dental practices. DSOs can now structure and execute compliant management arrangements without the delay and uncertainty of Board review. Parties should still ensure that written agreements satisfy the statutory content requirements, as noncompliant arrangements remain subject to enforcement action.
Rulemaking Mandate: What to Watch
The act directs the Board to adopt a permanent rule amending the Management Arrangement Rule to be “substantively identical” to the statutory provisions. Notably, this rulemaking is exempt from normal legislative review under Part 3 of Article 2A of Chapter 150B. The statutory provisions will sunset once the permanent rules become effective. Stakeholders should monitor the Board’s rulemaking process to confirm that conforming rules do not introduce additional substantive requirements beyond those in the statute.
Effective Date and Applicability
Section 38A.2 became effective on July 7, 2026 and applies to management arrangements executed, modified or renewed on or after that date.
What to Do Now
DSOs and investors should proceed with management arrangements with the following tips in mind:
Execute without delay. Management arrangements no longer require Board pre-approval. Parties can execute compliant agreements immediately.
Review existing templates. Confirm that your standard management arrangement agreements satisfy the four written agreement content requirements (signatures, material terms, service descriptions and compensation methodology).
Update deal timelines. Remove Board pre-approval as a closing condition or regulatory milestone in pending transactions.
Monitor rulemaking. Track the Board’s adoption of conforming permanent rules and assess whether they introduce any additional requirements.
Maintain compliance readiness. The Board retains complaint-based enforcement authority. Ensure arrangements comply with the Dental Practice Act to avoid enforcement risk.
For questions about how these changes affect your dental management arrangements, M&A transactions or regulatory compliance strategy in North Carolina, please contact the authors, your McGuireWoods contact or a member of the Healthcare Compliance, Regulatory & Policy Practice Group.